Define 'run out of'. The majority of gold that has ever been mined is still in existence in tangible form.
See above. Precious metals tend to not be used up but rather re-melted down and reused again over and over.
A likely scenario would be competing gold warehouses that issued receipts that could be encrypted and digitally transmitted through the Internet. From that, third party exchangers would emerge, and thus an entire currency ecosystem.
You don't. Arbitrage is an important mechanism to maintain a regular market. As it became more disaggregated it would create opportunities for people to push it back towards aggregation again. If gold (or anything else) became the common medium of exchange the opportunities for arbitrage would be tiny and fleeting.
Probably true, but non-currency assets do not necessarily equal immunity to hyperinflation. At the least the wealthy would face loss of their liquidity; at worst the whole house of cards would come down. Most of what the wealthy use as wealth holders, like the rest of us, has value only because we all agree it does. Look at the Great Depression; millionaires became paupers overnight. In many (perhaps most?) cases the wealth eventually came back, but if you can't meet your obligations of the moment then bankruptcy follows. I remain unconvinced that any of the movers and shakers in our government and its major influences would willingly adopt hyperinflation to eliminate our debt.
Eventually our credit will run out, granted, but I'd expect an austerity program like Greece is facing plus truly huge tax increases rather than intentional hyperinflation. For instance, we are currently borrowing something like $.48 on the dollar of federal spending. On the surface a lack of credit would mean doubling effective tax rates, but removing more money from the system means that much less economic activity available to tax, plus once we lose our AAA bond rating any future bonds will be at significantly higher yields. We'll have to take out those loans (or bonds) and our creditors will have to make (buy) them because our means even now would not be equal to paying off our existing debts.What makes you think they will have much choice given the system they inherited from their predecessor plutocrats? As far as I can tell it looks like a game of Hot Potato. Grab and loot everything you can, passing the long term fallout on to the next generation of government & financial filth.
Eventually our credit will run out, granted, but I'd expect an austerity program like Greece is facing plus truly huge tax increases rather than intentional hyperinflation. For instance, we are currently borrowing something like $.48 on the dollar of federal spending. On the surface a lack of credit would mean doubling effective tax rates, but removing more money from the system means that much less economic activity available to tax, plus once we lose our AAA bond rating any future bonds will be at significantly higher yields. We'll have to take out those loans (or bonds) and our creditors will have to make (buy) them because our means even now would not be equal to paying off our existing debts.
Possibly. And JS80 makes good points that the wealthy keep much of their wealth in assets that can float (to some degree anyway) above hyperinflation, especially with some forewarning. (Although it's not like there is a secret club where all the wealthy can meet to plan our demise.) Still, I have a hard time buying the idea that hyperinflation is coming any time soon, if only because it's been predicted to be right around the corner for decades (since the Ford and Carter years at least) without actually happening and because the Federal Reserve was largely set up as it is to control inflation.You realize that a huge tax increase would likely trigger a revolt whereas hyperinflation would buy the filth time to get out of the country, or even avoid being targeted at all. The hyperinflation could be blamed on Wall Street or greedy corporations.
No it wasn't. It was set up due to special interests and since the Great Depression, to safeguard fractional reserve banking. Like I said, a non-governmental system of money controls inflation a lot better than the Fed does and prices under the Fed have risen almost every year since 1913; they've devalued our dollar ~95% in the past ~97 years.the Federal Reserve was largely set up as it is to control inflation.
No it wasn't. It was set up due to special interests and since the Great Depression, to safeguard fractional reserve banking. Like I said, a non-governmental system of money controls inflation a lot better than the Fed does and prices under the Fed have risen almost every year since 1913; they've devalued our dollar ~95% in the past ~97 years.
There are plenty of other 'stores of value' available other than liquid currency. Gold, for example!No it wasn't. It was set up due to special interests and since the Great Depression, to safeguard fractional reserve banking. Like I said, a non-governmental system of money controls inflation a lot better than the Fed does and prices under the Fed have risen almost every year since 1913; they've devalued our dollar ~95% in the past ~97 years.
There are plenty of other 'stores of value' available other than liquid currency. Gold, for example!
The devaluation of the dollar, while accelerated in some periods with poor effects, is actually a pretty good idea. Maintaining slight inflation over time is a much better target than allowing deflaton, which can't effectively be planned for by both lenders and borrowers.
A worldwide currency based on gold could be easily manipulated by 'large' entities, is subject to random inflation and deflation based on the rate of production/discovery of new 'money' and is quite simply a terrible idea.
Put your money in gold when you aren't using it, sure, you won't be paying the inflation tax! But gold-as-currency is an obsolete idea, and it's not becoming a better idea over time.
What about the collapse tax? Don't forget that.
Bump in light of recent news. Greenspan now says the U.S. can't default because it can print money: http://www.cnbc.com/id/44051683. No, that's not The Onion!
He's right isn't he? I know you're an uber-libertarian but at the end of the day the US can print money. If you're worried about inflation, then worry about inflation but this default think is a bit silly isn't it?
He's right isn't he? I know you're an uber-libertarian but at the end of the day the US can print money. If you're worried about inflation, then worry about inflation but this default think is a bit silly isn't it?
Where did I say anything about default? I agree 100% with Greenspan. The government & Fed will just print the money, just like Germany did Post World War II.
I guess I didn't understand why you were comparing it to the Onion... What part is comical?
What happens when you run out of gold?
How do you prevent the transaction medium from becoming a disaggregated market, creating arbitrage opportunities for the wealthy and informed?
You'd figure the inflation kooks would stop talking about inflation about being wrong about it for a good few years now. Expect to continue to be wrong going forward.
Further devaluing our currency instead of getting our spending in order is "comical."
Wait, no it isnt. It is sad. We are selling out our children's future.