Wednesday, January 6, 2021

The importance of tangible assets

Here's news for you: Bitcoin has soared to new highs, trading at $35,000.

Hard on the heels of this article was another that caught my eye: "The Case for Digital Assets."

Call me a Luddite -- call me an old fuddy duddy -- but why would anyone put their faith in digital anything, especially when it comes to digital assets? It can disappear in the blink of an eye.

I find it unnerving enough to use fiat currency. I realize fiat currency is just as imaginary as Bitcoin, but at least it's tangible. It's one of the reasons we adopted an all-cash lifestyle several years ago.

Fiat currency may be little more than an agreed-upon fantasy of "worth," but at least it's something you can hold in your hands. It's not digital, it's tangible, insofar as that fantasy supports it.

Consider a few headlines I've collected over the past couple months:

The Circle Is Complete: BOJ Joins Fed And ECB In Preparing Rollout Of Digital Currency

Robinhood Users' Accounts Mysteriously Looted And There's No One To Call

The Astonishing Lack Of Value In Value

When Money Dies, 100 Years Later

The last link starts with: "Almost a century after the stark lessons of 1923 Germany [hyperinflation in Weimar-era Germany], the West is convinced it can't happen here. In our overwhelming material abundance, aided by the natural deflationary pressures of markets, we simply have lost our ability to imagine a hyperinflationary scenario."

At some level, I think investors understand this, hence yet another financial link: "An Epic Commodities Boom Is Coming," which starts: "Demand for commodities, tangible assets and the companies that mine, manufacture and transport them is about to blow sky-high."

Ah, tangible assets. I'm all in favor of them. These are my preferred investments:


Sure, these tangible assets also come with risks, but since there is no risk-free investment, these are my preferences

Right now there's a tremendous amount of uncertainty in the world, and somehow the thought of tangible assets is immensely comforting.


  1. Tangible assets are those which enhance your life and or have the ability to carry wealth past the bad times. At my age these are becoming fewer but there still important.

  2. Although I agree entirely that something you can hold in your hand *and* that has actual value (such as the livestock and stored food you pictured) is the best kind of wealth, and I also agree that Bitcoin can disappear immediately and unexpectedly (witness the number of Bitcoin wallets that have been rendered inaccessible when the owner forgot the password), digital currencies hold one great theoretical advantage over fiat currency, namely that no one can just make up more of it. So there's at least *one* reason it doesn't inflate dramatically. But yeah, give me some Big Cows over Bit Coins, please.

  3. At some point in the future someone will steal most of the assets behind bitcoin. It will be some elaborate sting or scam and it will be reported breathlessly as though no one can believe it could happen. I mean, seriously?? Every computer in the world has been hacked by the Chinese or the Russians or your neighborhood teen. It will all be hacked in fact it will all be hacked many times.

  4. Digital here today gone tomorrow...Tangible here for years...Love the post and seeing your photos as a reminder dear Patrice.
    Love from NC

  5. I'm with you, Patrice. My boss (I work for a nonprofit) has been encouraging our staff to invest in BitCoin ad nauseum. It's a hedge against fiat currency! It's only going to go up! Get in now and you'll be rich in xyz years!
    I'm biting my tongue and stocking up on tangible assets. We'd rather have food on the table than imaginary money.

  6. Agreed - digital 'currencies' are NOT a store of value and are to ephemeral to trust for anything beyond speculation.

    While some, like Bitcoin, have limits to how many there can be, others do not - and they are still subject to government regulation or seizure like an ordinary bank account. In fact, due to some seizures, the US government owns (owned? I'll have to check) a large stock of Bitcoins and at one point was trying to figure out how to sell them without depressing the market.

    1. I suspect the real reason behind the government's fascination with digital currencies is negative interest rates to "stimulate the economy". Don't laugh, it's a real thing.

  7. I struggle with the attractiveness of digital currency for no other reason that Government is not involved. That said, at this point it is essentially gambling.

  8. Agree wholeheartedly! I like to see my investment for the future!

  9. Who is the power behind the Bitcoin throne? Who sets the value? Is the supposed rise in value and pushing of it as a "safe" investment all hype?

    I listened to Alaska Prepper this afternoon (on YouTube) to his beginning of a series comparing our current economy to what was happening in the 1920s. There is a lot of similarity! And we know it came crashing down.

    Those tangible assets you have pictured will have great value if/when we have another great depression.

  10. Chickens, pigs, rabbits, cows, goats....that's my kind of stock market. Livestock.

  11. At my age of 74, I've seen both bust and boom years. Thru out, I've always been on the plus side altho one year it was really close to declaring bankruptcy due to stock investments going south. Now, it's in hand, touchable, usable investments of housing, food, tools, clothing. Even if hubby dies and my retirement income is cut in half, my tangibles will see me thru without much change in my lifestyle. Can't say that if my resources were in Bitcoin or the stock market.

  12. One thing I noticed is all the pictures are of what could be called "commodities". Commodities change very little in value in relation to other commodities. Some unexpected droughts or other weather events may temporarily change their ratios as opposed to one another, but over time these remain surprisingly stable.

    There are other commodities, although many people don't realize they are, and those a precious metals. Like other commodities they haven't changed over time in relation to each other. Just guessing, but I'd guess if in Roman times you could trade a silver coin for 10 chickens, you can today.

    Since the beginning of recorded history gold/silver have been traded for other commodities, there's no reason to believe they won't be again when fiat currencies are beyond inflationary.

    As opposed to other commodities, like chickens, they're portable and recognizable at the same time. If you need cooking oil and have a dozen chickens you don't need you could carry those chickens around looking for someone with cooking oil who needs chickens. Or, you could carry a few silver coins to someone who has cooking oil but doesn't need chickens, but needs beans. He'll take those coins to someone who has beans, but doesn't need cooking oil. They might just carry those same coins to you when they need chickens.

    I'll stay with PMs, EMP/CME can't touch them.

    Ozarks Tom

  13. Even tangible assets have to be owned, used, and protected from theft, whether from a 2-legged predator, or a 4-legged predator. Those who talk about owning tangibles, but lack them in hand still have nothing.