Post
Topic
Board Economics
Re: Gold: I smell a trap
by
cypherdoc
on 29/09/2011, 22:50:00 UTC

In Germany and Zimbabwe they had to print million and trillion dollar notes so it would easier to carry. Of course, prices of some commodities doubled every hour at the height of the hyperinflationary crisis. There is a book called When Money Dies where the Germany Weimar crisis is chronicled by eyewitness accounts. There were were several anecdotal descriptions of people using gold and silver to survive day-to-day.


that is the path they chose to get money out into circulation and that choice was made under duress of the post War depression.

the US on the other hand, has created an astronomical amount of USD denominated debt over the 40 yrs since we depegged to get USD out into circulation during a mostly expansionary and favorable economic environment.  this is a distinct and clear difference btwn what is present now and what went on in Germany and Zimbabwe.  these are not paper USD's that can't vanish from the system or be burned in a furnace.  these are virtual debt USD's that can vaporize once the borrower defaults on the loan and the bank has to take the loss.  this decreases the USD money supply which is composed of the currency plus that same debt.  this drives up the USD value which we're seeing now and throws into reverse the bubbles we've seen the last 40 yrs in stocks, commods, RE, bonds, and gold/silver.