Author Topic: Is Gold Anti-Mustachian?  (Read 133229 times)

matchewed

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Re: Is Gold Anti-Mustachian?
« Reply #250 on: April 23, 2014, 01:33:06 PM »
That is not what "produce" means. If you make a loan to an agricultural business which uses your money to make efficiency improvements, so that more food is produced by the same work, then your investment increased productivity. If I make a loan to the government so it can build a port which enables more trade, so that it collects more tax revenue, then my investment increased productivity. Gold doesn't enable more production - not if you don't use it to produce electronics or jewellery, at least.

Do you invest in large financial companies like Goldman Sachs or AIG?  What do they produce (other than profits)?

They produce a service. Namely investment banking.

*edit*

What does that question have to do with whether gold produces anything or not?
« Last Edit: April 23, 2014, 01:34:55 PM by matchewed »

warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #251 on: April 23, 2014, 01:46:56 PM »
That is not what "produce" means. If you make a loan to an agricultural business which uses your money to make efficiency improvements, so that more food is produced by the same work, then your investment increased productivity. If I make a loan to the government so it can build a port which enables more trade, so that it collects more tax revenue, then my investment increased productivity. Gold doesn't enable more production - not if you don't use it to produce electronics or jewellery, at least.

Do you invest in large financial companies like Goldman Sachs or AIG?  What do they produce (other than profits)?
Actually, I don't. But they make investments, most of which are productive.

Tyler

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Re: Is Gold Anti-Mustachian?
« Reply #252 on: April 23, 2014, 02:18:34 PM »
What does that question have to do with whether gold produces anything or not?

Just pointing out that not all companies produce a tangible product but that doesn't make them without value.  Gold also provides a service for my portfolio.  ; )

I have no issue with those who don't like gold as an investment, regardless of the reason.  Good for you for knowing why you invest in what you do.  I can only say that gold has been a productive asset in my own portfolio.  It's important to talk about any investment not in isolation but in terms of how it supports your larger strategy. 


warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #253 on: April 23, 2014, 02:29:00 PM »
I can only say that gold has been a productive asset in my own portfolio.
Profitable. You mean it has been a profitable asset in your own portfolio. They are two different words, they do not mean the same thing.

dragoncar

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Re: Is Gold Anti-Mustachian?
« Reply #254 on: April 23, 2014, 02:31:58 PM »
I can only say that gold has been a productive asset in my own portfolio.
Profitable. You mean it has been a profitable asset in your own portfolio. They are two different words, they do not mean the same thing.

I'm not really sure what your point is.  Gold produces gravitational pull, affecting the entire universe around it.  That, plus profit, is good enough for me.

warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #255 on: April 23, 2014, 02:40:14 PM »
My point is literally the first thing I said after "I vote no".
By putting money to work, productivity increases and thus we can all work less.
Putting your money in gold doesn't decrease the amount of work required to sustain anybody's lifestyle.

dragoncar

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Re: Is Gold Anti-Mustachian?
« Reply #256 on: April 23, 2014, 03:03:11 PM »
My point is literally the first thing I said after "I vote no".
By putting money to work, productivity increases and thus we can all work less.
Putting your money in gold doesn't decrease the amount of work required to sustain anybody's lifestyle.

It decreases the amount of work required to sustain MY lifestyle, so...

warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #257 on: April 23, 2014, 03:07:41 PM »
No, none of anybody's needs or wants can be satisfied with less work as a result, it just means less of it will be done by you.
« Last Edit: April 23, 2014, 03:13:11 PM by warfreak2 »

dragoncar

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Re: Is Gold Anti-Mustachian?
« Reply #258 on: April 23, 2014, 03:10:29 PM »
No, it just decreases the amount of work that has to be done by you.

Yes, that's my goal.  Do you plan to ER?  Because if you quit working, you'll be increasing the amount of work others have to do.

warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #259 on: April 23, 2014, 03:15:52 PM »
Yes, that's my goal.  Do you plan to ER?  Because if you quit working, you'll be increasing the amount of work others have to do.
You really can't tell the difference between less work for everyone, and less work for you at the expense of other people?

Or do you just not believe that there are investments which reduce the total amount of work required to satisfy human needs and wants? Early retirement is possible because of that reduction in the total amount of work required.

arebelspy

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Re: Is Gold Anti-Mustachian?
« Reply #260 on: April 23, 2014, 03:17:27 PM »
No, it just decreases the amount of work that has to be done by you.

Yes, that's my goal.  Do you plan to ER?  Because if you quit working, you'll be increasing the amount of work others have to do.

I'm not sure that's true...
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Spork

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Re: Is Gold Anti-Mustachian?
« Reply #261 on: April 23, 2014, 03:18:31 PM »
In an economic sense (not a fancy, jewelry sense) ... gold *is* money.  It's just an international currency that is not endorsed by a specific government.  It's a shiny place that stores value.  If things that store value must have some "productive value" ... then I'd suggest you dump all those dollars right out of your wallet and throw them straight away.

