Suppose inflation goes crazy and the US Government issues a new currency. Do shares of stock etc. get valued in the new currency or do they become worthless?
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December 26th, 2008 at 5:43 am
the value is converted according to the “exchange” rate between the old and the new currency. incidentally, we do not have inflation now and in fact we live today in fear of deflation.
December 26th, 2008 at 5:43 am
Why o why would the government issue new currency. In the abstract sense, bills are valueless pieces of paper. And if the Dollar reaches an insane inflation amount, I guarantee that some kind of nuclear holocaust has taken place, and you won’t be worrying about the value of stock.
But, if you do own stock, and have the certificate, its value can be redeemed in any currency .
December 26th, 2008 at 5:43 am
Stock gets priced by the market, not the government. So if someone is willing to give you new dollars for your shares, and you are willing to accept them, that becomes the price. Likewise shares can be value din Euros, Yen Gold, or .308 ammo.