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Comment by len | Hacker News Reader

buy gold. bullion if you can instead of futures.

no currency is stable at this point. hyperinflation will wipe out a lot of wealth.

Not to be a bastard, but hyperinflation is a very rare and distinct phenomenon, not just to be thrown around when the economy turns sour. Real hyperinflation is occurring in Zimbabwe, not Canada or the US.

It occured in Poland not that long ago, and there is a chance it will happen in other countries, if oil transactions would switch to another currency I wouldn't be surprised to see such a thing happen to the US dollar. There are some people out there that say that the Iraq war was to stop the US dollar from crashing because Saddam was going to switch to the euro for his oil transactions.

I know that's typical conspiracy nut fodder, but it may have a kernel of truth.

yes, it is rare. hyperinflation occurs in destabilized economies that have too much printed cash relative to physical assets (to oversimplify a bit).

the US govt has printed too much money and keeps going further with stimulus packages and bailouts. the dollar is strong, currently, because it is the default fiat currency of the world. at some point the US will not be able to sell more bonds or the foreign creditors will dump dollars on the market or any number of other things can happen to trigger inflation.

you don't have to agree, but i would bet that hyperinflation will hit.

... Not sure if you're joking or not, but gold is very inflated right now because everyone is panicking and running to it.

using the word 'inflated' assumes that the stock market has overreacted on the negative side. this is not the case, in my estimation.

the significant spread between bullion and future contracts is also telling.

in a hyper-hyper-inflation economy the only "stable" thing would be firearms and LOTS of ammo.

We had hyperinflation in the early 20ies in Germany. The country survived that --- though in a bad shape. At the end of the twenties / early thirties, we had a deflation (like you in America) and the Nazis came.

Choose your poison.

gold is pretty much at it's peak at this point. It can't really go above 1000, so its just a way to freeze your money w/o a chance to grow it, but with a chance for it to lose its value.

It has already been above $1000 before. In the beginning at the month it was at around $900. Now it's at $975, so it's very close to $1000.

How do you know gold is at its peak? With fiat money there is a risk for a high rate of inflation. That doesn't happen with gold.

Sorry, I just typed out a reply to this and deleted it because I can't speak to the details adequately enough for my liking.

The gist of it was that gold is also subject to monetary pressures because its price is a reflection of the fact that it is used as a financial instrument. (In other words, gold's value is tied to the fact that it is used as currency).

One can print more dollars (and that's happening). One can't increase gold supply nearly that easily.

Except one can also retire currency to shore up devaluation at a later date. You can't un-mine gold. Gold's value doesn't directly correlate to supply and demand or it would continuously go down in value. We're still pulling it out of the ground pretty regularly, and as far as I'm aware, nobody is putting it back.

To increase the amount of fiat currency, you just have to print a lot of it. To do that with gold is much harder. Gold is expensive to produce.

If by "shore up devaluation" you think that governments will destroy fiat currency, I think that is unlikely to happen. Do you have examples of that ever happening? Usually more is printed and sometimes so much that you end up with hyperinflation.

With the current cost of gold productions, which are unlikely to change dramatically, hyperinflation of gold is not possible. Gold provides security and the market appreciates that. Yesterday it did top $1000 (again) by the way.

Could you explain why gold can't go above $1000?

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