Costco gold bars are selling out within hours
cnbc.com
cnbc.com
Investment gold is usually kept in vault, and you trade ownership arms length. Direct gold ownership is rife with risks: fineness, substitutions and overpriced purchase. Yes, you can always sell at a mall gold trader but that's way way off market price.
So it's an inflation hedge with a lot of cost and risk and demands huge upswing in gold price to pay off. And securing it at volume is a nightmare. Plus Costco wants to limit you to 2, and have a margin.
Because we live in very uncertain times: a land-grab war in continental Europe, a serious and credible threat of both the US and a lot of European countries to fall to fascism, the threat of the US government going into an unprecedented shutdown yet again, and if that were not enough, it's reasonable to assume there will be an actual hot war with China in a few years' time.
Historically, people have always fled towards gold in uncertain times.
Every fiat currency that ever existed collapsed at some point.
> Gold is not money. It’s never going to be money again. So why care?
Gold survived all of them. It’s still being used as a financial instrument, after thousands of years, countless wars, changes of government, complete societal collapse and reorganization…
Gold is definitely a safer long-term bet.
Roosevelt seemed to care quite a bit: https://en.wikipedia.org/wiki/Executive_Order_6102
Apparently this lasted until 1974 (not sure about the details though, I always hear about the executive order in 1933 but never about the impossibility of owning gold between 1933 and 1974 - but that's what the articles seem to say) so a lot of mainstream economists have at least implicitly agreed.
https://www.nytimes.com/1974/08/15/archives/bill-signed-to-a...
People invest/collect gold like this and it clearly only profitable for the people who buy and sell gold who charge you to do both.
I also think it's a hobby. Like people collect this or coins or stamps or Pokémon cards. I think as far as things to spend your time on for entertainment, you loose the lease amount on this compared to collecting other things or spending the time you spend on this entertainment doing another form of entertainment.
It's not investment unless your scrooge mcduck and have a big gold factory, it's really entertainment like collecting baseball cards.
But, things will be pretty bad at that point from every viewpoint. As essentially global markets are crashing. On other hand, in even bigger crisis gold won't be that valuable at least for a while. If food and fuel are first priority people are unlikely to trade them for shiny metal...
There’s a class of crime that can only really exist in a rule-of-law situation, without that people just get summarily executed.
If we stretch it back a few decades we see things like the Wiemar republic, complete anarchy during the Russian civil wars when blacks, whites, reds, etc all marched across the countryside, Chinese civil war, or even just recently we have Yemen, ISIS, Ethiopia, and in none of these cases have a zombie apocalypse-style "have to defend myself with my gun and ammo" societal breakdown occured and people bartered with gold. It turns out that people organise very quickly, and a every-man-for-himself-style situation like in stories just doesn't happen.
Maybe a civil war breaks out, maybe there are food shortages, but for the most part if violence breaks out, it's organised, mainly in the form of civil wars or local power struggles. One guy with a gun is not gonna help. Food protests are common, but rarely end violently. People keep thinking that "this time is different", and they're wrong every time.
> Maybe a civil war breaks out, maybe there are food shortages, but for the most part if violence breaks out, it's organised, mainly in the form of civil wars.
If a war breaks out, the tradition is that the armies will raid you for food. The issue was never that other locals would do it. A war breaking out is what people are afraid of.
That's what I meant -- people get organised very quickly. In Rwanda, people quickly formed armies and militias, the same in Ethiopia, Columbia, and literally every other time this has happened before. One guy is not gonna accomplish much.
Civil war is also, by most measures, the least likely outcome. Usually civil war causes the breakdown, not the other way around. Usually it's really a deterioration of state capacity that leads to a powerless central government (see Venezuela, Yemen, Syria), or repeated coups that lead to unstable governance (all of west africa basically). Things are mostly stable, by and large.
Once you need to form a militia, you bring your gun and join your neighbors. That way you can actually resist the army. They will do more than just raid for food. They raid for people: conscription, slavery, and “comfort”.
But we have per capita probably the largest number armed private security companies - what happened when we had unrest in one of provinces - the owners of these companies formed self defense groups where they lived with their staff and had AK'47/AR-15 and stuff not available to normal citizens.
Our suburbs are still racially segregated so they turned around those folks who did not fit the profile.
They kept the looters out - but some got out of control and shot up innocent people that was in the wrong place at the wrong time.
The army was eventually mobilized and the sight of soldiers and wheeled APC's convinced them it is was time to go home now that the professionals were here.
I would not be surprised if the US is one of the few countries to end up like Mad Max if the world order should fully collapse due to climate change or other large scale events.
US charitable giving alone suggests your view of the country as individualism run amok is likely not the whole story.
A fair amount of the rest goes on political lobbying and influencing.
The proportion that goes on direct no-strings plain simple humanitarian work is not all that huge.
Most of the US population lives in cities. If the US wasn't "individualism run amok" it wouldn't have tent cities of homeless people, and its health industry wouldn't be bankrupting half a million people a year. (For example.)
And I don't think it's totally fair to exclude religious donations as somehow "not valid", especially in the context of the critique that Americans don't value community with each other. Religious charities tend have less access to alternative funding sources, so rely on these donations more. Note: I'm very much not religious.
> A fair amount of the rest goes on political lobbying and influencing.
I get a little mixed-up on whether donations to non-tax-deductible non-profits "count" in the metrics (e.g., does my donation to the ACLU which has a lobbying arm count just as my donation to the ACLU Foundation which cannot be used that way?). Nevertheless, I think it's wrong-minded to discredit charitable giving to organizations that influence public policy given the multiplicative impact that policy has on the lives of people and communities. Some of the biggest impacts to the lives of people came out of organized efforts to influence policy.
> If the US wasn't "individualism run amok" it wouldn't have tent cities of homeless people, and its health industry wouldn't be bankrupting half a million people a year.
This feels like a pretty uncharitable and over-simplification of very complex issues that also get into inter-state dynamics. I also think there's an error made in treating US culture as some sort of homogenous cultural construct. More than many other countries, the US is constantly at war with itself culturally.
All this has fallen to the wayside in the US as we have some weird form of individualism permiating on both sides of the political spectrum.
It is peak collectivism to accomplish this without requiring the monopoly on violence and the taxation that comes with it.
I'm not really seeing how that counts as "friendly and collective", but I live in the EU so perhaps I just don't understand these things.
There’s always a few bad apples but there’s always some counter pressure, too. The story of the deuce and half owner who drove into a hurricane comes to mind.
Yes, as we all know Sri Lanka, Argentina and Venezuela are all known for their low degree of violence.
secondly it is true that most short term instability results in people pulling together, but I do remember a study from about 30 years ago on long term multi-generational social collapse (I think it was Eritrea) in which the population became much less let's pull together to get through this and much more f* you I got mine.
If you think the US is at risk of collapsing however I would suggest you buy a gun before gold.
You need friends and allies before you need guns.
In one short sentence you may have summarised the difference between other societies and the USA.
I'd say I'm "prepper" enough that I'm heavily armed and have enough shelf-stable food to feed by family for a few months in an emergency - but I'm also "homesteader" enough that our garden seems to get bigger each year, I know all of my neighbors, and we regularly share skills and information.
I don't think anything catastrophic is likely to happen, but it's had an overall very positive impact on my day-to-day life. If something does happen, I have far more tools to deal with it than either approach alone would give me.
Several times, I had taxi drivers refuse to accept fare when they picked me up from a bus stop late at night (both petrol/gasoline and buses were in short supply for a while). Once a motorcyclist literally stopped by and handed me his spare helmet saying "If you're heading my way, I can take you". Many people (including my wife and I) drove around distributing food and supplies to folks we felt were in need. It's hard to describe what came over us, but it seemed like a common phenomenon that affected a lot of people.
I still think if food became really scarce, selfish, violent behaviour would have emerged. But fortunately it never came to that and the country managed to go into a debt restructuring program with the IMF.
The question of course is the very same people who voted in these clowns in the first place.
My spouse and I both had a short part of our childhood in a poor and wonky South Asian country. We both feel that people (and ourselves) are far less helpful to our neighbours and strangers in the west vs. back home. It actually felt different in the 90s vs. today. I recall being in the west and someone offering me a ride when the subway was closed (like 25 years ago). I just can't see that happening today. Just too many MLM schemes have been pushed on me, and too many reports of crazies on the news .. I dunno.
On the other hand, once in the New York subway, I was running toward the closing doors of a train, and some of the folks inside tried to keep the door open (which was not really possible) and clapped when I made it in by a hair's breadth. But then again it was a Friday night and many passengers at that time were a bit sloshed and quite friendly.
Turns out, most people aren't psychos and at one extreme, some would rather end themselves than hurt others.
> I still think if food became really scarce, selfish, violent behaviour would have emerged.
That does emerge, as you said, but it needs to be SUPER extreme. By SUPER extreme I mean gulag or shipwrecked crew on an island with no food. In human history these scenarios are very rare, probably since the dawn of agriculture.
And, I mean, we could implode that badly, but we're talking regressing 3+ thousands of years. It looks more like a post-apocalyptic nuclear wasteland or Earth being hit by an asteroid than a "regular" economic meltdown.
“But here's the main point: 'Preparing' for the disaster really didn't do anyone much good. Those who 'prepared' ate a little better for a while. They stayed warmer for a few extra days. They enjoyed the radio for a while longer (via batteries.) But in the end, they ended up hungry, cold and bored too, just like the rest of us. Guns and weapons helped no one directly and were even of little to no use in the defense of Sarajevo, since they were toys compared to the shells, bombs and high-powered armaments of the attacking forces. The worst parts of war were psychological - the fear, anxiety, boredom, loneliness, paranoia, bad dreams. Respite from those things came with sharing food with a neighbor, finding a piece of clothing that would fit someone you knew, commiserating with others in your position, figuring out how to make make-up from brick or french fries from wheat paste and spreading this newly-acquired war knowledge around the mahala.
We knew who had extra food and supplies. For the most part, they weren't attacked or hassled or bothered. Contrary to what these survivalists say, those in dire times generally hold on to their personal sense of pride even more than they do in normal times. I'd take a bite of a friend's salad without bothering to ask in normal times. I'd never have done that in wartime, no matter how hungry I was.
Within the domain of those trapped in the city, civility greatly increased.”
I suggest reading Larken Rose - The Most Dangerous Superstition.
I feel way safer in places with a neighbourhood watch and local people banding together to fend off criminals over places where the police may show up some times, if they're done fining people for going 5km over the ridiculously low speed limit or jailing people for selling pot.
Source: the EU pays my government to allow into the country jobless economic migrants, males in their 20s-30s, and local people have to defend themselves because the police won't do shit.
And I think you're right; if you look at how people behave in times of flood or famine, they do tend on the whole to come together.
From the outside looking in, I think in part it has to do with the history of parts of the US as a slaveholding society. In a society where a large minority (or in some places even a majority) are under the thumb of coercion, when order breaks down, there will be reprisals and violence. And I think this history has formed a cycle in some parts of the US long after the end of slavery, and also informs a lot of the gun ownership self-defense fetish there. e.g. for me, growing up in rural Canada guns were just a rather boring part of life because people hunted or had farms. But since then the have clearly become a kind of shibboleth, or cultural marker. Gun ownership is apparently at an all time high but actual hunting for meat is at an all time low.
The fact that society didn't descend into complete apocalyptic anarchy made it even better for the gold hoarders, because they didn't get robbed and murdered for their savings.
What a bizarre interpretation.
To this date more than 20% of Venezuelans left the country.
What happens over and over is that fiat currency becomes worthless and that people who have the means to leave leave.
Obviously if you own some gold you have a better chance of being able to escape to another country.
Bank accounts gets frozen all the time and for a variety of reasons.
I heard about freezes for people doing the protesting (including organizing). But that's an extremely different thing from supporting the free speech rights of the protesters.
Sometimes governments jail people for protests, and locking a bank account seems similarly or slightly less bad to me. Not great but not newly worrying.
Or is it that you don't consider direct organizational efforts to be a subset of taking part in a protest? I'm generally fine with it, I think. Do you have anyone in particular in mind that was in this role but shouldn't count?
And sticking someone in jail does those too.
The problem came with the freedom of assembly, which is bound up with the right to protest ... and long curtailed with restrictions from causing substantial disruption.
That last part was the line crossed when roads were shutdown for days on end, horns blared round the clock, etc.
Additionally, IIRC, the Canadian Gov't didn't debank individuals for the act of donating .. they froze accounts that donations were flowing into. The last time this came up in a forum several people linked to discussions in the Canadian Question time (or some equivilant) where "gotcha" questions were being posed about whether the law in question could be used to debank individuals .. as it was broad legislation targeted toward shutting down the protests by drying up funds the answer "yes, but ..." .. followed by a general failure to produce any non core individuals that had their general savings frozen - just the accounts used to collect donations and some(?) organisers taking part (again, IIRC).
It was surprising to see how quickly people turned around into saying that blue collar workers uniting and striking was a bad thing (with several suggestions that they be forced to work somehow), that protesting government authoritarianism is in fact fascism, that calling someone a Nazi is somehow supporting Naziism, and that the government coercing people by threatening their livelihoods due to their political activities (or refusing medication), and deciding what is and isn't "legitimate" political views, is actually defending democracy
And I have no faith in "yes the law has technical pathological cases but obviously nobody would do that". I used to, but I've just seen enough cases of the letter of the law being twisted with complete disregard to the spirit. E.g. practically any law to do with terrorism
don't get to close off access to and from work sites for days and weeks on end, nor do they get to block customers.
> protesting government authoritarianism is
A-OK in my book - but blocking intersections and pissing off fellow citizens and stopping their free travel is not.
The line crossed, in the view of many people who might have otherwise supported them, was the nature of their protest - not the fact that they were protesting and not the words that they were saying.
Depends on the circumstances - which specific protest in the US continuously occupied and blocked off major transport thoroughfares in the USofA for a month?
What do you mean “blocked off transport”? Is that the only form of protest deserving of harsh measures?
Do you not think rioting in commercial centers and setting fire to businesses would rise to a similar level as blocking downtown streets as was done in Ottawa?
Clearly you feel blocking city streets is sufficient, so burning down businesses must as well?
Flawed conclusions.
> What do you mean “blocked off transport”
See the upthread link to the Canadian Charter. https://en.m.wikipedia.org/wiki/Section_2_of_the_Canadian_Ch...
Follow the links to see how "freedom to assemble" allows the "Right to protest" but doesn't guarantee the a right to "substantial disruption".
Unions (for example) have (location dependant) a right to strike, to protest, but not a right to block access to a business.
> Do you not think rioting in commercial centers and setting fire to businesses ...
For which specific protest was this a stated core goal of that protest? Surely these were incidental actions by third parties that happened coincidental with otherwise peaceful protests?
In the Canadian case under discussion the entire purpose was specifically to blockade, inconvenience, and shutdown key areas until their demands were met - this took place over the course of a month.
Again, which which specific protest in the US continuously occupied and blocked off major transport thoroughfares in the USofA for a month?
And whether or not the protest has that as the "stated goal" is irrelevant. It happened, thus in order to stop it you should be willing to apply the same force of law.
You seem fine having two different standards - one where blocking a street in protest deserves suspension of Charter rights and one where burning down businesses doesn't.
You're entitled to your belief, but I can state that it doesn't make a lot of sense.
There's no issue there with the protest, go nuts arresting the rioters, arsonists and looters.
You're all over the shop and struggling to make a point here ..
> just blocking the street temporarily
for a month, 24/7.
What exactly, BTW, is my belief?
Scroll to the top and my first comment - I simply correctly stated that the Canadian Trucker protest didn't have a Freedom of Speech clash with the Canadian Gov., they had problems as they overstepped their right to assemble.
That is my belief and I stand by that.
You seem intent on imagining things.
No there isn't. The point in question is the impact - one of them blocks streets, one of them sets fires to buildings.
You keep coming back to intent because otherwise your argument makes no sense. But intent is irrelevant to the impact in the end - temporarily blocked businesses (which can reopen after the blockade stops) versus businesses burned down (which won't open for months or even years, maybe not at all).
