hyperinflation and depression, page-10

This is the exact issue I have been trying to get my head around. An investment in gold is also an investment in USD and therefore there gains made on the gold price due to the weakening of the USD, could be offset by the strengthening of the AUD, notwithstanding the gold price rising to say US$3,000 due to hyperinflation in the US.

In reality however I think it is far more complex than that. While its currency may devalue, America is still the biggest consumer nation in the world with the biggest GDP. China may be the largest manufacturer, but most of what it manufactures is consumed by the US. If the US falls into a depression due to a USD hyperinflation, then unless it raises interest rates to astronomical levels so support the value if the USD, which would kill the American consumer altogether, the cost of importing goods from China would go through the roof. China would need to lower its prices for the US to be able to afford them which in turn would reduce prices of Australia's commodities. If Australia's exports are impacted, then our deficit will increase, and we'll either need to print more money to service this or borrow. The world would basically go into a depression if the US goes into a depression

Gold will retain its intrinsic value no matter what the fiat currency. All us gold bugs will profit, but it may be a profit we can do without given the world we will find ourselves in.