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Doug Casey: Precious Metals Vs. The USD

Tyler Durden's picture


An interview with Karen Roche of The Gold Report

Doug Casey: Precious Metals vs. the USD

One sure upshot of the quantitative easing money flooding the stock
market will be further distortions, chaos and unpredictability that make
the value-investing proposition difficult, if not impossible, according
to Casey Research Chairman Doug Casey. On the eve of a sold-out Casey Research Summit in Boca Raton, Florida, Doug returns to The Gold Report. In this exclusive interview, he warns, "Like it or not, you're going to be forced to be a speculator."
The Gold Report: When the average investor
turns on the news, even on financial channels, they hear that the U.S.
economy is in the best shape it's been in for three or four years. While
the experts say the recovery is slower than anticipated, they expect
its slow recovery will equate to a long, slow growth cycle similar to
that after World War II. You have a contrary view.

Doug Casey: The only things that are doing well are the
stock and bond markets. But the markets and the economy are totally
different things – except, over a very long period of time, there's no
necessary correlation between the economy doing well and the market
doing well. My view is that the market is as high as it is right now –
with the Dow over 12,000 – solely and entirely because the Federal
Reserve has created trillions of dollars, as other central banks around
the world have created trillions of their currency units. Those currency
units have to go somewhere, and a lot of them have gone into the stock

As a general rule, I don't believe in conspiracy theories, and I don't
believe anything's big enough to manipulate the market successfully over
a long period. At the same time, the government recognizes that most
people conflate the Dow with the economy, so it is directing money
toward the market to keep it up. Of course, the government wants to keep
it up for other reasons – not just because it thinks the economy rests
on the psychology of the people, which is complete nonsense. Psychology
is just about the most ephemeral thing on which you could possibly base
an economy. It can blow away like a pile of feathers in a hurricane.

TGR: So, you're saying we're confusing the market's performance with the economy's performance?

DC: Yes. The fact is that the economy itself is doing
very badly. The numbers are phonied up. I spend a lot of time in
Argentina. Anybody with any sense knows you can't believe the numbers
coming out of the Argentinean Government Statistical Bureau, nor can you
(any longer) believe the numbers that come out of Washington D.C. The
inflation numbers consider only the things the government wants to look
at and are artificially low. It's the same with the unemployment
numbers. None of these things is believable.

TGR: Isn't the unemployment figure a lagging indicator of a rebounding economy?

DC: If you look at the way unemployment was computed until the early 1980s – something that John Williams from ShadowStats
does – the numbers would indicate about 20% unemployment today.
Besides, even while the population keeps rising, the number of people
reported as actually working is level or even lower. Most indicators of
the economic establishment, in my view, don't really make any sense.
GDP, for instance, includes government spending – much of which amounts
to paying some people to dig ditches during the day and other people to
fill them in at night. So-called "defense" spending is almost totally
wasted capital. The practice of economics today is pathetic and

TGR: So, the economy is not rebounding?

DC: No. My take on this is that we entered what I call
the "Greater Depression" in 2007. And now, because the government has
printed up trillions of dollars in the last couple of years, we're in
the eye of the hurricane. We've only gone through the leading edge of
the storm. People think this will just be another cyclical recovery like
all the others since WWII. But it's not. It's going to wind up with the
currency being destroyed. It's going to be a disaster… a worldwide

TGR: You indicated that the government is using these
mass infusions of made-up money to prop up the stock market due to the
psychological factor – that people will think the economy's doing well
because the market is doing well. However, we hear that a lot of that
money has been caught up in the banks. Would you comment on that?

DC: As I said, that money has to go somewhere. The
banks have been borrowing from the Fed at something like 0.5% and
investing it in government securities at 2%, 3% or 4%, depending on the
maturity. So, much of that money has been a direct gift to the banks;
and they're basically making an arbitrage spread of 2%–4%. So, yes,
that's happening with some of the money. Still, it doesn't all just sit
in these Treasury securities. A great deal of it, inevitably, goes into
the stock market.

TGR: You also said that psychology isn't the only reason the government wants to see the stock market go higher.

DC: Right. Pension funds have a great deal of their
assets in stocks. Certainly, many funds run by government entities, such
as the state and city employee pension funds, are approaching
bankruptcy despite the fact that the Fed has driven interest rates to
historic lows, artificially pumping up both stocks and bonds. And, I
might add, keeping property prices higher than they would be otherwise.
When interest rates rise eventually – and they will go up a lot – it'll
be something to behold in the markets.

TGR: You mentioned John Williams who's in your speaker lineup for the Casey Research Summit, The Next Few Years.
Another of your speakers is Stansberry Associates Founder Porter
Stansberry, who's been making two points about the devaluation of the
U.S. dollar. One point he makes in his The End of America video
concerns the quantitative easing (QE) you mentioned –those trillions of
dollars. But Porter also anticipates the U.S. government announcing a
devaluation of the currency similar to what England did in 1970. Do you
see that type of scenario occurring, as well?

DC: When the U.S. government last officially devalued
the dollar in August 1971, it had been fixed to $35 per ounce to gold.
In other words, before that, any foreign government could take the
dollars it owned and trade them in at the Treasury for gold. Nixon
devalued the dollar by raising it to $38/oz., and then to $42/oz. It was
completely academic, anyway, because he wouldn't redeem gold from the
Treasury at any price.

But because the dollar isn't fixed against anything now, the government
can't officially devalue it. It's a floating market. The government's
going to devalue the dollar by printing more of the damn things and
letting them lose value gradually – actually the loss will no longer be
gradual, but quite fast from here on out. But it's not going to do so
formally by re-fixing the dollar against some other currency or against
gold. I'm not sure Porter's phrasing it in the best way, but he's quite
correct in his conclusion and his prescriptions as to how to profit from
it. At this point, the dollar is nothing more than a floating
abstraction, an IOU nothing on the part of a manifestly bankrupt

TGR: Another abstraction is the fact that the Treasury
says the money it is printing has a multiplier effect when it gets into
the U.S. economy, so it can pull those dollars back when the time comes.
Is that a viable alternative to offset the devaluation caused by
printing more money?

DC: You have to look first at the immediate and direct
effects of what the government's doing, and then at the delayed and
indirect effects. And sure, just as it's injecting all this money into
the economy – mainly by the Fed buying U.S. government bonds –
theoretically, it can take it out of the economy by doing the opposite.
But I just don't see that happening.

TGR: Why not?

DC: One of the reasons is that the U.S. government,
itself, is running annual trillion-dollar deficits as far as the eye can
see. I think those deficits will go higher – not lower. So, where's
that money going to come from? Where will it get trillions of dollars to
fund the U.S. government every year?

China isn't going to buy this paper, and Japan will be selling its U.S.
government paper because, if nothing else, it'll need to buy things to
redo the northeast part of the country. Nobody else is going to buy that
trillion-dollar deficit either, so it'll have to be the Federal
Reserve. In fact, the Fed will have to buy much more and, therefore,
create more money. That's what happens.

TGR: This currency crisis isn't unique to the U.S. You
just brought up Japan. And aren't all the European countries doing the
same thing?

DC: The U.S., unfortunately, is not unique. This is
going to be a worldwide catastrophe. It's been a disaster for every
country that's done this in the past – Zimbabwe, Germany, Hungary,
Yugoslavia and countries in South America – but those were within only
those particular countries. In most of those cases, people never trusted
their governments; so, they had significant assets outside the country
in a form other than the local currency. The problem now is that the
U.S. dollar is the world's reserve currency and all of these central
banks own USDs as the backing for their own currencies. All these other
countries will wind up finding that they don't have any assets after
all. That's going to happen all over the world.

TGR: With countries around the globe facing the same issue, should anyone hold currencies?

DC: No. Sure, you need local currency to go to the
store and buy a loaf of bread. But for liquid assets you're trying to
save, it's insane to own currencies at this point because they're all
going to reach their intrinsic value. I've been recommending for many
years that people buy gold and own gold for their savings – serious
capital they want to put aside in liquid form. With gold now over
$1,500/oz. and silver at $48, people who followed that advice have made a
lot of money. That's the good news. The bad news is that very few
people have done so. Newbies to the game are paying $1,500/oz. for gold.
It's going higher, but it's no longer the bargain that it was. The
important thing to remember, though, is that gold is the only financial
asset that's not simultaneously someone else's liability. That's why
it's always been used as money and why it's likely to be reinstituted as

TGR: From your viewpoint, how does a person with any
wealth preserve it during this tumultuous period other than by investing
in gold?

DC: Frankly, I don't know. I own beef and dairy cattle,
which are a good place to be; but that's a business, and it's not
practical for most people. I think it boils down to gold.

TGR: But what investments should they be looking at these days?

DC: There really aren't investments anymore. With
trillions of newly created currency units floating around the world,
things will become very chaotic and unpredictable shortly. It's very
hard to invest using any kind of Graham-and-Dodd methodology
when things are that chaotic. Whether you like it or not, you're going
to be forced to be a speculator in the years to come. A speculator is
somebody who tries to capitalize on politically caused distortions in
the marketplace. There wouldn't be many speculators, or many of those
distortions in the marketplace, if we lived in a free-market society.
But we don't.

TGR: So, speculation will supplant value investing?