If you're willing to suspend Charter rights for a temporary blockade, then logically you should be willing to do the same for something with a far greater effect.
But you're unwilling to do so because you want the political goals of the protest to temper the force of the law against them. Unfortunately that's not not how the law works, we have (or are supposed to have) Rule of Law - every person is subject to the same law regardless of who they are or what they believe.
It is firmly established precedent here that murdering people and burning down buildings is a superior form of protest to slightly inconveniencing commerce.
I don't know what you thought you'd accomplish arguing on the basis of net harm on this site, but that doesn't happen here. You need to only understand the oppressor/oppressed dynamic. Protesting injustice against ten million gainfully employed oppressors is unacceptable. Protesting injustice against a single violent criminal is praised.
Your downvotes are well and truly deserved. Not for being wrong, which you're not, but for not knowing your audience.
Have you considered that the percent of the people in the crowd committing crimes makes a big difference for how some people want to enforce the law? Instead of that stupid strawman?
Thankfully the voting system here doesn't represent the beliefs of most Canadians/Americans when it comes to the Rule of Law.
I do get a kick out of calling out the logical inconsistencies of those who try and talk around it.
Am I understanding this right? They think the government should step in and freeze the bank accounts of people who haven't been tried or found guilty of a crime, and who just inconvenienced them?
As I mentioned in a comment above I'm not aware of any individual that had their personal savings frozen.
I recall a lot of reporting that it might happen and I recall a question time in which the accusation was made that it had happened but when pressed no actual details of to whom could be provided.
That dates back to about the time of your linked reporting which also talks about the potential for abuse but does not cite an example of abuse.
If you have an actual verified account of this actually happening it would be of interest.
Either. I don't really understand that anyone would think that a government being able to freeze someone's assets for protesting that government is a good thing.
This isn't the potential for abuse, in a sort of "price of freedom" way. This is an abusive power that, at best, was not used.
I actually count this as the primary positive outcome of COVID.
So many people woke up to the reality of state power during that period. No more "this couldn't possibly happen here" or "they'd never!".
And even more after COVID, once the propaganda relented and the veil dropped even further. You'd have to be really obtuse (or otherwise invested) to not get the memo by now.
The pool of people who got a taste of the oppressive medicine has extended from "fringe" / "criminal" to wide swathes of "normal", middle class population. A costly lesson for sure, but extremely valuable.
What a bizarre non-sequitur.
But why then complain when societies act? Having strong reactions to pandemics is historically normal nor can I see anything to wake up to in terms of oppression.
It only has value because we collectively agree it's valuable. But in itself it's not super useful, yes there are some industrial applications where it's better than other metals but if it was only valued on this basis it would be worth much, much less.
So unless you have a lot of aqua regia lying about in your house, it will remain exactly as is.
So gold isn't even a good inflation hedge: if you walked the streets of a failing economy (pick one: Argentina, Venezuela, Sri Lanka, there's plenty more) and tried to exchange gold for goods, you're not gonna get far (and will probably get mugged). You have to figure out how to convert that gold into something somebody will actually take, and that seems like the hard part.
When I look at the search trends in Argentina, I see Bitcoin in a very volatile longterm uptrend, Gold in a longterm downtrend and the Dollar being constantly a distant third:
https://trends.google.de/trends/explore?date=all&geo=AR&q=go...
Over the 20 years which the Peso has been devaluing, Bitcoin has outpaced the others by far in terms of searches.
What other indicators could we look at to get a better picture?
> and people are flocking to ... US Dollars. Not gold,
The search trends are the same for Dollar vs Bitcoin. Strongly in favor of Bitcoin.
Also in Argentina it's "dólar," not "dollar": https://trends.google.com/trends/explore?date=all&geo=AR&q=g...
Having spent enough time in the country people buy dollars to save money, there is no other way except investing in real estate and other large investments that are typically only available to people that are already rich.
https://trends.google.com/trends/explore?date=all&geo=AR&q=g...
It’s the same with dollars in places where it’s an actively used alternative to devaluating national currencies. You don’t search for “dollar” online, you just buy and sell in the street and use it to pay for things directly.
There are a variety of dollars, the one most people talk about is the "blue" (meaning black market). It trades for twice the official rate, but since you can also sell it at around that price it doesn't impact you that much when you're saving in it. It does hurt when you want to spend that money when for example traveling abroad.
Dollar means liquidity, stability and "money in pocket". Dollar inflation is nothing compared to Peso inflation
Bitcoin can help with some of those aspects but with much less liquidity and more volatility.
https://www.bloomberg.com/news/articles/2023-09-27/chinese-g...
Depends how you look at that picture. Let me ask this, if 100 people buy bitcoins and 100 people buy the equivalent dollar value, what proportion of each group will generally be checking how much their purchase is worth on a daily basis?
Not even "Messi" can beat the "dolar blue"
While I was there last year nobody wanted the local currency, everyone wanted you to pay in Euros.
>Turkey is richest country on the planet due to bitcoin ownership.
You must understand: Most Americans are not accustomed to shoving a third party currency under their mattress, or buying physical gold. The phenomenon of hyperinflation is foreign to them, and there's a steep learning curve.
The actual significance of this is that metal is being offered at a "blue dollar" rate by one of the three largest retailers in America. Prior to there being any concept of blue dollars here. This is going to influence spot prices. The people buying this are too stupid to even go to their local coin dealer. (Which I do, sometimes, go to my local coin dealer - and trust me - the people there to buy are generally pretty stupid).
If I had an hour, I'd like to expound on the significance of Americans buying precious metal at a loss through a giant vertical monopoly. But I'll leave it at the fact that they seem to be starting to alert themselves to the one critical thing that has defined Argentinian inflation for the past 20 years: Bullshit figures from the government saying the currency is stabilized, at the same time as the government takes obvious punitive measures to curb inflation. This leads to distrust which leads to the demolition of the currency.
Argentines can take a 20% drop in the Peso with a morning medialuna. Americans have no fucking idea what's going on. Americans have barely begun to put together the networks to measure it - and is evidenced by Costco taking advantage here, Americans have absolutely no peer-to-peer ways of negotiating the value of a dollar against value anymore. That's quite a dangerous situation, because it means prices are psychologically still thought of as an "act of God" as opposed to any true understanding of who is outpacing whom.
Like I said, inflation and hyperinflation especially are a steep learning curve.
If I were living in BsAs, I'd begin looking for something else to put under the floorboards besides USD. And voting for that clown who wants to tie ARS to USD as if it was 1983 is probably like trying to get tickets to the Titanic right before it sinks. You can do better than resurrecting Menem's economy. (Then again, the Fernandez are even bigger clowns, which is why I refuse to engage in anyone's politics in Argentina).
The one thing that can reliably trigger inflation in almost any country is oil/gas shortages on the global market, and you can't hedge that with precious metals nor store a 20 year supply in your house.
I am convinced we are making a huge mistake by conflating shortage of raw material with general inflation.
If there was shortage of food tomorrow, the correct responce is not to raise interest rates - that would cause even greater problems and famine.
The correct responce is immediate intervention to expand supply - build greenhouses, accelerated permits, zero interest finance for agriculture, etc.
This issue will lead to disaster as climate change bites - we are only managing fictisious financial parameters and ignoring what is happening to physical atoms.
if you read the plea from the Argentine above.. they say "peer networks to measure value" .. it implies that the entire inflation is NOT one single number. It is in sector by sector, with local "shadows" .. In the USA, it is housing obviously in large populated areas, but also health care and the cost of a University education. Those measures have climbed triple digits while yes, petrol and candy-bars are the same.
not per year, but .. there are residential housing listings here in California that have doubled in not very long.. I think the point is, that price increases are not uniform.. and it is related to structural forces of money, as well as markets
> health care and the cost of a University education
See "Baumol cost disease" - things which require highly skilled human inputs tend to get more expensive as automation makes everything else cheaper.
First of all, there's no evidence it's going down. Secondly, 10% is a wild figure. That's far over the breach for the population to begin to alter their behaviour by either hoarding or spending.
