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    Crude oil time-spreads have completely dislocated from inventories. Historically, such dislocations have proved to be short lived. We expect that either spot prices will sell-off again or the back...

Silverfinger - The True Story Of Nelson Bunker Hunt

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Thu, 05/05/2011 - 20:40 | 1245949 EscapeKey
EscapeKey's picture

This is an exceptional book, and I recommend everyone read it.

Monetary Regimes and Inflation: Peter Bernholz.

http://www.goldonomic.com/Monetary_regimes_and_inflation.pdf

 

5.2 HYPERINFLATIONS ARE CAUSED BY GOVERNMENT BUDGET DEFICITS

In this section it will be demonstrated by looking at 12 hyperinflations that they have all been caused by the financing of huge public budget deficits through money creation. To demonstrate this we present the evidence for twelve of the twenty-nine cases of hyperinflation (Table 2.1) in Figures 5.5 and 5.6.

 

Thu, 05/05/2011 - 20:49 | 1245988 Almost Solvent
Almost Solvent's picture

Don't forget to stop at your local coin shop on your way to the local bookstore. 

 

Or, don't forget to visit your favorite PM site on your way to Amazon.

Fri, 05/06/2011 - 00:25 | 1246395 asdasmos
Thu, 05/05/2011 - 20:52 | 1245990 Matto
Matto's picture

Absolutely paramount for all ZH's to understand where the silver market is at right now. Key developments have come through and action is required immediately!!!

 

Must watch:

http://www.youtube.com/watch?v=O0e1Y5FXNWs

Thu, 05/05/2011 - 21:07 | 1246033 Awakened Sheeple
Awakened Sheeple's picture

The YouTube vid is unavailable for people in the US. Can you give us a breakdown?

Thu, 05/05/2011 - 21:23 | 1246071 TeMpTeK
TeMpTeK's picture

I think he did give us the "breakdown"

Fri, 05/06/2011 - 07:20 | 1246695 tonyw
tonyw's picture

It's Olivia Newton-John - let's get physical

Thu, 05/05/2011 - 21:17 | 1246060 JustPrintMoreDuh
JustPrintMoreDuh's picture

This video contains content from UMG. It is not available in your country.

Thu, 05/05/2011 - 21:40 | 1246117 Matto
Fri, 05/06/2011 - 01:47 | 1246502 CD
CD's picture

Dude, rickrolling? I appreciate the attempt at humor, but that was too much.

Fri, 05/06/2011 - 02:14 | 1246525 Global Hunter
Global Hunter's picture

Physical physical...I wana get physical physical.  It was actually quite clever.

Thu, 05/05/2011 - 21:37 | 1246104 buck4free
buck4free's picture

It can all be reversed in "15 minutes".

Thu, 05/05/2011 - 22:08 | 1246177 Philidor
Philidor's picture

On The Serenity of Numeraire Change

The dollar is very sick, being fatally poisoned by years of debt and deficits stretching into both the past and future. It will probably die sometime before 2020. In the meanwhile, the doctors will throw every conceivable possible treatment at the patient in order to extend the patient's life, if only by a few months. In the Weimar Republic, a variety of bizarre laws were passed to hold off the inevitable passing of the Reichsmark (e.g. laws to make manufacturers fill out reams of paperwork applications to the government in order to secure price increases, thus supposedly slowing the rate of inflation). In the U.S. today, the governmental-financial complex ("bankstas") provides ample resources and vehicles for extreme life-support measures. Today's market action was a good example. The secret clue was given by Trichet's small remark the previous week that inflation expectations must be kept in check. After the demolition orchestrated this week in the commodities complex, on essentially no change in the fundamentals, you will have to admit that your inflation expectations have been substantially modified. It's been a brilliant show of force by the bankstas, replete with outstanding PR and talking heads. And while it doesn't address the core problems, it might well extend the patient's life by several months. It also has the brilliant side effect of discrediting the precious metals as a store of value, acknowledging in effect that there is a coming war of ideas regarding the successor to the throne of the dying dollar: shall it be all-electronic currency (the bankstas' choice) or gold and silver (the people's choice)? A currency dies when essentially everyone loses confidence in it. And as the process proceeds, people will be divided into early adopters, mainstream adopters, and late adopters (just like any other new trend) of confidence loss. Knowing that the dollar is dying, I have become an early adopter. Sure, I know that only my dollars can buy things now, but it no longer represents my unit for denominating my wealth. This is what economists call a "numeraire", or unit of value. But I am still working on my mental acceptance the change of numeraire from dollars to gold, where in the latter the only question is, what is my wealth in ounces? I take solice from the fact the Giovanni de Cosimo became the richest man in Italy around the early 1400's through owning only about 90,000 florins (about 9,000 ounces, worth roughly just $13 million at today's prices). The Zen of numeraire change is difficult to achieve, and it takes great effort for me not to anguish upon my dollar-based losses this week. I admit to not yet mastering this level of serenity. At the point of the dollar's death, however, I am confident my Zen practice will have served me well, regardless of the outcome of the battle for succession.

