Phat's Bookshelf

That in our arrogant attempt to control a country as large and powerful (nuclearwise, anyway) as Russia with sanctions as if they were a banana republic essentially was equivalent to shooting ourselves in the foot. The US dollar, weakened by years of inflation and no longer backed by anything but a democratic nod by a Western alliance, is on its way out.Russia and China play the game of good cop/bad cop. Putin, despicable though he is, is no fool. He is evil, heartless, and cruel but he chose to hang Russia's hat and economic future on the next rising global empire rather than the older falling one.

This explanation, as nutball as it is, has no relation to the statement I questioned.

quote:

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Nearly every asset class has seen miserable returns in 2022, except for the United States dollar.

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The dollar has strengthened dramatically over the course of the year as the Federal Reserve hiked interest rates in an effort to quash sky-high inflation. The U.S. Dollar Index, which measures the greenback against a basket of other currencies, is up more than 17% so far this year.

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“We have seen a tremendous rise in the dollar,” said Matt Forester, chief investment officer of Lockwood Advisors at BNY Mellon Pershing. “It’s a juggernaut in the middle of every securities transaction and payment around the globe.”
https://www.forbes.com/advisor/investing/strong-dollar/

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The dollar is still doing just fine.

Yes, and it has nothing to do with the markets that determine the value of the dollar compared to other currencies.

And gold and silver are down for the year.

Thats irrelevant...neither here nor there. Consider that Gold and Silver are slightly down, but in no way will they ever crash (as Bitcoin did). Stop and think. They are priced (valued) in US Dollars. There are five times as many dollars in circulation as there used to be. The dollar is inflating. Its not like the gold is going down. Gold doesn't "go" anywhere.It is the dollar that is essentially "going down" (inflating)Does that make any sense?

None at all.
Gold and Silver have crashed before.
Gold & Silver Crashes in History: Severity, Duration, and Recoveries | SilverSeek
The idea that they are a hedge against inflation is disproven by the fact their value in dollars has dropped when there was some inflationary pressure this last year.
The US dollar is up big against other currencies.
What do you mean the dollar is inflating? What does that mean?Gold is going down. It went down over the last year. YTD the value of gold has dropped 2% in 2021 it dropped 3.5%. That is over 5% in 2 years.

Source? Time frame? Are we talking months, years, decades? Do you actually have any idea what you are talking about?
Do you mean M1 or M2 or something else?

Why couldn't gold prices go down? Why couldn't there be a flood of gold onto the market? You are aware that people mine gold, right?If gold prices aren't keeping up with inflation then gold prices are down. Period. If you bought gold 2 years ago and sold it today you would have lost money.

So the central banks are conspiring? Who's behind the conspiracy? The oil and natural gas will be pretty handy to prevent shivering - not so much your adored land, gold, copper and nickel. Gold doesn't give off much heat.
​ Because they're reserves. That question has been answered for you before. Read your replies, even if you can't refute them.

No.

Do you recall hearing about the great depression? Do you know what happened to most of the banks? Banks are now required, as in legally required, to hold specific amounts as reserve because of that tragic experience.Do your research, Phat, BEFORE you stick your foot in it.

First of all, what is this insane idea that it is "normal" for assets to keep up with inflation?
Inflation is when the prices "inflate" while the assets stay put. Its a bit like the chicken and the egg analogy.So which came first in 1974? Wage hikes or Price hikes? and what were both of them hoking further and further away "from"? Riddle me that.My friend decided, a couple of years ago before the bear market to "cash in" his 401K and buy a bigger house. He wanted to own that sucker outright and also own the land that it sat on.This is whats beautiful. He is one of my liberally minded friends. He did know, however, that the markets would correct. Yet he worried about the "value" of his house also crashing. I told him to relax. A house is always going to be a house. The copper pipes are not going anywhere. The brick stay stacked. The floors are solid.Now...even if the value of that house (relative to the US Dollar, as are all assets) dropped, the intrinsic value of the house would remain. A house is a hard asset. And though Nixon decoupled the value of the currency (Cash, US Dollar) from the gold in 1971, the dollar has been hiking while the gold stays the same. It is not that gold fails to keep up with inflation. It is not that the dollar is increasing in value. The dollar is becoming worth less. The gold is standing still.(bedrock) It will be interesting to see once the world decides to dump the dollar and value everything relative to the value of some new currency. And I wonder what the bedrock will be that supports that currency?Republicans by and large want the gold to be the bedrock.(I think, anyway)
Democrats want the people to be the bedrock. But here is the kickr. Humans are not a solid bedrock. Only rocks are solid bedrock. (Or the Rock of Ages! )Human value is subjective like shifting sand.

If assets don't keep up with inflation then no one should buy them. They will always lose money. The intrinsic value won't matter much if a person needs to sell their house, either because of needing to move or financial hardship. This is especially true if people owe money on a mortgage. If you are upside down on your mortgage, that could be a real problem if you need to sell. So if gold is worth the same dollar amount over time as the dollar becomes worth less then the gold is worth less. When you decide to rejoin us in the real world, let me know. I'm not sure what good it will do to decide what is happening in the world you are fantasizing about. I have never heard Republicans pushing for the dollar to be put on a gold standard. In reality, both parties are strongly influenced by big finance which probably wants the modern fiat currencies to continue.

But they are. Despite all your harping about the "Rock of Ages", humans are the only thing that matters.Humans will always need food, clothing, shelter. Humans will always need to work.Their ability to work is their only real asset. Depressions, wars, etc. can make a mess of any "economic system" but no depression or war can eliminate a human's ability to work.