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Coming energy/resource scarcity will make a digital currency system nonviable.
On the subject of silver, your are actually slightly incorrect - the mined silver/gold ratio is 7 to 1. But because so much silver ends up in toxic dumps, there is in fact less silver in recognizable form above ground than gold. As far as I am concerned, no one should be buying any gold whatsoever right now. Silver does everything gold does, plus it has thousands of practical uses that gold does not- and it is basically being given away for free at the moment. $26 for an ounce of silver is less than chump change.
I certainly hope so on the digital, but they're going to try anyways; at least according to the executive order given to the Fed Res last year. Some of the rationale being it requires too many banks involved to process transactions etc etc.
Gold hasn't tempted me lately, in spite of historical charts showing we're due for that seemingly every 10 year increase. Am curious though, why do you feel it's a bad time?.
And thanks for the corrected ratio, so silver should be closer to 300...
I certainly hope so on the digital, but they're going to try anyways; at least according to the executive order given to the Fed Res last year. Some of the rationale being it requires too many banks involved to process transactions etc etc.
Gold hasn't tempted me lately, in spite of historical charts showing we're due for that seemingly every 10 year increase. Am curious though, why do you feel it's a bad time?.
And thanks for the corrected ratio, so silver should be closer to 300...
Silver simply has far more potential upside than gold. Gold is historically cheap when compared to other financial assets, yes. But when compared to other commodities, gold is historically expensive. And like I have said, silver is everything gold is and much more. Just ask yourself this: would you rather have one gold coin, or 70 silver coins? Which feels better to hold in your hands?
About the digital stuff- ironically, you need silver for that. All things electronic require silver. Silver that is going to be in increasingly short supply.
No, it does not. This is what exponential growth looks like
You showed a chart of 2050 years of population growth resulting in 9.5 billion people.
One dollar put in a savings acount with 2% compounded interest after 2050 years is worth over $425 quintillion dollars.
How is that not exponential growth?
The definition of exponential growth is a math kind of thing. It does not mean "grows a lot".
Basically it says that the amount of increase is based on the new present amount, like compounded interest.
It holds for savings accounts, population growth, and many other things. It can be a large number or a small number.
A one dollar savings account with 2 thousands of a percent compounded interest after 2050 years will be worth about $1.04. That's also exponential growth.
You showed a chart of 2050 years of population growth resulting in 9.5 billion people.
One dollar put in a savings acount with 2% compounded interest after 2050 years is worth over $425 quintillion dollars.
How is that not exponential growth?
The definition of exponential growth is a math kind of thing. It does not mean "grows a lot".
Basically it says that the amount of increase is based on the new present amount, like compounded interest.
It holds for savings accounts, population growth, and many other things. It can be a large number or a small number.
A one dollar savings account with 2 thousands of a percent compounded interest after 2050 years will be worth about $1.04. That's also exponential growth.
Exponential:
expressible or approximately expressible by an exponential function especially : characterized by or being an extremely rapid increase (as in size or extent)
Does anyone foresee in his own lifetime metal coins becoming the main medium of exchange again? What about heads of cattle?
What will they buy, exactly?
I understand a scenario mismatch between global demand and global supply for which the only solution is demand destruction, i.e. the death of a significant swathe of the population. It has happened before many times in history on various scales, from small hunting & gathering communities to entire civilizations.
So what?
We are all going to die sooner than later anyway, so what is the point of worrying about it?
What is the actionable suggestion here on an individual basis within hand’s reach within the next ten minutes?
Does anyone foresee in his own lifetime metal coins becoming the main medium of exchange again? What about heads of cattle?
No. In my lifetime I've seen remarkably little change, good or bad. Computers aren't fundamentally different from what they were in the 1960s. Transportation, housing and the basics of life are only incrementally more advanced. In my parents' lifetime, the pace of change was faster. But it was my grandparents' generation that witnessed the most momentous and substantial change. Their era has long passed.
What both the doomsday prophets and the evangelists-for-progress miss, is that the future won't be much different from the present. And the future after-that, will be even less different. Historians in the year 2300 will regard 1870-1970 as the great epoch of innovation, the times prior and later palling in comparison.
Our financial development should follow our technological. We'll borrow more, as demographics shifts, and resources become more scarce. But this borrowing will be concomitant with other forms of investment, resource-extraction and churning. As the pace of things slows, so will that of economic activity. Nowise does this inevitably lead to crisis or suffering. On the contrary, we may reach the dream of so many curmudgeons today: sustainability.
Historians in the year 2300 will regard 1870-1970 as the great epoch of innovation, the times prior and later palling in comparison.
