Posted on 01/24/2013 6:03:55 PM PST by blam
Gold Won't Save You From Hyperinflation According To A New Study
James Pethokoukis, American Enterprise Institute
January 24, 2013, 6:18 PM
A new NBER working paper, “The Golden Dilemma”, looks at the investment history — and possible investment future — of gold.
Many fascinating nuggets and charts in the research.
Especially interesting is its negative take on gold as a safe-haven hedge against hyperinflation (or even regular inflation, for that matter) or other crises:
We also parse the safe haven argument and come up empty-handed. We examine data on hyperinflations in both major and minor countries and find it is certainly possible for the purchasing power of gold to decline substantially during a highly inflationary period.
When the price of gold is high in one country it is probably high in other countries. Keynes pointed out “that the long run is a misleading guide to current affairs”. Even if gold is a “golden constant” in the long run, it does not have to be a “golden constant” in the short run. Conversely, current affairs are possibly a misleading guide to the long run.
The study offers three pieces of evidence:
1. Gold returns are surprisingly correlated with stock returns, suggesting gold may not be a reliable safe haven asset during periods of financial stress.The below chart shows shows the joint distribution of U.S. stock and gold returns.
Now look at Quadrant 3 where negative equity returns are matched with negative gold returns. “The simple safe haven test states that there should be very few observations in Quadrant 3. In fact, 17% of the monthly stock and gold return observations fall in Quadrant 3.”
(snip)
(Excerpt) Read more at businessinsider.com ...
OK then, silver it is.
(and bullets and beans)
Barter is a currency that is oblivious to inflation. Bartered goods are worth whatever they are worth...they are the currency.
Well, gold will always be worth something....fiat paper, not so much.
Gold and silver are not investments. They are hedges.
And durable clothes and enough food to,get through the crisis.
Look at be Y axis. Gold over CPI. The CPI is a politicized statistic, and it does not adequately assess the rise in staples such as food and energy.
Down to the basics...but ready for what is coming next.
If I only had enough toilet paper? Guess one can't have everything.;-)
What other errors have they committed in this? Are they hoping to slow the rush to gold, so there is more for them?
No matter what they say, when our dollar goes into the abyss, if you have a storehouse of gold that can be sold, someone will pay for it - with whatever currency (of greater value) is demanded.
Get fit...start by walking...and then add some running into the mix. Lift some weights!
Get yourself three sea shells. :)
FMJ lead is worth so much more than gold or silver.
In a SHTF scenario these anti gold fools will be dancing like little circus dogs for a little piece of my gold.
But I'll try anything from a good source.;-)
get a bidet or a bidet toilet seat. no toilet paper needed.
I hope the revolution is at least six month away.
I hope you can't see me thru the computer.;-)
That said, I just got a new Glock 26 and have a Windham Weaponry AR-15 on order.
I was a sorry Boy Scout...but this time I am going to "be prepared."
FUBO and God bless our Constitution! And God bless America!
Heheh...or just down-stream a ways.
Ha, an ounce of Gold from 100 years ago is worth an ounce of Gold today.
A paper dollar from 100 years ago is worth at least 20 times what a current paper dollar is worth.
This country should dump the Federal Reserve and go back to a gold or commodity based standard, it would solve so many problems.
Gold can't protect you from hyper inflation because it is meant to...when used properly. At some point, gold is replaced by whatever paper money replaces the US dollar. It's asset protection. Not inflation protection.
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