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I’ve asked this before and no one has stepped up to respond. Maybe I’ll get lucky this time . . .
Suppose all hell breaks loose and no country’s currency is of any value whatsoever. So now those who had the foresight to invest in precious metals and who actually have physical possession of them are in the catbird seat. What next?
How, specifically, will the holders of precious metals negotiate them? Suppose, for example, that they need food, so they take a gold coin or two down to the local market, make their selections, and then what? How will they and the storeowner determine what that coin will buy? And what if the coin’s more valuable than the groceries? How do you make change?
And how will it work with the phone company? The doctor. The electrician? The gas station?
It’s entirely likely that I’m wrong, but doesn’t the value of these precious metals still have to relate somehow to the value of some currency? How else can you hope to be able to agree on what a coin or ingot will buy? And what assurance will you be able to give the store owner that the coin in question really is gold or silver?
The value of any type of money is based on the confidence of the people using it. If there is no confidence whatsoever because society has completely broken down, then the only thing left is barter. Whatever is used as money or barter has to either have intrinsic value or actual value. Gold and silver have been used as money for 5000 years. Unless we enter into a radically different world wide paradigm, and we could, I suppose, gold and silver will retain the role of money when fiat paper currency dies ( and it always has died historically.
[quote=”sprite”]The value of any type of money is based on the confidence of the people using it. If there is no confidence whatsoever because society has completely broken down, then the only thing left is barter. Whatever is used as money or barter has to either have intrinsic value or actual value. Gold and silver have been used as money for 5000 years. Unless we enter into a radically different world wide paradigm, and we could, I suppose, gold and silver will retain the role of money when fiat paper currency dies ( and it always has died historically.[/quote]
David
having gold and silver will allow you to exchange for whatever currency arises then you can use that for daily living.
I don’t think you will be using gold or silver in small denominations for daily living.
I am sure a new currency or way for people to exchange products and services will arises again.
now having certain skill sets.. you will always be in demand.. so you can essentially trade your skill sets for specific items
which has alot of value.
Sprite
can you offer fiat currency’s of the past that have collapsed???
would like to read up on this topic
thanks
David
PS. BTW just being in costa rica will offer some protection because a large %%% of people here are self reliant and already know how to grow food and such as opposed to living in NYC and becoming a dumpster diver if this makes any sense.
feeding yourself and your family is the level where civility will break down and true chaos will happen
meaning if normal people come to a point where they cannot feed themselves OR their family.. they will resort to doing things they would not do before.
this will NOT happen here. food is abundant, there is NO extreme hot or cold climate, and the soil here is fertile
It was pointed out at the ARCR seminar in October the problem in Costa Rica with gold is that it will be difficult to sell your coins anywhere in the country. No market exists as it does in the states. I don’t think you would want to advertise that you were trying to sell coins on craigslist.com/cr which is probably the only way you could find expats that might be interested.
[quote=”Cancertomnpdx”]It was pointed out at the ARCR seminar in October the problem in Costa Rica with gold is that it will be difficult to sell your coins anywhere in the country. No market exists as it does in the states. [/quote]
[b]davidd[/b], you wrote: “having gold and silver will allow you to exchange for whatever currency arises then you can use that for daily living.”
I guess I’m still confused . . .
sprite says that all the world’s currencies will collapse and be worthless (and when was she ever wrong?), so having gold and silver to exchange for worthless currencies doesn’t seem to be a particularly safe or effective hedge. And waiting for “. . . whatever currency arises . . .” sounds like a prescription for a lot of zero-calorie meals.
What are you going to do while ” . . . whatever currency arises . . .” arises? How long do you suppose it’ll be until some entity (maybe a newly formed government?) establishes this new currency in which we’ll all have faith and for which we’ll be anxious to swap our precious metals?
And if, as ARCR says, there’s no market for gold and silver anyway, what good will they be?
Precious metals have value due to their uses in everything from adornment to manufacturing. If (big IF) there is a world collapse, there will remain relatively safe pockets of humanity where rebuilding will occur. All metals will have value there.
As for an exchange rate, the exchange is unlikely to be for paper money (worthless without something behind it). Instead, look at links from a bracelet as a basis for bartering for what you need. Cutting coins into smaller pieces also works.
Paying the electric bill? Will there be electricity? Paying the doctor? Doctors used to be paid with food, but a piece of gold will probably work.
Remember, here in Central America, cocoa beans used to be a medium of exchange. Humanity will find a way.
The 2012 dollar is certainly worth less than it was in 1970. however real wages have risen as well since 1970. we are not buying commodities in 2012 with 1970 dollars.
will the world collapse because of fiat currency and our current excesses? personally i don’t think so, but i certainly would not try and convince the true believers otherwise. we are free to believe what we want. there certainly is another side to the story equally convincing for our survival.
[quote=”sprite”]I am not sure if you are joking or serious BUT, just in case;
how many dollars did you need to buy an ounce gold in 1973?
How many dollars DO you need to buy an ounce of gold today?[/quote]
As I (mis)noted in my post, before the dollar was removed from the gold standard you could buy an ounce of gold for $35.00.
As of November 27th you could buy an ounce of gold for $1,742.18 on.
If gold was the great hedge against inflation that the sellers claim it is gold would be selling for $6,147.75 thus equaling the difference in inflation between the two dates.
A better investment would be in peanut butter which would at least go up in price as inflation increases allowing you to sell it at the inflated price. 😆
[quote=”johnnyh”]I think not Waggoner. When the Dollar hits the fan, or at least devalued as it is being done as I type this through Benny Shalom Bernankes’ money printing, you will see gold going up dramatically. The only reason you don’t see those inflationary high prices on gold is because the banksters and the yol kedoyols are suppressing the price. Ditto for silver.
No way that I’m going to trust monopoly money, and as fast as I get it I convert it to silver eagles or junk silver.
It’s funny how they call it junk silver, but when you put a token coin which is worthless next to a shinny silver quarter or dime or a gorgeous 50 cent Kennedy halve Dollar, or better yet a beautiful silver Eagle you can instantly see the difference.[/quote]Understanding the function of a central bank helps quite a bit.
One of the primary functions of a central bank is to provide flexibility to the monetary supply. Thus a central bank has the ability to create money as needed and destroy it as it is no longer needed. The cash created by QE1 and QE2 totalled only $1.6 trillion in spite of what the idiots have been saying and has been, for the most part, destroyed again. The Federal Reserve is the central bank of the United States and has acted accordingly.
If you have been keeping up with the news the central bank of the EU is doing exactly as the Federal Reserve did with QE1 and QE2. It is creating money to lend to Greece, Spain, Italy, etc.
If you started handling your finances after 1973 the only money you have ever dealt with is “monopoly money”.
Since the dollar was removed from the gold standard cash has only been a concept. A dollar has no value above the paper and ink needed to print it other than your trust that it has a value of a dollar.
The idea that the Federal Reserve is responsible for devaluing the dollar is a fantasy. If you want to see the real culprits look to those you elect to congress.
Waggoner
so in other words and correct me if I am wrong
the DEBT is NOT real??? its all make believe
so what does it matter if the fed keeps printing trillions of dollars more since its only monopoly money.
and what does this do to the purchasing power of the dollar world wide or internally??
nothing???
it’s such a con game it would be funny if it was not true.
fractional banking, leveraged debt, unlawful preemptive wars , these are the true weapons of mass destruction.
[quote=”davidd”]Waggoner
so in other words and correct me if I am wrong
the DEBT is NOT real??? its all make believe
so what does it matter if the fed keeps printing trillions of dollars more since its only monopoly money.
and what does this do to the purchasing power of the dollar world wide or internally??
nothing???
it’s such a con game it would be funny if it was not true.
fractional banking, leveraged debt, unlawful preemptive wars , these are the true weapons of mass destruction.[/quote]
You aren’t looking at this from a logical point of view. Debt is very real. If you don’t believe it try renigging on a loan. You will find yourself on the short end of the stick.
The value of any commodity is the faith that it has value. It is no different with fiat currency.
If you go overboard and print too much you risk holders losing faith that it can be redeemed for value. That is when you face real devaluation.
Like I said, the purpose of a central bank is to provide elasticity to the money supply. Any central bank can create and destroy money in order to keep the economy functioning.
The failure of the Federal Rerserve to provide this elasticity deepened the Great Depression.
Bernanke is doing exactly what the Federal Reserve is legislated to do.
The debt is not real if the money in which it is expressed is not real, and we are not dealing with real money here. This is pure logic and is factual, Wagonner. In addition to this ridiculous situation, we have the following:
The Fed creates this unreal, fiat currency (the principal) out of thin air and loans it at interest. But the Fed never creates the currency with which to pay the interest of the loan. So we have debt with no way to pay it all off built into this stupid, fraudulent system of fake money. The debt is a fraud employed on an ignorant population in order to control that population.
[quote=”sprite”]The debt is not real if the money in which it is expressed is not real, and we are not dealing with real money here. This is pure logic and is factual, Wagonner. In addition to this ridiculous situation, we have the following:
The Fed creates this unreal, fiat currency (the principal) out of thin air and loans it at interest. But the Fed never creates the currency with which to pay the interest of the loan. So we have debt with no way to pay it all off built into this stupid, fraudulent system of fake money. The debt is a fraud employed on an ignorant population in order to control that population.[/quote]
The money created by any central bank is real as long as everyone has faith that it can be used. Has anyone refused to take your dollars as payment for anything?
If you do not believe that it is real try paying for your groceries, your home loan or anything else that you need with gold or any other commodity that you value. Whether it is in the form of raw bullion or coin you will find that those whom you pay may have a different idea of its value than you do.
Your argument is fallacious. As long as others accept your dollar at its face value it has value.
Do you think that Costa Rica, or any other nation, has enough of any resource to cover the value of the currency that it has in circulation?
Since you don’t believe in the value of dollars and you see them as worthless, send me your dollars. Your refusal to do so will prove the fallacy of your argument. 😆
Now wait a minute, Les! If sprite is going to unload all her dollars, I want in on the action. I don’t care if she doesn’t think they have value. Somebody will and I want to be there when they do.
Sheesh! Don’t hog it all!
[quote=”DavidCMurray”]Now wait a minute, Les! If sprite is going to unload all her dollars, I want in on the action. I don’t care if she doesn’t think they have value. Somebody will and I want to be there when they do.
Sheesh! Don’t hog it all!
[/quote]I’m not greedy, just practical.
The illogical logic that Sprite posts here leads me to believe that the comments are argument for the sake of conversation.
If Sprite really believed what she has posted here I would see her cash come my way. I don’t really think that will happen.
Anyone who began dealing with their finances after 1972 has never dealt with anything but fiat currency. Here we are 40 years down the road and the dollar continues to have value albeit somewhat devalued by inflation.
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