Phat's Bookshelf

How in the world are commodities less of a risk than bonds? Bonds come with a guaranteed interest rate. Show me a commodity with the same guarantee. It doesn't exist. The unadjusted price of commodities can go down, but bonds will not. At worst, the interest on bonds will be less than inflation. With commodities, the unadjusted price could go down, much less the inflation adjusted price.

I have mentioned to you before the dangers of self-education. Too much opportunity for confirmation bias.You need to read things you don't want to read and consider ideas you don't want to consider. You need to BE ABLE to put ideas in your own words and to BE ABLE to put forth coherent arguments for counter-ideas before you decide to add something to your synthesis of ideas.

The current rate on a federal I bond is 6.89% right now, and the rate fluctuates with inflation. If you cash out before the 30 year term you lose the last 3 months of interest. So let's say an average of 6.5% interest over 2 years, losing the last 3 months so 1.75 years total.A $10,000 I bond held over those two years would yield $11,137.50, by my math.Gold was at $1862.31 per ounce on 12/22/20 and $1795.21 on 12/23/22. That's a reduction of 3.6%.A $10,000 gold purchase held over those two years would yield $9,640.Hmmm, which would have been the better investment?

WTF you talking about? The subject I was speaking to was your question on why banks don't lend out their reserves.That has fuck all to do with the laundry list of disjointed topics you responded to me with.I answered your question. Banks can't lend out their reserves because they are bound by law not to! And the reason is the liquidity issues that caused bank failures all through the 1930s.Don't you be telling me au contraire. I KNOW the history.

Do you know what a bond is? Do you understand how it works and how they are valued? Are you truly this ignorant in economics or finances?

Of course he is. The sugar rotted his brain.

The bonds worth are calculated in U.S. Dollars. The US Dollar has lost purchasing "power" relative to earlier times nearly always. But thats not the main point.

random ramblings:

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There is no easy way out of the corner the Fed has backed us into.

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Keep in mind that the Fed doesn’t exist to protect YOU or YOUR money – like some folks might think.

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The Fed is there to protect banks and the government.

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The decisions they make are all about next quarter’s numbers… or the next election.

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Because of this, the Fed’s policies tend to be short-sighted in nature.

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They’re not thinking about the effects their actions will have 5, 10, or even 20 years down the road.

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And so, the way we see it… the Fed has put temporary band-aids on major wounds that needed more time to heal.

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And today, that band-aid needs to be ripped off and get some air so it can heal.

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I'm sure that my critics will want my own words. But first lets address the data concerning these bonds you talk about. My argument is evolving. I don't have a total grasp on the reality of finance, but I have studied the effect of commodity pricing as counter cyclical to the US Dollar and International Dollar (as global reserve currency.)

Not quite. My BS is 97 this morning. Time to eat.

Does your math adjust for inflation? And does our collective math adjust for the fact that the US Dollar, though playing bedrock for the rest of the planet, is no bedrock. It is merely the strongest among equals.

Are you truly this stupid? Or are you just a troll?

Time for you conduct a reality check, especially given that this subtopic compares bonds and gold.I'm not a trained economist nor do I play one on TV, but obviously inflation would affect the value of all forms of investment equally, including bonds and commodities like gold. Bringing up inflation does nothing to differentiate between investing in bonds versus investing in gold adds nothing to the discussion ... except that in Taq's Message 48 to which you are not quite replying he did point to gold having lost value whereas a bond's increase in value is guaranteed by the bond, so if we also factor in inflation's effects on the return on investment (ROI) in "absolute dollars" gold would still lose out to bonds.By my understanding, nobody can accurately predict rates of inflation, so it makes no sense to try to specify in an investment contract the effects of inflation on the "absolute dollar" value of an investment's interest rate returns. Yes, there will be such an effect as there is to everything in practical economics, but it's not normally factored in in highly specific terms.The closest use for the accounting of inflation that I can think of is in Cost Of Living Adjustments (COLA) such as are performed periodically for certain sources of income; eg, Social Security benefits, military pay.Both of those COLAs come to mind for me because both affect me. My military retirement pay is a fixed percentage of the active duty pay for my paygrade and time in service (as of when I retired, I think, but I don't know because I served far past the maximum TIS for my paygrade); this year we got an 8.7% increase as opposed to the usual 1% to 2% increases of the past (I seem to recall an occasional 0%). I haven't heard yet what we'll get for Social Security, but if it's also 8.7% then I will be very disappointed with how they are treating and shortchanging our troops.The Republicans keep trying to cut Social Security benefits. COLAs are based on such economic indices as the consumer price index. I cannot find the details on this, but Social Security COLAs used to use an index which more accurately tracked cost increases for what seniors are more concerned with, but the Republican Congress replaced that with another index (Consumer Price Index, I would assume) which deals with other concerns and which provides lower increases in benefits. Breaking News!Having just written the above, I looked into US Military Pay on Wikipedia, which took me to the other index, Cost of Living Index. There I found this discussion:

