Will gold save us in a "Venezuela scenario"?

Hi,

I've been watching the news, the updates on what's currently happening in Venezuela and I was wondering whether Venezuelans who stacked gold could be having an easier life now...

The information available is scarce and I think there's a lot of info not propagating.
We have loads of info on Greece, but very little concrete info on the Venezuelan crisis... thus, we don't have reliable updates on what gold is doing in Venezuela.

So, do you think gold/silver would save you if a Venezuelan style hyperinflation occurred in your country?

Forget food shortage... Consider there are basic food items available, just that there's hyperinflation, riots etc.

 

Well Venezuela has vast quantities of oil, which is arguably more useful than gold... and it hasn't been able to save them.

The problem with Venezuela isn't their economy or oil or gold or hyperinflation...

...its their government!

 

It's corruption.

 

I agree with claw hammer it's the government that is the problem.

But if your honest with yourself that answer is the same all around the world. Not just limited to just this one country but rather the whole wide world. The problem is the government and the solution is simple, a self governance of the will of the people that occupy that land. I imagine after America has another "civil war" this is where we will end up.

To achieve this would be so easy set it up by the county in which you live. Could have a website for each county and local meetings to decide the law of the land. This corporate globalism that has infected the world has made us nothing but a slave to the federal reserve. Good news is it will die off in time. Any where the currency is debt based there will be chaos a coming. Just a question of when, not if.

This is all obviously just my opinion based on the economic history of debt based currencies. Good day everyone

 

Yes! Gold and silver is the best way to preserves ones wealth in a hyperinflation scenario.

The coming civil wars in America was foretold decades ago by my trusty crystal ball if you know what I mean !

 

Of course it would, as would anything that isn't Venezuelan currency. Gold, silver, bitcoin, USD, AUD, etc, anything that holds it's value against the hyperinflating currency.

 

...because I'm not sure about the following:

-whether gold and silver's price will really rise during such a scenario (theoretically yes, in Zimbabwe yes), but someone could manipulate it down if this happened in Europe or the USA (in order to "protect the currency", because people would turn to precious metals and that would devalue currencies exponentially)
-if anyone could have the huge stacks of cash to actually pay for your gold and silver (because I suppose the dealers/ e.g. "money changers") could also become poor
-whether people would flock to some other asset, like: currencies of neighboring countries, Bitcoin etc.

In a hyperinflation scenario it might not be as easy to sell your gold/silver as easily as it would be today.

But then again, I'm also incline to believe that PM's are a good hedge/safe haven. And in fact, I expect their value to rise, not only in terms of price relative to currencies. Panic increases demand and demand increases value.

Back in 2012, gold nearly hit 2,000 USD. And that's a higher real price than approx. 1,280 USD today.

So, I think one could potentially increase his/her worth/fortune during such a scenario... provided that one has a substantial amount of PM's in their portfolio.

 

Venezuela Seizes General Motors Car Plant

http://www.zerohedge.com/print/593722

GM is not the first US carmaker to suffer the irrational wrath of Venezuela's dictator: in early 2015, Ford wrote off its investment in Venezuela when it took an $800 million pre-tax writedown. Others have been hit too, and as a result a growing number of US companies are taking their Venezuelan operations out off their consolidated accounts. ExxonMobil pulled the plug on its operations in Venezuelan in 2007 after former President Hugo Chavez attempted to nationalized one of its projects. The oil producer then took the government to court. Coca-Cola was forced to halt production of Coke and other sugar-sweetened beverages last year due to a sugar shortage.

 

How come we can't hear almost at all about how gold is performing in Venezuela and Greece? But especially in Venezuela...

There's almost no information about this at all.

A few days ago I watched a documentary about a mobile app used in Venezuela for barter-type operations, as I understood.
Barter software could come in handy in such a situation.

I find it shocking that the world doesn't seem to want to help Venezuela. Are they getting any aid?

 

Anyone in Venezuela who was smart enough to stock gold and silver would have probably been smart enough to get out of the country a few years back.

But if they are still in the country they would now be dependant on access to an effective BLACK market to be able to trade PMs for food and other neccessities. Unfortunately the socialists are clamping down on the black market and even with PMs in stock it would still be tough and dangerous to get food and other supplies. Anyone known to be stocking PMs would be a target for criminals and government alike.

