“Well, Saddam owed us money.†– Arrested Development
What does Superman® dry off with? A Tow-El.
Money.
What is it?
Really, the truth is money is anything we accept as having value that we can trade for something else. Cigarettes have been used for money. Cowrie shells were used in China for money nearly 4,000 years ago. Booze has often been used for money.
I read an article back in 2013 that bottles of Tide® were being used to trade for drugs in New York City, so you know that there are plenty of insane. Heck, I hear the Germans are even raising money online through Krautfunding.
Ideally, money has some sort of scarcity attached to it.
Gold has a historic role as money. You can cut it up into very, very tiny pieces, and you have lots of tiny pieces of gold. It hasn’t changed – you can melt it back into a single bar again, having lost nothing. You cut up a dollar bill into very tiny pieces? You have a pile of gerbil cage fluff.
Gold is nice. So is silver.
But, like anything, there are problems.
I found a little gold once while prospecting – it was a minor success.
Well, generally always the same problem. Government.
I’ve mentioned Rome before, because it’s a great illustration of what happens when government designs money.
At the beginning, Roman silver coins were, well, actually silver. The problem with silver coins is that you can’t make silver show up out of thin air. Oh, wait, if you’re a government, you can. The Imperial Romans managed to maintain enough restraint that their silver coins were over 90% silver for a little over 150 years after Empire.
Proving once again I definitely deserve the Nobel Prize™ in Economics for my discovery of Bikininomics©.
After that, the percentage of silver in the coins declined rather quickly.
So did the Roman Empire.
Interestingly, where it took Rome 150 years, it took the United States 142 years for the same thing to happen: from 1792 (when the Coinage Act was passed) to 1934 (when Roosevelt confiscated United States silver and gold). History may not repeat, but it sure does rhyme.
Sure, there were silver coins produced after 1934, but silver coins were (largely) discontinued as United States currency in 1965. (*There were exceptions for dollar and half dollar coins in selected years. That ended in 1976.)
As soon as the non-silver coins were minted, the silver coins began to disappear from circulation. Gresham’s Law states the simple fact: bad money (non-silver coins) drives out good money (silver coins).
But it’s had an impact on people’s thought processes as well: they have (largely) stopped thinking about gold and silver as money. Want proof?
Yup. When Mark Dice offered people either a King Size® Hershey’s™ chocolate bar or a 10 ounce silver bar, everyone chose the candy bar. As bad money replaced good, people stopped even thinking about silver as money.
The money supply today is fiat money. I’ve written about that before – it means that our money is entirely made up. No silver backing, no gold backing, the only backing is the faith of the people who accept it. Oh, and several thousand nuclear weapons, if you’re talking about the United States dollar.
The next step from that are the cryptocurrencies.
Those are entirely a mathematical concept, though Ricky has noted in comments that this mathematical construct can cost upwards of a million dollars in power a day. Bitcoin is currently at $33,000. Four days ago? $40,257.
Used with permission.
Is Bitcoin a bubble? Will it go to zero? Will I go to $500,000?
Honestly, I have no idea. I would have bet against it going to $40,000.
The scary part of today is just that uncertainty.
- Gold has (generally) held its value over time, performing far better than the dollar since the Federal Reserve© came into being.
- Gold hasn’t performed as well as stocks over the same period – creative people added more value than a motionless metal.
- Stocks are today at a valuation that is (by my reckoning) insane. They can stay that way longer than I can bet against them.
- Bitcoin? Who can say? I think its primary role right now is to indicate bubble tops.
- Bonds? Who wants to buy bonds at nearly zero interest rates?
This is probably one of the more difficult times to invest in my lifetime – risks are very high, but returns don’t seem to have kept up.
First role of 2021? Don’t talk about 2020.
We seem to be, everywhere I look, near to a breaking point in our systems – economic, political, and social. Who knows, maybe we’ll be back at cowrie shell money by 2030.
But I think I’d prefer the booze, since I don’t smoke and, well, if you have booze do you really need clean clothes?
