Bank safe box storage diversification and other tips

Discussion of the Gold portion of the Permanent Portfolio

Moderator: Global Moderator

User avatar
Pointedstick
Executive Member
Executive Member
Posts: 8864
Joined: Tue Apr 17, 2012 9:21 pm
Contact:

Re: Bank safe box storage diversification and other tips

Post by Pointedstick » Wed Jul 31, 2013 4:58 pm

Mdraf wrote: Me too  since everybody is in fiat.  But what Libertarian666  was saying is that IF another country backstopped by gold then it would become a strong currency and possibly the world reserve currency. And I agree with him.  However a strong currency is a liability since it impacts negatively on balance of trade so nobody wants one in this age of globalization. The only economy which could -or rather used to - do well without the need to export is/or was the USA
There's another problem: being a reserve currency issuer means that when other people need money, they borrow it from you. If your currency is backed by gold, then that requires mining more gold during a period of heightened demand for your money, or devaluing your currency by making each dollar worth less gold, which kind of defeats the point of having a gold-backed currency that's supposed to be hard to devalue.

The basic thing is that for a variety of reasons, nobody wants a strong currency. Austrian economics buffs do, but very few other people have such a desire. That's just not the world we live in.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
Mdraf
Executive Member
Executive Member
Posts: 458
Joined: Tue Aug 23, 2011 5:54 pm

Re: Bank safe box storage diversification and other tips

Post by Mdraf » Wed Jul 31, 2013 5:16 pm

Pointedstick wrote:
Mdraf wrote: Me too  since everybody is in fiat.  But what Libertarian666  was saying is that IF another country backstopped by gold then it would become a strong currency and possibly the world reserve currency. And I agree with him.  However a strong currency is a liability since it impacts negatively on balance of trade so nobody wants one in this age of globalization. The only economy which could -or rather used to - do well without the need to export is/or was the USA
There's another problem: being a reserve currency issuer means that when other people need money, they borrow it from you. If your currency is backed by gold, then that requires mining more gold during a period of heightened demand for your money, or devaluing your currency by making each dollar worth less gold, which kind of defeats the point of having a gold-backed currency that's supposed to be hard to devalue.

The basic thing is that for a variety of reasons, nobody wants a strong currency. Austrian economics buffs do, but very few other people have such a desire. That's just not the world we live in.
HOWEVER..... :-X
Nobody wants a currency that's too weak either because that lowers the population's living standards
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3483
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: Bank safe box storage diversification and other tips

Post by Ad Orientem » Wed Jul 31, 2013 5:52 pm

Mdraf wrote:
Pointedstick wrote:
Mdraf wrote: Me too  since everybody is in fiat.  But what Libertarian666  was saying is that IF another country backstopped by gold then it would become a strong currency and possibly the world reserve currency. And I agree with him.  However a strong currency is a liability since it impacts negatively on balance of trade so nobody wants one in this age of globalization. The only economy which could -or rather used to - do well without the need to export is/or was the USA
There's another problem: being a reserve currency issuer means that when other people need money, they borrow it from you. If your currency is backed by gold, then that requires mining more gold during a period of heightened demand for your money, or devaluing your currency by making each dollar worth less gold, which kind of defeats the point of having a gold-backed currency that's supposed to be hard to devalue.

The basic thing is that for a variety of reasons, nobody wants a strong currency. Austrian economics buffs do, but very few other people have such a desire. That's just not the world we live in.
HOWEVER..... :-X
Nobody wants a currency that's too weak either because that lowers the population's living standards
I'm not sure I'd agree with that. It depends on how one defines currency weakness. If it is relative to other currencies it would normally have little effect on your standard of living unless you are fond of vacationing in Europe or buying a lot of imported goods. But if you are referring to higher domestic inflation, that can have a very prejudicial effect on standard of living.
Trumpism is not a philosophy or a movement. It's a cult.
User avatar
Pointedstick
Executive Member
Executive Member
Posts: 8864
Joined: Tue Apr 17, 2012 9:21 pm
Contact:

