Anerica 2050. What Will We Build? Part 5.

I am an historian, not a psychic. America in 2050 is just a nice round date. I believe that our destiny lies reliably in the past. If you want to know where we're going, we have to look at where we (and Western Europe) have been.

Nanny State: Path To Revolution

The recipe for a social and political revolution is fairly simple. Have a large percent of the population of a country in perpetual poverty, with a tiny rich minority holding the majority of all wealth. Insure the middle class is small and powerless. Mix in rising expectations with too slow progress, and a lost war or declining power and respect for social/religious/political structures (like caste systems, the Catholic Church, or the King). Finally add a spark, and voila, we have a full on 'blood in the streets' revolution.

The French Revolution in 1789 and the Russian Revolution in 1917 follow the above pattern pretty closely. The mass of society willingly participated, because they had little to lose and everything to gain by overturning an established order that largely excluded them from power and confined them to a tenuous periphery.

Today in 2012 in America we can view Middle and Near Eastern revolutions on our flatscreens nightly. The Libyan dictatorship has fallen, along with Egypt and soon to follow Syria. Iraq and Afghanistan are boiling under the surface, and are likely to erupt once the American military presence has withdrawn. Certainly these world events are cause for grave concern, but my focus is drawn to a much closer arena...America.

The civil rights struggles and riots in the late 50's and 60's were nothing less than a partially successful revolution. An oppressed underclass (African-Americans) rebelled at the second class citizenship that they had endured since the slaves were freed in 1865. "The long, hot summer," was something Americans heard a lot about that as the summer months approached in 1968, and it filled them with dread. By 1968, just the word "summer" was conjuring not just beaches and vacations and re-runs on TV, but also what were almost universally known as "race riots," events that today, with more circumspection, we call "urban rebellions." Large swaths of Los Angeles were devastated in summer 1965; much of Newark and Detroit (and Buffalo, and Milwaukee, and Minneapolis) went up in flames in summer 1967. By the mid-70's, however, they had largely petered out.

Why did the civil unrest end abruptly? Answer: They were paid off!

The Nanny State

America of 2012 is a semi-socialist country where over 48.5% of all households contain at least one person who receives some form of government aid. The social and economic safety net has reached an extent where our national deficit (including monies promised in the future), is estimated at $100 Trillion dollars, or over $300,000 per American citizen!

Many complain about the bloated government-sponsored entitlement programs, but few consider the relevance of the timing of their creation. Social Security was rolled out during the Great Depression. The Food Stamp program was introduced in 1964, as was the lesser known Job Corps (free trade school education for poor, urban youth). Welfare too was dramatically expanded in this decade, and the era of the "government cheese" stories were born.

One way to look at the expanding social and economic programs above is to say they were merely responses by a receptive government to a petitioning electorate. Another, less naive way to explain these expensive programs, was that they were simply bribes paid to the restless underclass to cease their troublesome activities! Current precedents are Arab Kingdoms like Saudi Arabia pouring oil money into the streets to keep their populations docile and obedient. The USA did much the same in the 60's, and has only accelerated the process to our 2012 America where the government is always expected to be there when a citizen is hurting...like a good Nanny! And who would ever rebel against an entity that supplies food, housing, and the other basic needs of life?

Finally, the fiat paper dollar is the last refuge of a controlling American state. If you rebelled centuries ago, the King's head might end up in a basket, but your money was still good. Anyone in any country would've been all-to-happy to take your gold or silver coin, even if it had the face of a very dead sovereign upon it. Not so with the fiat paper dollar of 2012!

The paper dollar of 2012 is reliant solely on the 'good faith and credit of the USA'. That's it, brothers and sisters. No gold or silver is available to back these 'promises'. If you rebel against the government of the USA and win, then every dollar in your pocket instantly reverts to their inherent worth...zero! If you actually succeed in throwing out the bums, you become penniless. All your hardwork over all those years was for nothing more than to build a supply of greenbacks to feed your homeless campfire!

How's that devious method for keeping your slaves loyal and peaceful?

America 2050

The social program bribes are already falling short in America 2012. Social Security is admitting to projected future shortfalls. Unemployment is high and likely to remain so. The dollar is weak, and with further QE (Quantitive Easing, or money creation out of thin air) it must continue to grow weaker based on simple supply/demand economics. Eventually between now and 2050 the US dollar will ultimately fail. When that happens the social net bribe will fall to pieces. The poor will form the majority of the populace, with the very rich occupying the tip of the new economic pyramid. The middle class will be virtually erased, and their stabilizing social and political power dramatically weakened. The America of 2050 will be a second or third rate power, eternally on the verge or in actual blood-stained revolution.

Of course, there is one possibility to forestall this revolutionary state - military run or supported dictatorship. Shooting thousands of people does make quite an impression on rebels, at least for a while. However, we need look no further than an exploding Arab world to know the end results of playing that heavy card!

Rick

America 2050: What Will We Build? Part 4.

I am an historian, not a psychic. America in 2050 is just a nice round date. I believe that our destiny lies reliably in the past. If you want to know where we're going, we have to look at where we (and Western Europe) have been.

There are many articles on 'Fiat Money' and its history. I urge you to read them. I'm seeking brevity, not comprehensiveness.

Future Economy - The Death Of The Fiat Dollar

The Founding Father's of America disagreed on many things. The extent of federal vs. state power, slavery, taxation, the form or our republic, how to give the smaller states some voice without being unfair to large ones. However, there is one thing they all agreed upon. Silver and gold constituted money - and paper fiat currency did not.

Briefly, gold and silver have been valued as money by humans for over 5000 years of recorded history. Whenever governments have tried to get around precious and scarce gold and silver as money, disasters inevitably followed.

