DarkRange55
I am Skynet
- Oct 15, 2023
- 1,968
Just some more ramblings…
Assuming you have $100s in a briefcase, you're going to need a 22-pound briefcase if you want to move $1 million paper in $100 bills.
Gold actually weighs more than that.
So fine art is a very mobile form of wealth. You get very good weight for value, much more than cash. A multi-millionaire can go out and spend $135 million on a Picasso, hang it on his wall or puts it in a vault. High value-to-weight, centuries of provenance, non-financial, hides purchasing power in a single painting that can cross borders rolled up in a tube, portable store of value whose cultural cachet can outlast regimes and currencies. And it won't set off metal detectors.
Gold: Universal collateral, universally accepted, no counter-party risk, portable (but immobile) store of value, border-agnostic money when legal systems break down.
Land: The original hard asset; creates rent/yield, can't be hacked or devalued away.
Generational estates, farms, timberland, or income-producing real estate.
www.zerohedge.com
Key take-aways from Eric Peters' "The Case for Digital Assets" (ZeroHedge re-post + original One River white-paper)
• The infrastructure race has begun. Blockchain was expected to take a decade to weave into global finance, but U.S. regulatory moves—starting with a fully regulated dollar-stablecoin framework—are speeding that timetable.
• Price still swings with macro fear—for now. Crypto prices tend to fall when recession odds or geopolitical risks (e.g., WWIII worries) rise, though Peters believes that correlation could break as the asset class matures.
• Fiat money is "an illusion" that governments openly plan to debase (2 % inflation target). That policy cocktail of fiscal deficits funded by central-bank balance sheets makes long-term currency erosion a near certainty.
• Why Bitcoin is different: it has finite supply (capped at 21 million; issuance halves every four years until 2140) and production is price-insensitive—unlike gold or any other commodity whose supply responds to price.
• Reflexivity strengthens the network. Rising prices draw more talent, capital and innovation, which in turn harden security and broaden use-cases—making the system harder for governments to kill and safer for holders.
• Portfolio logic: Digital assets offer an inexpensive hedge against currency debasement and a convex call option on a new financial architecture—unique because the same position can both protect against tail-risk and capture outsized upside.
• Traditional 60/40 portfolios are most vulnerable to the very outcome policymakers are trying to create—persistent inflation. Bonds yield almost nothing, equities trade at rich multiples, and both would suffer in an inflationary recession; adding digital assets reduces that single-factor risk without negative carry.
• Risks remain (regulatory bans, protocol flaws, thefts, fragmentation of investor faith), but each is shrinking as adoption, security tooling and second-layer innovations advance.
• Upside case: In a world of unlimited fiat and steadily expanding real-world utility, Bitcoin's market value could plausibly surpass gold's.
• Bigger picture: Tokenization of all assets and blockchain-based settlement could rewrite finance; owning digital assets is "a toehold on the future" that aligns investors with the twin megatrends of relentless tech progress and structural currency debasement.
However, in strong expansions, gold sometimes faces headwinds—higher interest rates and strong stock markets can make it less attractive to investors compared to other assets. So, gold doesn't always rise during expansions; it depends on interest rates, currency strength, and opportunity cost.
When gold has a big down dip, central banks and jewelers come in and buy big
Gold has a long history of manipulation by governments, banks and miners.
It has a 5,000 year track record but I'm curious when/if it will loose that value. Dislodging gold in places like India and China where it's deeply ingrained in the culture… then again, Vietnam's younger generations seem to have migrated away.
The gold in your jewelry today might have been a piece of gold in jewelry 2,000 years ago. It has been deeply woven into the cultural fabric around the world and into the global monetary system.
It benefits in times of crisis and at certain times of economic expansion because of its dual purpose of use in jewelry and industry.
I know a lot of Chinese folks on the west coast that have moved money from China to real estate. I wouldn't call it money laundering per se but it's their way of getting money out of China and into a real asset. The Chinese don't really trust the stock/bond market like westerns do and prefer to own hard assets.
