They devalue the currency nominaly, not the purchasing power.
You are subtracting zeros, and comparing as if devaluation erases $900 of cash value. This can only work if the dollar value before and after valuation stays the same (FYI - this would be considered theft on a grand scale!).
Devaluation adds zeros to your current cash holdings. However, you can only buy the same amount of stuff with it as before the devaluation. Ex. $1000 devalued to 10% of it's worth now becomes $10,000. That's the magic of fiat currency, assign to it any value you want! Only now a gallon of milk costs $45.00 instead of $4.50. Look up Zimbabwe.
So again, what's the difference if I can buy or sell an oz. of gold for ~$800 current value or an oz. of gold for ~$10,000 devalued (based on 1/12 valuation).
Answer that, or this post is simply scare mongering. "GOLD TO GO TO $10,000!!!" Sure, if they devalue the currency anything is possible. Gold could go to $100,000 if they wanted it to, but the fiat monetary units would be devalued in proportion.
RON PAUL 2012
Want DP delivered to your inbox daily? Subscribe here: