Showing posts with label 2012 hyperinflation. Show all posts
Showing posts with label 2012 hyperinflation. Show all posts

Saturday, November 5, 2011

The Lead (rhymes with) Head Survivalists!

It never fails. Everytime I read a blog on hyperinflation, economic collapse, gold and silver trading, or survival preparedness involving food and medicine, some moronic toad scralls a message boasting how his guns and lead is all he'll ever need. The implication, of course, is that when things get tough this armed grasshopper will just murder his way to food and any other necessity that he needs to survive! 

Leaving aside the obvious anti-social and immoral nature of the plans of such a marauder, I thought I'd just like to examine such an extreme course vs. more conventional preparedness methods from a purely objective viewpoint.

Firstly, lets look at a hyperinflationary economic crisis. Studying examples like Yugoslavia, Argentina, and the Weimar Republic we get a pretty clear picture. In all three of these instances, sporadic lawlessness did occur in cities resulting in food riots, theft, armed robbery, truck and car hijackings, and increased assaults and murder. However, while rising disorder definitely impacted the lives of the average citizen, police and military were usually available for deployment to restore order with a few days to several weeks. Armed criminals were quite often arrested or shot. Neighborhood watches supplemented the law enforcement in the absence or delayed response of the authorities. Curfews tended to dampen down crime, and shoot-on-site anti-looting laws made things quite hot for the sneak thief.

In the country, small communities also kept eyes out for strangers and warned out the shadier types. Of course, instances of robbery and violent crimes did occur in the remote communities as well. However, lingering bands of outlaws were rare in rural environments due to the difficulty of concealment in the small town environment. Reports of thieves being shot and killed were not infrequently reported as well, discouraging stand-out criminals.

In both these cases armed criminals did prey on the populace, but by no means did they get away with their activities for long. Indeed, most were usually caught or shot on a fairly regular basis, cutting down the number of extended crime sprees.

However, it is the breakdown of society event or "Mad Max" scenario, that the Lead-Heads really begin to salivate like rabid dogs. They theorize that in the absence of law and order theirs guns and ammo will be king, as they meerily roam about the countryside robbing, raping, and pillaging to their black-hearted content. My response to this assertion finds its roots in the Christian Bible, "those that live by the sword, die by the sword". Now, I'm not necessarily implying that God will strike these miscreants down. No, I'm just observing that a life of violent crime preying on a populace that is sporadically armed as well, is just a really high-risk way to make a living!

Vietnam Vets tell us that the average infantyman carried 100 rounds of M16 ammo. The reason they didn't carry more is that most fire fights ended before the soldier could fire more than one hundred rounds. Either the enemy was killed or fled, or the American soldier was dead or in retreat. I see no reason that the mathematical logic of guerilla combat in South East Asia should not be applicable to roving bands of rogues in post-apocalyptic America. They'll also never know just who or what type of resistance is waiting for them around the next copse of trees. Add a lack of medical care and antibiotics for the wounded law breakers to the equation, and death rates even from flesh wounds will inevitably prune back their numbers severly!

I recommend that proper preparedness include food, water, medicine, survival gear, gold and silver, as well as self-defense guns and ammo. If the key to the whole exercise is indeed SURVIVAL, however, I just suggest that the guns and ammo portion of the plan should get as little combat use as possible.

Rick

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Why the USA Deserved the S&P Downgrade!


It's amazing what simple math can show:

Why S&P downgraded the USA -

• U.S. Tax revenue: $2,170,000,000,000
• Fed budget: $3,820,000,000,000
• New debt: $ 1,650,000,000,000
• National debt: $14,271,000,000,000
• Recent budget cut: $ 38,500,000,000

Let's remove 8 zeros and pretend it's a household budget:

• Annual family income: $21,700
• Money the family spent: $38,200
• New debt on the credit card: $16,500
• Outstanding balance on the credit card: $142,710
• Total budget cuts: $385
Rick
GoldSilver.com - Buy Gold & Silver
 

Sunday, October 30, 2011

Entitlement Nation!


"A record 49 percent of Americans live in a household where someone receives at least one type of government benefit, according to the U.S. Census Bureau. And 63 percent of all federal spending this year will consist of checks written to individuals for which the government receives currently no services, the White House budget office estimates. That’s up from 46 percent in 1975 and 18 percent in 1940."

"Those figures will climb in coming years. The 75 million baby boomers have only begun their long march into retirement, while President Barack Obama’s health-care overhaul will extend insurance coverage to more than 30 million additional people."

http://www.businessweek.com/news/2011-10-28/americans-hooked-on-government-as-record-number-get-benefits.html

This is why owning gold and silver is imperative. Ignore the noise from the jackasses and the elephants concerned only with keeping their jobs (Ron Paul excluded). One party is pissing down our backs, and the other says it's just raining! The US dollar is 100% doomed. That's the great secret they don't want you to know until it's too late.

I don't blame the people getting Federal benefits. Many are genuinely needy. However, the USA has been playing rich uncle (Sam) for 80 years now, and there's no sign of a reverse in course or even a slowing of the growth of cash outlays. Rich uncles are great when they actually have the money available to hand out. But our Uncle Sam is borrowing trillions of dollars a year (in our names) to continue to send out more and more entitlement checks. Even if the US doubled taxes (revolution time) and cut benefits in half (more revolution), it still wouldn't be enough. Not even close either to pay off all debt and establish a constitutionally mandated balanced budget!

The US is doing exactly as ALL COUNTRIES with fiat money have done in the past - print, print, print, paper money in an attempt to keep itself afloat until the US Dollar isn't worth the paper and ink that went into it! Paper money unbacked by gold and silver (or another valuable commodity
like land) has always and will always fail, dragging down the vast majority of its citizens into the black abyss of absolute financial ruin.

Gold & Silver are the only precious metals that have been used as money for 6000 years. They are the Once and Future Kings. An owner of gold and silver gurantees that he will NOT be a slave to any man or government...ever!

"Give me Liberty, or give me Death!" - Patrick Henry

“Specie [gold and silver coin] is the most perfect medium because it will preserve its own level; because, having intrinsic and universal value, it can never die in our hands, and it is the surest resource of reliance in time of war.” ~Thomas Jefferson to John Wayles Eppes, 1813

Rick
GoldSilver.com - Buy Gold & Silver

Saturday, April 9, 2011

Is Silver Getting Bubbly?


Silver's rising prices as measured in US government fiat dollars (alias paper funny money) spawns new articles on a daily basis predicting that surely now silver is in a bubble (a price that is irrationally higher than the intrinsic value of the product or investment). I suspect that as the "tears of the moon" metal approaches the 1980 high of $50 per ounce, the uninformed scare-mongering will only increase in volume. But is silver really in a bubble just because its worth as measured in rapidly devaluing 2011 US dollars is nearing the former 1980 peak?


Firstly, let's make sure we're comparing apples to apples, or at least dollars to dollars. Based on the CPI, you'd need $134.29 today in 2011 to purchase the same products you bought in 1980 for $50. So, while we can talk about the NOMINAL high of $50 for silver per ounce, the real figure we should be eyeing for bubbly signs is a lot closer to the $134 mark in inflation adjusted dollars.


Secondly, exact information as to what price point constitutes pricing above an item's "intrinsic value" is always a little sketchy, to say the very least. However, I'd like to tentatively submit the inflation-adjusted high for silver of $134 as that point, since the 1979-1980 bull market is the best and only historical comparison to today's market.


Next, I think a "real world" comparison of actual buying power of one ounce of silver for the years 1980 and 2011, may aid us in our search for buying power equivalency, and perhaps the actual 2011 point at which we may be entering bubbly territory. Therefore, I've collected the economic information below:


1980 $ Price - Price in Silver Oz. @ $50 per ounce


Avg. New Home $76,400 - 1528 oz.


Median Household Income $17,710 - 354 oz.


First Class Stamp $0.15 - 0.003 oz.


Gallon Regular Gas $1.25 - 0.025 oz.


Dozen Eggs $0.91 - 0.018 oz.


Loaf White Bread $0.50 - 0.01 oz.



Next, we'll look at the 2011 - Silver @ $41 per ounce


Avg. New Home $202,100 - 4,929 oz.

Median Household Income $52,029 - 1,269 oz.

First Class Stamp $0.44 - 0.01 oz.


Gallon Regular Gas $3.75 - 0.09 oz.


