Bitcoin biting the dust?

[TV and credit cards]

For the vast majority of people x86 processors have utility, gold does not, save for a small percentage in medical and aerospace.
To consider the value of something and not consider its utility to me is irrational.

 

[bilby]

For the vast majority of people x86 processors have utility, gold does not, save for a small percentage in medical and aerospace.
To consider the value of something and not consider its utility to me is irrational.

Indeed. And as humans are irrational, there's no particular reason why gold cannot remain valuable indefinitely - just as there is no particular reason why it should.

The market can remain irrational longer than you can remain solvent.

But there's certainly someting worrying about a commodity whose value is high, while vast quantities of the refined material sit unused in storage.

Which makes confidence in the idea that gold will never suffer a correction even more irrational. And as humans are irrational, probably also correct (at least for any timescale relevant to people currently alive).

Belief in gold is like belief in gods. It's not going away any time soon, but that doesn't mean we should believe any of the crap spouted by the evangelists.

 

[Swammerdami]

Which makes confidence in the idea that gold will never suffer a correction even more irrational.

Often your posts contain insights, or are at least amusing. For this reason I'll choose to give you credit, and assume you posted after a long session at some secret pleasure dungeon where a trainer in tantric disciplines turned your brain into mush, and left you incapable of rational cognition.

Nobody capable of posting on a message-board has the "idea" which I've reddened for emphasis. I almost wrote "nobody alive on the planet" but I suppose you could make a field trip to Tennessee or Oklahoma to prove me wrong, scrounging up someone in a loony-bin or Republican campaign headquarters who watches reruns of InfoWars all day and will espouse this "idea." However anyone like that you could scrounge up would be too imbecilic to actually scribble any message on an Internet venue.

I don't blame you for taking solace in the pleasure dungeon. With the downfall of Western Democracy in sight, escapism is almost a necessity. But ethanol or other drugs are not only less expensive than tantric training, but should leave you aware that your thinker is out of commission for a while. Or you might want to do what I do: Play a backgammon or chess match on-line to test whether your thinker is working before posting at IIDB and making a fool of yourself.

Although your implication that anyone thinks "gold will never suffer a correction" is absurd, I know that even when your cognition is working you lack comprehension about gold and its use as a hedge. Instead you seem to fall for some perverse exaggeration of the Law of the Excluded Middle. EITHER a person is "smart" and knows that gold is completely worthless and should all be taken to Mordor and cast into Mount Doom. OR the person is a moronic gold-bug who wants to sell his family into white slavery to buy gold leaf which he will consume for breakfast, lunch and dinner despite its poor caloric value. No middle ground for you!

And as humans are irrational, probably also correct (at least for any timescale relevant to people currently alive).

So the idea is not only irrational, but also correct? Please start a thread in Lounge and tell us about your experiences in that secret pleasure dungeon. I've never seen your brain as mushy as this!

But there's certainly someting worrying about a commodity whose value is high, while vast quantities of the refined material sit unused in storage.

As you yourself point out more than frequently, Central Banks can create unlimited amounts of non-gold money just by pushing electrons around inside a computer. True, there are only several trillion trillion septillion electrons available in the Earth's crust but through clever programming, electrons can be reused! For consistency, I suppose you treat electronic dollars as even more worthless than gold. (And that's not even counting the many billions of counterfeit C-notes printed by North Korea or Myanmar and floating around Asia.)

 

[bilby]

I apologise if your ego is somehow deeply invested in the idea that gold is "intrinsically valuable", but seriously, it's futile to be so defensive about your religion; I shall continue to mock it, even if you post insulting but contentless screeds deriding me for doing so.

Electronic dollars are valuable only because they are the only thing accepted as payment by the US government. If that stops, then they will be as worthless as gold.

Being intrinsically worthless and unlimited except by policy is not a bug, it's a feature. Any good choice of currency is useless for almost anything else. But unless the issuer accepts it in payment of taxes, it's useless period.

