the huge Problem that most people doesn't really understand

[Erdogan]

...
You predicate your complaint on the baseless assumption that hoarded money should not depreciate.
In your case, think of inflation as God's way of punishing gluttony and greed.

Is he god now? Or should I say she?

Saving money is like waiving you place in the queue for resources to consume or invest. You should be free to consume or invest at the time of your own choice.

If you let a socker team of five year olds with mums go before you in the queue to the pissoir, should you only be allowed to lighten yourself half way afterwards?

No, saving money is nothing like waiving your place (...).  Where did you hear such an absurd comparison? 
What you call "saving money" is called hoarding.  It is called gluttony and greed.  Who/what are you saving this money from?

It is saved by not consuming. They come from trade of course, for instance sale of your work hours.

[Bambifan101]

...
No, saving money is nothing like waiving your place (...).  Where did you hear such an absurd comparison?  
What you call "saving money" is called hoarding.  It is called gluttony and greed.  Who/what are you saving this money from?

It is saved by not consuming. They come from trade of course, for instance sale of your work hours.

So if I have five hundred cooked dinners, you would think it wise and prudent for me to eat one & shove the rest under my mattress?  I saved those dinners by not consuming them.
That's exactly what you are doing with money, expecting it to be just like you have left it when you finally decide to come back for it and use it.
The result is I have wasted 499 dinners, dinners which could have fed 499 people, as I "saved" those dinners.  You, apparently, have done something similar with your money, and are now wondering why you weren't rewarded for your brilliant strategy.

[Impaler]

It's all about LIQUIDITY, in your 'in-line' analogy holding money is not like getting out of line because you the money holder expect to go to the front of the line at any time you wish.  Holding money is like lurking at the front of the line refusing to consummate the purchase because you can't decide between a hotdog or nachos.  You might be letting individuals pass you one by one while maintaining your position at the front.  That is bad line manners even when you let people pass and one jerk at a time doing it is annoying enough, imagine dozens of people at the front of a line who are just 'holding' thouse places and who you need to pass.  

Then imagine that they start demanding to be PAID in order to be passed, they say they EARNED that spot in line and they might buy something at any time if the whim strikes them so they should be compensated for giving that up.  Soon their are a bunch of people just camping the line and they have formed a kind of cartel, no one actually uses the line anymore, their are just a group of people who act as rent seekers at the front of the line and everyone must pay them to pass before buying their hotdog.  That's interest and the banking system, it arises from giving people unconditional rights to just sit on money.  We would never tolerate this in a line and we shouldn't tolerate it in money either.

If you want to keep your purchasing power then you need to actually go to the back of the line thus giving up liquidity, this is what any decent bank CD will do for you, protect you from inflation with no risk.  But as everyone has said investing is the smart thing to do which would be like opening up another hotdog stand so some of the line moves to you and everyone gets served faster.

[Erdogan]

...
No, saving money is nothing like waiving your place (...).  Where did you hear such an absurd comparison?  
What you call "saving money" is called hoarding.  It is called gluttony and greed.  Who/what are you saving this money from?

It is saved by not consuming. They come from trade of course, for instance sale of your work hours.

So if I have five hundred cooked dinners, you would think it wise and prudent for me to eat one & shove the rest under my mattress?  I saved those dinners by not consuming them.
That's exactly what you are doing with money, expecting it to be just like you have left it when you finally decide to come back for it and use it.
The result is I have wasted 499 dinners, dinners which could have fed 499 people, as I "saved" those dinners.  You, apparently, have done something similar with your money, and are now wondering why you weren't rewarded for your brilliant strategy.

What you describe is saving, but this is what money is for. You do not have to save the actual dinners, don't buy them, or if you made them, trade them for money,

[Erdogan]

It's all about LIQUIDITY, in your 'in-line' analogy holding money is not like getting out of line because you the money holder expect to go to the front of the line at any time you wish.  Holding money is like lurking at the front of the line refusing to consummate the purchase because you can't decide between a hotdog or nachos.  You might be letting individuals pass you one by one while maintaining your position at the front.  That is bad line manners even when you let people pass and one jerk at a time doing it is annoying enough, imagine dozens of people at the front of a line who are just 'holding' thouse places and who you need to pass.  

Then imagine that they start demanding to be PAID in order to be passed, they say they EARNED that spot in line and they might buy something at any time if the whim strikes them so they should be compensated for giving that up.  Soon their are a bunch of people just camping the line and they have formed a kind of cartel, no one actually uses the line anymore, their are just a group of people who act as rent seekers at the front of the line and everyone must pay them to pass before buying their hotdog.  That's interest and the banking system, it arises from giving people unconditional rights to just sit on money.  We would never tolerate this in a line and we shouldn't tolerate it in money either.

If you want to keep your purchasing power then you need to actually go to the back of the line thus giving up liquidity, this is what any decent bank CD will do for you, protect you from inflation with no risk.  But as everyone has said investing is the smart thing to do which would be like opening up another hotdog stand so some of the line moves to you and everyone gets served faster.

The analogy begins to fall apart (as they always do), but when you want to consume, you bid the price up.

If you want to invest instead of save, you use your money to buy for instance another microwave to the shop owner for a share in his business. Or lend money to someone who will invest.

Resources are needed both for consumption and for investment, the money queue is for both. Saving is necessary to invest, either the investor or someone else by lending. Thinking that you can create investments or consumption by manipulation of the money supply or the interest rate, is a fallacy.

You can change the market by the manipulation, but that only means some other person is moved backwards or forwards in the queue. Ultimately, the investment must use resources otherwise used by someone else to invest or consume, the result is suboptimal.

[Bambifan101]

...What you describe is saving, but this is what money is for.

You're mistaken, that's not "what money is for."  That's what you want it to be, but your wish has no basis in reality.
Money is not meant to be be hoarded any more than food is meant to be hoarded, and inflation is the mechanism through which money-hoarding is discouraged.  

[mostafakhalil]

to be honest after watching the poverty in Europe report, I feel more comfortable holding some bitcoins than having fiat, each time the price crash/correct than bounce back it makes me more confident about the whole concept of Bitcoin.

I think most of investors look to the quick profit bitcoin can offers, which is really impressive but not all of you here see what is going on around the world, the infinity of money printing (inflation) is killing the economy. and believe me, smart politicians knows that there is an issue and they also know that there is no way to fix it with the existing system, and they also doesn't know what to do, so they keep doing the same thing to give the illusion of fixing it which is temporary and they keep repeating the same thing.


I am sure most of you (older than 30) notice the loss in purchase power of your local currency, at least I do, I remember when I was 6-8 years old going to small store near my home buying milk and bread which cost at least 10 times less what it cost today, my father has been working all his life and could not save anything, my mother did work until her company did fire half of the workers than dramaticly shut down, she couldn't get another job so she stayed at home and took care of us, my father's duty was to offer a good  education to us (a brother and 3 sisters) and he did all he could and succeed.

if people take just a moment and think about how bad the economy is now, everyone would invest in bitcoin, not to talk about 20 years ago, just few years ago (2007-2008) I paid €2 for my cigarettes and less than €1  for gasoline , around €0.2 for bread (1 baguette) , today I pay €3.6 for cigarettes and €1.5 for gasoline and more than 0.3 for bread. the worst thing is my salary didn't almost change.

I did mention my parents for a reason, today when I think about the whole system, I am really thankful that my father couldn't save money, because even with the interest the bank would give him, that money would be worth nothing because of the high level of inflation. though he could buy some gold or some real estate and this would solve the problem, but to do so you have to have a good amount of money that you can invest, which he didn't have at the time.

but if bitcoin existed the whole situation would be different, now I feel that I am lucky and I think that all of you are lucky that you have been introduced to Bitcoin, and more people should know about it, this seems the only way out (solution).

take few minutes and watch this video, I am sure it is almost the same where you live http://www.youtube.com/watch?v=k_NxUFIRm9k&feature=youtu.be

Banks are Evils i would like to tell you same situation as yours far away from where you live! in Egypt, i think that we only should f*ck the system!! Appreciation For Parents  

[MoonShadow]

...What you describe is saving, but this is what money is for.

You're mistaken, that's not "what money is for."  That's what you want it to be, but your wish has no basis in reality.
Money is not meant to be be hoarded any more than food is meant to be hoarded, and inflation is the mechanism through which money-hoarding is discouraged.  

Savings must come before consumption on the aggregate.  Nothing else is possible.  We've been eating through the accumulation of savings of our predecessors for 30+ years.  By definition, that which is not sustainable cannot continue forever.  The only difference between savings & hoarding is the perspectives of the observer.

[Bambifan101]

...What you describe is saving, but this is what money is for.

You're mistaken, that's not "what money is for."  That's what you want it to be, but your wish has no basis in reality.
Money is not meant to be be hoarded any more than food is meant to be hoarded, and inflation is the mechanism through which money-hoarding is discouraged.  

Savings must come before consumption on the aggregate.  Nothing else is possible.  We've been eating through the accumulation of savings of our predecessors for 30+ years.  By definition, that which is not sustainable cannot continue forever.  The only difference between savings & hoarding is the perspectives of the observer.

