If you were in Zimbabwe 15 years ago would you rather buy shares in the top 100 Zimbabwean companies, or gold?

The point is investors can just buy gold. They don't need to buy stock in Palantir and then have Palantir buy gold for them. If you don't need cash and can't buy productive assets, give cash back to your investors and they can find something else to do with it, possibly buy gold.

> If you were in Zimbabwe 15 years ago would you rather buy shares in the top 100 Zimbabwean companies, or gold?

The interesting thing about that context, is you're likely screwed either direction.

You're existing under a very dangerous dictatorship 15 years ago, totalitarian. Gold isn't going to save you either, they'll just confiscate it. Gold in particular they'd want.

It's the very rare situation where things are so dire that a giant pile of gold is particularly useful, and somehow you're not going to get it taken from you by the people with all the guns.

Even in the US, at its most dire, and minus a dictatorship, gold was taken from everybody, confiscated; revoking the ability of companies and people to shield themselves from the substantial debasement of the currency.

One of the first things the dictator of Zimbabwe would plausibly do during hyper inflation is go after large piles of private gold.

If you, as a large share holder, were so bearish on Palantir's outlook - why would you bother keeping your money invested in them at all. Keeping your money in the company is a choice you've made above the option of divesting and just buying gold yourself. And for the company, it seems incredibly silly - companies don't exist as things if they lose their employees (which would happen if anything catastrophic enough to justify gold happened) and their shareholders.

Alternative reading - Palantir (being in the business of spooky levels of information) is predicting a global currency collapse... or a return to the gold standard - which is sort of just a slightly different flavour of a global currency collapse.

> why would you bother keeping your money invested in them at all.

I wouldn’t. They’re a money losing company that raised money by selling shares and didn’t even have a plan for that money. Then they did the least creative thing possible: bought gold. Something any investor can do with a dozen different funds.

If you want to share in palantir’s gold bet, save their fees and buy a gold etf/closed end fund or coins/bars directly that you can keep in YOUR basement.

That's exactly my point - buying gold in bulk like this is a clear way of signalling they're a bad investment since any sane investor will do just that - purchase gold that they control and that won't be subject to any bankruptcy collections exercised on palantir if they are in a really bad place.

Definitely the Zimbabwean companies, their debts are about to get zero’d out.

Debt wouldn't be zeroed out if it was made on external markets, right?

Then there would be no impact. If you’re a company producing stuff and Zimbabwean dinars are worth 1/10th as much, you would charge 10x as much.

If you’re a shell company with Zimbabwean dinar cash assets and external USD debt, you’re screwed but you’re also not a going concern.

Why isn't shares in the top 100 world companies an option?

Because Palantir is worried about the USD (and presumbably other major currencies such as the pound and euro) devaluing. There isn't an escape from that. Mars doesn't print its own currency yet.

Why wouldn’t a stock (e.g. a gold mine or google) escape a USD devaluation?

The only companies I see screwed are those that make long-term loans at fixed interest rates.

Because the cost of production inputs rise faster than they can pass on the costs to their customers. If no one suffered from inflation, we wouldn't bother measuring it.

So this is ultimately all about Thiel and Musk having a fued about the mars colony and whether that will work out.

I think the idea is that everyone else in the world is doing that right now, and a huge portion of gains in recent times has been from a handful of companies, so I guess there is the choice between productive assets that are overpriced because everyone is dog piling in, debt that is basically negatively yielding against inflation or something like gold.

But 50 million isn't that much for a company like Palantir I would imagine.

When the world still operated on the gold standard, gold bullion was the perfect hedge against inflation. Dollars (and pounds et al) were priced in gold, and so any inflationary measure that devalued the dollar would have a theoretically perfect mirror in the price of gold.

That's obviously no longer the case, but the fact remains that gold is a tangible asset universally recognized as valuable. There are other such assets, but most of them are either commodities with a shelf life (like crops and refined oil), or bulky capital assets (like industrial equipment). And that's discounting the fact that inflation often causes economic decline, lowering the relative value of said marketable assets, even if they are performing relatively better than the currency they are valued in.

Good commentary here.

Would like to read your thoughts about btc as store of value with minimal storage costs and does not corrode.

The only reason to include gold in an investment portfolio I could come up with is to decrease risk and volatility of the portfolio.

A separate issue is whether a company like Palantir should ever invest cash in public capital markets. Maybe when the company plans to invest in an internal project at some point in the future but doing a capital raise could be harder at that point.

Zero real rate of return. If bonds have a negative real rate of return and stocks have a RISK-ADJUSTED negative real rate of return, then gold or more generally commodities are a better option.