Financial Question

[Jaime]

Does anyone here know much about gold backed crypto currencies supposedly being poised to replace our fiat currency which is backed by nothing but the full faith and credit of our country which is in a debt spiral. It makes sense to my pea brain that our financial status as a country will have to be "reset", and our bank accounts will vanish for lack of a better word. It has never before sunk in that the full faith of US Government may leave us holding the EMPTY bag. AS A 71 year old I remember the perplexing notion of fax machines and cell phones. Any of you young folks got any advice for us old farts? I have had NO interest in Bitcoin because it isn't backed by anything as I understand it. But gold based crypto is intriguing since that seems to be where BRICS is in the global currency picture. I guess if our fiat currency dissolves all of a sudden, we'll be propelled back into the stone age effectively as our bank accounts disappear, grocery stores not taking fiat currency, utility comoanies not taking fiat currency etc. etc. one could make a pretty grim picture without much effort. Thoughts? I am not curious for sake of getting rich quick. I am curious to know if assett based crypto is soon to be how we will have to purchase essentials vs writing a check or pulling funny money paper currency from our wallets? We have all experienced inflation that deflates the of our money, but have we considered the scenario of our savings and bank accounts being worth NOTHING?  Most of us have figured social security was a fleeting thing, but our bank accounts suddenly being a balance of ZERO, since fiat currency will be worth zero? Have I missed something?

[4WD]

From the Babylon Bee:

Gold Crushes Bitcoin
While the crypto community compares Bitcoin to Gold, they are distinctly different investments. Physical gold allows for private offline transactions and is a top choice reserve currency for all major countries and central banks. It is a dual investment vehicle serving as a safe-haven asset against economic uncertainties and has thousands of industrial uses. Bitcoin's excessive volatility undermined its role as a decentralized currency, leading people to buy and hold it, speculating on price gains. With no inherent value and zero applicable uses, Bitcoin's value is purely speculative, dependent upon what the next person will pay for it. Bitcoin has become the largest online gambling game in history and wallops gold as a gambling tool. To get in on the action, financial institutions have introduced Bitcoin ETFs which generate massive money for their coffers. For conservative people looking for protection, gold can't be beaten. Over the past 24 years, amid U.S. economic and stock market growth and three major crises (2001, 2008, and 2020 COVID-19), gold is up over 700% and has outperformed broader stock markets. During this time, your dollar has dropped more than 40% and 2023 witnessed the worst bond market crash in 150 years ~ while gold soared.

 

Request a free investment guide today!

[Jaime]

What about gold backed crypto? I agree that Bitcoin is very speculative.

[Texas Conservative]

Where are you getting this stuff?

[Jaime]

There's all kinds of internet stuff on shielding your wealth from the coming global cash reset. if anyone needed a reset and the slate cleaned it is our federal fiscal house. I have also read that banks will eventually go on digital currency. I don't doubt that, but I DO doubt they will trade even with someone who has fiat currency backed by nothing but a promise from a broke country. The reset from what I read is a globalist plan, not necessarily good for THIS country or its peons. My concern if my savings in the bank are in danger of being nullified, I would want to hedge that. If gold is the best like 4WD said, I would probably go that direction. Of course I don't know how practical gold would be in filling up my car with gasoline or getting a few groceries. I just don't want to wake up and think crap I wished I had paid more attention. My savings is earning 5.2% in the bank. It is secure and FDIC insured, but I am not sure what happens if a currency reset is coming. I suspect not good for the little guy's "nest egg". Not even considering the total disaster for Social Security in that event. I have never been a "prepper" per se as in end of the world type stuff, but as screwed up as this country presently is, I am starting to think maybe weighing the scenarios is not all that crazy. I have heard all my life about a coming financial crisis beyond anything we  have experienced. I now believe it is closer to reality than anytime in my recollection.

