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jonflyfish
Penny Hoarding Member
USA
693 Posts |
 Posted - 08/23/2010 : 13:57:29
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Interesting read...
"...This is something hyperinflationist-skeptics never quite seem to grasp: In hyperinflation, asset prices don’t skyrocket—they collapse, both nominally and in relation to consumable commodities. A $300,000 house falls to $60,000 or less, or better yet, 50 ounces of silver—because in a hyperinflationist episode, a house is worthless, whereas 50 bits of silver can actually buy you stuff you might need..."
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The first panacea for a mismanaged nation is inflation of the currency; second is war. Both bring a temporary (and false) prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunities. |
Edited by - jonflyfish on 08/23/2010 14:03:12 |
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AGCoinHunter
Penny Hoarding Member
USA
685 Posts |
Posted - 08/23/2010 : 14:09:14
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| Great read, thanks for posting. I have been wondering what is going to the the leading indicators for this drop. Definately something to keep an eye out for. |
"All tyranny needs to gain a foothold is for people of good conscience to remain silent."
-Thomas Jefferson
"There is no difference between communism and socialism, except in the means of achieving the same ultimate end: communism proposes to enslave men by force, socialism—by vote. It is merely the difference between murder and suicide." - Ayn Rand
________________________________________________
Lenin: Class-based International Socialism
Hitler: Race-based National Socialism
Obama: Class- and Race-based Post-National Socialism
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Edited by - AGCoinHunter on 08/23/2010 14:12:50 |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 08/23/2010 : 14:47:17
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quote:
Originally posted by AGCoinHunter
Great read, thanks for posting. I have been wondering what is going to the the leading indicators for this drop. Definately something to keep an eye out for.
thats a bit misleading. the purchasing power of fiat collapses, and everyone will be much poorer. in such an environment, no one is buying lattes. in the german hyperinlation book, tehre is an anecdote of a farmer trading a few month's supply of potatoes for a grand piano. i think that is consistent with the point you are making. real estate skyrocketed in nominal terms but a house could be bought for a single ounce of gold. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/23/2010 : 15:08:17
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"I have no idea what will happen after we reach the point where $100 is no longer enough to buy a cup of coffee—but I do know that, after such a hyperinflationist period, there’ll be a “new dollar” or some such" This, I feel, is one benefit, for the most part misunderstood... and therefore unanticipated, that might well accrue from an eventual revaluation of a hyperinflated currency to a "new dollar." They won't change the value of the decimalized coins. So if the currency devalues 1:1000, the coins will revalue 1000:1  How'd ya like to be sitting on our piles of nickels and pennies when that happens? |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
Edited by - beauanderos on 08/23/2010 17:39:37 |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 08/23/2010 : 16:34:38
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| they'll demonetize the old coins. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/23/2010 : 16:39:05
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quote:
Originally posted by Lemon Thrower
they'll demonetize the old coins.
They can't. What are they supposed to do, ramp up the Mints and replace them with new ones? Too much effort for too little gain, the government will assume that few of the populace would have a significant amount of specie, and those entities that did, THE BANKS, would stand to benefit. And the Federal Reserve Branches are probably sitting on 95% of the coin once it has left the Mint. You figure it out.  Seems to me like a perfect case of the Golden Rule "he who has the gold, makes the rules." Fine with me, I just keep my emergency cash in metal instead of paper.  |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
Edited by - beauanderos on 08/23/2010 22:29:02 |
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argent_pur
Penny Sorter Member
78 Posts |
Posted - 08/23/2010 : 19:07:57
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quote:
Originally posted by beauanderos
Fine with me, I just keep my emergency cash in metal instead of paper.
That's exactly what I do. I just treat my PM's as a savings account that I can't spend. If I need cash, my metal is liquid enough to get the cash when I need it. |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 08/24/2010 : 05:12:12
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quote:
Originally posted by beauanderos
quote:
Originally posted by Lemon Thrower
they'll demonetize the old coins.
They can't. What are they supposed to do, ramp up the Mints and replace them with new ones?
they did this in brazil. i have a lot of cruizero coins.
what you want to do is hoard the copper coins that have intrinsic value regardless of whether the govt says they are money or not. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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AGCoinHunter
Penny Hoarding Member
USA
685 Posts |
Posted - 08/24/2010 : 08:37:13
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quote:
Originally posted by Lemon Thrower
quote:
Originally posted by beauanderos
quote:
Originally posted by Lemon Thrower
they'll demonetize the old coins.
They can't. What are they supposed to do, ramp up the Mints and replace them with new ones?
they did this in brazil. i have a lot of cruizero coins.
what you want to do is hoard the copper coins that have intrinsic value regardless of whether the govt says they are money or not.
I have a hard time believeing that they would demonetize coins. The cost of replacing them would offer no benefit. The average person has what $50-90 in coinage in their possession. I guess if they did they would be made of aluminum or steel. And yes, even holding CU at this point would be better than what they would produce, if they did it. |
"All tyranny needs to gain a foothold is for people of good conscience to remain silent."
