what are some possible scenario's when the dollar crashes?

[wvojak]

Options:

1) Use PMs directly at a store to purchase items

2) Use PMs directly as a "barter" item with another person

3) Go to the local PM/Coin/Exchange dealer and get X% of spot for the current paper currency. then run out to the store and purchase goods

Most likely order of acceptance will be: #3, then #2 then #1, especially if you are talking about big chain stores. As Silver Rocket Bitches! stated, a smaller privately owned market will be far more likely to take PMs directly, than a Krogers. . .

But if I owned a big grocery chain, I'd set up a company owned assay booth in every store so the people could trade their metal for paper, and then turn around and buy stuff from my stores with the paper. That way I could increase my profits. Make ~10% on the metal exchange and another ~10% on the food selling. .

[JohnQPublic]

Problem is, there isn't enough gold/silver in private hands to allow an economy of 300,000,000+ people to function properly.

If there's ever a true crash of the system, don't count on getting much of anything from any store after about the 2nd day.

Are you Joeking?

The production rate of gold and silver per capita has kept up since 1903.

[Joe King]

Problem is, there isn't enough gold/silver in private hands to allow an economy of 300,000,000+ people to function properly.

If there's ever a true crash of the system, don't count on getting much of anything from any store after about the 2nd day.

Are you Joeking?

The production rate of gold and silver per capita has kept up since 1903.

Ok, fair enough. But who holds it all? Would all the gold held only by governments be sufficient for the job? If so, coin away!

[Sparky]

Just can't get my head around this notion of a dollar crash. What country is going to back their currency with hard assets so as to make it more attractive than the USD? What country has more resources than the U.S.?

We probably have the largest amount of stored gold, we have inground gold, we have inground oil and natural gas, we have inground minerals, we border the largest fresh water lakes in the world, our military exceeds the rest of the world's military combined, we have the most pervasive educational infrastructure with the highest literacy rate, and the world's best hospitals, medicine, and research.

This superpower status we enjoy is what will allow us to continue to gradually bleed the dollar for many years to come. I just don't see where anyone has presented a plausible crash scenario, including our massive future debt obligations. The largest estimate I've seen of our unfunded future liabilities of the next 75 years is $225T. Starting with a M3 money supply of $15T, complete monetization would result 94% inflation over 75 years, but that's what we've experienced over the last 75 years with no USD crash.

The plausible threats to U.S. world dominance is China, and they are generations away from pulling it all together. The only USD crash I could imagine would be an orchestrated sabotage by China and Russia working in cooperation with a few other resource-rich nations.

[Saul Mine]

You see what I mean? Everybody assumes nothing will change except you pay for stuff with gold coins or chickens or something. Yes, 94% of the value of the money has been stolen in the last 75 years, but that doesn't mean we can tolerate another 94% being stolen. For one thing, that theft required the tax rate to go from 8% to something over 50%, and another round of inflation would drive the tax rate over 100%, meaning if you earn a dollar you owe more than a dollar in taxes. Jvoking suggests that supermarket managers would buy PMs - Supermarkets would close because the trucks can't get gas to deliver the food and the food rots in the foreign countries where they grew. The managers may or may not know enough to deal in precious metals.

There is one thing about a collapse: it's a collapse!

[palani]

Just can't get my head around this notion of a dollar crash. What country is going to back their currency with hard assets so as to make it more attractive than the USD? What country has more resources than the U.S.?

The U.S. is a federation and not a country. No federation anywhere, at any time, ever has been or ever will be a sovereign country. That includes the U.K., Swiss Federation, Canada, Mexico, E.U., Russia.

As these federations are not sovereign then they have no need to act in a sovereign manner. A sovereign is responsible. A federation is not. Until there is some semblance of responsibility no federation is ever going to win at the money game.

Instead of money the script you are used to I call "corporate coupons", issued by corporations and for corporations. If in doubt check 12 USC 411 where only banks and agents of banks may possess federal reserve notes.

The dollar crash happened 80 years ago. Some people still deny it.

[Sparky]

...
Yes, 94% of the value of the money has been stolen in the last 75 years, but that doesn't mean we can tolerate another 94% being stolen. For one thing, that theft required the tax rate to go from 8% to something over 50%, and another round of inflation would drive the tax rate over 100%, meaning if you earn a dollar you owe more than a dollar in taxes.