The Roman denarius, a coin the size of a modern nickel and made of pure silver, was accepted throughout the known world two millenia ago. As the Empire shrank geographically and the size and expense of government grew, the coin was secretly diluted by substituting base metals for silver. Toward the end of the Rome, the denarius had only a thin silver wash and was universally shunned in commerce.

Why did Rome destroy the denarius? Because they wanted money to spend without increasing taxation on the already overtaxed Roman citizens. So, they tried to produce more money without the inconvenience or political repercussions of increased taxation - or the bother of mining and refining more silver. They didn't have any other choice. Paper money wasn't to be invented for over five hundred years, rendering impossible the kind of instant digital and paper money creation we take for granted today.

No, the money magic act we see today had to wait until the Chinese invented paper money in about 806 A.D. Then, the Mongol Empire in the 13th Century used their power and influence to spread it around Asia and Eastern Europe like an STD. The citizens called it 'flying money', as the slightest breeze made it fly away. At first the paper money was backed by gold and silver and the economy expanded. Eventually, however, the government decided it needed more money without the bother of taxation, and the massive printing of notes began. Within two hundred years paper money had become worthless.

Flash forward to 2012. It's been nearly a century since the first modern paper fiat currency was printed in 1913. 'Fiat money' isn't some under-powered Italian car blocking the passing lane. It means that it's money and worth something solely because the US government says it worth something. It's no longer backed by gold or any other real asset. In the last one hundred years the paper dollar has lost 97% of its purchasing power! It's lost 72% just since 1972, when Nixon severed our last connection to the gold standard. The term inflation has been an unalterable part of our lexicon, and it seems axiomatic today that things are likely to cost more tommorrow than they did today.

In America 2050 our money will be very different. In 2012 we are nearing the endgame collapse of the fiat money lie. Our National Debt exceeds $100 Trillion dollars if you include all the money we owe as well as all the money promised in our ever growing "Nanny State" social net.

Prices will fall in deflation, as we have seen. History in Weimar Germany and Austria (as well as many others) tells us that inflation and hyperinflation will then follow closely behind. Paper fortunes will be wiped out overnight. The US money supply will continue to grow because like an addict's addiction, one fix followed by another and another, growing steadily larger to avoid painful withdrawal symptoms.

As prices rise and the middle class melts away like an ice cream cone in the hot sun, riots and unrest will occur. The US Government will be called upon to "do something". History tells us they will have the following options available to them:

1. Implement Price and Wage Controls -  Nixon tried this in the early 70's to combat stagflation. It was voluntary and an abject failure. History tells us when price controls are not enforced, they're ignored. When they are enforced with heavy fines or even jail and death sentences, they likewise fail because factories would rather close than sell their products for below market prices. Goods simply disappear from the shelves. Yes, the price is low and government controlled, but the products are nowhere to be found. In Austria in 1922-1923, a thriving black market cropped up selling anything you could want from sausages to work tools, at a marketedly higher price than the state-mandated one.

The "good" part about this idiotic non-market based strategy is that the government can claim they are actually doing something. It's just the speculators and the big companies who are evil - deflecting blame from them onto the companies struggling with rising raw material costs.

2. The other strategy is more effective, but much less popular. To stop runaway inflation by tightening the money supply and raising interest rates. Increased taxes on businesses and citizens, while slashing government entitlement programs follow. Paul Volcker in the 1980's used some of these methods effectively to recover from the excesses of the Carter years. However, he had a mouse-sized problem, and in 2012 America has a Godzilla-sized monster to handle!

This latter strategy will NOT be employed by any US government, at least not without a major revolution or crash - changing the very structure of our political structure and the "democratic process". At this terminal stage they have no choice but to continue with the former choice, and keep the money machine pumping.

In the America of 2050 many rich will have lost everything they had in paper stocks and dollar denominated assets. The Middle Class will be reduced to a butcher, baker, candlestick maker type form. A large poverty-level workforce and an unemployed underclass will be present, always on the edge of desperation and a never-ending source of political and social rebellion.

We will have a money supply grounded in gold, silver, and other sources of real wealth. The economy will be forced to contract as it has been artificially bloated with easy money and credit over many decades. Prices will become stable, but the standard of living could easily revert back to an 1850 level of sustainability.

America 2050. What Will We Build? Part 3.

I am an historian, not a psychic. America in 2050 is just a nice round date. I believe that our destiny lies reliably in the past. If you want to know where we're going, we have to look at where we (and Western Europe) have been.

Future Economy

The US economy is going through massive change. Manufacturing is no longer the province of the US as it was following WWII, when the US made products for a world looking to rebuild. We were owed by the world, and the US dollar's power and value was unquestioned. "Sound as a Dollar," was a common saying, and the speakers did so without the hint of a sarcastic smirk on their face.

In 2012 America unemployment is high, indeed, much higher than the US government manipulated low ball numbers of 9 or so percent. These number don't count those who've lost their unemployment benefits, who've given up after years of futile job searches, and the massive amount of underemployed. Yes, a job as a Walmart associate counts as a job at $22,000 per year. But it can't hope to replace the income that this now overqualified person earned at his previous employer. Cases of people accepting jobs at tiny fractions of their previous salaries are now commonplace. In these cases, despite the Obama Administration's claims, do not a true recovery make. Our Walmart worker has a job, but he's not buying the goods and services he once could afford. If he's lucky he's scraping by paycheck to paycheck, and not falling back on credit cards and other loans to make ends meet.