-Thomas Jefferson
"There is no difference between communism and socialism, except in the means of achieving the same ultimate end: communism proposes to enslave men by force, socialism—by vote. It is merely the difference between murder and suicide." - Ayn Rand
________________________________________________
Lenin: Class-based International Socialism
Hitler: Race-based National Socialism
Obama: Class- and Race-based Post-National Socialism
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/24/2010 : 10:18:49
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| One of the other threads says the average coinstar dump is $38, so I still maintain that if money way drastically devalued, the coins themselves would revalue and retain their original purchasing power. You wouldn't "make" money, but you wouldn't have it wiped out, like everyone else. Of course if makes sense to save the CU. |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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Cerulean
Penny Hoarding Member
USA
993 Posts |
Posted - 08/24/2010 : 13:28:58
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quote:
Originally posted by beauanderos
quote:
Originally posted by Lemon Thrower
they'll demonetize the old coins.
They can't. What are they supposed to do, ramp up the Mints and replace them with new ones?
It can be done. It can happen even to a large nation.
Great Britain did in 1971.
Mexico did in 1993.
Brazil did in 1994.
Russia did in 1998.
The EU did in 2002.
Turkey and Romania did in 2005.
I can only think of a few instances where old coins ignored revaluation during a currency shift, and only the Soviet Union and Zimbabwe come to mind.
The biggest myth I see on this forum is the idea that coins keep their value during a revaluation. |
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Edited by - Cerulean on 08/24/2010 13:30:10 |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/24/2010 : 22:51:27
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| If the Fed retains greater than 90% of the coinage, explain to me how it would benefit any of TPTB to spend hundreds of millions of dollars to create new coins? Commerce would grind to a halt if no coins of recognized worth were circulating. It just doesn't make any sense to demonetize entire billions of coins that exist now. They had enough problems trying to replace silver coins with clad when the changeover occurred. I guess I believe in myths, then |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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AGgressive Metal
Administrator
USA
1937 Posts |
Posted - 08/24/2010 : 23:26:44
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| It has never happened in other countries that revalued, so I certainly would not count on it. Logistically it would make sense though. And even if they did keep the old coins, that is not guarantee they would be more valuable in real terms just because the nominal value increases with inflation. |
And he that hath lyberte ought to kepe hit wel / For nothyng is better than lyberte / For lyberte shold not be wel sold for alle the gold and syluer of all the world.
-Caxton's edition of Aesop's Fables, 1484 |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/25/2010 : 05:59:17
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quote:
Originally posted by AGgressive Metal
It has never happened in other countries that revalued, so I certainly would not count on it. Logistically it would make sense though. And even if they did keep the old coins, that is not guarantee they would be more valuable in real terms just because the nominal value increases with inflation.
I'm not saying they would be more valuable in real terms, I'm saying that our hoarding, whether it be silver or gold or platinum... which will see real increases, or copper and nickel, which will see relative stability as paper currency devalues, provide a measure of protection greater than paper does. So our members think, that if there was an overnight devaluation, that our circulating coins... which would take years to replace, would fall in value as well?  |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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Numis Pam
Penny Sorter Member
USA
63 Posts |
Posted - 08/25/2010 : 08:04:33
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| Interesting artical, but it's all a little scary to me.. |
http://www.extrabux.com/r/4c6f54ba32 1% -27% cash back on purchases. Plus Refer Friends and Get $5 to Spend at Ebay or any of hundreds of participating online stores. |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 08/25/2010 : 11:19:07
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| i would not gamble that a cupro-nickel clad quarter will retain its purchasing power. now, a 75% copper nickel or a 95% copper penny is a different question. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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thogey
1000+ Penny Miser Member
USA
1617 Posts |
Posted - 08/25/2010 : 22:15:28
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quote:
Originally posted by beauanderos
If the Fed retains greater than 90% of the coinage, explain to me how it would benefit any of TPTB to spend hundreds of millions of dollars to create new coins? Commerce would grind to a halt if no coins of recognized worth were circulating. It just doesn't make any sense to demonetize entire billions of coins that exist now. They had enough problems trying to replace silver coins with clad when the changeover occurred. I guess I believe in myths, then
100's of 10x10^6 of dollars is no object in the above mentioned situation. The metal has value, the coins do not.
I wish we could get Jose from Mexico in on this. He came and went. Too bad I really looked forward to his insight on this situation.
He mentioned how all the bronze coins just disappeared in Mexico.
I think he came to RC to discuss battery recycling, Remember?
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Come to the new and improved realcent: http://realcent.org
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jonflyfish
Penny Hoarding Member
USA
693 Posts |
Posted - 08/26/2010 : 22:28:04
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Hyperinflation Part 2-
You must be logged in to see this link. |
The first panacea for a mismanaged nation is inflation of the currency; second is war. Both bring a temporary (and false) prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunities. |
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How hyperinflation will happen
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