Now: speculators have driven it up as an "investment" ... that's a different thing entirely.  And the fact that it's seemingly overvalued in respect to other currencies makes me want to avoid it in the short term.  That's like speculators driving up Bitcoin or some other foreign currency.  But they're all "money."


warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #262 on: April 23, 2014, 03:36:09 PM »
In an economic sense (not a fancy, jewelry sense) ... gold *is* money.  It's just an international currency that is not endorsed by a specific government.  It's a shiny place that stores value.  If things that store value must have some "productive value" ... then I'd suggest you dump all those dollars right out of your wallet and throw them straight away.

Now: speculators have driven it up as an "investment" ... that's a different thing entirely.  And the fact that it's seemingly overvalued in respect to other currencies makes me want to avoid it in the short term.  That's like speculators driving up Bitcoin or some other foreign currency.  But they're all "money."
I agree with all of this. It's not a very practical kind of money*, but it's money. Holding money isn't investment; bought-and-held gold is practically "under the mattress".

I don't think everything that stores value should be productive, but I do think productive investments are more Mustachian than non-productive "investments", because they lower the bar for future retirees.

*Nor a very safe one. Unlike US dollars, gold is only backed (to a small extent) by the jewellery and electronics industries!

Spork

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Re: Is Gold Anti-Mustachian?
« Reply #263 on: April 23, 2014, 03:43:10 PM »
In an economic sense (not a fancy, jewelry sense) ... gold *is* money.  It's just an international currency that is not endorsed by a specific government.  It's a shiny place that stores value.  If things that store value must have some "productive value" ... then I'd suggest you dump all those dollars right out of your wallet and throw them straight away.

Now: speculators have driven it up as an "investment" ... that's a different thing entirely.  And the fact that it's seemingly overvalued in respect to other currencies makes me want to avoid it in the short term.  That's like speculators driving up Bitcoin or some other foreign currency.  But they're all "money."
I agree with all of this. It's not a very practical kind of money*, but it's money. Holding money isn't investment; bought-and-held gold is practically "under the mattress".

I don't think everything that stores value should be productive, but I do think productive investments are more Mustachian than non-productive "investments", because they lower the bar for future retirees.

*Nor a very safe one. Unlike US dollars, gold is only backed (to a small extent) by the jewellery and electronics industries!

I pretty much agree here.... though I don't really have any ethical imperative for making things better for future retirees.  (No offense meant... Just not really my value system.  I'm cool if that's how you want to handle yours.)

I do think you'll always find someone to trade it with... though surely not at a the value of a bubble price.  If there is a world crash, it will be worth *something* ... though I'd rather have some non-spoilable food or a big tank of fuel.*  But in the same sense, if there was a world crash of enormous proportion, I don't think dollars would be worth much either.


*I'm not a prepper or a world-is-going-to-end nut.  This is a wild illustration.  I think those doomsday scenarios are things that cannot really be prepared for and thus should just be ignored.

dragoncar

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Re: Is Gold Anti-Mustachian?
« Reply #264 on: April 23, 2014, 03:44:00 PM »
Yes, that's my goal.  Do you plan to ER?  Because if you quit working, you'll be increasing the amount of work others have to do.
You really can't tell the difference between less work for everyone, and less work for you at the expense of other people?

Or do you just not believe that there are investments which reduce the total amount of work required to satisfy human needs and wants? Early retirement is possible because of that reduction in the total amount of work required.

I'm sure there are some investments which reduce the total amount of work required to satisfy humans.  I do not think I have the amount of money required to offset the loss of my work.  In purely economic terms, if I work until I'm 65 I will produce millions and millions of economic benefit.  My ER investment of under $1 million will not create enough efficiencies in the world to offset that.  Instead, it will probably employ a couple burger flippers, or possibly pay a quarter of an engineer's salary.  That engineer may be working to make the world more efficient, or might be working for Facebook or an Ad agency helping increase the sum total of human needs and wants.  I have no guarantee that my "productive" money will be beneficial to society (edit: here meaning "reducing the amount of work required to meet society's desires") unless I stop indexing and focus my investment on particular beneficial activities.
« Last Edit: April 23, 2014, 03:49:58 PM by dragoncar »

dragoncar

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Re: Is Gold Anti-Mustachian?
« Reply #265 on: April 23, 2014, 03:45:30 PM »
No, it just decreases the amount of work that has to be done by you.

Yes, that's my goal.  Do you plan to ER?  Because if you quit working, you'll be increasing the amount of work others have to do.

I'm not sure that's true...

