Financial Collapse and Energy - Something Other than a NINJA Problem

Re:Financial Collapse and Energy - Something Other than a NI... by Retric on Wednesday May 27, 2009 @05:32PM (#629235)

The value of the paper money is related to the economic harm that devaluing it would cause the government which issues it. This is why it the USD has been as stable as it has over such a long time.

The other problems with gold is you often have deflationary pressure as when it's value increases (which is unbelievably bad) and inflation whenever large new supply's come on line. Also once you start using gold as a currency it becomes far more expensive to use it for other things like a non corrosive conductor.

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Re:Financial Collapse and Energy - Something Other than a NI... by gibsonf1 on Thursday May 28, 2009 @12:42AM (#629781)

The problem is that you are comparing inflation/deflation in amazingly small amounts with gold (given the reality connection to actually having to have gold in your hands mined from the ground) to the radical change you get with paper which is happening right now as the printing presses are running 24/7 at amazing speeds. Watch the hyper inflation we get next year and tell me how that could have happened with gold?

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Re:Financial Collapse and Energy - Something Other than a NI... by Retric on Thursday May 28, 2009 @09:12AM (#630155)

I would, bet you 1000$ (or an ounce of gold) that we will not see hyper inflation or even significant inflation (15%+/year) next year.

Also, due to the increase in global weath every year we need a currency that increase in supply to keep up. Otherwise you get deflation which can happen with gold and distroyes the ability to lend and borrow. Not to mention the fact that their is not enough gold in the world to replace the USD without dramaticly increasing it's value.

PS: You can also see significant inflation with gold for a long term historical example look at spain after the new world.

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