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Gold/Mining/Energy : Gold Price Monitor
GDXJ 93.98+0.6%Nov 21 4:00 PM EST
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To: Hawkmoon who wrote (26753)1/22/1999 1:13:00 PM
From: Bob Dobbs  Read Replies (2) of 116764
 
Ron: Some comparative estimates show the differences between gold and fiat based money inflation.

In your oft-quoted example of the 16th century Spanish plundering of New World GOLD, the Europe's supply increased by roughly a factor of two, meaning an INFLATION of 100% or a DEPRECIATION of 50%, a worst case. In the rushes of Cal '48-49 and Yukon/South Africa '98 the inflation was less, because the world's above ground stock was, comparatively speaking, far larger in those periods.

Now compare that with inflation of FIAT currencies throughout history. How many have there been since 6th century China? Perhaps a THOUSAND? Just a guess. Except for present-day currencies, how much have all the other fiat currencies depreciated?
ANSWER: INFLATION of INFINITE % or a DEPRECIATION of 100% !!!

Furthermore, gold has always reverted to its mean purchasing value over time. That's the empirical lesson of history.

SO HERE ARE THE COMPARATIVE STATS:

********************** MEAN INFLATION ** MEAN DEPRECIATION

GOLD **************** 0% (100% worst case) *** 0% (50% worst case)
FIAT CURRENCIES
(excluding present day): **** INFINITE PERCENT ***** 100%

Where do you think present day fiat currency is heading? Why, that's an easy one - to the garbage heap of history!

Bob
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