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Comment by Dig1t | Hacker News Reader

Looks like Great Depression, 1979/1980, and right after the Great Recession.

What is the significance of 79/80?

It was the most severe recession since the Great depression lol good times /s https://en.m.wikipedia.org/wiki/Early_1980s_recession

Good time to buy defense contractor stock because one way to get out of serious depressions/recession is a war.

And the presidential election is next year...

Those previous recessions were marked by high unemployment, right? But currently we have record low unemployment. Is the high unemployment on its way, or is this something new?

I guess it depends on how you define unemployment.

Over half of of employed people nowadays don't make enough to pay their fundamental bills and/or live paycheck to paycheck and have to take up huge debt to make it every month.

so while they technically have a "job"...is it really if it doesnt cover their bills?

classifying something as a job is extremely bullshitable.

I wonder how the US army feels about a South American venture this time? Given the things happening in Guyana.

Given how small the Venezuelan military is, I’d wager the Americans would see it as too easy.

What Guyana needs is to invite the British and American military in for a joint “training” exercise. The uk has a nice new aircraft carrier that could do with a shake down.

Gold is generally considered a hedge against inflation.

https://www.forbes.com/advisor/investing/gold-inflation-hedg...

And by bidding it up at the end of a period of inflation, those trying to hedge burned themselves. Same thing is happening now: inflation is back down to baseline, but people think it's high because prices are higher than they were (brains have trouble with reasoning based on derivatives of functions).

Basically gold is, as it always has been, a sucker's bet. All the people buying it now are probably going to lose money.

Yep. The key is to buy it 6 months ago, and then do everything you can to get others to continue buying in.

1979/80 wasn't the end of the inflation. Especially 1979.

But even later... there's a lag time in peoples' minds and, especially, emotions. When inflation has gone up to 10%, it's a huge surprise, but your mind is still back on 6% or 8%. When it comes back down to 10%, your mind is still on the 14% it was, not on the 6% or 8% it's (maybe) headed back to.

Since Nixon ended the convertibility of the US dollar to gold (at $35/oz) in 1971, the price of gold in dollars has increased at about 8% a year. The S&P 500 over that time frame has returned a bit over 10% a year. If gold has been a sucker's bet, stocks have been barely less of one.

Of course, the correlation between gold prices and stock prices is quite low, so a blended portfolio (occasionally rebalanced) would have outperformed a 100% allocation to either with less volatility.

You're probably being downvoted unfairly because of the reference to the fiat currency conspiracism. But to treat your actual point:

That's an extremely cherry-picked date. 1970 was the bottom a deep trough in gold prices. If you look just a few years in either direction, it was 50% higher. You would have had to aim your investment with shocking precision to even get close to stocks in terms of returns. If you look back to 1940, you'll see that gold has returned about 1.2% in real value, which is significantly less than bank interest. Gold has been losing money, on balance, in the power-war world.

See: https://www.macrotrends.net/1333/historical-gold-prices-100-...

It's a volatile asset, so you can always play games with dates to make it look like a good thing. But it's not. It's a sucker's bet, and I stand by that. Buy a mutual fund.

Yes, but that doesn't explain why didn't gold soar when inflation was far higher in the first half of 2022%

And it doesn't explain why gold is suddenly hitting all-time-highs right now, precisely when inflation is nearly back to pre-pandemic levels.

There are many hedges against inflation. Gold is more akin to a hedge against catastrophe. Unlike commodities or industrial shares, gold can be hidden and transported personally.

Is it these sort of buyers that have a major influence on the price though? (I don't know the answer.)

If you buy a large amount of gold on an exchange the physical gold often stays in the exact same vault, and someone just updates an ownership record.

Always buy and own gold (in decreasing priority):

(1) Physically in your custody in a secure place. Not always possible, e.g. digital nomad.

(2) Physical at a bullion dealer in a westernized country with a vaulting service that records your private ownership, so it is owned by you as property, in their custody, with a daily audit with your name on it, not as a financial liability of the vaulting company - i.e. outside the banking system, and not in a safe-deposit vault that restricts liability for precious metals.

(3) A financial instrument in a westernized country tied to audited physical holdings, e.g. Sprott Physical Gold, not GLD ETF, which is just manipulated paper fiction.

No other option - except perhaps some gold jewelry, which is not really secure, but can easily be worn when crossing borders (usually up to $10k without declaration, and above $10k is often easy, except at times of national panic/emergency/reset, whether real, imagined or fabricated to steal your gold).

Also be very careful about T&Cs for funding (2) & (3) through a joint account, even if your gold account is in your name only. If you get divorced, you may find that your ex owns half your gold, independent of any settlement, and ignoring any routing of the money from your pre-marriage wealth into your single-named gold account.

That is more of a myth than a reality. If you chart gold investment returns along with consumer price inflation since 1971 (when the US fully left the gold standard) it turns out that gold isn't a great inflation hedge. Other asset classes are probably a better choice for most investors.

It was a period of what was called "stagflation", economic stagnation combined with inflation. It was supposed to be impossible to have the two happen at once, and no one knew what the hell was going on. Gold seems attractive in periods of uncertainty.

~1980, ~2010, and ~2020 are the three times it was higher, inflation adjusted. The Great Depression era doesn't come close (and is also well outside of the 50 year window given).

Trading in gold was banned in 1933 in the United States. The price was set by the government at $35/oz. The ban wasn't lifted until 1974, at which time the price skyrocketed.

Interest rates spiked as the Fed tried to address inflation. Gold serves, in essence, as a short against paper currency. When inflation is running 14%, gold looks like a good alternative. So everyone was buying gold.

Volcker and stagflation. Rather than fix the economy by raising rates and being accused of politics, Fed kept rates artificially low (which, incidentally, attributed somewhat to the US political shift that year).

Here's a better way to look at it.

What was 65 years(retirement age) year before each of these.I'll do it for you.

So 1930 - 65 = 1865. The end of the American Civil war.

1979 - 65 = 1914. The end of WW1

2009 - 65 = 1944. The end of WW2

Each of these events correspond with a major baby boom post war and subsequent major retirement period. These financial crisis are a consequence of major war.

Economists figured this out ages ago and now understand how to prevent future recessions.

So how about covid?

2020 - 65 = 1955 end of korean war.

It was simple to predict "covid" and guess what I was invested in on January 2020. Large cap healthcare. Big box consumer staples. All the stuff that would stay open.

Also an interesting discovery. No amount of money printing keeps the economy afloat, you must let it crash.

2040 is the next big one for vietnam, but that was a long war. Might not be the same. Might be harder to predict.

There was an energy crisis related to unrest in Iran, the Iraqi invasion of Iran, and the oil output fluctuating as a result.

Peak blood lead levels.

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