Topic: fiat vs commodity - page 2. (Read 366 times)

Yes. That is the reason why it seems our money becomes less if we deposit them in the bank. The value of it depreciates due to inflation. If you are a saver, it is okay to practice that principle but you should save to invest.

Because if you won't do something to make use of your money in investments, the banks are the ones that will make use of it and in return, they will give you very small amount of interest.

Investing in any asset you know is recommended.

thats right even deposits in bank can't truly contend against the inflation which means even if we supposedly invest our money, we still losing our share of wealth value anyway.
I think trying to find alternative investment where it can give us better return is essential in this case, considering the fact that inflation has been rising quite high these past few years due to geopolitical reasons.
investing in cryptocurrency, stocks and many more might prove to be beneifical at time like this even more so when the crisis could hit anytime.
but I think many people still don't have a clue about that, even don't have a clue that their salary should supposedly rise with the coming of inflation but many of them have unincreasing salary.
when it comes to fiat vs commodity, i'd honestly hold into commodity, just for the sake of avoiding inflation altogether. but can't refute the fact that fiat is still that convenient.

It's called inflation.

That's why in the past commodities and their prices weren't that much. And due to the inflation that happens yearly or anytime of the year, the price increases and that makes the value of fiat even lesser.

As for bitcoin, it's a deflationary cryptocurrency and we know that in the future the value of it becomes higher due to having a limited supply.

When you have that much money, don't keep them in fiat. But don't forget to at least save for some things that you need to spend it with cash and when you want to have high liquidity of your money.

The money you save in the bank will never increase or increase, and if you get additional money when you withdraw your money, it will only be in the form of interest given by the bank itself. And I don't think it would be worth the five years, whereas Bitcoin is purely because there is a very real price increase in the market and can also be witnessed by many people.

Fiat is very likely to weaken and this has been felt by many people every year, while Bitcoin clearly experiences an increase in price in each cycle so both are true. Likewise with houses, the price of which may never increase, but only the materials used to make the house increase in price, causing the house to become more expensive. And it is also accompanied by a weakening level of fiat due to several things, such as inflation, so there are two possibilities for one of the causes.

We can say that almost all commodities have a stable value, but we cannot say that the fiat value will continue to be stable because shocks through inflation could cause the fiat value to collapse. So everyone has to spend more fiat when they want to spend on the same items in different years and even in the same year it can also be different.

Robert Kiyosaki is a person who is smart enough to see and read opportunities so he will not ignore Bitcoin which has shown proof to many people for more than ten years. So we can also consider Bitcoin as a very good opportunity to earn more income in the future as said by Robert Kiyosaki where Bitcoin is a very valuable asset besides a house.

Both of these things are occurring, its a bit of a treadmill.  Nominally all workers and even skilled trades people are better off by pure numbers but in value terms people realize they have suffered greatly from the inflation occurring over decades and a family with employed householders may struggle to pay the bills despite having good jobs.   This points to a problem which may cause economic upset, where money is no longer valid in its purpose to propagate value through prices in an economy.  So its both and its a confusing effect.

BTC prices isnt the final consideration, factors behind the price are more important really and represent value growth better.  However price is the most simple to appreciate guide especially short term to gains or losses.

80's 90's - formation and completion process of global recession
90's to 2010's - artificial money strength, gold sucked because it seemed like the great USD was strong! Really, base supply of money was expanding, the effect showed in 08/09'
2010-2015 - Financial crisis subsiding and recovery, then the EU turned the printers on....
2015-2020 - Every other central bank starts turning their printer on. "Quantitative easing" was the US's form of rapid expansion.
2020-2023 - Brrrrrrrrrrrrrrrrrrrr sound is made pretty much globally.

With this series of history, comparing to Gold and Bitcoin, you'll see where prices suppressed then eventually priced in when it's difficult for the suppression to continue.

Homes should be similar but behaved a little different over time due to the mortgage scheme and the value booms/crashes caused by that scheme.

So you can cherry pick good and bad times, but it can be lined up with what central banks are doing, and when it is out of their interest for gold or bitcoin to reflect higher values against money...similarly, when that suppression is too difficult to maintain, and when the value is finally priced in.

Also fixed my post, there was a couple of things that weren't worded perfectly

That's true, since when did fiat improve, but every year it decreases, because as far as I know, fiat will continue to be printed because there is no fiat basis, but the belief is different from before, fiat had a 1:1 gold basis, now it doesn't exist, I think the purpose of creating Bitcoin is releasing us from fiat because there are only 21 million bitcoins in the world, it cannot be further different from fiat which has no limit on the amount of its supply and I think bitcoin can be said to be a discovery so that we can be separated from the fiat system, what do you think?

If we are to go by this analogy, then we can say bitcoin is not increasing in value but fiat is declining in value. As far as I know, inflation can indeed cause the prices of goods and services to rise over time and thereby making it seem like the value of fiat currencies is declining but this is not always the case especially in the housing industry that you use as example. The prices of different commodities can fluctuate quite a bit over time depending on factors like supply and demand. Houses increases in value regardless of inflation is high or not but it depends on where the house is located and how liveable the place is.

if we look at the nominal price of the house, it has gone up by 2,500% since 1980. But if we look at the real price of the house and taking inflation into account, it's only gone up by 29%. So the nominal price increase makes it seem like the house has gained a lot of value but the real price increase tells a different story. The argument here is that both fiat and commodities can go up or down in value over time depending on various factors.