US equities have a much larger and more regulated market size and maturity. The Chinese stock market is not fully developed and lots of market movers, not to mention high valuations. Vietnam's stock market is a scam and Cambodia's…
Also a lot of the international stocks are still using international accounting rules that are very liberal in classifying an expense, as an asset because the expense "is said" to provide a long-term future benefit. US GAAP has a tendency to expense those costs due to the unknown future benefit, so US accounting rules are more conservative and I would think more realistic when it comes to valuing a company at present value.
It shows up in the economy in a heterogeneous fashion. Lots of different types of gold coins, lots of different types of gold bars, lots of different types of gold jewelry. And the paper gold itself is sometimes trading at 100-to-1 versus the underlying physical gold. And there's no trusted protocol to guarantee the integrity or synchronicity between paper gold and actual gold.
In a big economic crisis, paper gold could become just paper.
Michael Saylor made his case that:
Over 100 years gold went from $20 an ounce to $1,700. A factor of 80 or 90. But Michael Saylor said, when you risk adjust it there is nobody that actually got that return over the course of the century. 95% of the gold was confiscated in the last 100 years. Everybody is Russia, China, Europe, South America and Asia all lost their gold so if you do a risk adjusted calculation, you invest a dollar it should be worth $100 but you lost it 95% of the time, you got $5. So the real risk adjusted return over a century is 1.5% per year.
Seizure risk.
Gold miner's are short gold(?) because their incentive is to dump as much gold on the market as possible. If you read their balance sheets you'll see they don't hold gold as an asset. The 2-3 biggest mining companies, over-mine the gold(?), dump the gold, then they pay an income tax, then they dividend out the excess and pay a dividend tax and then they pay off their debt which is 2%. They would rather loan money out to the world at 2% interest than own gold(?) So gold miners don't believe gold is money. They wouldn't sell it, they'd buy it. Gold miners make the price decay(?)
Most companies specialize. Most mining companies specialize in ming gold, not owning gold.
1 Gold has a high stock-to-flow ratio. This means that the existing supply of gold is many orders of magnitude greater than the amount of gold mined in any amount of time (usually measured per year). This puts a cap on supply growth, meaning that supply is relatively constant while demand, well...
2 Gold is traditionally looked at as a store of value. This is cultural and not organic (there's nothing "intrinsic" to gold which makes it valuable, just the value that people place on it). Since gold is looked on as a store of value, people who want to retain value of their money buy gold, and, because that's an activity that everyone wants to do (ideally, nobody wants to lose money), the demand for gold steadily increases (outpacing supply, as above, which is relatively constant)
Some people have invested in companies, Amazon was Jeff Bezos strategy, big tech. Other people bought city blocks in New York City. That's a valid strategy, investing in property or technology. Anybody in the world that has invested more than 50% of their portfolio in gold at a billion dollar level with their own money?
Maybe Eric Sprott, possibly Pierre Lassonde
Interesting question, but I have no clue who individually owns gold. Gold and silver are not the issue anymore. A 19th century approach to banking. We are off gold (silver) standards, so now value of economy and currency, like $, Euro, Yen, RmbGold has some intrinsic and some historic value, so while it is not necessary any more for currency, it is convenient and less speculative than other currencies.About 2,000 years ago in the Roman Empire, both gold and silver were official money, but they served different purposes—silver coins handled most daily transactions, while gold coins were reserved for large payments, international trade, and imperial treasury reserves. Over the centuries, the balance between the two metals shifted, with silver dominant for much of the Middle Ages until major gold discoveries in the 16th–19th centuries set the stage for the gold standard. In the late 19th and early 20th centuries, many countries required their paper currency to be backed by gold, holding a specific percentage in reserve. By around the 1940s, the U.S. and some other nations maintained roughly 40% gold reserve coverage—meaning $40 in gold for every $100 in currency—not that gold made up 40% of the world's money. After the U.S. ended gold convertibility in 1971, currencies became fiat, and gold's role shifted to being a store of value and reserve asset; today, all above-ground gold is worth about $15 trillion, roughly 3% of global wealth.As the price of gold goes higher so does the incentive to mine and