My point was, the mentality of coping with even 10% inflation is very foreign to Americans. But it's a learned skill, and people will learn it. When they do, it will resemble Argentina during the 10% phases (2003-2012 for instance). That's not necessarily terrible if you're coming down from 100%, but it's a brand new experience that Americans haven't come around to.
And it does a lot of very weird things to your politics.
It makes everything more populist far-right or far-left than it would need to be otherwise. It feeds into conspiratorial thinking. It is a regressive tax.
10% is a HUGE regressive tax right now on American citizens, and it's kind of a miracle that they haven't rioted more.
https://www.statista.com/statistics/273418/unadjusted-monthl...
Prices won't go down, but the rate of change of prices can go down.
> begin to alter their behaviour by either hoarding or spending.
Median savings is not huge: https://www.usnews.com/banking/articles/the-average-savings-...
Not to mention that middle America has fixed rate 30 year mortgages, an absolutely extraordinary product that means their payments are fixed in nominal dollars for a huge length of time. So if they get a raise that keeps up with inflation, inflation actually makes them "richer".
The effects are largely dominated by gas and energy prices, which Americans really will get upset over but seem to be recovering. I don't think there's any realistic way you can prevent against 10% gas price jumps and still have a free market.
Anyway, hoarding gold is not a natural behavior for a population at 10% inflation. It's natural for a population that distrusts the government and the financial markets. Inflation by itself pushes people into banks.
Banks are the main place you find those.
I use bank to accept revenue and transfer it to brokerage houses where it sits in highly liquid money market with better returns than bank savings.
Also, most of the world, including western Europe, has been experiencing >8% inflation rates.
Firstly the bars are being sold only a couple of percentage points above spot. This is a perfectly normal price for decent bars or coins in small sizes.
Secondly the 'blue dollar' concept refers to the fact that Argentines are restricted from buying more than a certain amount of US dollars. They pay much higher prices to buy dollars illegally. US citizens can buy as much gold as they like, and Costco is not an underground or illicit market.
LOL. What the US has is in no way, shape, or form hyperinflation. I've lived in a place with hyperinflation and less than 10% ain't it, chief :-)
Everything must be a sign. Strong job figures? Those are a precursor to hyperinflation. More mortgages fail than average? Hyperinflation on the horizon. Trump gets elected? He'll certainly cause hyperinflation. Trump loses? Democrat policies lead to hyperinflation.
They're not capable of understanding that they're wrong. JWs for example believe that the end of the world is extremely imminent... and it has been for over a hundred years. I know JWs who were taught as kids that their grandparents would live to see "God's Kingdom" and now, having lost those grandparents, they're still preaching the same nonsense and their own grandkids will be brought up to do the same.
I've seen a surprising amount of vaccine denialism, xenophobia, unsubstantiated pop Econ takes, Peter Zeihan bullshit, etc.
YC should just cut the cord on this forum tbh. It's not about "Hackers" or "News" anymore.
That said, you may be correct in that the voices have gotten louder. Also, the Covid conspiracy stuff drives me up the wall, and I didn’t remember older HN being like that.
It was stuff like mass surveillance, the TSA, etc. Went away after Snowden.
It's a marketing tool for them, always was. Probably fairly cheap to run, too.
I appreciate this place.
Does that mean that I don't believe this country is trending - psychologically in terms of its money supply - toward an Argentine way of thinking and battling?
To become Argentine isn't a total collapse in any sense. It's the disappearance of trust in the currency - on and off, slowly, over years - without actually ceasing to use the currency for day to day transactions. That is what I'm referring to, and that is what is indicated by people buying gold bars at Costco. So yes, I agree that there isn't a better economy or market to put my money in. But that's not a ringing endorsement, either.
[edit] Also, to portray what I made as a fairly nuanced argument about Americans losing faith in the dollar, as if I were a Watchtower devotee or a maniacal doomsday conspiracy theorist, is disingenuous, and a poor-faith argument.
Truly, you don't really get how it works in Argentina or how similar it is to 10% inflation here, unless / until it were to hit 20% inflation here, and smart people would begin to look at what the dynamics were in a similar scenario, in another western country, and how they played out economically and politically. It's something you should look at whether you believe it's possible here or not. There's a vast degree of hubris associated with your declaration that it can't happen in America.
But since neither becoming a Gleisner Robot nor Polis Citizenship are possible for me it's futile to spend time worrying about a nearby Gamma Ray burst. If it happens I would likely die instantly, but even if not there's no reason to plan for that.
I care about contingency planning a great deal but it makes no sense to plan for events which are both extremely unlikely and very difficult to successfully ameliorate.
It’s just irrelevant since you don’t need anything even approaching hyperinflation to have real world impact on people, and the real wage loss over the past several years is clearly in that category.
Not hyperinflation.
Words mean stuff. Hyperinflation leads to situations which the U.S. is nowhere near experiencing.
>>Like I said, inflation and hyperinflation especially are a steep learning curve.
Costco occasionally sells gold below spot if Reddit is to be believed. Most of the time it's right around spot. These 1oz bars were going for $1900 give or take, which is spot give or take. It's fairly common to see a small ~$50 ish premium on small quantities like this, around 2-3%.
Costco is also not a monopoly, and it's not really vertically integrated - these bars come from PAMP, a Swiss company.
You can get gold for exactly spot if you have a lot of money - just buy a futures contract and stand for delivery.
Spot on. There doesn't have to be a conspiracy. Like entities with like goals and finite ways to maximize will follow similar or like paths.
The example I like to use are starlings (birds) and murmurations. Obviously, the birds aren't conspiring in any way. And yet they magically move in sync. Business competitors can do the same. So do political parties.
It's not a conspiracy. It's murmuration.
p.s. There's actually a more scientific term. I think it's in the math theory field about the study of such patterns. Starlings are simply the goto example.
https://m.youtube.com/watch?v=uV54oa0SyMc&pp=ygUVc3Rhcmxpbmd...
Yes; flocking behavior is sufficient to explain how two or three supposed competitors can simulate a free market while profiting from monopolistic behavior. And it's also a fantastically nifty adaptation to allow any one entity to skirt the legislative hammer.
Technology and economies of scale favor Costco, and Walmart and etc. And people obviously like the low prices due to the economies of scale.
Regulation. Be it local, state and/or federal. The larger the organization, the more resources it has to mitigate / remedy such friction.
The irony? Regulation is also self-serving to gov in the sense it perpetuates ththe gov's need to prove it needs to exit, "create more jobs", etc. But that's another discussion for another day.
Two, lack of national *affordable* universal healthcare. Again, larger companies are better able to fill this gap, offer the benefit, and thus draw better employees, etc.
Wasn't Amazon just sued by the FTC due to anticompetitive practices?
Because they operate with 2% and 3% profit margins.
How much better do you think the prices can get for buyers?
>they do vertically control everything Kirkland from mayonnaise to roast chicken.
No, they do not. They hire other businesses to make everything that is branded Kirkland. They do not own any factories or poultry farms.
If anything, Costco spreads horizontally. They sell groceries, car tires and batteries, medicines (pharmacy), clothing, electronics, etc.
I am more interested in when Costco got into the gold mining business.
Gold hoarding wasn't much of a Chinese thing, and Indian gold purchases were a mix of regional biases (South Indian families seemed to purchase way more gold than equally well off North Indian families) and tend to skew more towards jewelery (why buy a store of wealth when you can buy a store of wealth and show off to the other aunties as well).
This is just being used to take advantage of deflated consumer expectations, as the article itself said
As someone who is studying economics in Argentina... You're pretty much the polar opposite of Argentina when it comes to the economy.
It is nothing like Argentina.
Inflation in America is not, and was not anywhere in this post-Covid episode, worse than in any other developed nation except Japan, which has so many problems hardly anyone will want to use it as a point of reference. U.S. economy is in better shape than almost any other advanced nation (and poor countries may be doing better but exactly because they are poor, they are playing technology catch-up, once they are caught up they have no avenues for quick growth and are stuck on Eastern European level). It is both currently richer, and grows faster, and is more stable, and provides more ways for an everyday, layman person to invest. Europeans don't buy stocks of European companies - because they know those companies are ridden with protectionist rules and omnipowerful unions - in all of which they actively, and cynically, participate - and will never give a good return. They buy American stocks.
