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CrowEpistemologist
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  • 10 months later...

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Keep investing Nicky. You're an example of the law of Social Darwinism, Financial Edition...

 

The important thing to note is that "economists" who define inflation, under their breath, as "an increase in the technical money supply" and then enjoy the benefits of the definition everybody else uses (an increase in the prices of most things people buy) are being called out as the charlatans that they are.

 

Btw, even if US Dollar inflation did finally, miraculously appear, the final irony for the gold bugs would be for it to still only go sideways since runaway inflation has been priced into gold's price for about 10 years now. There would be investment rocketships leaving all over the place, but gold bugs will be sitting on the sidelines with their silly yellow metal.

 

Get it through your head: gold is another speculated investment instrument like any other. Its mystical status among the Doomsday Prepper set drives it up in price. Yes, you can make money banking on an increase in aggregate stupidity--and even make a lot of money doing so--but I'm personally betting (with a very small side bet to be sure) on the opposite.

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Or to put it another way:

 

"It's impossible for you to have been more wrong, Rick. Your call for inflation, the destruction of the dollar, the failure of the US economy to rebound. Rick, it's impossible for you to have been more wrong. Every single bit of advice you gave would have lost people money, Rick. Lost people money, Rick. Every single bit of advice. There is no piece of advice that you've given that's worked, Rick. There is no piece of advice that you've given that's worked, Rick. Not a single one. Not a single one, Rick. The higher interest rates never came, the inability of the U.S. to sell bonds never happened, the dollar never crashed, Rick. There isn't a single one that's worked for you." - Steve Liesman

 

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Just as a reminder to everyone. This prediction was made over a year ago:

I think it will fall further still. I see gold going to $600 or so possibly. 

Since then, gold has stayed within $100 of its price at the time.

 

That's despite stock prices soaring. When they inevitably fall back to reality, gold will inevitably rise. I don't see it ever going under $1,200 again, let alone $600. 

 

But I'll wait. I'll keep posting from time to time, as a reminder of the delusion behind this prediction. Or, maybe, I'll be the one proven delusional, who knows. 

 

The only thing I know for certain is that if gold ever hits $600, I'll admit my delusion and reevaluate everything I think I know about Economics. I doubt the same is true for the gentleman making the prediction, in the very likely event that one year, two years, five years from now, the price of an ounce of gold will be closer to $2,000, then $2,500,  then $3,000, than to $600.

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The important thing to note is that "economists" who define inflation, under their breath, as "an increase in the technical money supply" and then enjoy the benefits of the definition everybody else uses (an increase in the prices of most things people buy) are being called out as the charlatans that they are.

 

I ain't no gold bug but that's what we call a definition by non-essentials. Your 'inflation' includes increases in demand, decreases in supply, and anything else that affects prices.

 

 

Btw, even if US Dollar inflation did finally, miraculously appear, the final irony for the gold bugs would be for it to still only go sideways since runaway inflation has been priced into gold's price for about 10 years now. There would be investment rocketships leaving all over the place, but gold bugs will be sitting on the sidelines with their silly yellow metal.

 

This is a non-sense statement. Gold is not a productive asset and as such there is no objective way to determine what has been priced into the price. That's just your 'feelings' speaking.

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My prediction was:

 

a. Based on science that comes from this world.

 

b. Wrong.

 

Your prediction was:

 

a. Based on fantasy and the enforcement of a narrative that harkens all the way back to the batshit insane Illuminatti wierdos from the 60s.

 

b. Wrong.

 

A stopped clock is right twice a day...

Edited by CrowEpistemologist
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I ain't no gold bug but that's what we call a definition by non-essentials. Your 'inflation' includes increases in demand, decreases in supply, and anything else that affects prices.

 

 

And your definition is intellectual bait-and-switch. Nobody but nobody cares about the numbers on some balance sheet somewhere, they care (less and less however) about the goods they buy on a daily basis going up in price on a US dollar basis.

 

It's bait-and-switch because while nobody cares about the concocted "technical" defintion of inflation that the Austrians et. al. use, people are concerned (rightly or wrongly) about consistent overall consumer price inflation--which is the definition everybody save a tiny cabal of egg-faced economists use as thier definition of inflation.

 

In other words, in the face of being absolutely, positively, dead-ass WRONG WRONG WRONG in their predictions of inflationary apocalypse, the predictors simply switched their definition to be, in circular reasoning fashion, the existence of a set of (now proven irrellevant) numbers that lead them to their incorrect conclusion.

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This is a non-sense statement. Gold is not a productive asset and as such there is no objective way to determine what has been priced into the price. That's just your 'feelings' speaking.

 

On the whole, you are correct. Investment decisions are educated guesses based on a large number of factors you observe in the world.

 

That goes for all investment instruments, not just gold btw...

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And your definition is intellectual bait-and-switch. Nobody but nobody cares about the numbers on some balance sheet somewhere, they care (less and less however) about the goods they buy on a daily basis going up in price on a US dollar basis.