prospect it which leads to increased supply. While it can be labeled scarce, in theory it doesn't have a ceiling of supply. Even when you find it, it's not easy to mine. The average period between discovery and production is 10-20 years and sometimes longer. And the grades are getting lower and which means you have to move a lot more debt which raises the cost. So it's becoming very expensive and time consuming to find these deposits. No world class discovery has been made in the last 30 years. All the gold discovered in the last 10 years is less than half of the amount of gold that was discovered in just one year in 1990 when gold was under $400 an ounce. The gold mining industry's reserves are depleting and they can't replace them. From 2012-2020 the reserves held by major mining companies have dropped 40% over the last 8 years. In 1971 when gold was $35 an ounce, the global production of gold by mining companies was 1,500 tons. 50 years later gold is up 50 fold, its gone up 6,000%. That number has only doubled to 3,000 tons a year which averages out to 1.5% growth per year which is about what you see in population growth. You could argue that gold supply is declining. I read both annual reports for Newmont Mining and Barrick Gold. Newmont sold 5.8 million ounces in 2023 and they reported 94.2 million ounces in reserves, almost 18-to-1, 18 years worth of reserves. And Barrick mined 4.76 million ounces and reported 68 million ounces in reserves. They found 10-15-20 years worth of reserves, they don't have an interest in reporting more. But they don't seem like they are anywhere close to running out. I've gone more in depth about this in other threads. Gold is an inflating asset. We know with certainty that they are mining more gold each year than the previous year. Gold doesn't really have value until it's mined - at least in the retail sense when it's under the earth. So they are constantly bringing new gold into existence therefore there is inflation in the asset of gold. And that means the currency is depreciating. It's just far depreciating less than USD.Only when supply increases faster than demand.
As for when I said: every asset is a confidence game and all representatives of the system are confidence men. Currencies, Bitcoin, equities, any type of investment. It is all a confidence game and it is all going to zero eventually. Even gold. Gold has a 5,000 year track record. Everything else you're lucky to get ~50 years on it. With the exception of real estate. Real estate will last a good amount of time. But countries are going to war, being taken over, buildings are torn down, natural disasters wipe out a building, land can be seized all these different things. It's all a confidence game in terms of its all just a narrative and nothing has inherent value.
Mostly true, but knowledge can have inherent value.
If everyone on the planet is dead and you're the only one left, your gold, your equities, your "land that you own," is of no value. Things that would be valuable to you would be food, clothing, shelter, technology, and if there's at least one woman on the planet. Very valuable. Those things are only valuable when you can trade them for something of value, a good or a service. The true value is goods, services and people and the types of relationships that you can have with people. And a lot of services really are just a relationship with a person. So those are the things that are of value. Everything else is just a narrative, it is a concept and in many cases doesn't have any physical value or physical properties. Gold has physical properties but the properties are really it's just a rock.
Gold also has some industrially useful properties. If one person owned all the bitcoin, it would probably lose its value.
We have clients that love art and buy it for their pleasure. A few have pursued it as a diversification strategy. We have a few clients who have pursued fine wine as an alternative strategy and that has been a decent outcome.
Are the diamond companies are controlling the supply and there could be a greater supply of diamonds, too?
https://search.app/?link=https://en.m.wikipedia.org/wiki/De_Beers&utm_campaign=aga&utm_source=agsadl1,sh/x/gs/m2/4
https://www.marketplace.org/2015/04/15/diamonds-pricey-not-valuable/
https://www.zerohedge.com/markets/debeers-shutting-down-its-lab-grown-diamond-brand
Diamonds are lightweight, easy to carry, don't wear out, have a very high value to weight ratio and have industrial use. Having the highest hardness and heat conductivity of any bulk material, diamonds possess tremendous value for industrial use. In fact, 80% of mined diamonds are used industrially. Many investors think the value of diamonds is only based on demand and speculation. The reality is they
The 80% used industrially are the non-gem and gem-cutting-leftovers, not the nice large crystals. And lab-grown diamonds are not yet the same quality as natural ones, either.
But the value of natural gems is also maintained by good marketing.
Intrinsic is a difficult adjective. It's subjective and objective at the same time. A flawless diamond has intrinsic value only because part of our human culture defines diamonds as precious or beautiful or valuable. Diamonds sparkle under certain kinds of light etc. Flawless diamonds are supposedly rare: that's what DeBeers wants you to believe. If you could access their secret inventory you'd discover DeBeers has thousands of flawless diamonds in their inventory. Intrinsic is "essential" because that's how we define it. One could argue that nothing has any intrinsic value. The value of something is assigned to it by people. A cup of water's value is dependent on the circumstances: to a dehydrated human in the hot desert sun it has a huge value; to someone working in a bar it has no value. Art only has assigned value dependent on a lot of different conditions including who the viewer happens to be. The banana taped to the wall could be a Godsend to a starving person.
The history of commodities is, as the price goes up, the decreases, the supply increases. Historically all commodities businesses need a cartel to be stable. John D. Rockefeller formed a cartel, OPEC is a cartel, De Beers diamond cartel is the same. You have to have some kind of restraint of trade. If you can't get it through patents or technically through some special sauce then you have to get it another way to make the price go up.
- Art is extremely illiquid. You also have to be careful about selling because you don't want to burn relationships with galleries or artists. Flippers have a horrible rep and people will avoid selling to you if they know you are a flipper. Additionally, a lot of galleries will have you sign a 5 year Right of First Refusal when you buy artworks by their most desirable artists, so you have to first offer the work back to the gallery before taking it to auction or another gallery.
- The market can change quickly based on the whims of a few influential collectors or curators. Art and what others want to buy outside of the really well-known artists is cyclical and goes in step with trends, so those cubist or MCM paintings may have been the hot thing at one point but won't be in a few years, while some other style grows in popularity to fill the void until that fades and yet another style is the new in thing.
- You most likely aren't buying in the circles needed to make money in it nor do you have the connections to make a good sale. The type of art that holds its value is high end art that is 6 figure tier in costs (starting). Regular art is unlikely to hold value. Art that's an investment and will hold its value is above the middle class finance pay grade. People who invest in art as an investment and not just art that they like already have millions in more traditional investments. I think that's a risk reserved for the uber wealthy and/or a money laundering scheme for criminals. Some critics say, the "fine art" market and buying investment art is just a way for ultra-rich people to launder money.
- Caveat emptor there is a ton of statistical shenanigans that goes in to demonstrating return on those mass market platforms (art fund) = Its a broker making far more money than their clients.
- There's always a chance that you damage the painting, either accidentally, or just wear over time from light exposure etc, that it winds up worth nothing.
- It's not easily divisible and you can counterfeit it.
- You can confiscate gold. Alexzander the Greater galavated around the world to seize gold, Livy tells the story of 1,000 Roman sieges in order to steal gold, Caesar sacked Gaul to take their gold, Kublai Khan seized gold, Pizarro seized gold from the Inkas, Cortez seized gold from the Azteks, Charles I seized all the gold from the British nobles, the Prussians seized gold from the French in 1871, in WWI everyone seized the gold, Lenin seized gold from the church in 1922, Rosevelt seized everybody's gold in 1933, Stalin seized the gold from the Spaniards in 1936, Churchill took everybody's gold in 1940 at the onset of the war, at Brenton Woods the US seized the world's gold and took it hostage. The UK ban on private bullion in 1966. Australia 1939-1976. And then Nixon killed all the hostages in 1971. Gold is always getting seized. Much of the gold throughout history has been confiscated. In some regions (like Switzerland or certain Asian countries), private holders had far better survival rates. In reality, risk varies over time and geography.
Assuming you have $100s in a briefcase, you're going to need a 22-pound briefcase if you want to move $1 million paper in $100 bills.
Gold actually weighs more than that.
So fine art is a very mobile form of wealth. You get very good weight for value, much more than cash. A multi-millionaire can go out and spend $135 million on a Picasso, hang it on his wall or puts it in a vault. High value-to-weight, centuries of provenance, non-financial, hides purchasing power in a single painting that can cross borders rolled up in a tube, portable store of value whose cultural cachet can outlast regimes and currencies. And it won't set off metal detectors.
Gold: Universal collateral, universally accepted, no counter-party risk, portable (but immobile) store of value, border-agnostic money when legal systems break down.
Land: The original hard asset; creates rent/yield, can't be hacked or devalued away.
