Bitcoin and Gold Both Fail Miserably as Hedges, Investments | Hacker News Reader

Bitcoin and Gold Both Fail Miserably as Hedges, Investments

greyenlightenment.com

30 pointspaulpauper29 comments

Anyone who has spent any significant amount of time watching the metals markets knows just how manipulated it is, and how deceitful most articles are, and how there is no enforcement against the big boys.

From the data I've seen, the outstanding warrants for commodities of silver and gold far exceed actual reserves, at about a little under 300:1 oz physical ratio.

Fun fact, the COMEX has never been independently audited.

The appropriate reasonable level of counter-party risk would be rated quite high for (paper) gold (which is what the spot price/derivatives are traded on), some silver investors tried to take delivery, and couldn't because of broker fraud (i.e. not disclosing they didn't have a loadout policy while advertising they could take delivery), and the COMEX refusing to speak with anyone but the broker, along with a lot of other policies that suggest volumes.

Honestly, who's to say if there is any gold in the COMEX vaults? For all we know it could be like what happened with China's gold-plated copper bars.

We are living through an era rife with fraud without any accountability. Eventually the bill comes due.

Unless it's physical gold, ideally with craftsmanship work combined. Same for shares, own those in name, not on some dodgy broker.

Markets are always in flux, never a dull moment.

Gold and bitcoin have done poorly whenever interest rates have gone up. the hedge is for self custody of wealth. Exponential growth is over though. back to investing in labor x knowledge.

There's very few pathways where self custody out does collective custody in a modern society.

Ergo, it's a mental trap, not a reasonable surety.

In the past year, self-custody of cans of beans outperformed the "modern" collective custody assets such as stocks, bonds, and bank account deposits.

That's only true since 2020. Before that, Bitcoin was not very correlated with other assets.

Then again, correlation is an iffy metric that does not take into account tail risk.

No, if you look at bitcoin bear markets of 2014-2015, 2017-2019, interest rates were rising, gold was down as well.

It's going to be hard to beat sitting on cash for 18 months until global indexes bottom out at PE 10 like in 2008, and then buying and holding for a decade after.

You can go TIPS or a TIPS index fund, if you believe inflation will continue.

> The coupon rate is fixed at the time of issuance, but the principal is adjusted periodically based on changes in the Consumer Price Index (CPI), the most commonly used measure of inflation. When the CPI rises, the principal is adjusted upward; if the index falls, the principal is adjusted downwards.[16] The adjustments to the principal increase interest income when the CPI rises, thus protecting the holder's purchasing power. [1]

[1] https://en.wikipedia.org/wiki/United_States_Treasury_securit...

Well, since houses are deliberately kept out of CPI, it systematically underestimates housing cost increases and thus the increasing prices of a big chunk of actual living costs.

Not a good basis for "protecting the holder's purchasing power".

I'd guess this is also one important reason why not basically everybody is simply buying these TIPS with their long term savings. Otherwise it'd be kind of a magical way to keep your buying power. Just too good to be true.

I suppose you could allocate some savings to REITs if you also want some housing exposure.

Cash is king

Until it isn't ;)

Youre losing $INFLATION%, very, very poor alpha sadly..

True, but with a decent bond portfolio I’d claim the reduction in risk is well worth having the money sit

Bonds != Cash

Spesh single dollar cotton documents, man that's stuff hot, everybody takes them the blind take them, the beggars take any bill but best that they be small they can spend them, same cotton document basically, same number of autopen signatures similar weight 1g I think, everything the same as the uh...hundred-dollar bill, which is just...like I can't accept $100 bills. A friend showed me one asked me was it real I said let's see..."Printed 1996, O-Kay, uh less believable but it looks pretty fresh so it looks newer"...I hemmed and hawed. Then a few minutes later he said "look the corner of the paper split into two sheets"

"aw aw...man you got robbed of a hundred dollars."

"Yeah..."

"Well you know it's not just United States that controls the printing press, not printing that much first off second, North Korea has just as good a printing press of its own. Panama close..."

"mmm"

"Yeah $100 I would flat out never accept as payment."

Oh yeah, bitcoin is only up 700% over the last 5 years after just crashing out. What a bunch of suckers.

Trees don't grow to the sky

But Bitcoin has grown 700% despite your empty quip.

I don't think you understand the concept of a hedge. Bitcoin boomed at the same time as the stock market. It cratered at the same time as we fell into a bear market. That's the exact opposite of a hedge. That's a leveraged gamble.

I don't know much about finance, but don't you want something that everyone will want in a "rush to safety"? Safe is not the first word that comes to mind with Bitcoin

I know I’ll get downvoted by bitcoin shills like you, but if you had bought bitcoin in Dec 2017, you would have lost money even after holding for 5 years.

By all means, invest your life savings in Bitcoin for the next 700% percent rise. My "empty quip" is a bit of investing wisdom that has long been repeated on Wall Street.

Meh, since 2017 - on a monthly DCA strategy (with no sells), annualised returns are;

- BTC 15%~

- ETH 35%~

700% cherry picking the data / lacking info on the trading start.

(Above numbers assume you buy at open price 00:00 first of every month)

compounded back to back for 5 years ... I mean, that's incredible performance. and it's performing worse than it's cycle average right now

Bitcoin is only up 350% over the last 5 years. There have been many stocks that put up better returns over the same period.

Pick your starting points, if you go back about a month or two from now it's closer to my number. If you pick the worst days it could be close to 0. The point is you would have had to have been buying in at peak hype not to get amazing returns.

What if I spend Bitcoin on a pizza? Why should that turn me into a sucker?

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