Gold is shit for use as money, because the issuer is "whoever stumbles across some". Its supply is independent of the size of the economy, so it deflates in times of growth and inflates during recessions; And it inflates whenever a new mine opens (or your galleons return from the New World laden with the stuff).

As long as you could pay taxes with gold, (or with dollars pegged to its value) it was money. As soon as you could pay taxes with fiat money, gold stopped neing money. Whether the population at large ever wakes up to that, remains to be seen, but if they do, the price of gold will crash.

You might note that this commentary is long on reasons, and short on insults; That should give any third parties reading this a basis for deciding which of us is the crazy one.

 

[Elixir]

Gold might not be intrinsically valuable, but it is consistently valued.
I don’t have the stomach for it, generally, for the reasons bilby cites. But it goes up over timespans of 10+ years, quite reliably. The reasons underpinning that fact might be irrational, but that doesn’t mean fickle or unreliable.



I think bilby is influenced by all those big nuggets just laying around in the Western Australia dirt.

 

[bilby]

Gold might not be intrinsically valuable, but it is consistently valued.
I don’t have the stomach for it, generally, for the reasons bilby cites. But it goes up over timespans of 10+ years, quite reliably. The reasons underpinning that fact might be irrational, but that doesn’t mean fickle or unreliable.

Sure; Like Islam, or Christianity, gold is hugely popular, and belief in it is highly resistant to reason or logic, so it's likely going to persist for centuries or even millennia.

Not a lot about gold makes sense, unless and until you understand that it's a religion. People like it for reasons they cannot articulate, they turn to it in times of trouble and uncertainty, and they become enraged when you disrespect it.

 

[bilby]

I think bilby is influenced by all those big nuggets just laying around in the Western Australia dirt.

It's a bloody long drive from here to Western Australia

Google maps says 31 hours. And that's just to the state border.

 

[Swammerdami]

I apologise if your ego is somehow deeply invested in the idea that gold is "intrinsically valuable", but seriously, it's futile to be so defensive about your religion; I shall continue to mock it, even if you post insulting but contentless screeds deriding me for doing so.

Wow, bilby! Doubling down on your confusion!

Do you see the sharp downturn beginning about 2013 in the graph Elixir just posted? This is what is meant by a price correction when intelligent people attempt to communicate with other intelligent people. Now let's look at what YOU wrote, and which provoked my laughter and my attempt to amuse you:

Which makes confidence in the idea that gold will never suffer a correction even more irrational.
And as humans are irrational, probably also correct (at least for any timescale relevant to people currently alive).

You assert, wrongly, that some people (presumably you include me) have confidence that a price correction will "never" occur. And then go on to assert, again wrongly, that that "irrational" idea is CORRECT.

In other words, the only one here denying the existence of the price correction beginning in 2013 is YOU.

Capische?

[Rant rant rant rant rant.]

Gold is shit for use as money.

[Rant rant rant rant rant.]

Your peculiar claim here is confused on two grounds:
(1) Nobody here, perhaps excepting our Libertarians, speaks of returning to the use of gold as money. Those who advocate keeping a small portion of one's investment portfolio in precious metals, advocate this as a Hedge. Start a new thread if Googling 'Hedge' just confuses you further.
(2) Although "shit" in your opinion, precious metals were used as money for five thousand years. (Yes, that's a '5' followed by three zeroes.) Experiments with paper money failed until

It was in 1661 that the private bank Stockholm Banco began replacing coins with banknotes, resulting in both Sweden's first banknotes and the world's first banknotes.

Amusingly(?), Sweden adopted paper money because it used, not gold or silver, but bulky copper as its precious-metal money. And the private bank Stockholm Banco pledged to redeem that paper money for copper on demand.

(The claim that the Swedish banknotes were the world's first is misleading. China had used paper money centuries earlier but, despite acceptance as taxes, the paper failed when government reneged on the promise to redeem with precious metals. And letters of credit functioned as a form of money in medieval Europe, successfully so due to the integrity of issuing private banks.)

You might note that this commentary is long on reasons, and short on insults; That should give any third parties reading this a basis for deciding which of us is the crazy one.