In other madness, er, news….
https://www.citizenfreepress.com/breaking/the-purge-continues/
I prefer the longer timeline that includes an end to cheap and easy energy for society. I won’t be here for that (probably), but hopefully my descendants will be. The system will eventually revert to what has worked for several thousand years.
It has to, but getting there is always, always tough.
I was all set to complain bitterly about the small quantity of bikini graphs when you mentioned at the beginning that there would only be one.
But when I got there, the protest died within me. Because, sir, that is one very high-quality bikini graph. Quality really is more important than quantity.
But, now … if we could just have both quality and quantity … whaddaya think? I believe I’m onto something here.
I know, right? I was just scrolling down to compliment Mr. Wilder on his exemplary use of the pool waterline.
Nobel Prize-worthy.
That’s what we’re all looking at, right?
Sometimes the bikini fits perfectly.
It really is a good graph.
I was going to do a second one, but The Boy (who transparentizes the graph) went to bed early.
Miner, or minor success?
At least you had prospects.
Prospecting? Not sure that will pan out for me.
When I was managing a bank we had a customer bring in a bag of silver dollars but we could only give him face value. He still deposited them, getting probably $40 for $800 in silver. We explained it to him but he still wanted to do it because he seemed convinced that money in the bank was better than the silver in his hand.
Just curious: what happened to those silver dollars after the depositor left?
If I had been the manager, I suspect what would have happened would have involved forty Federal Reserve notes going from my wallet into the cash drawer, and forty silver dollars going into my pocket in exchange. Since the bank only deals in “face value” and all. That may make me a bad person.
But I have a Morgan silver dollar, 1878, that I pull out of my desk drawer every now and then, just to admire the heft and the truly nice stamping job. I think about what it would have been like to live in a country that meant, by the term “money,” that lovely silver coin. You know, a serious, grownup kind of country.
On the other hand, dentistry was no good back then.
And on the third hand, dentistry is apt to be no good around these parts before long. Along with a lot of other things we take for granted.
I’ll stop now, before I depress myself any more.
I always said I’d miss the plumbing most…It’s a toss up.
Back in the late sixties, my then soon-to-be-wife was working the counter at a drugstore. A kid brought in what appeared to be part of his dad’s coin collection to buy some candy and other junk. She swapped out those coins for cash and took them home. We still have them.
(Shakes head). Pa Wilder collected quite a bit of silver in the 1960’s at the bank. I think that partially paid for my college.
On Tuesday, I got the heeby-jeebies. Ended up selling off a buttload of stock that I thought was overvalued. Unfortunately, I can’t get the cash out for a couple of days. I’ll be sitting on pins and needles until then.
Oh, I don’t think it will fall quite that soon. There’s time.
The best investment these days are brass encased lead projectiles of various weights and sizes.
Yup. Probably any size right now. Last time I looked in an ammo case at the local store? Nothing to be found.
Tricky Dick Nixon had his revenge by taking the US off of the gold standard and opening up relations with China.
That was probably on orders from the globalist cabal who really own and run the world.
Unity czar Xiden has stated that whites and traditional Americans will get nothing to build it back better with.
Build it back better? Doesn’t that mean fundamental destruction is imminent?
The end of the representative republic model and a final solution to the deplorables question.
Interesting times and I agree that brass will be the new currency.
Cold steel for an Iron Age.
My ammo has outperformed my stocks.
You clearly have scoped out a long-range trajectory for your investments
Ha! I love it!
My son today, “We’re sitting on a goldmine!”
Almost every problem in the US is caused by the government.
Rents and medical care are expensive because of regulations.
The economy is collapsing because everyone is under house arrest.
Tuition is expensive because of student loans.
The debt is increasing because of wars and welfare.
Airline tickets are expensive because foreign airlines cannot fly domestic routes.
Puerto Rico couldn’t recover from a hurricane faster because of the Jones Act.
Prisons are crowded because everything is illegal.
Families fall apart because females marry the state instead of a man.
Every government action has a consequence . . . and most aren’t good.