So when you quit teaching, you think they will just tell a few kids to go home?  No, someone has to do the work you were previously doing unless your departure somehow reduces demand?

warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #266 on: April 23, 2014, 03:51:41 PM »
I pretty much agree here.... though I don't really have any ethical imperative for making things better for future retirees.  (No offense meant... Just not really my value system.  I'm cool if that's how you want to handle yours.)
Sure. Not everyone sees environmentalism as an ethical imperative, but that's also a part of the Mustachian philosophy (e.g. Curing your Clown-Like Car Habit:)
Quote
And you’re not just wasting your own money, of course. You are wasting the gasoline that the rest of the world works so hard to produce, puncturing seabeds and spilling stadium-loads of oil into pristine wilderness areas as a necessary byproduct. Destroying coral reefs and flooding coastlines with your carbon emissions. Clogging roads and creating demand for roadway expansion, indirectly raising your own taxes. It’s a whole lot of badness we’re doing, every time we drive. It’s not just a matter of “Hey, it’ll only cost me ten bucks for the gas”. It’s a matter of choosing to be an asshole.

dragoncar

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Re: Is Gold Anti-Mustachian?
« Reply #267 on: April 23, 2014, 03:55:47 PM »
I pretty much agree here.... though I don't really have any ethical imperative for making things better for future retirees.  (No offense meant... Just not really my value system.  I'm cool if that's how you want to handle yours.)
Sure. Not everyone sees environmentalism as an ethical imperative, but that's also a part of the Mustachian philosophy (e.g. Curing your Clown-Like Car Habit:)
Quote
And you’re not just wasting your own money, of course. You are wasting the gasoline that the rest of the world works so hard to produce, puncturing seabeds and spilling stadium-loads of oil into pristine wilderness areas as a necessary byproduct. Destroying coral reefs and flooding coastlines with your carbon emissions. Clogging roads and creating demand for roadway expansion, indirectly raising your own taxes. It’s a whole lot of badness we’re doing, every time we drive. It’s not just a matter of “Hey, it’ll only cost me ten bucks for the gas”. It’s a matter of choosing to be an asshole.

I just don't get you, man.  You want me to sell my gold, that's just sitting there not hurting anybody, and invest my money into "producing" things, which basically means digging more stuff out of the ground, shipping it around, polluting the environment to transform it into something else, and deliver it to satisfy human wants and needs?  Or do you only invest in R&D companies that work on making the world efficient?

waltworks

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Re: Is Gold Anti-Mustachian?
« Reply #268 on: April 23, 2014, 04:07:26 PM »
All I know is that every ad for gold I've ever seen is on National Review, or Parade magazine, or Fox News. And looking at the demographics of Fox's viewers, if I were into gold, I'd be very concerned about it in 10-20 years.

In a similar vein, I wonder about all the ammo that old white people have bought up over the last decade or so. What is going to happen to all that stuff when those people die? Is there a way to short ammunition? :)

-W

thesinecure

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Re: Is Gold Anti-Mustachian?
« Reply #269 on: April 23, 2014, 04:09:19 PM »
it seems to me gold is not well understood, in this forum or most anywhere else

i own a "ton" (not literally unfortunately) of it in different forms, and am absolutely confident it is not in a "bubble" (more below) - it's a big part of my portfolio relative to most others (common references for diversified portfolios would be up to 5% allocation to precious metals ideas)

i consider gold a store of value and a currency (which it has been for literally thousands and thousands of years) - but its a currency that no one controls which is what's important - a keystroke can't create any more of it and the global market sets the price

as far as speculators running up the price as an "investment", raise your hand if you own any?  do any of your friends own any?  at least in my corner of the universe, it's acceptance in ownership is less than 5% of people i know.  if it's in a bubble, then why don't more people have some?

i might suggest it's nowhere close to a bubble, and when it is you will know - and those of us who have followed it and studied it and understand why we own it will likely be the ones selling it

i for one wouldn't sell a single coin right now, and most of that other 5% i know wouldn't either - the majority of "sellers" are the ones who don't have any in the first place

warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #270 on: April 23, 2014, 04:21:15 PM »
I just don't get you, man.  You want me to sell my gold, that's just sitting there not hurting anybody, and invest my money into "producing" things, which basically means digging more stuff out of the ground, shipping it around, polluting the environment to transform it into something else, and deliver it to satisfy human wants and needs?  Or do you only invest in R&D companies that work on making the world efficient?
I haven't said anything about what I want. I also didn't say anything about what I invest in (other than that I don't invest in Goldman Sachs or AIG). The thread is about Mustachianism, not about me.

You're conflating productivity with environmental destruction. There are many things that can be produced without net harm to the Earth - for example, bicycles and wind turbines, or software and music.