Thu, 05/05/2011 - 23:56 | 1246351 Tail Dogging The Wag
Tail Dogging The Wag's picture

Would you measure your wealth in ounces of precious metals (real money for over 6,000 years), or would you measure it in Bernank IOU notes (paper ponzi currency in a coma) signed by Mr Geithner?

I thought so. I also love the sound of a flatliner in the morning.

http://www.youtube.com/watch?v=T07ABb0n2rg

Fri, 05/06/2011 - 02:47 | 1246542 i-dog
i-dog's picture

"shall it be all-electronic currency (the bankstas' choice) or gold and silver (the people's choice)? "

This is the crux of the battle. Well said! May the people prevail.

PS. I also like your creative handle ... says it all :)

Thu, 05/05/2011 - 22:55 | 1246245 gorillaonyourback
gorillaonyourback's picture

its was interesting reading about silverfinger and how paul volker played a very key role in the demise of the price of silver.  They r doing the same thing now increasing margin requirements  maybe next allowing only liquidation sales.  the price kept going up it was only when volker raised the interest rate to dry up all the money is when silver came tumbling down.  THIS TIME I DONT THINK THE FED HAS THE BALLS TO RAISE INTEREST RATES.  maybe that guy talkin about a slingshot trade maybe on to something.  I personally believe or have faith the comex is broke and out of silver so im going to wait till monday or maybe tommorrow if i see a rate of silver price increases that i like to buy. 

 BUT then again if been wrong before, they r printing lots of money and its not getting into the publics hands so if they raise rates things cant get much worse or can they any opinions?

Fri, 05/06/2011 - 01:39 | 1246487 Captain Benny
Captain Benny's picture

Heres a rough chart of APMEX raw # of sales over the last few months.... just transaction #s, but you can get the picture.  https://docs.google.com/document/d/18U_lxCXwjymKoAVsrV-uEjaXFaP8JyZSpYFxf0ByMg0/edit?hl=en&pli=1#

Fri, 05/06/2011 - 05:42 | 1246642 Titus
Titus's picture

Later testimonywould reveal that nine of the 23 Comex board members held short contracts on 38,000,000 ounces of silver. With their 1.88 billion dollar collective interest in having the price go down, it is easy to see whyBunker did not view them as objective regulators. At the same time, though, the C.B.O.T. restrictions madeBunker even more bullish on silver, because, as he put it, “they show a silver shortage exists.”

Fri, 05/06/2011 - 07:46 | 1246720 Sam Clemons
Sam Clemons's picture

So wait, 12 of 12 or 12 of 29 were caused by govt budget deficits?

Fri, 05/06/2011 - 08:30 | 1246825 mgochoa
mgochoa's picture

For a moment I thought you were talking about Playboy. 

Fri, 05/06/2011 - 19:44 | 1249753 GregGH
GregGH's picture

How nice to see the first post also be a post worth reading ... thanks for sharing the link for the book ... my iPad is filling up much faster than I am reading them .. but thanks there the less

Greg

Thu, 05/05/2011 - 20:40 | 1245962 RealitiveMind
RealitiveMind's picture

Benny Zimbabwe at your service . . . . .

Thu, 05/05/2011 - 20:43 | 1245964 ShittyLipsMcCra...
ShittyLipsMcCrapStain's picture

Ordered up another 300oz at 33 today....thank you very much.

Thu, 05/05/2011 - 20:45 | 1245973 traderjoe
traderjoe's picture

What kind of silver? Where? If junk silver, I can understand price...