 

It's bait-and-switch because while nobody cares about the concocted "technical" defintion of inflation that the Austrians et. al. use, people are concerned (rightly or wrongly) about consistent overall consumer price inflation--which is the definition everybody save a tiny cabal of egg-faced economists use as thier definition of inflation.

 

In other words, in the face of being absolutely, positively, dead-ass WRONG WRONG WRONG in their predictions of inflationary apocalypse, the predictors simply switched their definition to be, in circular reasoning fashion, the existence of a set of (now proven irrellevant) numbers that lead them to their incorrect conclusion.

 

People are concerned with prices so that's how we should define inflation... is just a terrible argument. Not to mention completely inconsistent with an objective theory of concepts. Like I stated above, and you ignored, your definition of inflation includes a hodgepodge of unrelated things.

 

On the whole, you are correct. Investment decisions are educated guesses based on a large number of factors you observe in the world.

 

That goes for all investment instruments, not just gold btw...

 

That's not what I said. Of course all investment involve estimation but a productive asset's price can be related back to the cash flows it produces. By viewing the price as a multiple of the cash flow it's possible to determine what scenario is priced into the price of the asset. Gold has no cash flows so any claim that inflation is already priced in is an unverifiable assertion based on feelings.

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People are concerned with prices so that's how we should define inflation... is just a terrible argument. Not to mention completely inconsistent with an objective theory of concepts. Like I stated above, and you ignored, your definition of inflation includes a hodgepodge of unrelated things.

 

 

No, definitions absolutely exist in the context of human society. You don't get to make up your own definition based on things that have no connection to how people popularly use the term.

 

Wikipedia defines inflation as, "In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.". They don't talk about the money supply.

 

Of course maybe Wikipedia is part of the conspiracy?

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That's not what I said. Of course all investment involve estimation but a productive asset's price can be related back to the cash flows it produces. By viewing the price as a multiple of the cash flow it's possible to determine what scenario is priced into the price of the asset. Gold has no cash flows so any claim that inflation is already priced in is an unverifiable assertion based on feelings.

 

Investment decisions are based on your estimate of the future value of the thing you invest in. There are a million factors, including your estimated (guessed at) future cash flow, that help determine the future value of an instrument.

 

But to be clear, as I said above, my statement absolutely was an, "unverifiable assertion based on feelings". It was also hypothetical...

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No, definitions absolutely exist in the context of human society. You don't get to make up your own definition based on things that have no connection to how people popularly use the term.

 

Wikipedia defines inflation as, "In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.". They don't talk about the money supply.

 

Of course maybe Wikipedia is part of the conspiracy?

 

Wow! You sure got me good. :thumbsup:

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My prediction was:

 

a. Based on science that comes from this world.

In this world, an ounce of gold costs $1,290, not $600. If it's going to hit $600, then whatever "science" (seems to me that your main argument was that FoxNews dictates the price of gold, and FoxNews is over-pricing it; hardly scientific or factual, since the price of gold, aside from the inflation of the dollar, is mostly driven by demand in China and India) you used will be proven to be of this world.

 

If it won't, and I'm quite confident that it won't even come close, then your science will be proven to have been of a different world. 

 

It's OK, we don't need to decide right away, we can wait. If five years is not long enough for you, we can wait even longer. Will you give up this nonsense if let's say 10 years from now the price of gold is around $4-5,000, or will you still be claiming that the sciency thing to believe is that gold will hit $600 any day now?

Edited by Nicky
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Yeah Nicky, go ahead, mischaracterize my views. If that makes you feel better, sure.

 

How is your portfolio going, anyhow? Still have those 3 Krugerrands in your floor safe? Run-away inflation will make you rich someday, just like all of those non-believers who drive those fancy cars. That'll show em.

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A retired coin dealer I used over the years once pointed out that "the street" (brokerage firms in general) hated gold. When I pressed him a bit, he indicated that FRN's converted into precious metals where FRN's they would never see.

 

I disagreed with him, but I do have to ask - CrowEpistemologist, are you an investment manager, who out of the kindness of your heart are volunteering free investment advice here?

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Yeah Nicky, go ahead, mischaracterize my views.

I didn't characterize your views, wrongly or otherwise. I quoted them. Hang on, I'll do it again, just to be sure there are no misunderstandings:

 

I think it will fall further still. I see gold going to $600 or so possibly.

You keep claiming that that prediction is based in reality, and that my disagreement with it is not. 

 

There is only one way to verify that: follow the price of gold. That's what we've been doing, and that's what we shall continue to do, until reality proves you right or you gather up enough sense to admit your prediction was based in silly bias, not reality.

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Yeah, I've said about 5 times now my prediction was wrong.

It is wrong, yet you still insist it's based in science. Good science isn't wrong. Only bad science is wrong. And bad science is thrown out when it's wrong.

Have you thrown your science out yet, or are you just going to keep using it to make your "scientific" predictions?

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