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The Golden End Game – A Thought Experiment - Part One
The Golden End Game – A Thought Experiment
Part One of Two
By
Cognitive Dissonance
With limericks by The Limerick King
This is part one of a two part exploration (part two found here) into what the world might look like after a total or partial collapse of the currency/economic system from the perspective of holding Gold. As the title explains this is a thought experiment, not a dissertation filled with footnotes and references. Consider it one man’s flight of fancy, so take what you need and leave the rest. Anyone who claims they know what will actually happen is a fool greater than me.
As markets are starting to sink
The end could be here in a wink
So should I prepare?
Should I even care?
My PMs will save me!!! (I think......)
(The Limerick King)
When I first entered the business 20 plus years ago the firm I started with had a mentoring program that paired the fresh faced rookie with a veteran for the first 6 months. The idea was that for a piece of the action paid to the veteran from the rookie’s commissions, the veteran would offer hands-on review, insight and support. While some on both sides of the office divide groused over this arrangement, from management’s point of view it made all the sense in the world because now the office was raising the rookie, not just one or two managers.
I found the mentoring system to be beneficial simply because I was coming in quite a bit older than the younger shark chum fresh from the diploma mills. Most of them felt they had the world by the balls, thus as long as they showed up the (fiat) spice would flow. But I knew these financial chop shops had a tendency to chew up the rookies, and then spit them out once they’d been used and abused. Since I didn’t want any part of the rookie churn and burn I relished the chance to work with a veteran and develop good habits early rather than be left with trying to break many bad habits later.
Luckily I was paired with an old pro who quickly took a shine to me and showed me the ropes, spending far more time with me then he was ever compensated for. In fact the experience re-invigorated him and he went on to become the top producer of the office two years running. The more I learned the harder he pushed, reasoning that since I knew this, I damn well better know that. So he took most of his compensation in the form of my spilled blood and an inner satisfaction that he was making his mark. For me, the processes, morals and methods he taught me are still paying sweet dividends two decades later.
One of his demands was the weekly ritual of a portfolio review of each holding in every client account. When Friday came round he insisted I justify why this or that position was in a client’s account and quite frankly it drove me crazy. I would complain that we had done the same damn thing every week for months and not much had changed. So why was he still asking me the same questions again and again. And every time I complained he would respond with a question of his own, often dramatizing it by looking out the window or throwing the Wall Street Journal on his desk. Prove to him that the world was the same one that existed when we reviewed the accounts the last time.
And of course he was right; the world was not the same and often quite different from week to week. This trial by fire is something I still force myself to go through every Friday afternoon. Knowing the client and the world situation, if I can’t justify the position, why the hell is it still in the account? But of equal or greater value to me were my mentor’s questions each time I tried to add a new position to an account. I hated his probing and poking and often I took it personally. And that bastard knew where all my buttons were and delighted in pressing every single one until I finally wised up and stopped letting him goad me.
After we had discussed why I was adding the position, and well before I was allowed to call the client and make the pitch, he always had one final question for me. How was I going to dispose of it if things went wrong in a hurry? Or in his words, “What’s the end game on that?” At first I felt his question was downright stupid and my rote answer was always that I would cross that bridge when I got there. But he never let me get away with my intellectual laziness and he’d ask the same question 6 different ways until I saw all the possible pitfalls based upon the knowledge I had at the time.
I can still hear him today. “Don’t ever take on a new position until you have thoroughly considered how you will dispose of it under the worst of conditions.” It forced me to look beyond my nose and consider how circumstances change, and with those changes the ability to sell something that, while saleable today, might not be tomorrow. Liquidity and desirability can dry up quickly and always when it is least convenient to you and your client. This perspective broadening exercise was extremely useful beyond my business world because it can and should be applied at all (not just major) life decision points.
As this Keynesian game nears an end
And the Banksters can no longer lend
What will we all treasure?
Will gold be our measure?
Or the love of our family and friends?
(The Limerick King)
So……what’s the end game here folks? Regardless of whether we are USA centric or more globally focused, the fact is that we ‘own’ a political, economic and social portfolio that is the foundational basis not only of our wealth and investments, but of our very lives and those of our family, friends and neighbors. So have we done a fearless and thorough portfolio review or are we simply buying Gold and other precious metals, along with guns and various food stuffs, and hunkering down to wait out the storm?
