Gyroscopic Investing

Bongleur wrote: Keeping physical overseas is a hedge against something really nasty happening to your own country's stability, and that would affect the currency exchange rate.  Can someone explain the details of the various scenarios that might play out?

I would suppose that under those circumstances, you would either emigrate and convert your gold into the local currency, or liquidate your gold to pay expenses in your own country under a hyperinflation scenario (after your PP cash has become worthless) ?

I'm wondering if gold always will have a high value for purposes of exchange into a local currency when the local country is in trouble.

MediumTex wrote: It seems to me that when political arrangements become strained it first becomes tempting to impose capital controls to attempt to prevent capital flight.  

At some point later in the process of political deterioration, it might begin to seem appealing to impose travel restrictions to prevent unpatriotic people from leaving.

I think the idea with geographic diversification is to prevent yourself from being caught up in capital controls while giving yourself time to make travel arrangements if that became necessary.

It's very unpleasant thinking about this sort of thing, but it's really no different than the thought process that goes into buying life insurance.

The fact is that political institutions come and go all of the time.  I don't think it is unreasonable to acknowledge the transitory nature of all political authorities throughout history, and to simply make allowances for the idea that current institutions might also ultimately be of a transitory nature.

craigr wrote:

MediumTex wrote: It seems to me that when political arrangements become strained it first becomes tempting to impose capital controls to attempt to prevent capital flight.  

At some point later in the process of political deterioration, it might begin to seem appealing to impose travel restrictions to prevent unpatriotic people from leaving.

I think the idea with geographic diversification is to prevent yourself from being caught up in capital controls while giving yourself time to make travel arrangements if that became necessary.

It's very unpleasant thinking about this sort of thing, but it's really no different than the thought process that goes into buying life insurance.

The fact is that political institutions come and go all of the time.  I don't think it is unreasonable to acknowledge the transitory nature of all political authorities throughout history, and to simply make allowances for the idea that current institutions might also ultimately be of a transitory nature.

In layman's terms:

Shit Happens.

"Secretary of the Treasury William H. Woodin declared tonight emphatically that the United States had not gone off the gold standard on account of the proclamation of the President. He was supported in this view by other high officials of the administration, both in the executive and legislative branches. Among them Senator Key Pittman, chairman of the Committee on Foreign Relations. Secretary Woodin said: 'It is ridiculous and misleading to say that we have gone off the gold standard, any more than we have gone off the currency standard. We are definitely on the gold standard. Gold merely cannot be obtained for several days." - New York Times March 6, 1933

craigr wrote: http://www.knology.net/~bilrum/gold_hoa ... s_1933.jpg

"Secretary of the Treasury William H. Woodin declared tonight emphatically that the United States had not gone off the gold standard on account of the proclamation of the President. He was supported in this view by other high officials of the administration, both in the executive and legislative branches. Among them Senator Key Pittman, chairman of the Committee on Foreign Relations. Secretary Woodin said: 'It is ridiculous and misleading to say that we have gone off the gold standard, any more than we have gone off the currency standard. We are definitely on the gold standard. Gold merely cannot be obtained for several days." - New York Times March 6, 1933

MediumTex wrote: It seems to me that when political arrangements become strained it first becomes tempting to impose capital controls to attempt to prevent capital flight.