I don't know; who would have thought we could ever lose 94% once? Look at it this way: The dollar has lost 50% of its value 4 times in the last 100 years: From 1910 to 1930, then from 1930-1970, then from 1970 to 1980, then from 1980 to 1995. In five more years it will have lost half its value for a fifth time. And this can happen without additional taxation (although that's coming too). My point is that I don't see any fundamentals pointing to an end to the inflation cycle that's we've been operating under for the last century.

Fiat's a human invention, like the wheel. Once you have invented it, it doesn't go away; it just gets re-made in different forms. We're not going back to a barter system, though I could see a distribution breakdown where some bartering might take place for days or weeks, which is why I don't think having extra "stuff" on hand is such a bad idea.

Jvoking suggests that supermarket managers would buy PMs - Supermarkets would close because the trucks can't get gas to deliver the food and the food rots in the foreign countries where they grew. The managers may or may not know enough to deal in precious metals.

There is one thing about a collapse: it's a collapse!

I could see a temporary distribution collapse, but not a dollar collapse. Just a dollar erosion. I don't see supermarkets dealing with PM in lieu of currency. I've tried to envision how that scenario would be plausible, but now that fiat is digital and the government is willing to step in and back it regardless of its long-term inflationary impact, I just can't see it. At least not until there is some other sovereignty that can step in and offer a more sound fiat option.

As for gas stations accepting PM in the 1970's, they continued to take cash, and I'm sure they were only taking PM at an exchange that was very profitable to them. I'm sure you could get a store owner to take silver right now at $10/ounce.

[Sparky]

Just can't get my head around this notion of a dollar crash. What country is going to back their currency with hard assets so as to make it more attractive than the USD? What country has more resources than the U.S.?

The U.S. is a federation and not a country. No federation anywhere, at any time, ever has been or ever will be a sovereign country. That includes the U.K., Swiss Federation, Canada, Mexico, E.U., Russia.

As these federations are not sovereign then they have no need to act in a sovereign manner. A sovereign is responsible. A federation is not. Until there is some semblance of responsibility no federation is ever going to win at the money game.

Instead of money the script you are used to I call "corporate coupons", issued by corporations and for corporations. If in doubt check 12 USC 411 where only banks and agents of banks may possess federal reserve notes.

The dollar crash happened 80 years ago. Some people still deny it.

Your entire argument is based on semantics. You can call nations and currency anything you like. If the dollar crashed 80 years ago, then I'd say we have nothing to fear. I've been exchanging paper fiat for real goods my entire life.

[Heimdhal]

preps and barter are for during SHTF

PMs are for AFTER SHTF when things begin to normalize, so you have a vehicle to transfer your pre-SHTF wealth into the new system.


I dont know why people think theres going to be this mass junk silver trading going on. How many people in your daily life do you know that even has a clue as to what a silver merc is or what its worth today? What makes you think they are going to have any after SHTF to give you to buy some beans off of you? Are you going to sell your last pound of rice for 5 mercs and a 1/10 panda?

Common goods will be traded for common goods. You've got and excess of rice, I've got an excess of flour, we swap. This is assuming a total collapse of any currency trading. Maybe youll get some jewlery if you're lucky.


Eventualy a new currency system, whether fiat or not, will ineveitably take over. This is what your PM's are for.

[Joe King]

You see what I mean? Everybody assumes nothing will change except you pay for stuff with gold coins or chickens or something. Yes, 94% of the value of the money has been stolen in the last 75 years, but that doesn't mean we can tolerate another 94% being stolen. For one thing, that theft required the tax rate to go from 8% to something over 50%, and another round of inflation would drive the tax rate over 100%, meaning if you earn a dollar you owe more than a dollar in taxes. Jvoking suggests that supermarket managers would buy PMs - Supermarkets would close because the trucks can't get gas to deliver the food and the food rots in the foreign countries where they grew. The managers may or may not know enough to deal in precious metals.

There is one thing about a collapse: it's a collapse!

What you're saying is that we're simply reaching the point of diminishing returns.
i.e. if the first 94% took 75 years, the next 94% will take just a few.