Gold Bitcoin or Silver- Which is the Best Store of Value?

[Smaulgld]

In 2014 Gold Has Been The Best Store Of Value

This year and for hundreds/thousands of years, Gold has been the most consistent store of value.


Bitcoin's 50-60% price drop this year disqualifies it to even be considered as a store of value.


Silver? not so much this year.


These charts show the stability of gold compared to Bitcoin and silver.


https://smaulgld.com/bitcoin-gold-silver-stores-value/

[Zippyjuan]

If you consider gold being just below where it started the year at in terms of dollars "the best store of value". Gold was $1240 in January and is hanging just below $1200 today- down three percent so far this year. Other assets like stocks have outperformed gold by quite a bit.

"Of those choices" it may have done relatively well. But other asset options have done better.

[osan]

If you consider gold being just below where it started the year at in terms of dollars "the best store of value". Gold was $1240 in January and is hanging just below $1200 today- down three percent so far this year. Other assets like stocks have outperformed gold by quite a bit.

Stocks are in a major-league bubble. When the plug is pulled on that one, I shudder to think where the value will ultimately settle. It depends largely on how far down the tube the economy does.

"Of those choices" it may have done relatively well. But other asset options have done better.

"Better" under artificial conditions, a truly free market being the standard of measure. There is almost nothing organic about this market. It is hyper-manipulated in the most unsound ways and therefore cannot be trusted. It could stay this way for another 100 years, or it could go to pot tomorrow. There is no way of knowing, and given the fact that the current state is the product of such heavy artificialities, nobody in his right head would trust it unless he had very inside information.

Twas a time when the big dogs were content to let the little ones ride their coattails. Those days are over. Rising tides no longer float all vessels because the true insiders were busy drilling holes in the hulls while everyone was asleep. This game has taken on a vicious timbre it never before had. I doubt it is because the insiders were any more decent back then, but because the technologies are enabling the big dogs to design and execute strategies that were never before possible. The mere capabilities that computers have provided in terms of statistical analysis are simply staggering. They can now do things that men with slide rules could barely dream of.

[tangent4ronpaul]

There is malware that will steal bitcoin, magnetic media dies and then the FBI likes to steal it.
Silver has a lot more room for upward mobility and is in quantities that make it more useful for barter and then the FBI likes to steal it.
Lots of countries are stocking up on gold, presumably in prep for the US dollar failing. Then again, massive deposits of gold have been discovered on the ocean floor - like nine times what's out there in circulation but they won't start mining it for about 10 years... and the FBI likes to steal it.

-t

[Zippyjuan]

Gold is deflating from its own major bubble- down 37% from its peak so far.

[NorthCarolinaLiberty]

Gold was $1240 in January and is hanging just below $1200 today- down three percent so far this year. Other assets like stocks have outperformed gold by quite a bit.

"Of those choices" it may have done relatively well. But other asset options have done better.

Gold has quintupled in about 10 years.

[Zippyjuan]

Which is a good sign of a bubble in an asset- rapid and large appreciation in price. It has risen farther and faster than houses did during their bubble. And has fallen more since their respective peaks -too.

Actually right now it is down to being a triple after ten years- at its peak ($1900 an ounce) it was almost a quintuple.

http://www.kitco.com/charts/popup/au3650nyb.html

[Shane Harris]

Lets look at the longer term and compare bitcoin, gold, and silver over the past three years. In October 2011, Gold was $1700/oz (now $1200), Silver was $30/oz (now $17), and one bitcoin was $2 (now $300).

October 2011 - October 2014

Gold -30%
Silver -40%
BTC +15000%

[NorthCarolinaLiberty]

Which is a good sign of a bubble...rapid and large appreciation in price.

What you have just described is the stock market, which has also (coincidentally) quintupled in a short period of time.


Rising items like gold are occurring in a global economy, with rising eastern markets. Compare that with a bubble stock market, which has rapidly ascended against the United States' decades long declining output:

[Zippyjuan]

Your chart does not show declining output. Everywhere the graph is above zero output is increasing- it shows the GROWTH RATE in GDP, not GDP itself. When the growth rate is negative, then you are facing a decline in output. Yes- stocks are up a lot as well.

[thoughtomator]

I'm a fan of silver. I believe that even if you bought it at its $35 peak, you're still going to make out like a bandit if you hold onto it a few years.

[NorthCarolinaLiberty]

Your chart does not show declining output. Everywhere the graph is above zero output is increasing- it shows the GROWTH RATE in GDP, not GDP itself. When the growth rate is negative, then you are facing a decline in output. .

Yes, it is obviously charting growth rate because that is the title of the chart. Yes, our output is declining. Numbers can be positive and still show a declining output over time.

Yes- stocks are up a lot as well

In stark contrast to the chart, which shows a steadily declining economy.

[Zippyjuan]

Sorry- your chart does not show declining GDP. That would require it to show GDP growth rate below zero which it does not (though it did in the second quarter of this year, it rebounded higher in the third).

against the United States' decades long declining output

And it certainly has not been declining for decades.

http://www.tradingeconomics.com/char...p.png?s=wgdpus



Even per-captia GDP isn't declining now (output per person).


http://www.tradingeconomics.com/unit...gdp-per-capita

[NorthCarolinaLiberty]

Sorry- your chart does not show declining GDP.

The chart clearly measures GDP growth rate. The chart clearly shows that the growth rate is declining.

[Zippyjuan]

The chart clearly measures GDP growth rate. The chart clearly shows that the growth rate is declining.

