Inflation, World Inflation and Gold

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kiwifr00t's picture
kiwifr00t
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Joined: Jan 6 2009
Posts: 2
Inflation, World Inflation and Gold

First,  a huge Thank You to Chris Martenson for the video series!

I can see how the financial crisis and out of control bail-out spending can result in higher inflation and quite possibly hyper-inflation.

I'm lucky in a sense since I've seen this first hand. I know this can happen. I know the US isn't somehow smarter than other countries that have suffered through this.

Years ago I travelled through what was Yugoslavia and over about a month prices of goods and services (and I presume wages, or at least some wages) went up by 5 or 10 times! The people didn't see it coming. They barely knew what was happening as it happened. Since I couldn't speak their language I was baffled by these constantly changing prices. Things would vary between cheap and expensive depending on when you exchanged travellers checks.

But, my question(s):

If the US goes into accelerated inflation will it happen quicker than other times in history due to instant baking/internet etc., or, would it be slower because of the huge mass of currency involved?

If the US goes into accelerated inflation will other Fiat currencies be sucked into the same spiral thanks to globalization and/or thanks to vast amounts of US$ in the hands of other countries?

If the way to solve this is a gold backed monetary system, do you think owning gold will become illegal (a felony) as it was for years starting in 1933?

It would seem that if it isn't in some way, then gold purchased now would not have a high value later, but an astonomically high value.

Some (Peter Schiff and others) have speculated gold might soon go to $2,000 an ounce (in today's $ value). But if the US$, or worse, all Fiat currencies, had to be backed by physical gold then an ounce of gold may be worth tens of thousands of dollars?  The ratio to convert trillions of dollars to the limited available physical gold has to be astronomical !

Thanks in advance

gyrogearloose's picture
gyrogearloose
Status: Gold Member (Offline)
Joined: Sep 8 2008
Posts: 480
Re: Inflation, World Inflation and Gold

Gold backed currencies have been tried before, and the crims (oops I meant politicians and/or bankers ) in charge of the presses always print more notes than they have gold........

jneo's picture
jneo
Status: Platinum Member (Offline)
Joined: Jan 7 2009
Posts: 738
Re: Inflation, World Inflation and Gold

Gold backed currency will work again after the fiat dies, but we need to have more power in the hands of the people to prevent the politicians and bankers from corruption.  If the people had the power to vote out the treasury head or Federal Reserve chairman that would greatly balance out the powers.  Having a gold standard helps keep governments in line with our money.  As long as you give the people more power to get these people out of office the better.  

 I keep scratching my head for other reasons too.  First off having a central bank, and a progressive income tax are all key factors in the Communist manifesto.  Also if we want true free markets, our Anti-American tax system must go.  This is getting out of hand.  

kiwifr00t's picture
kiwifr00t
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Joined: Jan 6 2009
Posts: 2
Re: Inflation, World Inflation and Gold

kiwifr00t wrote:

Some (Peter Schiff and others) have speculated gold might soon go to $2,000 an ounce (in today's $ value). But if the US$, or worse, all Fiat currencies, had to be backed by physical gold then an ounce of gold may be worth tens of thousands of dollars?  The ratio to convert trillions of dollars to the limited available physical gold has to be astronomical !

I think I've partly answered one of my own questions after some more research:

According to GATA the world's central banks have about 16000 tons of gold in their vaults. If ALL of this was used to back just US currency, which is about $14T, then an ounce of gold would be worth $27,300 per ounce.

something to think about...

laurens's picture
laurens
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Joined: Jul 20 2010
Posts: 4
Re: Inflation, World Inflation and Gold

Keep buying physical gold and silver because these prices are relatively adjusted and as inflation takes hold, populations grow, gold/silver mined reduces, someone is going to win... I think over time there is no doubt that we have them... their only choice is population reduction a la New World Order.
Especially when there are only about 5.14 Billion Ounces mined with the world population being 6.7 Billion there are indeed more people than ounces of gold. So what's going to give?

laurens's picture
laurens
Status: Member (Offline)
Joined: Jul 20 2010
Posts: 4
Re: Inflation, World Inflation and Gold

Keep buying physical gold and silver because these prices are relatively adjusted and as inflation takes hold, populations grow, gold/silver mined reduces, someone is going to win... I think over time there is no doubt that we have them... their only choice is population reduction a la New World Order.
Especially when there are only about 5.14 Billion Ounces mined with the world population being 6.7 Billion there are indeed more people than ounces of gold. So what's going to give?

Godfrey's picture
Godfrey (not verified)
Re: Inflation, World Inflation and Gold

Ok I am always interested in relative inflation because the shadow statistics are simply rubbish so it's best to work it out oneself.

Being Australian I decided to look at the average property prices and gold/silver relative price in the 1980's because we always see figures quoting $2000-$3000USD being the inflated adjusted high. I've always believed this to be rubbish and now relative to housing I will prove my point.

As you will see by checking my references, the figures I use here are entirely generous.

In 1980's gold went to $850 and silver to $50 USD, the AUD was around 1USD to 0.87AUD and averaged around 1:1.10 throughout 1980's.

The average home was 77,000AUD or 85,000USD.

So to buy this house you required...
100 oz GOLD
or
1700 oz SILVER

Today the exchange rate is USD1.00 : 1.16AUD.
The average price in Sydney is now 600,000AUD or 510,000USD

Therefore the property inflated adjusted high for Silver and Gold relative to Sydney property...

GOLD $5,100USD or $5916AUD
SILVER $300USD or $348AUD...by (oz Waver)

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