Dozen Eggs $3.00 - 0.07 oz.


Loaf White Bread $2.78 - 0.07 oz.


It's easy to see from these two pricing tables that you need a lot more silver to buy everyday items in 2011 than was required to purchase the same products at the peak of the 1980 silver bubble. For example, you could purchase an average new home in 1980 for only 1528 ounces of silver, but you'll need 4929 ounces to close on that same house today!


Finally, I'd like to see how high silver would have to rise in price before it could buy the same amount of products it did in 1980. To determine the 2011 dollar adjusted figures I'll divide the current 2011 dollar product costs by the number of silver ounces required in the 1980 peak. See below:


Avg. New Home - $132 per ounce silver


Median Household Income - $147 oz.


First Class Stamp - $147 oz.


Gallon Regular Gas - $150 oz.


Dozen Eggs - $167 oz.


Loaf White Bread - $278 oz!


The incredible numbers above show that silver will have to rise to between $132 to $167 per ounce to arrive at pricing levels in 2011 dollars that proved to be overheated or bubble-ridden in 1980! In addition, if you want to eat bread again like we did in 1980, you're going to need silver at $278 per ounce! So, our tentative figure of $134 per ounce for a silver top is pretty right on the money.

Given all the information above, I'd say we have quite aways to go with silver at about $41 an ounce before we reach any frothy action! For my part, don't even wake me until silver has exceeded $100 per ounce!

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles.

Rick
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Buy Gold Online Today at APMEX.com

Thursday, April 7, 2011

Silver is Consumed!


Industrial Demand


The first fact that jumps off the page is that the future for silver looks remarkable with industrial silver demand rising from 15,160 tons (487 million ounces) in 2010 to 20,712 tons (666 million ounces) in 2015. Much of the growth in the global total of industrial silver consumption will be driven by stronger demand for a number of established uses including the manufacture of electrical contacts and the use of silver in the photo voltaic industry. New uses center on silver's antibacterial qualities, while other new uses tend to make use of its conductive properties, including solid state lighting and Radio Frequency Identification (RFID) tags. Overall please note that silver’s importance in the technology of the day is huge. We go so far as to say that the demand from silver has transformed from a want to a need! Whether we are in a boom or bust silver’s demand will remain robust. It is now needed to make all facets of an economy run well and at all levels, even down to individual needs. This secures its future and assures us that silver prices are well supported. Here is the list of the amounts used in different applications that emphasize this point.


- Cell phones used 404.35 tonnes [13 million ounces] of silver last year.

- Computers consumed 684.29 tonnes [22 million ounces].

- Thick film PV consumed 1,461.90 tonnes [47 million ounces] in 2010.

- Automobiles which used 1,119.75 tonnes [36 million ounces] of silver.

- Electrical and electronics demand for silver reached an all-time high of 7,555.21 tonnes [242.9 million ounces].

- Solar Power in 2011 is expected to reach 2,177.29 tonnes [70 million ounces], up 40%.

- RFID tags in 2010 reached between 31 and 62 tonnes with a long way to go before reaching full market.

- Water purification used 62 tonnes [2 million ounces] set to grow to 74.65 tonnes [2.4 million ounces].

- Medical applications may grow strongly to reach 93.3 tonnes [3 million ounces] by 2015.

- The use of nano-silver in goods packaging and hygiene combined would consume 124.4 tonnes [4 million ounces] of silver over the next five years.


Silver is consumed


While photographic use of silver allows for the re-cycling of silver, reclamation of silver from most of the above uses is difficult to nigh-on-impossible. This in itself assures either a constant or rising demand for these applications. Of particular note is the growth in Asia where we are watching around half of the globe’s population developing at infrastructural level as never before. This growth will continue at double figures, per annum for at least the next decade. Gold is rarely consumed as it is deemed far too valuable. Reclamation efforts relative to the value of the gold ensures that scrap merchants will go to extraordinary lengths to recover the gold. In silver’s case these efforts would cost more than the sale of the silver so used. As the silver price rises further reclamation efforts will become profitable and more silver will be recovered, but we are still a long way off from that day.


Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles.

Rick
CLICK ADS BELOW FOR FREE DISCOUNT!

Buy Gold Online Today at APMEX.com


Wednesday, March 30, 2011

Why Junk Silver Ain't Junk!