DC: Well, investing is best defined as allocating
capital in a way that it reliably produces more capital. The government
is going to make that quite hard in the years to come with much higher
taxes, much higher inflation and draconian regulations. You will
actually be forced to speculate. That's a pity, from the point of view
of the economy as a whole. But I kind of like it, in a way. Few people
know how to be speculators, so I should be able to make a huge amount of
money in the next few years. Unfortunately, it'll be at a time when
most people are losing their shirts. But I don't make the rules. I just
play the game.

TGR: As you look over the next year or two with your
speculator hat on, what sectors do you expect to experience the most
distortion and, therefore, offer the most opportunity for the

DC: One sure bet is the collapse of the U.S. dollar.
Always bet against the USD and you'll be on the winning side of the
trade. A very direct way to make that bet is by shorting long-term U.S.
government bonds because, eventually, interest rates will go to the
moon, which means bond prices will collapse.

You can also look at the precious metals because, at some point, when
people panic into them, their price curves will go parabolic. Mining
stocks are likely to draw a lot of money, so they could go wild as they
have many times over the last 40 years.

TGR: Your summit has presentations scheduled on silver,
gold, currencies, Asia, real estate, agriculture and even more. What do
you expect to be the major takeaway this time?

DC: What we're facing now is something of absolutely
historic importance – the biggest thing that's gone on in the world
since the Industrial Revolution. Many things will be completely
overturned in the years to come. What's happening now in the Arab world,
with all of these corrupt kleptocracies being challenged and
overthrown, is just the beginning. We haven't seen the end of this in
any of these countries – Tunisia, Egypt, Syria, Algeria. Of course,
Saudi Arabia will be the big one. Everything's going to be overturned.
And all these stooges that the U.S. government has been supporting for
years could very well lose their heads. It's going to be the most
tumultuous decade for hundreds of years, bigger than what happened in
the 1930s and 1940s.

TGR: Any last things you'd like to tell our readers?

DC: Yeah. Hold on to your hats. You're in for a wild ride.


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Fri, 04/29/2011 - 19:23 | 1222573 Spitzer
Spitzer's picture

Gold IS a bargain still. It could be cheaper then it was in 2000 if you compare it to the expansion of other monetary aggregates.1500 is nothing, I painted the tape at $1275 and I will be happy to paint it again.


Fri, 04/29/2011 - 19:35 | 1222612 Long-John-Silver
Long-John-Silver's picture

$12 Silver and $700 Gold is where I got in. I also have a years worth of food for everyone in my family.

Fri, 04/29/2011 - 20:01 | 1222692 LivermoreJim
LivermoreJim's picture

Right on about extra food, not to mention a propane stove, plenty of propane, water and a lot of whatever else you might need in a crunch.  Worst thing would be a mad scramble to the supermaket trying to fill the cart, and fighting those oblivious of how illusionary the safety of our lifestyle really is.

Fri, 04/29/2011 - 22:58 | 1223089 Michael Victory
Sat, 04/30/2011 - 01:16 | 1223323 JW n FL
JW n FL's picture

It is time for Americans to take back our Country from the Lobby Whore Government that is OWNED By Wall Street Banks / AAA Rated Corporations! "We the People" need to take back our Country. It is to Bad the Broader Populace is watching Danzig wiff da starz and completely ignorant of the Truth! You can fix Stupid and the Broader Populace is Stupid or Blissfully Ignorant and does NOT! want to know the Truth! America will be a Privatized Corporate Police State Very Soon! Because of the Stupidity! Max Kaiser Report Silver JPM TALF Goldman Sanders Report with a Zero Hedge pat on the back for Tyler!

Sat, 04/30/2011 - 00:37 | 1223286 FeralSerf
FeralSerf's picture

You're going to have problems with TSA when you try to take these propane tanks with you on the way out of Dodge.

Historically, the safest plan for most people when the SHTF has been to get away from the "action".

Sun, 05/01/2011 - 03:53 | 1225091 The Navigator
The Navigator's picture

Country Roads, take me home.

Fri, 04/29/2011 - 22:27 | 1223025 Piranhanoia
Piranhanoia's picture

The reactors won't be shut down properly or spent fuel dealt with and we won't need food for that long, but its a nice thought. 

Fri, 04/29/2011 - 19:50 | 1222649 Shell Game
Shell Game's picture

Agree, still an aggressive buyer here.



Fri, 04/29/2011 - 20:45 | 1222801 disabledvet
disabledvet's picture

have you made any trips to "the curb" and "found them wanting?"

Fri, 04/29/2011 - 19:58 | 1222680 Snidley Whipsnae
Snidley Whipsnae's picture

Doug Casey made some excellent observations. I especially like this one because it is exactly what I see since almost all asset classes are now tightly correlated to Fed moves (command economy)...

TGR: But what investments should they be looking at these days?

DC: There really aren't investments anymore. With trillions of newly created currency units floating around the world, things will become very chaotic and unpredictable shortly. It's very hard to invest using any kind of Graham-and-Dodd methodology when things are that chaotic. Whether you like it or not, you're going to be forced to be a speculator in the years to come. A speculator is somebody who tries to capitalize on politically caused distortions in the marketplace. There wouldn't be many speculators, or many of those distortions in the marketplace, if we lived in a free-market society. But we don't."

Sat, 04/30/2011 - 09:55 | 1223723 ivana
ivana's picture

:-D I like begining sentence:
>> As a general rule, I don't believe in conspiracy theories, and I don't believe anything's big enough to manipulate the market successfully over a long period <<

Thann later he listed one by one all manipulations and not free-market society which is = conspiracy

Sun, 05/01/2011 - 10:47 | 1225381 Renfield
Renfield's picture

I don't think any change of historical significance (political or economic) has ever happened, that was *not* the result of a 'conspiracy' of some sort.

Do people think 'God' suddenly decided one day to topple Louise XVI? Or start WWII? or WWI? Were any of the historic empires planned, at all, by anyone? Did 'God' suddenly start flooding the US economy with money in 2008? Maybe 'God', last decade, just felt like making everyone on our street millionaires for taking on a mortgage, then just as whimsically decided to make those same homedebtors real poor over the last five years...

People who dismiss conspiracy theories simply because that's what they are, are doomed to being the pack-runners who 'never saw it coming', don't understand how it 'suddenly' happened, and have no idea what to do when the times change. And times always change.

The answer isn't to avoid conspiracy theories. The answer is to figure out which ones to credit.

Fri, 04/29/2011 - 19:28 | 1222587 Long-John-Silver
Long-John-Silver's picture

World Collapse Bitchez!

Fri, 04/29/2011 - 22:58 | 1223081 Howard_Beale
Howard_Beale's picture

I'll hijack right here about this post...

"Psychology is just about the most ephemeral thing on which you could possibly base an economy."

What the fuck is a fiat currency based on, you idiot? Trust. What is trust? Belief. Where do beliefs come from? Psychology.



Sat, 04/30/2011 - 00:53 | 1223299 FeralSerf
FeralSerf's picture

They come from salesmen like preachers, pundits, politicians, etc.  (All begin in "P" like many other disrespectable professions -- e.g. psychologists.)  Most of the trust is based on lies.  It's fraudulent.  The best carnie is the one that gets the most trust.  He's not usually the one with the most integrity.  He's the best liar.  Ditto with fiat currency creators.  They're a bunch of fucking liars.  Only idiot stupid fucking sheep believe them.  Unfortunately most Earthlings are stupid fucking sheep.

Did I mention that sometimes fiat currency creators are not entirely truthful?

Sat, 04/30/2011 - 01:01 | 1223308 Founders Keeper
Founders Keeper's picture

Howard, I think you just made his point.

Were you trying to say something different?


Sat, 04/30/2011 - 09:57 | 1223728 ibjamming
ibjamming's picture

Nah...just WW III...


Think about it...the end of CHEAP, almost free energy is what's dooming us...  So, we just take it.  Use some excuse to purge the ME of it's current occupants...and just take it.  Almost "free" oil, will allow almost unlimited growth again.  For a while...

Fri, 04/29/2011 - 19:27 | 1222591 Jovil
Jovil's picture

And the Fed will have to print another $2.5 trillion soon to buy the bonds China, Japan, Middle East oil producers will not buy this year which is about 40%. This does not include the Chinese, Japan and others will dump to buy gold, silver and other assets to position themselves when the new international currency is established to replace our USD. Read more here:

Fri, 04/29/2011 - 20:48 | 1222813 Bear
Bear's picture

China and Japan will print more of their currency to buy more of our bonds.

Fri, 04/29/2011 - 22:10 | 1222996 flacon
flacon's picture

Cool. Invest in cotton!

Sat, 04/30/2011 - 03:53 | 1223459 Vlad Tepid
Vlad Tepid's picture

Gibberish.  Why would they spike their economies with inflation just to match us??

Sat, 04/30/2011 - 07:47 | 1223564 Kickaha
Kickaha's picture

Obviously, as willing participants in a currency-kiting scheme.  Just another way to play kick the can.

Fri, 04/29/2011 - 19:40 | 1222637 scatterbrains
scatterbrains's picture

The one nagging issue I keep coming back to is what impact ramping govt bond rates will have on the pm's. Is it not a bond vs. dollar battle? If bb keeps his boot firmly planted on the neck of interest rates then the dollar will die, if he takes his foot off and lets rates rise then the dollar should catch a bid and the pm's should see out flows of money right ?

I imagine there will be wild swings in bonds, pm's and the dollar as BB is forced to try to slow the dollars death down at some point. Not until you get to the other side of that battle, when the country is bankrupt and the dollar is worthless do you see your final reward with your backyard coinage I'm thinking.

