Hyperinflation is that transition period when a paper money is clearly failing as a store of value but has not yet died as a medium of exchange. This blog is to look at this and any other interesting economic issues. Vincent Cate
Wednesday, February 9, 2011
Commodities Already Priced in Gold
If you think in terms of gold coins, there is no commodity inflation since 2002. However, in paper money prices have jumped up. In effect the world commodities are already priced in gold.
The last people to switch to the new money will get the worst deal.
Note that 17.5% interest compounded annually for 10 years will result in something being 5 times the original size. This kind of inflation in commodities will eventually feed through to everything else.