Comments on: Deflation file: All commodities but gold are now bust.

By: Mike

Mike — Tue, 21 Oct 2008 14:13:34 +0000

Hyperinflation is one way for a currency to fail. Ordinary bad inflation followed by a replacement currency is another. Who knows? All we can tell now is that the US, UK and other governments are broke and must default on their bonds somehow. Inflation is a preferred solution of politicians and bankers, but it is also possible for there to be outright defaults on bonds and social welfare promises, in which case the currencies would not have to fail.

By: Mike

Mike — Tue, 21 Oct 2008 14:09:47 +0000

James Turk seems to have a good grasp of the political risks involved in this issue, and he has done his best to build a robust system. There is of course no perfect solution, but I don’t see a problem with using this service or bullionvault (very similar, but with cheaper spreads) for part of one’s holdings.

By: Bjorn

Bjorn — Tue, 21 Oct 2008 14:04:57 +0000

Hi Mike,

When fiat money “falls flat” are we essentially talking about hyper-inflation? Is hyper-inflation the big threat that looms ahead for the fiat currencies of the world? Or, is there even a worse fate awaiting the currencies of the world?

Also, do you have any thoughts about services such as “goldmoney.com” which allows you to own allocated gold and buy and sell it electronically? Not the same as coins in hand/vault, but do you think it has any serious merit considering the times we are soon to be entering. That particular program uses a vault in England, I believe. I could be wrong about the location.

I am considering my options for holding gold. I once thought I had it figured out, but a bad experience with a Swiss outfit that was touted as the best in the world has left me reconsidering things.

Thanks much