America is virtually insulated from global warming because it's so big and diverse: some places may be wrecked but others will even win - no other nation is like that. It is virtually insulated from potential wars or invasions due to protection of the oceans. It is safe from any demographic issues because it has a guaranteed stream of immigrants with a lot more brains and money than any other country can hope attracting. It has an attitude to politics where people don't expect politicians to do much, apart from entertaining them, an expectation current generation of politicians fulfils brilliantly. Because there is no way America can be wrecked by politicians NOT doing something (as everything was built from the ground up with exactly that expectation - the government not doing anything), only threat comes from government actuallY DOING very wrong things - but American political system is built to very effectively prevent that.
All in all, comparing America to other rich places, it is evidently the best place to be for the rest of XXI century, at least as long as you have cash.
Would it be the same reasons african americans rejected the covid shots in greater numbers than the rest of the US population?
Maybe they perceive something "culturally" , or maybe something historically....which has not been forgotten?
Possibly being a reserve currencies adds an additional burden to US policymakers, so they can't always take the easy way out.
Or, it’s a novelty item to get PR buzz.
There's been a huge increase in ads about "buying hold to protect yourself" instead of buying US government bonds, that will actually make you money, because these grifters feed off fear and there's plenty of people there that will believe in it. These people will all lose money on this gold when they decide to sell it.
It's clear that it's "wild" in the sense that everyone in the world pegs their economy to USD, and as long as you expect that to continue you have nothing to worry about. Fundamentally, though, in its divided politics and its willingness to oscillate between propping up the economy and going hog-wild with privatization, the US is the same as Argentina and has been for a long time. The only difference is the ability to project military power and enforce the value of its currency through bribery and fear; Argentina doesn't have that ability. (Nor would we think it would be great for the free market if she did).
The US has recently been moving on the exact opposite direction from hyperinflation. At least on the short term, they don't have exploding debits, they are removing money from the economy, and have a concerned monetary regulator.
This is a marker of a coming recession. The spikes happen after recessions begin, and it's bizarre that it's been so low for so long: https://fred.stlouisfed.org/series/UNRATE
Not exactly the same thing everyone's talking about here, but "historically low unemployment" isn't exactly a good thing overall - IIRC the theory behind why it signals a coming recession is something like "reduced job mobility because people are afraid of losing their jobs", because it only counts people who are unemployed and looking for a job.
The only thing Costco has a monopoly on is $1.50 hotdogs. Also, inflation in the US has dropped by more than half in the last year. I think this is the opposite of countries like Argentina.
You need coins. You can't walk around with a gold bar. I would say silver coins to keep the value down, too.
As a "my government made our money useless" back up. USD cash are good too unless you are American, obviously.
I think that's where you first get into "some other governments money may be less useless" as a first stage backup. Precious metals in direct ownership are really a hedge against all or most other governments money collapsing.
Until you reach a global societal collapse, having gold in your possession seems like a negative ROI and I wonder if, should that case happen, would precious metals again become the medium of exchange or something else (peoples' opinions have changed and a fist full of diamonds might not be as valuable to me as say fresh drinking water should such a thing happen). It would likely depend on the cause of global collapse and what people consider valuable (obviously, but it probably needs stated).
Precious metals seem to be a good medium of exchange historically only at a certain level of assumed societal infrastructure, similar to our fiat currencies. Cavemen and small tribes cared little of precious metals and would rather trade land, access rights, livestock, etc.
They are not placing fake gold into real packaging. They are manufacturing the counterfiet packaging themselves.
Gold-plated lead would instantly be discovered if it was measured by weight AND dimensions.
That also makes them good speculative assets fwiw
Investing in gold as a hedge for the collapse of society is imo a really piss-poor idea. Either invest in stuff you can use (i.e. food) or stuff that will be demand (Ham radios, firearms). Gold is just not going to be the future medium of currency there isn't enough of it in practical sized values.
[1]: https://en.wikipedia.org/wiki/History_of_money#Overview
Ham radio is only useful if you can power it and find someone else with one who can also power it, my guess not enough people will have them to be useful. firearms are only useful if you have ammo - while you can make bullets and black power it is hard to say if it is worth it. I doubt there will be much firearm trade unless there is an ammo manufacturing (no longer society collapse - though a much more likely scenereo) - people who have ammo will keep the guns that go with it.
I'm not disagreeing that there are plenty of things other than gold to hold onto. However gold is still a reasonable choice for post disaster trade for the same reasons society settled on it in the first place. (note that society also used copper and silver for trade)
Roman currency (both the coinage and the numeric value promixal to goods) lasted for years after the empire fell. It was just easier to use that relative value, and rely on local credit
> "society will have broken down far enough that even the gold will be relatively worthless and the predominant goods of choice will be cans of dog food and beans.
it absolutely was peaceful, especially in those two countries.
Again, yes, it was peaceful BETWEEN the US ans UK, but your thesis that the primary global currency can collapse peacefully without a catastrophic global crisis is... well, picking the transition of the Pound to make that point is not a choice I would have gone with.
Now that same kind of dinner can still be had for the same silver dollar, but the amount of gold in the small 1923 gold eagle[0] would be enough to serve 30 today, not merely the 10 diners of 100 years ago.
And some of these are nice restaurants.
Today if your dollar does not contain the full ounce of silver it was originally intended to, and all you have is a $1 bank note instead, it still buys a kid-sized ice cream cone at McDonald's. Now sometimes only during special promotions depending on market.
[0] Regular ordinary legal tender, but were all confiscated by the government because they were gold in 1933, when the ownership of gold by Americans was outlawed until decades later (only after its backing of the dollar was discontinued).
This has been (more or less) the standard since like forever, for at least several thousand of years including in major world's empires including the Greek, Persian, Roman (Rome and Byzantine), Islamic (Rashidun, Umayyad, Abbasid, Ottoman) and British Empire until 19th century where bimetallic currency namely silver coin (dirham) and gold coin (dinar) were pervasive.
Fun facts, the word dirham in Islamic empire is derived from the word drachma with the same meaning in Greek, while dinar is derived from the Roman word denarius.
When you try to do both, you end up with situations where the government gets incentivized to take a metal that's fairly low value, and stamp a design into it to infuse it with new value. Silver bullion in the 1880s that might be worth 60 cents an ounce suddenly went up to a buck and change when you turned it into a Morgan or Trade Dollar. I suspect the introduction of the $20 gold piece in 1849 (and possibly the $3 in 1854) were in part to sop up a glut on the gold market.
We hyperinflate the currency by printing $trillllions a year and hading it out to countries at war, businesses that have failed and defending the oceans.
USD has already been hyperinflated, its just the affects are being felt slowly as the money "trickles down" from the 1% to the rest of us.
It's why collectables, real estate and such were the first assets to inflate, because that's what the rich buy, food inflation is much slower.
Hyperinflation is coming, I've been saying it and buying gold since QE1 back in '08.
It probably won’t come to that but we don’t know. And uncertainty is bad for business.
unless we agree for it not to. it took faith in a social structure to put the system together, and as long as it's maintained, it will stay together.
there's likely no invisible hand that builds and then ruins all of our achievements (unless we want to believe there is one (which makes it just us again in the end))
I'm not sure what makes you feel that way. Gold and Bitcoin are up against the dollar in the past decade, and by a significant margin. Bitcoin is up ~225x against the dollar. Gold is up ~50x against the dollar going back five decades. The US dollar is pretty terrible at holding value.
You could also find individual stocks or maybe even the S&P500 and compare those to the dollar as well (and to each other).
Gold you can't travel with (weight and loss due to theft and also probably actually illegal) and is also not accessible, and Bitcoin you can't buy a coffee with. Other available crypto currencies just do worse jobs than Bitcoin or dollars at their respective functions.
The key here is to understand that monetary instruments have pros/cons. Dollars have the con that they aren't a great store of value (and this is by design). Dollars have the pro that they are widely accepted, hold their value in the short term (i.e. not volatile), and are highly liquid. Bitcoin has the pro that it's a great store of value, but has cons like inability to transact. Stocks are liquid but volatile, etc.
