Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: BGR who wrote (37612)	6/2/2000 11:47:00 PM
From: pater tenebrarum	Read Replies (2) \| Respond to of 42523

they have done great while the Yen was falling vs. the dollar. the yen lost 50% of its value vs. the dollar from peak to trough, while the dollar gold price lost only 25% during the same time period. thus the gold price in Yen was rising from early '95 until late '98. 'paper assets' refers to stocks and bonds...not cash. in the 1930's stocks and bonds (ex government bonds) were dumped en masse...gold was hoarded, until FDR confiscated it. good night...

To: BGR who wrote (37612)	6/2/2000 11:50:00 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 42523

<<Why exactly should people try to flee paper assets during a deflation beats me completely, as by definition the purchasing power of paper money goes up during such a time! In fact, the dollar price of gold (another currency) should go down as the paper currency strengthens, just as other foreign currencies.>> They flee paper assets at these times primarily because they no longer trust them. To GET to a period of sustained deflation usually means that people have endured the bursting of a financial bubble and/or a panic first. They've been burned by government and financial institutions en route to reaching this point. Moreover, there are often widespread societal upheavals associated with these periods (e.g. the rise of Fascism in Europe during the 1930's). Fiat currency might work out OK as a reservoir of value....but do you want to take that chance, given that you've: a) Probably lost most of your assets, and don't have much left AND b) May get uprooted physically by the economic/political turmoil you now reside in (i.e., to other countries). Therefore wealth portability may play a role as well. Understanding the role of gold in times of economic instability requires some out-of-the-box thinking for modern day Americans, most of whom believe "economic upheaval" means (at worst) gas at $2.50/gallon!