Well, What happened to all the GOLD HOARDERS ?

[Finnster]

Generally it's bought the same amount of goods and services no matter the paper currency or time in history. I think you will find in the end of all discussions there is only one currency, gold. Been that way, forever, not likely to change.


HS

No it hasn't. You're gold just bought 2/3 the loaf of bread it did 6 mos ago. Gold is an asset, not a currency.

You cannot pay taxes in gold as it's not legal tender. SS checks are not going to come as little nuggets. The $16T in US bonds will not be paid in gold. The army is not going to be using gold to buy bullets. There is no realistic scenario where the dollar is just forgotten and unused anytime soon.

If some true calamity came about (would have to be much bigger than a recession...) Americans would do what people in other countries with weak currencies do, use another currency when they can. Canadian dollars, euros, Swiss francs have a much better chance of overcoming the dominant currency before gold would if in some fantastical scenario where dollars somehow disappear.

 

[creekbend]

Gold ended at a tad over $1200.00 today.

 

[EE_Bota]

If some true calamity came about (would have to be much bigger than a recession...) Americans would do what people in other countries with weak currencies do, use another currency when they can. Canadian dollars, euros, Swiss francs have a much better chance of overcoming the dominant currency before gold would if in some fantastical scenario where dollars somehow disappear.

If a major fiat currency collapses, I should think it would be bad for several of the other fiat currencies.

 

[Finnster]

If a major fiat currency collapses, I should think it would be bad for several of the other fiat currencies.

Maybe, maybe not. The Euro is fundamentally flawed and has circled close to the drain a couple of times. What we did see is a rush into other currencies. Namely the Yen and Swiss Franc at the time. They got much stronger.

The laugh is they are export economies, so a stronger currency was a net bad for them as their exports became less competitive (higher priced.)

The other irony is one of the flaws with the Euro is that it a defacto gold standard in Europe (& why the UK and Switzerland had the sense to not join.) EU Nations no longer have control over their monetary policy, the currency does not float on a national level, so the only way nations like Spain, Portugal and Ireland can only regain competitiveness is through "internal" devaluation.

Ie wage deflation, which only comes about by falling wages and high unemployment. =>27% unemployment in Spain atm, over 50% for youth. This is what a disaster looks like.

Bang on the Fed as you will, but our unemployment rate is some 20 points lower than major EU nations, and our deficit/GDP is half of theirs.
Spain's current deficit to GDP is ~10.5%. In US terms, that's equal to a $1.7 Trillion/year deficit with no improvement in sight. Our current projections are $0.6-0.7T for 2013 and falling.

Note also that Spain was a "model" economy before the crisis and was running a big surplus from 2006 to 2008 and was busy cutting taxes in a booming economy. They are not the "Greek" storyline of corruption/fraud and rampant spending.

 

[joe t]

I think the Cliff notes from above would be it is not a bad thing having fiat currency, which I agree with.


If things went to **** even for a few currencies products become so cheap that buying from that country/currency holder is cheaper and everything rebounds.


I'd rather have currency based in economic policy than gold. Gold or pegging currency just doesn't make any sense.

 

[EE_Bota]

I think the Cliff notes from above would be it is not a bad thing having fiat currency, which I agree with.
(I omitted part)
I'd rather have currency based in economic policy than gold. Gold or pegging currency just doesn't make any sense.

I am not all or nothing. I like some diversity in assets. The choice is not all gold / no fiat in my view. As a percentage, I have loads of fiat, only a little gold.

Up to 1999, it was all fiat currency, or the standard suite of stocks, bonds, mutual funds, etc, all of which is denominated in dollars. I bought several ozs. of gold at less that 350 / oz during that period, and it is trivial as a percentage of my net worth.* I thought "ok, I have the amount of gold I wanted, that was not so bad, I am done."

My precious metals are less than 0.5% of my net worth.

*Typically, I don't like to buy all of anything in one go...how do I know the current price is not higher than the next price. But I did buy all my gold in less than a month, so obviously I considered it a task to accomplish, not an ongoing strategy.

 

[joe t]

I agree with that. I had gold, sold it and bought other stuff.

 

[Grumpy Old Man]

Many of you seem to think that in a collapse there would still be some type of trustworthy government and a steady source of supplies . When everything we currently use are trucked to your local 7-11 including fuel what makes you think you would have anything to buy let alone a way to go pick it up and transport it home ? fema can't deliver stored goods to a storm ravaged area in a weeks time ,What makes you think you could rely on any government help ? All these things could be destabilized by something as simple as racial divide and after this weeks top news stories we are only seeing the start of demonstrations which no one wants .A major highway was closed down by less than 100 demonstrators this past week (rt 10) yet many still think it's nothing to worry about as long as their rocky road ice cream is still available at your local store .With the naacp calling for demonstrations in 100 cities this weekend I hope they all remain peaceful .

 

[joe t]

100 protestors?

No one invest in a grill guard in that area? Don't need gold for that.

 

[EE_Bota]

Many of you seem to think that in a collapse there would still be some type of trustworthy government and a steady source of supplies .

Not me. I have food too, a place to go with a spring, lots of food, guns, ammo, etc. Folks from many professions will meet me there. We don't have chickens though. We think they will be everywhere. EVERYWHERE.:laughing: