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<p>[QUOTE=&quot;doug444, post: 1926725, member: 38849&quot;]A silver dollar contains 0.773 Troy ounce of silver.&nbsp; If its valuation is less than a dollar, i.e., a dollar exceeds the value of the silver in a silver dollar, that means silver is available for $1.29 per ounce.&nbsp; That&#039;s why silver was selling for $1.29 through the 1930s and 1940s.&nbsp; If silver is currently roughly $19 per ounce, that means silver (metal) has declined in value by 93%.&nbsp; All silver thus tendered in the marketplace would disappear immediately, hoarded by households or businesses, highly preferable to paper dollars which could be printed at will (and currently ARE).&nbsp; Think of it as, inflation destroys households; deflation destroys commerce.</p><p><br /></p><p>But all this has nothing to do with the concept of deflation.&nbsp; Without getting into long discussions, the Great Depression caused deflation, not vice versa.&nbsp; Several events are generally accepted as causing the Depression:</p><p>1.&nbsp; The stock market crash of 1929.</p><p>2.&nbsp; The failure of over 9,000 banks (there was no deposit insurance then).</p><p>3.&nbsp; Diminished incomes which resulted in a great contraction in consumer spending.</p><p>4.&nbsp; The great drought of 1930, which prevented farmers from raising enough crops to pay the taxes on their farms, causing many to be repossessed by banks, who were utterly unable to sell farmland under the circumstances, thus causing additional bank failures.</p><p><br /></p><p>Fortunately for the Treasury Department, with its back against the wall by the late 1930s, World War II came along, with massive gains in employment, primarily government jobs and transportation jobs.&nbsp; At this time, women entered the workforce in large numbers, since millions of young men were serving (or would serve) in the military, reducing the number of available workers substantially.</p><p><br /></p><p>In the next 5 years, deflation is possible, but hyperinflation is much more likely.&nbsp; The tipping point comes when foreign countries demand ever-higher interest rates (on Treasury bonds) to compensate for the risk of a dollar collapse.&nbsp; The Euro will disappear altogether, as its usage across Europe compels the rich nations to indirectly support the weak nations, the PIIGS, for instance.&nbsp; That&#039;s the weakest of the weak:&nbsp; Portugal, Italy, Ireland, Greece, and Spain.&nbsp; Germany would drop the Euro and revert to the Deutsche Mark tomorrow if this action would not crush their primary export markets.</p><p><br /></p><p>During hyperinflation, gold and silver will be the ONLY real money, and the unprepared middle class will be whacked for the second time in a decade.&nbsp; Will coin values (not bullion) surge or drop?&nbsp; I don&#039;t know, there&#039;s persuasive arguments both ways.[/QUOTE]</p><p><br /></p>

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