Saving does not need to precede spending.  Buying on credit is not only possible, but commonplace.
We have not "been eating through the accumulation of savings of our predecessors for 30+ years."  Perhaps some of us have, I have not.
I agree with "that which is not sustainable cannot continue forever," though you have failed to show the relevance of that truism to this topic.

[disclaimer201]

Could OP finally PLEASE correct the thread title to make it comply with basic grammar rules? Thanks. If I see this popping up every day in my Updated Topics list I am more likely to panic sell.

[MoonShadow]

...What you describe is saving, but this is what money is for.

You're mistaken, that's not "what money is for."  That's what you want it to be, but your wish has no basis in reality.
Money is not meant to be be hoarded any more than food is meant to be hoarded, and inflation is the mechanism through which money-hoarding is discouraged.  

Savings must come before consumption on the aggregate.  Nothing else is possible.  We've been eating through the accumulation of savings of our predecessors for 30+ years.  By definition, that which is not sustainable cannot continue forever.  The only difference between savings & hoarding is the perspectives of the observer.

Saving does not need to precede spending.  Buying on credit is not only possible, but commonplace.

Credit cannot exist without someone first saving the capital to support the extension of said credit.  There is no way around the fact that savings, in some form, must exist.  However, savings isn't necessarily in any fomr normally associated with the concept.  Savings can be food storage or the like.  Take this example...

Before the industrial revolution, most economies were agriculturally based, the United States included.  The new colony in the wilderness needed to establish farms quickly, in order to produce food for the families.  If the farms did well overall, the community could commit resources towards other endeavors than food production, such as craftmanship, artistry or public works; but none of this can come before the surplus food production even if there was some rich dude with gobs of gold able to lend out for credit (lacking a greater society to trade resources with).  Gold or not, if the colony couldn't produce enough food for it's own population, the young people who might otherwise study blacksmithing, advanced carpentry, masonry or any form of art would have to spend their time hunting or gardening in order to make up the difference.  That would be what we call 'subsistance farming' today, where the methods used require all of the labor time of the community to maintain an even keel, and leave no surplus gain.  In this context, any surplus gain (for the individual farmer, or the community at large) is the savings.

If you really want to learn something about this, I recommend the Uncle Eric Series starting with Whatever Happened to Penny Candy?  They are great, short primers on economics and praxeology.

EDIT:  The above example should provide a hint as to why both gold and Bitcoin, while great forms of independent currencies, are not capital in the proper sense.  Both are an abstraction of capital, because so long as a trade market exists, both gold or Bitcoin could be traded fro true capital.  Capital is the means of production; i.e. to the farmer, the tractor is capital; to the ditchdigger, the shovel (and backhoe) are capital; and to the programmer the computer is capital; but to the recreational gamer, the computer is a toy.

EDIT2:  And when I say that we've been eating through our capital for decades, I mean this literally.  In our modern world, oil is the primary input commodity for just about everything, including industrial fertalizers.  In a world where such protrolem inputs become significantly more expensive, less valuable uses get priced out; while everything that currently utilize cheap oil as an input becomes more expensive, as production shifts to more expensive methods and inputs.  Industrial food production is no exception, and a greater number of the population must become involed in their own food production (via backyard gardens, hunting, fishing, etcetera) in order to provide enough cost-cutting|savings|production|whatever to support the entire family.  Youth unemployment might be very high for some time, but they better be reading gardening books from the library whether or not dear old dad still has a job or not.

[undeadbitcoiner]

If people take just a moment and think about how bad the economy is now, everyone would invest in bitcoin, not to talk about 20 years ago, just few years ago (2007-2008) I paid €2 for my cigarettes and less than €1  for gasoline , around €0.2 for bread (1 baguette) , today I pay €3.6 for cigarettes and €1.5 for gasoline and more than 0.3 for bread. the worst thing is my salary didn't almost change.

We dont need to Go back to 2008 also for that
Fiat economy is worst we can see every week back

Could OP finally PLEASE correct the thread title to make it comply with basic grammar rules? Thanks. If I see this popping up every day in my Updated Topics list I am more likely to panic sell.

That is the problem Hera fault is not of OP fault is of yours, Why you only go on Thread Title Why dont you take a bit of Time to study and watch where you are Investing and where you are driving.
Good Luck to Hold your oins not to PANIC SELL

[subcoin]

You predicate your complaint on the baseless assumption that hoarded money should not depreciate.

1. I wasn't talking about money. I was talking about "wealth".
2. Hoarded or not - it doesn't matter. I have "wealth", I don't want it to depreciate.