Re: Bank safe box storage diversification and other tips

Post by Pointedstick » Wed Jul 31, 2013 6:14 pm

If by "currency weakness" you mean "domestic inflation", then that can only cause the people's standard of living to fall if their wages and savings don't keep pace with it. For example if inflation is 5%, but wage growth and interest rates are 5.5%, there's really no problem except for the hoary old prospectors who put cash under their mattress. ;)
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3483
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: Bank safe box storage diversification and other tips

Post by Ad Orientem » Wed Jul 31, 2013 6:19 pm

Unfortunately in periods of high inflation the working and middle classes tend to suffer. Wages usually lag rising inflation by at least a bit and of course savings take a big hit. The only people who really do well in inflationary periods are debtors and those speculative investors who wagered on inflation.
Trumpism is not a philosophy or a movement. It's a cult.
Mdraf
Executive Member
Executive Member
Posts: 458
Joined: Tue Aug 23, 2011 5:54 pm

Re: Bank safe box storage diversification and other tips

Post by Mdraf » Wed Jul 31, 2013 8:34 pm

Countries with weak currencies have no choice but set up currency controls to protect the standard of living.  It hardly ever works in the long run. It creates a huge underground economy and black markets for foreign currency. 
User avatar
vnatale
Executive Member
Executive Member
Posts: 9423
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Bank safe box storage diversification and other tips

Post by vnatale » Fri Mar 06, 2020 5:55 pm

Libertarian666 wrote:
Tue Jul 30, 2013 9:39 pm
Pointedstick wrote:
Libertarian666 wrote:
MediumTex wrote: If you were talking about basically ANY country in the world other than the U.S. I might be able to comprehend your argument, but the U.S. dollar is in so much better condition from a structural perspective than any other currency in the world that I can't fathom why the dollar would be the currency to collapse.
Obviously we live in different worlds, since in the world I live in, the dollar is the currency of the most overextended, bankrupt entity the world has ever seen.

What color is the Sun in your world?
Would it be fair to say that mental model you're working from is that the dollar is worthless trash that everyone in the world is on the verge of ditching as soon as they realize that it's a bunch of unbacked confetti conjured out of thin air by the most violent, least trustworthy band of organized criminals in human history?
Everyone in the world? No. I don't expect everyone in the world to do anything at the same time.

What I expect is that the marginal demand for the dollar will take a nosedive at some point after an event that is unknowable in advance but will be heralded as "the reason" for its demise, just as the 1929 crash is considered by the unknowledgeable as "the reason" for the 1930's depression.
I challenge any comedian to come up with a more comedic line than the one I've highlighted above!


And, Libertarian666, have we since come close to the dollar taking a "nosedive". Could this virus be the "unknowable in advance"?

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
User avatar
vnatale
Executive Member
Executive Member
Posts: 9423
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Bank safe box storage diversification and other tips

Post by vnatale » Fri Mar 06, 2020 5:58 pm

MediumTex wrote:
Wed Jul 31, 2013 1:05 am
Libertarian666 wrote:
MediumTex wrote: If you were talking about basically ANY country in the world other than the U.S. I might be able to comprehend your argument, but the U.S. dollar is in so much better condition from a structural perspective than any other currency in the world that I can't fathom why the dollar would be the currency to collapse.
Obviously we live in different worlds, since in the world I live in, the dollar is the currency of the most overextended, bankrupt entity the world has ever seen.

What color is the Sun in your world?
The U.S. has:

- Largest economy in the world

- Largest bond market in the world

- Largest stock market in the world

- Largest manufacturing infrastructure in the world when you exclude plastic crap production

- Largest and most powerful military in the history of the world

- Enormous natural resource deposits

- Incredibly productive economy

- Very productive and dedicated workforce (When was the last time you took a vacation?  How long was it?)

- Admirable levels of political stability compared to most of the world

- Strong protection of property rights

- Mostly corruption free government (Let's be honest about this one.  However screwed up our government is, if you offered 99% of cops a $100 bill not to write you a ticket they wouldn't take it, and if you offered 99% of politicians $100,000 to vote a certain way on a piece of legislation, they wouldn't take it.)

