The Market Value of Gold and Silver if the Dollar Fails?

Posted August 31st, 2010 by ddonza50

If the dollar failed tomorrow and gold and silver took its place...Heck Yes!! Is it safe to say that the buying power of an ounce of silver or gold would match that of their current spot prices. In other words 1 ounce of silver would buy about $19.00 worth of goods and gold would buy apx. $1,200.00 worth of goods. Or would their values change dramatically therefore their buying power would be worked out overtime by the market.

Current spot prices will not hold

c-i-a 4 years 51 weeks 6 days 8 hours ago

Considering the number of people who own absolutely no bullion and believe the dollar is not subject to hyperinflation because it's the world reserve currency, it would be reasonable to expect that commodity currency would deflate upon fiat currency collapse. That's just my speculation, of course.

What you're asking is how much you can get in goods for precious metals. You're looking in the wrong place when you try to deduce this using the ratio by which precious metals are exchanged for illusory paper. What matter are the trade ratios between metals and what you want to buy.

While it may seem that you can just apply the transitive rule here and have paper be the chain connecting the two, it doesn't work that well. This is because governments lie. The dollar's books are cooked. In fact, it could be argued that the dollar itself is a massive deception. So, you can know how many lies will buy you an ounce of silver, and how many lies will buy you a nice suit, but will you take the leap of faith to think that the lies can be counted on to accurately portray the values of real commodities with respect to each other?

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