Pardon my French, but: fuck security. Nothing is safe, nothing is secure, enjoy the thrill and live.
False argument. The Permanent Portfolio is safe.
I don't think you'll enjoy the thrill if you lose your lives work.
Topic: Why going all-in is not financially responsible. Capital is your Security. - page 3. (Read 4181 times)
sr. member
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March 11, 2013, 12:23:01 PM
False argument. The Permanent Portfolio is safe.
I don't think you'll enjoy the thrill if you lose your lives work.
March 11, 2013, 12:19:26 PM
I'm sorry. You did address my question.
I think we may have cross-posted.Your answer is that you will depend on others to take care of you. That is the tribe/socialist solution. I have rejected that solution in my opening post as it limits your freedom and the freedom of others.
Any time you consume more than you produce (spending your savings) you depend on others to take care of you. The only difference is whether you are depending on anonymous producers in a market, or depending on people you've built up personal relationships with.
Saving means consuming less that you produce in the present in order to accumulate that which you guess the producers of what you want to consume in the future accept for trade. It presupposes those producers will be willing and able to trade with you, and that whatever you accumulate now will still be in your possession when you want to consume.
Is it less speculative to depend on your ability to predict what anonymous producers will want in the future, or is it less speculative to maximize your own productive ability and to build social capital with people you know and trust?
This is not to say that saving and speculation are bad, but I just don't think they are the best long term strategy to rely on.
March 11, 2013, 12:16:19 PM
Pardon my French, but: fuck security. Nothing is safe, nothing is secure, enjoy the thrill and live.
March 11, 2013, 12:15:39 PM
I just know that if I converted all my savings into bitcoin when it was at 0.10 a piece, neither I nor any one of my relatives would've had to work again, ever. Probably grandchildren would've been covered, as well.
Completely risky and crazy, sure, but it would it have been totally worth it. But yeah, I'm a chicken
I prefer security as well, as OP. So that means doomed for mediocrity.
Completely risky and crazy, sure, but it would it have been totally worth it. But yeah, I'm a chicken
I prefer security as well, as OP. So that means doomed for mediocrity. sr. member
Activity: 294
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March 11, 2013, 12:13:41 PM
Again you ignored my vital question:
What if you are not able to earn a living due to illness, accident or old age?
I did not ignore it.What if you are not able to earn a living due to illness, accident or old age?
The majority of illnesses in the modern world are both chronic and preventable, so they can be minimized with appropriate lifestyle changes. For the risks that can't be eliminated you can hedge against by having a strong social network.
In the current worldwide fiscal climate the people who are already old are doomed, so there's not much they can do anyway besides speculate and hope. Those who aren't yet old have the opportunity to prepare before they end up in that position.
In the current worldwide fiscal climate the people who are already old are doomed, so there's not much they can do anyway besides speculate and hope. Those who aren't yet old have the opportunity to prepare before they end up in that position.
I'm sorry. You did address my question. Your answer is that you will depend on others to take care of you. That is the tribe/socialist solution. I have rejected that solution in my opening post as it limits your freedom and the freedom of others.
March 11, 2013, 11:56:33 AM
Again you ignored my vital question:
What if you are not able to earn a living due to illness, accident or old age?
I did not ignore it.What if you are not able to earn a living due to illness, accident or old age?
The majority of illnesses in the modern world are both chronic and preventable, so they can be minimized with appropriate lifestyle changes. For the risks that can't be eliminated you can hedge against by having a strong social network.
In the current worldwide fiscal climate the people who are already old are doomed, so there's not much they can do anyway besides speculate and hope. Those who aren't yet old have the opportunity to prepare before they end up in that position.
In the current worldwide fiscal climate the people who are already old are doomed, so there's not much they can do anyway besides speculate and hope. Those who aren't yet old have the opportunity to prepare before they end up in that position.
sr. member
Activity: 294
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This bull will try to shake you off. Hold tight!
March 11, 2013, 11:54:17 AM
Saving is much more speculative than maximizing and diversifying your own ability to produce new wealth because in the latter case more of the variables are under your control.
Again you ignored my vital question:
What if you are not able to earn a living due to illness, accident or old age?
Also you repeated the same false argument 'all savings are speculative' and ignored my argument why the permanent portfolio is not a speculation.
It feels like talking to a wall.
