I hear it all the time. “I’m going to take these silver coins and buy food when the dollar collapses.” First of all, you can’t take a silver or gold coin to the gas station or grocery store and buy food or gas with it, because retailers have to pay their bills in dollars, or whatever currency there may be at the time, in any nation. Without a currency, civilizations would collapse. Silver and gold are easy to convert into a currency, and quickly. Other forms of hedges, such as antiques of all kinds, rare stamps, numismatics, or other tangibles cannot be as easily converted into dollars, as bullion coins or bars.
As to whether the dollar will collapse, I think not. Actually, it already has collapsed in a way, since it will buy what a penny bought a hundred years ago. As each year passes, the buck buys less and less, thanks to inflation. Why do we have inflation? Because politicians cannot control their desire to give money from the public treasury to buy votes, and it’s that simple. It’s gotten so bad now, that if politicians ever decided to stop giving largess, there would be riots which would wreck the major cities, and that’s why I urge everyone who can, to leave the major cities.
The dollar is the world’s reserve currency. Oil and gold are priced in dollars, and dollars are linked and pegged to currencies everywhere, including China. Dollars are desired around the world, and are the world’s measuring stick for prices, booms, and declines. I am well aware that the dollar is losing its value and purchasing power, but then, so is every other currency, including the Swiss Franc, which has just been devalued. The dollar self devalues, as billions of them are printed, thanks to the Federal Reserve and politicians.
America’s economy is a shambles compared to what it was a century ago, and there is no argument about that. However, the world’s newest currency, the euro, in its short life, is about to go the way of all flesh. Seventeen nations are tied to the euro, and it looks like close to half of them are on shaky economic grounds, which could take the euro down the drain. Greece is on the verge of total collapse, as usual, thanks to politicians, and they are so far in debt that it looks like the Greek Humpty Dumpty cannot be put back together again. China it is said is trying to help Italy, but the Germans want no more parts of bailing out Greece, which still leaves Italy, Ireland, Spain, Portugal, and I am certain others not yet mentioned, who could take the euro down to zero.
The Japanese situation is terminal I think. The earthquake, tsunami, and radio activity are bad enough, but before those things happened, Japan’s debts were probably higher than any nation on earth. China is having huge inflation, and they are printing just like everyone else. The British debt is higher than America’s and they just raised their VAT (sales tax) to 20%! The entire world’s currencies are in dire straits, and compared to others, the buck is a long way from collapse. As a matter of fact, I think that if there is going to be a collapse of a currency, it will be the euro, with the nations going back to the former paper monies. No mater where you live, nor no matter what currency you live under, gold and silver bullion coins and bars will always be easy to convert into that currency, and especially dollars.
From the August 5, 1899 Gladstone Kibosh: “Mason & Mason, the enterprising saloon men, having heard of the famous mixer, Kokomo Williams, secured his services. He held the position for exactly five minutes as he offered the mayor and another prominent citizen, whose name we will not mention, water in our whiskey. Ye Gads what is the west coming to when our best citizens can be insulted by imported labor.”