As for how gold is doing value-wise. Just do the math. Gold price in USD. Venezuelan Bolivar in USD. Do the math and you'll see the Gold price in Bolivars has skyrocketed.

 

As for aid....do they deserve any aid? The problems are all self-inflicted.

The people need to toss out the government and clean house before anything is likely to improve.

 

From my understanding the government got a lot of money when the price of oil rose.

They then spent all that money on ambitious public works projects.

They then assumed that they would just keep selling oil at high prices so they went into debt to fund even larger public works projects.

Then the price of oil dropped.

Then they were stuffed.

All they have done is blame Americans for conspiring against them and blame Colombians for taking all the Venezuelan money and buying up all the products in the Socialist Price Controlled Supermarkets and then smuggling the goods into Columbia.

If the Gov had gold they might be better off as the price of gold is doing well, if the individual had gold they might be better off.

As for aid, they have oil, they should be rich, any money you give them will not end up with the people who need it and the world probably needs a good reminder of the dangers of Socialism.

 

Millions of innocent people are suffering because of the economic crisis! YES, the must be helped.

 

But if a capitalist country was to send aid it might be seen as undermining the socialist government, maybe the aid should be coming from another socialist country.

 

I know it sounds cold hearted, but if I can use an analogy......if your neighbor was a sick drug addict and they were broke, in pain and suffering....would you give them money? Or would you take them to rehab?

Venezuela needs rehabilitation. Any aid is only going to be an ENABLER for the government to stay in power longer and will actually draw out the pain and suffering of the people for longer.

 

I saw a TED talk about how Humanitarian Aid to African countries with despotic govts just prolonged the people's suffering.

The ruling party took the aid and doled it out to its own 'circle' and the plebians recieve nothing. It doesn't matter if the farmers don't put crops in the ground, because they're not dependant on the farmers for their survival.

When the aid is cut off, the ruling caste only have their own population to parasitise. Therefore its in their best interests to have a productive population that they can steal from.

The problem for Venezuela (and those outside whom wish to influence its reform) is the country was/is largely dependant on oil for survival. A very small skilled workforce... not a broad population of farmers, manufacturers, fishermen etc

 

As I said, no matter how much the currency devalues, gold might not follow it in the same pace!

Look at gold's price in Venezuelan bolivars - it only doubled (that means around 200 %)... while the currency scored an inflation of 500 % by 2016...



So, it doesn't necessarily follow the pace of inflation...

Some of us think if the dollar inflates to 500 %, then gold will be worth 5x more as well.

Venezuela is proof that gold might behave sluggishly.

I would be curious to see real estate stats in Venezuela. Some things might actually cost less due to less demand.

I reckon, gold's price doesn't "just skyrocket" if the crisis hits "too fast", because it crushes demand: people won't have enough money to buy gold.
I think the slow gradual fear (as post-2008) fuels gold's demand, thus its price more. If the crash just slams suddenly, then few people will be able to buy it... after all, if your money devalues, you run to buy food instead of gold. If your money is worth less and less and gold is worth more and more, it's already too late: you don't care about a gram of gold, you'd rather have a bowl of rice!

 

Venezuelan government have support of significant number of people could be more than fifty percent. Because even now their life is better than when the middle class and higher was having a good life.

Furthermore this government could be considered doing what the poor and lower class people want, for the SS people advocating people over throwing the government, one should keep in mind that the change might not be what many SS members want.

Venezuelan socialist government is only hated by upper class and middle class. The government have strong support from the poor to take money from the likes you, me, and everyone else on SS and give it to the poor.

That chart gold vs Venezuelan dollar is not representative as it the offical currency rate, which no one uses, much like the set price of toilet paper in Venezuela which no one can buy.

For the poor living below the poverty line, they are in favour of Venezuelan government taking money from people who owned cars, computers, iPads and iPhones and building schools and hospitals for the poor.

 

To answer your question Will gold save us in a "Venezuela scenario"?

Yes, but only if you have enough gold and silver to support yourself through the last 15 years

 

The short answer to this is NO