Randy_H

Don't Miss the Coming Gold Bull

On "hyperinflation", which is the core premise of your article:

*Sustained* hyperinflation, the sort of condition which utterly destroys a nation's economy, has _never_ occurred within a (modern) country that maintains a credible and project-able military force. In fact, historical sustained hyperinflations have been halted by either (a) establishment of a credible military power as in the post Weimar Germany; or (b) foreign intervention inevitably by a country or countries which maintain such a power, as in the case of Israel.

Other countries such as Russia, when facing a long-run hyperinflation scenario, simply change the rules -- ie. default in one way or another. The world simply must accept that outcome and endeavor to restructure global financial positions accordingly.

The goldbug theories are all predicated upon terribly flawed thinking. The sort which Nassim Taleb eloquently describes in his books. They are assuming a linear-style projection of macroeconomic factors in arriving at their outcomes which, of course, inevitably favor gold becoming worth a zillion dollars per ounce.

I am not smart enough to tell you how this current situation will play out. But I am smart enough to tell you that I don't, and that I simply cannot. And neither can you. What you can do is think outside the box and broaden your consideration of possibilities. You can prepare for the unknowable unknowns by maximizing your exposure to positive things you can know, and minimizing your exposure to things you can't. Or more concretely, minimize your exposure to gold (note I didn't say eliminate it, just make it minimal).