We have power grids that are on the brink of failure, we have inflation out the wazoo. We went to the moon almost 60 years ago and we seem to have lost the technology to do those type things. We have congress people making something like  $174K in salary becoming mega millionaires from insider trading on stocks they regulate. Things just seem way off track. Biological males competing in women's sports and women's right groups seem to be OK with that. If we are not in Bizarro World, I don't know anything. (Off My Soapbox!)

[Hobie]

Does anyone here know much about gold backed crypto currencies supposedly being poised to replace our fiat currency which is backed by nothing but the full faith and credit of our country which is in a debt spiral. It makes sense to my pea brain that our financial status as a country will have to be "reset", and our bank accounts will vanish for lack of a better word. It has never before sunk in that the full faith of US Government may leave us holding the EMPTY bag. AS A 71 year old I remember the perplexing notion of fax machines and cell phones. Any of you young folks got any advice for us old farts? I have had NO interest in Bitcoin because it isn't backed by anything as I understand it. But gold based crypto is intriguing since that seems to be where BRICS is in the global currency picture. I guess if our fiat currency dissolves all of a sudden, we'll be propelled back into the stone age effectively as our bank accounts disappear, grocery stores not taking fiat currency, utility comoanies not taking fiat currency etc. etc. one could make a pretty grim picture without much effort. Thoughts? I am not curious for sake of getting rich quick. I am curious to know if assett based crypto is soon to be how we will have to purchase essentials vs writing a check or pulling funny money paper currency from our wallets? We have all experienced inflation that deflates the of our money, but have we considered the scenario of our savings and bank accounts being worth NOTHING?  Most of us have figured social security was a fleeting thing, but our bank accounts suddenly being a balance of ZERO, since fiat currency will be worth zero? Have I missed something?

The problem being that they can tell you it's backed by gold, silver, platinum, etc.. but your money can disappear just like FTX, it just happen to many church members who were told it was backed. They had to invest a minimum of $10,000 and would soon see their money increase by the investment and they could not loose it as it had backing. Well hundreds if not more of the members as it spread through the churches put in their money, lifesaving, tithe monys, and even church funds as even pastors and church boards were convinced it was a sure thing. Then they tried to take it out......it's all gone..

[4WD]

Gold has an inherent value due to its physical properties and it's relative rarity. None of that really exists for Bitcoin.

[Jaime]

I agree totally as to Bitcoin. It only has a conceptual value based on what people are willing to pay for it, in my understanding. My question was as to the validity of any Gold Backed digital currency.

https://www.investopedia.com/terms/d/digital-gold-currency-dgc.asp

[Hobie]

Gold has an inherent value due to its physical properties and it's relative rarity. None of that really exists for Bitcoin.

But there is no gold, they just tell you or have maybe a smidgen enough to cover the cash for one investor, the rest is smoke and mirrors as we pleaded with the members to keep their life savings and retirement money out... They are sorrowful now and no one can make them whole...

[4WD]

But there is no gold, they just tell you or have maybe a smidgen enough to cover the cash for one investor, the rest is smoke and mirrors as we pleaded with the members to keep their life savings and retirement money out... They are sorrowful now and no one can make them whole...

I have no idea what you are talking about.  What do you mean there is no gold? The government issued money is fiat money.  It has no relation to gold one way or the other, or anything else for that matter.

[Texas Conservative]

I have no idea what you are talking about.  What do you mean there is no gold? The government issued money is fiat money.  It has no relation to gold one way or the other, or anything else for that matter.

I think Hobie's assertion may be true about gold backed crypto.

[4WD]

I think Hobie's assertion may be true about gold backed crypto.

Yes, of course.  Thank you for that.

[Hobie]

I have no idea what you are talking about.  What do you mean there is no gold? The government issued money is fiat money.  It has no relation to gold one way or the other, or anything else for that matter.

It is not backed by nothing but a tiny bit of gold, not bigger than my bank account at best...

[Jaime]

What was the brand to avoid or does it describe them all?