Seriously look at the last 10 year chart of Bitcoin vs USD (or if you want purchasing power) - its far, far too volatile to be a store of value.
That's not the case for most people in most countries. There are billions of people who are not even able to open a bank account, let alone a US stock brokerage account. Bitcoin and gold are way more accessible to the average person.
I agree that every instrument has a different set of tradeoffs though.
Your bank knows you, perhaps for many years. Then you move country, or lose your phone, and suddenly they have forgotten you, and you face an uphill nightmare to retain your old accounts.
A share certificate should be a bearer asset, but it is not accepted anywhere outside the original jurisdiction (e.g. EEA for UK/European shares).
Which country? Last week I travelled on planes in USA and may have carried 35 pounds of silver coin, about a pound of gold coin, and >$10k cash. No problems other than being careful putting bag in overhead bin.
Travelling in/out of countries like Turkey with metal in carry-on has always been easy. One time the screener was curious and wanted to see some coin, but no problem.
Diversified bearer instruments are a prudent way to proceed into the coming government chaos in next ten years.
> Well you can sell the stock and convert it into dollars
How well did that work the entire week after 9/11?
Shipping valuables as insured cargo is another option.
That happens with account balances in USA. Try to fight an account seizure after the fact in courts in USA, and be prepared to lose.
Tangible items including metal are diversification, and bitcoin and ethereum are incredible across borders.
Assets are assets.
Claiming that an asset is better than a currency because it’s better at what assets are supposed to do and currencies are explicitly not supposed to do is strange to say the least.
Currency is exceptionally liquid (interchangeable) and nearly-universally accepted within a particular region.
Stocks, bonds, and other financialised instruments tend to be better inflation hedges, as currency will, does, and should inflate and deflate to meet actual transaction needs, and to dilute excessively burdensome debts.
Real estate is exceptionally durable, tends to hold value well (excepting speculative bubbles), and serves excellently as collateral for debt. Other long-term tangible property (e.g., industrial plant and equipment) can play a similar role.
Commodities tend to be intermediate between cash and other forms of financialised instruments, generally having inherent liquidity (that is, the commodity can be sold for use-value), as well as its investment role.
Collectables ranging from fine arts to wines to luxury automobiles tend to have hold value well (again, modulo speculative bubbles), and are both more readily stored and transported than real estate.
Cryptocurrencies tend to most strongly resemble the latter, in both their intrinsic durability (which is NOT the same as price stability), and their portability, which is to say that they serve as a highly effective way of moving financial wealth between jurisdictions, often without any external visibility, though of course blockchain transactions, like diamonds, are forever.
Power and ATMs were out for two weeks on Puerto Rico, which is basically run by the USA. Maybe keep a couple weeks of cash under the mattress.
https://www.cnn.com/2022/10/01/us/hurricane-fiona-puerto-ric...
That's correct. Almost everything beats the US dollar (except other fiat currencies).
I just mentioned one: gold. It's a bit early to tell for Bitcoin, of course it's probably not going to be doing 225x every decade, but I could see it holding its value better than the US dollar does.
Bitcoin we can come back to in another 150 years or so.
Interesting, I didn't know that. On the other hand, it's hard to imagine what other asset would have successfully preserved its value all the way back to the Middle Ages. Certainly not company shares. Real estate maybe? Although that would require maintaining ownership through numerous wars, revolutions and tax regimes.
Same with gold, buy low and sell high.
But don’t worry, there’s an entire scam industry (the other thing you mention) built almost entirely on people not understanding the difference between an asset and a currency and the almost diametrically opposite roles and purposes of the two.
Not because US bills are used in SE Asia or other places but because big transactions (like oil) are done in USD.
Within 48 hours I can easily convert my precious metal to bitcoin, cash or get a check. People's general fear of holding and using gold seems to be very similar to the unfounded concerns with Bitcoin. I think people just don't trust themselves with money.
So imagine the cognitive dissonance when a sizable "team" picks a product that's not part of the perceived friendly and safe. These "alternative" products also require responsibility without anyone else to blame but yourself for mistakes.
They are for paying off the border guard when a family member does not have the right docs or the low level soldier checking lottery numbers to see if you can get on the escape vehicle or enter the bunker.
These are real “world is going to fall apart” hedges. I am not expecting a crisis of that level in my neighbourhood but they have certainly happened before ( crossing borders in WWII took a few diamond earrings perhaps ) and there are risks now that are bigger than ever.
You can own gold mines on paper, but gold, only in hand.
There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.
Although I’m not sure if Costco buyers are thinking like that.
very good sales pitch!
>The ratio of iron-ore derivatives to physical trading volume was about 25 times, far lower than the 80-100 time for more mature commodities such as gold and copper, according to a study by Hong Kong Exchanges & Clearing.
https://www.bloomberg.com/professional/blog/expect-chinas-fu...
Silver is quite a lot worse btw
Might be worth pointing out that this isnt surprising given the activity of speculators in the market. Without markets would get cornered for investment and industry would cease.
edit1: There is however also an incentive to keep individuals from investing into precious metals due to monetary considerations. Derivate induced volatility is one way to do that. https://wikileaks.org/plusd/cables/1974LONDON16154_b.html
edit2: Also worth considering is that the large central bank holdings can and will be loaned out to maintain price stability if push comes to shove and gold were to rise drastically.
Paper gold is something like the gold ETFs where a share represents gold in the fund’s vault. If those were actually fraudulent in reserves, then you would have a point.
Every commodity that has a futures and options market will have a huge ratio of derivatives to the underlying. That’s the nature of producers and consumers locking in prices and speculators getting in between.
I also didnt disagree with derivative overhang being normal. Not sure why you thought it necessary to repeat.
This one even lets you convert: https://www.vaneck.com/us/en/education/investment-ideas/phys...
I thought it necessary to spell it out because your understanding is clearly based on the false assumption that most of the gold investments aren’t backed.
https://www.gold.org/goldhub/gold-focus/2021/06/basel-iii-an...
Or directly from the LBMA:
https://cdn.lbma.org.uk/downloads/Pages/NSFR-PRA-Letter-fina... https://www.lbma.org.uk/articles/pra-clearing-banks-may-now-...
This is not to say that all ETFs work this way. I believe Xetra is one example of being fully physically backed. But this naturally increases running cost due to storage. Last i checked i believe you pay in the rough region of 0.1% a year in storage cost at the reputable physical gold bullion storage sites as a large customers (tons / room). That sums up. This also explains why physical copper is not something you can easily invest in.
But again, this kind of misses the point, i would really appreciate a definition of paper differing from backed by derivatives. I think you might be onto something here, i ran into this argument a few times now so i believe i might be missing something.
I would also like to reiterate that i do not share the conclusion the initial post made about run away gold prices. I elaborated on that in the other posts.
Sorry for the late edits, had to double check the numbers.
A /GC futures contract—-even with physical settlement—- is not paper gold because two parties can create the contract without any actual gold existing anywhere.
Which doesn't mean ETFs like GLD are not real. It just means that if I say I'll bet you the price goes up, we settle the bet at $100 for each dollar the price moves, that is independent of us actually owning any gold.
Whats your definition of real if it doesnt involve physical gold? An ISIN existing? Sorry if that sounds passive aggressive, i cant figure out how else to word it.
There seems to be another definition of paper gold i am missing? I always assumed it was clear we are talking about derivatives.
>There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.
is probably not representative of what would happen. Derivative bets can come and go without really moving the spot price.
But again, due to golds importance from the monetary perspective, significant price increases are not going to happen. It could be seen as currencies devaluing, thus lending out central bank gold reserved to achieve price stability is very much on the table. I believe it was Greenspan that talked about this in the past.
¹ https://www.reuters.com/article/jp-morgan-spoofing-penalty-i...
Those cancel each other. The important number is how it compares to the net amount. I don't think anybody does fractional reserves of commodities.
That certificate ensures the commodity is mine even if the holder gets bankrupt or some other disaster. Not having it there would be fraud, and my government does go around checking it.
I have a quite strong suspicion that this is universal. But well, I haven't checked this.
an ETF backed by physical gold. Probably safer and cheaper than getting bars from Costco.
