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Further, why is gold a suitable money when rising real production would be rewarded with deflation?

 

It's not ideal money if a country relies on deficit spending to fund the government expenses. 

 

Think about earning $1000 worth of gold (or any fixed base currency).  Ten years from now deflation results in increased purchasing power because you can buy more with your $1000 of gold if you saved it.  Inflation, on the other hand, is a tax.

 

I already acknowledged that deflation is good for the individual that hoards gold.  There are alternatives to cash if you worry about inflation, so it's not a binary debate between gold or cash as currency.

 

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As for jewelry as far as I know platinum is cheaper than gold. Maybe that's why it's more popular these days  ¯\_(ツ)_/¯

 

People are shelling out more for the platinum settings.

 

Plat $890:

https://www.bluenile.com/build-your-own-ring/petite-solitaire-ring-platinum_19010

 

18k gold $750:

https://www.bluenile.com/build-your-own-ring/petite-solitiare-ring-18k-yellow-gold_44709

Platinum: $971 per once

Gold: $1,783 per ounce

 

Nice hustle for jewelers

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As for jewelry as far as I know platinum is cheaper than gold. Maybe that's why it's more popular these days  ¯\_(ツ)_/¯

 

People are shelling out more for the platinum settings.

 

Plat $890:

https://www.bluenile.com/build-your-own-ring/petite-solitaire-ring-platinum_19010

 

18k gold $750:

https://www.bluenile.com/build-your-own-ring/petite-solitiare-ring-18k-yellow-gold_44709

Platinum: $971 per once

Gold: $1,783 per ounce

 

Nice hustle for jewelers

 

ROLEX Lady-Datejust 28mm:

$6,750 in steel

$24,650 in yellow gold

$44,050 in platinum

 

https://www.rolex.com/watches/configure.html#/lady-datejust/m279178-0006/material

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Gold and crypto seem to have diverged with crypto moving up while gold has pulled back significantly.

 

Dies this mean gold is a buy?  Or is crypto moving up for reasons other than inflation hedging?

 

To go back to JRMs reasoning. Don't forget to factor in crypto.  If a large portion of gold is to hedge inflation and crypto can start to take that on then what does that mean for gold demand?

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Gold and crypto seem to have diverged with crypto moving up while gold has pulled back significantly.

 

Dies this mean gold is a buy?  Or is crypto moving up for reasons other than inflation hedging?

 

To go back to JRMs reasoning. Don't forget to factor in crypto.  If a large portion of gold is to hedge inflation and crypto can start to take that on then what does that mean for gold demand?

 

Crypto has certainly become more accessible to the individual investor.  Just open up PayPal app.

 

Buying physical gold, especially in quantify can be difficult and possibly unsafe.

 

Other than that, I'm definitely not qualified to speculate why one is up while the other is down.

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What I don't understand about Bitcoin is what happens after the 21e6 Bitcoin is mined?  The miners are compensated by receiving Bitcoins.  Does this mean the transaction cost goes up to some ridiculous level overnight? 

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Gold and crypto seem to have diverged with crypto moving up while gold has pulled back significantly.

 

Dies this mean gold is a buy?  Or is crypto moving up for reasons other than inflation hedging?

 

To go back to JRMs reasoning. Don't forget to factor in crypto.  If a large portion of gold is to hedge inflation and crypto can start to take that on then what does that mean for gold demand?

 

Crypto is absolutely moving up for reasons other than inflation hedging. Paypal announced crypto adoption a few weeks back and it has been estimated that they've been sucking up 70% of new Bitcoin supply since. If one player is sucking up 70% of new supply, in addition to that supply being curtailed with the halving of production earlier in the year, there is NOT a lot of new BTC supply going around to satisfy this newly forming institutional demand.

 

Demand from the likes of billionaires (Druckenmiller, Paul Tudor Jones, etc), investment management companies (Blackrock, Vanguard, etc) and companies involved with adoption and/or payment processing (Square, PayPal, MicroStrategy) are not small sums and will likely continue, and potentially accelerate, with the growing acceptance of the currency. Prices will have to move higher to incentivize sellers to meet the demand.

 

Lastly, on the comment of gold demand moving to crypto - Im sure a small amount of gold demand is moving to crypto. But the gold market is measured in several trillions and BTC market cap measured at $342 billion even at all time highs. If even a small amount of gold demand moves to crypto, it will shoot crypto into the stratosphere and incentivize the selling back into Gold at some point as relative prices will be out of whack. There's enough space in the world for both of them just like there is enough space in the world for silver and platinum alongside gold.

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