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Politics : Welcome to Slider's Dugout
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To: Proud Deplorable who wrote (14885)1/29/2009 10:35:31 PM
From: Fiscally Conservative3 Recommendations  Read Replies (1) of 50122
 
If there is a lack in confidence in the Dollar then Gold will soar. I have no doubt about that. So think about it. You think the picture Slider is painting with 'Containment Camps'(whatever negativity he implies) would warrant the Federal government allowing you to keep your Gold too and erode the confidence in the dollar. At first glance you might think yes. But that will not happen.

The Federal government must maintain confidence in the dollar,at the very least domestically,but in varying degree internationally as well. They will not allow a serious lack of confidence in the dollar. If Gold soars the dollar becomes less a value and less a reason to hold. There would be a flight away from the dollar and flight into Gold. Everyone will want to hold Gold and not the domestic currency;the dollar. A serious lack of confidence in the dollar would allow Gold to soar or a serious rise in the value of Gold would erode the confidence in the dollar. They will not let this happen. So I am of the opinion that Gold will not be allowed to soar.

Commodities will rise against the domestic currency but the currency will remain the only viable option to hold in purchasing commodities. Now that is something,in and of itself,a contradiction of sorts. Commodities will rise but Gold will not soar. Hmmmm...
You can not eat Gold. It has little use outside of being a fantastic conductor of electricity. It has limited use as compared to what you can eat and use as a fuel. Gold's attraction is the assumed appreciated value in any currency standard applied as a hedge against the fall in value of that currency. Since no country today pegs their currency to the Gold Standard Gold's intric value is limiting in breath and scope. en.wikipedia.org

I guess we will find out.
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