Hello Leonard Poulin,

Thank you for your interest in the story and your response to it. I’ll comment on each point in the order in which you left them.

To start off, I’m not sure what you meant by saving $380 35 years ago. Saving it how?

~If you had taken the actual bills and stuck them in a mattress, then today you would still have $380 in cash, not $0.42.

~If you had instead put that money into a savings account earning a paltry ½% compounded monthly over 35 years, you would now have somewhere in the neighborhood of $453 in that account. However, savings accounts earned much better interest rates on average over that period of time, probably over 3.5% on average, which would give you around $1,300 today, with monthly compounding.

~Using a basic stock market returns calculator online (there are many), investing $380 in the Dow in 1983 would have netted you close to $7,500, if you sold out today.

~It’s only with hindsight that you know that utilizing $380 in 1983 to purchase gold would result in your gold now being worth $1,223 today. If you had sold in the year 2003, you would have actually ended up roughly with the same value you began with — not much of a return for a 20 year holding period. If you had really wanted to maximize your return, you should have sold out in 2011. All that is to say, your time period is arbitrary, and hindsight is 20/20. Then there’s the ever-relevant adage: Historical performance is no guarantee of future returns.

As for whether something is a “store of value” or an “investment”, the answer to that can be quite arguable. Gold may only be a store of value because it will never lose all value, but it may lose a good deal of it, as evidenced by its price movements over the decades. Does that make it a good store of value? I personally think there are better ones.

As for carrying costs, most things have them. If you own real gold, your carrying cost is the storing and safeguarding of that gold. You may also face a conversion cost in order to turn it into something you can use to buy something you need.

Finally, with the Motel 6 comment, I’m not sure what case there is to rest, here. You’ve just described the power of inflation, which is, indeed, a monetary phenomenon. What is its relevance to the points made in the story or to your other statements?

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Intersectionist :: https://philipvalenta.com

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