[MP-Ryan]

I think S-99 is confusing the fact that there is a theoretical finite limit of element Au on Earth with near-absolute value.

Gold is a commodity subject to market valuation and accompanying fluctuation.  Now, if all countries moved to a gold-standard for currency valuation then it would become at least partially inflation- (and deflation-) proof, but at the present gold is no more secure or stable than any other commodity or resource.

While gold isn't a bad investment if you time it right - see the recent astronomical increase in gold value, but accompanying devaluation - it's no more useful than a number of other commodities and not terribly more stable over the long term.

There's an increasing perception among survivalists/preppers/Freemen/fringe Republicands/other conspiracy-minded types that gold or silver is the best way to hold monetary value, but it just isn't true.  In fact, it's actually one of the poorest ways to hold value in that gold is not an essential commodity of use (well, except for certain electronics applications); it's largely just another form of currency.

Nothing is truly inflation-proof, but one of the best ways to ensure you hold financial ground is to diversify your investments to different vehicles (some safe, some riskier), invest in stocks that match the index performance (rather than trying to beat it), and invest in real property.  And by real property I mean land, not real estate.

[The E]

For a primer on the subject of illicit internet markets and secure internet money, I recommend reading Neal Stephenson's Cryptonomicon.

For a similar exploration of backed currencies vs fiat currencies, I recommend Stephensons' Baroque Cycle (Which is incidentally a prequel to Cryptonomicon...)

[Phantom Hoover]

you could also just read actual reference material

[The E]

Not enough gunfights and weird stuff in there.

[yuezhi]

 
Happy?

[S-99]

No, just no.

That is just wrong. Look at the graph I provided, it shows the value of gold adjusted for inflation since 1915.

Gold is subject to the same effects as other commodities, it's not a magical substance.

Of course it's not a magical substance. The value of gold will definitely inflate the more we get it out of the ground. The spanish went through this with a lot of gold coming from the new world which definitely inflated the price back then.

How can gold be inflation proof? I guess a better answer would be that at certain long periods of time and trends in the gold market that it can be inflation resistant. Inflation resistance would be judged by how many times the damn stuff is adjusted for inflation for an overall outlook as opposed to certain long periods of times and trends. Really i think what matters for gold inflating noticeably any time soon would pretty much be something ridiculous such as someone pulling 400 tonnes of gold out of the ground for a big adjustment for inflation.

s-99, you're aware that bitcoin is essentially a pyramid scheme right?

It's not.

[MP-Ryan]

I think you're confused about the term 'inflation,' and the economic forces at work on commodities.  Generally speaking, commodity prices are determined by supply-and-demand economics; supply is inversely proportional to value while demand is proportional.  If you extract more of a commodity, the value of it will go down unless there is a corresponding increase in demand.  These value fluctuations have little to do with inflation; rather, inflation describes devaluation of currency and assets.  So long as gold is either a currency or an asset, it is subject to inflation. 

Gold is no more inflation-proof or resistant than any other commodity, from lumber to gas to oil to precious metals to rare earths.  Where all of those differ from each other is in volatility as a function of time.  Gold isn't really a better long term investment than any other commodity at present; and in the short term, if you invest at the wrong time, it can really hurt.

[Black Wolf]

S-99, you seem utterly oblivious to the realities of what really drives the gold price, and the gold supply. First off, the gold price is absolutely driven by supply and demand. That's why greater demand (such as for Indian wedding season) affects the price. And as the price goes up, production ramps up to meet the greater demand - often taking the form of old mines that were once uneconomic, but have become economical to extract from under a higher gold price. Note that that particular scale (higher price of gold = viable to extract from lower grade sources) goes a long way - there are literally thousands of small plays across just the small parts of my home state where I've worked that are left sitting in the ground because they're uneconomic without a higher gold price.

Really i think what matters for gold inflating noticeably any time soon would pretty much be something ridiculous such as someone pulling 400 tonnes of gold out of the ground for a big adjustment for inflation.

Globally we pull about 4-5 times that much out of the ground every year - Australia alone pulls out more than half that amount. A big mine will easily pull 10 tonnes a year, really big ones will do two or three times that.

[Klaustrophobia]

s-99, you're aware that bitcoin is essentially a pyramid scheme right?

It's not.

the creators whipped up a virtual..... something out of thin air.  They professed these bits of data flying about on the internet were inherently worth real money and sold them.  The only legitimate selling point (by that I mean not including illicit purchases over the internet) was that they were going to increase in value and you could sell them for gain later.  And that whole "mining" bitcoins business that was designed such that returns exponentially tailed off the more coins were created.  Guess who this benefits again?  So it's either a scam or a currency for illegal things.  Oh, there's like one t-shirt guy or something who takes bitcoins.  So there's that too I guess.

[Mongoose]

Yeah, the idea of a "currency" without the full faith and credit of...pretty much any legitimate entity doesn't really fly with me.

[Ghostavo]

No, just no.

That is just wrong. Look at the graph I provided, it shows the value of gold adjusted for inflation since 1915.

Gold is subject to the same effects as other commodities, it's not a magical substance.

Of course it's not a magical substance. The value of gold will definitely inflate the more we get it out of the ground. The spanish went through this with a lot of gold coming from the new world which definitely inflated the price back then.

How can gold be inflation proof? I guess a better answer would be that at certain long periods of time and trends in the gold market that it can be inflation resistant. Inflation resistance would be judged by how many times the damn stuff is adjusted for inflation for an overall outlook as opposed to certain long periods of times and trends. Really i think what matters for gold inflating noticeably any time soon would pretty much be something ridiculous such as someone pulling 400 tonnes of gold out of the ground for a big adjustment for inflation.

S-99, look at the Gold values from the last 20 years. You went from a relatively low value to historic high values and now it's crashing back down again. By your description, one would expect that the value of gold adjusted for inflation would remain a reasonably stable constant. But that's about the opposite of what happens.

Hell, if you look at weekly trends you'll see its value going all over the place. You might as well claim S&P500 is also inflation proof.

P.S.
Remember this remark?

If you bought gold at $1310 an ounce, and next year you sold that gold with inflation still going up with next years price per ounce being $1500; all you did was successfully keep up with inflation, you did not grow your money.

If a year ago you had bought gold to sell it right now, you would have lost a lot of money, and with the current trends, what you suggested still seems like a mistake.

[Phantom Hoover]

Note that S-99's definition of 'inflation' seems to actually be the rate of change of gold prices; so of course, it's inflation-proof by definition. You're coming at this from the wrong angle.

[Grizzly]

S-99, look at the Gold values from the last 20 years. You went from a relatively low value to historic high values and now it's crashing back down again. By your description, one would expect that the value of gold adjusted for inflation would remain a reasonably stable constant. But that's about the opposite of what happens.

Funnily enough, it's because of what S-99 is saying that it's so fluctuable. Rich people buy lots of gold because they think it's stable and inflation proof --- thus making it very unstable. It's a self-destroying prophecy or... something.

[Aardwolf]

@Klaustrophobia (and anybody else, really):

As I understood it, the driving rationale for inventing bitcoin was to get rid of the possibility of third-party interference in transactions, in particular the sort of bull**** Paypal et al. pulled on Wikileaks.

[Bobboau]

it's such a success that no government in the world or even the recipient of the money can stop transfers.

[Mongoose]

That seems...incredibly silly.  Why would anyone use a currency where every transaction you make is publicly-viewable?

Also protesting the shutdown of a blatantly-illegal site (and we're not talking the warm fuzzy torrentzplz kind of "illegal") just makes you look rather stupid.

[S-99]

I'm back. RL had taken me away for a while.

Of course it's not a magical substance. The value of gold will definitely inflate the more we get it out of the ground. The spanish went through this with a lot of gold coming from the new world which definitely inflated the price back then.

How can gold be inflation proof? I guess a better answer would be that at certain long periods of time and trends in the gold market that it can be inflation resistant. Inflation resistance would be judged by how many times the damn stuff is adjusted for inflation for an overall outlook as opposed to certain long periods of times and trends. Really i think what matters for gold inflating noticeably any time soon would pretty much be something ridiculous such as someone pulling 400 tonnes of gold out of the ground for a big adjustment for inflation.

S-99, look at the Gold values from the last 20 years. You went from a relatively low value to historic high values and now it's crashing back down again. By your description, one would expect that the value of gold adjusted for inflation would remain a reasonably stable constant. But that's about the opposite of what happens.

It got down to me saying nothing more than sometimes gold doesn't change value....sometimes.

P.S.
Remember this remark?

I do remember that remark. Then people reminded me that gold can inflate, then i remembered a famous historical moment for that happening. Yes we know the market goes up and down and i was reminded that gold can inflate. I wasn't tracking trends, but more or less what makes gold inflate, and one way for certain is flooding the market with more gold.

the creators whipped up a virtual..... something out of thin air.  They professed these bits of data flying about on the internet were inherently worth real money and sold them.  The only legitimate selling point (by that I mean not including illicit purchases over the internet) was that they were going to increase in value and you could sell them for gain later.  And that whole "mining" bitcoins business that was designed such that returns exponentially tailed off the more coins were created.  Guess who this benefits again?  So it's either a scam or a currency for illegal things.  Oh, there's like one t-shirt guy or something who takes bitcoins.  So there's that too I guess.

The person and persons who created bitcoin is definitely the mysterious part. Them remaining anonymous is an intelligent decision for them. It beats having governments coming after you because they don't like the new competing currency that they don't get to govern. There's only 21 million bitcoins in existence, there is a fixed amount. The more and more people will mine for them, the less and less they'll get. Quantifying what backs the currency is another interesting thing. Really, the currency backs itself like gold does. People gave bitcoin value, like people give other things value too. If you find that bitcoin has no value because it is backed by itself, then that's like saying gold is valueless because it is backed by itself. Why they back themselves is because people gave those items value.

Anyway, i'm not going to get too much into bitcoin with you. You simply don't like the currency, and that's you're right.  Maybe because it's too suspicious for you? Maybe the intangibility of the currency is the problem? I don't care. I doubt i'm going to hear anything more from you about this currency other than "it's a scam", "it has no value", "why are the guys who made it unknown?", "it's a currency for illegal items or just buying a t-shirt", and other heebie jeebies you got about this currency. Then again, most people who don't like something definitely don't want to learn more because it's not a product of their interest. If you want to learn more about bitcoin, then find out more. I'm tired of talking to a wall who "feels" a certain way about something.

[FireSpawn]

This is great news. I remember reading up on bitcoin after seeing This story, and that lead to finding info and articles on tor, the darknet and Anon's crusades into it.

After reading about some of the crazy **** people found on that site and in the hidden wiki, and how easy it was, it makes me wonder why it took so long.

[Bobboau]

they were gathering evidence on as large a portion of the user base as possible.

[Phantom Hoover]

Really, the currency backs itself like gold does. People gave bitcoin value, like people give other things value too. If you find that bitcoin has no value because it is backed by itself, then that's like saying gold is valueless because it is backed by itself. Why they back themselves is because people gave those items value.

so remind me why fiat currency is a scam