Fri, 04/29/2011 - 19:56 | 1222682 anarchitect
anarchitect's picture

Real interest rates (nominal rates minus inflation) would have to go positive, as under Volcker, for PMs to be affected. This isn't going to happen any time soon because it would divert the majority of tax revenue to servicing the debt.

Fri, 04/29/2011 - 20:20 | 1222743 akak
akak's picture

Indeed.  One only has to look at the rise in interest rates from early 2004 at 1.0%, to 2006 at 5.25%, and the simultaneous and corresponding rises in gold and silver, to see evidence that rising interest rates can be irrelevant to the prices of the precious metals, particularly when those rates remain negative in real terms.

Fri, 04/29/2011 - 20:39 | 1222792 FastBoat
FastBoat's picture

You also have to account for the buyers who don't care about a few dollars here or there in price.  It went south for a while, great, I get to pick up more provisions cheap for a while.  I look at PMs just like my long term pantry. 

Sat, 04/30/2011 - 00:57 | 1223307 FeralSerf
FeralSerf's picture

Try 15 or 20% in your calcs.  How much do the (remaining few) workers/taxpayers need to send Uncle then?  Will any of them continue to work for that amount of take home pay?

Did anyone ever hear the rumour that blood can't be wrung out of a turnip?

Fri, 04/29/2011 - 20:43 | 1222803 Bear
Bear's picture

I think you are right. We live in a world of so many catch22's and so little leadership. It is so easy to spend somebodies elses money and so hard to pay the piper.

Fri, 04/29/2011 - 20:49 | 1222815 disabledvet
disabledvet's picture

"real rates" are rising--you just don't equate "margin rates on silver" with "real rates."  in fact "those are VERY real rates" as "you must have REAL money to purchase REAL silver."

Fri, 04/29/2011 - 21:43 | 1222943 Bubbles...bubbl...
Bubbles...bubbles everywhere's picture

What tax revenue?

Fri, 04/29/2011 - 20:16 | 1222742 firefighter302
firefighter302's picture

APMEX is asking customers to sell back Silver Eagles at $3 over spot.

The comex silver reserves are questionable, shall we say?

The governement admits they are out of silver.

Physical silver is selling for (Eagles) $56+ online at the ususal suspects.

I cannot sell silver for dollars, at this time. Not until I see some significant changes for the better. And I do not have faith in Washington to do the responsible thing.

What I'd like to know is opinions on the differences in ETF at $48 and physical over $55.

What does this increasing spread suggest?


"I will fear no evil, for Thou art with me."

Fri, 04/29/2011 - 20:38 | 1222790 Quixotic_Not
Quixotic_Not's picture

If you're holding physical PMs, short of starvation don't let them go until:

A.  The U$D has collapsed and a NEW World Reserve currency has been created as a replacement.

B.  The Federal Reserve FRAUD has been decommissioned and a NORMAL interest rate environment has been re-established..

C.  The (D) & (R) Free Shit Empirehas imploded and an intelligent, rational and SANE region in North America re-establishes a government based on the Declaration of Independence (this would require you not being behind enemy lines).

Pssss...I have a feeling unless you're the last decade of life on Earth, you won't have to wait long, and your patience will be VASTLY rewarded  :-)

Anyone holding paper ANY FUCKIN' THING is nothin' but a chump!

Fri, 04/29/2011 - 20:51 | 1222832 disabledvet
disabledvet's picture

EASY there, tiger.  "All eyes on Japan."

Fri, 04/29/2011 - 21:04 | 1222858 Quixotic_Not
Quixotic_Not's picture

As GM, errrr JAPAN goes, so goes the USA...

Got Ag puta?

P.S.  Why the feck doesn't the strike-through command work?

Fri, 04/29/2011 - 21:23 | 1222903 Stormdancer
Stormdancer's picture

hmmm....I thought it was spelled "plata"?




Sat, 04/30/2011 - 01:59 | 1223360 Tail Dogging The Wag
Tail Dogging The Wag's picture

"If you're holding physical PMs, short of starvation don't let them go until"

Why would you compromise the food security of your family?

Buy farmland outside the US:

Fri, 04/29/2011 - 20:34 | 1222777 Confuchius
Confuchius's picture

The US is already bankrupt and the dollar is already nearly worthless.


ANY increase in interest rates will consume ALL federal taxes just to pay interest.

HHow much would you expect rates to increase then?

Sat, 04/30/2011 - 01:05 | 1223316 FeralSerf
FeralSerf's picture

"the dollar is already nearly worthless."

It only takes about 48 of them to get you an ounce of silver and less than 1,600 of them will get you an ounce of gold!   Worthless?  Not by a long shot.  You might want to take advantage of that deal ASAP.  It's not going to last forever.

"Man who stands on hill with mouth open will wait long time for roast duck to drop in." -- Confucius, BC 551-479

Fri, 04/29/2011 - 19:57 | 1222673 eisley79
eisley79's picture
by Dangertime
on Fri, 04/29/2011 - 13:23


I don't want to argue, I want a rational explanation on what price silver should be and why.



O RLY?  Well let me see, i think in 5 minutes, it should be 48.5213545 for about 3 seconds, and then.....


You want other people to pick some arbitrary point because you are so ashamed of how owned your predictions got.  Well let me educate you:


Was silver going to be able to hold the rate of appreciation it was seeing?  No, I don't think so.  Is Silver an investment bubble of speculators, just waiting to crash? SURE IS NOT.  The real issue with Silver and Gold, is the USD.  The USD is a lie, and the lie is unraveling.  There will be many bumps along the way, and pull backs a plenty, but Silver is going to keep going up over the long term for as far as the eye can see.


The only thing that could pull it down significantly is the US Dollar going up big.  A Euro collapse, or US Interest rates rising could trigger a big push in the USD.  That would probably hurt silver pretty good in the short term, but cant change the fundamentals of the US or World economy, only delay the march forward. 

In the case of the former, a Euro collapse is possible, and probably the most significant threat to a suddne spike in the USD up.  The confetti masters will imagi-print any such issues away as long as they can.  In terms of the latter, US interest rates rising would be the absolute death knell of the US economy due to it being a complete debt based fantasy la-la-land.  So, I dont see that happening until the end of Shit Hitting the Fan, in a bid to maintain US Hegemony.  More likely, TPTB would try to bring in some new reserve, combining all the big currencies into one big piece of confetti to play with.


This projecting can go on and on.  The point is, 2008 was just the begining of the greatest depression in human history which is coming/started.  They ended so-called "free-market" capitalism in response to stave it off.  They then printed insane quantities of money as debt, lent it out, which were then used to hold up all the markets.  They are then trying to pay off that debt by devaluing the dollar (rise of physical metals, relative to their devaluing measuring tool the USD), to as low as they can get away with.  Eventually the other shoe is going to drop, dont kid yourself.  All the Countries, States, Cities, Corporations, and most of the people, are all in debt beyond what they can ever payoff, and are only hang on because interest rates are impossibly low, simply due to reserve status.  More and more debt needs to be created, just to maintain the status FAUX.  One of two things is going to happen, QE3 gets announces, metals soar even more. Or Two, interest rates rise and the world economy explodes again like in 2008, except nothing can hold it back this time, in which case metals will soar (As a TRUE flight to safety, with everything else becoming worthless).  Inflation or Deflation, metals=win, because they are simply staying the same, relative to the insanity around them.


So, keep pretending to make your little imagi-puts.  I'll keep buying and holding physical metals to give to my children.  Celebrate every time there is a slight pull back, and i'll continue to own you with your quotes of failure.  Then, when SHTF, remember this post and think.  Damn, instead of arguing for no reason on ZH about imaginary things I could have done with puts, I should have got a job, and actually bought something for real.  Something you can hold in your hand, and would be worth a lot of money in this new USD2, or BANCOR currency you keep hearing about.

ya dig?

Fri, 04/29/2011 - 20:00 | 1222695 Renfield
Renfield's picture

To keep it simple:

I'd be more interested in a discussion of whether the correct price of silver should be HIGHER now, than its conventional 1/16th of gold price.

I've heard 1/15, 1/17 - but never really seen the issue of industrial use of silver addressed - whether that makes it more or less valuable as a currency than gold.

(As for the 'price' in USD or any other fiat - that's backwards of course. Makes as much sense as asking what the price of bread should be, in pine cones.)

Fri, 04/29/2011 - 20:05 | 1222702 eisley79
eisley79's picture

i reposted my argument here because its like the article above was quoting me lol :)

but yes, i didnt want to get into the ratios with him, because FUNDAMENTALLY, it is the underlying problems of the world economy that are driving things.  Every"thing" is going to keep going up, and every "instrument" (read stock, bond, etc), is going to get wiped out.

when the real shit, hits the real fan, people will be fighting over paper clips  and rod iron fences like in weimar ;)

Fri, 04/29/2011 - 21:58 | 1222974 Stormdancer
Stormdancer's picture

I thought you hit a lot of the important highlights in readable, understandable fashion.  I enjoyed it.

Fri, 04/29/2011 - 20:05 | 1222709 Snidley Whipsnae
Snidley Whipsnae's picture

Dangertime = one more troll

Don't bother with trolls, don't feed the trolls, ignore the trolls...