Today's America makes virtually nothing it consumes. Our economy is 4 times larger than Germany's, but Germany's share of global merchandise exports is actually higher than America's (9 percent vs. 8.5 percent) in 2009! The other key measure -- little known in popular discussions of manufacturing -- is export intensity, the ratio of a nation's exports to its total manufacturing sales. The global average export intensity is twice as high as that of the United States, which ranked 13th out of the 15 largest manufacturing countries in 2009, higher only than Russia and Brazil. Meanwhile, the leading EU countries had export intensities 2.5 times to 4 times higher than America's. Comparisons of the value of manufactured exports on a per capita basis are even more dramatic: they are higher in Spain ($3,700), Japan ($4,000), Canada ($4,600), and Germany ($11,200) than in the United States ($2,400).

China has become our merchant of choice. In fact, Walmart, the largest retailer in America, claims that 70% of all products they sell as made in China. As a result, China has now become the supplier of cheap manufactured goods to the US. In exchange we give them paper fiat dollars that are backed by nothing other than the "Good Faith and Credit of the USA". In the past they held those dollars in Chinese banks, effectively giving us their products for free. However, rumors abound now that they are quietly spending their hoard of paper dollars on natural resources, gold and silver, mines, real state - anything to divest themselves of a rapidly depreciating piece of green paper. The resulting dollars are dumped back into the US money supply, fueling inflation through basic supply/demand economics.

Of course, in this process the US surrendered it's status as the lender to the world to the largest debtor nation on Earth. We also dismantled the manufacturing base that won WWII and offered a middle class existenance to millions, in exchange for cheap coffee makers!

America 2050 - Economy

It's hard to find a precedent in the past for a nation that has risen as high and fallen as low as the USA must by 2050. I could look at the 18th and 19th English Empire and the shrunken corpse remaining after WWII, and get an weak idea of what the future may hold for America. Once the sun never set on the English Empire. They ruled the seas and were a commanding presence in any world political event. Today they are at best a third rate power excluded from the councils of the powerful. Their economy putters on, but growth of all kinds, population and economic remains static. Like Egypt, they find themselves eternally looking to the past for their source of glory. The USA will likely be in a similar, if not much worse state, in 2050. After all, the America Empire was the largest to date in power, wealth, and prestige, if not landmass. It's only reasonable to assume that her fall would break records as well.

The erosion of the middle class is likely to continue. Jobs working as a barista at Starbucks, or a retail clerk, will never pay the wages to build a middle class existence as heavy manfacturing once provided in post WWII America. Multigenerational family living will replace the nuclear family ideal, and renters will overwhelm buyers as the most economically feasible option. America of 2050 will resemble pre-WWII US infintely more closely than the post war boom version!

Already China is showing its economic, military, and political power around the globe. They're providing Europe with loan guarantees, buying mines and resources in South America and Asia, and pointedly warning American warships to behave themselves in the Taiwanese Straits. It appears we even need them for space exploration, as the Obama Administration announced that they need Chinese help to send a manned mission to Mars!

China is certainly a shoe-in for the next world Superpower. Other Asian nations such as India are sure to gain ascendance as well. America will confine itself to our shores and coastlines, and do our level best to avoid angering our Asian friends. Maintaining a bloated military policing the world is very, very expensive. By 2050, such an extravagance will seem an absurd to a struggling once-great power. Perhaps out of the profound darkness everywhere else, this anti-imperial reality will supply a renewed glimmer of hope that one day the descendants of the Founding Fathers may indeed create the 'City on a Hill' once envisioned by our Founding Fathers! A country that spreads its light by a silent, shining example, not through the miltary interventionist policies that have sought to control the world, but instead has only bankrupted our country!

Rick

America 2050. What Will We Build? Part 2.

I am an historian, not a psychic. America in 2050 is just a nice round date. I believe that our destiny lies reliably in the past. If you want to know where we're going, we have to look at where we (and Western Europe) have been.

Baby Boomers - The Big Elephant in the Room

80 million Baby Boomers are starting to retire. Born between 1945- to the mid-1960's, they are a major part of our consuming economy. They have invested in stocks, started businesses, were famous for outrageous work ethnics, and paid taxes - a lot of taxes.

The problem now is they're retiring and expecting all the dollars that America has promised them for Social Security, Medicare, and other programs. Born in 1961, I receive my Social Security statement every few years. I always read them, but they're never quite real to me. I just can't imagine ever getting back any of the money they've taken from me for this program per se.

Of course, any money I might collect in the future isn't really my money coming back to me. Social Social Security, starting taxation in 1937, has been called one enormous pyramid-scheme, taking money from many and giving it back to a few. Today, about 16 people pay SS taxes for the benefits for 1 retired person. By the time the last Baby Boomer retires, the projected ration will be 2 people paying to support 1 retired Baby Boomer! All government BS aside, that means that SS taxes will have to either to increase by many times, benefits will be reduced or put off to further advanced ages, or money will be paid to retirees that will be so inflated as to be virtually worthless. Keep in mind that retirees are promised a certain amount of dollars per month, not what those dollars will actually buy! Therein lies the government's hole card.

The most likely result will in the future will be more of the same, to an extent. Benefits will be delayed and taxes will slowly rise. However, will future generations sacrifice 80-90% of their paychecks to support Baby Boomers?  If they're voters, I think not. The short fall will come from more money printing until the dollar becomes virtually worthless. Current deficit projections that include financial commitments the US Govt. has made to Baby Boomers and others reveal an astronomical figure of $100 Trillion dollars! That works out to $300,000 owed by each of the 325 million Americans today!

A Baby Boomer will get his $2500 monthly check, and buy one or two days worth of food with it. It's the only solution. The government keeps it word, and the younger taxpayers don't throw them out of office for impoverishing them. Every pyramid scheme has it's balloon popping moment. Bernie Madoff had the Great Recession starting in 2008, and America will have the Baby Boomers to burst the bubble of lying promises that our government has made.