My intent was to amuse, not to insult. I thought you would grin and post some punny retraction when I pointed out that YOU are the only one here asserting that an idea (which you correctly call "irrational") was "correct." Instead YOU resort to insults.

Sigh.

 

[bilby]

My intent was to amuse, not to insult.

Then you failed.

 

[Bomb#20]

For the vast majority of people x86 processors have utility, gold does not, save for a small percentage in medical and aerospace.
To consider the value of something and not consider its utility to me is irrational.

x86 processors are valued for their own sake by a handful of hobbyists who are into building motherboards and bit-twiddling machine code -- about as many as the people who value gold for its own sake because they like hammering it into home-made jewelry. For the vast majority, x86 processors have utility only because people value them because people value them, in a virtuous circle: buying them because there are apps for it, and writing apps for it because people own them. Likewise, for the vast majority, gold has utility only because people value it because people value it, in a virtuous circle: buying it because there's an ecosystem for using it, and implementing the ecosystem for using it because people own it. Which begs the question, why do you regard using something to run apps as "utility", but regard using something to convince other people you have the ability to return favors and to protect yourself from being hurt by irresponsible or malicious government decisions as 'not utility"?

 

[southernhybrid]

Gold might not be intrinsically valuable, but it is consistently valued.
I don’t have the stomach for it, generally, for the reasons bilby cites. But it goes up over timespans of 10+ years, quite reliably. The reasons underpinning that fact might be irrational, but that doesn’t mean fickle or unreliable.

Sure; Like Islam, or Christianity, gold is hugely popular, and belief in it is highly resistant to reason or logic, so it's likely going to persist for centuries or even millennia.

Not a lot about gold makes sense, unless and until you understand that it's a religion. People like it for reasons they cannot articulate, they turn to it in times of trouble and uncertainty, and they become enraged when you disrespect it.

Since gold has been mentioned and I had 3 articles left to gift this month, let me share one I read this morning that explains why at least some people value gold.

https://www.nytimes.com/2024/11/28/...e_code=1.dU4.i_8j.ARz581uEqIxL&smid=url-share

As a trader, Ms. Aysoy said, she learned something critical about gold: “You need to hedge in this business. Otherwise, you won’t make it.”

Nearly 40 years later, Ms. Aysoy is once again shielding her business from the ups and downs of the gold market, this time as a buyer of the precious metal at a time when its price has been on a steep ascent. Over the past year, gold has broken record after record, reaching a new peak of $2,801.80 per ounce on Oct. 30. Despite declining somewhat in the wake of the U.S. presidential election, it is on track to break the $3,000 barrier, “but whether it comes this month or next year, we don’t know,” Jim Wyckoff, the senior market analyst for Kitco Metals, where he reports on precious metals and mining, said in a phone interview in late October.

“The latest acceleration came when the Federal Reserve unexpectedly cut interest rates by half a percent” in September, Mr. Wyckoff said. “Lower interest rates in the U.S. put pressure on the U.S. dollar and foreign exchanges, and that benefits the gold market because the dollar and gold prices typically trade in an inverse fashion.

Gold reminds me a bit of the stock market. It's hard to predict if it will increase or decrease because it depends on a lot of economic factors, but people will buy and sell it on a regular basis. Gold has been breaking record highs. No. I don't invest in gold, but I did sell some gold jewelry that I had inherited many years ago and made a nice little bit of cash. I have enough gold jewelry now to leave to my son or his kids, although I prefer Platinum jewelry and gold is usually less expensive than Platinum, but gold is higher this time around. So, regardless if you like jewelry or not, there will likely always be a market for gold because a lot of humans enjoy bright sparkly stuff. To each their own.

There are a lot of things that are valuable for no rational reason, like a banana taped to a wall pretending to be art.

I just thought the article was interesting when I read it this morning.