We have watched a secular move up in PMs for 11 years while the trolls have predicted the PM decline daily. That the trolls are desperate is obvious by there increasing numbers and the shrillness of their posts.

As long as the Fed continues to expand the monetary base at an astronomical rate PMs will continue their secular rise. The action in PMs is just beginning to get hot and is nowhere near a peak. Those holding PMs are few and will be among those with real assets on the other side of the catastrophy...and... Use your PM assets wisely when the time comes to deploy them.

Let the trolls go suck on their fiat...

Fri, 04/29/2011 - 20:51 | 1222825 Quixotic_Not
Quixotic_Not's picture

Don't bother with trolls, don't feed the trolls, ignore the trolls...

It's far worse that that on ZH these days -- We've got numerous .GOV employees paid to counter-post against TRUTH; Agent Provacateurs attempting to spread PROPAGANDA, and just regular ol' The (D) & (R) Free Shit Empiretrolls GRASPING at the death of their dreams...

Lots of pure bullshit being posted on ZH as of late!

Fri, 04/29/2011 - 20:56 | 1222845 disabledvet
disabledvet's picture

"Is that New Jersey that just blew up?"

Fri, 04/29/2011 - 21:09 | 1222877 Quixotic_Not
Quixotic_Not's picture

Why, are you in NJ?

Fri, 04/29/2011 - 21:04 | 1222860 akak
akak's picture

You noticed that, did ya?

You're far from the only one who has.

And no, I don't believe it is all just "a coincidence".

Fri, 04/29/2011 - 21:20 | 1222893 Renfield
Renfield's picture

A lot more people reading and commenting too. ZH isn't only for the informed anymore.

Back when the comments were 'smarter', there weren't many people here either.

Me, I expect the comments will get even bullshittier as more and more of us former/sheep wake up and wander fuzzily around asking obvious questions and making tard comments. And when the REAL mass starts to shake itself awake, the comments here might not even be that literate. But on the whole maybe that's a good thing. Compared to only the informed 1.5% having a clue what's going on and keeping the chatter just amongst themselves.

I flunked math early and often in school, but here I don't care about sounding like a dope or bringing down the quality of the comments, so much as learning from you regulars. So my glass is half full...some are socks but a lot of us are just starting to wake up.

I'll admit that a more discerning CAPTCHA couldn't hurt, though.

Fri, 04/29/2011 - 21:22 | 1222905 akak
akak's picture

That's a good point you make, about this forum probably now having a wider if shallower audience and membership.  And I would hardly say that you "sound like a dope" --- you certainly can compose a sentence (not to mention a paragraph --- I know, a what?) better than at least half of the regulars here.  Don't sell yourself short.

I never criticize anyone for not being as intelligent as another, only for not being willing to use whatever intelligence they do have to its full capacity.

Sat, 04/30/2011 - 01:49 | 1223346 Founders Keeper
Founders Keeper's picture

[I never criticize anyone for not being as intelligent as another, only for not being willing to use whatever intelligence they do have to its full capacity.]---akak

Well that statement came out of nowhere. Wasn't expecting that. Insightful statement.

I've given some thought to this issue over the years. Intelligence and willingness. IMO willingness comes from the heart; intelligence from the head. I value heart over the head almost always.


To put it another way, words from the head can be filling, but words from the heart can be nourishing.

That was a nice side-post, akak.


Sat, 04/30/2011 - 02:37 | 1223387 akak
akak's picture

Thank you, Founders Keeper --- I appreciate your reply.

It is interesting how so many people who are otherwise highly intelligent can be so stubbornly blind, or even outright incapable, of seeing (or even desiring to see) the wider truths regarding our society when it comes to politics, economics, or other topics of broad and fundamental importance.  I know a number of intelligent, well-educated people --- such as doctors, lawyers, business executives, etc. --- who are, to be blunt, like gullible and ignorant children when it comes to matters outside of their respective fields.  On the other hand, I also know several people of a lower socio-economic background, or of shall we say less than very high IQ, who are sharp as tacks when it comes to those same topics addressed above, and who are completely aware of matters about which so many of their "betters" remain willfully clueless.  These latter people impress me and attract me very much, despite often not having the same background or educational opportunities as myself.  I have noted, and been fascinated by, this dichotomy for many years now, but still lack a firm explanation for it.

Sat, 04/30/2011 - 05:22 | 1223497 Snidley Whipsnae
Snidley Whipsnae's picture

akak... People fear change almost as much as death. This has been proven in many clinical tests and we also have each observed it in our day to day lives, interacting with other individuals, as you pointed out.


Sat, 04/30/2011 - 11:35 | 1223962 DosZap
DosZap's picture


I get your dilemma;

"but still lack a firm explanation for it."

IMHO, it's called common sense, and selfishness.Some of the most intelligent people I have known through life, usually have a severe lack of it.

Also, the upper echelon,well educated, well paid professionals, do NOT give one whit about much of anything outside their nuclear family group, and their "world".

As long as their lives and lifestyle isn't changed for the worse,interfered with, they go day to day like mindless automatons.

Sat, 04/30/2011 - 12:39 | 1224072 DoChenRollingBearing
DoChenRollingBearing's picture

Did Dangertime ever acknowledge he was a troll from Gaza?

Just thinkin'...

Sat, 04/30/2011 - 13:02 | 1224098 eisley79
eisley79's picture

one thing about this site, its made with drupal(as its basically an empty drupal theme with the default settings).  I am done with the simple is good, and faster style, but it does border on drudgereport horrible ness in its presentation.

It wouldnt take much to clean it up just a little bit, and maybe add some customization to the comment module (which is what we all create content with here).


As the traffic keeps going up and up, its going to get harder and harder to have conversations in the comment section, using the drupal default settings...

(tyler(s) take note)

Sat, 04/30/2011 - 13:36 | 1224153 Cathartes Aura
Cathartes Aura's picture

"intelligent, well-educated people" have often been taught to think in specific patterns that (intentionally) exclude a wider picture - it's that "specialist" tag that has been pushed in education/business, where one person has extensive training in a particular area, often to the exclusion of the whole - resulting in myopic opinions, arrogantly defended, which means many well-paid folk running around with pieces of the puzzle, and few having the ability to think of the whole.

those who, for whatever reasons, didn't climb on the "higher education" train(ed), often have more wide-ranging practical skills in navigating the(ir) world. . . and even though some are mired in political/religious storytelling, many just get on with the daily chores of life, freed from having to constantly defend their "reality" as taught them - because, of course, if you've paid a lot of monies for your "education" you're invested in selling all you've been taught, that which makes you (a) special(ist). . .

(in my humble opinion, of course, heh)


Sat, 04/30/2011 - 15:22 | 1224327 gdogus erectus
gdogus erectus's picture

Damn, CA - you NAILED that.  I'm going to use that if you don't mind.

Sat, 04/30/2011 - 07:38 | 1223559 knowless
knowless's picture

ditto, I'm just some kid in a city, came by looking for real data instead of doublespeak.

Fri, 04/29/2011 - 21:27 | 1222908 Quixotic_Not
Quixotic_Not's picture

I have come here to chew bubblegum and kick ass... and I'm all out of bubblegum.

Fri, 04/29/2011 - 23:26 | 1223144 D1eeeeeNAHHHHH
D1eeeeeNAHHHHH's picture

"Don't bother with trolls, don't feed the trolls, ignore the trolls...

It's far worse that that on ZH these days -- We've got numerous .GOV employees paid to counter-post against TRUTH; Agent Provacateurs attempting to spread PROPAGANDA, and just regular ol' The (D) & (R) Free Shit Empiretrolls GRASPING at the death of their dreams...

Lots of pure bullshit being posted on ZH as of late!"

If you think ZH is bad, look at nearly all the responses to yahoo news! 




Sat, 04/30/2011 - 01:09 | 1223318 FeralSerf
FeralSerf's picture

A fine use of taxpayer money, don't you think?

Sat, 04/30/2011 - 01:49 | 1223355 JacktheTab
JacktheTab's picture

Speaking of paid .gov sock-puppet shills, I'm wondering if they're more frequent during regular Eastern time zone office hours? I would think .gov employees probably knock off by 5 or so. Might be the reason that the comments on late breaking posts like this have fewer trolls commenting.

Sat, 04/30/2011 - 12:57 | 1224092 Moe Howard
Moe Howard's picture

They have a second shift.

 A few years ago I know for a fact the Army here at Fort Knox hired people to go to forums and IRC channels and talk joining the Army up to people. Don't know if they still do, but you did have to be under 30 for example. They wanted people who fit in with the targets. Here it would be a 'funny name and avatar' to fit in.

Sat, 04/30/2011 - 12:20 | 1224045 Dangertime
Dangertime's picture

Get your tinfoil hats on!

Fri, 04/29/2011 - 20:58 | 1222842 disabledvet
disabledvet's picture

you mean "suck their margin."

Fri, 04/29/2011 - 22:26 | 1223022 Hulk
Hulk's picture

Trolls come and go but PMs abide...

Sat, 04/30/2011 - 00:41 | 1223291 6_7_42
6_7_42's picture


Check the brief spikes in price of Ag in the 70s (before summary hammer time) and then project that to now using the shadowstats inflation numbers and you get ~$90/oz which is roughly 1500/16 and then think about all the amazing new industrial uses discovered for this amazing and rare substance.

