Hyperinflation

[jprad]

Quote from thriftybob:

Did I not just say that?

"If you buy the panic spikes, you will get creamed unless there is a complete collapse of the dollar."

A panic spike is just the parabolic part of the rise, you can get burned buying anything at that point.

The "elevator down" is part of the phrase that's specific to gold; it takes the esclator up and the elevator down.

An overnight devaluation, like what FDR did after all gold was confiscated, is not a "complete collapse" of the currency.

 

[jprad]

Quote from Debaser82:

Gold outperformed every asset class on this planet this year (besides $ and Yen and those had nothing to do with fundamentals but was the carry trade unwinding).

IMHO, short and leveraged short ETFs are an asset class.

They absolutely crushed everything this year, without exception.

 

[jprad]

Quote from m22au:

1. You own gold. You want to buy some groceries. You don't have any "US Dollars" because they are losing value quickly. You sell a gold bar / coin at a local coin shop in exchange for "US Dollars", and go and buy your groceries.

That sort of behavior only makes sense in a hyperinflation scenario where the dollar is losing value by the minute.

That's not going to happen.

2. Once the US Dollar is replaced by another more stable currency (eg. an existing fiat currency or a new currency), you sell your gold in exchange for that new currency.

This is less likely than hyperinflation occurring.

 

[Debaser82]

Quote from jprad:

IMHO, short and leveraged short ETFs are an asset class.

They absolutely crushed everything this year, without exception.

True and I am glad to have had money in SRS and SKF.

But from a fundamental medium to long term view I like gold.

Trade in other assets and put the profits in physical gold is my play.

 

[SteveD]

It seems gold fans fall into two categories:

1. People who think of it as an "investment" as opposed to a "trading vehicle". I have no problem with that if you can make money with it, good luck to you.

But, make no mistake, it is a "tulip bulb" you are trading...greater fool....really no different than trading IPO's in the tech bubble...companies with no INCOME trading for large dollars, LOL


2. The "doomsday" aspect of gold.....this is the Ron Paul crowd..go back to gold standard...

I think gold is ripe for a very shocking pull back....in the area of below $200/oz...very fast....

Be careful.....and good luck

SteveD

 

[Rearden Metal]

Quote from SteveD:

It seems gold fans fall into two categories:

1. People who think of it as an "investment" as opposed to a "trading vehicle". I have no problem with that if you can make money with it, good luck to you.

But, make no mistake, it is a "tulip bulb" you are trading...greater fool....really no different than trading IPO's in the tech bubble...companies with no INCOME trading for large dollars, LOL


2. The "doomsday" aspect of gold.....this is the Ron Paul crowd..go back to gold standard...

I think gold is ripe for a very shocking pull back....in the area of below $200/oz...very fast....

Be careful.....and good luck

SteveD

An ounce of gold bought a cow during Biblical times. An ounce of gold bought a cow during the Dark Ages, and an ounce of gold buys a cow today. Can you name any other easily portable currency with that kind of millennia-long track record?

 

[SteveD]

So you are saying one can go to the auction house, buy a $700 milk cow and hand over an ounce of gold?

And that gold with be freely accepted without question?


That brings up another question. Can one take a bar of gold into Bank of America and exchange it for US dollars in cash or just have the money deposited into your account? Just curious..


SteveD

 

[scriabinop23]

Quote from SteveD:

So you are saying one can go to the auction house, buy a $700 milk cow and hand over an ounce of gold?

And that gold with be freely accepted without question?

SteveD

I don't know where you live, but in my neighborhood the cows run towards you if you have the gold. They'll trample over their fence, open their mouth, and take their deposit. I guess they are waiting for hyperinflation as well... One ounce of gold will buy a stake in charter flight on some saudi airline to drop them off in a land where their milk will provide a lifetime of leisure in greener pastures, most likely in the middle of a desert somewhere near dubai.

(don't ask about the state chartered pilgrimages to mecca where goats and other livestock come on board)

 

[propseeker]

Quote from SteveD:

So you are saying one can go to the auction house, buy a $700 milk cow and hand over an ounce of gold?

And that gold with be freely accepted without question?

No, he's saying that gold as a storehouse of value is as stable as they come with thousands of years of track record.

That brings up another question. Can one take a bar of gold into Bank of America and exchange it for US dollars in cash or just have the money deposited into your account?

No, you have to take it to a gold dealer. Any mom and pop coin/jewlery shop or your more respected bullion dealer will buy.

People aren't suggesting gold will be used as money/currency, rather as store of value. The 'gold will never be used as money' argument is moot.

Also, why gold vs other commodities? It's the easiest thing to hold physical of and easily the most commonly traded off-market. Hard to do anything with a $50 barrel of oil.

 

[propseeker]

Quote from jprad:

That sort of behavior only makes sense in a hyperinflation scenario where the dollar is losing value by the minute.

That's not going to happen.

Until it does.

Wiser to hedge for it, than assume it's impossible.