Stats for nerds
1recommend
7mentions
5people
2023–2025years
14% recommend86% neutral
Mentions per year
What Hacker News says
- Gold does not help deal with unexpected inflation:
* https://www.nber.org/papers/w18706
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789
* https://www.pwlcapital.com/will-gold-save-the-day/
See also The Golden Constant: The English and American Experience, 1560-1976 by Roy William Jastram:
* https://www.goodreads.com/book/show/3267510-the-golden-const...
* PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
- You can, but then those people have more money, and you have less. The money supply is much smaller than the supply of goods and services, because the same money circulates repeatedly. So simply doubling your money can tilt things a little more your way, but does not make the situation completely lopsided, because you can only spend the extra money once.
Also, to quote Jastram [0], "In spite of the romanticism of the Spanish Main and treasure ships, the supply of gold from the New World was just a trickle by later standards. Less than 1% of what was to be 1930 world production was produced in each of the years from 1500 to 1520." Over the next 80 years, it never got much above 1.3%.
[0] Roy W. Jastram, The Golden Constant (1977), pg. 41.
- > Gold will always retain value.
After >40 years, gold has only just gotten back to its 1980s inflation-adjusted price:
* https://www.macrotrends.net/1333/historical-gold-prices-100-...
Papers have been written on how it does not hedge inflation:
* https://www.nber.org/papers/w18706
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789
See also Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976:
> Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning.
* http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
So if the barbarians are (close to literally) coming across the fields, gold can be useful to hide or take with you as you head for the hills, but for most economic situations it is not useful.
> Stocks and crypto can fall to 0.
In which case, you better be a farmer with lots of ammo so you can feed yourself and protect what's yours. Of course the Mad Max chaos is a popular trope, but historical events show that people tend to be altruistic and pull together during disasters:
- > Gold is just such a weird special-case thing in economics that it seems very hard to draw interesting conclusions about anything else when you're opening up the discussion with using gold as a benchmark.
Especially since the gold standard did nothing to help in stabilizing currencies:
* https://archive.ph/FWKcL / https://www.theatlantic.com/business/archive/2012/08/why-the...
Is not an hedge against inflation:
* https://www.nber.org/papers/w18706
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789
even over the long-term, per Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976:
> Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning.
* PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
* Via: https://www.pwlcapital.com/will-gold-save-the-day/
Having a fixed currency base can turn economic downturns much worse, as happen in the Great Depression:
* http://www.nber.org/chapters/c11482
With countries only starting to recover once they left it:
* https://delong.typepad.com/delong_long_form/2013/10/the-grea...
- With regards to Rule 11, especially:
> GOLD not only does well during times of intense inflation, it does very well.
No, it does not:
* https://www.nber.org/papers/w18706
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789
From Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976:
> Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning.
* PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
- > It’s a hedge against inflation, a low risk, static asset to keep in place of cash.
It is not a good hedge against inflation:
* https://www.nber.org/papers/w18706
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789
From Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976:
> Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning.
* PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
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