Those paying attention to world events, inflation, and the destruction of the US Dollar are buying silver. However, there are many forms of silver available for buyers including bars, rounds, American Silver Eagles, foreign silver coins, and 90% US silver coins or junk silver. I believe junk silver coins (dimes, quarters, halves) minted for circulation up to and including 1964 make the best investment for the following reasons:

  • First and foremost, during intense bull markets in silver - like the one we're experiencing right now - junk silver tends to outshine (and outperform) silver bullion.

  • Junk silver is a finite commodity.

  • Junk coins are no longer being produced (the scarcity factor).

  • Junk coins are easily recognizable.

  • Junk coins are divisible, meaning you're able to use small amounts to pay for something.

  • Junk coins require no assaying.

  • Junk silver was produced by the U.S. government, meaning everyone everywhere recognizes what you've got, so you don't need to run any tests to prove its value.

  • Junk coins are utilitarian, meaning you could actually put change into a payphone (remember those?) or a vending machine to purchase a product or service.

  • Junk coins were produced by the US government itself - and remain "legal tender". Therefore it is unlikely they will be confiscated by said government.

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies:

Rick

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Should I Pay To Store My Gold / Silver?

Many gold & silver sellers today offer buyers the option to store their precious metals for them in their secure vault for a fee. To some concerned about theft or storage, this solution could seem like a good deal. The buyer gets to own gold and silver without the worries associated with keeping these valuable metals at home. So, is it wise to give your precious metals investment to your seller for safekeeping? Heck, NO! Why? See below:

  • Conflicts of interest - The seller is running a business. Like every business profit and cash flow are primary concerns. The temptation for a vendor to "sell" you imaginary gold or silver and then charge you fees for its storage at his facility are very real. The situation practically begs for a ponzi scam set up. Even a basically honest seller with sub par business skills could find himself in a financial tight spot if a large amount of deposits are withdrawn precipitously or through plain mismanagement.

Example: Earlier this month, FBI agents seized computers, records and safe-deposit box keys from the Tigard home of Lawrence Henry Heim, president of U.S. Gold & Silver Investments Inc. in Portland. The FBI says the mail and wire fraud investigation stems from unfulfilled investor orders made as long ago as 1998 and as recently as October 2010.


Heim and his company also face three lawsuits -- one in federal and two in state courts -- seeking more than $875,000 and alleging breach of contract. One of the suits was filed on behalf of the estate of the late Portland high-tech pioneer Tom Holce.


According to the lawsuits, first reported in Willamette Week, Heim's company has not delivered on at least $875,000 of U.S. gold and silver coins. In some cases, the suits say, investors asked Heim to store coins on their behalf. In others, Heim entered into contracts with investors for which he would pay interest while holding the coins, according to the lawsuits.



  • Bankruptcy & Legal Problems - What happens if a business storing your PM's goes bankrupt, or its assets are seized for civil and criminal legal proceedings? There's just no clear answer to this vexing question.

Example: Bernard Von Nothaus, the founder of the Liberty Dollar was arrested in 2007 and over $7 million dollars worth of copper, silver, and gold bullion owned by investors storing their PM's with the company were seized by the Federal government. Von Nothaus was recently convicted of counterfeiting, and faces 15 years in jail and substantial fines. In addition, the US government is seeking court permission to permanently confiscate all the bullion seized. As it stands now, the investors in the Liberty Dollar stand to lose their entire stored bullion, or at best face long legal battles to regain ownership.


There are plenty of other reasons not to entrust your gold and silver to others, but I hope the above two "horror stories" will be sufficient to dissuade anyone from pursuing this foolish investment choice.


Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles. Rick


CLICK ADS BELOW FOR FREE DISCOUNT! Buy Gold Online Today at APMEX.com

Tuesday, March 29, 2011

Prices Haven't Risen for Over 70 years!

When you're riding in a car the houses and trees outside the vehicle appear to be whizzing past rapidly while you stand still. Of course, every adult knows that the apparent movement of the objects outside the car is only an optical illusion. The motor vehicle in which you're riding is moving. The scenery is actually rooted fast.

