Friday, December 10, 2010

Weimar Hyperinflation vs. US Dollar


German Children Playing with Worthless Paper Reichsmarks

During the Weimar Germany hyperinflationary period (1922-1923) the Reichsmark lost value rapidly against the US Dollar. Review the information below for conversion rates as the hyperinflation progressed:

Timeline of Weimar Republic Hyper-Inflation (Reichsmarks per USD)

June 24, 1922: 272 Reichsmark (RM) to $1.00 US
July 1922: 670 RM
August 1922: 2,000 RM
October 1922: 45,000 RM
November 1922: 10,000 RM
December 30, 1922: 500,000 RM
February 1923: Reichsbank buys back RM (or reichsmark); stabilizes RM at 20,000 to 1 US dollar
May 4, 1923: RM 40,000
June 1, 1923: RM 70,000
June 30, 1923: RM 150,000
August 1-August 7, 1923: RM 3,500,000
August 15, 1923: RM 4,000,000
September 1, 1923: RM 10,000,000
Around September 10 to September 25, 1923: Prices reportedly rise hourly in several German cities.
September 30, 1923: RM 60,000,000 = 1 US Dollar
November 15, 1923: Rentenmark issued; pegged to the Gold Standard; Rentenmark 4.2 = 1 US dollar; at this time: Old Reichsmark 4,200,000,000 = 1 US dollar.
1 New Rentenmark = 1 Billion Old Reichsmark!

Only the issuance of the Retenmark, backed by bonds indexed to market prices (in paper Marks) of gold, brought the out of control hyperinflation to heel.

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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China Gobbling Up Silver!

The CPM Group in a new report said silver use in China is estimated to have risen around three and a half times over the last decade, from 40.8 million ounces in 2000 to 139.2 million ounces in 2009, twice as large as many Western commentators have previously suggested. “Chinese silver fabrication demand is projected to account for nearly a fifth of global silver fabrication demand this year,” CPM Group said.

China has also recently encouraged it's populace to buy both silver and gold as investment vehicles against inflation.

The report further reviews uses for silver, including new fabrication demand such as solar panels, as well as investment. The report includes 10-year projections of supply, demand, and prices under a base case and two alternative scenarios.

“Strong investment demand, the single most important factor in influencing the price of the metal, is expected to keep silver prices at elevated levels during the projected period,” CPM Group said in a news release announcing the publication, which can be purchased. “Investors who view silver as a safe-haven asset are expected to continue buying large amounts of silver over the next couple of years as uncertainty regarding global economic growth, financial market instability, and volatility in major currency markets persist. As these concerns recede later in the decade, investment demand is projected to decline. Silver prices are expected to weaken alongside the decline in investment demand as the decade progresses.”

CPM Group said fabrication demand for silver is forecast to rise over the projected period, providing additional support to prices.

“Even in present economic conditions, there is strong demand for some of the products in which silver is used, including various electronic components used in a full range of consumer and industrial equipment,” CPM Group said. “Fabrication demand for silver is expected to rise further over the next few years, due to an anticipated improvement in global economic activity coupled with increased use of silver in some of its new and relatively new uses, such as solar panels, silver-zinc batteries.”

Primary silver mine production is expected to increase due to high silver prices and the relatively low cash and total operating costs, CPM Group said. Also, since much silver is produced as a byproduct of gold, copper, lead, and zinc, favorable market fundamentals and rising prices for these metals are expected to mean higher output and thus more silver as a by-product during the initial years covered by the CPM Group report. However, during the second half of the forecast period, net additions to silver mine supply are expected to decline, which CPM Group forecast to support silver prices during that time.

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


Wednesday, December 8, 2010

Hyperinflation in the Future!

In 1910 the average unskilled worker could expect to earn about one silver dollar per day. He was expected to support himself and his family on this daily wage. Doesn't seem like much today, but it was enough to buy the food and fuel needed to keep going and even set a little aside each week.

