ribit,
re: "...if you are hungry, silver is like gold. In the final analysis, it is just a shiny rock."
That's a flawed argument. If you are hungry, NOTHING matters - except food. Your argument would seem to say, then, that NOTHING has value.
But you're wrong - because after a person gets the food he needs to survive, certain other things that used to be valued are suddenly important again, aren't they?
But not fiat money.
Oddly enough, after the South stopped being hungry, its people never valued Confederate dollars again. After the Weimar Republic stopped being hungry, its people never valued Weimar marks again. After the new U.S. government stopped being hungry, its people never valued Continentals (the first American currency) again. After the Austrians stopped being hungry following the Great Depression, the Austrian people never valued the Austrian Pengo again.
Want more examples? I could give you hundreds.
When a country gets to where everyone is desperate for food, fiat money goes to zero even as gold does. But unlike gold, the fiat money DOESN'T recover. Only things with inherent value do.
And that's the problem with your thinking.
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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