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<p>[QUOTE=&quot;InfleXion, post: 1444329, member: 29012&quot;]In the event of a default gold will not be worth as much denominated in today&#039;s dollars, but the dollars themselves will not be worth anything because the promises behind them will have been broken. Gold will retain your wealth in a hyperinflation, or keep you from being flat broke in a default. The only way it loses out to currency is a deflation without default which is not possible since national debt is growing at an exponential rate that GDP cannot possibly keep up with. The only possible outcomes are default or hyperinflation, with any deflationary pressure being a temporary segway. </p><p><br /></p><p>Sure they could cut the budget in half, or raise interest rates to Volcker-like levels, but either of those actions would cripple the economy by either cutting the government cheese which accounts not only for a large portion of jobs but enables people to keep spending money that is keeping a lot of companies afloat, and raising interest rates will blow up the balance sheets of any company that has outstanding debt. So these are not viable options in the world we live in today. </p><p><br /></p><p>Whether the outcome is hyperinflation or default stocks and bonds will both leave you up a creek. In either case the money will be no good, corporations will not be in a position to do commerce until a new system emerges, bonds will become worthless in a default for the same reason that currency would or else fail to hold value in a hyperinflation, and when all the high frequency algorithms drop away leaving the $1.7 quadrillion derivatives bubble to its own devices there is not a financial vehicle in cyberspace that will be safe. This may take some time to play out, and certainly stocks will be of great benefit when the next round of QE kicks off, but that&#039;s not a safe haven by any means nor it is a good place to keep your money for the long haul even if it has been in the past.[/QUOTE]</p><p><br /></p>

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