How much would a US worker need to earn each day in 2010 to pay the bills to heep pace with his ancestor? Even more interesting, given the same rate of inflation, if not hyperinflation, how much will it cost our future children in 100 years just to get by?

1910 - $1.00 wage earned per day (unskilled work)
2010 -$103.00
2110 -$10,600

1910 - $0.05 candy or chewing gum
2010 - $1.22
2110 - $28.00

1910 - $0.165 gallon milk
2010 - $3.85
2110 - $89.70

1910 - $0.125 one gallon of gas
2010 - $3.00
2110 - $73.00

Voltaire (1694-1778) “Paper money eventually returns to its intrinsic value ---- zero.”

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.

Measuringworth.com CPI and Wage calculators were used to compute the prices above.

Rick

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Buy Gold Online Today at APMEX.com


China's Number One Coin Counterfeiter!

Liu Ciyun (who prefers to be known by his eBay handle, “Jinghuashei”) is a typical young upwardly-mobile Chinese suburbanite. Married, with a 2-year-old son, Jinghuashei has worked hard the past few years to build a business.

Like most legitimate businessmen, Jinghuashei operates within the laws of his country, and has earned official certification for his small production facility, which employs up to 30 people. The products he sells are properly licensed, where appropriate, and absolutely, 100 percent legal to produce and sell in China.

The only fault that most Americans might find with Jinghuashei’s business model is that he is in the business of producing counterfeit coins.

Jinghuashei’s company is called the Big Tree Coin Factory. It is located in the Fujian (also known as Fukien) province in the southeast portion of the People’s Republic of China. This area is well known to be a hotbed of counterfeiting activity and Jinghuashei acknowledges being aware of approximately 100 competitors who are manufacturing fake coins.

Jinghuashei says that his coin factory is probably the largest of its type in China. It produces in excess of 100,000 fake coins per month for Chinese coin types alone.

He says he is currently only selling about 1,000 counterfeit U.S. coins per month, mostly on eBay. His primary motivation for servicing this comparatively small volume business is that he is making contacts with people he hopes will come to China to buy counterfeit coins on a wholesale basis.

Jinghuashei also claims a sales volume of several thousand counterfeit coins per month in world coin types.

Legal business
Jinghuashei is forthcoming about his business practices. He is certain that he is operating legally in China, which requires that the coins he makes are dated 1949 or earlier. As long as he sticks to this one important regulation and maintains his business certification (license), he says he has nothing to fear from the authorities in China.

But what about the United States of America?

Isn’t he worried that the Secret Service or some other U.S. government agency will come after him for making counterfeit U.S. coins? After all, the coins struck by the U.S. Mint, regardless of date, are all still legal tender, and thus subject to U.S. coin counterfeiting laws. It is illegal for him to sell these coins in the United States, even via eBay.

Jinghuashei responds by claiming that he is operating within the confines of the Hobby Protection Act, a U.S. law that requires all nongenuine numismatic items produced after 1973 to be permanently and conspicuously counterstamped with the word COPY. When informed that his eBay auctions are not in compliance with this law, because he is using a punch that says REPLICA, he seems unconcerned.

Despite numerous online chats and e-mail exchanges with him in which the U.S. law has been discussed, Jinghuashei still hasn’t changed his punch to be in compliance.

Although he has never said it outright, it is apparent he feels invulnerable to U.S. law enforcement because they are unlikely to go all the way to China to prosecute him for the relatively small sums of money his eBay sales generate.

The word “replica” was used in conversations with and questions of Jinghuashei since that is the term he prefers and he appears to be more open to talking than if the terms “counterfeit” or “fake” are used.

Production costs
Jinghuashei acknowledges that the minting equipment currently used in his Big Tree Coin Factory is old and the images he provided show a cramped and dirty environment. But that helps to keep Big Tree’s coin manufacturing costs very low. He says he has access to more modern presses when he needs them.