 

[TV and credit cards]

For the vast majority of people x86 processors have utility, gold does not, save for a small percentage in medical and aerospace.
To consider the value of something and not consider its utility to me is irrational.

x86 processors are valued for their own sake by a handful of hobbyists who are into building motherboards and bit-twiddling machine code -- about as many as the people who value gold for its own sake because they like hammering it into home-made jewelry. For the vast majority, x86 processors have utility only because people value them because people value them, in a virtuous circle: buying them because there are apps for it, and writing apps for it because people own them.

All right. I thought x86 processors were still the basic architecture of all PCs and what I was considering regarding their utility.

Likewise, for the vast majority, gold has utility only because people value it because people value it, in a virtuous circle: buying it because there's an ecosystem for using it, and implementing the ecosystem for using it because people own it.

Using it or holding it?

Which begs the question, why do you regard using something to run apps as "utility", but regard using something to convince other people you have the ability to return favors and to protect yourself from being hurt by irresponsible or malicious government decisions as 'not utility"?

In this do we paint a picture of a collapsed dollar and all that would ensue?

 

[Elixir]

Using it or holding it?

One of the overlooked properties of gold, vs say, x86 processors, is that you can make something out of gold, and it will only increase its value. As long as it’s still gold it’s worth its weight in gold - at minimum.

 

[robnisch]

Using it or holding it?

One of the overlooked properties of gold, vs say, x86 processors, is that you can make something out of gold, and it will only increase its value. As long as it’s still gold it’s worth its weight in gold - at minimum.

Gold is an unique metal. Why is it used in phones and computers? Why do so many of shops in the developing world buy your electronic scrap?

 

[bilby]

Gold is an unique metal.

So are all the others...

 

[Bomb#20]

Gold is an unique metal. Why is it used in phones and computers? Why do so many of shops in the developing world buy your electronic scrap?

Gold doesn't oxidize. When you bond most metals, for example copper, you have to take precautions to make sure when you heat up the wire to weld it or solder it you don't get an insulating layer of copper oxide forming on the surface you want to run electricity through. With gold wires you don't have to deal with that complication.

 

[Bomb#20]

For the vast majority of people x86 processors have utility, gold does not, save for a small percentage in medical and aerospace.
To consider the value of something and not consider its utility to me is irrational.

x86 processors are valued for their own sake by a handful of hobbyists who are into building motherboards and bit-twiddling machine code -- about as many as the people who value gold for its own sake because they like hammering it into home-made jewelry. For the vast majority, x86 processors have utility only because people value them because people value them, in a virtuous circle: buying them because there are apps for it, and writing apps for it because people own them.

All right. I thought x86 processors were still the basic architecture of all PCs and what I was considering regarding their utility.

Yes, they are, and yes, I understood that's what you were considering. My point is that if you unpack why they are the basic architecture of all PCs, you get a two-part answer. (1) Back in 1981 when the PC first came out, the company that made IBM's first-choice processor, Motorola, was having temporary production difficulties and wasn't going to be able to deliver as many as IBM wanted to buy, so IBM had to choose between delaying the launch or switching to their second-choice processor. (2) When the first-choice processor became available in bulk a few months later, the PC was already out, Motorola had missed its market window, time and tide wait for no man, and for the forty-plus years since then, x86 processors continue to be the basic architecture of all PCs because x86 processors are the basic architecture of all PCs. Everybody who chooses to use that instruction set chooses it because that's what other people do. It's pure conformism. It's recursion without a base-case. Not only has the original reason gone away, the original manufacturer who made the original decision has gone away -- IBM doesn't make PCs any more. Nobody who still makes PCs ever gave a damn about Motorola's long-ago yield problems. What they care about is the endless use it because people buy it because people use it because people buy it... loop.

That's the same reason people use gold as an investment: an endless use it because people buy it because people use it because people buy it... loop. Bilby tells us the original reason to use gold for this function went away fifty years ago. So what? That governments are no longer tying currencies to gold is as unimportant as that Motorola figured out how to produce in bulk after it was too late for them to win the order. The social convention of using the same item everyone else is accustomed to using is an entirely sufficient reason to make it rational for people to keep choosing x86 over 68000, and gold over rhodium or sunflower seeds or whatever.

