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To: Cogito Ergo Sum who wrote (31893)	3/30/2008 4:47:42 AM
From: elmatador	Read Replies (1) \| Respond to of 217656

When you use tangible good as safe heaven one must consider the currency that given good is price in. If the good is priced in USD the price of that good certainly will increase to reflect the devaluation of the USD. Secondly, you chose that good as safe heaven, because you understand there is and will continue to have a big demand. After a while you look at the price of that good, and see that its price has increase a lot. Now you have to do two things: 1) remove the devaluation of the USD because the good simply went up reflecting the devaluation the good is priced in. 2) Then you see the price of that good went up higher than it is justified by USD devaluation. And that reflects two other things: a) that many more people are doing the same as you are b) that the big demand -that was one of the reasons why you chose that good- is bigger than you imagined and keeps propping the price of that good. Now look that scenario and let’s plot a collapse. For a collapse to happen, you need a lot of people who have done like you did to sell that good. Thus sinking its price. Say you sell, get USD and no longer have your safe heaven. What are you supposed to do with the cash, keeping in mind that it is devaluing by the day? Other possibility is, no one is selling but the price collapses. The price can collapse if the demand vanishes from one day to another and people no longer are buying the good that you're holding. How can demand disappear?