March 11, 2013, 11:40:47 AM
Agree with the general sentiment. However, I think you would benefit from knowing what real capital is. It's stuff that produces, cutting down the amount of labour and other production factors that need to be used to produce a certain amount. Think machinery in a factory. That is capital. Savings in cash is not capital in that sense. If referring to it as capital, it best to talk about financial capital, to distinguish it from real capital.
Savings is a way of taking value forward through time, and is not a production factor.
Savings is a way of taking value forward through time, and is not a production factor.
March 11, 2013, 11:39:48 AM
25% bonds, 25% cash sounds pretty dollar-heavy to me. You are advising saving in dollars if you are pushing this allocation.
You forgot to mention the 25% stocks and 25% physical gold that are also part of the Permanent Portfolio. But agreed, the Permanent Portfolio is very fiat heavy with his 25% bonds and 25% cash. This however does not matter. What matters is whether the Permanent Portfolio succeeded in preserving your purchasing power in all economic climates. And yes, it succeeded in beating true inflation in every climate, even in the short term! (3-5 years).
Hiya RS. I don't think the Permanent Portfolio is 100% guaranteed to preserve your capital (what if a disruptive technology such as bitcoin takes over the role of gold and cash), but I do believe it is the best attempt at preserving your capital as risk-free as possible in diverse economic environments, based on historic data. At present however, I would hedge the strategy with a few bitcoins.
March 11, 2013, 11:36:10 AM
Saving means consuming less that you produce in the present in order to accumulate that which you guess the producers of what you want to consume in the future accept for trade. It presupposes those producers will be willing and able to trade with you, and that whatever you accumulate now will still be in your possession when you want to consume.
Saving is much more speculative than maximizing and diversifying your own ability to produce new wealth because in the latter case more of the variables are under your control.
Saving is much more speculative than maximizing and diversifying your own ability to produce new wealth because in the latter case more of the variables are under your control.
March 11, 2013, 11:34:17 AM
Might as well go all in on Bitcoin. If it fails that means that the government won, and they will take care of you in your old age.
God bless socialism.
God bless socialism.
sr. member
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March 11, 2013, 11:33:30 AM
25% bonds, 25% cash sounds pretty dollar-heavy to me. You are advising saving in dollars if you are pushing this allocation.
You forgot to mention the 25% stocks and 25% physical gold that are also part of the Permanent Portfolio. But agreed, the Permanent Portfolio is very fiat heavy with his 25% bonds and 25% cash. This however does not matter. What matters is whether the Permanent Portfolio succeeded in preserving your purchasing power in all economic climates. And yes, it succeeded in beating true inflation in every climate, even in the short term! (3-5 years).
March 11, 2013, 11:30:25 AM
all your citing is coming from one single site, i agree with notme, guns bullets and food are where power comes in when shit hits the fan. you going to trade some gold or some silver to people with guns? no they have no use for that. gold is used by astronauts and deemed a value because of its limited supply and its high class value in our society. someone correct me if i have gaps in my arguement
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March 11, 2013, 11:28:05 AM
Nobody will give a shit about your shiny rock if the shit really hits the fan. Weapons (for hunting and defense), bullets, and food stores are the only sensible investments for such a time.
You obviously did not study any economic crises. Yes, the shiny rock will go up in value/purchasing power during severe economic crises. Such was the case recently in Iceland and Argentina, as in Germany and Russia during the hyperinflations.
March 11, 2013, 11:17:33 AM
OP of course your advice is sensible, for me personally I could reduce it to something like:"to support bitcoin is hard work, not easy money",only it's hard work that I like.
Besides, I think I should add that the bitcoin rally is creating opportunities for non-bitcoin low-risk investment as well, it's almost guaranteed that someone would be more risk seeking than you and want to borrow your fiats at high interest rate to buy BTC, a very good way to hedge your risk.
Besides, I think I should add that the bitcoin rally is creating opportunities for non-bitcoin low-risk investment as well, it's almost guaranteed that someone would be more risk seeking than you and want to borrow your fiats at high interest rate to buy BTC, a very good way to hedge your risk.
March 11, 2013, 11:14:12 AM
History shows saving in dollars to be foolish since the creation of the federal reserve.
I'll keep dollar cost averaging into sound money, thanks.
I'll keep dollar cost averaging into sound money, thanks.
I agree. I did not advise saving into dollars. I advised saving into a Permanent Portfolio.