Likewise, for the vast majority, gold has utility only because people value it because people value it, in a virtuous circle: buying it because there's an ecosystem for using it, and implementing the ecosystem for using it because people own it.

Using it or holding it?

Why do you feel holding doesn't qualify as using? You're using your car insurance even if you hold the policy in your safe deposit box and never have an accident -- you're using it to convince the rest of us to trust you behind the wheel.

Which begs the question, why do you regard using something to run apps as "utility", but regard using something to convince other people you have the ability to return favors and to protect yourself from being hurt by irresponsible or malicious government decisions as 'not utility"?

In this do we paint a picture of a collapsed dollar and all that would ensue?

Sort of. We don't need to imagine all that would ensue, just some of it -- if the dollar collapses you're probably better off with gold than without it. And "collapse" is a matter of degree. We don't need to have Zimbabwe inflation to make gold have been a useful hedge -- a rerun of 70s stagflation or even of Covid inflation is quite sufficient. So why wouldn't it be rational to buy some insurance against those eventualities? They're more likely than a car accident.

 

[TV and credit cards]

Gold is an unique metal. Why is it used in phones and computers? Why do so many of shops in the developing world buy your electronic scrap?

Gold doesn't oxidize. When you bond most metals, for example copper, you have to take precautions to make sure when you heat up the wire to weld it or solder it you don't get an insulating layer of copper oxide forming on the surface you want to run electricity through. With gold wires you don't have to deal with that complication.

It's also an excellent conductor used to coat the inside of rf waveguide where signal integrity is crucial.

And the human body tolerates it well. Were it not so expensive due to the irrational behavior of humans, we might still be using it for fillings.

 

[Swammerdami]

Gold is an unique metal.

So are all the others...

1. Gold is the most malleable of all metals.

2. Gold is the most ductile of all metals. Typical gold leaf is 0.1 microns thick -- much thinner than aluminum foil. Gold leaf as thin as 0.0005 microns -- just two layers of atoms -- has been produced.

3. Gold resists corrosion; it doesn't rust or tarnish. Famously, Gold is dissolved using aqua regia, a mixture of hydrochloric acid and nitric acid.

4. Gold is the 3rd best electric conductor of any metal, behind only silver and copper.

5. Gold is very reflective. Among several other applications of gold in aerospace, many satellites are covered with gold foil. (Because of the extreme thinness possible with gold foil, this gold is not even particularly expensive.)

Yes, other metals have their own uniquenesses, but objective observers will read this list and see that gold is, after all, very special.

Amusing anecdote: In the mid 1970's, silver was often used for electrical connections on circuit boards. Silver is second only to gold for malleability and ductility; is slightly better as a conductor and much less expensive. But it does react with some chemicals in even slightly polluted air; silver salts form and migrate across a circuit board eventually causing short circuits. It took months for the circuit boards to fail; manufacturers were disheartened to learn that circuit boards they'd shipped were "time bombs", due to fail after some months

This had nothing to do with my duties, but I overheard a report to our V.P. of Engineering that one machine in Germany was NOT experiencing trouble. The C.E. doing maintenance on that machine was cycling spares and taking them home to run through his dishwasher! "Find out what detergent he uses" was the V.P.'s immediate reaction on hearing this.

Of course this is all off the sub-topic, which is Investment Hedging. Although several investment managers whose opinion is hugely more valuable than mine recommend a large gold position in a diversified portfolio (especially given rising debt levels), I might prefer giving priority to real estate or even perhaps crypro-currency. We hold some gold instead because my daughter is being very cautious about choosing a real estate parcel. And being a landlord or playing with crypto might be incompatible with our carefree relaxed life-style.

But detailed financial advice is NOT the purpose here. Instead I just want to rectify the confusion which might have resulted from flippant gibberish like "gold is worthless."

My intent was to amuse, not to insult.

Then you failed.

So now it's my fault you are so infatuated with your own wrong ideas that you can't see the humor?

 

[robnisch]