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<p>[QUOTE=&quot;Rono, post: 1115940, member: 6492&quot;]Howdy folks,</p><p>&nbsp;</p><p>A couple of things.&nbsp; First as an inflation hedge, the value of the dollar has dropped by 94% since 1913 when the Federal Reserve began.&nbsp; </p><p>&nbsp;</p><p>I&#039;ve read that in ancient Rome you could buy a very nice toga and sandals for an ounce of gold;&nbsp; during the 1920&#039;s you could buy a nice suit of clothes for an ounce of gold;&nbsp; and, today at $1400 an ounce you can STILL buy a nice suit of clothes.</p><p>&nbsp;</p><p>More personal is that when I was growing up in Lansing MI, I could take a quarter to the grocery store and buy a loaf of bread (circa 1960).&nbsp; Well, at melt value of $5.00 I can still take that same 1960 washington quarter and buy a loaf of bread.</p><p>&nbsp;</p><p>That my friend is why gold is considered an inflation hedge - store of value over time.</p><p>&nbsp;</p><p>Now as far as the dollar going to zero and us seeing finanical meltdown and anarchy, I don&#039;t give it much of a chance.&nbsp; &nbsp; I&#039;d say around 10% probability.&nbsp; I&#039;d give them about the same probability of fixing the economy and I&#039;d give it an 80% chance of us muddling along in a stagflation scenario for another 10 -15 years.&nbsp; You can quibble about the exact numbers, but you get my point.&nbsp; I see the chances of hyper inflation or financial meltdown as very slim.&nbsp; BUT, there is a chance that it could happen and it&#039;s greater than zero.&nbsp; Well, now the second question is how bad would it be?&nbsp; Methinks it would be bloody ghastly and therefore, having a little safeguarding and hedging against it is prudent.&nbsp; </p><p>&nbsp;</p><p>It&#039;s a risk/reward matrix trick where you figure the chances of some various events coming to pass, and the costs and benefits associated with both it happening and not happening.&nbsp; Then you optimize your choices.&nbsp;&nbsp; In this case, the greatest probability is another 10-15 years of stagflation.&nbsp; However, I don&#039;t see the costs of such as being enormous&nbsp; and so I don&#039;t need to take greater preventative measures.&nbsp; However, the cost of a financial meltdown and/or hyper inflation, while having a slim possibility of occurring, are so terribly dire that not taking some preventative measures is silly and borders on the insane.&nbsp; </p><p>&nbsp;</p><p>That doesn&#039;t mean you have to move to the country, build an off-grid cabin and revert to living off the land.&nbsp;&nbsp; In my case, I have no debt, house paid, yard enough for a garden, close neighborhood and community ties, current resume&#039; and constantly upgraded job skills (and I&#039;m retired),&nbsp; having some stash, diversifying both your portfolio and wealth, etc.</p><p>&nbsp;</p><p>peace,</p><p>&nbsp;</p><p>rono[/QUOTE]</p><p><br /></p>

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