Thu, 05/05/2011 - 23:43 | 1246333 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I sold everything at $45.  This is nothing more than a speculative blow off.  Buy now and you are catching a falling knife, IMHO.  The banks are insolvent.  With QE2 winding down and Federal spending under pressure, the debt bubble has reached another peak.  I suspect another round of deflation is beginning.  Remember what happened to commodities the last time that happened?

 

Fri, 05/06/2011 - 00:01 | 1246356 tmosley
tmosley's picture

Last time was nonsense.  The dollar as safe haven?  Please.

That's not to say it won't happen again.  People can be stupid.  But I somehow doubt it this time.

I won't let go of my physical for any price in dollars.  Only gold.

Fri, 05/06/2011 - 00:42 | 1246406 Lucius Corneliu...
Lucius Cornelius Sulla's picture

In the USA the money supply is measured by total debt outstanding.  All the FED has managed to do, even given its radical and illegal (as defined in its charter) measures, is hold the house of cards up.  Well, guess what?  Just because FASB changed the accounting rules hasn't made any of the non-performing loans start magically paying.  Those loans are on the books for probably more than double what they are worth.  As banks are forced to sell off their REO, they will have to realize the losses.  That is deflationary, as in money (credit) disappearing into thin air.  When the money (credit) supply shrinks, remaining dollars and safe debt will be more valuable.  People who think the FED is in control are mistaken.  The bond market is in control.  Bond prices are predicting deflation.  The USG will not continue to print because that will mean yields will rise and make the interest payments unbearable.  The world's largest debtor cannot afford to let that happen.

 

Oh, and I bought my silver at $6.50 and less.  At the time people were curious as to why anybody would want it.  Now I am hearing office chatter about gold an silver...

Fri, 05/06/2011 - 01:53 | 1246506 traderjoe
traderjoe's picture

And how would the financial system survive that sort of deflation? How would the gov finance the deficit? As things fall apart - why would people have more confidence in the dollar?

Fri, 05/06/2011 - 02:32 | 1246531 Global Hunter
Global Hunter's picture

If things go LC's route there is going to be a lot of pension plans and 401k plans under water furthermore even non investors pay attention to the stock market (even if they just hear it on their evening news).  I think the stock market dropping will cause at first concern and then panic whereas inflating the way out causes the illusion that everything is OK as most will just see that the markets are going higher and not give it too much consideration. They will be hoping that nobody makes the connection between price increases at the grocery store and price increases in their retirement funds.

Fri, 05/06/2011 - 03:07 | 1246561 LudwigVon
LudwigVon's picture

How would the gov finance the deficit? 

 

This is the part I don't get in that scenario as well...

Fri, 05/06/2011 - 03:14 | 1246567 LudwigVon
LudwigVon's picture

1. money (credit) supply shrinks, remaining dollars and safe debt will be more valuable.

 

2. continue to print because that will mean yields will rise


I agree with most of what you say, however, just like today, they seek to strike a balance between these two forces. Printing does continue to finance a good majority of the deficit. There will be further pressures to make fiscal cuts as this would aid the economy.

Fri, 05/06/2011 - 06:37 | 1246665 Withdrawn Sanction
Withdrawn Sanction's picture

Just because FASB changed the accounting rules hasn't made any of the non-performing loans start magically paying. Those loans are on the books for probably more than double what they are worth. As banks are forced to sell off their REO, they will have to realize the losses. That is deflationary, as in money (credit) disappearing into thin air.

 

In the deflationary collapse of bank credit you’ve described (w/which I largely agree), the idea is that the liquidated proceeds will flow into the remaining dollars.  I believe this is an overly strict, if traditional, interpretation of the deflationary thesis.  What if, instead, the remaining proceeds flow into “money” (broadly and correctly conceived) instead of FRNs per se’.  (After all, FRNs are really just debt instruments backed by debt whose value seems likely to deflate along w/the deflating values of their collateral backing.) 

In that case, value fleeing out of credit instruments seems just as likely to flee into the money forms of long-standing (i.e., into gold and silver).  Indeed, as JP Morgan (the man, not the shell of an institution that carries his name) noted, “gold is money; nothing else [is].”  It IS money because it cannot be conjured into existence costlessly.  That’s why, at bottom, honest people love it, and why dishonest people loathe it. 

 

Thu, 05/05/2011 - 20:43 | 1245970 Dr. Porkchop
Dr. Porkchop's picture

Ben Shalom Johannes Gutenbergnanke.

Thu, 05/05/2011 - 20:44 | 1245971 ShittyLipsMcCra...
ShittyLipsMcCrapStain's picture

Isn't that Benny Hill?

 

Thu, 05/05/2011 - 20:48 | 1245978 Henry Chinaski
Henry Chinaski's picture

I remember the seventies.  They sucked.

Yes, I see a lot of similarities to the present days, but without the price and wage controls... so far.

Thu, 05/05/2011 - 20:48 | 1245982 EscapeKey
EscapeKey's picture

Oh, they're coming. And it'll all be caused by the "speculators", completely ignoring that the gains of ALL "speculators" won't make a dent in the deficit.

Fiscal illeteracy FTW! (sadly!)

Thu, 05/05/2011 - 21:45 | 1246125 Gold 36000
Gold 36000's picture

Why do you care are you not across the pond?

Thu, 05/05/2011 - 21:46 | 1246127 EscapeKey
EscapeKey's picture

You think the situation differs here in Ole Blighty? Fuck, I have to listen to morons on a daily basis blaming it on "speculators" and switching off when I attempt to explain the "deficit" to them.

Thu, 05/05/2011 - 22:04 | 1246165 Dr. Porkchop
Dr. Porkchop's picture

Don't engage the troll... he's already exposed himself as a multiple account posting douche. Except he forgot to log out when reponding to himself.

Fri, 05/06/2011 - 07:26 | 1246702 StychoKiller
StychoKiller's picture

(S)He's also responded to his/her own posts -- perhaps it's cyber-induced Schizophrenia! :>D

Fri, 05/06/2011 - 10:10 | 1247332 Troublehoff
Troublehoff's picture

Shit, at least the 'morons' you speak to are paying attention enough to at least consider what the reasons for inflation might be.

The majority of people in this country are narrow minded and never consider the fundamental reasons as to why the world is as it is.

They don't understand or care to understand fractional reserve banking. When I tell them that the private banking institutions which employ our elites are allowed to borrow money at the base rate and lend it back to the government (us) at a much higher rate of interest, at zero risk they do not seem to care or make the connection that this is effectively a licence to print money which is backed by the productivity of the taxpayer

True, it is not rocket science to deduce that we are fucked and heading for an economic depression but the level of obsfucation  and the abstraction level at which people live their lives mean that it just doesn't feature in most peoples world view.

It is more palatable to a politician to add to an already large debt load than to allow any of the unpleasant side effects of a deflation such as defaults, skeletal public services / entitlements or high unemployment.

 

For these reasons, I've got to agree with you. We're heading for some severe inflation. Sooner or later.

Thu, 05/05/2011 - 21:10 | 1246034 Caviar Emptor
Caviar Emptor's picture

I take difference: the seventies were better than now economically and whole lot more fun. 

Thu, 05/05/2011 - 21:12 | 1246039 Freddie
Freddie's picture

+1

At least Nixon, Ford and Carter had a USA BC and were eligible.

 

Thu, 05/05/2011 - 21:13 | 1246043 fuu
fuu's picture

No AIDS.

Thu, 05/05/2011 - 21:19 | 1246062 Caviar Emptor
Caviar Emptor's picture

Party central. Great nightlife. Loads of freedom.  Nonstop booty call. 

Thu, 05/05/2011 - 21:39 | 1246114 EscapeKey
EscapeKey's picture

Booty time, booty time

Across the USA

Booty time, booty time

Waheyhey

Thu, 05/05/2011 - 22:35 | 1246222 fuu
fuu's picture

Shake that junk.

Thu, 05/05/2011 - 22:42 | 1246224 cpnscarlet
cpnscarlet's picture

The 70s in NYC - Dad layed off by Chase; expensive hobby (Lionel Trains) and no summer jobs; mugged in Prospect Park twice; Even Catholic school education started to suck; graffiti EVERYWHERE; welfare hotels in Park Slope; subway fare always increasing...John (F***ing) Lindsey...Abe (Bullsh*t) Beame...people actually thinking liberals had answers...

NO FUN AT ALL....except for Joan C....what a rack!

Thu, 05/05/2011 - 23:01 | 1246251 Freddie
Freddie's picture

Wow you dated Joan Crawford?

Thu, 05/05/2011 - 23:27 | 1246294 WmMcK
WmMcK's picture

I thought he meant Collins, I always preferred Severance.

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