I believe the America of 2050 will have fewer benefits or social programs available. Clearly our debt cannot continue to climb forever. Sooner or later a default, or more likely dollar creation will push us into Hyperinflation as it famously did for Weimar Germany, Austria, Hungary, Argentina, Iceland, and numerous other countries. People will work until death or sickness overcomes them, they will move in with their children, and the standard of living will be more meager than today.

The America of 2050 will undoubtedly still have a tiny amount of very wealthy living high in their guarded castles. But the destruction of the dollar, and the other social programs propping up a middle and the lower classes, will have been severely curtailed - taking the stabilizing influence of middle class working stiffs with it.

Rick

America 2050. What Will We Build? Part 1.

I am an historian, not a psychic. America in 2050 is just a nice round date. I believe that our destiny lies reliably in the past. If you want to know where we're going, we have to look at where we (and Western Europe) have been.

Normalcy Bias

Many people reading my articles and watching my Youtube videos at rickpyle1 sometimes email me or leave comments expressing their exasperation with their friends and family. They want to know how they can't see the economic disasters looming and the dramatic changes in American lives that will most certainly be a reality in 2050. The answer is the normalcy bias held by many of our fellow citizens.

The normalcy bias is an irrational and illogical belief which states that since in the lifetime of the individual nothing catastrophic or devastating has ever occured, then nothing profoundly negative will ever occur in the remainder of their life.

The prosperity enjoyed by post WWII America has been a time of prosperity unparalleled in the history of humanity. We have had recessions, foreign wars, and some political turmoil. However, millions have not been executed without trial in purges, our money has not become abruptly worthless, wars have not devastated our homeland, millions have not been held in concentration camps or died of hunger lying in street. Many other countries including Germany, Japan, Russia, and China cannot make such claims.

America 2050 will have no "get out of jail free card" from the horrors described above. Like all investor prospectus point out, "the past performance of a stock is no guarantee of future results".

Rick

How Reliable is the Old Gold / Silver Ratio?

Many traders, speculators, and investors focus on the gold/silver price ratio in determining which metal is under or overvalued. In recent weeks and months the ratio has collapsed from above 65:1, down to a current low of around 36:1. Throughout the twentieth century, the gold/silver price ratio went to nearly 100:1, occasionally dipped below 30:1, and only briefly hit a ratio of 17:1 in 1980. But few seem to question how misleading this ratio may be, let alone question why the ratio matters for a monetary system that (for the time being at least) is no longer based on gold and silver.

Gold/Silver Ratio as a Relic from Bygone (for now) Monetary System

First off, a quick review of where the interest in the gold/silver ratio comes from. When governments and their people used gold and silver as a medium of exchange, the official mint would dictate at what ratio they would coin gold and silver. In the case of the “American Act for Establishing a Mint” in 1792, all private persons had the right to have bullion coined at “the legal ratios.” The ratio was set by the U.S. government under the direction of the Secretary of Treasury Alexander Hamilton at 15 ounces of silver for every one ounce of gold, often expressed as a gold/silver ratio of 15:1. This relative value had been present in Europe more or less since the late 1500s, when large amounts of silver had flooded into Europe from the huge discoveries made by Spain in Mexico and Peru (which are still the two largest sources of silver today.) This ratio was supposed to be a reflection of the commercial value of gold and silver on the market in Europe—or the proportional value of the two metals in western trade. The European gold/silver ratio of 15:1 was much higher in gold’s favor than in India, parts of Africa, or East Asia, where gold/silver ratios were reported (in isolated cases) as low as 1:1, and generally stayed well below 10:1. Of course, the fixed Anglo-European ratio got out of whack with the market ratio, which is part of the problem with fixed bimetallic systems, but that is another story.

Gold/Silver Price Ratio Is Distorted by Government Bias against Silver

Over the course of the nineteenth century, for various reasons, gold was increasingly favored first by European nations, then by the United States, supposedly as a more stable monetary asset due to its rarity. The prejudice in favor of gold and against silver was due to many reasons, but the bottom line is that silver began to be demonetized in the late 19th century. This demonetization only accelerated throughout the twentieth century as countries from China to the U.S banished their silver from currency circulation. It also did not help matters that huge new discoveries of silver in places like the American West dumped ever more silver on the market. Yet without governments getting rid of silver stockpiles, or refusing to coin new silver bullion at the mint, the monetary demand for silver would not have dropped to as great a degree as it did. Governments took part in a campaign to demolish the monetary value of silver, really, and this cultural legacy has left its scars on the importance of silver as an investment. By the early twentieth century, the value of silver was nearing 100 ounces to 1 ounce of gold, the lowest in history. Yet, the mine production of silver was not 100 times that of gold, nor was the relative abundance of silver money 100 times that of gold.

You should note, then, that the prejudice of the official sector (governments and mints) in the US and Europe has played a factor in the widening of the gold/silver ratio away from 15 to 1, to anywhere from 35: 1 up to 100:1. The dumping of silver on the market by government continued right up until a few years ago. Between 1965 and 2000 governments sold over 3 billion ounces of silver, versus roughly 150 million ounces of gold over the same time period. Moreover, another billion or so ounces of silver was consumed by industry, as opposed to private gold stockpiles actually increasing. The official sector, beginning in late 2009, has begun to buy back some of this gold. They have not begun to do the same with silver. Should we be wondering when they might start?

Keeping with the issue of official sales, governments at present only hold at most 60 million ounces of silver, as compared with 1 billion ounces of gold. Among those who run our world, silver is now far rarer than gold.

