This Probably Won't Go Anywhere, But...

[raulus]

I’ve said it before, but I’ll repeat it again. I don’t think the speculative term is meaningful when it comes to investments, simply because the line gets really fuzzy at times.

But there’s a definite difference between productive and unproductive assets. Gold, Bitcoin, cardboard, all unproductive assets. Farmland, income-generating companies, etc. fall into the productive bucket.

Certainly there’s nothing wrong with unproductive assets, although some might take offense at the name. Just a different flavor with different characteristics, and a different approach to valuing them. Plus with unproductive assets, you usually can’t get much (economically) from them while you hold onto them. With a productive asset, you might get something while you hold and wait for the right time to sell. But even with productive assets, plenty of them don’t deliver much while you wait for the right time to sell.

As an added challenge, many nonproductive assets, including cardboard, often have ongoing costs to hold them. Even if it’s just storage costs, it’s something. And if you have insurance, the costs are usually more.

[Balticfox]

Originally Posted by raulus

But there’s a definite difference between productive and unproductive assets. Gold, Bitcoin, cardboard, all unproductive assets. Farmland, income-generating companies, etc. fall into the productive bucket.

Despite not normally generating an income stream, gold (and silver) straddles the line between unproductive and productive. Given its unique characteristics, e.g. the single most malleable plus the single most ductile metal and its complete resistance to corrosion under any natural circumstances, it's a very useful substance. That's why it has several thousand years of history in coinage and decorative applications such as jewellery. And because it's an excellent conductor as well, it now has its uses in high tech electronics as well.

But what's actually most important these days for gold is that its long history in coinage applications has given it cachet as an alternative to government fiat currencies. Therefore when everything goes to hell in a handbasket and government money isn't worth the paper upon which it's printed (that's the history), gold and siver will be the only currencies accepted for transactions. (And of course when everything does collapse and an alternative currency is actually needed, Bitcoin accounts will have disappeared with the internet.)

[raulus]

Don’t forget that Bitcoin has some decorative value too!