Bitcoin at this point is not sound money. If it works out it will become sound money. Until then it is a speculation.
Hence, you are dollar cost averaging into a speculation.
25% bonds, 25% cash sounds pretty dollar-heavy to me. You are advising saving in dollars if you are pushing this allocation.
March 11, 2013, 11:12:36 AM
By the way, here is a link to an actual explanation, since your link is just a sales pitch with no details: http://earlyretirementextreme.com/wiki/index.php?title=Permanent_Portfolio
March 11, 2013, 11:10:42 AM
What do you do if an unprecedentedly severe economic disruption means the goods you want to buy aren't available at any price? How can the Permanent Portfolio preserved your wealth?
That is what I mean by "all saving is speculation". Nothing can guarantee the future ability of the economy to produce the goods and services you will want to buy with deferred consumption.
That is what I mean by "all saving is speculation". Nothing can guarantee the future ability of the economy to produce the goods and services you will want to buy with deferred consumption.
Even in a severe economic disruption all goods are available for some price, likely high. The Permanent Portfolio will preserve your wealth in such scenario because it holds 25% physical gold. This gold will in such scenario also be valued high. That is how you will be able to buy the goods you desire even during a severe economic disruption.
You did not answer my question: What if you are not able to earn a living due to illness, accident or old age?
Nobody will give a shit about your shiny rock if the shit really hits the fan. Weapons (for hunting and defense), bullets, and food stores are the only sensible investments for such a time.
March 11, 2013, 10:58:05 AM
i am going to agree with justusranvier on this one. the reality from which we live in right now is nothing like the golden years of america or the world, with technologically advances in a wide range of fields you will understand that the classic be safe investments and security's are obsolete in many perspectives and for many reasons bitcoin is new, innovative and thriving. you can't cure stupid idiots who waste money and don't know how to live within a budget or even know what damage they do to their independent future by deficit spending on credit. once credit was born to be used by the average user, many people young naive and not ready to live , interpreted the card or the loan as free easy money
EDIT
Even in a severe economic disruption all goods are available for some price, likely high. The Permanent Portfolio will preserve your wealth in such scenario because it holds 25% physical gold. This gold will in such scenario also be valued high. That is how you will be able to buy the goods you desire even during a severe economic disruption.
You did not answer my question: What if you are not able to earn a living due to illness, accident or old age?
the government steps in and takes care of you that's how messed up it is because they enable and provide a safey netting for society, the mass majority doesn't understand the depth of despair once your living on complete poverty
EDIT
What do you do if an unprecedentedly severe economic disruption means the goods you want to buy aren't available at any price? How can the Permanent Portfolio preserved your wealth?
That is what I mean by "all saving is speculation". Nothing can guarantee the future ability of the economy to produce the goods and services you will want to buy with deferred consumption.
That is what I mean by "all saving is speculation". Nothing can guarantee the future ability of the economy to produce the goods and services you will want to buy with deferred consumption.
Even in a severe economic disruption all goods are available for some price, likely high. The Permanent Portfolio will preserve your wealth in such scenario because it holds 25% physical gold. This gold will in such scenario also be valued high. That is how you will be able to buy the goods you desire even during a severe economic disruption.
You did not answer my question: What if you are not able to earn a living due to illness, accident or old age?
the government steps in and takes care of you that's how messed up it is because they enable and provide a safey netting for society, the mass majority doesn't understand the depth of despair once your living on complete poverty
sr. member
Activity: 294
Merit: 250
This bull will try to shake you off. Hold tight!
March 11, 2013, 10:37:56 AM
What do you do if an unprecedentedly severe economic disruption means the goods you want to buy aren't available at any price? How can the Permanent Portfolio preserved your wealth?
That is what I mean by "all saving is speculation". Nothing can guarantee the future ability of the economy to produce the goods and services you will want to buy with deferred consumption.
That is what I mean by "all saving is speculation". Nothing can guarantee the future ability of the economy to produce the goods and services you will want to buy with deferred consumption.
Even in a severe economic disruption all goods are available for some price, likely high. The Permanent Portfolio will preserve your wealth in such scenario because it holds 25% physical gold. This gold will in such scenario also be valued high. That is how you will be able to buy the goods you desire even during a severe economic disruption.
You did not answer my question: What if you are not able to earn a living due to illness, accident or old age?
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