Gold Hits Record High and Surpasses 1,900 Dollars Per Ounce

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3 hours ago, Fether said:

How does that effect the average American? Would I no longer be able to go to the store and buy ground beef? Will it just be harder to travel abroad using American currency?

There are different thoughts about what could or would happen.  Different things HAVE happened in the past.

One example is Argentina which had a situation similar.  Bartering became a bigger item between people.

Germany after WWII and right before Hitler took over (and one reason he was able to take over) is another example.  Inflation was so terrible and horrible that money became useless.  People would spend their life savings on a loaf of bread.

Zimbabwe is probably one of the most recent examples with it's hyperinflation.  This caused the money to have no worth.  It had nothing to really back up it's worth or what the government was saying it was worth.  Furthermore, in today's paper society (where currencies value is not so much based on hard values such as gold, but rather what people think it is worth), people did not trust that it could retain it's value (and it didn't) and so didn't see it worth anything.

In these instances, the best bet is to invest in another currency, such as a foreign currency.  The hope is that the foreign currency will actually hold it's value.  In Zimbabwe you'd see people using foreign currency simply because it was more reliable than the national currency.

In the instance that the US dollar fails...I'm not sure what would occur.  The US dollar has a far wider impact than any other economy, and it's failure would reverberate around the world.  It could be possible that almost ALL currencies fail in that instance, and most would be in serious trouble (as most nations have a paper society, rather than a gold or silver based one today).  The best bet would be to try to find some foreign currency that is based on something else.  If this currency was found by others in business, it probably would become the status quo currency to fall back on.

The reason people cite keeping gold or silver is the expectation that they will retain value.  A Gold Based economy/society has it's money (such as the dollar) based on that material.  It is directly correlated.  For example, if I had a currency and called it a Pound, and said each Pound is equal to a Pound of Silver...then your money actually has a direct correlated worth to something.  Many societies in the past had their currency with a direct correlation.  The US had this in the past with it's dollar tied to silver.  So many silver dollars equaled a gold amount (it has varied, but one of the more popular forms was 20 silver dollars to a 20 dollar gold piece, though they also had 16 to 1 and other variations in the past if I recall of the top of my head).

The fallacy of this is that gold and silver values are also superficial.  In the case of a crash, if no one values gold, gold will have no value.  If we go with foreign currency, it would be hoping that they are based off a gold or silver standard.  If, instead, that economy is based on land (such as each dollar is based upon an amount of land) or other such backing, gold may not be worth as much as some think it will.  In the instance of a US dollar crash, most likely it will cause the crash of currencies worldwide.  It could be a trigger for the entirety of the paper backed systems to fall. 

Most of these were based on gold or silver in the past.  There is still a superficial connection between them and gold and silver.  If they fall, expect the value of gold and silver to fall as well, perhaps drastically.  It could be that we go to a food backed currency (for example, in the past some societies based their money off the value of grain, such as wheat or rice.  Money was directly correlated as worth to a bushel of wheat for example).  In this instance, gold becomes largely useless, as you cannot eat gold (for example, though they had a lot of it, in the Americas before the Europeans came, it was not seen as valuable as Europe saw it). 

Thus, in answer to your depends on how hard the crash was.  In a total crash, the entire system of markets falls apart, which means you might not be able to go to the store and buy ground beef.  You may have to hope that your local community and the farms in the local area have produce you can eat.  Traveling abroad could be harder as American currency would not useful and you could not use it.  No one would accept it perhaps, and you'd have to find another way to make your way.

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On 7/27/2020 at 5:24 PM, Still_Small_Voice said:

It’s been a historic week for gold and silver prices. Gold rallied close to nine-year highs, approaching its all-time high of $1,920 an ounce. Silver has also been firing an all cylinders, breaching $23 an ounce this week as it traded near six and a half year highs.

If the US$ ever loses its reserve currency status, it's hard to predict how high gold and silver will go.

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On 8/12/2020 at 8:08 AM, Still_Small_Voice said:

I am wondering though how much debt our country can continue to take on.  Current United States national debt is close to $26,600,000,000,000 (26.6 trillion) today.  At some point in the future the debt bubble will explode.  When it does it will cause great financial ruin.  It could be many years from now but it will happen if Congress and the President do not restrain financial spending.

The US has over $300 trillion in assets..  Not close to broke. 

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