Purchasing power of precious metals rise during currency crisis?

Discussion in 'Currencies' started by Scryed000, Mar 3, 2014.

  1. Scryed000

    Scryed000 New Member

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    Hello everybody.

    I'm new to investing in metals and I'm trying to find out how precious metals will be in a currency crisis. Does the purchasing power of the metals rise or does it simply just go up with inflation if that makes sense? I recently watched this video about hyperinflation in Zimbabwe.
    A loaf of bread cost trillions of zimbabwe dollars, but it only costs 0.3 oz of gold. Thanks for anybody that can help.
     
  2. Clawhammer

    Clawhammer Well-Known Member Silver Stacker

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    in todays prices 0.3 ounces = $13 doesn't it?

    that's a pretty expensive loaf of bread
     
  3. Gilligan

    Gilligan Member

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    0.3oz au = 450?
     
  4. whinfell

    whinfell Well-Known Member Silver Stacker

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    Huh? 0.3 oz of gold at A$1500/oz is $450. That's a REALLY expensive loaf of bread!
     
  5. Scryed000

    Scryed000 New Member

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    Sorry I got it mixed up. It's actually 0.1 grams for a loaf of bread. here's the vid. You can check it out.


    https://www.youtube.com/watch?v=7ubJp6rmUYM
     
  6. trew

    trew Active Member Silver Stacker

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    Buggered if I know but I do know I'd prefer owning something physical than fiat in any sort of currency crisis
     
  7. Argentum

    Argentum Well-Known Member

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    0.3 grams according to youtube videos i watched about a year ago. 1 gram a day for family to survive
     
  8. Gilligan

    Gilligan Member

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    12 ounces a think year to survive. $18000 at today's prices. Makes you think, huh?
     
  9. TreasureHunter

    TreasureHunter Well-Known Member

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    What are you talking about? 0.3 ounces = 450 USD! :eek::eek::eek:

    That's terribly expensive!

    If you could live out of 0.3 ounces for an entire month, that would be more credible.

    Even 0.03 ounces per bread would be horribly expensive: 45 USD per bread?

    Try 0.003 ounces: 4.5 USD pe bread. Gosh, that's still horror! :(
     
  10. TreasureHunter

    TreasureHunter Well-Known Member

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    First of all, 0.3 oz of gold is terribly much. That's 450 $ currently.

    It's way more than 100 times the original price, I guess.
    I think a loaf of bread in Zimbabwe would cost 300-500 times less than 0.3 oz of gold. Realistically.

    Precious metals' prices go up during times of crisis for several reasons - one of the main reasons is that people rush to buy them. They build up savings in gold, silver etc.
    The other reason is that the currency loses value, while precious metals remain more stable - them, having intrinsic values, being historically more stable than fiat currencies etc.

    If you are willing to invest in precious metals, then go for it! They will help you survive the coming crisis. It's less likely that the west won't be hit by a major crisis in the near future to mid-term. This means: until 2020 it's highly likely that it will happen. Some countries may not be that affected, others can spiral down economically...

    I recommend you to check the Japan, Argentina, Venezuela scenarios. Even Australia. They are going through economic problems. Currency is getting weaker.

    The Japanese rush to gold in order to protect themselves from the effects of "Abenomics". If you were living in Japan, you would have lost a sizeable purchase power if you had most of your savings in JPY.
     
  11. TreasureHunter

    TreasureHunter Well-Known Member

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    1 gram a day is quite a lot, in my opinion. Especially in Zimbabwe. Even in the West, it would mean 50 grams a month. That's 2170 USD per month for a family to survive?

    In which country?

    How large would that family be and what are the characteristics of its members?

    Even in the USA, 2170 $ wouldn't be terrible for survival - even for an entire family. It's far from becoming homeless.

    In the EU, 2170 $ would be a really good monthly income in many countries. Even for an entire family!

    I say these figures are way too high!
     
  12. TreasureHunter

    TreasureHunter Well-Known Member

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    Unless it's gold-enhanced bread :D:

    [​IMG]
     
  13. Pirocco

    Pirocco Well-Known Member

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    Should the purchasing power of precious metals change during currency crisis?
    A currency crisis means everything whose value is expressed in currency goes up. Gold goes up. Bread goes up.
    Now, there is such thing as 'speculation'. People anticipating. They might anticipate currency crisis and already buy ex gold in advance, driving its price already up ahead of the currency crisis.
    While various other products may not have risen in price yet (ex bread). In this scenario, those other products price may repeat the price uptrend of gold, while golds price just hangs. Then the purchasing power of gold dropped.
    There, some rocket science for the new "INVESTORS" (grin) in precious metals. :D
     

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