Certainly values of commodities are relative. My point is just that paper currencies (much less digital ones) are not commodities. The "inherent-ness" of value isn't a magical thing, it is the usefulness of the commodity itself. Sure, technology changes can make commodities cheaper and this certainly happens all the time (consider computer hardware). But some things have been desirable for thousands of years and they remain quite difficult to get. Gold is one of those things, but it's only one of those things.

Which is more likely to happen over the next 10 years:

1. A major technological breakthrough allows us to mine gold without huge capital expenditures, or without diesel fuel, or without digging, or through some other means and suddenly we can product an ounce of gold out of the ground or from seawater for half what we can today? OR

2. Gasoline will be $7/gallon from inflation?

There isn't a risk of inflation, it's a certainty. Look at the prices over the last 40 years if you don't believe that. I'll take my chances betting against the chance of a huge disruption in mining technology against the sure thing of fiat currency devaluation, thank you very much.

Your example of how fiat currency can be used (to burn in a stove to heat your house) pretty much proves my point exactly. Paper money has no (significant) intrinsic value or usefulness.

Store diesel fuel if you want. Or keep your money in a bank. I don't really care. I'm trying to help people realize that just because a government calls something "money" doesn't mean it has value. THINGS and STUFF have value (or what I call "intrinsic value", relative and somewhat changing, of course).

I see how you've emotionally distanced yourself from what happened in Cyprus. The victims of the bank run there are "not people" but evil rich villains bent on avoiding taxes. As if an "oligarch" or "criminal" is not a person! Or that the capital controls only affect them and not *actual* "people". In fact, the evidence is that the biggest "oligarchs and criminals" got advance notice to get their money out by the government.



But you *are* disagreeing with it. You think that dollar bills (T-bills) are a better store of value than something you can hold in your hand, like gold. Look at the last 100 years of history of the relative value of gold vs. US Dollars and explain that to me.

Inflation is here. It's primarily in the stock market and bond market right now, but it's here. Food prices are also up, but not included in the CPI, which is a deliberate lie perpetrated on US citizens and creditors. This is all intentional as well. The Krugman/Keynesian idea is that by inflation you can lower real (inflation-adjusted) wages and this will eventually cause employment to rise. That might be true, theoretically, but it is a catastrophe for anyone who has anything saved up in the currency.

John Williams, the statistician who runs shadowstats.com, recalculates CPI-measured inflation using the US government methods from 1990 and 1980 to show how the CPI metric has been manipulated over time to distort reality. If we used the same method for calculating CPI as we did in 1990, current CPI inflation would be 6%. If we used the 1980 method, it would be about 10%. He's probably a "goldbug", too, so you can disparage him, but it's hard to get around the fact that he's using the government's own methodology to reveal the lie.

So, if you are awake, and pay any attention to your grocery bill or household expenses rather than listening to the nonsense coming from central bankers, you know that price inflation is already here. Or do you actually think the stock markets are making new highs on the strength of the economy? Give me strength. The stock market and bond market are both enormous bubbles now, brought on by electronic money printing. Suggesting the TIPS spread has anything to do with consumer inflation is like saying that shitty 1930's bungalow in inner-city Detroit was actually worth $300k. Especially since the only significant buyer of Treasuries is the Federal Reserve, allowing them to manipulate rate and yield pretty much however they want.

Bubbles pop eventually, and when this one does interest rates will spike, and TIPS along with them. You've got to be smarter than thinking that prices in a bubble mean anything, or you end up taking out a 0%-down jumbo ARM in 2006. The same people you disparage warned against doing that, too. The same people you seem to believe in were the ones telling us there was no housing bubble.

Call me a "goldbug" if you like, but it misses the point entirely. The point isn't about gold. Gold is just convenient. The point is about paper money and the lying, despicable, power-hungry, corrupt, greedy, douchebag politicians and bureaucrats who control it. Do you know why they hate "goldbugs" and seek to discredit them? Because gold and other commodities are (largely) beyond the power of the politicians to counterfeit and thus steal our savings.