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RE: Why Crypto And Not Gold / Silver?

in #crypto6 years ago

Thanks for sharing your thoughts. I appreciated getting to hear them. I also got an opportunity to review where my own thoughts are at. As anyone can tell from looking at my blog, I'm a fan of precious metals. I'm also a fan of crypto, so I get both sides of the coin. Pun intended. Ha ha

I think that with cryptos being newer, there's more room for upside, but that's mainly because it hasn't reached mass-adoption yet. It's still working on being accepted into the culture, so yes, I think there's probably a higher likelihood that in the next 6 months you'd see a better return in dollars.

If you're all-in on crypto, that's cool. I'm bullish on it too. I can't give investment advice because I'm not licensed to do so, but did want to give you a few things to consider in terms of investing in precious metals. Some of them you cover yourself in the video.

  • Even if they're getting more metals out of previously-mined areas, the "low-hanging fruit" has been picked, so it's getting harder to get more. There's scarcity.
  • Metals are used in manufacturing, so they have utility, and the become more scarce as used.
  • Paper market manipulation has driven the price down. The paper price of silver isn't a reflection of the intrinsic value of metals. Also, the low paper price means a buying opportunity for the real asset.
  • Throughout history when there were "economic issues" people have reverted to using gold as their financial standard. (financial reset because the fiat currency inflates to become worthless. The USD has lost over 96% purchasing power since 1913, so that's coming soon.)
  • Oil could be a hedge against inflation, but it's not portable, so people couldn't use it as money... they can't carry it. Like you said, it's hard to keep drums of oil at your house. And the physical asset shouldn't be confused with the paper asset. The paper assets are mostly worthless, but their "spot pricing" can be used to get the physical assets at a lower price now.

The last thing I would suggest that you consider is "purchasing power." If a thing is worth $1 today and tomorrow it's worth $100, you got a 100x return. However, if the cost of other things went up 120x, then you've actually lost purchasing power. Precious metals have always been a hedge against this. As an investment, they haven't been doing well because of the manipulation of the paper price. However, as we get closer to financial difficulties, the value of metals becomes more clear.

Personally, I don't think we're headed for a recession. I think we're headed to a reset. That's completely different and there will be a new financial system that we come out with on the other side. It's sort of like the difference between cutting your spending because of a budget, as compared to declaring bankruptcy.

I do think that a few cryptos have value because of the functions their underlying technology represents. So some have value (although there are many that are only concepts and still no use case), but being that they're newer technologies, they're more prone to swings in prices. You could get a lot of gains now, but if things go poorly, there might be huge drops.

At this point, I think you could make money more easily off cryptos because of the speculative nature of the markets. However, if you're looking for an asset that people have used for thousands of years to protect their wealth and purchasing power over time (and through financial reset), I don't think you can beat precious metals... or food and water!

Wow, that ended up being a long response! I'm strapped on Resource Credits, but I think it's the same cost whether I type one word or one thousand, so go big, right? Ha ha.

Thanks again for sharing your thoughts and giving people a chance to share theirs. If any of my thoughts help, great. If not, that's cool too. I still think you have a lot of great ideas and cool things to share. I'm looking forward to seeing more from you.

Have a great day!

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Thank you for your response. I get everything you are saying but from a return perspective I just don't feel like it will achieve the same results for me as crypto will and I don't think we will have hyper inflation so bad that all gains are negated. I just think that in another recession even if it is twice as bad as 2008 it will just mean more people lose their houses and have to file for bankrupcy and sports cars, boats, ATVs will be going even cheaper than they were last time.

As far as a total reset I'm not sure what you envision in that situation so I can't speculate how bad that would be.

In some respects while I don't think that buying Silver and Gold is a bad investment I feel like it follows an old world law of economics. There was a time when a horse was very valuable and everyone with a homestead / farm needed one. Now ATVs and tractors are more valuable because they can do more work and you don't need to feed them if you aren't using them.

I feel like Gold and Silver is somewhat the same. You can't buy stuff online with Silver rounds but I can go to Overstock.com, Purse.io, ....etc....etc. and buy stuff with crypto and have it shipped to me. Gold and silver simply doesn't have the utility that crypto has in a globalized ecommerce world.

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