A lower growth rate is not the same as falling production. It means things aren't growing as quickly as in the past, but they are still growing. Unless the growth rate goes negative. You said output was declining and had been declining for decades which is untrue.

(side note on an earlier point, the DOW has not quintupled- in March, 2009 it hit its low of 6,547 and peaked recently about 17,000 which is about 2.5 times higher).

[NorthCarolinaLiberty]

A lower growth rate is not the same as falling production. It means things aren't growing as quickly as in the past, but they are still growing. Unless the growth rate goes negative. You said output was declining and had been declining for decades which is untrue.

I don't know what to tell because the chart is right there. There's a different between growth and growth rate. Our rate has slowed, or declined. You don't even have to itemize it to see it. You can project an imaginary sloping line from left to right with a quick glance of the chart.

This steady erosion of growth rate is happening while the stock market quintuples. If you're talking about bubbles, then it does not get any more significant than that.

[Zippyjuan]

You are getting it. The growth RATE has declined but output hasn't. It is still growing- just at a slower rate.

Stocks probably are over-priced (though not quintupled- plus they got underpriced during the Great Recession) and have been retreating from the highs lately. Stocks tend to trade at multiples of expected future earnings of companies- higher stock prices means investors expect more growth in the future.

[NorthCarolinaLiberty]

(side note on an earlier point, the DOW has not quintupled- in March, 2009 it hit its low of 6,547 and peaked recently about 17,000 which is about 2.5 times higher).

The DOW was around 3,000 about 20 years ago. The 17,000 mark means it has quintupled (fivefold or 3x5 =15).

[NorthCarolinaLiberty]

You are getting it. The growth RATE has declined but output hasn't. It is still growing- just at a slower rate.

I'm getting it?!

Definition of decline: a gradual and continuous loss of strength, numbers, quality, or value.

[Zippyjuan]

What was the chart again? The growth rate of GDP. The growth rate of GDP was declining. Yes- your chart does show that. A chart of GDP over the same times shows that GDP was rising. GDP is a measure of our total output. Along with your chart you included a claim that US output was falling and had been falling for decades. That was actually rising.

If I weigh 100 pounds and put on five pounds the first month, three pounds the second month, and one pound the third month, the rate of growth in my weight is going down. It is declining. But my total weight is still going up.

[Zippyjuan]

The DOW was around 3,000 about 20 years ago. The 17,000 mark means it has quintupled (fivefold or 3x5 =15).

I see- you had to find a time period where your number worked. True you did not say since when the DOW quintupled. I assumed you were talking about since the recession.

But if you want to use that year, fine. US GDP was 10 trillion in 1994. Today it is almost $17 trillion- an increase of about 70%. Not exactly "decades of decline".

[Zippyjuan]

For some historic comparision of what GDP growth normally is:
http://www.tradingeconomics.com/unit...tes/gdp-growth

The Gross Domestic Product (GDP) in the United States expanded by a seasonally adjusted annual rate of 4.6 percent in the second quarter of 2014 over the previous quarter, according to a third and final estimate from the Commerce Department. GDP Growth Rate in the United States averaged 3.27 Percent from 1947 until 2014, reaching an all time high of 16.90 Percent in the first quarter of 1950 and a record low of -10 Percent in the first quarter of 1958.

[NorthCarolinaLiberty]

I see- you had to find a time period where your number worked.

Find time for my number to work? I gave my quintuple number as an example of your definition of bubble: "...rapid and large appreciation in price."

But if you want to use that year, fine. US GDP was 10 trillion in 1994. Today it is almost $17 trillion- an increase of about 70%. Not exactly "decades of decline".

Absolute numbers are not rate. I'm viewing your numbers against a benchmark (rate), which is what I presented from the very beginning.

[Zippyjuan]

The "benchmark rate" (average) for GDP growth since 1945 is 3.27% a year. Last quarter was 4.6%.

Is 20 years a "rapid" increase in something?

[NorthCarolinaLiberty]

If I weigh 100 pounds and put on five pounds the first month, three pounds the second month, and one pound the third month, the rate of growth in my weight is going down. It is declining. But my total weight is still going up.

An example that does not even apply to the U.S. economy.

If I make $100 in year A, $90 in year B, $80 in year C, etc., then I am declining on that marker. This is the U.S for over 60 years, expressed in the original and only graph I posted.

[NorthCarolinaLiberty]

Last quarter was 4.6%.

You measure quarters. I measure half centuries.

[NorthCarolinaLiberty]

Is 20 years a "rapid" increase in something?

It is if you're talking about a fivefold stock market increase against a declining economy. That's the very definition of something overvalued, or a bubble.

[Zippyjuan]

If you want your example to match you graph, you should be saying you got a $100 increase in income the first year, a $90 increase in income the second year, and a $80 increase the third year. The growth rate in your wage was declining. Your chart shows changes in the RATE OF CHANGE.

If those are your real wages, then you need a different chart. The rate of change between year one and year two was negative ten percent. First point on graph. Rate of change for second year was minus eleven percent. Second point on graph if you want to show changes in the growth rate of your income. Not 100, 98, 80 since those are the real wages, not the change in wages.

[Zippyjuan]

It is if you're talking about a fivefold stock market increase against a declining economy. That's the very definition of something overvalued, or a bubble.

How much did US output decline since 1994? Or if you prefer, how much has the US economy declined in 50 years?

You measure quarters. I measure half centuries.

[NorthCarolinaLiberty]

..you should be saying...

Not really. View 2008 with the late seventies, early to mid-seventies, 1959, etc. Then, view those numbers in the context of overall declining growth.