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To: Bloody Sam Roberts

Two things: first of all, gold and silver will not inflate 1000%, because inflation is tied to currency. So it could be 10,000%, 100,000%, etc. Think in dynamic terms. With inflation, gold and silver will track inflation, probably plus a little. But with hyperinflation, starting in commodities including gold and silver, the brakes have failed. The sky is the limit.

However, this starts invoking the laws of economics, such as Gresham’s law. This could mean that even though gold might be thought of as worth $1m/ounce, *nobody* will sell their gold for that amount, because it is stable, and currency is not. So everyone would spend their currency as fast as they could, it being the “bad money”, and nobody with gold will part with it, because it is “good money”.

In turn, this creates a “convertibility crisis”, where gold is so valuable that nobody can “make change” for it. This means that gold becomes dependent on other “good currencies”, whether they are actually currency, or commodities.


150 posted on 11/25/2012 6:49:15 AM PST by yefragetuwrabrumuy (DIY Bumper Sticker: "THREE TIMES,/ DEMOCRATS/ REJECTED GOD")
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To: yefragetuwrabrumuy
In turn, this creates a “convertibility crisis”, where gold is so valuable that nobody can “make change” for it.

I like John Wesley Rawles' suggestion; Invest in gold chains of various link sizes...24k preferably. When gold is worth millions per ounce, purchases can be made by one, two or thre small links...or a larger link and 1 smaller link, etc, etc. Snip them off as needed to barter.

However, that is not the proper use for gold. It should only be used to "buy back in" to whatever economic system replaces the one we are going to see collapse. Or whatever currency replaces the dollar. Asset protection is the key.

154 posted on 11/25/2012 7:59:29 AM PST by Bloody Sam Roberts ('Need' now means wanting someone else's money. 'Greed' means wanting to keep your own...)
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