Generational estates, farms, timberland, or income-producing real estate.
The Case For Digital Assets | ZeroHedge
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com
Key take-aways from Eric Peters' "The Case for Digital Assets" (ZeroHedge re-post + original One River white-paper)
• The infrastructure race has begun. Blockchain was expected to take a decade to weave into global finance, but U.S. regulatory moves—starting with a fully regulated dollar-stablecoin framework—are speeding that timetable.
• Price still swings with macro fear—for now. Crypto prices tend to fall when recession odds or geopolitical risks (e.g., WWIII worries) rise, though Peters believes that correlation could break as the asset class matures.
• Fiat money is "an illusion" that governments openly plan to debase (2 % inflation target). That policy cocktail of fiscal deficits funded by central-bank balance sheets makes long-term currency erosion a near certainty.
• Why Bitcoin is different: it has finite supply (capped at 21 million; issuance halves every four years until 2140) and production is price-insensitive—unlike gold or any other commodity whose supply responds to price.
• Reflexivity strengthens the network. Rising prices draw more talent, capital and innovation, which in turn harden security and broaden use-cases—making the system harder for governments to kill and safer for holders.
• Portfolio logic: Digital assets offer an inexpensive hedge against currency debasement and a convex call option on a new financial architecture—unique because the same position can both protect against tail-risk and capture outsized upside.
• Traditional 60/40 portfolios are most vulnerable to the very outcome policymakers are trying to create—persistent inflation. Bonds yield almost nothing, equities trade at rich multiples, and both would suffer in an inflationary recession; adding digital assets reduces that single-factor risk without negative carry.
• Risks remain (regulatory bans, protocol flaws, thefts, fragmentation of investor faith), but each is shrinking as adoption, security tooling and second-layer innovations advance.
• Upside case: In a world of unlimited fiat and steadily expanding real-world utility, Bitcoin's market value could plausibly surpass gold's.
• Bigger picture: Tokenization of all assets and blockchain-based settlement could rewrite finance; owning digital assets is "a toehold on the future" that aligns investors with the twin megatrends of relentless tech progress and structural currency debasement.
However, in strong expansions, gold sometimes faces headwinds—higher interest rates and strong stock markets can make it less attractive to investors compared to other assets. So, gold doesn't always rise during expansions; it depends on interest rates, currency strength, and opportunity cost.
When gold has a big down dip, central banks and jewelers come in and buy big
Gold has a long history of manipulation by governments, banks and miners.
It has a 5,000 year track record but I'm curious when/if it will loose that value. Dislodging gold in places like India and China where it's deeply ingrained in the culture… then again, Vietnam's younger generations seem to have migrated away.
The gold in your jewelry today might have been a piece of gold in jewelry 2,000 years ago. It has been deeply woven into the cultural fabric around the world and into the global monetary system.
It benefits in times of crisis and at certain times of economic expansion because of its dual purpose of use in jewelry and industry.
I know a lot of Chinese folks on the west coast that have moved money from China to real estate. I wouldn't call it money laundering per se but it's their way of getting money out of China and into a real asset. The Chinese don't really trust the stock/bond market like westerns do and prefer to own hard assets.
US equities have a much larger and more regulated market size and maturity. The Chinese stock market is not fully developed and lots of market movers, not to mention high valuations. Vietnam's stock market is a scam and Cambodia's…
Also a lot of the international stocks are still using international accounting rules that are very liberal in classifying an expense, as an asset because the expense "is said" to provide a long-term future benefit. US GAAP has a tendency to expense those costs due to the unknown future benefit, so US accounting rules are more conservative and I would think more realistic when it comes to valuing a company at present value.
It shows up in the economy in a heterogeneous fashion. Lots of different types of gold coins, lots of different types of gold bars, lots of different types of gold jewelry. And the paper gold itself is sometimes trading at 100-to-1 versus the underlying physical gold. And there's no trusted protocol to guarantee the integrity or synchronicity between paper gold and actual gold.
In a big economic crisis, paper gold could become just paper.
