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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: Snowshoe who wrote (55350)11/1/2004 7:02:27 PM
From: Elroy Jetson  Read Replies (2) of 74559
 
There is no lending going on when your savings are in Gold, that part is true.

If your savings are in currency, then your savings are devalued everytime the government creates money, say to make good on FDIC insurance.

If your savings are in a bank, life insurance company or similar . . . well I think that speaks for itself.

But if I use my savings to pay off my mortgage and bury a few gold coins, I can plant a garden in the back yard and thus survive a depression. Savings are not equivalent to lending.

During the Great Depression, the de-leveraging process caused such a large decline in prices that those with cash found the value of their money so greatly increased that they did not realize that part of their value had been taken by government money creation.

As an example, my newly married Grandparents bought a home in 1932 for $500 which a few years earlier had sold for $6,500.
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