patrick.net

Nobody's suggesting that paper dollars are useless as a means for transacting -- I think the suggestion is that it's a tenuous place to park your savings. If the currency is debased through QE and other volatile fiscal measures, the buying power of the dollar will diminish accordingly. So, while you can still pay your bills with paper dollars, it will require more dollars to afford the same (or less) of that good/service, thereby making the dollar less attractive/useful as a store of wealth.

As for the broader implications of fiat currencies over the long term, David Stockman makes some excellent points starting at about 14:00 on this video. No matter how you feel about this subject, it's good food for thought:

http://www.youtube.com/watch?annotation_id=annotation_478159&v=Lq9NwyQSzhk&feature=iv

Except for a modest reserve, all my money goes in to various free-market investment vehicles: stocks, bonds, and real estate.

Unfortunately, 'free-market' in the present-day context is something of a misnomer. Thanks to things like bubblenomics, regulatory capture, the increasing confluence of corporate/banking interests and policymakers and other more abstruse trickle-up apparatus, the playing field more resembles a minefield where all the goal posts move in favor of the big players. Think Wonderland croquet.

Gold: highly unimaginative.

Gold and silver critics, listen up.

Clearly demonstrate to us where the money is going to come from to bailout the states that are bankrupt. Show us where the jobs are going to come from to create economic growth. Show us where the tax revenue is going to come from, when housing prices keep dropping and foreclosures keep climbing. Show us how the US taxpayer is going to pay for the coming $40+ trillion dollar shortfall over the next 40 years for social services. Show us how high taxes stimulates the US dollar.

Show us how the central banks of China, Russia and India that are now buying gold and silver are wrong. Russia and China also recently agreed to price trade deals in their sovereign currencies, not dollars.

We want facts and not smarmy insultive critiques. You have lost your credibility because all you do here is attack (and skew and twist and distort and distract) fact-supported opinions, rather than support your own in any tangible fashion.

Lay down your facts now, or stop posting mindless critiques that waste our time here.

another gold commercial I bet.
With the high unemployment and dropping house price, I really don't see the hyper-inflation.

If smart and rich people see high inflation, they will buy land/house and hire people like crazy.
After all, these workers/sellers are stupid enough to accept worthless US dollars as a compensation.

xenogear3 says

another gold commercial I bet.
With the high unemployment and dropping house price, I really don’t see the hyper-inflation.
If smart and rich people see high inflation, they will buy land/house and hire people like crazy.
After all, these workers/sellers are stupid enough to accept worthless US dollars as a compensation.

And I wish the exact opposite and it will happen because I wish it were true.

Do you have ANY supporting data? Anything? Care to tell us where the money is going to come from, as I asked about in my post above?

Easier to critique the other side than it is to support your opposing view, isn't it?

For the record, gold and silver are, historically, good hedges in BOTH inflationary AND deflationary scenarios.

Again, please stop the smarmy comments.

Billy Jack says

Gold and silver critics, listen up.
Clearly demonstrate to us where the money is going to come from to bailout the states that are bankrupt. Show us where the jobs are going to come from to create economic growth. Show us where the tax revenue is going to come from, when housing prices keep dropping and foreclosures keep climbing. Show us how the US taxpayer is going to pay for the coming $40+ trillion dollar shortfall over the next 40 years for social services. Show us how high taxes stimulates the US dollar.
Show us how the central banks of China, Russia and India that are now buying gold and silver are wrong. Russia and China also recently agreed to price trade deals in their sovereign currencies, not dollars.
We want facts and not smarmy insultive critiques. You have lost your credibility because all you do here is attack (and skew and twist and distort and distract) fact-supported opinions, rather than support your own in any tangible fashion.
Lay down your facts now, or stop posting mindless critiques that waste our time here.

I'm not sure who you are having an imaginary argument with--I'll try to keep the smarminess down though.

My questions is--how does any of what you describe above translate into a reason to buy gold? Other than that's always how it's worked in the past...

tatupu70 says

Billy Jack says

Gold and silver critics, listen up.

Clearly demonstrate to us where the money is going to come from to bailout the states that are bankrupt. Show us where the jobs are going to come from to create economic growth. Show us where the tax revenue is going to come from, when housing prices keep dropping and foreclosures keep climbing. Show us how the US taxpayer is going to pay for the coming $40+ trillion dollar shortfall over the next 40 years for social services. Show us how high taxes stimulates the US dollar.

Show us how the central banks of China, Russia and India that are now buying gold and silver are wrong. Russia and China also recently agreed to price trade deals in their sovereign currencies, not dollars.

We want facts and not smarmy insultive critiques. You have lost your credibility because all you do here is attack (and skew and twist and distort and distract) fact-supported opinions, rather than support your own in any tangible fashion.

Lay down your facts now, or stop posting mindless critiques that waste our time here.

I’m not sure who you are having an imaginary argument with–I’ll try to keep the smarminess down though.
My questions is–how does any of what you describe above translate into a reason to buy gold? Other than that’s always how it’s worked in the past…

I'm in agreement with taputu. I'm just not seeing anyone show up at VONS/Ralphs and pay for their groceries with gold.

I'm not saying that arguments for gold are invalid. Some are reasonable, but I just don't see it being a new currency. Although who knows anything anymore, I live in an upscale neighborhood in LA County and people are buying up guns here for whatever the reason. Gold doesn't seem like such a far-fetched idea anymore.

This explains why the unemployment is so high.

These 10+% people don't want US dollars as compensation !!!!