Michael Saylor made his case that:
Over 100 years gold went from $20 an ounce to $1,700. A factor of 80 or 90. But Michael Saylor said, when you risk adjust it there is nobody that actually got that return over the course of the century. 95% of the gold was confiscated in the last 100 years. Everybody is Russia, China, Europe, South America and Asia all lost their gold so if you do a risk adjusted calculation, you invest a dollar it should be worth $100 but you lost it 95% of the time, you got $5. So the real risk adjusted return over a century is 1.5% per year.
Seizure risk.
Gold miner's are short gold(?) because their incentive is to dump as much gold on the market as possible. If you read their balance sheets you'll see they don't hold gold as an asset. The 2-3 biggest mining companies, over-mine the gold(?), dump the gold, then they pay an income tax, then they dividend out the excess and pay a dividend tax and then they pay off their debt which is 2%. They would rather loan money out to the world at 2% interest than own gold(?) So gold miners don't believe gold is money. They wouldn't sell it, they'd buy it. Gold miners make the price decay(?)
Most companies specialize. Most mining companies specialize in ming gold, not owning gold.
1 Gold has a high stock-to-flow ratio. This means that the existing supply of gold is many orders of magnitude greater than the amount of gold mined in any amount of time (usually measured per year). This puts a cap on supply growth, meaning that supply is relatively constant while demand, well...
2 Gold is traditionally looked at as a store of value. This is cultural and not organic (there's nothing "intrinsic" to gold which makes it valuable, just the value that people place on it). Since gold is looked on as a store of value, people who want to retain value of their money buy gold, and, because that's an activity that everyone wants to do (ideally, nobody wants to lose money), the demand for gold steadily increases (outpacing supply, as above, which is relatively constant)
Some people have invested in companies, Amazon was Jeff Bezos strategy, big tech. Other people bought city blocks in New York City. That's a valid strategy, investing in property or technology. Anybody in the world that has invested more than 50% of their portfolio in gold at a billion dollar level with their own money?
Maybe Eric Sprott, possibly Pierre Lassonde
Interesting question, but I have no clue who individually owns gold. Gold and silver are not the issue anymore. A 19th century approach to banking. We are off gold (silver) standards, so now value of economy and currency, like $, Euro, Yen, RmbGold has some intrinsic and some historic value, so while it is not necessary any more for currency, it is convenient and less speculative than other currencies.About 2,000 years ago in the Roman Empire, both gold and silver were official money, but they served different purposes—silver coins handled most daily transactions, while gold coins were reserved for large payments, international trade, and imperial treasury reserves. Over the centuries, the balance between the two metals shifted, with silver dominant for much of the Middle Ages until major gold discoveries in the 16th–19th centuries set the stage for the gold standard. In the late 19th and early 20th centuries, many countries required their paper currency to be backed by gold, holding a specific percentage in reserve. By around the 1940s, the U.S. and some other nations maintained roughly 40% gold reserve coverage—meaning $40 in gold for every $100 in currency—not that gold made up 40% of the world's money. After the U.S. ended gold convertibility in 1971, currencies became fiat, and gold's role shifted to being a store of value and reserve asset; today, all above-ground gold is worth about $15 trillion, roughly 3% of global wealth.As the price of gold goes higher so does the incentive to mine and prospect it which leads to increased supply. While it can be labeled scarce, in theory it doesn't have a ceiling of supply. Even when you find it, it's not easy to mine. The average period between discovery and production is 10-20 years and sometimes longer. And the grades are getting lower and which means you have to move a lot more debt which raises the cost. So it's becoming very expensive and time consuming to find these deposits. No world class discovery has been made in the last 30 years. All the gold discovered in the last 10 years is less than half of the amount of gold that was discovered in just one year in 1990 when gold was under $400 an ounce. The gold mining industry's reserves are depleting and they can't replace them. From 2012-2020 the reserves held by major mining companies have dropped 40% over the last 8 years. In 1971 when gold was $35 an ounce, the global production of gold by mining companies was 1,500 tons. 50 years later gold is up 50 fold, its gone up 6,000%. That number has only doubled to 3,000 tons a year which averages out to 1.5% growth per year which is about what you see in population growth. You could argue that gold supply is declining. I read both annual reports for Newmont Mining and Barrick Gold. Newmont sold 5.8 million ounces in 2023 and they reported 94.2 million ounces in reserves, almost 18-to-1, 18 years worth of reserves. And Barrick mined 4.76 million ounces and reported 68 million ounces in reserves. They found 10-15-20 years worth of reserves, they don't have an interest in reporting more. But they don't seem like they are anywhere close to running out. I've gone more in depth about this in other threads. Gold is an inflating asset. We know with certainty that they are mining more gold each year than the previous year. Gold doesn't really have value until it's mined - at least in the retail sense when it's under the earth. So they are constantly bringing new gold into existence therefore there is inflation in the asset of gold. And that means the currency is depreciating. It's just far depreciating less than USD.Only when supply increases faster than demand.
