Central banks accelerate shift from dollar to gold worldwide
More resilient to upcoming rate hikes, holdings rose to a 31-year high in 2021"
I did NOT say that gold isn’t an asset in which you can invest, I just said it is not money.
It will never be money in our modern society.
It’s simply to impractical to use gold as money. We barely use paper money these days, but day to day money requires such small amounts of gold value that as a physical money, it could only be ‘backed’ by some gold held elsewhere.
In that regard, there is no advantage to gold over other tangible assets which could back a money system.
Every smart urban boy I have ever known, including yours truly, knew the three money hideaways trick, whether on your person while walking to the store in a dicey neighborhood or storage at home: 1) money in your wallet (never very much but enough to be convincing to a robber if you know how to do “the poor boy” thing and aren’t so stupid as to be wearing a Rolex or the like), 2) money somewhere like between an inner and outer sock in your shoe or up your calf – you surrender this if the robber was smart enough and self possessed enough to demand “the rest of the money” while waving a gun at you, 3) your real main cache which you hide in your “pants”.
Similarly at home. I have a formidable safe at home where I have put a couple bottles of fancy looking but cheap wine, a bottle of obviously extremely expensive Mezcal that is actually water mixed with a shot of sewage to give the right color and with the bottle carefully resealed and refoiled, a few display boxes of utterly exquisite looking junk costume jewelry bought at yard sales, and a rubber banded wad of play money rolled inside a thin layer of real Benjamins. In a secret compartment behind the drawers of an antique desk a $200 or so wad of real money, and in a sock in a rusted can currently under greasy and dogdoo’d clean up rags is my real cache of emergency funds and my only jewelry (a turqoise belt buckle and bolo tie), and a fine big bag of old silver dimes and quarters. I move that cache around every couple of months.
and in a sock in a rusted can currently under greasy and dogdoo’d clean up rags is my real cache of emergency funds and my only jewelry (a turquoise belt buckle and bolo tie), and a fine big bag of old silver dimes and quarters. I move that cache around every couple of months.
Hell, I learned the “appallingly icky pile of rags” trick when I was surviving in Boston for college and then later in Topanga Canyon (a lot of aged hippies were cat thieves).
Regarding crime Mexico seems to me to be about par with the USA, and i have never had serious trouble in either location.
It’s simply to impractical to use gold as money. We barely use paper money these days, but day to day money requires such small amounts of gold value that as a physical money, it could only be ‘backed’ by some gold held elsewhere.
At one point, years ago, I calculated that silver was 15 cents a gram and gold was 15 dollars a gram.
A gram is about the weight of a cheap little bent-wire paper clip. Gold is denser than the metal they use for those clips, so a gram of gold would look smaller than that. In comparison, a current US dime weighs a hair over 2 and a quarter - and is made of relatively low-density metals (in fact a silver dime weighs 2.5 grams).
We are not going to have coins that weigh less than a gram, which would make gold non-applicable for buying an item that costs less than $15 (as of the date of that calculation, whenever it was).
Apparently the current price of gold is over $60 per gram. (And silver approaching 75 cents.)
An ounce of gold in 1971, when the US defaulted on an international agreement, was $35. It is now approching $2,000. Doesn’t that tell you something?
What has gold done for us over the last 10% of inflation? Call it about 18 months or so. Looks like very close to nothing. So gold is “down” about 10% just like my fiat dollars are “down” about 10%.
What has gold done for us over the last 10% of inflation? Call it about 18 months or so. Looks like very close to nothing. So gold is “down” about 10% just like my fiat dollars are “down” about 10%.<?i>
It is worse than that. The inflation-adjusted dollar price of gold is still below the 1980 peak. It has been a losing asset for 42 years and counting, down about 26% from the peak. That is a long time to be losing money.
On the flip side, over the same period the S&P500 with dividends reinvested has a returned an inflation-adjusted 3,166%.
Since 3,166% is larger than -26%, I don’t think I’ll be buying gold.