I don’t pretend to have all the answers, let alone the proper questions. So don’t look to me for instructions when the T-1000 HFT bots crest the ridge and cream our asses. But a little proactive introspection is well warranted here considering we are now entering uncharted territory. And it is uncharted territory; at least for plebs such as you and me, even though there have been fiat currency collapses throughout history. This time really is different (as were all the other times for each generation caught in the middle) if for no other reason than the massive use of financial leverage combined with the humongous explosion in global population over the last 100 years.
Don’t get me wrong. I’m basically a hard asset guy at this point in the great unwind. But as I have said in the Zero Hedge comment section several times before, it’s one thing to grow and/or protect your assets and wealth in Precious Metals (PMs) (and other hard assets) and another thing entirely to move those assets to the next game board when this one is reset, replaced or recreated.
I see and hear a great deal of cognitive dissonance in many of the articles and comments discussing PMs as the best vehicle to use when moving to dry land……….that is, when dry land finally does rises from the ocean floor to form the new capitalist capital called Atlantis Redux. I find that many are kind of fuzzy on how the actual transition/transaction will go down and nearly all just sort of insert “and then a miracle occurs” at some point in the discussion when they recite the precious metals (PM) mantra.
Let’s just say for a moment that our Gold, Silver, Platinum and Gold-plated Tungsten have all quintupled in price (as measured in whatever fiat is the favorite at the end) and we are now all sitting pretty. Do we really honest-to-God no-fingers-crossed cherry-on-top believe that the powers-that-be will simply allow us to mosey up to the cashiers cage and redeem or convert it all for whatever monetary unit reigns supreme? Really? Because from my point of view it’s just crazy talk to assume that the enemy of the state (Gold and other PM’s) will be welcomed home with a warm welcoming embrace.
Now before you bite my head off (remember boys and girls, this is just a thought experiment) understand who this essay is directed towards. Or rather isn’t directed towards. If you are capable of purchasing several LBMA Gold bars and are able to store them overseas and you can easily relocate yourself to where your Gold is, then this rant really isn’t directed towards you. While you may not be a power-that-be, you are in a class above the middle class regardless of your protestations to the contrary. I’m not saying you don’t share many of the problems others are facing, only that you have a great deal more flexibility to deal with them.
In the same respect, if you own several Gold Eagles and a couple hundred ounces of Silver, then you are also not to whom I’m speaking. Most likely you will run under the radar because your small amount of Gold and Silver is being held in the form of the U.S Eagle coin which, while not exactly produced as a numismatic, is a US Mint produced Gold and Silver coin that is considered US legal tender. So from my point of view, if Gold and Silver Eagles are held in small quantities, they will not be considered an investment, but rather savings or collectibles.
The people I am talking to are those who are converting a substantial portion of their investable assets into physical Gold. Or who are selling other assets or breaking qualified retirement accounts (IRAs, 401(k)s etc) in order to purchase relatively large amounts of physical Gold and Silver, though the focus of this essay is Gold. Their intent is not only to grow their PM assets, but to carry the bulk of their wealth over to the Promised Land when the current Ponzi Empire crashes and burns.
You know who you are and unfortunately so do the government goons if you have ever bought any quantity of Gold from an established dealer with a check, a cashier’s check, wire, electronic funds transfer or other traceable method. And because of Check 21 everything is traceable nowadays (even cash within a few degrees of separation) if you used one of these instruments to gather the cash.
The End Game is here so I'm told
Will the last valued asset be gold?
If so, keep it tight
From the thieves in the night
For they know every ounce that you hold
(The Limerick King)
Where I have a problem with the logic used by some is this. There seems to be a general consensus that Gold is the arch enemy, the Kryptonite if you will, of the out of control fiat creation by central authorities in order to extend and pretend while looting the executive bathrooms of the Gold faucets and monogrammed bathrobes. This understanding, along with a host of others, is always proffered when explaining the reason behind PM manipulation and the entire PM paper racket. And I don’t necessarily disagree with this general supposition.
What I don’t get is the idea that if Gold has been considered ‘contrary’ or ‘dangerous’ to the unfettered debasement of fiat in the past and present, thus the reason for the manipulation, then why would this suppression and resistance to the ‘Golden enemy’ by the powers-that-be suddenly disappear precisely when the powers (or more accurately their agents and puppets) are desperate and have the most to lose? It is clear to me, and judging by the comments clear to many others here on Zero Hedge, that these guys and gals play for keeps, consistently pushing nearly all their chips to the center of the table in an endless game of bluff and intimidation.
