Because the numerator in all those fractions is the dollar, which is rapidly losing the worlds trust, as a store of value. Eventually we'll see what happens when you try to divide by zero.
45 year cup and handle patterns playing out in gold and silver, both going much higher -- governments cannot borrow their way out of debt, current paper currencies going to zero value over time -- Dow down over 70% measured in gold over last 25 years -- etc. etc.
To teach my daughters about investing when they were young, I gave them some actual silver coins that I purchased — thinking these are tangible things, they can track the price. Of course I bought at the peak. They're adults now but just might be seeing a profit on their coins.
When people are talking about inflation, what inflation statistic are they referring to? CPI has been below 3% since May 2024.
Precious metals (silver, gold, platinum, palladium) have out-paced Bitcoin.
USD:EUR hasn't gotten worse than 5-year lows, same with USD:GBP.
I don't think these statistics support "money is fleeing the U.S." or "tariffs are causing runaway inflation", unless I'm missing something? You could paint it as "wealthy people are hedging against globalized recession / future break-downs in trade", maybe, but then why are precious metals out-performing bitcoin?
If anything this feels like "momentum"-driven speculation, similar to what we're seeing with some of the biggest companies in the S&P500, and similar to what we saw in late-2020, where the numbers are front-running a plausible but as-of-yet-unrealized narrative.
What indicators that people are finding useful to make sense of this?
It’s the debasement trade. Going off the gold standard in the early 70s started the eventual snowball of the USD currency collapse and the last few years has picked up steam.
No political party will ever choose to fiscal prudence when they can just print print print. This is why Bitcoin exists.
> In the era of Emperor Augustus (27 B.C. to 14 A.D.), a Roman centurion was paid 15,000 sestertii. Given that one gold aureus equaled 1,000 sestertii and given there was eight grams of gold in an aureus, the pay comes to 38.58 ounces of gold
Today, 38.58oz of gold would be a salary of $156K/yr.
If we do the same for silver, it comes out to about 470oz of silver. So $23,500/yr.
If we compare that to a US Army E-8 (say 80k/yr), we can argue that gold has doubled its value relative to labor and silver has dropped to almost a quarter.
The dollar index has fallen 11% this year and it doesn't seem to slow. It's great for assets, Gold being a prime example, and people with assets but bad for consumers. It's hard to see how this will not turn into inflation since we import so much and those good are only getting more expensive.
We don't have an asset bubble the prices are just adjusting to the lower dollar.
I bet the FED will have to increase interest rates next year and that's when we'll see a collapse of asset values and since markets tend to over correct, it's going to be painful for all holders. Be ready...
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[ 4.2 ms ] story [ 45.4 ms ] threadI suppose lesson learned?
Precious metals (silver, gold, platinum, palladium) have out-paced Bitcoin.
USD:EUR hasn't gotten worse than 5-year lows, same with USD:GBP.
I don't think these statistics support "money is fleeing the U.S." or "tariffs are causing runaway inflation", unless I'm missing something? You could paint it as "wealthy people are hedging against globalized recession / future break-downs in trade", maybe, but then why are precious metals out-performing bitcoin?
If anything this feels like "momentum"-driven speculation, similar to what we're seeing with some of the biggest companies in the S&P500, and similar to what we saw in late-2020, where the numbers are front-running a plausible but as-of-yet-unrealized narrative.
What indicators that people are finding useful to make sense of this?
The political fairy tale that is the CPI stays low to avoid having to increase government payments for social security and the like.
No political party will ever choose to fiscal prudence when they can just print print print. This is why Bitcoin exists.
feels pretty relevant again...
It takes between 38 and 39 paper Reserve Notes to equal its value. If Trump isn't removed, I expect it to be 100:1 before the midterms.
https://people.duke.edu/~charvey/Media/2013/Hurriyet_May_2_2...
> In the era of Emperor Augustus (27 B.C. to 14 A.D.), a Roman centurion was paid 15,000 sestertii. Given that one gold aureus equaled 1,000 sestertii and given there was eight grams of gold in an aureus, the pay comes to 38.58 ounces of gold
Today, 38.58oz of gold would be a salary of $156K/yr.
If we do the same for silver, it comes out to about 470oz of silver. So $23,500/yr.
If we compare that to a US Army E-8 (say 80k/yr), we can argue that gold has doubled its value relative to labor and silver has dropped to almost a quarter.
Interesting approach!
We don't have an asset bubble the prices are just adjusting to the lower dollar.
I bet the FED will have to increase interest rates next year and that's when we'll see a collapse of asset values and since markets tend to over correct, it's going to be painful for all holders. Be ready...