CC09LawAg said:
silverado_lover said:
Mostly 1 kg bars. I'm not looking at silver as a way to exchange for goods if SHTF, rather hedging against inflation.
Can someone break down the hedge against inflation argument in simple terms? Every time I think my brain has wrapped around it I end up confusing myself.
Easy! Imagine the dollar as a ruler; it is a way of measuring value for any good or service.
The more you value something, the more dollars you'll give for it.
Now, try thinking about this "what if" scenario … what if prices aren't really rising? What if the unit of measurement (dollars) is literally shrinking, so it takes more of them to measure up?
Imagine measuring your driveway with a 12 inch ruler. Next year you measure it with a ruler that is only 8 inches long, but everyone still calls that a "foot"?
Three years later, it's a six inch ruler that equals a "foot." How long is your driveway, actually? 25 feet? 50? Depends on the ruler, doesn't it?
Your driveway = any good or service you want to buy and your ruler = the US Dollar.
That's inflation.
Since 1915, the US Dollar has "shrunk" 97% … you have 3 percent of the purchasing power your great, great grandad enjoyed. All by design of the Federal Reserve.
When you buy gold or silver, they go up in price along with inflation, instead of shrinking like the dollar. That's the hedge.
