# Probability of a currency collapse within the next 3 decades? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [November 27, 2019, 8:24pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086 "2019-11-27T20:24:02Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![ASL\_v2.0](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asl_v2.0/32/3525_2.png) [@ASL\_v2.0](https://boards.straightdope.com/u/ASL_v2.0)\ **Post date:** [December 4, 2019, 5:25pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/101 "2019-12-04T17:25:26Z")
> [@septimus](#): > > As a thought experiment about confidence, put $1000 of U.S. currency in a time vault, along with the gold purchased with a 2nd $1000. (To please OP, buy silver with a 3rd $1000 and put that in the vault too.) Come back and open the vault in 50 years. I am fairly _confident_ (not 100% certain, but perhaps 96% or so) that the gold and/or silver will then be worth more than the paper money. (To make it interesting, we’d want to put another item in the vault – a rolling-over interest-paying CD or such with initial $1000 value. This becomes more complicated.) I’d wager the gold and silver would outpace the cash for value, just going over how the markets have played out over the last 50 years (observed trends). But the question here isn’t whether or not gold and silver stored long term will prove to be a better or worse investment than large cash reserves in a stable market. It’s whether or not it is a good investment to hoard gold or silver specifically as a hedge against a failed market. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [December 4, 2019, 5:42pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/102 "2019-12-04T17:42:53Z")
> [@septimus](#): > > We have discussions like this every year or so. The misleading arguments get worse and worse over time. > > I was old enough to vote when Nixon closed the gold window in 1971. I’m not quite 100 years old yet, let alone 200. > > And anyone who writes “the US Currency has been good for like 200 years” doesn’t know much about US currency. Unless you follow the lead of others in this thread who refer to minted silver dollar coins, which have a dollar’s worth of silver, as “fiat” money. Two hundred years ago, paper money in the U.S. was issued by private banks and sold at discounts. The first federal banknotes were issued by Abraham Lincoln, and traded at 30 cents on the dollar compared with gold or silver coins. > > . That was for other nations. America effectively went off the Gold standard in 1933. You are gonna need cites for many of your claims. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [December 4, 2019, 5:50pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/103 "2019-12-04T17:50:04Z")
> [@septimus](#): > > … > > As a thought experiment about confidence, put $1000 of U.S. currency in a time vault, along with the gold purchased with a 2nd $1000. (To please OP, buy silver with a 3rd $1000 and put that in the vault too.) Come back and open the vault in 50 years. I am fairly _confident_ (not 100% certain, but perhaps 96% or so) that the gold and/or silver will then be worth more than the paper money. (To make it interesting, we’d want to put another item in the vault – a rolling-over interest-paying CD or such with initial $1000 value. This becomes more complicated.) Take a look at this chart: > **[Gold Prices - 100 Year Historical Chart](https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart)** > > Interactive chart of historical data for real (inflation-adjusted) gold prices per ounce back to 1915. The series is deflated using the headline Consumer Price Index (CPI) with the most recent month as the base. The current month is updated on an... I dont think so, since the price of gold is quite high now, and will likely fluctuate downwards. Gold is a commodity, so we can also put a barrel of oil, some pork bellies and a bag of coffee (all represented by certificates of course). ---
**Author:** ![Marcus\_Flavius](https://avatars.discourse-cdn.com/v4/letter/m/a4c791/32.png) [@Marcus\_Flavius](https://boards.straightdope.com/u/Marcus_Flavius)\ **Post date:** [December 4, 2019, 5:55pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/104 "2019-12-04T17:55:08Z")
> [@septimus](#): > > Construct specific claims; express them in clear sentences and I will be happy to tell you whether I agree or disagree with each claim. Instead the thread jumps all over the place, with posters seeming to put words in others’ mouths. (I may also be very guilty of that. Sorry. :o ) > > I’ll start with yours: _ **Yes, currency is backed by confidence.** _ > > This is precisely why I mentioned discounted greenbacks and Nellie Bly’s journey when I saw what appeared to be a claim that American money has been confidence-inspiring for 200 years. > > As a thought experiment about confidence, put $1000 of U.S. currency in a time vault, along with the gold purchased with a 2nd $1000. (To please OP, buy silver with a 3rd $1000 and put that in the vault too.) Come back and open the vault in 50 years. I am fairly _confident_ (not 100% certain, but perhaps 96% or so) that the gold and/or silver will then be worth more than the paper money. (To make it interesting, we’d want to put another item in the vault – a rolling-over interest-paying CD or such with initial $1000 value. This becomes more complicated.) It’s a guarantee that the gold and silver will be worth more. Currency is losing value every second of every day. ---
**Author:** ![Buck\_Godot](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/buck_godot/32/6573_2.png) [@Buck\_Godot](https://boards.straightdope.com/u/Buck_Godot)\ **Post date:** [December 4, 2019, 6:27pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/105 "2019-12-04T18:27:19Z")
> [@Marcus\_Flavius](#): > > It’s a guarantee that the gold and silver will be worth more. Currency is losing value every second of every day. Sure all this shows is that putting your money in cash under a mattress is a poor investment strategy (although better than gold between 1980 and 2000), but I don’t think that anyone is arguing in favor of that. ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [December 4, 2019, 6:38pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/106 "2019-12-04T18:38:28Z")
> [@Marcus\_Flavius](#): > > It’s a guarantee that the gold and silver will be worth more. Currency is losing value every second of every day. Again, you have been pointed to historical prices which show ridiculous swings. A tiny loss in value in currency is tremendously better than going through those wild swings. Today silver lost 1.63% of it’s value. A loss of 3.29% over the last 30 days. Wow. You also, repeatedly, have not noticed that the value of gold and silver are _mental constructs_! You can’t eat silver. You can’t use it to keep warm. Etc. It’s value directly relates to what people think it’s worth. Do you not notice the word “think” there??? And what people think of the value of silver varies all over the place _now_. Nevermind when things get iffy. Why do you keep posting the same refuted points over and over? Don’t you think it’s time to pay attention here? ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [December 4, 2019, 6:58pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/107 "2019-12-04T18:58:30Z")
> [@septimus](#): > > … > > This is precisely why I mentioned discounted greenbacks and Nellie Bly’s journey when I saw what appeared to be a claim that American money has been confidence-inspiring for 200 years. > …) Event those discounted greenbacks were redeemed at full face value, allowing those who speculated in them to reap a nice profit. Bly traveled with SILVER dollars. Thus disproving that silver always has value. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [December 4, 2019, 7:02pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/108 "2019-12-04T19:02:55Z")
> [@septimus](#): > > As a thought experiment about confidence, put $1000 of U.S. currency in a time vault, along with the gold purchased with a 2nd $1000. (To please OP, buy silver with a 3rd $1000 and put that in the vault too.) Come back and open the vault in 50 years. I am fairly _confident_ (not 100% certain, but perhaps 96% or so) that the gold and/or silver will then be worth more than the paper money. (To make it interesting, we’d want to put another item in the vault – a rolling-over interest-paying CD or such with initial $1000 value. This becomes more complicated.) Currency is not supposed to be an investment. It’s the lubrication that makes investments and other transactions possible. Talking about currency’s value in 50 years is so missing the point that I have to believe we’re having two discussions in separate worlds. ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [December 4, 2019, 7:15pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/109 "2019-12-04T19:15:07Z")
> [@Marcus\_Flavius](#): > > Silver is the only financial investment for me because: > > 1. It’s the safest and most liquid asset in the world Safest? It was worth $49/oz in early 1980, and $6.30 by May 1982. Somebody who bought near the peak lost 85% over 2 1/2 years and didn’t break even (in nominal terms) until 2011; in inflation-adjusted terms, they’re still waiting. Please provide your definition of “safe.” (Other periods of loss include 2011-2019 and the era of the conquistadores.) Most liquid? It’s liquid only if somebody else wants it. In times of great turmoil, who wants it and has the resources to buy it at a favorable price? In times of scarcity, everybody wants food, and silver is just a pretty trinket unless and until somebody has surplus food. > [@Marcus\_Flavius](#): > > 1. It is one of the few assets that can be completely outside of the financial system. How? Outside of mining country, one acquires silver by exchanging some other asset, most commonly some form of currency. Even if you posit a world in which silver has become the principal medium of exchange, that just makes silver the basis of the financial system, not something apart from it. > [@Marcus\_Flavius](#): > > 1. It is a form of real wealth, and not a paper or digital illusion of wealth. Sure it’s an illusion of wealth. It has value only insofar as somebody is willing to exchange it for things that provide food or shelter or heat or other life-sustaining items. You believe that somebody will always be willing to do that, but historical examples of society-wide collapse (the late Bronze Age collapse, after the fall of the Roman Empire in the West, the Mayan Collapse) show radical economic simplification accompanied by drastic declines in the use and accumulation of precious metals. Nobody worries about silver when they’re worried about survival. ---
**Author:** ![Buck\_Godot](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/buck_godot/32/6573_2.png) [@Buck\_Godot](https://boards.straightdope.com/u/Buck_Godot)\ **Post date:** [December 4, 2019, 7:19pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/110 "2019-12-04T19:19:58Z")
> [@Exapno\_Mapcase](#): > > Currency is not supposed to be an investment. It’s the lubrication that makes investments and other transactions possible. Talking about currency’s value in 50 years is so missing the point that I have to believe we’re having two discussions in separate worlds. I would also point out that in general currency inflation is a feature not a bug. Having currency slowly lose value, encourages people to spend and invest it. This is why the Federal reserve targets an inflation rate of about 2%, not zero. If there was no inflation, than you might as well just sit on your money, rather than do something with it, at which point it loses is ability to function as a lubricator. Yes, high rates of inflation are bad, but one thing that is worse than high inflation is modest deflation. At that point hoarding money is no longer just an option, it’s a sound investment strategy. That hoarding reduces the money supply making it more valuable, and causing further deflation and pretty soon you get great depression 2.0. ---
**Author:** ![begbert2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/begbert2/32/3357_2.png) [@begbert2](https://boards.straightdope.com/u/begbert2)\ **Post date:** [December 4, 2019, 9:33pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/111 "2019-12-04T21:33:18Z")
> [@slash2k](#): > > Sure it’s an illusion of wealth. It has value only insofar as somebody is willing to exchange it for things that provide food or shelter or heat or other life-sustaining items. You believe that somebody will always be willing to do that, but historical examples of society-wide collapse (the late Bronze Age collapse, after the fall of the Roman Empire in the West, the Mayan Collapse) show radical economic simplification accompanied by drastic declines in the use and accumulation of precious metals. Nobody worries about silver when they’re worried about survival. Perhaps they’re picturing a society-wide collapse caused by werewolves? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [December 4, 2019, 9:54pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/112 "2019-12-04T21:54:36Z")
So. What is a gold standard? There is a _nominal_ gold standard, and a _fully enforced_ standard. There is also the system that FDR instituted, where the U.S. actively acquired gold, prohibited gold ownership by its citizens, and set an official price of $35 per ounce, _with gold traded at or near the official price._ I don’t consider it interesting to debate the meaning of ‘gold standard’ splitting every hair. FDR’s Treasury, and its successors until Nixon, stood ready to buy or sell gold (to/from foreign central bank) at the $35 official price. Americans who chose to defy the law, e.g. by buying gold in a foreign country, also paid about $35/oz IIUC. Availability of gold had always been a problem. As others point out, there had been financial crises exacerbated by the tightness of money — sometimes ships laden with gold were directed across the oceans, depending on where the demand for gold was!. Nevertheless, from 1930 to 1971 transactions around the globe were tied to the dollar, which in turn was stabilized by its official gold price. > [@DrDeth](#): > > That was for other nations. America effectively went off the Gold standard in 1933. > > You are gonna need cites for many of your claims. We’ll definitely need a new thread if the quibble is to be _What is a Gold Standard?_ Let’s start with the simple facts. In about 1715, Sir Isaac Newton, Master of the Mint, set the price of gold at £4.25 where it remained until the gold standard was completely renounced circa 1940. (After that the pound bound itself to the dollar for a while.) Except for a few brief excursions due to wars, the fixed price was almost identically the market price in London; this was still £4.25 (Newton’s price) in 1930. The U.S. Official Price was $19.39 from 1791-1833, $20.67 from 1834\*-1933, $35 from 1935-1971 when the gold standard was finally abandoned. The New York Market Price tracked the official price exactly with these exceptions: [ul][li] During 1815-1816 [War of 1812] the gold price inflated by up to 12%. There were major wars in Europe and the London price was 35% above the official price. By 1818, NY was at its official price again, as was London by 1820.[/li][li] As mentioned, the U.S. official price changed 1833-1837, with gold trading at a premium of almost 5% in 1837 and 1% as late as 1838, after which the New York price continues to track the official prices[/li][li] From 1862-1869 [Civil War] there was a steep hike in New York gold price, returning to 23-24 by 1870 and back to the official price by 1879.[/li][li] As mentioned, the U.S. official price changed 1934. But the market price immediately the new official price. Because of restrictions we can call this a ‘quasi-gold standard’ or such, just to finesse quibbling.[/li][li] _ **The $35 == $35 equation is maintained from 1934 to 1968.** _ Gold traded around the world (where legal) at about that price IIUC.[/li][li] By 1968, supply of $35 gold dries up. A price of $41.50 is hit in 1969. Central banks begin redeeming their U.S. Notes at the official price. Unwillingly, but according to contract the U.S. Treasury sells gold to central banks for $35 an ounce. Gold’s market price remains about 15% above the official price.[/li][li] In 1971, R.M. Nixon changes the official price and announces that the U.S. will no longer purchase gold at any guaranteed price. The gold standard is over. Gold price soars, up to $600+ in 1980, after which it falls.[/li][/ul] ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [December 4, 2019, 10:14pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/113 "2019-12-04T22:14:56Z")
> [@septimus](#): > > Nevertheless, from 1930 to 1971 transactions around the globe were tied to the dollar, which in turn was stabilized by its official gold price. As a side effect to this, currencies were pegged to the dollar and thus to gold. When the legal conversion rate began to diverge from the trading rate that would have been determined by a free market, you got black markets. I think they are pretty much gone with market rate currency conversions. ---
**Author:** ![Marcus\_Flavius](https://avatars.discourse-cdn.com/v4/letter/m/a4c791/32.png) [@Marcus\_Flavius](https://boards.straightdope.com/u/Marcus_Flavius)\ **Post date:** [December 4, 2019, 11:51pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/114 "2019-12-04T23:51:17Z")
> [@slash2k](#): > > Safest? It was worth $49/oz in early 1980, and $6.30 by May 1982. Somebody who bought near the peak lost 85% over 2 1/2 years and didn’t break even (in nominal terms) until 2011; in inflation-adjusted terms, they’re still waiting. Please provide your definition of “safe.” (Other periods of loss include 2011-2019 and the era of the conquistadores.) I’m not worried about the price drop… silver is simply waiting for a turn to come back into fashion, which all assets that have an intrinsic worth always do. There will come a day when silver will be worth $Infinity/oz. Meaning no amount of fiat dollars will be able to buy it. > [@](#): > > Most liquid? It’s liquid only if somebody else wants it. In times of great turmoil, who wants it and has the resources to buy it at a favorable price? In times of scarcity, everybody wants food, and silver is just a pretty trinket unless and until somebody has surplus food. It’s the most liquid because _it is_ liquidity, silver is the epitome of honest money. It is real constitutional money, whereas fiat paper or digital dollars are fake, unconstitutional money. Are you familiar with Exter’s pyramid? It is an inverted pyramid, at the base are the riskiest and most illiquid assets. At the tip is gold, which is considered to be the least risky, most liquid asset. Silver is not on there, but I would add it as the tip cap. [![](https://sdbullion.com/media/wysiwyg/Blog/How_much_gold_is_there_in_the_world_SD_Bullion_SDBullion.com_John_Exter_pryamid_updated_2018.jpg) ](https://sdbullion.com/media/wysiwyg/Blog/How_much_gold_is_there_in_the_world_SD_Bullion_SDBullion.com_John_Exter_pryamid_updated_2018.jpg) In a crisis, he says cash comes flowing down from the top, to the bottom. In the last financial crisis the wise thing would have been to be in currency so you could buy up all the distressed assets. In Venezuela, the smart thing to do in the years leading up to that crisis was to stockpile US dollars. Well, in the next major crisis, the currencies themselves will be casualties. Investors will look into gold, massively driving up its price and making it utterly unnafordable. The public will see how cheap silver is in comparison and go flooding into that. The problem is- silver is not abundant. It’s been used up and discarded so much in industry that there isn’t that much of it left. If all the above ground silver were evenly distributed to everyone in the world, each person would only have 1/4 oz. keep in mind that there are hardcore silver stackers who have _hundreds_ of _pounds_ of silver. If a million investors tried to buy 65K worth of silver, they wouldn’t be able to, that amount of above ground silver simply does not exist. This is why silver to me is so safe and has such tremendous potential. > [@](#): > > How? Outside of mining country, one acquires silver by exchanging some other asset, most commonly some form of currency. Even if you posit a world in which silver has become the principal medium of exchange, that just makes silver the basis of the financial system, not something apart from it. What I meant is that it can be kept privately, completely outside the banking and financial system. No one knows I have any silver besides thee sellers who I buy it from. > [@](#): > > Sure it’s an illusion of wealth. It has value only insofar as somebody is willing to exchange it for things that provide food or shelter or heat or other life-sustaining items. You believe that somebody will always be willing to do that, but historical examples of society-wide collapse (the late Bronze Age collapse, after the fall of the Roman Empire in the West, the Mayan Collapse) show radical economic simplification accompanied by drastic declines in the use and accumulation of precious metals. Nobody worries about silver when they’re worried about survival. Silver is _not_ an illusion of wealth, it has been money for thousands of years, and at no point has it ever lost its value. It is a relatively rare precious metal with many uses. What is illusory is us thinking that a piece of paper with a number and a picture of a dead guy is any more valuable than monopoly play money. ---
**Author:** ![Marcus\_Flavius](https://avatars.discourse-cdn.com/v4/letter/m/a4c791/32.png) [@Marcus\_Flavius](https://boards.straightdope.com/u/Marcus_Flavius)\ **Post date:** [December 4, 2019, 11:57pm UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/115 "2019-12-04T23:57:34Z")
> [@Buck\_Godot](#): > > **I would also point out that in general currency inflation is a feature not a bug.** Having currency slowly lose value, encourages people to spend and invest it. This is why the Federal reserve targets an inflation rate of about 2%, not zero. If there was no inflation, than you might as well just sit on your money, rather than do something with it, at which point it loses is ability to function as a lubricator. Yes, high rates of inflation are bad, but one thing that is worse than high inflation is modest deflation. At that point hoarding money is no longer just an option, it’s a sound investment strategy. That hoarding reduces the money supply making it more valuable, and causing further deflation and pretty soon you get great depression 2.0. This is correct. Fiat currency is designed to lose purchasing power. Its very purpose is to confiscate your wealth and transfer it to the government. ---
**Author:** ![aruvqan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aruvqan/32/2891_2.png) [@aruvqan](https://boards.straightdope.com/u/aruvqan)\ **Post date:** [December 5, 2019, 12:36am UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/116 "2019-12-05T00:36:23Z")
Just skip to the bottom of all this =) > [@FlikTheBlue](#): > > The more I’ve thought about this issue, the more I come to the conclusion that money is not any of those things. Fundamentally money is a way of keeping score in the game of exchanging things of value. Modern fiat currency, with a few exceptions\*, doesn’t have any fundamental value. A dollar bill is just a small piece of paper, and having an image of Ben Franklin on it doesn’t make it 100x more valuable than having an image of George Washington. Here’s the analogy I use to make sense of it. Money (a dollar bill) is like the score on a scoreboard. Things of actual value (guns, food, services) are equivalent to the actual scoring of a touchdown, making a basket, putting a puck in the net, etc. What happens in the cases of runaway inflation is that the people who control the money in a sense make it easier to score a touchdown or make a basket by shortening the field or lowering the height of the basket (printing more money). Of course this doesn’t change the fundamental value of the things being exchanged in the economy so the money becomes less valuable. The reasons we don’t have to worry about any of this happening to the US dollar has been mentioned by others above. I would be happy to have their input if my analogy is flawed in any way. > > - Exceptions include things like copper pennies as well as silver, which would have some value in the right hands, even after the apocalypse. Gold, however, is pretty much useless compared to copper and silver. > [@Oredigger77](#): > > I would guess the chance of USD being completely devalued in the next 3 decades at less than 10% so I guess that has me voting a 1. The only way I see it happening is if the entire government pursues a course to try and destroy itself. Basically, racking up larger amounts of debt, moving the fed funds rate negative, and then defaulting on the deficit would probably get us close. Considering our current president is taking these some of these steps and has talked about doing the others I think there is a possibility of it happening. > > As far as the way to prepare for the collapse I think it is much more likely we’ll devolve into a barter society then a functional economy without fiat currancy. Stockpiling precious metals could be useful in the long term but I think focusing on getting through the transition is more important. There are two paths I see, one is focusing on buying land primarily that can be used for production of barter products (lumber, food, and minerals) the other is building a business that is able to take those primary inputs and turn then into something else valuable that is located close to its primary input. In my case I make beer, wine and spirits. When I start my next distillery I’m looking at working with my brother-in-law to locate the distillery near his potato and barely farm. > > Of course, if you are looking to own and use productive land you’ll need to be able to do the work yourself so learning the skills to farm or whatever will be equally important. The same goes for the secondary business. Learning to make furniture will be critical if you want to own a furniture business next to an oak forest. There are lots of these types of cottage business that will also be viable if the world doesn’t collapse so find you passion making artisan cheese and then build you apocalypse plan from there. > [@Marcus\_Flavius](#): > > How often do you see pre 1965 US quarters in circulation? Almost never! That’s Greshsms Law for you which states that people hoard valuable money and spend debased money when they have the same face value. > > When the USD fails, it will no longer be useful to speak of the value of silver in terms of dollars. The market will determine what silver and gold are worth. > [@jz78817](#): > > If the USD fails, it will take other currencies with it, and there won’t be anything resembling a “market” in the ensuing chaos. In such a situation I’d much rather have my AR-15 with a pile of ammo than a bag of gold coins. > [@septimus](#): > > 😕 WHY is Gold no longer used as money? If it’s because it failed as a store of value someone forgot to tell gold shops which charge $1000’s for a simple necklace. > > I can’t speak for OP, but for many investors the question is NOT whether countries will go back to a gold standard. It’s simply whether the spot price of the metal will rise or fall over the next several years. > [@Mangosteen](#): > > I always find it amusing when people say they are prepared if things go South. These individuals claim that they have enough food and water to last for years and guns with lots of ammo to protect these supplies. > > What they don’t seem to realize is that Preppers are going to stick out like a sore thumb. And more than likely there will be some level of local government still functioning. These government officials will surely come knocking and, at first, ask that your bounty be shared. If you refuse, they will accuse you of illegally “hoarding” food and demand that you turn over your supplies for the “good of the community”. They will return with enough arms and men to confiscate your supplies even if it means killing you and your family. Your lone AK-47 and hundreds of rounds of ammo are not going to make any difference in the outcome. > > If things go so far South that there aren’t any government authorities around, your problems will not go away. Hungry, armed marauders will be roaming the area and will stop at nothing to get to your supplies. You may hold them off for awhile, but they will be back with more men and more weapons and will certainly at some point overwhelm your defenses. OK, while our dollar is going to fluctuate, perhaps wildly. I doubt we are going to end up all Mad Max. That being said: _snicker_ Feudalism, a strong guy in charge of a bunch of weaker guys, providing strength in numbers. If one is smart enough to have a bunch of land that is arable, a source of dependable water, a source of energy [windmill, waterwheel, solar power, pocket nuke?] and the forethought to have weapons and ability to throw up a fort, one can bring a selection of people through a Mad Max scenario. Hells bells - wanna buy some [mountain artillery](https://en.wikipedia.org/wiki/List_of_mountain_artillery)? Hit some of the gun auctions, some are available that [don’t need specialty licensing](https://www.morphyauctions.com/jamesdjulia/item/2053-373/) … keep in mind you can reach out and touch someone’s vehicles at a better distance than anything except another bit of artillery or snipers. I know a handfull of reenacors that own their own _cannons_ and shoot stuff, and I posit that anybody that can rig a trebouchet able to chunk a punkin, they can chunk a hunk of rock just as competently with a tad of practice. Actually, you want a bunch of reenactors - I personally know [our roomie] is a blacksmith, I can take sheep and not just cook them to be palatable, I can turn wool into clothing and leather into shoes. I can design, produce and use spinning tools, weaving tools, know how to process clay from dug up messy crap to well crafted and fired pieces. I can cook for 60 people on a campfire with the proper equipment pwhich oddly enough I happen to have ] and I know people that can and have made and used everything from a Davids Sling, atlatl and dart, bow and arrow, wooden seige equipment and can manage to make proper gun powder [and better, know how to make the requisite ingredients and where to find sulphur] and know how to process various ores into various metals [he made a freaking Bessemer converter, how cool is that :eek:] You also want to know where to source some common animals, how to care for them, and process them into eating or other functionality - I actually know a bunch of people into plowing and plow horses other than my Mom’s side of the family. You want people who understand agriculture and have access to plants and seeds appropriate for the area, or already are hobby growing stuff that can be expanded into community based survival agriculture and animal husbandry. The only use I have for gold is as jewelry - though it can be melted and turned into bullets =) Ditto silver. Though I can tell you how to make silver fulminate using a silver dime as the weight measure [convenient, as one can find silver dimes] Although as a classically trained inside outside mechanic I could direct a project to bootstrap machining from wood and copper and bronze to at least mild steel if all the machine equipment in the world suddenly vanished [and have I got a bone to pick with the author of the Belisarius series about his lack of proper bootstrapping, and he even gave both sides almost omniscent helpers in the form of Aide for the good guys, and a overbearing computer that takes over the minds of a host female.] ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [December 5, 2019, 12:44am UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/117 "2019-12-05T00:44:40Z")
> [@septimus](#): > > I don’t consider it interesting to debate the meaning of ‘gold standard’ splitting every hair. Me neither. The U.S. went off the gold standard in 1934. There. End of debate. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [December 5, 2019, 12:46am UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/118 "2019-12-05T00:46:24Z")
> [@Marcus\_Flavius](#): > > What is illusory is us thinking that a piece of paper with a number and a picture of a dead guy is any more valuable than monopoly play money. Absolutely. I totally agree. To spare you more grief, I will be happy to take all these worthless pieces of monopoly money off your hands. ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [December 5, 2019, 12:47am UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/119 "2019-12-05T00:47:37Z")
> [@Marcus\_Flavius](#): > > I’m not worried about the price drop… silver is simply waiting for a turn to come back into fashion, which all assets that have an intrinsic worth always do. There is nothing that says it will or must come back into fashion during the timespan in which you need to use it, or indeed within your lifetime. If you don’t have it when you need it, then how “safe” is it? There’s an example of a trireme crew during the Peloponnesian War (5th century BC) being paid one drachma per rower per day. Since an Attic drachma contained 4.3g of silver, that works out to about $2.30 of silver (at current spot) buying a day’s hard labor. In 2019, $2.30 worth of silver isn’t going to buy you much more than 15 minutes labor, or something rather less than two percent of what it used to buy. That is a rather astonishing loss of value. How soon are you expecting it to “come back into fashion” at its former level, if twenty-four centuries hasn’t been enough time? > [@Marcus\_Flavius](#): > > There will come a day when silver will be worth $Infinity/oz. Meaning no amount of fiat dollars will be able to buy it. What is the reasoning behind this proposition? > [@Marcus\_Flavius](#): > > It’s the most liquid because _it is_ liquidity, silver is the epitome of honest money. It is real constitutional money, whereas fiat paper or digital dollars are fake, unconstitutional money. It’s liquid because it’s liquid? That’s called a tautology, not an explanation. It’s “honest money” only if everybody in your economic sphere agrees that it is preferable to own silver instead of paper money or some other good. If everybody in your sphere wants some other good (like food), who’s going to buy your silver at a fair price? Somebody upthread pointed to the example of the Warsaw Ghetto, when the only people who wanted your silver were people who had a connection outside the walls, and they could (and did) demand enormous amounts of silver in exchange for food and other necessities. > [@Marcus\_Flavius](#): > > In a crisis, he says cash comes flowing down from the top, to the bottom. In the last financial crisis the wise thing would have been to be in currency so you could buy up all the distressed assets. In Venezuela, the smart thing to do in the years leading up to that crisis was to stockpile US dollars. Well, in the next major crisis, the currencies themselves will be casualties. Why will the next crisis be so unlike recent crises? What makes you certain that the next crisis won’t be similar to 2008, or indeed 1929, in which currency was the wise (safe) choice? > [@Marcus\_Flavius](#): > > What I meant is that it can be kept privately, completely outside the banking and financial system. No one knows I have any silver besides thee sellers who I buy it from. As soon as you try to USE that silver, however, they’re going to know, because it will be back into the financial system (even if that is only the local economy). You can’t turn it into food and shelter and livable assets without disclosing its existence. > [@Marcus\_Flavius](#): > > Silver is _not_ an illusion of wealth, it has been money for thousands of years, and at no point has it ever lost its value. It is a relatively rare precious metal with many uses. At no point has it ever lost its value, except for all the times it has. From $50/oz to $6/oz is a loss of value, in fact a loss of nearly 90% of its value. From purchasing a day’s labor to purchasing 15 minutes worth of labor is a loss of value. From $21.75/oz in mid-2016 to $16.92/oz today is a loss of value. The price goes up and the price goes down, and when it goes down that means it is less valuable. > [@Marcus\_Flavius](#): > > What is illusory is us thinking that a piece of paper with a number and a picture of a dead guy is any more valuable than monopoly play money. Silver is not intrinsically extremely valuable; it has industrial uses, but industry accounts for only about half of silver production, with the rest going to jewelry, coinage, and investment (and industrial silver usage waxes and wanes–silver halide photography, e.g., used to be the principal industrial use, but that market collapsed in the wake of the digital photography revolution). A big chunk of its perceived value is people thinking that silver is valuable and good to have. That is exactly the same thought process as thinking that a piece of paper with a number and a picture of a dead guy, backed by its issuing government, is valuable and good to have. Aluminum, at one point, was more valuable than gold because people believed it was valuable and good to have. Today, aluminum has rather more industrial usages than gold or silver, but scrap aluminum fetches two or three pennies per ounce, if you’re lucky. ---
**Author:** ![begbert2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/begbert2/32/3357_2.png) [@begbert2](https://boards.straightdope.com/u/begbert2)\ **Post date:** [December 5, 2019, 1:09am UTC](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086/120 "2019-12-05T01:09:43Z")
> [@Marcus\_Flavius](#): > > I’m not worried about the price drop… silver is simply waiting for a turn to come back into fashion, which all assets that have an intrinsic worth always do. The notion that silver -or anything- has “intrinsic worth” is absurd. I mean, you can make something of an argument that a person has intrinsic worth: they’re versatile for a variety of purposes and their sheer adaptability means that they’re almost always useful for _something_. Silver, though? Please. It’s damn near useless for anything other than making jewelry or trying to convince other people to please please _please_ take this shiny metal from me and give me food. What worth it has is based entirely on whether the person you’re dealing with wants to make jewelry - or whether they think of it as (gasp!) a _fiat currency_. A currency that has worth because people have arbitrarily decided it’s worth that much. Not because it has intrinsic worth, but because the masses have decided to pretend it’s worth something. Don’t try that with me, though. You can keep your shiny metal and I’ll keep my food (or give it to that guy threatening me with a gun). [Previous page](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086.md?page=5) [Next page](https://boards.straightdope.com/t/probability-of-a-currency-collapse-within-the-next-3-decades/844086.md?page=7)