More important to me, at least for the purposes of this essay, is that those lovable sociopaths would rather burn to the ground than play to lose or walk away. This, by the way, is precisely why they rarely lose. They play for keeps and they’ve been doing so for thousands of years. They not only have the power, but they know how to use the power they have. Meaning they are ruthless cutthroat bastards who see you and me as cattle to be consumed or beasts of burden to be used. And I’m being kind for the sake of the weak stomachs among us.
As best as I can tell the general assumption is that when the partial or total collapse comes (not if because we are talking worst case scenario here) the failed powers that be, perhaps inspired by some public hangings and decapitations, will pack up their lawn chairs and vacate the levers of power, allowing more responsible adults and even some advanced children to take over and save the day. Or at the very least, the expectation is that the new kids on the block will clean up the mess left behind by those traitorous bastards and that they will do so in a reasonably fair, open and egalitarian manner. Let me take a moment to collect my thoughts before rendering my opinion on this matter.
I DON’T THINK SO!
Why am I so confident of this? Well, from studying history of course. And by history I mean good old fashioned world history dictated and approved by the Empire for high school or college textbooks. You see, from the perspective of long term history, while we may have a new production company and support system for the global Ponzi screenplay, as well as fresh faces to fill the role of puppets, enablers and useful idiots, and even a (relatively) new political system to emotionally and culturally unify us all as we labor away in our hamster cages, the Ponzi is at its central core the oldest con in the books.
Essentially we are all experiencing plantation living at its highest and most efficient evolution to date, where the sole purpose of our existence is to serve our immediate masters who then serve their masters who then serve their masters in an ever narrowing pyramidal hierarchy. This goes on until it reaches the point where at the top we find several hundred to a thousand elite scattered across a number of blood-line families that share the power and spoils. And there is serious evidence available to be examined by the determined researcher that there might even be another level (or two) above that.
BTW for the most part, but with certain exceptions, you will not find these elite of the elite on any list of richest people in the world. I personally suspect that many of those who you do see listed are in fact the public caretakers of the wealth of others and who are paid handsomely to play the role and weather the slings and arrows of public scorn in exchange for growing the assets and guarding the anonymity of the real owners of Mother Ship Earth.
The Powers That Be are concealed
Their identities won't be revealed
They will hide from the light
And continue their fight
Until all of our fates have been sealed
(The Limerick King)
History is full of examples of crumbling empires and nearly all of them seem to share several characteristics. First and foremost in my mind is that regardless of how dire things may seem to be, the collapse progresses much slower than expected. It always seems like today’s bad news signals the end of the world as we know it….until tomorrow’s even worse news hits the ticker.
Grab Mr. Peabody and fire up the WABAC (pronounced ‘wayback’) machine to travel a few years into the past, say to 2007, and consider some of the headlines we saw and the reactions they provoked. What were considered Earth shaking events back then are nearly routine today, no big deal really. This is a severely misunderstood and underappreciated, and thus under weighted, counter balancing force to the general insanity level. The (normalcy bias) force is strong in you young Skywalker.
I suspect this isn’t so much because the powers that be are holding it all up, but rather it is the common folk living on the ground floor of this insanity that are doing the heavy lifting. Never underestimate the desperate desire of those who are chained to the plantation to preserve that plantation even when it would be easier and saner just to walk away. This Stockholm syndrome conditioned mind is of course exploited by the masters to rape and pillage long past the normal or even expected expiration date of the Empire.
Also, collapse (partial or total) is a relative term. For the financial elite, politically powerful and top tier business people, collapse is just another word for a really severe business cycle downturn. When conditions become harsh, the script is always the same. Shed useless eaters, strip all usable assets and sell the estate to the last of the greater fools, then move on to a more favorable business location. So by the time the barbarians are at the gate, the rich and powerful are long gone and have stripped most of the wealth from the kingdom.
In the modern era this means that the rape and pillage of the middle class is the purpose and eventual outcome of any severe recession/depression. So of course it is the purpose of the ongoing collapse. See ‘The Great Depression’ of the 1930’s for the Cliff Notes on the coming fun and games…exponentially escalated by $708 Trillion (notional value) in derivatives. But always remember that the explosive firepower released back in the 1930’s is nothing compared to the massive potential energy that is about to be released. The real purpose of can kicking is to try to slowly release that energy rather than to allow it to go BOOM all at once. Consider it a form of extended game play for the elite.
