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There is a way and it has already happened many times. You goldbugs need to learn some history and gain a bit of perspective.
by hristov 14y ago
There is a way and it has already happened many times. You goldbugs need to learn some history and gain a bit of perspective.
- wintersFright 14y agoI'd agree with your last sentence if you substituted 'goldbugs' for 'paperbugs' :) Some history for you: A USD until 1971 represented a thing. It was redeemable for a specific weight of gold. After Nixon shock it become a concept. It is now only backed by the 'idea' that someone will exchange their goods or services in the future for the paper you hold - or the full faith and credit of the USG if you prefer. The value of the USD is only in the prices placed on the goods. If someone refuses to trade an item with you for your USD then what value is the dollar? If you also read up on Triffin's Dilemma, you will understand why the US must run a perpetual trade deficit - to provide lubricating dollars for world trade. So there are many many many more dollars in circulation than can lay claim to physical goods in this world. Eventually all paper money returns to its intrinsic value (Voltaire!). When it happens to the USD, it's going to be a doozy!
- ekianjo 14y agoToday USD has no tangible value. A currency, to be efficient, has to be : 1) in limited amount or cannot be produced easily 2) represent high value per space (value density) 3) be exchangeable for tangible goods The USD has lost on 1) after removing all equivalency to Gold, and we saw that 2) its value has been dropping versus a number of commodities and precious metals over the past 50 years. I agree the 3) may be challenging if you carry only Gold, but the day the USD will crash, Gold will become a new currency of exchange again. Paper remains paper, and Gold remains gold. It has a value that paper will never have.