reply to post by glaucon
Half of your statement is reasonable, the other half not. The reason hyperinflation is extremely unlikely is that the paper we are printing is held as
excess reserves in banks. Without that money actually in the economy, one cannot fill wheelbarrows with cash. That is why the Weimar situation is not
happen. The same is to be said of Zimbabwe. In both cases, the money was printed and handed out to people. In our case, the money is just being added
to electronic banks and not being circulated at all in the economy.
The reasonable statement is 10% in gold. Even if gold is not a yielding asset, it is as you say a hedge against extremely tough times. As a result,
definitely hold 10%. Beyond that and you are getting into sheeple territory.
Well, considering your comments to Danbones, I guess being half reasonable is a compliment, thank you!
I suppose I would be surprised if someone living in New Orleans didn't agree with the traditional 10 % diversification, since it has always been a
hedge, and you well know that tough times can hit.
As far as assigning a tiny "likelihood" to hyperinflation, well, I wish I had your faith!
As an agnostic, I try not to indulge in things like "faith" too much. Should I put faith in the US Dollar? How about gold? Actually, the prudent
investor refuses to put "faith" in anything, and attempts to make allocations based on the reality that we don't know the future.
I notice you didn't attempt an interpretation of recent IMF statements treating of gold. No, I don't know the future any better than you do, but I
would suggest that those at the helm of the global banking empire probably do know a bit more about what they have planned than you or I.
"What if" TPTB have a plan already, and further, they have revealed a few hints about that plan? Would it be wise to ignore them, preferring faith
that terrible things just aren't "likely"?
This is where "faith" (or the lack thereof) can finally play a reasonable role in assessing things "likely". TPTB are in far more control than we
often like to give them credit for. Yes, that implies that I have "faith" that they are fairly powerful, but we each must form a basis, or
foundation for interpreting the many signals coming at us.
I have chosen to keep TPTB firmly in the center of whatever possibilities that I may be considering. I always try and ask, "What are they really up
to?" Here's a corollary, "It may look like chance, but it's probably been planned."
Back to "hyperinflation". I mentioned the possibility that this might NOT happen when I brought up the history of Sterling. One thing is for sure,
"if" TPTB are planning on A, or B, one will happen. I may be grateful if they were gentle about it, but I would be foolish to assume they will be.
Not to mention, our masters are not gods actually, and even if they had planned on "A", things could take place that result in "B". So, we should
be prepared for BOTH. However, considering we really don't need much preparation for the "slow" scenario, then logically, all we can do is prepare
for the worst.
Obviously, I don't believe in going to defcom 4 like many posting about the virtues of gold, but then again, I try never to forget who owns almost
all the gold. And that impacts my decisions too.
Oh yes, as far as the wheelbarrows go, that is the traditional image of hyperinflation, and I wouldn't get hung up on it. As I said, when whatever
we have in our bank accounts buys nothing, it won't really matter if you have a physical wad of paper.
As far as the mitigating effect of having the USD serving as the world's reserve currency at the moment, granted, that has been the saving grace for
the addled USA for a long time now. Will that somehow prevent hyperinflation? Maybe, maybe not. Such a thing absolutely depends upon cooperation at
the highest level. If that breaks down, or is "allowed" to break down, then the jig could be up sooner than you think. In 12 hours? Yes,
possibly. Which means that a military mobilization to help stop it would be largely moot. Something to consider.
Another clue that should not be ignored is that many nations have been significantly increasing their gold reserves, as they use gold as one more
attempt to diversify out of the USD, without killing themselves in the process. The writing may be on the wall, we just have to be able to see it.
I'd like to rephrase something you assert. You say that hyperinflation is "extremely unlikely". Unless you are friends with Bernanke or someone
at that level, then you might as well say, "I trust! I trust that they won't let this happen." (Actually, that might be more logical than saying
it "can't" happen...)
I would sugest that TPTB can indeed make it happen, if they want to, when they want to. They may also think that they have good reasons to do it,
especially if we realize that they have desired a true world currency for a long time now. The decades-old dollar hegemony never was supposed to last
forever. There will come a time, maybe sooner, maybe later, but it will have to go, in favor of something even more "global".
And as far as trust goes, it doesn't really go too far these days! As a result, don't be too sure that the sheeple are going to want to jump back
into a "bargain" stock market. People have learned, many the hard way, that holding stock in a company is pretty much "trusting" the people
running that company. And what we have seen many times since Enron is that we would be foolish to place too much trust in people who are virtually
history's greatest thieves.
Interesting times we're living in. Got gold?