Understanding hyperinflation: courtesy of a mountain man
There is a man in these parts, who would call me one of his perhaps 5 friends, called Monrow. Monrow stands about 6'4, weighs near as krikies 300 pounds, has an unkempt beard and a black pony tail down the middle of his back. He owns a small handful of businesses, recently leaving these parts to start another in a town a couple hours away. He is easily one of the most memorable characters I have come across, and thats saying something as i've met some pretty interesting people.
Beyond looking like a mountain man, Monrow is flatly antisocial. You'd assume he was some kind of hillbilly and steer clear of him at a convenience store except for one thing. He is almost surreally charismatic when it suits him. He was a body builder and beach dude in a former life, and seems generally disinterested in fitness these days (although he is on a perpetual diet). He can seem shy, out of place when he's out of his element - say if you catch him on a date at a nice restaurant - but in his element he drips charm and authority and people flock to his place of business to hang out, to flirt with him, to listen to him weave a story with a flair matched by few. The man could tell a story about changing a tire on his car after he got a flat and keep an audience in rapture for half an hour doing it. When Monrow tells a story, thats the one and only thing going on in the room. For all that charm, he struggles constantly to interact with people, he gets frustrated with people when they don't see things his way and can sort of blow up and make a room very uncomfortable. He is frequently short with customers, who he often views as clueless and unworthy of recieving his products and services. A typical alpha type very talented male, a walking bundle of contradictions, talents and flaws. Add to all this an intense conspiracy-theorist side and you have something thats simply not understandable. The man will panic over mind control devices the government owns, AND MUCH MORE, frequently, and he means it.
I know htat he's a high school grad, because he played a couple years of college football before quitting over an injury, but you'd never know it. He leaves little evidence of what must be a perfectly capable mind outside of that (occasional) wall of charm and the fact that he owns 3 successful businesses.
The last time I saw Monrow was at the lounge at my pal Doug's hotel, which is the finest lounge in our area. He was on a date with his now girlfriend, a girl some 15 years his junior (23 to 38). Feminine, dignified, and plain beautiful, there she sat with a mountain man nonetheless. Monrows legs were twitching, he couldn't relax, he kept looking around the room as if scoping it for combat. This, afterall, wasn't his environment. So I did the only thing I could think of, I argued with him until I won over him sitting down, with his lovely date, to enjoy a bottle of champagne with the girl I was seeing at the time and I.
He must htink of me now and again, because almost always when I see him he has something to say to me. Sometimes its just ridiculous, sometimes its a skirt-chasing story, sometimes its about cars, sometimes its a conspiracy theory, and sometimes its something plainly profound. On this particular evening, Monrow says:
"Check, you remember when I told you to go buy a bunch of gold and bury it? Thats retarded, I realize now thats stupid."
"why?", said I. Monrow, you see, mroe or less hates money. He keeps $30k in his checking account at all times, saving if he goes below, and spending it immediately if he goes above. He likes htings, he hates money. He's the perfect template for a true gold bug.
"Well think about it", he says, as if I was stupid to have ever considered his suggestion in the first place, which I hadn't, but this is part of that storytelling ability... "if society collapses and the dollar is worthless, and lets be realistic, if the dollar becomes worthless its because society collapsed. I mean, if society is still there and functioning the simple factthat we have to pay our taxes in dollars will keep it having value. And if society collapses, it doesn't make any difference what stuff you have, what food, what gold, what shelter."
"why is that?" I asked. There is no way to deny that this mans mind is an interesting place to explore
"think about it", he says confidently, even as he is so visibly nervous to be at this high end lounge that its amazing, "the only thing thats going to matter if society collapses is firepower. Guns. And organized guns at that"
"i get what you are say....."
"check, listen, don't talk, just listen", back to that remarkable tendency to seek social authority, it can be hard to beat him in that contest sometimes, "look, if society collapses we're going straight medieval. its going to be organized packs of armed people that carry all of the power. rogue generals with troops still loyal, a police precinct turned predatory. You have all that gold, you won't be able to spend it because they'll just take it. If society collapses the only asset that will have any actual value is military power or equivalent."
Now he had gotten interesting enough to actually make me want to listen. He has a habit of doing that. He continued
"and all that farmland you bought? all that crop you have planted? you know what thats worth?"
"tell me monrow"
"nothing unless you are the one with enough hired guns to defend it. if society collapses it just won't be yours anymore unless you can shoot everybody who is trying to take it from you, and there will be someone trying to take it from you. because, check, you gotta realize, those cops, those soldiers, they are gettin gpaid in dollars, and they have all the guns. if their dollars aren't worth anything anymore, guess what? they use the guns to get what they need and want"
From there the conversation carried on through a few comments, and then we drank our champagne, and Monrow finally got to leave, which is all he wanted to do in the first place.
But you know what? He is EXACTLY right. What is gold worth in a true dollar-collapse scenario? Nothing, because it will simply be taken from you when you need to use it most. What is my farmland worth? Nothing, once I've run out of bullets and someone simply takes it from me.
Truly, in those "canned food and ammunition, hyperinflation, dollar collapse, china won't buy our bonds, end of days" panicfest stories, what actually has value? Affiliation with an organized group of armed men. And thats it.
Think about it. You are running around, chest out, pimping and proud, because you were long gold to some extreme level when society collapsed... If things get that bad. That ugly. We will have a society that is simply run by the law of the gun. And all you can shoot at one time is 2 guns, and you'll never fend off an organized group of armed men. If society collapses so gold goes to a million bucks a gram, everybody loses. Except Navy Seal Team Six. Or, rather, the general that they are still loyal too. And the pack of Army Rangers they make a territorial truce with, etc.
Now, don't stop reading until you read my next post as well.