Not only are house prices for living in expensive now, boarding house prices also rise if demand is high, especially if the location is strategic. We can easily find this in reputable campus complexes where students are always looking for temporary accommodation that is not far from where they study, is safe and saves time.

It's a hard mix of both , as value of fiat is depricating to a small extend as well as commodities increasing and increasing inflation is causing the price of commodities to increase but value of Fiat remains more or less same.

I will give you an example of myself. I have recently started construction of my house and I had got a quote from a building contractor 2 years ago and now the quotation which I got is 55% more than what was quoted  2 years earlier and the reason given was the price of petrol/gas has increased and thus the transportation cost of raw materials have increased. It's a chain process and we can neither beat inflation with our fiat nor cope up with it if we save in fiat hence Bitcoin or stock would be better option here.

House price is increased, don't compare between 1980s where the number of population is way smaller which make almost everyone afford to buy house after work for 2-3 years. While right now the population is really big, while land supply is limited, that's make not everyone can afford to buy house. House price will not increased if the population is stable or decreased, last few years the house price is quite stable until now.

While Bitcoin, definitely it's the most promising asset in the current generation and it's not yet reach the mass adoption.

Inflation is a global issue that's ripping off the fiat. If you save $100M in a bank for the next 5 year, your money will not be valued at $100M again because the price of commodity in the market must have increased over the years. If a bag of rice sells at $60, in the next 5 years it might be at $100 or more, so the fiat is declining in value as a result of high inflation rate. But if you use same amount to buy Bitcoin during the bear season, you hodl and sell during the bull season, inflation will have no effect on your savings because your Bitcoin would have also appreciated in value. So Bitcoin is an edge against inflation.

    -  The house may not increase in value when it lasts if it is not renovated, but the land the house is built on increases in value as time passes.

Now the question for Kiyosaki is: maybe he saw the potential of Bitcoin, and it is normal for him to invest in Bitcoin because he is a businessman and he really knows that he will make a profit from a volatile asset like Bitcoin. Maybe he will buy again now because he has seen more and more people investing in Bitcoin.

This is best way to describe it.

You can toss in gold and homes and silver etc.

They all travel on a value path when compared to one another.

Gold sucked from 1992 to 2003 it stayed in a 200-400 usd slot.

 it is now about 2000 so it did better from 2003 to 2023.

 homes sucked from 2007 to 2015 but were great from 2020 to 2023.

btc sucked from nov 2021 to nov 2023

but were great from dec 2018 to nov 2021

so you can see cherry picking the good times or the bad times shows variations

I would say the word weakening is the right term

 fiat and bitcoin both share the fundamental concept of supply and demand

money loses value mainly because of inflation
with fiat if there are more printed money than the circulating products so now products are much more expensive then fiat loses its purchasing power and that’s inflation

more demand than supply results in higher prices

bitcoin has only limited supply the more people are buying the higher the value goes up

This is correct interpretation on how inflation works. Many people think that the value of an asset such house is increasing over time but the real reason behind the increase of value is due to the fiat weakening of buying power due to excessive circulation over time since fiat has unlimited supply.

You will notice that most of the commodity including salaries is increasing too not because of appreciation of their value but rather fiat supply is already saturated that makes it value less in terms of buying power.

Historically, when the price of gold has increased, it has been because of the decreasing value or purchasing power of money. Bitcoin works similarly due to it's similar economic characteristics, though I think one of the superb things about Bitcoin as a cyber commodity, is that it gains strength from its own use case and development, which is something that is not entirely the case with gold anymore (in its early times though, it did have use case discovery but markets were no where near as a good at efficiently valuing things as they are now)

In short, the answer is both! This can be seen clearly on Bitcoin's graph

Bitcoin is an asset of value.

Bitcoin was once a time at less than $1
The price in 2012 was around $12 but increasing
Bitcoin has been increasing in price continuously in a way its increase is more than its decrease.
The low price in 2018 was $3100 or so after $19650 which was its 2017 highest price.
All-time-high price is $69000 in 2021
Its price today is $37350

Bitcoin price continue to increase and decrease but in long term it increased. It is an appreciative asset and worth buying at the right time when its price has decreased. It is not still too late to buy before 2024 halving which is not more than 5 or 6 months away.

So what is the value of anything determined by?

That's why you will encounter many people accepting the fact that 1 bitcoin = 1 bitcoin, 1 USD = 1 USD

Allow yourself time to see that from birth to death is a big journey, and we always need to learn and apply it to every field in which we participate. Sometimes the confusion between movement/fixity causes many people to confuse finding the true meaning of life. And here we can all easily access the opportunity with bitcoin as well as the risks in that exposure process, but perhaps the truth is that bitcoin will help our lives more in one place where fairness is emphasized.

Inflation is devouring local currencies at a rapid pace. The best performing currencies against the dollar may witness limited growth and the collapse of the value of the dollar against fixed assets. Gold is measured in terms of 5 to 10 years. As for Bitcoin, during the past few years the price has proven that it rises regardless of the value of the dollar. If we take gold as a measure of value. The value of Bitcoin rose sharply against gold in a curve that changed from the dollar. This leads us to conclude that Bitcoin has not reached its actual value and will continue to increase until it reaches it.