When the global reset is complete
And the Kleptos are in full retreat
Secure family and friends
For their game never ends
And they'll never accept their defeat
(The Limerick King)
The true powers that be have a long history of backing all sides in nearly every conflict or collapse. So it is not a stretch to assume they are supporting the very barbarians who are beating the door down while also relocating their kin from the collapsing empire. If you spend any time studying the blood lines of the rich and powerful, despite our general indifference to this seemingly inconsequential subject matter, to Earth’s owners the blood lines are carefully massaged, managed and manipulated in order to maintain a balance of power and influence among the bickering kings and queens. Do not underestimate the utmost importance of blue blood hierarchies or of the interconnected web between supposedly bitter enemies and plantations/countries. If it is important to them, then it should be considered life and death to us.
Inside the sprawling plantation the conditioning of the slaves is ongoing and ever changing and relies heavily upon the older, more experienced slaves to indoctrinate and condition the new ‘volunteers’, thus cementing the bond that is often expressed as nation or community…..or more properly ‘misery loves company’. For several thousand years religion was the center of the indoctrination process and controlled by the blue bloods, all of whom had no aversion to donning priest’s robes to spout the all important rites and rituals. A close inspection of history shows that while the vehicles of power shifted and morphed, the methods used and the personalities involved always remained the same.
Closer to the modern era, there was a shift to the sharing of power between religious centers and blue blood families who presided over kingdoms. Again, there really wasn’t a divide, only the public appearance of division. Mom usually decided which son became King and which became a Cardinal or Pope, thus assuring her it all remained in the family.
Over the last several hundred years the center shifted once again to the façade of central governments organized under ideological memes such as democracy, communism, socialism and of course the more traditional blue blood families aka Kings, Queens and royal families, sometimes along with a quasi democratically elected congress designed to create a false sense of self control for the naïve native slaves.
Regardless of the method or ideology used today, they are all simply more sophisticated methods to organize and exploit the plantation and nothing more. In much of the so called ‘free’ world today, giving the slaves the illusion of freedom of (limited) choice has been found to dramatically increase productivity. An intelligent plantation manager will allow any work rules as long as they still maintain order while increasing efficiency because strip mining the human and mineral resources of Earth is the one and only goal of the ruling elite.
Preserving your wealth can be fun
The first thing you'll need is a gun
Trust no one you meet
Each night soak your feet
Just in case it is prudent to run
(The Limerick King)
Regardless of whether the financial elite remain in place or move on during or after the collapse, there will still be some type of procedure set up to exchange the old slave script for the new slave script. Without a doubt there will be different tiers or exchange rates depending upon which social and/or economic class you reside in. And rest assured the transition will not be fair and it will be used to extract whatever remaining wealth the middle class still holds. This is a given, but it will not be readily obvious or even visible since most of the dirty work will occur behind closed doors and well in advance of the general scrum.
There is also no doubt, once again predicated by a careful reading of history, that regardless of the leadership actually holding office, when the gates are busted down (or as is more likely the case pulled down from within, often via false flag attacks), in order to placate the increasingly restless slave population, fresh faces will magically appear from the cloning rooms to offer stirring speeches and heartwarming platitudes about how all the slaves must engage in mutual sacrifice and work even harder to ensure that the elite make a clean getaway before the cleansing fires are set and the system is finally rebooted. I can’t wait for the games to begin because I still have more cognitive room left over for that hope and change thingy.
Every crumbling Empire always reaches into the same bag of tricks when the heat is on and the slave nation becomes restless. After all, the elite must maintain order so that the fleecing can be completed. ‘Order’, especially near the end of the End Game, is usually maintained by a heavy handed police and/or military presence via outright martial law or the stealth version implemented by (executive) decree. Let the head bashing begin. Desperate puppet leaders will most certainly do desperate things, first to maintain their own illusion of power, then just to save their asses. Count on it.
Two tricks of the deception trade that often work hand in hand are scapegoat harvesting combined with war mongering, which usually leads to out-right-war in order to deflect attention and blame those evil elites over there and their supporting band of vicious baby eating enablers, indentured servants and wage slaves. And while it might be an old trick, even the oldest, it still works every single time it is used because we slaves would rather support the devil we know then to take a chance and actually live free. Spend enough time in a locked cage under dehumanizing conditions and the jailer no longer needs to lock the door anymore. We slaves will keep ourselves just fine, thank you very much.
