# In the event of a total dollar collapse will gold and silver even be useful?



## moXJO (23 September 2008)

If the fiat system was to fall on its A$$. Would holding gold and silver still be of value or just pretty paperweights?
Really a decent food and water supply would probably be worth more.

I suppose a couple of questions really 
1. If you did have a fair chunk of gold in assets would you be the richest man on the street and be in a better position from the masses? 

2. What happened in the depression with those that held gold?

I understand the whole perceived value of any items, just wondering what happens if it ever came to crunch time.


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## brty (23 September 2008)

Hi moXJO,

If we get a real depression, then gold is likely to lose value.

If we get hyperinflation, then gold is likely to gain greatly in terms of the hyperinflating currency.

However in hyperinflation, kg bars of gold are not likely to be of much benefit to you, much better to have lots of 1/2 oz or less sized bars.

In a depression, debt will be extremely toxic, likely to send you bankrupt. In hyperinflation, debt is fantastic, provided you have fixed your interest rate.

brty


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## refined silver (23 September 2008)

brty said:


> Hi moXJO,
> 
> If we get a real depression, then gold is likely to lose value.
> 
> brty




In the 30s gold stocks were the only ones that went up. Gold went up too.


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## pepperoni (24 September 2008)

Im starting to think oil will hold its value better than anything, if its possible to buy warrants or something like the gold ones.

In a total meltdown the last thing we will be needing is gold.


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## Spanning Tree (24 September 2008)

Gold can be used as a new currency. Food like rice can be a currency but rice is perishable and there are differences in rice quality and density. Gold is convenient as a currency. Since rice can be made quite easily it is also prone to inflation whereas gold is hard to find.


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## marklar (24 September 2008)

Well, in the event we do end up back at bartering for goods I'll be the first to kick things off...

If anyone's got some spare rice, I've got a really nice hat to trade.

m.


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## rub92me (24 September 2008)

If there would be a total collapse, nothing is safe. Chaos will reign and draconian mesaures would be needed. After a bit of market turmoil the powers that be banned shorting to protect their interests. Who's to say they wouldn't ban people holding or trading precious metals if they decide that's the new scapegoat and undermining the economy.


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## mayk (24 September 2008)

Spanning Tree said:


> Gold can be used as a new currency. Food like rice can be a currency but rice is perishable and there are differences in rice quality and density. Gold is convenient as a currency. Since rice can be made quite easily it is also prone to inflation whereas gold is hard to find.




I have a question which need answering. The amount of gold in the world is limited (finite), then how can growth be supported? 

Especially when we are on an exponential curve of growth? Does progress has to be linear? Even then we will run out of gold...

Something like the King's stick maybe? but govt. sponsored bonds serve exactly that purpose. I guess it is a reasonable system which can accommodate growth easily. A fallback to gold is not possible now-a-days.

I started out in the favor of GOLD but now am thinking of other systems. One way will be to introduce an interest free system, credit without interest, will at least chop off the running increasing debt because of interest. Any thoughts?


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## moXJO (24 September 2008)

The old rule of bet on nothing changing much is probably the best route to take. It's good to know what to do just in case though. I doubt the fiat system would ever cark it.


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## amory (11 November 2008)

use your imagination, folks.  suppose you were living in Zimbabwe or some other african democracy where the currency is worthless & you want to sell a house.  tell me what currency do you discuss with the buyer?

correct.  needless to say, there is a death penalty attached to this kind of transaction.  trading gold in a bankrupt country is illegal, subject to death penalty more often than not.  

the peasant trying to escape massacre in his homeland - the democratic republic of congo or wherever - what do you imagine he'll try to sneak across the border apart from what he can carry on his back?  

correct again.  at some risk, they'll likely chop his arms off if they catch him.  which doesn't alter the eternal fact:  amidst turmoil & disaster, gold is the currency of last resort.  

but the real question now is whether the United States will find means to save the USDollar from collapse & if so, what will that do to the price of gold?  because up to now & recent events considered, the Fed is not doing too badly.  survival of the dollar wise.

from the trader's point of view, there is some uncertainty.


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## Glen48 (11 November 2008)

If thing get really bad and people find you have gold bars/coins to spend and follow you home...well... chaos
I see China announces a billion dollar rescue deal so our share go down Today...I see USA wants more money for Bail outs GM is on the ropes and the USD is still strong.
How much longer can the USD keep going???


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## sinner (11 November 2008)

> If thing get really bad and people find you have gold bars/coins to spend and follow you home...well... chaos
> I see China announces a billion dollar rescue deal so our share go down Today...I see USA wants more money for Bail outs GM is on the ropes and the USD is still strong.
> How much longer can the USD keep going???




USD is going strong (imho) mostly because of massive deleveraging amounts to be paid in USD. They have positioned themselves as the long term gateway currency, if you want to participate in the international market or are a nation-state looking to buy commodities like oil and minerals for your country then you must first go and buy USD. If you are a massive institution or government currently in the deleveraging process you need to go out and  buy a lot of USD to pay off your bad bets.

As a small/personal investor you only need a very small hedge in gold and silver (10% of holdings), as if things get so bad that they become the default currency then even that small amount will have a huge purchasing power.

It would be crazy to liquidate all your holdings to convert them to precious metals. But those of us who recognise the (however remote) possibility of fiat evaporating or inflating to nothingness also recognise the use of a small gold hedge.


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## Glen48 (11 November 2008)

I went out and paid spot gold price for some jewelry the Mrs. has taken a shine to it and now I have to hope thing don't get bad and i have to cut off a hand to get my Gold


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## noirua (17 January 2022)

E.B. Tucker, director of Metalla Royalty, discusses with David Lin, anchor for Kitco News the outlook for stocks, gold, and silver in 2022.
20 December 2021


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