People in the year 2300 (if there are any, and that is a big 'if') will regard the fact that man went to the moon as a fairy tale.
Quote:
Originally Posted by ohio_peasant
Our financial development should follow our technological. We'll borrow more, as demographics shifts, and resources become more scarce. But this borrowing will be concomitant with other forms of investment, resource-extraction and churning. As the pace of things slows, so will that of economic activity. Nowise does this inevitably lead to crisis or suffering. On the contrary, we may reach the dream of so many curmudgeons today: sustainability.
I'm sorry, but this is delusional wishful thinking. But you are correct about one thing- man will be sustainable. However, there cannot be a smooth, orderly, and graceful transition to sustainability (not at this point, at least). Instead, man will squander the earth's remaining energy and resources in futile attempts to perpetuate this terminally unsustainable paradigm for as long as possible, thereby depleting the remining energy and resources to levels too low to ever support such a paradigm again- this scenario is unfolding right now.
Last edited by Taggerung; 11-23-2022 at 07:53 PM..
Consider this: just prior to the 2008 crisis, the total global debt was right around $150T. In 2020, it had doubled to $300T. Think about how insane this is for a moment- it took 6000 years of civilizational development for the global debt to reach $150T. It took only 12 years thereafter to add another $150T. This is terminally unsustainable. There cannot be endlessly expanding debt in a finite realm. Eventually, something must give- and something will give. There will be no "slow, gradual" unraveling of the system either- because what rises exponentially, must decline exponentially.
When this debt bubble finally bursts, once and for all, it will happen so quickly and abruptly, no one will know what hit them. The governments and central banks will not even be able to react in time. Everything will just "freeze," and never be unfrozen. This is the crisis I believe we are heading towards. The "world as we know it" has been living on borrowed time since at least 2008. Well, now that borrowed time is coming to an end, and it must be paid back, in full, with interest, at loan shark rates.
I'd say it was even before 2008. 2008 was just the first major visible crack.
Coming energy/resource scarcity will make a digital currency system nonviable.
On the subject of silver, your are actually slightly incorrect - the mined silver/gold ratio is 7 to 1. But because so much silver ends up in toxic dumps, there is in fact less silver in recognizable form above ground than gold. As far as I am concerned, no one should be buying any gold whatsoever right now. Silver does everything gold does, plus it has thousands of practical uses that gold does not- and it is basically being given away for free at the moment. $26 for an ounce of silver is less than chump change.
Silver is worth buying but there's a reason CB's buy gold.
Exponential:
expressible or approximately expressible by an exponential function especially : characterized by or being an extremely rapid increase (as in size or extent)
Sigh.
Here's what you said in your initial post:
Quote:
Eventually, something must give- and something will give. There will be no "slow, gradual" unraveling of the system either- because what rises exponentially, must decline exponentially.
This was the basis for the assertion that "When this debt bubble finally bursts, once and for all, it will happen so quickly and abruptly, no one will know what hit them."
I disagree.
The assertion that what rises exponentially, must decline exponentially is not a true statement.
That can happen, of course, but it does not always follow. It's the use of the word "must" that is wrong, and also why that can't be the basis for the prediction of a crash.
Why did I give the example of the savings account with compounded interest? Because the growth of a savings account with compounded interest is by definition exponential growth.
Here's the math for compound interest formula:
A=P(1 + r/n)^nt
A = final amount
P = initial principal balance
r = interest rate
n = number of times interest applied per time period
t = number of time periods elapsed
See that ^nt? That is the exponent, and that's why compounded interest growth is exponential growth.
What does this have to do with your post? You said "what rises exponentially, must decline exponentially"
and THAT IS NOT TRUE for the growth of compounded interest. Savings accounts do not decline exponentially.
It's not true for population growth either.
Remember that chart you put up for population growth in which you said this is what exponential growth looks like? The world population has not grown exponentially for over 50 years now, it's been linear and the rate of growth has declined. Hopefully, we are headed to steady state population replacement.
Here is a historical example for why saying "exponential decline" is incorrect.
This graph is US debt/GDP ratio since 1790. https://cdn.theatlantic.com/assets/m...-gdp-main6.png
What does this have to do with your post? You said "what rises exponentially, must decline exponentially"
and THAT IS NOT TRUE for the USA's debt. Explosive increase in debt is followed by a much longer period of decrease in debt. That's the opposite of your assertion.
Now, I want to be clear on one thing. IMHO, we presently have too much debt, and it's not a good thing because it impacts our flexibility to respond to any crisis that may arise. Plus that tends to increase inflation which is bad for me personally.
The good news is that global debt has dropped over the last two quarters from a bit over $300 trillion to $290 trillion on a global GDP of $96 trillion.
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