While I could extend this list of common denominators for several more pages, let me cut to the chase and list the one commonality that is near and dear to my heart and the core function of every central government that administers the (crumbling) Empire……..to be a blood sucking parasite. The bottom line is that governments, Kings and religious orders do not ‘produce’ anything nearly equal to their consumption no matter how you measure it, unless you have been drinking their Kool-Aid. These entities will consume from all sources using one or more of the following strategies; regulation, taxation and ultimately confiscation.
In Chapter Two we will examine the third method as the end game worst case scenario draws ever near.
11-20-2011
Cognitive Dissonance
Special thanks to The Limerick King for his wonderfully apropos limericks. It is an insult to describe the process of condensing complex subjects into 5 lines of prose as ‘writing’. The term ‘stupid good talent’ just begins to scratch the surface of what The Limerick King has to offer. Thank you TLK.
I also wish to thank Dagny Taggart for the ongoing and wonderfully diverse conversation that always leads to further inspiration. Thank you Dagny.
PS: For those who just can’t get enough of The Limerick King, below please find some more of his work that just couldn’t be fit in. Momma always told me never to waste a single mouthfull of The Limerick King.
To those who think gold is the cure
For everything fake and impure
You may get your wish
If gold catches fish
By making an outstanding lure
As the great global reset draws near
Consider the things you hold dear
Will others agree
With the value you see?
If so you have nothing to fear
My wealth is so precious to me
Without it I just couldn't see
Life would be dour
I'd lose all my power
I'm spawn of The Powers That Be...
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I <heart> The Limerick King. Truely a hidden gem here on Zero Hedge.
never make a bet you can't collect. if someone wants to bet you the world will end tomorrow, take all that action you can get.
and this from horseracing. first you have to win the race, then you have to manage to leave the track with the money. there are a lot of ways they have to keep you from ever collecting your winnings (think LTCM)
and once you have the money you have to hold on to it (which is something lottery winners learn, or don't learn)
and once you have the money you have to hold on to it (which is something lottery winners learn, or don't learn)
It's occurred to me a few times that people who win the lottery jackpot more than once are among the saddest people on the planet.
I recall one who won several million dollars. Rags to riches overnight.
That person ran out and bought a big mansion in the old Colonial style... something like 600K (Equal to 1-2 mil today) and then we moved on...
Some years later that Person returned to media attention when cries of poverty rose from the property due to the required taxes on the home each year around 45K.
Ate it all up little by little returning the riches back to moth eaten rags.
We have not been stocking in PM's but rather working on useful things that will come in handy when the time comes. For example weapon and training to use it well.
As they like to say, stay fit, lean and mean so that you may be able to take care of you and yours when the starving obese people turn from the stripped and looted walmart and start eyeing the homes among which you live in.
I am old enough to remember 200 dollar gold ounce.
It was common around the coffee pot to laugh and dream of buying 200 now and selling 1500+ later.
Well here we are at 1500.... make your bets. (Me? Naw not where our Government has done in way of tracking everything if not the very cash you use to purchase anything.
Blockcade runners during the Civil war years have a thing to teach to those who wish to learn.
Every fraud-bill with a SN is tracked. Typically this is regionally and by the bill (obviously not time or the process).
Same thing with credit cards (only that data is mined/traded and sold).
Ever wonder what happens with Gmail autosave data? That shit you didn't actually send but was saved "somewhere?"
Your privacy is someone else's profit and money itself is the machine.
Starving obese people. Lol. Really, have you ever experienced that? I have. It is horrifying. Folks who are used to eating whatever/whenever they want, get violent very easily when not fed when they're hungry. Reminds me of a camping trip with some friends many years ago. One of the campers, big gal, went hiking one day with a group of us. We ended up having so much fun, stayed out all day, no food, but we had water. Big Gal started having food withdrawals. At first just complaining and whining. Later in day, turning snippy, then down right nasty, demanding we head back to camp. We get back to camp, she literally pushed people out of the way to get to food immediately. Snarfing anything and everything she could get her hands on. Then, when the cooked food was ready, ate what normally would feed 6 people. Obese people are food addicts. They act like any other addict that can't get their fix.