With Silver, the Ants (Investors) Will Carry Away the Banks’ Picnic Basket

Given that the official sector can’t dump any more silver on the market, this dramatically increases the importance of the individual investor in the silver market. It means that the vast majority of silver bullion in the world is held by investors. This is quite different from the last silver bull market, where official exchanges and governments stood ready to release several hundred million ounces for consumption.

But just because average investors are the ones who hold most of the silver in the world, please do not take this to mean that there is widespread ownership of silver among retail investors! In fact, up until recently, most people who bought precious metals only bought gold. During the decade from 2000 to 2010, the dollar amounts invested in gold far outstripped those invested in silver. Yet in the past few months something has begun to change.

So far in 2011, dollar demand for Silver Eagles has been nearly equal to that of gold. Inflows into the iShares Silver Trust (SLV) have been greater than inflows into the GLD ETF, and Eric Sprott, of Sprott Asset management has similarly reported that investors are buying more silver from him in dollar terms than gold. Additionally, James Turk of GoldMoney is reporting silver sales near gold in dollar terms. These statements, like them or not, mean that in terms of investor interest the gold to silver ratio is 1 to 1. Since there is less silver above ground than gold, it really means that the gold to silver price ratio should be in silver’s favor.

Please Pay Attention to Gold/Silver Ratios in Terms Other Than Price

I understand if you think that this is a bunch of hyped BS from someone getting carried away with an asset that is dramatically outperforming nearly everything else in the investment universe at the moment. But remember, investment manias take on a life of their own, and when the human investing herd changes directions, you need to learn to get out of the way. I write this with old silver and goldbugs in mind, who perhaps understandably can’t believe the price action on an asset many have owned since it was under 4 dollars. I will address the various metrics for valuing silver today in a different article, but rest assured, with the amount of money printing or monetizing going on, silver may be as cheap today as it was when its price was 10 dollars. Hard to believe, but I think its true.

And at some point, more articles online may begin to quote other ratios between the precious metals. For example, about nine times as much silver as gold comes out of the ground each year, but the vast majority of this silver is used by industry, much of it destroyed. And miners, believe it or not, only believe that there is about 6 times as much silver in the ground that can be mined, according to the USGS. I have read or heard others claim that there is 15 or 20 times more silver in the Earth, but much of this may never, under any circumstance, be economical to mine (this ratio, in other words, is the natural occurrence ratio, not the reserve base ratio). In addition, you might think that producers will just be able to ramp up production in silver to increase the amount of silver bullion or coins to a level greater than gold. But this has not happened yet: the amount of new gold and silver bullion and coin production is not that far from 1:1, even if more silver is produced. And over the past decade, 35-40 times more silver was not earmarked for coins and bullion, which is what the price ratio of gold to silver would lead you to believe.

In short, if you are going to use gold/silver ratios, you may want to think about the possible relevance of other ratios:

9:1 is the ratio of silver to gold annual mine production 6:1 is the estimated ratio of economic gold to silver in the ground (USGS) 5:1 is the estimated physical ratio of all silverware, silver/gold jewelry and other stocks above ground (according to CPM Group) 1:1 is the year-to-date ratio of investment dollar demand. 1:3 (more silver than gold) is the physical ratio of gold and silver coins/bullion These gold/silver ratios are not as familiar to traders, hedge fund managers, or the investing public. But I think that someday in the not so distant future they will be.

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!

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

CLICK ADS BELOW FOR FREE DISCOUNT! 

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

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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

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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

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Junk Silver for the Apocalypse?

In the preparedness world there is a very vocal segment that believes that TEOTWAWKI (the end of the world as we know it) or SHTF (**it hits the fan) will happen any day now. Some see pandemics and plagues, others see Earth Axis Shifts, Mega Tsunamis, Super Volcano Eruptions, Giant Asteroid Impacts, Nuclear War, and even an avenging God as the key players in the extinction of human society. They hold these apocalyptic beliefs so fervently that all prepping actions they take are with the absolute worst case scenario in mind. As such, they talk endlessly about food, water, self defense, medicine and seeds, sarcastically dismissing precious metals like silver and gold as valueless shiny things that you "can't eat".

Now, I'm not saying that big disasters can't happen. The recent earthquake in Japan is just one reminder that we humans live at the mercy of our very geologically active planet, and not the reverse. However, in the last 6000 years of recorded human history mankind has suffered some pretty big kicks to the chops, but has always recovered eventually. We're not immortal, but we're pretty darned resilient. History has proven that much. As such, I always feel a little insulted when TEOTWAWKI extremists assume a human extinction event is not only inevitable, but likely to happen tomorrow or the following day at the latest! They further point out the absurdly obvious conclusion that silver and gold money while pretty handy and valued ever since man started building the first cities in the Tigris-Euphrates River Valley millennia ago, will most certainly be useless when billions are dead and starvation is universal. No kidding, really?!

As far as gold and silver being worthless in a complete and total apocalyptic "gotterdamerung" case, what knowledgeable person could disagree? In a true "Road Warrior" lawless state, food, water, seeds, guns and medicine will most certainly be king, not silver or gold pocket change. However, I like to examine all the percentages before I commit my scarce funds.

Historically, we've had numerous cases of rampant inflation and hyperinflation in the last 100 years of civilization. On the other hand, we've had zero mega tsunamis, a few widespread plagues since Ancient Rome fell, one dinosaur level asteroid extinction strike in the last 65 million years, one super volcano eruption 75,000 years ago, and zero axis shifts and nuclear wars. Statistically speaking, therefore, we should be a lot more worried about inflation and hyperinflation than any of the other known human-impacting events. Junk silver coins (pre-1965 USA dimes, quarters, halves) plainly won't help you if a Mount Everest-sized rock traveling 10 times faster than a speeding bullet splashes next to your oceanview villa, but during hyperinflationary times these shiny coins have saved many thousands in Weimar Germany, Hungary, Yugoslavia, Argentina, Iceland, and Zimbabwe, etc., when their paper fiat money crumbled to dust.