The vast majority of successful companies work to make the world more efficient. That's the effect of having to compete with other companies who are making similar products or providing similar services: if you're more efficient than your competitor, you make more of a profit, and you can still make a profit if you have to reduce your prices.

i own a "ton" (not literally unfortunately) of it in different forms, and am absolutely confident it is not in a "bubble" (more below)
I don't mean a temporary bubble, I mean a millenia-long, ingrained-in-most-human-cultures bubble. A speculative bubble is what happens when the price only goes up because people are buying, and people are buying only because the price goes up. As in, people only think gold is valuable because they think other people think gold is valuable. I'm not talking about a prediction within the timescale of our lifetimes, but eventually people are going to look back (maybe with advanced time-viewing devices from the 50th century!) and think "what ridiculous circular logic! why did so many people fall for it?" just like we look back on dutch tulips.

arebelspy

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Re: Is Gold Anti-Mustachian?
« Reply #271 on: April 23, 2014, 05:44:03 PM »
No, it just decreases the amount of work that has to be done by you.

Yes, that's my goal.  Do you plan to ER?  Because if you quit working, you'll be increasing the amount of work others have to do.

I'm not sure that's true...

So when you quit teaching, you think they will just tell a few kids to go home?  No, someone has to do the work you were previously doing unless your departure somehow reduces demand?

One example doesn't make a universal true, unless you were speaking directly to me, and are saying it was only applicable to me.

Your blanket statement of "Do you plan to ER?  Because if you quit working, you'll be increasing the amount of work others have to do." I don't think is universally true for all jobs.

1) Some jobs have are mostly busy work.  That doesn't necessarily have to be (though it often might be) taken up by someone else.
2) Jobs become redundant (downsized, taken over by a machine, etc.) all the time.  People stopping those jobs don't create work for someone else.
3) You could be creating the demand for your services, so you stopping it doesn't mean someone has to fill that void.
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dragoncar

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Re: Is Gold Anti-Mustachian?
« Reply #272 on: April 23, 2014, 05:51:59 PM »
No, it just decreases the amount of work that has to be done by you.

Yes, that's my goal.  Do you plan to ER?  Because if you quit working, you'll be increasing the amount of work others have to do.

I'm not sure that's true...

So when you quit teaching, you think they will just tell a few kids to go home?  No, someone has to do the work you were previously doing unless your departure somehow reduces demand?

One example doesn't make a universal true, unless you were speaking directly to me, and are saying it was only applicable to me.

Your blanket statement of "Do you plan to ER?  Because if you quit working, you'll be increasing the amount of work others have to do." I don't think is universally true for all jobs.

1) Some jobs have are mostly busy work.  That doesn't necessarily have to be (though it often might be) taken up by someone else.
2) Jobs become redundant (downsized, taken over by a machine, etc.) all the time.  People stopping those jobs don't create work for someone else.
3) You could be creating the demand for your services, so you stopping it doesn't mean someone has to fill that void.

Yes, there are edge cases, but the vast majority of us retiring are going to leave work left undone. 

warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #273 on: April 23, 2014, 05:57:55 PM »
Irrelevant, I am talking about the total amount of work which needs to be done, not whether you're doing it or not. Retiring doesn't increase that total, but productive investments can decrease it.

matchewed

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Re: Is Gold Anti-Mustachian?
« Reply #274 on: April 23, 2014, 06:20:22 PM »
What does that question have to do with whether gold produces anything or not?

Just pointing out that not all companies produce a tangible product but that doesn't make them without value.  Gold also provides a service for my portfolio.  ; )

I have no issue with those who don't like gold as an investment, regardless of the reason.  Good for you for knowing why you invest in what you do.  I can only say that gold has been a productive asset in my own portfolio.  It's important to talk about any investment not in isolation but in terms of how it supports your larger strategy.

Cool but we're talking about companies and gold right? You're trying to equate the two by saying well they both provide service in a very roundabout way. No offense but winking about it doesn't make it so. Buying a block of gold provides no service. In fact the service provided is only in the perception much like the tulips wf2 has mentioned. Gold under your mattress provides nothing the perception of the value is the only thing that actually provides value. Money invested in Goldman Sachs means you own a piece of the capital and are entitled to a proportionate share of the profits. Those are two very very different things.

I'm not saying gold can't work in a portfolio, I may feel that but that isn't what I said in my original comment. You were likening gold to a company. And you can't just compare the two like that. It's not an apples to apples because you can put money into it. It's more like apples to crap IMO but if you want to stick to the idiom oranges then.

I've painted my bias allover this thread before so I'm sure the rest of this just highlights it.

arebelspy

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Re: Is Gold Anti-Mustachian?
« Reply #275 on: April 23, 2014, 06:21:28 PM »
Yes, there are edge cases, but the vast majority of us retiring are going to leave work left undone.

Perhaps, though I wouldn't call everything I named merely an "edge case" - automation, for example, replacing jobs is quite frequent.