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The United States Consumer Price Index (CPI) is a price index that is based on the idea of a cost-of-living index. The U.S. Department of Labor's Bureau of Labor Statistics (BLS) explains the differences:

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The CPI frequently is called a cost-of-living index, but it differs in important ways from a complete cost-of-living measure. BLS has for some time used a cost-of-living framework in making practical decisions about questions that arise in constructing the CPI. A cost-of-living index is a conceptual measurement goal, however, not a straightforward alternative to the CPI. A cost-of-living index would measure changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living. Both the CPI and a cost-of-living index would reflect changes in the prices of goods and services, such as food and clothing that are directly purchased in the marketplace; but a complete cost-of-living index would go beyond this to also take into account changes in other governmental or environmental factors that affect consumers' well-being. It is very difficult to determine the proper treatment of public goods, such as safety and education, and other broad concerns, such as health, water quality, and crime that would constitute a complete cost-of-living framework.

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 Also, when I spoke above of "absolute dollars", I know of no such metric, but rather know that it must exist as a reference point. For example, we often hear of the current cost of certain things in terms of "in 1960 dollars" or of past costs in terms of "today's dollars". So such a metric must exist, otherwise cost comparisons across time ("diachronically") would be impossible. I just don't know what it's offcially called or how it's officially defined.Examples abound as we research the past. For example, misled temporally by the movie, 1941, I searched through the Los Angeles newspapers of December 1941 for coverage of the Battle of Los Angeles (AKA "Great Los Angeles Air Raid") which actually took place 24–25 February 1942. Along the way I saw many grocery store and restaurant ads. The only one I remember (that research was in the mid-80's) was a diner which offered a complete turkey dinner for $0.25.Similarly, while rewatching the beginning of The Day the Earth Stood Still (1951 -- the year I was born, BTW), in the background I saw that a child's haircut was 25 cents. Google tells me that it's now about $30 (as a senior, mine is $20).In the 60's, I saw that a grocery clerk made $400 a month. That was my older sister's husband's pay and they lived in a nice new apartment paying $100 a month rent, which was within the standard budget estimate of a quarter of your income going to housing. Then their first house cost them $18,000 -- The Game of Life at that time had the price of a house at $15,000. As I was approaching graduation (Class of '69 -- sounds more fun that it was), the big housing boom of Orange County, Calif., was underway with houses selling for $86,000. Not even out on my own yet, all I could think was that I could never possibly afford to buy a house. Now my condo valued at about $450,000 is paid off and that older sister and brother-in-law of mine have just sold their house for just over $1 million.

I don't think so. Reference points for relative values is ... relative. That's why we reference things in 1990 dollars, 1960 dollars or some other year's dollar. Your choice depending on the political spin you want to give the comparison you're looking to make.I could suppose one "absolute dollar" metric might be the original dollar as authorized by congress in 1791. It was minted in gold or silver. Gold content was required to be 1.505 grams.So back then a dollar was worth 1.505 g fine gold. Today 1 gram of fine gold is valued at $57.81 per gram. The original dollar is the gold valued equivalent to $87.00 today. So, in absolute (1792) dollars your $10 lunch cost 11¢. Someone should check my math.

Still waiting. Or are you ready to admit you have no clue what you are babbling about and are just repeating crap you saw on youtube. 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?

Im not a scholar. I dont use footnotes or references. 90% of the information that I repeat is gleaned from books and written source materials, but since I never take nor never have taken notes I dont have written sources. IIRC, the money growth was M1. Let me search a bit and see if i can find anything: I have been told by people who actually know me that I am intuitive. While I readily admit that I have little if any solid objective evidence, this is irrelevant to what may turn out to be a closer approximation of future scenarios than you even fear in your worst imagination. In which case I hope I'm wrong.

In other words you don't have a clue. Start with the 5 times claim. Here is a hint. If you can't back what you say with facts and data don't say it. "I heard" or "people say" is for liars and charlatans.