[Hobie]

They all are a scam, Bitcoin, Ethereum, FTX, you name it. https://crypto.com/price
In this case it was called EminiFX.
https://behindmlm.com/companies/how-the-fbi-took-down-eminifx-eddy-alexandre/

[Jaime]

To my knowledge, Bitcoin, Etherium or FTX never claimed to be gold backed or even any kind of asset backed. They fall into the category of being worth only what someone is willing to pay for them as a concept, and NOT an asset based platform. I'm not talking about a get rich quick platform. I'm talking about a digital asset based currency that is an alternative to fiat currency. Someday it seems we will reach the end of the proverbial "backed by the full faith and credit" of a hopelessly financially broke country. A reset, that I believe is coming because there is no other solution to our debt, will drastically reduce the value of our fiat currency, if not render it worthless for all intents and purposes. Ithe reset will do all at once what inflation doesnover a longer period of time. A reset will be like quickly jerking a bandaid off a wound rather than a slow tortuous process.. We've all heard, I assume, of the coming Great Reset. What does that mean to everyone?

[Alan]

They all are a scam, Bitcoin, Ethereum, FTX, you name it. https://crypto.com/price
In this case it was called EminiFX.
https://behindmlm.com/companies/how-the-fbi-took-down-eminifx-eddy-alexandre/

I don't think any of the popular cryptos listed on Coin Exchange are a scam, however their value is extremely volatile. The pattern has been more than obvious over the years, as the value increases people flock to invest to try and make a quick buck, the currency peaks, people sell like mad and the currency takes a steep drop. 

The other side of crypto investing was to mine the product rather than just purchasing it and sitting on it, but I do believe this time around that mining is no longer practical for the average Joe, the equipment and utilities to run the equipment are just too expensive for the return gained. There are still mining farms, but even they have scaled back somewhat, with certain countries placing limits on their electrical usage and taxing them on a different level than other businesses. 

[Jaime]

I never have understood the concept of mining crypto currency. Whybwould they not just market the units? I met a man a couoke of years ago who set uo a ining ooeration in his office. I asked him to give me a one paragraph synopsis of what happens in a mining operatikn. He said all of my computer servers in this operation answers questions really fast and when it does, I am rewarded with a crypto coin. The more servers, the more questions it can answer, hence more crypto coins. My response was WHAT?! Which translates to I am even more confused than before I asked the question. I know other people in the oil patch that utilize otherwise flared natural gas to power generators that in turn power these banks of computer servers. All for churning out correct answers to digital puzzles so that digital currency can be stacked up? I guess I am hopelessly old school.

If anyone has a clearer explanation of all this, I am all ears. Though it will probably still be a total mystery to me. 

[Texas Conservative]

Being asset or gold backed means nothing.  If you don't have the gold, you still just have a promise, which most likely is an empty promise.

[Jaime]

That would be my guess. Even more bizarre is the lure of bitcoin mining by building bigger and bigger computer banks to solve cryptic cyber puzzles faster and faster.

[Hobie]

Being asset or gold backed means nothing.  If you don't have the gold, you still just have a promise, which most likely is an empty promise.

Yes, that was my essential point, as we saw with FTX all the media and sports stars they put up backing it and at the end it meant nothing as they went from Billions of valuation, to almost nothing within a few hours...

[Alan]

That would be my guess. Even more bizarre is the lure of bitcoin mining by building bigger and bigger computer banks to solve cryptic cyber puzzles faster and faster.

We've had this discussion before, in short, the mining process is designed to yield more crypto (current fiat currency value) than the investment in equipment, the bigger the rig, the more you are able to yield. 

[Jaime]

And my answer remains, just sell the bitcoins, no need for the excessive hoops to jump through. Jeopardizing infrastructure and power grids. I think there is a future for digital currency, but Bitcoin, not so much.

[Alan]

And my answer remains, just sell the bitcoins, no need for the excessive hoops to jump through. Jeopardizing infrastructure and power grids. I think there is a future for digital currency, but Bitcoin, not so much.

For the majority of miners, it was cheaper to invest in a bit of equipment than to drop a couple of k in coinbase and hope the coin value increases. With mining, at least you can sell off the equipment, even used graphics cards hold a significant value. 

Some people even mined with the computers they already owned.