And if the derivatives bubble is going to pop, you'll be too busy surviving to worry about your money.
i'm really glad you brought this up. i've been meaning to talk about this.
miscreanity calls gold an asset as do i. i believe that gold as an asset can inflate just like any other asset via USD inflation. the derivatives mkt is no different. as is the gold derivatives mkt. gold pundits argue that if we get a gold derivatives implosion there will be a scramble for physical gold which will drive it to the moon. but you have to ask yourselves: what were those derivative positions funded with? Answer: USD's. so if anything, a gold derivatives implosion should cause a scramble for USD's (or a shrinking of the virtual USD's depending on how you like to think about this) causing a further skyrocketing of the USD. if THAT happens, what becomes of the physical gold price?
Gold can only inflate if the supply times the velocity (speed at which it changes hands) increases faster than the value of goods in the economy. I don't see that happening, but that's just my opinion.
If there is a massive shrinking of the USD supply, the USD price of gold will go down to nearly nothing. But that's irrelevant. Everything will go down in USD price, so I will be able to buy just as much for my gold. However, there is another more interesting aspect to this scenario. If there are no dollars, there's no trade in dollars. People will trade is a different currency, or barter.
USD price for gold is pretty much irrelevant, if you use gold as a store of value. The USD isn't exactly stable either. Besides that, I'm talking about gold that you can actually touch. Not paper gold.