I also think there's a net gain in reduction of work done by someone becoming Mustachian - i.e. even by FIREing, their reduced consumption overall means less overall work is done - your particular work may shift to someone else, but your reduced consumption more than makes up for that.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

dragoncar

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Re: Is Gold Anti-Mustachian?
« Reply #276 on: April 23, 2014, 06:36:41 PM »
Yes, there are edge cases, but the vast majority of us retiring are going to leave work left undone.

Perhaps, though I wouldn't call everything I named merely an "edge case" - automation, for example, replacing jobs is quite frequent.

I also think there's a net gain in reduction of work done by someone becoming Mustachian - i.e. even by FIREing, their reduced consumption overall means less overall work is done - your particular work may shift to someone else, but your reduced consumption more than makes up for that.

Yes automation happens, but I don't know anyone here waiting for the automation to come before quitting.  I guess some are hoping to engineer their layoffs?.  Also, I don't think most of us are planning to decrease our consumption in FIRE (you for example are planning to increase).

MidWestLove

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Re: Is Gold Anti-Mustachian?
« Reply #277 on: April 23, 2014, 06:40:03 PM »
The deal with gold is that it does store value...
The problem with gold is that it does it poorly...

I.e. a troy ounce of gold right now is give or take 1300  which in Chicago area is
2 months in crummy apartment or 1 month of rent in good neighborhood with more than one bedroom , or
3-4 months of food for family of three like ours , or
a roundtrip across an ocean ,or  (for ammo/guns inclined among the audience)
a full rifle from reputable maker and 500 rounds of ammunition or multiple hanguns.

if anyone thinks they can get any of above 'when things turn bad' for a coin which is nothing more than a piece of metal  they are wildly optimistic.


 


« Last Edit: April 23, 2014, 06:54:05 PM by MidWestLove »

AdrianM

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Re: Is Gold Anti-Mustachian?
« Reply #278 on: April 23, 2014, 07:55:38 PM »
The deal with gold is that it does store value...
The problem with gold is that it does it poorly...

I.e. a troy ounce of gold right now is give or take 1300  which in Chicago area is
2 months in crummy apartment or 1 month of rent in good neighborhood with more than one bedroom , or
3-4 months of food for family of three like ours , or
a roundtrip across an ocean ,or  (for ammo/guns inclined among the audience)
a full rifle from reputable maker and 500 rounds of ammunition or multiple hanguns.

if anyone thinks they can get any of above 'when things turn bad' for a coin which is nothing more than a piece of metal  they are wildly optimistic.

So what would the medium of exchange be? Your first daughter maybe? or a year as an indentured serf?
You talk as if you know what the future medium of exchange will be, so spill.

You an I both know that we have no idea what the monetary environment will look like in the future.
What we do have is history to guide us.
So you and I may hold shares of X company or index
Or a piece of productive real estate.
You can also own gold.

Remember, each asset has its place and time in the sun.


grantmeaname

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Re: Is Gold Anti-Mustachian?
« Reply #279 on: April 23, 2014, 09:25:44 PM »
Remember, each asset has its place and time in the sun.
The first half of your post says not all assets are equally good. This line seems to say that they aren't. So which is it? Is your first daughter an asset whose time in the sun is not yet come?

Kriegsspiel

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Re: Is Gold Anti-Mustachian?
« Reply #280 on: April 24, 2014, 11:22:49 AM »
How much for that daughter?

thesinecure

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Re: Is Gold Anti-Mustachian?
« Reply #281 on: April 24, 2014, 02:30:46 PM »
if anyone thinks they can get any of above 'when things turn bad' for a coin which is nothing more than a piece of metal  they are wildly optimistic.
the entirety of human history indicates that it will be easier to get those things with my barbarous relic coins than it will be with paper dollars or internet "coins"

but that result (complete meltdown of all society) is a pretty far fetched tail event, and it's not the reason i've invested in PMs (and not a reason most people that I know have, either)

foobar

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Re: Is Gold Anti-Mustachian?
« Reply #282 on: April 24, 2014, 03:10:26 PM »
It produced ~1100 dollars per ounce.:)  Productive have a lot of definitions. You are focused on one and ignoring the rest.


gold would have been just about the only productive investment you could have made in the 70s
Oh. What did gold produce in the 70s? Inquiring chemists want to know :-p

Just because someone buys it from you for more than you bought it for, doesn't mean your investment was productive; only that it was profitable. Dutch tulips were profitable for some; so were pyramid schemes. But if the only reason the price goes up is because everyone wants to buy in, and the only reason everyone wants to buy in is because the price goes up, that's not a productive investment, it's circular logic.

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Re: Is Gold Anti-Mustachian?
« Reply #283 on: April 24, 2014, 03:22:01 PM »
It produced ~1100 dollars per ounce.:)  Productive have a lot of definitions. You are focused on one and ignoring the rest.
No, for the point I was making, it was clear what I meant by "productive". What followed was an argument sort of like "a drum is not a stringed instrument", "but my drum has a piece of string holding it tight", &c. You can't just swap out a word from an argument with another meaning for the same word, and expect to have a sensible counter-argument, that is the logical fallacy of equivocation.

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Re: Is Gold Anti-Mustachian?
« Reply #284 on: April 24, 2014, 03:37:15 PM »
It produced ~1100 dollars per ounce.:)  Productive have a lot of definitions. You are focused on one and ignoring the rest.
No, for the point I was making, it was clear what I meant by "productive". What followed was an argument sort of like "a drum is not a stringed instrument", "but my drum has a piece of string holding it tight", &c. You can't just swap out a word from an argument with another meaning for the same word, and expect to have a sensible counter-argument, that is the logical fallacy of equivocation.

You are right, the response should have been:  It doesn't matter if an asset is "productive" as long as it serves your investment goals.


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Re: Is Gold Anti-Mustachian?
« Reply #285 on: April 24, 2014, 03:49:24 PM »
You are right, the response should have been:  It doesn't matter if an asset is "productive" as long as it serves your investment goals.
And it doesn't matter if a vehicle is "environmentally friendly" as long as it gets you where you want to go - depending on your philosophy. But concern for the environmental is part of the particular philosophy called Mustachianism, and I would argue that investing productively is Mustachian on the same grounds. It may not be part of your philosophy, that's your call.

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Re: Is Gold Anti-Mustachian?
« Reply #286 on: April 24, 2014, 04:06:49 PM »
You are right, the response should have been:  It doesn't matter if an asset is "productive" as long as it serves your investment goals.
And it doesn't matter if a vehicle is "environmentally friendly" as long as it gets you where you want to go - depending on your philosophy. But concern for the environmental is part of the particular philosophy called Mustachianism, and I would argue that investing productively is Mustachian on the same grounds. It may not be part of your philosophy, that's your call.

You seem to be conflating productivity with concern for the environment.

warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #287 on: April 24, 2014, 04:26:36 PM »
And it doesn't matter if a vehicle is "environmentally friendly" as long as it gets you where you want to go - depending on your philosophy. But concern for the environmental is part of the particular philosophy called Mustachianism, and I would argue that investing productively is Mustachian on the same grounds. It may not be part of your philosophy, that's your call.

You seem to be conflating productivity with concern for the environment.
...
No. I'm arguing that the same reasoning (it improves the world for everyone else) applies to both. How wasn't that clear?

dragoncar

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Re: Is Gold Anti-Mustachian?
« Reply #288 on: April 24, 2014, 04:31:00 PM »
And it doesn't matter if a vehicle is "environmentally friendly" as long as it gets you where you want to go - depending on your philosophy. But concern for the environmental is part of the particular philosophy called Mustachianism, and I would argue that investing productively is Mustachian on the same grounds. It may not be part of your philosophy, that's your call.

You seem to be conflating productivity with concern for the environment.
...
No. I'm arguing that the same reasoning (it improves the world for everyone else) applies to both. How wasn't that clear?

Because "the same grounds" refers back to "concern for the environmental."  Otherwise you are arguing that investing productively is Mustachian because it "is part of the particular philosophy called Mustachianism," which is just circular reasoning.

warfreak2

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Re: Is Gold Anti-Mustachian?
« Reply #289 on: April 24, 2014, 04:57:05 PM »
"The same grounds" meaning "the grounds on which environmentalism is favoured". For the same reasons. I.e., it improves the world for everyone else. The Mustachian reasoning in favour of environmentalism is not "because it is Mustachian".

KingCoin

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Re: Is Gold Anti-Mustachian?
« Reply #290 on: April 24, 2014, 05:29:04 PM »
More correlation than causation, but interesting nonetheless:
http://www.bloombergview.com/articles/2014-04-22/rich-buy-real-estate-poor-want-gold

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Re: Is Gold Anti-Mustachian?
« Reply #291 on: April 24, 2014, 06:11:30 PM »
"The same grounds" meaning "the grounds on which environmentalism is favoured". For the same reasons. I.e., it improves the world for everyone else. The Mustachian reasoning in favour of environmentalism is not "because it is Mustachian".

I don't agree that "productive" assets inherently improve the world by virtue of their "productivity."  I also don't agree that environmentalism inherently improves the world (there are a lot of misguided recycling programs).  How do you feel about gold miners?

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Re: Is Gold Anti-Mustachian?
« Reply #292 on: April 24, 2014, 06:33:41 PM »
Re: Is Gold Anti-Mustachian?

Nope… Ask my Stache..

But I would not but it at todays prices.

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Re: Is Gold Anti-Mustachian?
« Reply #293 on: April 24, 2014, 08:08:20 PM »
Adrian,

Not sure why such aggressive response - if you want gold, buy gold. Just be aware of it not being great storage of value and that is what my post was about.

