Adding to my stack... Just keep adding just one more

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As far as the Kennedy halves you bought, I would've at least bought Unc. ones. And DON'T overpay. I bought a roll of 1964 proof Kennedy halves some years ago for $133 I think.

And as soon as you start talking about how the $USD is "worthless", it ain't. One of the strongest currencies on the planet. Lots of people going back to the late 1970's, & more recently around 2012 I think, have made big mistakes pouring their $$ into PM scared that their $USD's are about to become "worthless".

All I'm saying is, don't get too carried away with all the "fiat currency" stuff. It's not like we live in Bolivia or Argentina with huge inflation & the currency always going down.

 

“I view gold as the primary global currency. It is the only currency, along with silver, that does not require a counterparty signature. Gold, however, has always been far more valuable per ounce than silver. No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counterparty…Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today, we would not have reached the situation in which we now find ourselves.”
– Allen Greenspan

 

Hey Chris,

Long time You were right the first time. US Dollars is money, Gold is not.
The primary definition of money is an agreed upon unit of exchange. That is the way it always has and always will. The store of value is secondary BUT, FRN's numbers in a bank, ARE indeed a store of value. They have value because people agree they have value. The fact that someday in the future they possibly may not have value is irrelevant to the conversation. There are never any guarantees what will be worth something in the future.

Think about salt. That was once considered an extremely valuable commodity and a store of weath, but now, not so much.

Now let's look at Gold. People certainly value Gold and most likely they will for a very long time, but its value is not really based on it's worth as a commodity. It really only has minor industrial uses and we have more than enough Gold in holes in the ground to meet those needs for over 100 years. Gold is really valuable for the exact same reason as US currency. It is valuable because people agree it is valuable. Gold is actually very fiat like. Sure there is a chunk of useless metal to "back it up" but what exactly does that mean???.

So in conclusion the definition of money really hasn't changed and never will, for the simple reason, if something for whatever reason stops being a store of weath, that means it can no longer be used as a medium of exchange since no one values it, until then, a stack of Benjies is Money and IS a store of wealth.

 

Yes sir, long time. Good to see you back.

IDK man. I have a hard time saying a FRN is a store of value. Maybe a US bond could serve as store of value and medium of exchange, but thinking back to when money was invented. The gold or silver would not go down in value, even if they debased current coinage. The older coins always had their PM value, so retained original purchase power.

It has been MUCH longer than people think though that this has been true. When the US had silver dollars, I bet most here don't know there was NOT a dollar worht of silver in them. They had some value, but not a dollar of melt value most of the time. So even US PM coins were not STRICTLY ancient model "money". So it might have been much longer since old school, STRICT definitional money circulated. Maybe it lasted only a few centuries before it got derailed.

 

Well I totally agree that we have been on the Fiat system way longer than folks would like to believe.

Now as far FRN's being a store of value, I really don't expect a lot of folks to agree with me, and I really are not trying to convince you but here are some things to think about. Different things have value for different reasons.

A TV has value for its utility. A warehouse full of TVs is a store of value.

An art collection would be a store of value, but it has no utility, it is valued for its beauty/possible rarity.

Numismatic coins have value for their collectability.

The commonality for those things is other people want them and you can store them, simple enough. They are all stores of value.

Now with FRN's people want those too. They are valued in every corner of the Globe, everybody wants greenbacks. People just can't get enough. They are valued for a 4th reason though. They are valued for their exchangeabilty. So my point is, the reason people want them is immaterial. If people want them, for whatever reason, they have value, period.

Now, there is a talking point as to how "good" that store of value is. An oz. of Gold is MOST LIKELY (but no guarantees) is "better" then 16 Benjamins in your bottom drawer. No argument there. Now you touched on this when you talked about currency be debased, but the PM's holding their value better. Most likely true, but nowhere in the definition of store of value is there a rating of the relative effectiveness of that store. Also PM's are not immune to being bad stores of value. Just look at Platinum and Rhodium, they would both be considered Stores of value, but in those cases the FRN's kick their butts !

I think we can agree that commodities are stores of value. Some of them would be considered horrible for the long term though. Let's look at Barley. It certainly has value, but if you are storing ityou better be turning it in beer, or selling it, because it won't maintaining its value for very long. So what I am saying, is the quality of that store of value does not define if it is truly a store of value or not.

Anyway, just some thoughts YMMV.