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Comment by bluGill | Hacker News Reader

Eventually, but that eventually shows no sign of stopping soon. There are two cases where it stops: the US decides to replace the dollar with something else, and there is a clear trade in program (the EU went to the Euro, and India did something similar); or things change slowly over time so you will have plenty of time where your dollar maybe isn't worth what it was yesterday but still is worth almost a dollar - odds are you don't hold dollars long enough or that loss of value to matter.

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Or, the mostly likely result and the path we are on, hyperinflation.

We hyperinflate the currency by printing $trillllions a year and hading it out to countries at war, businesses that have failed and defending the oceans.

USD has already been hyperinflated, its just the affects are being felt slowly as the money "trickles down" from the 1% to the rest of us.

It's why collectables, real estate and such were the first assets to inflate, because that's what the rich buy, food inflation is much slower.

Hyperinflation is coming, I've been saying it and buying gold since QE1 back in '08.

You're forgetting the case where the US dollar gets hyperinflated or highly inflated due to something like a debt crisis. Speaking of which...$33 trillion.

A hundred years ago a US silver dollar would buy you a decent steak dinner, and naturally a US $10 gold eagle coin would serve 10 people.

Now that same kind of dinner can still be had for the same silver dollar, but the amount of gold in the small 1923 gold eagle[0] would be enough to serve 30 today, not merely the 10 diners of 100 years ago.

And some of these are nice restaurants.

Today if your dollar does not contain the full ounce of silver it was originally intended to, and all you have is a $1 bank note instead, it still buys a kid-sized ice cream cone at McDonald's. Now sometimes only during special promotions depending on market.

[0] Regular ordinary legal tender, but were all confiscated by the government because they were gold in 1933, when the ownership of gold by Americans was outlawed until decades later (only after its backing of the dollar was discontinued).

Thanks for the info, I didn't know back in the 19th century that the US also used bimetallic currency where 10 US silver dollar is equivalent to 1 gold coin.

This has been (more or less) the standard since like forever, for at least several thousand of years including in major world's empires including the Greek, Persian, Roman (Rome and Byzantine), Islamic (Rashidun, Umayyad, Abbasid, Ottoman) and British Empire until 19th century where bimetallic currency namely silver coin (dirham) and gold coin (dinar) were pervasive.

Fun facts, the word dirham in Islamic empire is derived from the word drachma with the same meaning in Greek, while dinar is derived from the Roman word denarius.

I like yours but, the rule of thumb for gold I've heard is that from Roman time until today, a 1 oz gold coin is enough to buy a suit of clothes and a fancy dinner.

Bimetallic currencies were a hairball for every major economy for decades. If you tie a currency to gold or silver alone, and the other a sort of token sense, it generally works.

When you try to do both, you end up with situations where the government gets incentivized to take a metal that's fairly low value, and stamp a design into it to infuse it with new value. Silver bullion in the 1880s that might be worth 60 cents an ounce suddenly went up to a buck and change when you turned it into a Morgan or Trade Dollar. I suspect the introduction of the $20 gold piece in 1849 (and possibly the $3 in 1854) were in part to sop up a glut on the gold market.

This may change tomorrow when the republicans again hold the economy hostage demanding increasingly unhinged political concessions. They can do this till the dollar isn’t a useful currency anymore.

It probably won’t come to that but we don’t know. And uncertainty is bad for business.

What political concessions are they demanding? The primary one is reducing government spending. The US Govt cannot keep its current rate of spending and the democrats in the House of Representatives don’t yet see that. Interest on the government debt has grown to $640 billion dollars in 2023. That is 16% of all government revenues now (in 2023). The outstanding debt only grows due to the ~$1.5 Trillion dollar deficit between revenue and the reckless spending. To say congress has been spending like a drunken sailor would be an insult to drunken sailors. I hope congress changes that in the new budget bill by cutting spending.

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