By David Seaman
We’re well into 2016 - the year the more dire YouTube videos five and six years ago from alternative media personalities said would be catastrophic. Some of these people were peddling gold coins or water purifiers, but aside from that possible misalignment of objectivity, they turned out to be more or less... well, ahem... they turned out to be more or less right.
Never thought you’d read that here, did you?
Certainly, there are no zombies in the streets. No alien invasions. No unexpected coups- err, okay, bad example given the recent news coming from Turkey. Or the rise of an outsider candidate in the most contentious presidential race of a generation... the race protests and riots... the displacement of millions and immigration wave rocking Europe... so, fine, the nutty trafficwraiths of YouTube a half decade ago were right: 2016 is a meltdown year.
And, maybe, a make or break year for the individual paying attention objectively.
GOLD AND BITCOIN HELP US DETERMINE HOW ‘HEALTHY’ OUR ECONOMY MIGHT BE
This is where Bitcoin and gold become very useful for comparison’s sake, even if you haven’t yet become a Bitcoin bug or a gold aficionado (hang around me enough, you’ll end up desiring both - be sure to read my recent piece on how to buy your first Bitcoin).
When we want to determine if something is good or attractive at this particular moment in time, we usually look to the past.
“Back in my day, we had to walk five miles in the snow to school...”
“Before the Internet, businesses were forced to do x, y, and z...”
“Before they carried antibiotics on their expedition...”
That sort of thing. So before fiat currencies like the US Dollar and euro, and things like PayPal, people around the world of various cultures and eras basically always used gold - and sometimes silver - as a monetary tool for value transfer and value storage. Gold or silver coins in the pocket, gold bars in the bank vault. Worked for thousands of years, in hundreds of cities.
The US Dollar has a 45 year market history since its current post-Nixon iteration, the Euro has an even shorter 17 year market history since its introduction to global markets, and cryptocurrencies such as Bitcoin are only - at most - six to seven years old. Similarly, many bond products that took off in the 1980s and bundled synthetic financial products that came along even later have relatively short market histories.
So how do we figure out the relative performance of such new inventions? We have to compare to what people used to use, in one way or another. Since gold has more than 5,000 years in economic use within human societies, let’s go with gold.