Sat, 04/30/2011 - 08:16 | 1223591 Dangertime
Dangertime's picture

You know what, fuck ya.  I tried to be civil and the majority of you all just cannot handle someone calling a correction.  You are little more than children.

I'm just going to watch your account burn.

Sat, 04/30/2011 - 09:05 | 1223650 prole
prole's picture

Any chance you could do that silently?

Sat, 04/30/2011 - 12:48 | 1224043 Dangertime
Dangertime's picture

Oh, am I ruining your giant tinfoil hat circle-jerk?

Sat, 04/30/2011 - 13:03 | 1224100 eisley79
eisley79's picture

tried to be civil?

the first post I read from you, which is why I went on to crush you, was arrogant ramblings telling everyone they were stupid and that you knew best.

Add to that the fact that you lie and pretend to making investments you dont actually have



Sat, 04/30/2011 - 14:45 | 1224272 Dangertime
Dangertime's picture

My first post was telling everyone to be careful and that silver was getting frothy.

Not my fault you missed the civil warning, you can thank mosley for his attacks and lies about me.

And the fact that you follow mosley's lies about my investments say everything I need to know about you.

Show me ONE lie I made.  If you cannot, then you know that you are following a fool and get everything you deserve when this thing goes back to the low 30's.

Fri, 04/29/2011 - 20:01 | 1222685 Re-Discovery
Re-Discovery's picture

All fiats are surfers in a tsunami.  They may stay on their boards for a while and think they're going to make it, but they are all going to end up dead on the beach.

(BTW I also found it curious that he said Gold was expensive at 1500 but that fiats were all dead.  As the PMs are not yet to inflation adjusted highs, I think this throw away talk exposes a lack of knowledge of the supply and demand fundamentals of the metals.  And if this guy isn't fully versed, think about everyone who has yet to buy any PMs.  If what he says is occurring -- of which I agree -- PMs are very very cheap at these levels.)

Fri, 04/29/2011 - 20:59 | 1222855 disabledvet
disabledvet's picture

actually what is more interesting is he said "GDP is not a correct measure of output."  What is GDP you ask?  I will tell you:  "it is a measure of GROWTH in an economy."  So AGAIN ask yourself this "how is one to know when an irrational exuberance has taken hold?"

Sat, 04/30/2011 - 02:25 | 1223377 Terminus C
Terminus C's picture

GDP is not the measure of growth.

Gross Domestic Product is the measure of all goods and services produced within a country in one year.  This is a total value, not a percentage.  Growth is calculated by comparing it with the previous year.


Sat, 04/30/2011 - 07:57 | 1223570 earnulf
earnulf's picture

Unfortuately, the GDP is produced by the government and is so full of BS that it's no longer reliable.    According to the BEA the GDP in the 1Q11 surpassed the CBO estimate of GDP for the fiscal 2010-2011 year, even while the Q/Q GDP only rose 1.8%   (the current dollar value GDP Q/Q rose 3.5%! Winning the Future! (WTF))     So that's how the government plans to keep the GDP/Debt ratio (those sneaky folks!)

Sat, 04/30/2011 - 10:53 | 1223877 Thisson
Thisson's picture

GDP is a stupid metric of growth.  GDP inludes government spending, so when government spends more it makes it look like the economy is improving.  In reality, government spending is mostly waste that crowds out productivity.  Similarly, GDP includes consumption, which is why government is stupidly always asking the populace to go out and spend.

GDP = Consumption + Investment +Govt Spending +(Exports-Imports).

Fri, 04/29/2011 - 19:58 | 1222690 yabyum
yabyum's picture

Went to the coin guy to get my backordered OZ's today. The shop was packed, one dude selling a ammo box of AG, a homeless looking guy ( Just looked that way, seen him before) sold a fist full of collector silver spoons. Folks selling Unc. quarters that  had more value in melt that collector value. I and one other guy were there to buy. Poor shop folks have been running ragged on both ends. "  we havenever had this much buisness"!

Fri, 04/29/2011 - 21:41 | 1222941 Wynn
Wynn's picture

What does your coin guy charge over spot? My guy is like 6 over, but I prefer anonymous cash purchases, so I pay the piper.

Fri, 04/29/2011 - 22:35 | 1223040 yabyum
yabyum's picture

Wynn, ' Rust coin SLC Ut 801 3634014. I always do cash buy....I have never sold..I'am  a very small investor as I am a RN, small but steady x 20 years.

Sat, 04/30/2011 - 12:31 | 1224062 DoChenRollingBearing
DoChenRollingBearing's picture

Wynn and yabyum, birds of a feather...

I too have bought small for decades  now(esp. gold, I was late to the silver party, but hey I'm up).

Sun, 05/01/2011 - 05:59 | 1225105 The Navigator
The Navigator's picture

Do Chen RB - I always wonder what part of the world you're in when I don't see you around - hope you've been stuffing Ag and Au in various parts of the world.

Last Friday I bought 10oz at $48 at my local coin shop when the spot/close was 48 - either he was being kind or was loopy from all the ups/downs of the market that day/week.

This weekend have bought some $600+ of junk 90% silver at about (ave) $46.20 per oz on ebay - it's work, but it can be done.

I started buying at $10/oz so my average is $23/oz and $48 is not a scare for me - if you're just starting now, $48/oz seems high, but I'd still get some, and do the "dollar cost averaging" method and buy 'some' every week or month.

Trading ANY kind of fiat paper for real money (ag or au) makes sense to me. In the late 1980's I saw 3 different Brazilian paper currencies in 2 years - Crudzados, Cruzieros, etc, all shit and not worth the ink/paper they spent to make it. Lately we all know about Zimbabwe dollars and how excessive printing of that made it worthless. Get at least some real money (gold/silver) for "just in case" situations.

Fri, 04/29/2011 - 23:37 | 1223163 D1eeeeeNAHHHHH
D1eeeeeNAHHHHH's picture

I saw the same thing at a mall gold buyer no long ago.

A young black woman was selling her jewelery and got $33!

I should have told her I'll give you $40 in the food court if you say you changed your mind and meet me there in 6 minutes.

I should have an walked.  Those mall guys, traveling motel buyers, jewelers and many coin shops pay much much less than scrap.

Sat, 04/30/2011 - 11:37 | 1223977 DosZap
DosZap's picture

We recently had one of the scumsuckers move into a strip mall.

They pay around 30% below spot, and if the scrap is jewelry, and had stones, they keep  those also as part of the deal.

Sheeple are so stupid.And Crooks, are still crooks.

Fri, 04/29/2011 - 20:01 | 1222698 Godfrequency
Godfrequency's picture

The Rothschilds paper printing company (The Fed) along with their collection agency (IRS)

and their court systems of guilty until found guilty then your guilty are the ones running this country.  You are nothing more than human cattle, and anyone placing their money into the stock market has lost their ever loving mind.  72% of this market consists of high frequency trading, with the Federal Reserve being the largest buyer.  The money they are using is the chains of your slavery.  Anything they spend is backed by your social security number, and your labor.  It is called the National Debt, another imaginary number that was supposidly lent to our nation by the Fed with the promise that we would all work here on the farm to pay it back. 

Riddle me this, who is the Federal Reserve.  We just got through watching the Royal wedding, we saw their images all over television, why don't we see our royalty here in the states?  Why isn't the popperazzi following the families of the Federal Reserve around snapping photographs,  Hell we don't even know what most of them look like!  Yet these are the people we have surrendered our freedom to. 

Riddle me this, Where on earth did the Federal Reserve get the money to lend 14 trillion dollars for the National Debt?  You cannot lend something you do not have, or never had.

This is the nightmare version of the Wizard of OZ.  Pull back the curtain, and understand your own slavery.  Chase after their debt notes on Wall Street, and understand that you sold your soul in the process.  We live in a Nation of shallow materialism, and almost everyone is misserable. 


Fri, 04/29/2011 - 20:42 | 1222798 DavidPierre
DavidPierre's picture

"The way that you people talk to each other is the very problem with this world. Instead of coming together and striking peace into the face of these fascists you would rather hide behind your computer and say horrible things to your fellow man. I dont know what I believe, but I do know something is happening to this world and its not a step towards peace. Stand up for what you think is right and be considerate to other peoples beliefs."



Fri, 04/29/2011 - 20:53 | 1222836 Quixotic_Not
Quixotic_Not's picture

Pull back the curtain, and understand your own slavery.

Speak for yourself...I started buying Ag when it was still $5 per oz.

I am NO slave!

Sat, 04/30/2011 - 11:01 | 1223890 Abitdodgie
Abitdodgie's picture

If you have a social number or you pay taxes of any kind your a slave .If you need permission to do anything , eg drivers licence , register a boat or anything you are a slave , don't believe me try not paying your property tax .

Sat, 04/30/2011 - 12:50 | 1224083 Dangertime
Dangertime's picture

Careful, Mosley will now declare you a liar!  Dont you know that nobody bought silver ten years ago?

Sat, 04/30/2011 - 01:15 | 1223325 FeralSerf
FeralSerf's picture

"why don't we see our royalty here in the states? Why isn't the popperazzi following the families of the Federal Reserve around snapping photographs, "

Too many guns here.

Sat, 04/30/2011 - 13:21 | 1224119 Moe Howard
Moe Howard's picture

+.40 S&W.

Nail, meet hammer.

Sat, 04/30/2011 - 10:54 | 1223879 Abitdodgie
Abitdodgie's picture

If you want to get out of thier system read "THE ERRANT SOVEREIGN'S HANDBOOK" a free download by Augustus Blackstone. 

Sun, 05/01/2011 - 04:56 | 1225118 The Navigator
The Navigator's picture

Thanks for this great link - the sooner the producers get out and de-fund the cesspool our "leaders" have made this system, the sooner we can rebuild our Republic.

Fri, 04/29/2011 - 20:08 | 1222710 gwar5
gwar5's picture

I would argue the aim for the psychological effect of the up stock markets is true, as stated by Bernanke....

But an artificial stock market also keeps people from panicking about their money in IRA's, 401ks, and also keeps the institutional players controlling public and private pension money -- keeping the money in the US instead of going elsewhere.

People already took a huge hit in 2008 on their portfolios and houses -- pumping stocks were what's for breakfast.

Sat, 04/30/2011 - 01:59 | 1223354 Threeggg
Threeggg's picture


Had to chime in on your comment as it is spot on. Thats why all these news channels have these commentators and hosts on, saying how peachy cream everything is. If the herd finds out the truth (they are told the truth by the likes of schiff and others, but they are laughed off by the people they have trusted for years as their 401k's have gained traction) all news agencies, financial hosts and guests will loose any cred they have. I often wonder how long this game can go on.

I have questioned myself for years as to why they would have a Fed president on, from one city or the other, talking about the economy, like they could be trusted to give an honest opinion.?

People are catching on slowly, but I soon suspect it will become a stampede as there is no way out of this catch 22 !

Fri, 04/29/2011 - 20:13 | 1222731 max2205
max2205's picture

The sooner you all figure out that 90% of the time the market does what it wants to do WITHOUT regard to the countrys Economic status, the richer you will be.

Fri, 04/29/2011 - 21:03 | 1222866 morkov
morkov's picture


Fri, 04/29/2011 - 20:16 | 1222732 swissinv
swissinv's picture

Since we have a lot of clever gold bugs here I hope you can help on a question where I can't find an answer. Basically, I am referring to the E-Currencies XAG/USD and XAU/USD traded OTC. As far as I understand they replicate the physical spot metal price. Of course, I am aware that I can't compare it with real owned physical metal since I have the full credit risk against the OTC counterparty. However, I am wondering about market  risk  - assuming we would see an extraordinary event like a COMEX defaut, what is the price impact on XAU/USD? Would it skyrock as it exactly tracks the physical spot price or are there any risk that the price can go down since it is only tracks the physical metal?

Fri, 04/29/2011 - 21:11 | 1222881 disabledvet
disabledvet's picture

i can't say i can answer this question in the manner you wish Swiss Investor but i can say "currency is not a risk but a hedge" and "the name of the site is Zero Hedge" not "Zero Risk."

Sat, 04/30/2011 - 10:57 | 1223885 Thisson
Thisson's picture

One problem is that the spot market price of metal can collapse while the price premium for physical skyrockets, and this is what is predicted to happen in a collapse as "paper" metal is shunned for physical.

Sun, 05/01/2011 - 15:56 | 1225860 swissinv
swissinv's picture

yep makes fully sense to me - XAU will reflect the spot price but nobody will sell at that price and will charge an extra premium for physical delivery

Sat, 04/30/2011 - 12:37 | 1224066 DoChenRollingBearing
DoChenRollingBearing's picture

@ swissinv,

I would say just stick to buying physical gold (silver OK too, but I like gold better) with a decent chunk of your funds.

"If it's not in your physical possession, it's not yours."   <---  someone here at ZH

Fri, 04/29/2011 - 20:17 | 1222738 BernankeHasHemo...
BernankeHasHemorrhoids's picture

Guns and ammunition, baby. When it all goes down there's going to be payback.

Fri, 04/29/2011 - 21:10 | 1222887 disabledvet
disabledvet's picture

i was hoping you would say "passbook."  that's one part of the 70's i miss:  actually putting cash in a bank watching it become more cash!

Sat, 04/30/2011 - 02:06 | 1223363 Founders Keeper
Founders Keeper's picture

[...actually putting cash in a bank watching it become more cash!]---disabledvet

I think we call that third party risk around here. Or, is that "simultaneously someone else's liability?"



Sat, 04/30/2011 - 02:29 | 1223378's picture

It's called "The Miracle of Compound Interest," and in a hard money system it's a beautiful thing.

Sat, 04/30/2011 - 12:40 | 1224068 DoChenRollingBearing
DoChenRollingBearing's picture

@ BernankeHH,

Since we do not know WHAT is going to happen, your advice to have guns & ammo is good.

I would add physical gold & silver as well, without doubt.

The more liklely you think the SWHTF, then look at food & water, medical kits, etc.

Fri, 04/29/2011 - 20:20 | 1222745 Gordon Freeman
Gordon Freeman's picture

This is a very transparent Fed.  The Great Satan told us what he is going to do:  sacrifice the dollar--literally nothing else matters, for ZHers, for bankstas, for the rest of the world, etc.  That's it.  A steadily declining dollar is great for exports, multinationals, and will completely fuck with the Chinese.

Gold and Silver are as close to a sure thing as you could hope for--unless, uh, you're short...

Fri, 04/29/2011 - 20:18 | 1222748 BernankeHasHemo...
BernankeHasHemorrhoids's picture

Guns and ammunition, baby. When it all goes down there's going to be payback.

Fri, 04/29/2011 - 20:25 | 1222761 bothsidesnow
bothsidesnow's picture

If you can't believe the numbers coming out of Argentina why invest their just because you can borrow dollars and get a higher return somewhere else.

You know the old addage two wrongs don't make a right.

Fri, 04/29/2011 - 21:16 | 1222898 disabledvet
disabledvet's picture

first off "bothsidesnow" you pic is proof that two wrongs do make a right.  insofar as "hyperinflation in Argentina" it "depends on your point of view."  If I am a "rancher on the Pampas" then of course i would want to borrow US dollars "when the weather gets bad 'till next year" because "Brazilian reals are VERY close to home."  Of course i may consider euros instead....

Fri, 04/29/2011 - 20:26 | 1222763 Al Gorerhythm
Al Gorerhythm's picture

My strategy for people who asked about PMs as an investment(?) was to get them to take control of the issue by answering the question; "What is money and what gives it value?"

If they could investigate that issue, they would be on their way to controlling their own investment  decisions.

Now I ask them to answer the questions; "What is a credit note, in what forms do they exist and what gives it value?" 

Fri, 04/29/2011 - 20:51 | 1222772 Renfield
Renfield's picture

"What is money and what gives it value?" THIS.

Trying to break out of the Matrix of the fiat mind is about as easy as playing both God and Paul on the road to Damascus.

I've been working so hard to free my mind from this and retrain it. Brainwashed into valuing things by government scrip since I was a kid.

Money = 1) a store of value AND 2) a medium of exchange. More and more, I am thinking that these really cannot be the same thing.

We were brainwashed into mistaking our paper medium of exchange, for an actual store of value.

Fri, 04/29/2011 - 20:35 | 1222785 AN0NYM0US
AN0NYM0US's picture

Porter Stansberry??? now that Rosie has gone bull we are left with only fringe bears? 

Where's Tice and the bee keeper; hopefully they haven't rolled over too.

Fri, 04/29/2011 - 21:04 | 1222861 Gimp
Gimp's picture

Had a relative who lived through the UK - revaluation of their currency in 1970. He told me that the government excuse was "Decimalization", the English Pound went from 120 pennies(i think) to 100 pennies. It was sold to the public as part of the new metric system. Result was that everyone immediately lost 20% value of their paper assets. He told me that prices on all daily items exploded as they were re-priced in the new currency by an average of 100-200%. Example: the old currency, one penny could be broken into four farthings (?) you could by one bazzoka joe with a farthing. New money one bazooka joe was one penny (no more farthings) increase of 400%. This is what we can expect here.

Sat, 04/30/2011 - 05:49 | 1223509 Snidley Whipsnae
Snidley Whipsnae's picture

Gimp... As pointed out by Casey and an army of others a fiat currency cannot be revalued when it is backed by nothing.

I began thinking about this little problem in 2001 when I first decided that there was no 'out' for the dollar reserve system except letting inflation rage until the dollar purchasing power declines or goes to zero. Triffin pointed out the paradox (and ultimate currency destruction of currency) of using a single country currency as the world reserve country back in the 50s. Destroying the purchasing power of the US Dollar is Ben's solution and he cares not what it does to the little people that have built this country through their work and excess savings.

Now, those that have decided to preserve some of their wealth by moving into PMs, and dumping dollars to make the move, are being called all sorts of names for attempting to preserve some of their wealth. Said wealth is really an accumulation of savings from excess labor and belongs to each individual, not the state.

My problem with trolls is this continuous sniping, name calling, harrasment, etc. I do not go on other boards and berate the investment decisions of those posting there, why are the trolls here berating PM purchasers?

So, I have declared war on the trolls that visit this site and berate me and those that have made the conscious decision to preserve some of their savings by purchasing PMs. To hell with the trolls,iows.

Sat, 04/30/2011 - 13:48 | 1224182 Gimp
Gimp's picture

Good stuff SW, I have been a buyer of PM's for years, along with other non paper assets  as part of an asset distribution plan. My question is with Silver $50+ and Gold at $1500+ I am still buying, smaller quantities of course but I am afraid the confidence tricksters on WallSTreet and DC are going to pull some scam to purposely collapse the price of PM's. Any opinion?

