What a missed opportunity... to expound on the relative advantages of funny money that's actually funny... which a proper analysis would reveal as... ???
The assumption that money has to be "serious" ? The error in assuming that "value" is both obvious and "immutable" in being "real"... is a mistake made only by those who didn't understand Graham and Dodd.
Bankers, of course, want you to thnk of money as serious and important... as a part of justifying their role in controlling the perception of value... which otherwise might wander more than is convenient ?
The reason that things of value are often greatly undervalued... is the same reason that things of no value are often greatly overvalued... People are mostly not very good at valuing things. And, they tend to be very impatient, and short term in focus... easily distracted by trends (fads), and easily dominated by herd instincts... while value disconnects, high or low, tend to operate in trends sustained over longer periods of time than most people find it useful to think about...
And most people, including people in the industry... don't bother to think much about the nature of and sources of real value...or the impacts of errors made in things fundamental relative to the sources of value... focusing instead on "price" as a proxy... and "control" as a source of...an ability to exploit others errors... while always assuming that trends that exist... will always be sustained, without ever considering changes in the trends tied to "value" in the underlying. Stock scams... or central bank run gold price suppression schemes... have more in common with Graham and Dodd's understanding of value, even if the application is an knowing abuse or exploitation of others rather than simply focused on finding things that are undervalued and holding them while price corrects to "reality". The market can remain irrational longer than you can remain solvent... a correllary.
A reason, again, that critics of gold deride it as "pet rocks"... when the reality is that "pet rocks" had very little reason to be considered valuable... but by pricing the joke at below resistance thresholds... a lot of money was made out of something with no intrisic value in the "rock"... but substantial value, like crypto, in the "virtual" component in getting the joke. Why do people collect Beanie Babies ? I guess it doesn't matter what you trasde, as long as the trend remains your friend ? Will museums compete to get access to your priceless beanie baby collection when your heirs finally decide to sell ?
The point of the analysis isn't just to determine what's "real" in underlying value... but to understand why (and when) that "real" value you can find that others are ignoring... will be likely to "correct" to the underlying... generating vastly more upside potential than average... with vastly less than average risk... given the risk in the loss of value has already been realizaed...
Long gold and silver... short fiat... only makes sense in a Graham and Dodd type value trade... at the point that long running errors imposed in valuation by "control" are likely to be corrected... which does little to impact the trading based on short term price variations... while manipulation cointinues.
In valuing crypto... the question becomes one of... is the "underlying" improvement an economic enhancement of "money" in things people already do or should value in the features of money... or is it simply a replacement in a new proxy... substituting one form of "control" for new forms of "control" that are more "efficient"...it in no way being an advantage to grant more power to those seeking a monopoly in "control"... which only kills value ? The more money facilitates spying on you and controlling you... the less valuable it is... which doesn't alter the market reality in "price" is not "valuie" ?
New forms of money that seek to help you avoid others interest in imposing "control"... have real value only in the degree they are able to succeed in that effort to insulate you from others efforts to control you ? But, in an age of deceit, you should expect the advertisment in the advantage to be a lie ? Buyer beware... as the ongoing bait and switch is pretty obvious....
How much of the "value" in any thing... is a function of the ability to impose "control" through it ?
in an age when banks mainpulate evertything through "control", overtly, or through frauds in derivatives ?
Which is likely to last longer... gold... or a monetary system based in fraud... that independent of the issues in fraud... appears it has also reached natural limits in its ability to sustain the fiction that debt is money... so that having more debt is "the same thing" as having more money ? Except that "money" you own... doesn't have to be paid back ?
Undervaluation imposed by price suppression... as a separate source enabling preservation of value in owning already realized risks... is probably not what most people think about when they consider gold ? |