And a 1 oz Krugerrand or Gold Eagle is about $20,000. If you can afford enough volume of those that it’s difficult to secure them, you can afford to secure them.
We took it round to the old owners new house and passed it all over. They seemed happy. I think I'd have struggled to keep it the law not withstanding.
Three months later we found a box of (from what I am told, illegal, modified) small arms bullets hidden behind the wardrobe. We handed that into the police.
Ofcourse in the "developed world" the problem is, one fuckhead will show up, who wants to own all the cows, for no logically reason other than he just has too. Naturally gold wont work.
My friend in Vietnam was saying how it wasn’t that long ago (10-20 years maybe?) when property was purchased directly with gold talens.
You exchanged Vietnamese dong for gold, then transferred that to the seller.
I assume it was done to avoid the crazy inflation and concern over validating that a massive stack of bills didn’t include counterfeits. And the lack of foreign currency to convert to.
Personally I think the prices might be to high and a drop is coming. To keep the market moving someone is now trying to create a new market segment and is attempting to pull in new customers, apparently via Costco. This is either to prevent a slump in sales or to offload gold holdings before the price starts dropping.
E.g. maybe one day the CIA will believe very strongly that you are a terrorist. In that situation a kilo of gold might be extremely useful!
Actually this is probably an even stronger case - gold will lose almost as much value as money in the case of economic collapse. Whereas wanted terrorists can probably still get a fairly decent price.
So if you really want to prepare for that (which should be like step 156 in terms of prepping), the right solution after you have all your direct physical needs (canned food, medicine, etc.) is simply a cash stockpile.
That is, it's not a hedge against inflation, it's a hedge against financial system instability/collapse of which severe inflation can be a harbinger.
Every kind of ownership comes with "risks". It is stupidity not to own gold "directly". Buying a gold ETF is likely a bad idea like having your cryptocurrencies not under personal control.
Precious metals ETF charge a yearly fee. A buddy of mine once developed a financial instrument, where the ETF really owns the metal and does not mimic its spot price but also pays a dividend. (And yes, it was legit and a great idea)
They loan it out.
If the dividend were also a function of volume & prices of (filled) ETF orders, it could tolerate up to 100% loss.
But that doesn't account for the 'I said precious metals, not gold' hint.
0: https://www.reddit.com/r/Costco/comments/16tae6a/how_does_co...
Directly-held gold is mostly a scam. In good times, vault gold trades at a premium. (Like diamonds, try to sell your ingot of gold for anywhere close to commodity spot.) In bad times, someone will stab you for it.
Unless you have $100+ million, where you can charter your own logistics outside government-sanction lines to e.g. aerolift you [1], your family and your gold across national borders, directly-held gold isn’t doing anything for you.
There are vanishingly few cases where your vault-held gold certificates are valueless while your directly-held gold has value.
[1] Also, news flash, when dictators flee they carry dollars. Gold is heavy and traceable if you’re using proper bars.
In any situation where it might be relevant, how are you going to sell your gold?
For example, if you bought one of those bars right now, how would you then sell that bar again right now?
And, if things really are completely collapsing, nobody wants gold. They'll want something much more immediately useful--food, clothing, ammunition, etc.
I did look at this to see if it was cheaper than any jewelrymaking gold I could buy, but the prices are bang on identical per ounce.
But presumably if the shit hits the fan and the USD is worthless, it’s a form of trade.
I don’t disagree not a great one. My biggest issue is if you want to buy food what do you do with a $2,000 piece of gold? Buy $2000 in food? You can’t really divide it up (a random chunk of gold is much less valuable than a minted coin).
I'm not sure I buy that. Barter for an intermediary is fundamentally useful. In a case of societal collapse, people with food/clothing/ammunition--or people who can provide useful services (like driving me to the nearest border) aren't going to want more food/clothing/ammunition--they're going to want something fungible that they can trade for what they need!
So, sure, there's probably some rare scenario where gold (ideally in small, easily verifiable discrete units, not big bars) is useful.
I doubt you will find any unbiased opinion. Its important to remember that economists arent solely focused on the IS state. Its not a science, its perception management. The narrative is self fulfilling.
I really enjoy the npr article on the Brazilian inflation on this https://www.npr.org/sections/money/2010/10/04/130329523/how-...
The tldr is that the economy is what you think it to be.
Unless they are too incompetent or corrupt to keep the ship sailing. Which you could also reword into the problem becoming too complex and the process missing means to counter steer.
Especially with the later framing it becomes clear that one might have unrealistic expectations for the process the problem got delegated to. Stuff is complicated and checks and balances in form of the fourth estate are currently dysfunction due to a lack of a financing.
Success in the market as far as selling it to retail is more a demonstration at how successful certain elements in society have been peddling fear.
Re inflation it has historically been good at being fairly constant in value in real terms which is not usually what you actually want in an investment - you want them to go up.
Here's the famous graph from Stocks for the Long Run with the 200 year track record https://occaminvesting.co.uk/wp-content/uploads/2021/01/Stoc...
That shows stocks as the best, though for a reasonably enterprising private investor rental property probably wins.
Something you can actually do something with?
Televisions, video game consoles, etc.
A 1/2 oz gold coin is a superior investment to a PlayStation 5. Sure, it won't generate any yield, and has some degree of illiquidity, but it won't waste N hours per day of your limited, and rapidly expiring life, that you could have spent on more productive pursuits.
Why people are distrusting those institutions, and on the US for all places... that's a question for sociology or psychology. I strongly suspect the social network cultural bubbles are behind this, but don't have much to say there.
(Anyway, I'm not an economist, but I've studied it a bit. This question is quite simple anyway, and it's something that has happened before, so it's pretty well covered.)
Current online price, $1930. Spot gold, $1872.59. So a little less than a $58 premium.
My credit card gives me 2% back, and my Costco membership 2% on top of that, for a total of 4%. I assume that Costco probably pays a bit more than 2% for card processing, and of course they're the ones actually paying me the 2% back from the membership.
So that's at least 4%, not including the minter's profits, shipping and security costs, warehouse worker wages and overhead, insurance, shrinkage, etc, which are surely at least a few percent more of the sales price.
But just 4% of $1930 is $77, meaning I would recognize a hypothetical profit in an immediate spot sale of $77 - $58 = $19 per bar. Costco's actual loss is certainly more than that, realistically probably more like $50+ per bar, or most likely $100+ per member.
Weird. The article mentions preppers, I guess they really want them as members.
https://www.fool.com/the-ascent/credit-cards/articles/why-do...
They actually secure a very nice low rate via their credit card policy
Credit card transaction fees in Europe are capped at 0.30%[1] and visa operates here.
[1] https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
In particular the articles talks about exemptions:
> provides for a limited number of exemptions, such as business cards used only for business expenses being charged directly to the account of the company;
You, and people who use such cards, do. But everyone else is having to pay for your cash back.
Costco's cashback is probably some variation of the same scheme, or a similar loyalty scheme.
So ultimately Costco only pays the processing fee of 0.4% or whatever.
But with the 4% you mention it makes a lot more sense.
Fake gold bars are common.
If you want to hold gold as a hedge against high inflation then you want "good delivery" gold, which stays in a vault with chain of custody records.
If the entire system collapsed then you should be holding food, not gold.
Or hoard bullets and high explosives to redirect food from the rubes who collected gold.
The things you do when you're young…
One of the strangest financial anecdotes of my life. To this day I wonder what the vendor thought seeing a literal child buying bars of silver bullion, then selling them at a 25% markup later.
Have you ever heard a precious metals ad? The line between cautious and paranoid can wear thin, and that's who the target market is.
While doing familial eldercare, I have to wear earplugs, to protect myself from the sensory overload.
India is a great source for beaten leaf gold - you can buy "books" of hand beaten tissue thin gold which is useful both for gilding idols and for other craftwork (eg: glassblowing).
With gold, IIRC, some 45% of annual extraction goes to jewelry {decoration | investment}, roughly 10% goes to actual 'practical' use, and the rest goes to pure investment hoarding.
In many ways the vast amounts of energy and resource spent on gold mining are wasted almost entirely just to have something shiny that is conventionally deemed 'precious' because it is shiny (and noble - doesn't react).