As for when I said: every asset is a confidence game and all representatives of the system are confidence men. Currencies, Bitcoin, equities, any type of investment. It is all a confidence game and it is all going to zero eventually. Even gold. Gold has a 5,000 year track record. Everything else you're lucky to get ~50 years on it. With the exception of real estate. Real estate will last a good amount of time. But countries are going to war, being taken over, buildings are torn down, natural disasters wipe out a building, land can be seized all these different things. It's all a confidence game in terms of its all just a narrative and nothing has inherent value.
Mostly true, but knowledge can have inherent value.
If everyone on the planet is dead and you're the only one left, your gold, your equities, your "land that you own," is of no value. Things that would be valuable to you would be food, clothing, shelter, technology, and if there's at least one woman on the planet. Very valuable. Those things are only valuable when you can trade them for something of value, a good or a service. The true value is goods, services and people and the types of relationships that you can have with people. And a lot of services really are just a relationship with a person. So those are the things that are of value. Everything else is just a narrative, it is a concept and in many cases doesn't have any physical value or physical properties. Gold has physical properties but the properties are really it's just a rock.
Gold also has some industrially useful properties. If one person owned all the bitcoin, it would probably lose its value.
We have clients that love art and buy it for their pleasure. A few have pursued it as a diversification strategy. We have a few clients who have pursued fine wine as an alternative strategy and that has been a decent outcome.
Are the diamond companies are controlling the supply and there could be a greater supply of diamonds, too?
https://search.app/?link=https://en.m.wikipedia.org/wiki/De_Beers&utm_campaign=aga&utm_source=agsadl1,sh/x/gs/m2/4
https://www.marketplace.org/2015/04/15/diamonds-pricey-not-valuable/
https://www.zerohedge.com/markets/debeers-shutting-down-its-lab-grown-diamond-brand
Diamonds are lightweight, easy to carry, don't wear out, have a very high value to weight ratio and have industrial use. Having the highest hardness and heat conductivity of any bulk material, diamonds possess tremendous value for industrial use. In fact, 80% of mined diamonds are used industrially. Many investors think the value of diamonds is only based on demand and speculation. The reality is they
The 80% used industrially are the non-gem and gem-cutting-leftovers, not the nice large crystals. And lab-grown diamonds are not yet the same quality as natural ones, either.
But the value of natural gems is also maintained by good marketing.
Intrinsic is a difficult adjective. It's subjective and objective at the same time. A flawless diamond has intrinsic value only because part of our human culture defines diamonds as precious or beautiful or valuable. Diamonds sparkle under certain kinds of light etc. Flawless diamonds are supposedly rare: that's what DeBeers wants you to believe. If you could access their secret inventory you'd discover DeBeers has thousands of flawless diamonds in their inventory. Intrinsic is "essential" because that's how we define it. One could argue that nothing has any intrinsic value. The value of something is assigned to it by people. A cup of water's value is dependent on the circumstances: to a dehydrated human in the hot desert sun it has a huge value; to someone working in a bar it has no value. Art only has assigned value dependent on a lot of different conditions including who the viewer happens to be. The banana taped to the wall could be a Godsend to a starving person.
The history of commodities is, as the price goes up, the decreases, the supply increases. Historically all commodities businesses need a cartel to be stable. John D. Rockefeller formed a cartel, OPEC is a cartel, De Beers diamond cartel is the same. You have to have some kind of restraint of trade. If you can't get it through patents or technically through some special sauce then you have to get it another way to make the price go up.
