24 Feb 11
Originally posted by AThousandYoungIn such a catastrophic meltdown, wouldn't you be worried about getting food instead?
The image to keep in mind when considering those buying gold is: in the near future, the dollar becomes what Confederate or Zimbabwe dollars are today. How do you preserve your wealth in this scenario?!
Gold.
24 Feb 11
1 edit
Originally posted by AThousandYoungGold's value is also arbitrary. It has little inherent use other than as a luxury. In a catastrophic meltdown situation, there's no guarantee that people will be so interested in hoarding gold as they are now.
The image to keep in mind when considering those buying gold is: in the near future, the dollar becomes what Confederate or Zimbabwe dollars are today. How do you preserve your wealth in this scenario?!
Gold.
And unlike dollars or euros or yen, there is no government that has pledged to pay you value for your gold.
24 Feb 11
Originally posted by KazetNagorraYou have stores of food. You have seeds. You have weapons. You have land. You aren't worried about food.
In such a catastrophic meltdown, wouldn't you be worried about getting food instead?
By God...it'll be just like the glory days with pioneers and self-sufficiency and stuff.
25 Feb 11
1 edit
Originally posted by Metal BrainI think that the 70's inflation was in part due to the Fed's (read as the monetary economics profession) lack of understanding regarding the importance inflation expectations. An economist with more background than I in monetary history could give you more reasons, but I do know from some one who worked on policy at the Fed during that time period that some of it was a matter of learning.
You are so full of it!
You think inflation in the late 70's was an accident????
The FRS has a monopoly on the issuance of money. If you want to claim it is a regulated monopoly that is fine, but it clearly is not regulated enough. You are very wrong, it behaves exactly like a monopolistic firm. Hyperinflation is proof enough of that.
If the FRS had to compete with another currency that is TRULY competitive hyperinflation would not happen.
As for the rest I don't think you have a clue how a monopolist behaves. They certainly don't return all revenue in excess operating costs to the federal government.
And I know that you don't have any idea what hyperinflation is. If you did you wouldn't throw it around so cavalierly. Try talking to some one who has lived through one before ascribing that term to any period in US history.
25 Feb 11
Originally posted by AThousandYoungDo you have some one to run your money to the only other people with goods to exchange who are hunkered down in a similar bunker 2000 miles away?
You have stores of food. You have seeds. You have weapons. You have land. You aren't worried about food.
By God...it'll be just like the glory days with pioneers and self-sufficiency and stuff.
25 Feb 11
Originally posted by sh76Well, you can't eat gold. I see that much of it.
Gold's value is also arbitrary. It has little inherent use other than as a luxury. In a catastrophic meltdown situation, there's no guarantee that people will be so interested in hoarding gold as they are now.
And unlike dollars or euros or yen, there is no government that has pledged to pay you value for your gold.
You can't ignore thousands of years of history though. Governments sure hoard gold. No doubt about that.
Our government confiscated gold from it's people before it let the dollar fall. Then the currency they paid the people for their gold was worth far less. There is no guarantee that your currency will hold it's value. That is the point.
Have you heard the expression "good as gold"? It still holds true.
25 Feb 11
Originally posted by telerionThe FRS is just a counterfeiting scam. They create more money than they admit and tax us with inflation.
I think that the 70's inflation was in part due to the Fed's (read as the monetary economics profession) lack of understanding regarding the importance inflation expectations. An economist with more background than I in monetary history could give you more reasons, but I do know from some one who worked on policy at the Fed during that time period that som ...[text shortened]... some one who has lived through one before ascribing that term to any period in US history.
I know plenty about inflation and monopolies both. You are the one who does not have a clue. You just read something on the FRS website and believe it without question.
You are clearly incapable of critical thinking.
25 Feb 11
Originally posted by AThousandYoungWell, I understand that during the second world war, Jews in Germany used gold and art as bargaining tools in some cases, but then I don't think they got full value either.
The image to keep in mind when considering those buying gold is: in the near future, the dollar becomes what Confederate or Zimbabwe dollars are today. How do you preserve your wealth in this scenario?!
Gold.
In Zimbabwe, much of the current troubles are related to the discovery of gold. The people actually mining it though do not get very much for it.
In Zimbabwe, do you think that those that did keep gold in their houses managed to maintain their wealth during the inflation years? Could they have traded the gold locally?
25 Feb 11
2 edits
Originally posted by twhiteheadIn Zimbabwe, much of the current troubles are related to the discovery of gold.
Well, I understand that during the second world war, Jews in Germany used gold and art as bargaining tools in some cases, but then I don't think they got full value either.
In Zimbabwe, much of the current troubles are related to the discovery of gold. The people actually mining it though do not get very much for it.
In Zimbabwe, do you think that t ...[text shortened]... d to maintain their wealth during the inflation years? Could they have traded the gold locally?
Would you elaborate?
In Zimbabwe, do you think that those that did keep gold in their houses managed to maintain their wealth during the inflation years? Could they have traded the gold locally?
I don't know much about Zimbabwe. It's a very different culture and geography than we have. However, in principle, if you spent all your cash on gold, you'd have no cash to depreciate when Mugabe printed more money. Your wealth would stay more or less intact, and I'm sure at any major port the gold would be easily traded off or sold for most of it's value.
If gold is not appropriate for whatever reason, you could buy anything really that is durable. High quality steel tools, for instance. They're still good tools no matter how many bills Mugabe prints.
EDIT
Here's someone who discusses the topic.
http://www.dailyreckoning.com.au/buying-gold/2007/04/03/
So, the lesson is clear; those Zimbabweans who put their savings into gold, instead of Zimbabwean dollars and assets that can be easily seized and devalued by a government, made out very well, just as the theory predicts!
25 Feb 11
Originally posted by AThousandYoungMy point is your scenario only works if a sufficient number of people in proximity to you are doing the same thing.
You won't be doing business with people 2000 miles away.
After all, just because you are sitting comfortably on a stockpile of necessities and stand ready to trade your gold pile, if the world is falling apart few people are probably going to be in your position (that's why I picked 2000 miles). Who would be willing to give up their non-perishable food source for a hunk of metal? This is especially true since they face the same thin market for gold tha you do.
In such an extreme circumstance in which day to day survival is a serious concern, liquidity risk will be many
orders of magnitude more important than inflation risk.
When starvation and illness is imminent I'm not going to take the risk of having to search for three days to find some one well-provisioned enough to accept gold for the goods I need.