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> There just isn't a realistic scenario in which USD has 0 value and Gold is useful. This happens all. the. time. The USD lost 33% of its real value between 19
by aianus 11y ago
> There just isn't a realistic scenario in which USD has 0 value and Gold is useful.
This happens all. the. time. The USD lost 33% of its real value between 1977 and 1981 while Gold increased in value in real terms by 65% during the same time period. USD itself has been reasonably stable since, but there's no guarantee that will continue.
I'm not a crazy goldbug, I don't think we should go around trading gold shavings with each other in our day-to-day lives, but it's an indisputable fact that Gold is an excellent hedge against financial and currency crises the likes of which happen somewhere in the world all the time. Hell, right now Russia is in a currency crisis where the Ruble has lost 50% of its value in less than two years.
- dagw 11y agoThis happens all. the. time. You're talking about two different things. No one is disagreeing with the fact that gold is a fine hedge against local currency fluctuations. As you say that happens all the time. The question is whether gold will have any significant value after some global cataclysmic event that is so extreme that it would literally drive the value of the worlds most dominant reserve currency to basically zero.
- dragonwriter 11y ago> > There just isn't a realistic scenario in which USD has 0 value and Gold is useful. > This happens all. the. time. No, it doesn't. About the only times its even approximately happened during or after the 20th Century to a national currency of a nation that had been a major world power within the preceding century have been a few cases to the losing side of major wars (and in those cases, prewar businesses are quite likely to lose their market and ability to operate as a result of the war and its loss, independently of the collapse of the currency.) It absolutely doesn't happen all the time.