As for the new question on the good medium of exchange - it is whatever your community will accept and want, and is highly situational. i.e. back in early nineties during civil war in my country, the water heaters (spiral and a plug basically to boil water anywhere there was electricity) were great medium of exchange - the water was dirty and dangerous to drink, having drinking water was good. One water heater plug in thingy easily traded for AK. Gold at that point was absolutely useless and instead was an invitation to get killed or kidnapped. for my friends a little more south from where we were , their food plant was destroyed by fighting and all they had was cheese wheels - those and cheese became medium of exchange, people learned to cook bred out of cheese wheels (don't ask me how as I have no idea)

There is one scenario where gold/precious metals and items truly shine - if you have to bolt and leave the country. I remember a podcast interview with a son of a Vietnamese immigrants who left when south Vietnam lost the war and what this person said was basically "we were wealthy, had plantations, had business in Saigon, had connections and "friends", had armory worth of guns plus people to protect us and ours, but when Communists came none of that mattered. plantations were no longer really ours, businesses were chattered, friends or people we paid to died or flee the country, and we knew too well that few dozen family with AR rifles stand no change against armored divisions. so we took what family kept in gold, paid/bribed to get out and used the remainder to start businesses in the new country including a set of laundromats". I agree with the guy who spoke, this is where small ,portable, untraceable, asset like gold matters. in other cases you are better off owning means of production (of food, of energy, or security, etc) vs a chunk of metal 

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Re: Is Gold Anti-Mustachian?
« Reply #294 on: April 25, 2014, 04:31:44 AM »
I don't agree that "productive" assets inherently improve the world by virtue of their "productivity."  I also don't agree that environmentalism inherently improves the world (there are a lot of misguided recycling programs).  How do you feel about gold miners?
So it's not part of your philosophy. But it's part of Mustachianism*. The thread is not called "Is Gold Anti-Dragoncarian?".

*Or at least, that's what I'm arguing.

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Re: Is Gold Anti-Mustachian?
« Reply #295 on: April 25, 2014, 08:29:15 AM »
I don't agree that "productive" assets inherently improve the world by virtue of their "productivity."  I also don't agree that environmentalism inherently improves the world (there are a lot of misguided recycling programs).  How do you feel about gold miners?
So it's not part of your philosophy. But it's part of Mustachianism*. The thread is not called "Is Gold Anti-Dragoncarian?".

*Or at least, that's what I'm arguing.

I would disagree, and argue the opposite - you're saying it's anti WF2. 

It's not anti-Mustachian.

Sure, maybe you could argue it's less optimal that an asset that produces things and makes life better for people, but it's not necessarily making life worse, or harming people (any more than, you know, anything else, such as the mining to get metal to make a bicycle).

If I was making a list of core Mustachian tenants, I wouldn't include "invest only in productive assets" as one of them.
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Re: Is Gold Anti-Mustachian?
« Reply #296 on: April 25, 2014, 09:29:43 AM »
I would disagree, and argue the opposite - you're saying it's anti WF2. 
But I'm arguing with reference to Mustachian principles. For example, that life is great because increases in productivity permanently reduce our workloads; and that we should improve the world for everyone.

Quote
If I was making a list of core Mustachian tenants, I wouldn't include "invest only in productive assets" as one of them.
(I assume tenants is a Freudian slip for "tenets" because you invest in so much real estate. :-p)

The principles I appeal to may not be "core" principles, but they are found within our sacred texts:

How to Make Money in the Stock Market:
Quote
And all this happens because of the natural ingenuity of  hardworking humans making things at a profit, and continuing to advance our knowledge and technology and make us all more productive in every field

Why We are Not Really All Doomed:
Quote
As recently as my own childhood, nailguns were incredibly rare and expensive, and much bulkier – used only by large construction companies. Nails were driven with hammers, because nobody could afford the gun. Today,  I personally own five different sizes of nailguns, because the boost in productivity and work quality greatly outweighs the cost or the loss of manliness caused by the automatic driving of fasteners. In turn, I am using the time saved by these nailguns to write this article for you.
[...]
The crazier ones turn to gold and silver [sorry, couldn't resist including this bit!]
[...]
Invest your money in index funds and real estate rather than “protecting” it while trying to predict the next collapse. You’ll still own your piece of land or your slice of thousands of businesses regardless of what the guy on the fence is yelling about what he would pay for it at the moment.