Ditto on that. I have a few friends who are overweight, but not obese, and I've seen near-meltdowns on several occasions. Take away that constant food supply and I don't think most folks are able to comprehend what their "friends" would turn into. (spoiler: Zombies) The country would become completely ungovernable in less than a week without food. No doubt this is why the fed gov avoids that problem with a measly $6B for food stamps (50M people x $120 average benefits per person).
That sounds like a bad carb/sugar withdrawal.
I am not overweight by any means, but my carb withdrawal (after a "healthy" diet) flawed me for two weeks and I got very weird indeed. The impulses to consume sugar or grain carbs were extraordinary.
I can't imagine what it might be like for someone who is obese, and who is used to consuming seriously high doses of dietary sugar every day.
This is why anyone with s small scale brewing or distlling operation will do well.
It's good to have a skill.
In all fairness to CD, whose pieces are always worth reading and pondering, I have to point out that I can remember reading this exact same sentiment eight or ten years ago, when gold was only in the $250-$300 range: "If gold were to ever reach the sky-high figure of $1000 or even $1500 per ounce, do you really think that the powers-that-be are going to allow you to harvest such gains in the price of gold?" Yet here we are.
If I may be so bold, CD, I might suggest that you may be at least a partial victim here of one of the most insidious, and pervasive, memes propagated by the power elite throughout history: that the power elite is at all times all powerful. "L'etat c'est moi", as stated by a famous French king --- and yet it was le guillotine for his successor. In fact, history has often demonstrated that there are very real limits to their power, and that sometimes (temporarily, of course) they lose power altogether.
I am not, however, trying to outright negate anything that you have said here --- merely giving you, in return, some further thoughts upon which to reflect.
Akak, I think you make an excellent point, about folks expecting confiscation many years ago if Gold ever hit the unthinkable price of $1,000 per oz.
We also have unmentioned "non-elites" such as Bill Gates, Elon Musk, Kyle Bass, ad infintum, that possess no "noble blood", but have rather formidable fortunes. I doubt anyone is going to hold their feet to the fire or confiscate diddly squat from them.
Add to that, MY thought exercise (cut to summary) which ends like this:
The "Elites" themselves, will insure Gold gets to $6,000 an ounce (or higher - insert some big number there), and as was pointed out, less than 1% of people own any physical PM's, meaning they can triple or quadruple their wealth, as at THAT price, J6P will not be able to purchace even a single ounce of Gold.
I believe the "big picture" goes like this - PM's are "run up" (see Nov./Dec., 2010) and then crashed (see this week), and the average Joe can't handle the volatility, and views the PM's with distaste. The big PM shorts cover (I can't wait for the Dec. COT report), and get this - go LONG, and (finally) take down the US Dollar (after massively shorting it). At this point, they then go massively long the PM mining sector, as J6P has abandoned THIS sector as well, having gotten badly burned.
Money shot - they won't give a shit who has Gold or Silver - that tiny minority will represent NO threat to them, as they will have profited handsomely, as well. I don't think we would have Central Banks buying Gold, if "Gold Devaluation" or confiscation were in the works.
Love your work, CD - this is just MY "endgame" scenario, and IS reviewed regularly for continuity. My preferred form of PM's is "Junk Silver" - pre 1964 Halves, Quarters and Dimes. Yes, heavy as hell, and bulky, too, but in MY SHTF model, WAY more liquid than a 1 oz Gold coin/bar/round, which VERY few people would be able to "make change" for. Hell - I'll go a step further - a grey/black market will emerge, offering to take your Gold and convert it to small units of Silver for a premium of 7 - 9%.
B
>>>but in MY SHTF model, WAY more liquid than a 1 oz Gold coin/bar/round, which VERY few people would be able to "make change" for. Hell - I'll go a step further - a grey/black market will emerge, offering to take your Gold and convert it to small units of Silver for a premium of 7 - 9%.<<<
I see that as the logical end problem to the gold skyrocketing to $6,000 or whatever.
Small is beautiful...and there are a variety of easily recognizable PM forms for trade that even the average dolt will accept.
I like this Biberts idea, but they may have to deal with the ETF's first and I am not sure how they would do that. Millions of people will be surfing that wave. So it's not going to be only the physical holders who will be riding. Even with the discouraged J6P's there will be many. Nonetheless, they will indeed make tons of money that way.
Your points are correct and that is what is happening right now in front of us.