- No danger of military conquest from another nation

Which nations in history with even a few of the characteristics above have experienced currency collapses?

A currency collapse is mostly a result of capital flight or war.  I can't think of any currency collapse scenarios that wouldn't involve one or both of these factors.

POWERFUL statement by Tex regarding the strengths of the United States!

(And, sorry, in the light of recent discussions I could not resist highlighting and bolding what I did...)


VInny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3483
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: Bank safe box storage diversification and other tips

Post by Ad Orientem » Fri Mar 06, 2020 6:36 pm

With 10YT yields below .8% I'd say the dollar remains in high demand. But I will also add that I'm not buying any bonds farther out then 2 years right now.
User avatar
vnatale
Executive Member
Executive Member
Posts: 9423
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Bank safe box storage diversification and other tips

Post by vnatale » Fri Mar 06, 2020 7:01 pm

Ad Orientem wrote:
Fri Mar 06, 2020 6:36 pm
With 10YT yields below .8% I'd say the dollar remains in high demand. But I will also add that I'm not buying any bonds farther out then 2 years right now.
And, 30 year treasuries are yielding what? I know that Craig stated at least once that if yields came down to 1% he have to pause to re-evaluate.

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
User avatar
Ad Orientem
Executive Member
Executive Member
Posts: 3483
Joined: Sun Aug 14, 2011 2:47 pm
Location: Florida USA
Contact:

Re: Bank safe box storage diversification and other tips

Post by Ad Orientem » Fri Mar 06, 2020 8:35 pm

vnatale wrote:
Fri Mar 06, 2020 7:01 pm
Ad Orientem wrote:
Fri Mar 06, 2020 6:36 pm
With 10YT yields below .8% I'd say the dollar remains in high demand. But I will also add that I'm not buying any bonds farther out then 2 years right now.
And, 30 year treasuries are yielding what? I know that Craig stated at least once that if yields came down to 1% he have to pause to re-evaluate.

Vinny

Currently 1.29%.
https://www.bloomberg.com/markets/rates ... t-bonds/us
User avatar
Mark Leavy
Executive Member
Executive Member
Posts: 1950
Joined: Thu Mar 01, 2012 10:20 pm
Location: US Citizen, Permanent Traveler

Re: Bank safe box storage diversification and other tips

Post by Mark Leavy » Tue Apr 14, 2020 6:56 pm

I spent the weekend driving through large parts of the Navajo Nation (currently under quarantine and curfew 8pm to 5am).

What a huge, and stunningly beautiful area. Immensely impoverished and so sparsely populated as to be almost virgin land. A sovereign nation the size of a good sized state embedded inside the USA. I see zero chance of widespread development (or much of anything) happening inside this land mass within my lifetime.

If someone wanted to dig a hole somewhere, I don't think you could do better than to generate a random GPS co-ordinate inside these bounds and a minimum of X miles from any of the few roads or trails.

Safety not guaranteed.
navajonation.png
navajonation.png (320.92 KiB) Viewed 5696 times
User avatar
vnatale
Executive Member
Executive Member
Posts: 9423
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Bank safe box storage diversification and other tips

Post by vnatale » Sun Apr 19, 2020 8:08 pm

MediumTex wrote:
Tue Jul 30, 2013 10:11 am
Another thing I don't understand about the gold confiscation scenarios is why the government would want anyone's gold. 

We're not on a gold standard, so it wouldn't improve the backing for the currency.

We will never go back onto a gold standard because politicians and central bankers hate it.

And the U.S. government is already the largest holder of gold in the world.  What would be the point of obtaining more through confiscation?
Related to other gold discussions currently going on here?

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
User avatar
ochotona
Executive Member
Executive Member
Posts: 3353
Joined: Fri Jan 30, 2015 5:54 am

Re: Bank safe box storage diversification and other tips

Post by ochotona » Sun Apr 19, 2020 9:36 pm

I don't want more than one box. I hear horror stories about seniors squirreling assets away in multiple SDBs then dementia sets in and no one knows about the boxes any longer. Government wanted your gold in 1933, not 2023.
Post Reply