This Is What Gold Does In A Currency Crisis, Euro Edition

Zero Hedge ^ | 1-23-2015 | Tyler Durden

[blam]

Tyler Durden
01/23/2015

Submitted by John Rubino via Dollar Collapse blog

Yesterday the European Central Bank acknowledged that the currency it manages is being sucked into a deflationary vortex. It responded in the usual way with, in effect, a massive devaluation. Eurozone citizens have also responded predictably, by converting their unbacked, make-believe, soon-to-be-worth-a-lot-less paper money into something tangible. They’re bidding gold up dramatically.

(snip)

[blam]

These Europeans are silly, eh? Everyone knows you can't eat gold.

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[blam]

Robbers target food delivery trucks in shortage-hit Venezuela

[Bloody Sam Roberts]

These Europeans are silly, eh? Everyone knows you can't eat gold.

Aw crap. Sarcasm? Gold ain't for eating. It is for asset protection. But I sense...you know that.

[TBP]

No, but you can use it to fill teeth.

[ctdonath2]

Total value of all gold ever mined is about $8T.
Total value of all fiat currency (cash) is about $5T.
Total what most people call “money” is about $60T.

[BwanaNdege]

Total value of all gold ever mined is about $8T.
Total value of all fiat currency (cash) is about $5T.
Total what most people call “money” is about $60T.

Interesting numbers! Could you provide links for further reading on this?

[Toddsterpatriot]

This Is What Gold Does In A Currency Crisis, Euro Edition

That's what everything does when your currency goes down.

If I find a chart of gold priced in Swiss Francs, can I write an article for Zeroclue? I mean hedge.

[Yo-Yo]

Let's put that chart into a more reasonable long term perspective:

[expat2]

maybe that happens, but if we get major deflation, gold is just another asset class that shrinks in price.

[yefragetuwrabrumuy]

For those who invest in gold, it is also essential that they invest in lesser specie and other *fungible* commodities as well. The reason being that during very hard economic times, while gold will almost certainly still be respected, *conversion* of gold may be extraordinarily hard.

Say you gold exists in ounces. While shopping you want to buy an apple. Were you to try to buy an apple with an ounce of gold, you might have to exchange it for a truck load of apples.

But with a quarter ounce of silver, you might be able to buy a bushel of apples. With a pure copper slug, maybe a single apple.

So think of the other metals as “change”. Still a good reason to have it.

[Jet Jaguar]

Goldbug ping.

[bajabaja]

I am not sure how this really differs from the slide of the euro versus the Swiss franc after the Swiss National Bank unpegged their currency from the euro. Gold stayed the same in terms of its value, but the number of euros it takes to buy that steady amount of value jumped — because now the Swiss won’t be inflating their currency to keep it pegged to a devaluing euro. This is not a knock on gold, it does question the “insight” here as this is just the euro’s slide.

[bert]

total us debt and liabilities
$18 +127 trillion = $145 trillion

[ctdonath2]

Look up “value of all gold ever mined”, “value of all currency”, and “world M3”.

[DeaconBenjamin]

Then there's the 10 year chart.

[caww]

What if the “powers that be” are intending to wipe off nations debts by ‘starting over with all currency required to be backed by gold’....?

Might explain why sovereign nations have been buying gold left and right.

[PA Engineer]

But with a quarter ounce of silver, you might be able to buy a bushel of apples. With a pure copper slug, maybe a single apple.

That is why I like War Nickels. They don't have the wear of silver dimes and are easily recognizable.

[Toddsterpatriot]

total us debt and liabilities
$18 +127 trillion = $145 trillion

What are total US assets?