Scryed000 said:
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.
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.
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