Sun, 05/01/2011 - 11:02 | 1225404 Renfield
Renfield's picture

FOFOA predicts that just before PMs become almost unavailable at any price, the paper traders (COMEX, etc) and ETFs will collapse in price to near-zero.

This will be due to everyone fleeing the paper trades of 'gld' and 'slv' for the real thing. So no-one will want to buy those fiats.

I think I have the gist of what s/he says, correct. Here's a link so you can look it up for yourself:

Fri, 04/29/2011 - 21:17 | 1222899 Jovil
Jovil's picture

The end of our dollar as an international currency is near the end. Be prepared.

Fri, 04/29/2011 - 21:35 | 1222914 Renfield
Renfield's picture

I saw that. I think all it means is the IMF is getting ready to announce the next stage in their fiat-slave attempt, the New World Currency stage.

USA has always been just a useful stepping stone in the plan. The 'Age of America' (if there ever was anything so grandiose) has been over for about a century now, so this isn't really a big deal or even anything different.

It's not about the USD. It's about government scrip, ANY government scrip, even an international one - and how much each citizen is willing to believe in it, labour and even die for it.

'Age of America' will soon be replaced by the 'Era of Global Brotherhood' or some other such patriotic fairy tale IMO. The Euro and the Amero come together as the Dolleur of Oceania and the united 'western' nations rejoice under one benevolent government.

Corptocracy just getting ready to move us all along to the next stage, that's all.

Fri, 04/29/2011 - 22:17 | 1223011 walcott
walcott's picture



Fri, 04/29/2011 - 22:29 | 1223028 Bansters-in-my-...
Bansters-in-my- feces's picture


Thats a purdy name.

Fri, 04/29/2011 - 22:33 | 1223043 Bansters-in-my-...
Bansters-in-my- feces's picture

Ya ..max the credit cards out for silver,then claim bankruptcy.

Fri, 04/29/2011 - 22:39 | 1223053 Jovil
Jovil's picture

I never thought I would see this happen. The peso has appreciated against the USD by 8% in only about 35 days. They are calling it the Superpeso in The Economist of Mexico.

Sat, 04/30/2011 - 02:40 | 1223393 StychoKiller
StychoKiller's picture

The Peso is simply not sinking as fast as the FRN -- it's so easy to miss this -- it's like you have to turn your head 90 degrees to "see" the truth!

Fri, 04/29/2011 - 22:58 | 1223076 defencev
defencev's picture

Of course, the author is respected in certain circles

but apocalipsis he is promoting is total nonsense.

I am pretty sure that he does not beleieve himself in what he is saying.

It is just a ploy to promote his business interests.

Obviously, it is a good idea to have part of the portfolio in physical precious metals  but to say that nothing else matters or has no value as investment vehicles is absolute bulshit.

All these crazy scenarios are based on premise that US

cannot meet its financial obligations. Objectively, it is an absolute nonsense.

Remove this argument and Charlatan Casey has absolutely nothing to say.

P.S. Who cares whether his conference is sold out.

There always exists a small group of idiots who have a lot of money to waste.

Sat, 04/30/2011 - 05:52 | 1223514 Snidley Whipsnae
Snidley Whipsnae's picture

"I am pretty sure that he does not beleieve himself in what he is saying."

'pretty sure'? So, you gazed into your crystal ball and it said 'pretty sure'?

You need a replacement crystal ball, troll.

Fri, 04/29/2011 - 23:38 | 1223175 Atomizer
Atomizer's picture

When the USD should shift north during June 2011 or there after... The second stage of mass Central Banking fleecing will commence. You have been warned. Keep a watchful eye on forex markets.

22 going on 23

Woman: I enjoy your show and I've been trying to get through for quite a while.
Man: Well, We're glad you kept trying
Woman: Umm. I have this problem. Last July, I was assaulted...sexually, and ever since then, I've been having trouble sleeping.
Man: How old are you?
Woman: I'm 22 going on 23
Man: Medicine...Counseling...Anxiety...Sleep Programming
..Medicine...Sleep Programming

Many will be sexually assaulted in July. It only takes 15 minutes in the world of central planning policy to change the game. This crisis has to do with EU & Obama. Stay bonded amongst one another during event. Many monkey's will fall from the trees, others will spue name's to save themselves.

Your Q3 forecast summary - Atomizer

Sat, 04/30/2011 - 00:15 | 1223247 Pain Train
Pain Train's picture

China’s Gold Reserves

China, which has just 1.6 percent of its reserves in gold, may invest more than $1 trillion in bullion, [Michael Pento of Euro Pacific Capital] said. “China wants to be an international player, and they need to own more gold than they currently have.”

...“China is out to have more gold than America, and Russia is aspiring to the same,” [Robert] McEwen, [the chief executive officer of producer U.S. Gold Corp] said yesterday in an interview in New York. “When you have debt, you don’t have a lot of flexibility. China wants to show its currency has more backing than the U.S

Sat, 04/30/2011 - 01:44 | 1223349 Transformer
Transformer's picture

It's funny, but all estimates that I have seen start with the conclusion that China had very little or no gold at the beginning of the modern era.  I do not think this is true.  China was a world power for thousands of years  when the west was barely civilized.  I think they have much more gold than they let on.

Sat, 04/30/2011 - 02:21 | 1223370 JacktheTab
JacktheTab's picture

The story is that Chaing Kai-shek sent all of China's silver and gold to Taiwan before the Red Army could get to it.  To this day China blames Taiwan's relative aflluence on what it sees as the theft of China's wealth.  Probably a big reason why China still has such a hard-on to retake Taiwan.

Sat, 04/30/2011 - 02:11 | 1223367 Ben Fleeced
Ben Fleeced's picture

Break the light 

Chew the fat

Keep moving out into the gap.

Sat, 04/30/2011 - 02:29 | 1223379 Temporalist
Temporalist's picture
Silver beats gold as investment winner
  • From: AAP
  • April 28, 2011 2:31PM

Cobar Consolidated's managing director Ian Lawrence

"Mr Lawrence said demand for silver for new industrial applications was growing at about 20 per cent a year but production was up only five per cent.

Today, the chemical reactions that affect silver are contributing to demand far outstripping supply, Mr Lawrence said.

"I think a number I saw not so long ago was about 700 million ounces of silver bullion that you can put you hands on," he said.

"That's less than a year's production in the global market.

"While people are putting silver away as hedges against currency devaluation and inflation, that will keep demand pretty robust as well.""

Sat, 04/30/2011 - 11:21 | 1223942 kumquatsunite
kumquatsunite's picture

"Mr Lawrence said demand for silver for new industrial applications was growing at about 20 per cent a year but production was up only five per cent.


That is ridiculous. In a downturn economy, silver will also turn down because there will be less and less manufacturing. As the economy softens, any industrial demand for silver will also soften. The young uns won't be replacing their "pods" of any kind in upgrading every two months, and contributing to our horrid landfills.

Silver mines in Mexico are gearing up: hear that sound? That is Mexico beginning to roar. For the stupids: the best game theory players know that you "pretend" to be weak and poor and in doing so you take take take. Then after you've bled them dry you run back to your own country that is one of the richest in in natural resources in the world, and that country is Mexico. For natural diversity of agriculture (no Monsanto seeds there!), for diversity of land, and wealth in natural minerals, Mexico is incredibly rich. So while we have stripped our country of water, clean air, and decimated our schools and hospitals supporting them, they have a nice un-stripped country to run back to. Only a fool uses the seed corn of the future: America has decimated its seed corn of fresh air, water (giant amounts sent to China and elsewhere in tankers; how STUPID is that!!), and most importantly, the glue of affinity through social connections and loyalty that allowed us to fight World War II and win. Balkanized, Colonized, and Decimated. We are in trouble. Not one more immigrat. We are past carrying capacity. So if you want to watch your children and grandchildren die, keep letting them in. 

Sat, 04/30/2011 - 13:34 | 1224147 Moe Howard
Moe Howard's picture

Hey, we are importing water too, I bought some Finn water on sale at Walgreen's, cheaper than US water. How stupid are they?

Here is a news flash for you - water falls from the sky. It evaporates from the vast oceans covering this planet, and then it falls down again, purified, even fluoride is removed! We got so much the last week the river is overflowing, the streams are running backwards. If they have to, they can make it rain. If not, low tech can distill it from sea water. Stop the fear mongering about water. We may not have all the water we want economically everywhere we want it, but guess what? There is plenty. Natural evaporation will keep it that way.

Sat, 04/30/2011 - 07:08 | 1223534 Mr Deathcare
Mr Deathcare's picture

I'm a member of The Zeitgiest Movement and we are advocating a Resource Based Economy as proposed by Jacque Fresco of The Venus Project, is a RBE going to even be a consideration after the collapse of the global economy?? Or are we just in for more currency and wage slavery?

Sat, 04/30/2011 - 07:54 | 1223569 knowless
knowless's picture

if the world economy collapses then you're on your own where ever you are, hope you're a good leader.

Sat, 04/30/2011 - 11:13 | 1223919 Temporalist
Temporalist's picture

Just think to yourself what is human nature and you will have your answer.  When you can convince people not to be greedy and self absorbed The Venus Project will be a great hit.

Sat, 04/30/2011 - 09:47 | 1223706 LateToTheTable
LateToTheTable's picture

I think I'm going quitely insane.  I'm walking around looking normal, but I'm not sure how much longer I can keep up the facade.  Just a simple gal of 50+ years, worked my way into a pretty secure job in the natural gas world, pay my taxes, dumped fiat into the 401K because that's what smart savers were suppose to do; and now find myself in a very small box.  38K in the 401K, 1,500 in cash savings for emergencies, half done with a 30yr mortgage, college kid fixing to find out the facts of life in a couple of weeks.  All disposable income spoken for each pay day.  What on earth are folks that are hanging on by their fingertips to do that makes sense in this madness.  Alrighty now - happy to have barfed up that hairball, now I'll go about my quazi-normal day.

Sat, 04/30/2011 - 11:10 | 1223917 kumquatsunite
kumquatsunite's picture

The problem that we all face is the welfare state that LateToTheTable doesn't realized has drained her and so many others. She worked and supported babies that weren't hers; druggies sent to rehab on "medicaid" vacations...repeatedly; people with alcoholism same thing, a medicaid vacation in rehab; huge numbers of people who don't marry because they can have as many children as they want and the state rewards them by paying the medical bills and giving them endless benefits; and don't forget: call you child autistic because it's been sitting in front of the unblinking tube since day one...jackpot!! disability checks for the wee one. PBS has had a six-part series on autism. One family has Three autistic kids, and of course, as the experts say, "Every autistic kid is 'different'". This means they throw every kid with any kind of symptoms into that category. The problem for these children is that so that their parents can receive these checks, the children are now stigmatized, forever. 

Franklin Graham says that we should "help" the "poor". What Mr. Graham, whose intentions are good and whose has a wonderful heart, misses is that the "poor" are committed to a game theory plan of bleeding us all dry. If you make a "mistake" once, certainly, most would lend a hand "up". But that hand "up" has become a blackmail by the poor: one baby is a "mistake", second baby is a blackmail plan. And if you watch Judge Judy othen you know that the concept of "student loans" is ridiculous. Student loans have become wholesale welfare. The people on Judge Judy are all too often there because they have "loaned" money to a friend to buy a car (or whatever!) and just how is that "student loan" money. Student loan money should cover: books, tuition, and that's about it. Student loans have become "vacation" money, car money, and live the good life money. 

One woman on Judge Judy recently mentioned that she had the loan so she could go to school full time. Duh. These people should have to be working part-time and going to school part-time rather than getting these giant loans that are dependent upon us borrowing money from China. The point being that the "poor" have created a welfare state that they LIKE; they won't be happy when our economic situation says we won't support them anymore. My favorite book on the subject: Frnk Dikkoteer's Mao's Great Famine. So all you gold bugs might wanna get a scythe rather than another piece of gold; just in, the "crunch" down on a piece of gold is not tasty; my loaf of bread is deeeliicious.

Now as to "late to the table" and her concerns:"What on earth are folks that are hanging on by their fingertips to do that makes sense in this madness." 

Here is what you are to do: Find something part-time to do. Add income a dollar at a time. Use the library; it's wonderful. Your child/ren should be required to pay reasonable amounts to live with you. As adults, we have the right to prepare for our own retirement and not mollycoddle the wee ones, of any age. 

Or, for as long as it lasts, the best game in town is welfare. Think how much you can do if you don't have to go to work every day! Yowza. You can spend months developing and beginning a business plan, which you then use to transition out of welfare....

There's a new world coming down the train tracks, won't be here for five to seven years, but if you wanna eat, your gonna have to work. 

Love youse'all at ZeroHedge! So before all that doom/gloom sets in: Remember: one person changes the game. One person speaking the truth can be heard. One person saying, "this far, no further" saves the country. Be the John Wayne. We have a responsibility to our children to give them a country that is English, white majority (why this? because it is the white majority country that created this country so consider that this white majority may be necessary...for a range of create the standards that build. See: Ayn Rand. Funny isn't it? Oboma ranting about racism in the Only County in the World that even tries to create equality. Funny how he doesn't call China racist for not deconstructing it's country via immigrats from Africa, Mexico, whatever, wherever. Or Mexico...maybe if they weren't so racist and had some white people they'd be able to get a grip on those Mexican drug lords; oh wait, we are importing their problems with the illegals that Oboma says are legal...)

The bottom line is that the liberals have structurally kneecapped this country via unbridled immigration. And paying for the immigrats and the welfare trash is the reason that LateToTheTable doesn't have any spare income.

After all, my parents, and your probably, lived in a world where welfare was considered so disdainful that one fought at all costs not to be on it. Now, we don't even blink at being skewered, scoured, and splayed by the US govt in one giant redistribution scheme. And again, to see how that turns out read Mao's Great Famine or throw on Dr. Zhivago...and then, when you are asked to "donate" or "give" anything, demand the government stop redistribution and then you will "give" and "donate". As is, your "giving" and "donating" is simply feeding the addiction and further enriching the best game theorists the world has ever seen: the welfare trash. And if that offends you, take a family in on welfare  and tell them you will support them. Now that's taking personal responsibility.

Sat, 04/30/2011 - 12:45 | 1224081 DosZap
DosZap's picture


You meant well but miss Mr.Graham's definition of the "POOR".(from a biblical sense)

The truly poor, are the street people, and the homeless, most of our street people are drug addicts( mostly caused by mental issues), the mentally ill,( released from state institutions that closed down due to costs) veterans,and others who have problems/physical/mental beyond their ability to cope,and simply drop out of society.

You are correct to get the able bodied of the Gov teat.

But there are several, (not many) agencies who do not give these folks $$$/Aid for nothing.

The Salvation Army is the best IMHO.

They have strict rules and guidelines for helping people.

Follow them or no help.Do not give to the Red Cross, or any other Org, that $0.25 on the dollar gets to where it's needed.

Check them out,prior to being taken.

At my church we have a Benevolence Fund.

NO one gets cash handed to them, they must  meet strict guidelines, and must do follow ups with receipts(and a member shops w/them), and follow budgets to qualify.

We do not fall for the able bodied Con Artists.

There is not enough money to go around.

This goes for Church members also.IF they get into fiscal trouble, they must bring in their statements of income, and where it goes.

They are then counseled, and put on budgets, and must follow to continue to get any assistance.

The scriptures definition of a Rich man was if he had two cloaks, and knew where his next days meals were coming from.

None here, are remotely at that low a level.

Even the lowest class in this country is wealthier than 98% of the rest of the worlds population.

Mind boggling.

There are (as most here know) only TWO ways to get out of debt, ONE, make more money,or spend LESS.



Sat, 04/30/2011 - 11:31 | 1223956 Abitdodgie
Abitdodgie's picture

I was down in Los Angeles doing the same for quite a while until I got out , now I am doing the same in North Dakota , I just don't see that many people so I don't seem as mad.

Sat, 04/30/2011 - 13:44 | 1224166 Moe Howard
Moe Howard's picture

I hear you. I understand. You have to make changes now to make up for the dream you were in. First, cut your expenses to the bone. No eating out, no cable or sat, no cellphone plan etc. That will help you to become debt free. BTW, cut up the credit cards if you have them, keep one from a local credit union for online etc, no balances. Pay as you go. You can do it. I did and so did many more. If you are spending your paycheck every week in bills, you need an intervention. Or keep on and drown with the rest in the near future.

If you have 38k in a 401k, see if you can get it out [borrow it from your account] and apply it to your mortgage. You sure aren't retiring on that chicken feed.

Sat, 04/30/2011 - 09:56 | 1223730 Tinfoil Hat
Tinfoil Hat's picture


Perhaps the shortages wont be quite so short soon!

Sat, 04/30/2011 - 10:22 | 1223788 dollartheque@ya...'s picture

now that micro cap silver stocks are underperforming, am looking for an entry point.Uranium micro cap also are on the list....

Sat, 04/30/2011 - 10:22 | 1223789 dollartheque@ya...'s picture

now that micro cap silver stocks are underperforming, am looking for an entry point.Uranium micro cap also are on the list....

Sat, 04/30/2011 - 12:31 | 1224060 mick_richfield
mick_richfield's picture

I have a newbie COMEX question for ZHers.

COMEX silver contract margins are defined as specific dollar amounts, rather than as a predictable formula, i.e. "6% of contract price, to be adjusted after the close of trade on the last trading day of every week."

So -- why?  Why do they use specific dollar amounts rather than predictable formulas?  

At (my) first glance, the reason would appear to be obvious: so that the controllers of the COMEX can gain undue influence over their markets. 

Is there another, legitimate reason why margins should be defined as they are?

Thanks in advance.

( And ... Fed delenda est. )

Sat, 04/30/2011 - 14:14 | 1224226 Jovil
Jovil's picture

We must not forget the consequences that the world economies from the Japan disaster which until today remains a radiation threat to the world and a death threat to it's people. Bagining in July will be published the quarterly earnings of corporations. This will be the first full quarter after the disaster. There are Japanese factoriesa around the world and other factories that rely on Japanese components to finish their products. Lower sales and profits will be reported and we should expect a large drop in the world stock markets. For more on this:

Sat, 04/30/2011 - 16:05 | 1224381 sbenard
sbenard's picture

Just listened last night to a speech by the Assistant AG of my state. He said we are going to soon hit a national debt brick wall. It is going to happen. He told us all to prepare for it.

He also said that never in US history has freedom been in so much jeopardy!
It was stunning to hear him say those things!

and I think he's right!

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