Krugman: Spend Now, Save Later

[richardhutnik]

Final-Fan said:

richardhutnik said:
When the entire economy collapses and people are resorting to barter, because money is worthless, what the heck is gold and silver going to get you?  Yes, get out of debt, but I think far more important is to possess skills people have use for and need, so you can get basic food and water and clothing and shelter.  Gold and silver and precisions metals are good when you have a stable economy, and want to hedge against inflation.  But, in a total meltdown, exactly what is it worth?  People would only want it, if others want it.

Look this is crazy.  Even if the world economy totally collapses the idea of money is practically hardwired into our society at this point.  Furthermore gold and silver has been valuable for just about as long as we have had civilization.  If people decided not to place very high value on gold and silver anymore it would be just about the first time since the stone age. 

You use gold and silver in economies AS money.  The thing is that, when markets break down, and people can't trust anything, and get basic goods and services, they want food and clothing.  They don't want gold or silver.  You can historically see what happens, from Katrina onward, and even the Soviet Empire.  People bartered goods and services.

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