The total practical use of gold is about 12% of total gold (10% new gold per annum, 2% recycled gold) with 88% of gold going to some form of hoarding | possession.
Mother and Baby Kangaroo 2023 2oz Gold Bullion Coin
https://www.perthmint.com/shop/bullion/bullion-coins/mother-...
from the Perth Mint?
( Or Dillon Gage, Texas: https://dillongage.com/coins/perth-kangaroo/ )
Buy one for your mother and two for your girlfriend, they're so cute you'll want more!
Don't turn over if you're not into monarchies
Caveats when biting the gold: https://www.perthmint.com/news/media-announcements/corporate...
There are probably similar rules in other countries.
Also handy for reducing transfer taxes on house purchases - you can have a higly qualified QC (fancy lawyer) swear affidavits that they witnessed the purchase of a house for an absurdly low amount and therefore the required tax is correct despite being so low.
If a seller offers a house for $6,000,000 and an offer is made to pay $200,000 in legal tender of that country .. and the seller accepts ... what is the sales tax?
Is it calculated from the $200,000 in legal tender which was witnesed by officers of the highest standing, or is it calculated from the metal value of the coins ($6 million)?
You really don't want a tax advisor on this, you want an authoritive legal opinion.
It is a loophole that has been exploited in various countries at various times - but you'd want to be sure of current laws if you're tempted to go that route.
I can just imagine someone inheriting my coins and spending them for face value!
self-deprecating joke about your genes :)
https://www.perthmint.com/shop/bullion/bullion-coins/super-p...
The regent on the obverse is a standard feature of all Australian coins.
You can't eat it.
You can't use it as a tool.
You can't even buy groceries with it (well at least today. Point is: it's not a liquidity).
But yes, maybe you'll be able to make a profit in the future, by selling it to people who can't eat it or use it as a tool either. Or I guess trade it to save your life in a hypothetical future scenario.
It's just a weird way of keeping value. Wouldn't you rather buy a piece of land? At least you can pitch your tent or grow potatoes there.
Am I missing something?
Cash is how taxes, payments for state services, public workers salaries, and public investments are specified. If the goal of cash is to serve as money then those all on themselves already set very concrete measures of value.
Buying land requires maintenance, and probably comes with some ongoing tax implications.
You can buy and sell gold anytime at the bank (at least here in central Europe) just like any other currency.
So if you don't trust your own currency it kinda seems like a logical next step. Should the dollar crash it's likely gold won't crash at the same rate, at least not for long.
As an aside, unfortunately for Bob they have him dead to rights this time, there's not gonna be a hung jury.
In case of gold, part of the store costs is the fact that its not legal tender and direct gold ownership has several large obstacles. Not to mention gold coin where the cost to take that non-pure gold and convert it is expensive.
If you are looking at this buy a meal for a commodity trader and use that meal time to get an education on these issues before jumping into it!
"lost it"
"Mind if we search your house?"
"i've known you were going to ever since I bought the gold; knock yourself out. Just please don't disturb my antique collection of locked filing cabinets. They're all empty but the keys are in that big pile over there"
[ibid.]
(just don't buy new ones, you have to pay 20% VAT on those which is silly)
Ironically the plot of Goldfinger relies on something which no longer exists: capital controls. The evil Auric Goldfinger was trying to circumvent British control of the export of money by hiding gold in car panels.
This is very popular here because gold sovereigns here in greece are traditionally given as presents from close relatives on very important moments like marriage, child birth etc (i.e when a child is born its grandparents will give a gold sovereign to its parents)
>For example, the company markets a 150-serving emergency food preparedness kit that could come in handy, you know, just in case. Gold meshes with that type of product.
>“They’ve done their market research. I think it’s a very clever way to get their name in the news and have some great publicity
This is the crux of the trend. I actually pick up one of these food preparedness kits every time I make a trip to Costco. They have a 25 year shelf life and have 25 servings of food. At $60 each (in the store, the online price is higher for some reason), that's the cheapest insurance policy I can think of, I'll take it.
But really they are cashing in on the growing sense of uncertainty about the future that many Americans are feeling.
Shipping is included in the online price.
Over 100 years of the value being propped up by a social narrative alone. Boggles the mind. Reminds me of no-vote no-dividend stocks.
If you assume gold prices can fluctuate a few percent, one can imagine making profit purely through the credit card rewards.
Essentially credit card funded benefits.
I'm just imagining someone walking in and asking to return some items, then plonking five of these on the counter. Granted, From what I've heard, ~$10k sales/returns at costco are not that uncommon.
This is symmetrical / zero-sum, right?
Consumers are (allegedly) buying lots of gold for $x. And Costco is getting rid of lots of gold for $x.
If you sell the gold whole, I don't know of anyone that will buy it for it's true value in weight.
The best strategy for gold is buy and hold until the buyers will offer more than what someone bought it for.
IMHO, coins from reputable national mints are best b/c easy to verify w/o assay.
left with the knowledge of arguments about storing gold for collapse, and that i might be an idiot for preparing for a collapse. also have some knowledge of argument totally unrelated to "costco gold bars are selling out within hours"
luv u hacker news.
ps wut i do prepare for collapse ?
Going to wait for gold to drop as that's what always happens with HN topics like Bitcoin and Tesla and DropBox and so many others.
The next year buy it at half and hold for 10 years seems guaranteed.
Funny how Americans who voted Biden in probably still think they have 10% inflation when Inflation is almost 40%.
Going to be fun.
The price of a gold piece could be $1000USD or $100USD . But if it buys you a loaf at either point of time, has the gold changed in value?
I have a joke that I believe BTC is going to $1M USD. But my fear is that so is a price of bread.
To explain the joke, I'm suggesting that Bitcoin might hit $1M each, but that it will actually be nearly worthless compared to todays purchasing power (alongside the USD)
[citation needed]
[1] https://www.reuters.com/markets/commodities/central-banks-bo... [2] https://www.fiscal.treasury.gov/reports-statements/gold-repo...
The industry could counter these misgivings, by making the holdings publicly auditable, but chooses not to.
The supply of new gold at least is pretty high: https://twitter.com/LynAldenContact/status/17066072297915888...
Over a hundred years ago, that pan would have been something only for the most wealthy in the world.
Only a matter of time before the same happens to gold
https://en.m.wikipedia.org/wiki/Abundance_of_elements_in_Ear...
Gold is not hard to extract, so that won't happen with it. Instead it's hard to get in any form, so people can dig out more but the cost of extraction keeps increasing.
seems logical given the diminishing supply, suggesting some "peak gold".
is it rooted in fact thou? you know, could be that humanity just hasn't found as much and is underestimating the remaining quantity.
Today you can see this (subject to access | subscription) in industry Production All-in Sustaining Cost (AISC) Data
People write essays such as:
https://www.coindesk.com/markets/2014/06/28/under-the-micros...
and articles such as:
https://www.xetra-gold.com/en/gold-news/news/gold-production...
You can see decade long snapshots such as:
https://www.gold.org/goldhub/gold-focus/2023/04/gold-miners-...
which might convince you that gold is somehow cyclically hard to recover and the cost per unit ebbs and flows .. but the long term (50 year, 100 year) truth is that gold becomes increasingly more resource intensive to extract.
Which makes sense when you consider that it no longer just lies about on the surface in the same frequency as it once did (yes, you can still find surface nuggets .. but they are fewer and fewer).
If you want to cite wikipedia, you might want to cite the article on the history of aluminium, where it says in no uncertain terms that aluminium was more expensive than gold prior to the development of industrial refinement methods in the 19th century.
also in the article:
> Diamonds used to be exceedingly rare, until large deposits were discovered in the 1800s in South Africa. The British businessman and colonial government official Cecil Rhodes consolidated all South African diamond mining under the De Beers company, an effective monopoly which later was controlled by the Oppenheimer family. Over the years, De Beers managed to defend this monopoly against challenges from various upstarts, by hoarding diamonds when prices were low and flooding the market to destroy competitors
Gold has an important economic role as a means of exchange should currency collapse. So I wouldn't see it going anywhere anytime soon. Until maybe i have a gold skillet that I'm throwing out someday!