Conclusion: Most definitely have emergency food, water, seeds, guns and meds. In my mind, that all goes without saying. However, trust in gold and silver as the American dollar is openly and systematically undergoing devaluation leading to ultimate destruction by our so-called leaders. Inflation is already here, and hyperinflation is a vicious beast whose hot breath can already be felt breathing down our collective necks! First things first, I say!

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 (below):

Rick

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SHTF Survival First Aid

Many accomplished survivalists are well prepared to defend themselves and their families with a variety of firearms and a cornucopia of ammunition. They also tend to have food, water, generators, and silver and gold for trading. However, one major area of survival is often neglected - Health/Medical/Dental/First Aid. This sector may often be ignored, but it's at least as important as self-defense and food.

I'd like to offer the following suggestions for your medical preparations:

• Adventure Medical Kit - a good first aid kit is crucial. Unfortunately, many of the kits on the market today are composed of substandard materials with gaping holes in important first aid categories. My favorite manufacturer is Adventure Medical for quality contents at an affordable price. They also include a rugged, water-proof pack that's easy to transport.

• Medical Info: The Adventure kit includes easy-to-use water-resistant First Aid instruction cards and A Comprehensive Guide to Wilderness & Travel Medicine. I recommend you purchase the SAS Survival Guide pocket guide. It's a complete survival guide with a good health section that's water-proof and fits in any pocket.

• Add ons: Den-Tek Tootache Kit and CELOX First Aid Temporary Traumatic Wound Treatment. A toothache when no dentist is available can be extremely debilitating. The Den-Tek kit allows anyone to quickly supply a pain-killing temporary filling. The Celox wound treatment causes quick clotting of bleeding wounds to prevent excessive bloodloss.

• Painkiller & Antibiotics - Over-the-counter painkillers like ibuprophen and Tylenol are must haves for any survival kit. Antibiotics can save a life in the case of a bacterial infection. If you have an understanding doctor you can get your prescriptions from him. If not, get some fish! The antibiotics in pet stores for fish are the same meds that are manufactured for human use. Buy The Pill Book to read more about what diseases each medication treats and recommended dosage regimes. Note: Never self-prescribe medication while there are doctors available to consult. Obey all State and Federal laws.

• Red Cross First Aid Course - Take a first aid class from the Red Cross. A little knowledge will go a long way in saving lives when the SHTF!

Rick
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 (below):

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How to be Prepared for Hyperinflation!

You're part of the 1% of Americans who have the vision to see that hyperinflation is coming to America, most likely within the next few years. Believe me, you've already taken the most important step which any twelve stepper would second - you agree the US HAS A PROBLEM! Our country has become a SPEND-A-HOLIC!

The next steps you take could mean the difference literally between life and death for you and your family. My recommendations are as follows:

Firstly, take stock of your financial situation. What monies do you have available that you can put towards preparation. Include any non-precious metals collectibles you own (stamps, numismatic coins valuable due to rarity or condition, antique items, baseball cards, old comics etc.,). How much could you get for them if you sold them on eBay? Be realistic, please. Remember most collectibles took a serious value hit during the present recession. Sell these items ASAP. During hyperinflation the masses can't afford to eat properly. History tells us that during times of extreme national stress like economic collapse, items not related to basic survival revert to their inherent worth...nothing! Owning the first Superman comic book ever printed is cool, but a starving man won't trade a sandwich and a glass of clean water for it when the SHTF (..it hits the fan).

Secondly, divide the money into two groups on a 50-50% basis. Half the money should go for food & water, fuel, medicine, and self defense. The other half should go towards the purchase of junk silver coins (pre-1965 US dimes, quarters, and halves) and American Silver Eagles.

Long term storable survival foods like MRE's (meals ready to eat) and freeze dried foods made by Mountain House are the best. I like the MREdepot for Class C MRE's and you can find more info here on Mountain House foods. Water is the most important item of all, and it is very difficult to stock adequately. If you have a well, make sure you can still draw water if the electricity is out. Wilderness water filters and purification tablets are good to have as well. Camping fuels can be stored easily for cooking purposes. Keep over-the-counter pain killer pills well stocked, and web chatter says fish antibiotics are made by the same companies that make human antibiotics. I really can't say about this last point - but always obey the law. The defense part of the equation is necessary to defend your family should lawlessness breakout as prices soar and food becomes harder to get. A good selection of rifles, shotguns, and Glock pistols that you can shoot along with a healthy ammo supply is best.

Lastly, your remaining 50% should be spent building up a supply of silver for trading purposes. Both silver and gold have been used as money for 5000 years. In previous national hyperinflation experiences these precious metals have allowed owners to preserve their standard of living while others starved and froze. If you have a large amount of funds available for this purpose, you might want to buy American Gold Eagle one tenth of an ounce gold coins as well as silver. Keep the gold and silver in a safe and/or hidden away where you can get at them. Safe deposit boxes won't do you any good if the banks are closed by government mandate.

The above information is just the Reader's Digest version of what you need to know. See my other blog articles for more information and do your due diligence.

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!

Gold or Silver for Survival Trading?

A financial disaster (severe hyperinflation, SHTF, TEOTWAWKI, or a complete US dollar collapse) has occurred. Things are finally improving, and law and order is restored to your area. People and businesses are buying and selling again. Some people are using barter, but carrying around a basket of tomatoes while looking for someone with eggs is tiring to say the least. What type of gold or silver would be best to have on hand at this point to make commerce easier?

