Gold, Currency and Hyperinflation

Dear Ferfal,

In Argentina which has experienced hyperinflation and installation of a new currency, what has happened to the price of gold/silver in the new economy?

But why do you think the USD will not collapse?

Also thank you for the advice to buy real estate if possible. Do you think it is still worthwhile in California?

Thanks so much for your blog. Someone just told me about it tonight, and it's wonderfully informative and helpful.

Thank you,
Bertha

Hey Bertha

The currency is still the same ( peso) what it did is drop from a pegged 1 to1 ratio with the USD to a 3 to 1 ratio. It lost 66% of its value.

Gold kept it’s value like it always does, even went up some given the country’s situation. You’ll find jewelry to be very expensive here compared to what you pay for in USA, and even if you go to a bank that deals with precious metal ( such as Banco Paino) you’ll find that PM are a bit more expensive here as well.
In general terms the gold business went up 500% since 2001.

I don’t know what will happen with the USD, it’s hard to say.
Apparently it’s doing well these days against the Euro, but the situation is still shake, another big bump and it can easily go down a lot.
To its advantage, as shaky as the situation is its still reputably the most trusted fiat currency world wide. In spite of everything, people trust it.

But again, it’s impossible to tell, and of course, nothing is as solid as solid gold. Gold usually goes down during periods of “prosperity” shall we, say, when the real estate market is overinflated and no one worries about anything.
When people see storms in the horizon, they start buying gold, and that increases the price some.
Still, it’s a pretty stable platform.

Imagine I can’t give you acquire advice about for a specific location.

If prices are still inflated then no, wait some more. IN general terms all across USA prices have gone down significantly and it’s a good buyers market now.

You’ll have to determine yourself if the prices in your area are still inflated, are reasonable, or are bellow reasonable and it’s a good deal to buy.

In general, no matter where you are, homes will not go bellow 50% of its real value. ( real value being what they where before people got stupid and charged 300.000 for a house that was really worth 200-250.000)
Once it reaches 50% -60% , investors see the potential and start buying to make long term investments when the wheel goes round .


FerFAL