As I was biking past an outdoor cafe on College Avenue, my friend Stephen flagged me down. "Come join us," he called. Hey, they sell organic shade-grown fair trade de-caf. Why not.
Stephen is a jeweler so I grilled him about possible commodities one could buy to protect one's savings in case of inflation. "I'm hearing a lot of rumbling about how a potential economic shipwreck is in the works due to the Bush bureaucracy's horrendous debt and the Federal Reserve's instant-money-by-fiat policies," I said. "What if there is another Great Depression or one of those super-inflations where it takes a wheelbarrow full of dollar bills to buy one loaf of bread? If that happens, what can average Americans like us do now to protect our savings? Would you recommend buying gold?"
"Nope," said Stephen. "Definitely not. While the price of gold may go up and down, its value will always remain the same -- based on what it costs to mine it. This means that even though the speculative price of gold on the market might even reach over $2,000 an ounce, it's never going to be actually WORTH $2,000 an ounce."
"Silver is too uncontrolled. Plus there's too much of it. Nope."
"So. What would you recommend?"
"But why are diamonds better than gold?"
"Diamonds are highly controlled, Jane. DeBeers rides herd on the price of diamonds like you wouldn't believe. This company is rich beyond your wildest dreams. They OWN the diamond industry. And they only release enough diamonds per year to keep the price steady. There's NO fluctuation in the supply."
"But what if the diamond market crashed too?" I asked.
"Jane, for the diamond market to crash, the world would have to come to an end." Oh. "DeBeers is way above and beyond politics and economics. They live in a whole different sphere."
Moving on to the next question. "Exactly how fluid are diamonds? Suppose I buy diamonds and then the dollar inflates and I want to cash my diamonds in. Are they easy to liquefy?"
Stephen also told me that if I didn't trust dollars, there was an internet bank called www.everbank.com where I could keep my bank deposits in whatever currency I want. Euros are good.
Just then we were joined by my friend Martie who is also interested in the subject of money. But he was very hopeful about the economy's future. "There's not going to be a major depression," he said, "but there WILL be a war on Iran."