Hedging clarification for a newbie

[OzzieLepricaun]

This is my first post and my first time on anything like this. I currently have a little silver. I just wanted clarification about hedging with gold or silver which is my main reason. Surely if keeping a stockpile of cash for 20 years  ends up in reduced purchasing power because the cash buys less, then surely after 20 years of keeping gold or silver and then  exchanging it for cash I would be still in the same situation?. because that cash from 20 years ago will only be able to buy as much as the future cash could? this may be a stupid question and perhaps I am missing a vital point. I am just seeking clarification. Cheers.

[Draconicus]

Hello dear friend,

I am certain that many ppl will have something to say about that! But it was better if your first post would be a presentation one, so we all start to know you a little more.

Welcome to the forum mate!

[Blockhead]

Your hope is that the silver you hold after many years can be exchanged for more cash than the amount you bought it with. E.g. If you spend £100 on silver and that buys you a full month's basic food items, then decades later you come to sell, you hope that it will still buy a full month's basic food items, regardless of whether inflation means the same items cost £200, £250, £175 etc. You'll be getting a larger cash amount out but able to buy as much as you could before. This is obviously a broad simplification to understand the idea. 

Welcome to the forum

[sixgun]

i was talking about silver and gold hedging against fiat currency last night.

We have seen for example in England, the gold sovereign was circulating currency in 1913, 106 years ago. If you put £1000 of paper currency is the drawer on one side of a desk and 1000 sovereigns in the other, the sovereigns would be worth at least £220 000 today whilst the paper money other than collector's value of the notes, it would be £1000, if a bank would take the notes. This is how much Sterling has eroded in value.

Gold is money - everything else is credit - JP Morgan said this and it is true. All fiat is a debt instrument - circulating IOU's. It is in fact fraud because these promissory notes are broken promises. The £5 note promises to pay the bearer £5 on demand. So firstly it is not £5, just the promise of £5. If you demanded £5, which i will say is 5 gold sovereigns you would be asked to leave the Bank of England and escorted from the building. Force enforcing fraud.

Governments and banks issue more and more of this fraudulent paper - its value keeps going down but as we see the value of gold doesn't. It protects purchasing power. Gold and silver are money - the paper is counterfeit. We collect gold and silver as a saving - if you save in fiat your purchasing power dwindles through inflation - this is another tax on the people, it is another theft of our labour.

i expect in 20 years the present currency system will have collapsed. The paper currency is becoming worth less and less until it is truely worthless. i saw the gold was at its highest value against the AUD at the end of last year. It makes sense to save your value in gold because the AUD clearly is heading to nothing. Do you want a pot of gold coins or a fist full and waste paper?

 

[Blockhead]

My concern is - and this is probably my own ignorance - there always seems to be another way to manipulate these instruments while propping up the systems based on promises and confidence. Silver is low and seems to be staying low. Gold less so but both are no doubt manipulated to some extent by paper promises and claims. What's to stop another system, of subtlety and complexity, rising after one finally collapses?