Basically, all I wanted to say is that: if you truly want to preserve your "wealth", you should invest into essential business.
You should not invest into currency or diamonds.
You may try to invest into housing/land, metals or stocks - if you have insides into how these markets are manipulated.

No matter what happens in this world, there are 3 things that people will always want: food, health and s_ex.
If you have the business dealing in those "essential" areas, you will be ok.
Investing into these type of businesses I would consider a true protection against inflation.

[Kungfucheez]

Hoarding implies there will be or already is a scarcity of whatever it is you're hoarding.

Saving money in your bank account is not the same thing. Not even close.

[Bambifan101]

Hoarding implies there will be or already is a scarcity of whatever it is you're hoarding.

Saving money in your bank account is not the same thing. Not even close.

See TV show "Hoarders."  I suppose you could argue that old newspapers and broken combs are scarce, but most won't find your argument convincing.
+1 for creativity, nonetheless.

[Bambifan101]

You predicate your complaint on the baseless assumption that hoarded money should not depreciate.

1. I wasn't talking about money. I was talking about "wealth".
...

If you take money out of this argument, than what, exactly, are we talking about?  What do you mean by the word "inflation"?
As for your other points, I agree.

[Kungfucheez]

Hoarding implies there will be or already is a scarcity of whatever it is you're hoarding.

Saving money in your bank account is not the same thing. Not even close.

See TV show "Hoarders."  I suppose you could argue that old newspapers and broken combs are scarce, but most won't find your argument convincing.
+1 for creativity, nonetheless.

Well, A.) Don't cite a TV show as an example. Ever.

and  B.) None of those things are scarce. There's another term for what that is. But you already know that

[subcoin]

If you take money out of this argument, than what, exactly, are we talking about?  What do you mean by the word "inflation"?

Well, I think, the OP wanted to know the way to protect his money from inflation.
As many pointed out, keeping "wealth" in money is not a good idea.
Therefore, I've suggested converting money into something else.
In my opinion, investing into essential business is the best option.

Money is nothing more than a temporary storage of wealth.
One should not store his "wealth" in money because it will depreciate due to inflation.
All standard currencies will depreciate - process is unavoidable and unstoppable.
Best advice for OP is to save and then invest into something inflation-resistant.
That is assuming that there is no interest on debt to be paid.
If there is interest, need to pay that first.  

[Bambifan101]

...Credit cannot exist without someone first saving the capital to support the extension of said credit.  There is no way around the fact that savings, in some form, must exist.  However, savings isn't necessarily in any fomr normally associated with the concept. ... And when I say that we've been eating through our capital for decades, I mean this literally.  In our modern world, oil is the primary input commodity for just about everything...

I agree with you that we have been eating through commodities like oil for centuries, but you can't possibly mean that these commodities are "savings"?  Sure, the oil economy can't continue indefinitely, but neither can the universe (which, according to the second law of thermodynamics, tends toward entropy).  I'm not trying to nit-pick but by savings, I mean not spending MONEY for a nontrivial amount of time.  I'm all for trying to cut down on unnecessary consumption.

[MoonShadow]

...Credit cannot exist without someone first saving the capital to support the extension of said credit.  There is no way around the fact that savings, in some form, must exist.  However, savings isn't necessarily in any fomr normally associated with the concept. ... And when I say that we've been eating through our capital for decades, I mean this literally.  In our modern world, oil is the primary input commodity for just about everything...

I agree with you that we have been eating through commodities like oil for centuries, but you can't possibly mean that these commodities are "savings"?  Sure, the oil economy can't continue indefinitely, but neither can the universe (which, according to the second law of thermodynamics, tends toward entropy).  I'm not trying to nit-pick but by savings, I mean not spending MONEY for a nontrivial amount of time.  I'm all for trying to cut down on unnecessary consumption.

That's exactly what I mean.  Money (and currency, not quite the same thing) is an abstraction of wealth, but not wealth itself.  As noted by others, thinking of cash/gold as wealth is a common error.  Think about what the "old money" of the North-Eastern US does.  They certainly don't sit on billions of dollars, or even billions of dollars worth of gold; they buy assets and/or commodities.  That's investing, but it's also savings.  They may simply be buying equities in corporations, but that is still an abstraction of what real savings is.  The corporate capital is the savings, and the stock certificate is simply a deed to a small part of that.  The monetary price to aquire said stock certificate is only relevant to when it's bought or sold, the rest of the time it's irrelevent.  In the novel Cryptocromicon, a wealthy character describes it like this, "Gold is not wealth, gold is the corpse of wealth; I can show you how to make  wealth."