Curing your Clown-Like Car Habit:
Quote
And you’re not just wasting your own money, of course. You are wasting the gasoline that the rest of the world works so hard to produce, puncturing seabeds and spilling stadium-loads of oil into pristine wilderness areas as a necessary byproduct. Destroying coral reefs and flooding coastlines with your carbon emissions. Clogging roads and creating demand for roadway expansion

Electric Cars: Are they For Real?:
Quote
The real benefit, however, comes in areas like mine where non-coal power is available. Here in Colorado, wind power is cheap and plentiful, and when you buy more of it, they just put up more towers in the otherwise-barren Eastern desert plains of the state. The impact on jobs is spectacular, as I keep seeing shiny new wind company headquarters popping up, and meeting highly-paid engineers and technicians who have come to the state to work in the growing industry. All caused by me just checking a box on my power bill that said “100% wind”.

And then there's this lovely article on how to sell any physical gold and silver that you might happen to have, which suggests sentiment as the only reason to keep it, and makes the case against buying, on environmental grounds:
Quote
If you’ve got silver or gold in your family, and are not sentimentally attached to it, you should seriously consider selling that shit!
[...]
And it’s even environmentally friendly to cash this stuff in. Today’s sky-high precious metals prices have caused a mining boom (just ask any Australian). When you sell into the market, you are increasing supply, which tends to decrease the market price and decrease the profitability of mining operations. So less mining happens, if you decide not to hoard silver and gold.

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Re: Is Gold Anti-Mustachian?
« Reply #297 on: April 25, 2014, 09:18:33 PM »
(I assume tenants is a Freudian slip for "tenets" because you invest in so much real estate. :-p)

Hah, yes.  I almost always do that when typing tenets, I just usually catch it first. 

The principles I appeal to may not be "core" principles, but they are found within our sacred texts

That's fine, but there's plenty of stuff MMM does that doesn't necessarily make it a core tenet.  For example, he owns a rental.  I could link to 5 or 6 articles referencing it.  That doesn't mean owning a rental is a core principal of Mustachianism.

One could argue that gold isn't useful, and that it's more Mustachian to invest in productive assets, but it's also more Mustachian to ride a bike, that doesn't mean all cars need to be burned.  It's more Mustachian to eat at home, but eating out sometimes is fine too.

Mustachianism is a scale, and while less gold and more productive assets may be higher on the scale (like biking more and eating at home), owning some isn't "anti-Mustachian," IMO.
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Re: Is Gold Anti-Mustachian?
« Reply #298 on: April 26, 2014, 12:38:22 PM »
While this obviously isn't binary, I continue to think gold is pretty plainly anti-mustachian.

1) It derives it's value primarily from a pessimistic worldview. I mean, when bribing border guards is one of the best uses we can think of, we're talking about a seriously pessimistic asset class. Take a look at any gold-bug's thinking and a high valuation for gold almost always goes hand-in-hand with doomsday scenarios, government conspiracy theories, and general fear mongering. It may be OK to hold a small amount of physical gold as a "currrency of last resort", especially if you happen to be an unprotected class of person in a politically unstable country, but the average 1st world westerner would probably do better to spend their money and brain power on things like healthy eating and making sure you don't get hit by a car when you cross the street than stockpiling gold and reading zerohedge.com.

2) Its a tenet of mustachianism that we get rich through compounded returns on invested assets. Gold has no real return (it will only track inflation over the long haul) so it's a poor way to reach FIRE. As a 5-10% portfolio holding, gold is fine for diversity and a inflation hedge. But a 50% allocation to gold means you're likely going to working for "the man" a whole lot longer.

3) It's hugely environmentally destructive while having only minor useful application. Unlike iron mining which provides the raw material for bikes and nail guns, gold pretty much just sits in a safe (minor applications for products like electronics aside). The world would be better off if we all decided that gold was no longer a store of value and chose something similarly arbitrary instead (perhaps Frank Thomas rookie cards or something).

We can split hairs on any of these individual items, but the overall picture strikes me as pretty anti-mustachian.
« Last Edit: April 26, 2014, 12:43:14 PM by KingCoin »

k9

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Re: Is Gold Anti-Mustachian?
« Reply #299 on: June 17, 2014, 09:20:22 AM »
1) It derives it's value primarily from a pessimistic worldview. I mean, when bribing border guards is one of the best uses we can think of, we're talking about a seriously pessimistic asset class.

That's right. The thing is, you do not choose what the markets favor at a given moment and you don't choose what the world becomes (and, by extension, whether the markets were right or wrong). The only thing you can do (regarding assets) is either buy/hold/sell it at a given moment, and the winner's deal is to buy what the market disregards and sell what it begs for. You think there are too many pessimistic investors looking for gold at any price ? You think gold is too expensive and people are crazy to buy at that price ? Fine ! You may be right. Then the only good thing you can do is to massively sell gold right now.

How can *that* be anti-mustachian ?

Another way to say it : I don't own a car because I think owning / driving cars is not necessary to my lifestyle and not very mustachian. Does that mean
investing in automobile manufacturers stocks is antimustachian ? Should I disregard luxury goods companies because I despise luxury goods as a consumer ?