Various truths on monies and value

Gold is not an investment. That is to say, it doesn't change in value. It IS value. It will hold and it is the true baseline against which other things of value are measured. Nevertheless, gold's value is almost entirely based on perception rather than its functionality in industry.
It (gold) buys more or less dollars or stocks or whatever, but IT doesn't change in value. Rather other things change in value when measured against gold, itself.

Stocks are considered legitimate values of wealth, but their value, like gold, lies in primarily in desirability.
Why would I say such a thing? Because stocks are "valued" at several times their asset worth, and ability, to generate profit to the particular industry which they represent. Their "worth" as valued to buyers and sellers is higher than what they "do". WHEN WE THINK STOCKS HAVE "LOST" VALUE, THEY FREQUENTLY HAVEN'T. If a single stock is down in relation to other stocks, it has lost value. BUT IF ALL STOCKS ARE "DOWN", THEIR "VALUE" HASN'T CHANGED. Dollars are now able to BUY MORE OF THEM. The stocks are on sale, as it were.

Land/Real-estate is truly an investment because you can improve it and profit from your work. Others' work, and time itself, can raise the value of surrounding land as well. This is tempered by a variety of taxes, fees, fines and whatnot, which vary by location. So land profit can be gobbled up by government at every level, and it gets complicated because less profit is grabbed by governments in areas where less profit is possible, but in areas of greater profit, more profit is grabbed by the government precisely because of the increased potential for making money.

Inflation is brought about when money is worth less. The lessening of money's worth is destructive to an economy...
... but...it makes your debt cost you LESS.
So you buy a house you can barely afford, then Inflation hits and you get a pay raise. EVERY THING YOU OWE MONEY ON FROM LOANS PURCHASED BEFORE YOUR RAISE NOW COSTS YOU LESS.
But you will watch every thing else go up in price.
The GOVERNMENT makes money from every form of Inflation. Minimum Wages, Increases in wages, Higher Purchase Prices...
Each and every increase in costs of monetary transactions filters down to MORE MONEY GIVEN TO THE GOVERNMENT IN THE FORM OF TAXES. But soon, they have to pay out more money for Wages, Services, Products and every other thing.
Inflation (minimum wages in particular) give the government more money via taxes. Taxes on the wages, and also, taxes on every single taxable transaction you make or contribute to.

Inflation, in general and Minimum Wage Increases, in particular, are the Opiates of Badly Run Governments.

Last Edited by Swamprat on 10/02/2021 03:20 PM