Jinghuashei says it costs him only 8 cents each to produce each fake Chinese coin using iron-based planchets. Counterfeit U.S. coins cost more – an average of 50 cents each – because the copper and nickel planchet alloys cost him more to make. Jinghuashei says these figures include his entire expense, including materials, labor and marketing.

On eBay, Jinghuashei’s single-coin auctions are usually listed with a starting price of 5 or 10 cents, and they usually close around those prices when he gets a buyer.

Asked how he makes a profit if it costs 50 cents each to make his coins, he explains that he makes most of his profit from the shipping expense he collects from buyers.

This is a common practice with China-based sellers on eBay. They sell the item very cheaply, but then charge as much as $70 or more for shipping. Doing this serves two useful functions. First, their Final Value Fee expense is minimal, since eBay bases this fee on the auction’s closing price. Secondly, if an item is returned to the seller for some reason, the buyer can only recover that minimal bid amount since shipping and handling is typically nonrefundable.

Most of the Big Tree Coin Factory’s current profits are coming from the large number of fake Chinese coins it produces. Many of these coins are replicas of ancient Chinese coins. There is a strong demand for them at flea markets and in tourist zones. Jinghuashei does an active wholesale business in fake Chinese coins, most of which are sold within China itself.

Some of the photos Jinghuashei provided of his storefront operation, the Big Tree Temple Coin Shop, depict fake Chinese artifacts, but he says that some of the goods for sale in the shop are produced by other counterfeiters.

Also evident in photos he provided are what appear to be slabs similar to ANACS slabs, and containing fake U.S. coins. When queried about the slabs in this photo, he became very wary.

Reprint from
Coinworldonline.com

Update: Jinghuashei was kicked off eBay back in August 2010, FINALLY! He had a total of 9,240 feedbacks, 52 of which were negative in the last twelve months.
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!

GoldSilver.com - Buy Gold & Silver






Monday, December 6, 2010

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!

Buy Gold Online Today at APMEX.com


US Mint Halts America The Beautiful Coin Program!


The US Mint announced today that they were halting the distribution of the 5 oz. America The Beautiful coins due to consumer complaints about sky high premiums being charged by distributors. Primary distributors like APMEX were charging premiums of $130 above the cost of the silver in the coin due to high demand. Other secondary distributors were asking $200 or more per coin in premiums above silver coin cost. The US Mint, on the other hand, was only charging primary distributors $9.95 per coin to cover minting costs.

Due to the US Mint having to buy new press equipment to handle the large bullion coins and difficulties associated with the manufacturing process, only 33,000 sets of the coins were to be minted for 2010.

Stay tuned for further developments as the drama unfolds!

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


Should You Buy the 5oz. 2010 America The Beautiful Coins?


Should you buy the 5 oz. 2010 America the Beautiful bullion coins?

  • The answer is YES if you're looking for a quick flip and profit. Current premiums at APMEX are running $130 per coin over silver melt value. Even at this level, however, APMEX blew through 1000 sets in one day and is currently sold out. I've seen sets on ebay now with bidders at $200 and higher per coin above the silver melt price as I write this blog.
  • The answer is twofold if you plan to hold onto these coins for the long haul. NO, and HELL NO! Look, these coins are still bullion coins, not numismatic collector's items. You can probably make a quick buck on the press these things are generating now, but it's unlikely that a set of bullion coins, no matter how scarce, will hold onto much less significantly grow the already skyhigh premium. Most likely much of the current panic premium will evaporate in 2011 when the new batch of coins are minted.
The US Mint will make 33,000 sets of these bullion coins in 2010. If you must buy, then unload them ASAP (preferably even before you take delivery) and take your profit while the getting is good! For the long term, stick with the 1 oz. American Silver Eagles with their $2.50 premium per coin.

If you really must have a set for yourself, my advice is to wait until next year when the buzz dies down along with the current hyper-premium. I'm sure they'll be some sellers looking to unload some sets to cut their losses.

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