Originally posted by AverageJoe
Take for instance UK when it contemplated entering EU. It refused to subscribe to monetary union because it loses its ‘soul’ in that conversion.
Bitcoin in similar sentiment will never reign over sovereign currency edpecially the big liquid ones. The direct CB will never allow it!
How is a store of wealth suddenly morph into a store of investment? Fiat is just the intermediate vehicle of asset ownership exchange for universal valuation. Provided all the nation’s developed institution is preserved and quality maintained, fiat is the only universal source of transactional exchange. Gold is just another commodity to preserve that valuation according to some. It suffers supply demand mechanics in the same manner as mighty reserve USD.
Objectively speaking why would I want an inert metal that only attracts expenses for length of ownership and doesn’t reward the owner in the interim. As a store of wealth insurance against crashes and goldbugs flipping decades old chart, I take it the strategy is hoarding instead of capital gains?
If I had millions of excess lazy funds to protect, I may think differently but for the purpose of the discussions here, it is all about capital gains monetized.
The average person that's not financially or economically savvy think they are doing well when they're savings dollars in the bank only to find it eroded away by inflation and tax. A large proportion of the world population don't invest and don't acquire assets other than their own home.
The ones who are uneducated and unhappy with earning 1% interest in the bank decide to invest, usually by looking around at what everyone else is doing and copying them or entrusting their money to fund managers. This is usually the wrong time to invest in those asset classes, they might get some good short term gains and get a false sense of security potentially sinking more savings into their investment.
Now let's have a look at the sophisticated investors, when do you think they are buying and selling? They're buying low when no one else is and selling when everyone is buying.
Right now a lot of advisors or investment managers are saying you need to position yourself in cash before the recession so you can take advantage of undervalued stocks, best time to buy is when blood is in the street. Now this to me is bad advice, because we now what happens to cash during a recession. Inflation is taking it's toll on the dollar. A much better idea imo is to position in gold/silver then when you see a good undervalued investment sell some gold and invest, likely making a nice profit along the way. And if hyperinflation did take hold then you'd also be positioned well for that too.
