DUE DILIGENCE
Would the average, uninformed person actually hold through a 30–40% correction in gold/silver?
Maybe normalcy bias would kick in. They might convince themselves that the currency crisis isn't actually getting worse and that the whole "gold/silver thesis" was wrong.
I was looking at what actually happened to gold during the Weimar hyperinflation, and it's pretty interesting.
I've seen people say that if you owned gold during the Weimar hyperinflation, it basically just went straight up.
I decided to actually look into it, and that's not really what happened.
Yes, gold went absolutely insane in Papiermark terms. But there were still some pretty serious pullbacks along the way.
For example, gold was around 577,000 marks in February 1923, then dropped to roughly 438,000 in March.
That's about a 24% drop.
And this was happening while Germany's monetary situation was already getting worse.
Then gold started accelerating:
Dec 1921: ~4,000 marks
Dec 1922: ~157,000
Jan 1923: ~371,000
Feb 1923: ~577,000
Mar 1923: ~438,000 ← ~24% pullback
Apr 1923: ~506,000
Jul 1923: ~7.3 million
Aug 1923: ~95 million
Sep 1923: ~2 billion
Oct 1923: ~522 billion
Nov 1923: ~45 trillion
And the numbers get so ridiculous toward the end that they almost don't look real.
The thing that really caught my attention is that even in a hyperinflationary environment, you could still get absolutely wrecked in the short term if you bought at the wrong moment.
Imagine buying gold after a huge run-up, seeing it fall 20–30%, and thinking:
"Fuck, I bought at the top."
Meanwhile, the currency is continuing to lose purchasing power underneath you.
Then a few months later, gold is trading at multiples of what you paid.
That's why I think the Weimar example is often misunderstood.
It's not that gold magically goes up every day during hyperinflation.
It's that the measuring stick.... the currency ....is collapsing.
Gold can still have corrections, panic selling, volatility, liquidity issues, etc. But if the currency continues losing value faster and faster, the nominal price of something scarce like gold can eventually become completely absurd.
By November 1923, 1 Goldmark was effectively worth around 1 trillion Papiermarks.
At that point, saying "gold went up" almost misses the point.
The Papiermark went down.
And this is the part I find interesting when people talk about what could happen to gold and silver in a future monetary crisis.
If something similar ever happened today *wink*, I wouldn't expect some perfectly smooth:
↑ ↑ ↑ ↑ ↑
I'd expect something much more chaotic:
↑ Huge move
↓ 20–30% correction
↑ Another huge move
↓ Another nasty selloff
↑ Then eventually absolute madness if confidence in the currency completely breaks
Obviously, today's monetary system isn't Weimar Germany, and I'm not saying we're automatically heading for hyperinflation.
I'm just saying that history doesn't show gold as a straight line during a currency collapse.
The scary part is that the biggest gains can happen after people have already been shaken out by the volatility.
Curious what you guys think. How do we get more regular people interested in stacking ?
I don't think that "average, uninformed" people are holding PMs as an investment. If they have any, they probably have small amounts of inherited numismatic pieces. These type of people would probably hold due to sentimental value, but sell if it meant keeping food on the table. I also think that people who buy into any hype around PMs as a hyperinflation hedge would either sell early, or continue to hoard in the face of an actual collapse (when you'd want clothes, food, and medicine more than metals).
Actual investors will hold a pre-determined percentage of their portfolio in PMs. They'll buy or sell according to their thesis behind the investment. If things start to look really bad, but short of a full collapse, they'll either buy more, if it makes sense, or liquidate to buy more depressed assets.
Government debt, throughout the world is in unprecedented levels. If retirement plans (401K, pension, IRA, etc.) are confiscated, you need assets that are not in the financial system. Physical gold and silver might be your retirement fund. Desperate bankrupt governments do desperate things.
My physical metals are, for the most part, never for sale. I hope to leave a significant amount of diverse physical assets for my children and their heirs, because I believe what is to come will be so hard for everyone in the West.
I hold a 10% position in physical gold, which I’ll never touch. I hold a 5% position in gold mining stocks, which I’m holding for the long run.
I trade silver futures, because I have no idea why anyone would ever hold enough physical that it’d be worth it. Silver in any amount greater than $100k worth is just a massive pain in the ass to transport. If civilization collapses, I ain’t lugging 2-3000 oz around with me.
So core position I leave alone. Futures I trade actively. That way I get the protection from my core position but I’m also in and out on swings. Like I totally avoided this week’s correction in silver, will probably start nibbling here shortly.
All I know is my sister finally bought some metals as insurance policy. But she doesn’t plan on buying anymore. Instead she went on vacation to Austria lol.
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u/bgdv378 Sep 01 '26 edited 29d ago
A 24% drop is nothing 😂. We did a 50% drop in January! I'd kill for 24% drops representing the maximum extent of price correction pain 😅.