Quote from: The Pharmacist on December 17, 2018, 11:13:37 PM

Quote from: truehedge on December 15, 2018, 09:06:10 AM

I can't speak for US treasuries as I don't understand them that much let alone understand why would anyone invest in anything that does not even cover (real) inflation which in my opinion is about 7 - 10 % per year depending on where you live and things you buy.

Yeah, inflation does depend on those things. In the US where I live, and for the things I buy, inflation is nowhere near 7-10%. Inflation hits some goods & services more so than others, and the data the US government gives is based on a "basket of goods" if I'm not mistaken, and it certainly doesn't measure everything that's bought or sold.

Anyway, if your investment doesn't at least keep up with inflation then you're obviously losing money. One of the facts that precious metals hucksters keep repeating over and over is that a silver quarter can still buy a gallon of gas and therefore silver is the best hedge against inflation. Do I believe that? Absolutely not, though I don't think it's a horrible idea to buy some metals right now. They've taken a serious beating since 2011 and may go up again if any sort of crisis hits.

Bitcoin, though? Come on, I couldn't think of a worse inflation hedge, even at the price it's selling for right now. Why? Because any safe-haven, inflation-hedging asset should not be as volatile and prone to bubbles and crashes like bitcoin is. It may be an excellent way for a trader to make money from, assuming that the price appreciates in the long- or short-term, but there's no way I'd feel safe using it as a hedge. It's around $3400 as I write this, and it could drop to $1000 by tomorrow morning for all I know. There's too much uncertainty and too much volatility, and traditional inflation hedges lack those two features.

Even though I don't buy into the propaganda the gold & silver permabulls keep promulgating, I agree with their point that neither metal is going to drop to zero, since both have actual real-world uses. Bitcoin probably won't drop to zero, but there's more of a chance of it doing so than metals--or even stocks with solid companies behind them for that matter.

I'm hoping that this discussion turns out to be pointless and that we're not staring down a global economic crisis, but I do feel the bad vibes that are going around and I do get the feeling that something bad is going to happen. I can already see some of it in the stock market, though I've been expecting a major correction for quite some time now. For bitcoin, I'm hoping 2019 turns out to be a better year than this one.

Well not sure if you meant that it's actually higher or lower but if you look at thing like Chapwood Index, Big Mac index or M1 Money supply with data provided by FED (https://fred.stlouisfed.org/series/M1) you will quickly realize it's at least 7%.

I agree with the argument that the metals will probably never go to zero but at the same time I strongly believe that it's days as future go-to store of value are numbered because of its limited portability.