The Changing Value of Money.

I find this chapter too wonky, his words, so I have tried to summarise it.

Money has two functions:

1. As a medium of exchange.
2. As a storehold of wealth.

As a storehold of wealth:

• The real (i.e. inflation-adjusted) return for bills since 1912 (the modern fiat era) has been -0.2%. The real return of gold during this era has been 2.2%.
• History has shown that there are very large risks in holding interest-earning cash currency as a storehold of wealth especially late in debt cycles.

In other words Dalio is with Cory Bernadi in betting on increasing inflation resulting in a devaluation of bills and currency.

Looking to the bigger picture. There used to be three investment vehicles: Cash, Equities, Real Estate.

As we have discussed over the last 6 months, Real Estate has been taxed and regulated out of the game, cash is not giving a return and is likely to be devalued by inflation, which leaves equities.

Some of these will boom and some bust. Those that boom will either be those that create wealth or those that ride the bubble as the world is dragged out of poverty.

Where do cryptocurrencies fit in. Reading  https://www.theaustralian.com.au/business/why-bitcoin-may-be-worth-its-weight-in-gold/news-story/3a5cefeca58fb42316c71d1c050ca8d3  this morning, and knowing very little about bitcoin, it appears that it fits the bill as a medium of exchange and a storehold for wealth. You could conclude that as it does not add value to the economy, its role is likely to be the same as that of gold.