The driving analogy above is ideal for describing the inflation of prices in US fiat money (US Dollars). It is not the prices of food, fuel, etc., that are continually moving upwards, it's the value of the US paper Dollar that is plummeting downwards!


To prove my price inflation assertion, let's look at everyday prices on items from 1940 and 2010. All costs will be computed using US 90% silver coins (dimes, quarters, halves) that were minted for circulation up to and including 1964. Coins minted after that date for circulation were made from base metals and fall under the heading of fiat money (money that has no value outside of the government mandated value).


Average Cost Gallon Of Gas


1940 $0.11 cents


2010 $2.75


Present Value $0.11 cents silver money $2.97


Average Cost Loaf of Bread Food


1940 $0.10 cents


2010 $2.79


Present Value $0.10 cents silver money $2.70


Average Cost 1lb Hamburger Meat


1940 $0.20 cents


2010 $3.99


Present Value $0.20 cents silver money $5.40



You can see from the price information above that if you'd saved your 90% US silver coinage since 1940, you could still buy these everday items for the same amount based on their silver content value! In other words, the "real prices" of these items has really stayed relatively the same. The only reason that inflation has appeared to cause prices to rise is that the actual buying power of the US Federal Reserve Notes un-backed by precious metals has dropped precipitously.


There are exceptions, of course, to the above rule. Although housing prices have been battered by the recession, they're still hovering above their 1940 silver coin equivalent. The price of a new car is likewise further ahead than its equivalent in 1940 silver coins. However, I expect these exceptions to be liquidated in the future as silver continues to rise versus the empty shell that is the US Dollar of today.


So, the next time you fill up with gas, don't give the gas station attendant a hard time. Remember, it's the Federal government with its money printing presses flooding our economy with worthless greenbacks that you should direct your anger towards.


Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles.


Rick

CLICK ADS BELOW FOR FREE DISCOUNT! Buy Gold Online Today at APMEX.com

Wednesday, March 23, 2011

Silver Eagles vs. Silver Rounds!











A never-ending debate raging within the silver buying community revolves around the merits of owning American Silver Eagles (ASE's) vs. generic silver rounds. Despite the basic logic of one troy ounce of silver is one ounce silver is one ounce of silver, I believe the ASE's are clearly superior to rounds for trading for several market reasons.

Firstly, ASE's are minted by the US government. Silver rounds are minted by numerous private firms. Every American alive today has been raised with the notion that the only valid money is money minted or printed by the US government. Any privately minted items would be subject to inherent prejudice as counterfeits.

Secondly, the American Silver Eagles are uniform in design and weight since 1986. Americans are used to seeing the same basic pennies, nickels, dimes, quarters etc., for decades. Sure, the Mint will change the obverse portrait of Washington slightly and the reverse for the state issue quarters, but anyone can pick out US circulating coins fairly easily. Silver rounds, on the other hand, come in a bewildering number of designs from prospectors to easter bunnies, Santa Claus, and even a wizard (see above)!

Thirdly, the ASE's are one official US dollar. Some silver round proponents think that this assigned denomination will damage the ASE's buying power. However, based on historical hyperinflationary examples in Weimar Germany, Argentina and others, a silver dollar will trade for a lot more than the US paper ones.

Silver rounds will be more problematical because of the wide variety of pieces made. In addition, most companies go out of their way to describe their product as a round or medallion, not a dollar or a coin. The man behind the Liberty Dollar, Bernard Von Nothaus, didn't use the same care as other private manufacturers, and designed coins with recommended dollar denominations that appeared dangerously similar to US coins. As a result, he was recently found guilty of counterfeiting and faces fines, expropriation of millions of dollars of bullion, and 15 years in prison! At any rate, the non-denominational silver round will require a lot more selling and explaining by the prospective trader to convince the product vendor than an ASE holder will likely be required to do.

ASE's are selling for around a 10% premium currently, while rounds are averaging around 5% above the silver melt price. I guarantee that in a case of rampant hyperinflation you will not be sorry you spent the extra 5% over the generic rounds. Besides, I'd feel damn silly as a grown man trying to explain to some merchant why he should accept my coin with a wizard or a freaking Easter Bunny on it! That alone is worth an extra 5% in my book!

Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles.

Rick

CLICK ADS BELOW FOR FREE DISCOUNT!

GoldSilver.com - Buy Gold & Silver