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Idols of the unaware
Does the average person understand what central bankers globally are doing to money? Do they realize inflation is about to cause crisis in America? I suppose the answer is no, however they will likely soon feel the effects.
Francis Bacon (1561–1626) was an English philosopher, statesman, scientist, lawyer, jurist and author. Bacon developed a reliable method of questioning he believed would free people from dependence on infrequent geniuses (Ozmon & Craver, 2008). He encouraged individuals to develop alternative methods of thought. According to Ozmon &Craver (2008), Bacon believed that “knowledge is power”, and devised what he called the “inductive method.” Bacon’s inductive approach insists on confirmation of specifics before reaching conclusions. Bacon urged people to reexamine all previously accepted knowledge. He believed people should free their minds of various “idols”.
Three of Bacon’s idols, according to Ozmon & Craver, (2008):
1. Idol of the Den:
People believe things because of their own limited experiences.
2. Idol of the Tribe:
People tend to believe things because most people believe them.
3. Idol of the Marketplace:
This idol deals with language because Bacon believed that words often are used in ways that prevent understanding.
On Idol of the Den:
The average person underestimates the possibility of a disaster and its effects. They believe since something has never happened before it never will. We are all guilty of this as it is human nature.
On Idol of the Tribe:
The idea of a currency collapse or hyperinflation is alien to the average person. They are likely unaware of such an event. If they watch a major television network, they are likely to trust an economic recovery is underway.
On Idol of the Marketplace:
The Consumer Price Index (CPI) is a government statistic that measures consumer goods and services prices, and is used to gauge inflation in the United States. What is interesting about CPI is that it fails to recognize rising prices of food and energy. What? The cost of food and energy are not considered by government as indicators of overall inflation? Talk about unclear language that restricts understanding.
Warning Signs
Worldwide quantitative easing is flooding global money supply. This money is chasing fewer goods as more and more of the world’s population ramps up consumption. Predictably, this will lead to higher prices. It is happening now, as we are already seeing food and energy prices rise significantly with price increases of 30% or more year-over-year.
Another sign of coming fiscal problems, which ultimately leads to more monetary quantitative easing, is continued uncontrolled spending of federal, state and local governments. As more money is spent, more needs to be created to monetize the debt. Quantitative easing and monetizing are trouble. Especially with a measuring stick now segmented in trillions. Monetizing will ultimately overwhelm purchasing power of everyone holding U.S. dollars, and dollar denominated assets. Inflation is set to occur at an alarming rate.
Drink Upstream
Francis Bacon urged people to reexamine previously accepted knowledge, and believed people should attempt to liberate their minds of the assorted idols. Bacon encouraged individuals to develop an alternative method of thought (Ozmon & Craver, 2008). Is there a chance the prediction of extreme future inflation is inaccurate? Yes, and I genuinely hope it is. This piece isn’t really about if I’m right or wrong. It’s about preparation and identifying the possibilities, because it seems likely economic recovery will not take place anytime soon. It should be easy to see, the signs are all around us.
I reckon it’s still not a bad time to pick up a few pounds of extra rice, tins of tobacco and some junk silver. It is without a doubt a time to heed Francis Bacon’s remarks, to free our minds and think independently.
Ozmon, H. A. & Craver, S. M. (2008). Philosophical foundations of education (8th ed.). Upper Saddle River, NJ: Pearson/Merrill Prentice Hall.
~MV
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I love and buy silver.. but BS on these assertions..
#1: I have lots, buying more.. but it doesn't "always" go up..How else could I buy on the dips. Also take a look at some charts.. there have been plenty of times it slid back for long periods.
#2: Total BS. I have bought a bunch of these "collector" coins off of people who were lied to in this fashion.. I promise you I didn't pay a dime more than spot, and many of them less than spot value (of the actual silver content).
Junk Silver is plenty interesting in the metals market. I don't hold a lot of it, but have sold 10s of 1000s of dollars worth to silver bugs who do like it. And for the record, the vast majority of "junk" silver is 90%.
Ugh... back to work..
I've been looking to move my silver investment from a physical silver ETF into something closer to home (i.e. either stored at home or in a safe.) Been talking to antique dealers and coin dealers in Germany over the last week and am hearing interesting stuff. My decision is based upon tax (collectables such as coins and "antiques" or "junk" are better for where I am), how close to spot you get and ease of resale. Firstly, in Germany, there is huge "quiet" demand. I am looking at around 50kg in total and it is going to be very hard to get this in coins, because the silver traders are buying anything they can and it is going to be melted for bullion. There are very few coins that are making a premium at these prices. Junk (i.e. antiques, often hideous gothic stuff) is usually stamped 800 (i.e. 80% pure and dealers are paying 80% of spot silver price (i.e full value), or sterling silver which is 92.5% pure. I heard one dealer bought a box of 800 silver and found that there was a large plate that was actually platinum. Buying junk will be far easier and quicker and if I have a short turnaround time, won't make much difference, but longer term they may not always give this price, the idea that large numbers of silver coins are being melted down (coin collectors in Europe don't seem so sold in the silver story, so are reluctant to add to their collections at these levels), so if I can buy nice coins at spot, I would go for that. You may never get more than spot for the coins when you sell, but that's the lowest price and some may be becoming rarer than people realize. The one consistent message I got is there is a very strong demand for silver bullion, so anything but the highest quality antiques or rarest coins are being melted.
I've been looking to move my silver investment from a physical silver ETF into something closer to home (i.e. either stored at home or in a safe.)
"there's nothing as precious as a hole in the ground."
I thought the same. Also one cannot legally melt coins but can melt junk for themselves.
It's only illegal if you get caught. But I wouldn't. i see a big future for junk silver - you can use it for tipping and bribes and leave the pure stuff under the bed.
informed response. thank you.
Sudden, The only 40% silver coin I know of is the 1965-1970 Kennedy half, the rest of the <1964 are 90% silver. Easy to own, everyone knows what they are, and no one would fahion them out of say, tungsten. They may be the coins of the future...get some!
Some Swedish coins are .400 Silver.
Yes, and if/when the melt price drops below the face value, it retains its face value -- a built-in deflation hedge!
But that will never happen you say? Read the article again.
True it is implied that it could happen but the idea is it will happen when people are being fed the opposing idea and are comfortable in a world completely different than the present one. That is a long way off.
Bring in the bacon
+1. Agreed.
It needs to be said. Hedge lifestyle and expectations accordingly.