Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: the invisib1e hand
He's right. With the interest collected included, dollars have held their value in real terms since the Fed was founded, and with a vastly smoother ride than gold. Gold hasn't offered any higher return than just taking your interest in dollars, and it has had 10 times the volatility. Sure the return is higher than bills stuffed in a mattress, but that isn't saying anything.

Real property carried at low interest rates can be even a better hedge, and some of each better still. Gold can zig when other things zag and be worth a modest position for that reason, or as catastrophe insurance. But as a long term store of value it isn't as good as currency lent at interest.

6 posted on 09/14/2009 11:26:14 AM PDT by JasonC
[ Post Reply | Private Reply | To 2 | View Replies ]


To: JasonC

the entire premise is a presumption about the dollar or, indeed, any fiat currency, one that is dubious.


8 posted on 09/14/2009 11:40:15 AM PDT by the invisib1e hand (hang the Czars.)
[ Post Reply | Private Reply | To 6 | View Replies ]

To: JasonC
With the interest collected included, dollars have held their value in real terms... Sure the return (on gold stuffed in a matteress) is higher than bills stuffed in a mattress,

You meant to say that "With the interest collected included, loans to insured banks or loans to the US treasury held their value in real terms if you don't count income tax paid but was less than the returns on physical gold leased/loaned out to financial markets... Sure the return on gold stuffed in the mattress is higher than bills stuffed in a mattress.

13 posted on 09/14/2009 12:09:37 PM PDT by staytrue
[ Post Reply | Private Reply | To 6 | View Replies ]

To: JasonC

“But as a long term store of value it isn’t as good as currency lent at interest.”

If Obama wasn’t president, I would agree, but during the next four years, I am guessing that gold will blow the dollar into the weeds, and depending on how much damage Obama does, it might continue to do so very long into the future.


14 posted on 09/14/2009 12:24:56 PM PDT by monday
[ Post Reply | Private Reply | To 6 | View Replies ]

To: JasonC

Interest was paid on gold deposits prior to the 1933 confiscation, although rates under the gold standard were fairly low. So, the only real reason gold doesn’t pay interest is because the government forbade it! I’m no goldbug, but thems the facts.


26 posted on 09/15/2009 2:33:24 PM PDT by Freedom4US
[ Post Reply | Private Reply | To 6 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson