Probability of a currency collapse within the next 3 decades?

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.

That was for other nations. America effectively went off the Gold standard in 1933.

You are gonna need cites for many of your claims.

Take a look at this chart:

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).

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.

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?

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.

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.

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.

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.

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.

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.

Perhaps they’re picturing a society-wide collapse caused by werewolves?

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.

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]

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.

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.

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.

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.

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.

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.

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.

Just skip to the bottom of all this =)

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? Hit some of the gun auctions, some are available that don’t need specialty licensing … 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.]

Me neither.

The U.S. went off the gold standard in 1934.

There. End of debate.

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.

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?

What is the reasoning behind this proposition?

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.

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?

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.

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.

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.

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).