Quote:
Originally Posted by jamesqf
Gold has its own problems, though. It's subject to wild swings in price that're driven by speculation & hysteria. Nice if you bought at a low point, but I knew several people who lost significant sums by buying near the top of the last "gold rush" back in the '80s. Same with the current bubble: the "value" of gold has gone up by half or more, yet the price of most goods bought with dollars (or Euros, Francs, British pounds, etc) hasn't changed much at all. So if we were using gold as currency, we'd be seeing an extreme deflation.
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The whole point is that a currency that is tied to a precious or semi-precious metal is more stable than one that is only tied to a government's promise to pay.
When it comes to inflation, the American government has been in denial for a long time: for more than a decade
under the regimes of both political parties, they have taken the cost of fuel and food out of the inflation index.
Fleecing the foolish is an old American tradition. Is the government really clever? Or are we really gullible? Or is it both?
What we see as inflation is actually devaluation. Inflation is really not about "prices going up"; it's really all about
the value of the currency going DOWN.