Let's review junk silver (pre-1965 US coins), American Silver Eagles (ASE's), and Gold coins and their utility in a post-economic disaster trading environment. Junk silver coins like dimes, quarters, and halves can be thought of as singles, fives, and ten dollar bills respectively. An ASE is like a twenty and a ten dollar bill. A gold ounce coin is like a thousand dollar bill.

I believe junk silver coins and ASE's will have the most utility in trading due to their lower value. When you buy food and gas today you usually use lower denomination bills because it's easy for the business you're patronizing to make change. Imagine the look on a convenience store clerk's face if you paid for your twenty dollar purchase with a thousand dollar bill! Chances are he'd turn you away because he couldn't make change. I imagine the same thing would happen after a dollar collapse as well. If you're dead set on having some gold coins, then purchase the one-tenth of an ounce US gold coins. They demand a higher premium than one ounce coins, but at least they're more like a hundred dollar bill - large, but not too big to make change.

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 (below):

Rick

CLICK ADS BELOW FOR FREE DISCOUNT!

How to ID a Junk Silver Coin

Finding out whether your US coin is 90% silver or not is easy.

1. The first test is to check the date. If your dime, quarter, or half dollar is dated prior to 1965 your coin is 90% silver.

2. Another test is check the reeded edges for the "copper/nickel sandwich". If you see a band of copper around your coin that means it's made of about 92% copper sandwiched in by 8% nickel. Be careful! You have a fake zombie coin on your hands!

On the other hand, if the reeded edges are all silver colored, then you're 90% silver and all good!

3. If you got good ears and a lot of patience, you can try the "ring test". A silver coin when hit makes a clear ringing sound, while base coins make more of a short plink. Sometimes it worked for me, but most often I just ended up dropping the coins all over the floor!

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

CLICK ADS BELOW FOR FREE DISCOUNT!

Inflation Stole My Houses!

In 1913 the Average House cost $3,400 - a millionaire could buy about 295 average homes.

If you bought gold in 1913 with your million dollars at $20 an ounce you'd have bought 50,000 ounces. The value of the 50,000 ounces today would be about $60 million dollars.

In 2010 the average house cost around $200,000 with gold at $1200 per ounce. With $60 million dollars you could buy about 300 homes!

If you kept the cash in, well, cash... you could buy 5 WHOLE HOMES now! What happened? The government and the Big Bankers stole your money using a sly instrument called INFLATION.

If a man offers you gold or silver and you decide to take green paper instead - then I've got a bridge in Brooklyn for SALE with your name on it!

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!

Flying Money

Around 800 AD, The Chinese Tang dynasty invented the first paper money. China was a big country, and the rulers of China didn't like the idea of having to transfer all that heavy gold and silver around on a constant basis. The money certificates were exchangeable by merchants for the stated amount of precious metals in any city in the Empire. This remarkable innovation in trade was nicknamed "flying money" by the Chinese merchants, due to the frequent problem with the valuable paper blowing away on the slightest breeze!

A couple hundred years later the Song, Chin, and Mongol rulers began to use paper currency throughout China. By 1309 AD, the currency called the Yuan, had depreciated 1000%. Often the government would refuse to exchange the old money for new as the old became battered and useless. By the end, the great innovation that so impressed Marco Polo had ceased to have any connection to gold or silver, and reverted to it's inherent worth...nothing!

Every paper currency that followed in Europe, America, and around the world has either collapsed or become substantially devalued. In 1950, a US silver dollar bought 4 gallons of gas. It would do the same today due to its silver content if you sold it for US paper dollars. A paper dollar saved from 1950, however, wouldn't even buy half a gallon of gas at your local pump. That, my friends, is inflation and currency devaluation. Please keep in mind as well, that this loss of buying power occurred during the period of time where the USA was the Mightiest nation on Earth!

Is worthlessness the inevitable future for the US Dollar? In a word, yes. It's purely a matter of time. Perhaps it will be a matter of days, months, or years, but it will eventually become WORTHLESS. The process of paper currency devaluation is like an hourglass with an elastic neck, the sand will continue to slip away, only the rate at which it falls is open for debate.

There are a few truisms in historical economics. Governments will always seek to debase currency because it allows them to spend without raising taxes (which everyone who votes generally hates). Think about that for a moment. If you had a printing press and could print your own money seemingly without a reckoning, wouldn't you print away 24/7? When the government gets print-happy, however, the money supply soars leaving manufactured products & supplies in the dust. Too much money chasing too few goods means inflation, or worse, hyperinflation.

Buy 90% "junk" silver coins, American Silver or Gold Eagles now and prevent your money from FLYING AWAY!

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 (below):

Rick

What Kind of Gold/Silver Should I Buy?

The first thing I want to say is that everyone should have some gold or silver stacked away for the future. Any kind of gold or silver will give you an enormous advantage over the 98% of US citizens that have only paper assets (and no stockpiled survival food/water supplies as well). So, if you own any gold or silver, GOOD FOR YOU! You get the Prepper Seal of Approval! You're light years ahead of the average sheeple who is still blindly plugged into The Matrix. My guess is you're probably the type of person who is reading this blog anyway.

The question asked in the title of this article relates only to the conflict between the Preppers (the intellectual chosen people) as to what types or forms of precious metals are best to have for the uncertain future. We know we need gold and silver, we just want to know whether we should buy Numismatic Collectable Coins, Junk Silver, Silver & Gold Eagles, Foreign Coins, or Rounds and Bars. My infuriatingly simple answer is, IT DEPENDS!

I believe the issue can be broken down into two basic questions:

1. Do you want gold & silver for investment purposes, inflationary and hyperinflationary hedges, or later stage SHTF situations? Unfortunately for the Prepper community, all sizes (and forms of precious metals) do NOT fit all situations.

2. If you want gold & silver for an improving SHTF scenario, which form of precious metals will be most acceptable and therefore more valuable? I believe this questions hinges on the depth and breadth of the evolving knowledge of the newly unplugged Matrix denizens.

In Inflationary periods any of the above gold and silver forms will grant you a defense against the decaying buying power during inflation. Hyperinflationary periods are similarly accepting of all forms of gold and silver, with the only exception being the fact that numismatic coins and values just don't do as well. Coin collecting is a hobby of the rich and the happy middle classes. Hyperinflation makes these classes very unhappy as their wealth evaporates. During this painful period coin collecting is strictly relegated to a low priority, therefore numismatic premiums above precious metal content will suffer.

Bottom Line? During inflation and hyperinflation eBay and coin shops will still exist. You'll be able to exchange your silver and gold in virtually any form fairly easily for currency. You'll also keep up with buying power (or even advance) while paper folks are running around with wheelbarrows overflowing with green fiat paper!

Summary: Inflation - junk silver, gold & silver numismatically valued coins (preferably US - its just easier), Silver & Gold American Eagles, rounds, bars, your grammas silverware, etc. are all good. In Hyperinflation its all good as well, with the exception of numismatic coins.

The next scenario is where things get tough and contentious. SHTF (..it hits the fan) is what most survivalists are referring to when they mention prepping. Society, law and order, and the economy have collapsed. People are starving and perishing for lack of food, water, fuel, medicines etc. So what form of gold and silver are the best in the early stages of collapse? Answer - NONE! People need food and clean water in these initial stages, and they need to defend themselves from marauders. Shiny metals won't supply any of these very basic needs. Preppers who have these INVALUABLE resources will not trade you these necessities for any form of your gold and silver. And the 98% of the population who were completely unprepared for the complete collapse of the world order don't even have enough food for themselves, much less a surplus they can afford to trade away for your junk silver or gold eagles.

Only in the later rebuilding stages of the SHTF situation will gold and silver come into play once more. The question of knowledge of value becomes relevant again as well. Law and order exists once more, at least in the small towns. Economic recovery has begun, and commodity and useful item bartering is a common activity within a 20 mile radius of the newly ordered towns. However, hauling around produce all day to trade to a neighbor for clothing, canned peaches etc., is becoming tiresome. People start waking up to the fact that gold and silver still exist, and can be used once again for trading purposes. So what silver or gold is best to dig out of your stockpile?

I believe the most familiar form of precious metal will be the preferred choice, old 90% silver pre-1965 junk dimes, quarters, half dollars and dollars (war nickels and non-1964 Kennedy halves not included*) will be most useful and readily accepted. Why? Because many people remember that they were once used as currency, and carry the stamp of the old US, the importance of which hasn't totally evaporated yet. Next would come Silver and Gold Eagles. These coins carry a premium due to the stamp on the coin as legal tender with silver content of the Old US. However, people will still need to be educated about just what exactly they are. Most US citizens today do NOT own Eagles, and are not even aware of their existence! They'll be harder to trade at first than the more common junk silver. Lastly, comes the precious metal rounds and bars. Yes, I know they have the same amount of silver as the Eagles, but just who the hell is Sunshine Minting and Johnson Matthey? That's what you're going to have to explain to extremely skeptical (non survival prep) trading partners!

I believe there will still be enough trust in the reputation of the Old US to make US minted coins, 90% junk silver and Eagles, acceptable fairly quickly during the SHTF recovery period. But the privately minted rounds and bars will not have that stamp of approval to rely upon. People will remember that private companies could and did cheat their customers, and that tungsten filled-gold bars did exist. Indeed, even the notion of a private currency will be a hard sell to a NON-PREPPER! Remember, everyone alive today thinks that printing your own money up is called COUNTERFEITING, and is BAD! As a result, I firmly believe that junk silver and ASE's and GSE's are the best ways to go. Believe me, you won't care about the small extra premiums you had to pay during this period of time for the Eagles over comparable rounds. Of course, keep in mind I'm not saying your rounds will be worthless (perish the thought), just a lot more of a pain to move than their US minted alternatives.


Summary: SHTF Recovery Mode - Junk Silver and Gold & Silver Eagles are the only way to fly!

*Note above on 1942-1945 35% silver war nickels and the 40% silver 1965-1970 Kennedy halves. Remember, with non-prepper trading partners you need to keep things simple. They'll understand eventually that all pre-1965 dimes, quarters, halves, and dollars are 90% silver. But please, do not find yourself having to explain these two freaks to non-preppers and non-coin collectors! Yes, I know pound for pound they're cheaper than the 90% coins. My reply? They should be! And please, don't get me started on those so-ugly-even-a-mother-couldn't-love 35% silver "war nickels". I mean, they don't even look like a silver coin! And don't forget to explain to your perplexed trading partners that some of the 1942 nickels weren't made from silver, so you have to look for the big mint mark on the back. Can you say i before e except after c, and sometimes y and w?!Please, give me a break! Refiners like the reputable Midwest Refinery scorn these two silver coins as unacceptable for melting now, and I don't believe anyone else will really want them in the future. Personally, if you have these two turds I recommend you sell them NOW on ebay and buy 90% junk silver ASAP!

Additional Note: I didn't really get into foreign coinage at all. I know there are a lot of stunning Pandas, Kooks, Krugs etc., out there. But notice I didn't even attempt to spell the last two coin names for a very crucial reason. Americans just aren't very knowledgeable about foreign coins and grams and such. We want ounces, and English only please! So, avoid these coins for SHTF instances unless your just a collector who has extra money to play with.

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 (below):

Rick

CLICK ADS BELOW FOR FREE DISCOUNT!