Topic: Bitcoin vs. Gold Prices - page 14. (Read 2347 times)

QE was only the tip of the iceberg.  The vast majority of money is created in the banking sector as new deposits (or equivalent in investment banks.)  QE was merely a symbol of the ultra-low-interest environment after the crisis 10 years ago, that created a ton of money through the banking system.

Anything I say about how this will turn into goods and services inflation is by definition speculative, as it hasn't happened yet in this case.  If you want to read this kind of narrative, there's plenty right now in investment literature, since reflation is one of the major bets (if not the major bet) in financial circles right now.  Suffice it to say, there are many pathways possible.

In fact, for all we know, it may never turn into inflation in our lifetime.  (It's just that that scenario would be far worse from a humanitarian point of view.)  But inflation is still a good bet (at least inflation as part of the tools used to reset the system.)

As I pointed out before, even if it doesn't turn into inflation in our lifetime, even if it takes 100+ years (as the paper-pound bubble lasted,) history is that it always turn into inflation (or worse -- as in the Dutch case, where Dutch public debt was simply defaulted on by the French occupation government, long after the decline of the Dutch empire.)


Try reading 'Lords of Finance' by Liaquat Ahamed, in the relevant chapter, about post-WWI Germany.


The point I was making was big enough that, if I didn't talk in very generic terms, it would take too long to write.

Final thing I'd like to say is, if you're looking for cut and dry answers, I'm afraid there's no such thing in this field.  There are multiple possible pathways for each case of financial inflation to evolve, but what we do know is that things won't be good.

But I feel confused. What you say comes down to asserting that asset inflation, for example, due to 3 rounds of quantitative easing and money poured into stock markets, will ultimately turn into consumer price inflation. In other words, it is just deferred inflation and a matter of time when shit hist the fan. If so, I want to know how it will get transferred to goods and services. It is not like people are hoarding money as they did in Germany according to you, though even that sounds dubious if you ask me. You are talking in broad and vague terms (like terrorism, wars, pollution, whatever) which don't make a lot of sense to me.

With the two commodities now in roughly the same price range, it's worth putting aside some of bitcoin's short-term volatility and liquidity concerns to compare them as long-term stores of value side by side.If we think about the qualities that make gold a respected 'money' or store of value, bitcoin is actually superior in many regards.

yeah you are telling truth bitcoin can give much more than gold investment and due to its volatility the ratio of high profit is more in bitcoin and now gold investors are also coming toward bitcoin because bitcoin is attracting each investors of any kind of investment,

Between 1919 and 1920, a loaf of bread went up about 5 times in Germany.  This was before the hyperinflation and was due to money printing to finance the war, with the money being hoarded immediately after the war, but for some reason flooded into the market a year or so afterwards.

As I mentioned again and again, I think focusing narrowly on consumer price inflation in the West really misses the important issues due to the modern system of central bank created money.  And these include severe economic and social pain outside the West, terrorism, wars, pollution, etc.

That is, when the Western elites choose not to inflate enough but try to continue to prop up confidence in their currency, is the time when the worst suffering occurs.  (It's also not one or the other: usually it's a combination of inflation, deflation, financial repression, etc.  I'm simplifying here to refer to the effects of deflation vs. inflation.)

I think if you invest in Gold you will not make more profit and the price is almost stable at any time. very rarely the price will increase high so be making more profit chances are less in Gold but your investment will be. You invest in Bitcoin you can make big profit but risk is also high

THIS is so wise if you are preferring bitcoin over gold because investing into gold for earning some decent profit has become old fashion and it is very slow method of increasing your capital whereas bitcoin is having the potential of making you rich in very short time span.

Bitcoin and Gold are both good investments. But value wise i go for Bitcoin because it is more profitable compare to Gold and more people are getting interested to invest in bitcoin.

My opinion is equally good but it's better if we choose both. If there is more money we save gold and bitcoin because gold is also a good price but more with the increase in bitcoin may be a great one. so it's good to take a 50% / 50% investment.

today, people are always looking at bitcoin and gold prices, both of which are excellent investment tools for the future. however, bitcoin prices tend to accrue more quickly, so many people choose to invest in bitcoins rather than gold. but, gold has an advantage, that is physical form, and its value always increases even if it is a little longer.

So you are basically saying that even if we have somehow postponed consumer price inflation now, it will inevitably kick in later because the printed trillions will sooner or later trickle into the real economy pushing consumer prices higher. It may be like that in many cases as it happened in the past with Germany after World War I. But even with Germany that in fact remains to be seen. Germany lost war in 1918 when the Versailles peace treaty was signed, while hyperinflation started there only 3 years after, in 1921. And it was an obvious outcome of excessive money printing back then, not due to paper money having been stashed for 4-7 years. 

Also, there are even more powerful arguments you could have used.  The British Empire issued much more paper money than it had gold, over most of the 19th century, under an official gold standard, and there was little inflation in Britain and the West over that period.

So that particular bubble in money (supported by British acquisition of colonies which were 'happy' to hold paper pound sterling as reserves, and other mechanisms) arguably took 100 years to burst.

But that time came too (the precise mechanism being very complex, again, involving world wars and transitioning the imperial seat to America, etc.)  A paper pound note is today worth less than 3% of its 'equivalent' in gold under the British gold standard -- 3% being the amount of gold Britain owned relative to the amount of paper money it had issued, on the eve of World War I.

There are many possible pathways, and the current financial inflation hasn't yet gone into consumer price inflation, so predictions are hard.  (Further complicating the scene is that developing countries often end up absorbing a lot of the financial inflation -- a consequence of the imperial system we have in this world which is arguably a much bigger problem than simple inflation.)

The reasoning is, when you have sold many more tickets than there are seats in the concert hall, one way or another, there will be a problem.  And inflation (where maybe 4 people squeeze into 3 seats) is the best possible outcome, since the pain is gradual and spread around.

For example, for all the printing of money in Germany during World War I, there was no immediate postwar consumer inflation.  People just preferred to hold onto their money, for whatever reason.  When confidence in that money was lost, inflation happened like a tidal wave.  When a bubble in money bursts, and how, is one of the classic problems of investing -- you never know for sure since the bubble is supported by the most powerful people in society.  Given the incentives for the elites to destabilize their own system, you know it will burst in some way, at some point.

True, and in fact you don't even need to go that far.  Science has already succeeded in using radioactive reactions to create gold (so alchemy has succeeded!)  So the currently very high cost of such lab work will become an upper bound of gold prices.

But all of these ventures are today expensive (or speculative,) so gold holders need not worry at this point.

The important thing is that the special commodity of money arises naturally from economic activities, since barter is so inconvenient.  If and when all monies have lost trust in one way or another, the economy will use a commodity, if it has to (tobacco, sea shells, etc. have all been used in the past.)  The state will of course always try to issue its currency, but due to the inherently perverse incentives for the issuers of state currency, there will always be a role for non-state money.

Yes your truly correct!Gold is nice because when I start to born in this planet we considered the value of gold and how expensive it is but the fact is I'll never experience to earned gold.Unlike Bitcoin even if I'm newly know it but the impact and the changes of my life was very big as in truly amazing apparatus to create my future shining like a star.

But I don't understand how the former (asset price inflation) is going to translate into the latter (consumer price inflation). It would be nice if you explained in short the transfer mechanism if there is any. Look, when the Fed poured trillions into the financial markets in late 2000's and early 2010's, it didn't turn around as consumer price inflation. The Fed had managed to keep the inflation rates on a tight rein. So why should today or tomorrow be different?

If you will just make an analysis, bitcoin and gold really do have that same attribute of becoming an asset iminvestment for trading. But aa you can see, the entirw features of the two are directly different.
Gold, after a very long time, has been eyed by many people, those who are seeki ng for monetary richness. Bitcoin is on trend and people are excited to earn for bitcoin

This is not entirely true, yes gold and silver are uncommon due to being heavy elements created only when a star goes supernova but the universe is huge, once humans are able to get out of earth and begin to populate other planets natural resources will stop being a limitation, this is why we will need something like bitcoin because no matter what you do there is a limit in the amount of coins.

Gold and silver have the unique attribute that their scarcity is secured by physics rather than code and data, so I think there will always be a special role for them.

And it also helps that you can't create alt-precious-metals everyday!

I think if we reffer on  business bitcoin is really has an advantages than gold because bitcoin has the unstable price that is really fit for buy and selling process of gaining.But if we talk about price stability I think gold is better than bitcoin well the decision is our the choices is always to be work upon.