Besides, why would the elites wish to shut down all the pm mining operations through confiscation? That's ridiculous because the elites will be the major owners of them. They are certainly smart enough to keep a carrot at the end of the stick so the donkey keeps on truckin. The stick may be lengthened or shortened depending upon the speed desired.
The elites realize that there are just far too many well armed Americans for them to take the carrot away even if they wished to do so. But why would they? If you own the dog and pony show, you do not send the horse to the knacker.
A very healthy percentage of my Silver holdings is in pre 1965 Silver dimes, quarters, halves and dollars. I think they will have great utility because they began as US currency, thus their validity won't be questioned by the average Joe....who will quickly find/figure out what their "real" Silver value is.
And I appreciate your thoughtful response.
I have no problem with criticism....unless it is presented only to hurt or demean, something you have clearly not done. I agree that we labor under many illusions and thought memes, many placed in our heads in order to control. The idea that the powerful are all powerful is one of those false thought memes I've explored in other articles.
May I gently suggest that you wait until Part Two before firming up your thoughts? Thank you for taking the time to leave your comment.
It is important remember that fewer than 1 in 500 Americans own even a single ounce of gold bullion. That is quite different than the last time gold was confiscated. Back then the currency was backed by gold. Everyone owned gold is some form.
So it is does not appear that the government will care nearly as much about our gold as we do. The gold market in the US is far too small to matter. Your gold is unlikely to be confiscated again. I'm not taking any chances so I threw all mine in the lake last summer. But odds are you will have no problem selling your gold in the future for whatever fiat paper the US is using at the time.
Silver is even better. Talk about a tiny market! No one will care that a few wackos loaded up on silver.
Hold physical.
I gotta find that lake, there have been lots of boating accidents there lately.
If there are so few Americans that value gold or silver enough to own a single ounce now, what makes you think that there will be more when things are really bad?
It seems that in recent history when fiat became worthless, the PTB just issued new fiat and told everyone that the problems have been solved and they needn't worry about the value of the new currency. I can't think of any recent hyperinflation scenario that the government replaced their worthless fiat with gold or silver.
There are examples, of course like the Russian Revolution, where the old gold coins retained value (but became illegal to possess) and the old currency became worthless. In order to safely and effectively use the old coins, one needed to emigrate.
" I can't think of any recent hyperinflation scenario that the government replaced their worthless fiat with gold or silver."
You also can't think of any recent (or non-recent) hyperinflation scenario where gold and silver didn't perform beautifully for wealth preservation AND transactions.
You might want to read this first-hand account:
http://dailyreckoning.com/gold-and-money-in-extremis-one-mans-story/
I always get a bunch of "red" arrows shot at me for asking how to value you gold post collapse, oh well. Like one guy at another forum said, "If the grocery stores are shut down and empty, and you and I are both hungry. You have some silver and gold, and I have some food. Guess who's going hungry?"
Zimbabwe went to a gold and foreign currency economy, when their money took a dump. Here is the link to "Gold for Bread, Zimbabwe""
http://www.youtube.com/watch?v=7ubJp6rmUYM
The reason gold, Euros, Dollars still worked was due to the fact the rest of the world still functioning. If the flow of information stops (no TV, radio, internet, newspapers, etc...), people have to set their own value on items be it gold or food or ammunition, etc.... I concentrate on the essentials for a worst case scenario, but if you think the coming shit storm will pass quickly, stock up on whatever floats your boat.
"Invest in things you can stand in front of and defend with an AR-15", Anne Barnhardt 2011
PMs are only precious if the rest of one's society values them so. It may be necessary to emigate to a society that does value them if the merde really hits the fan. I know of no way to predict how bad the political situation will get. If it turns out like Russia in 1920, the only thing one go do is emigrate if possible. If it's like Argentina, a good multi-year vacation if it was possible made life much more enjoyable. CD suggests that the wealthy keep some of their chips in other jurisdictions. This is not an impossible strategy for many of the rest of us either on a smaller scale.
As one guy posted at a preping forum, "Silver and gold are for optimists".
Mark Dice tries to buy a 99 cent taco at Taco Bell with a $50. gold American Eagle:
http://www.youtube.com/watch?v=1F6S3Efrh-M
What will the price discovery mechanism be in a post collapse, no internet, no London PM gold fix, no fiat accepted world? Will a one oz. gold coin buy the whole cow (like it does now) or will it buy one five lb. roast? If you are hungry, would you trade it for a 50 lb. bag of rice and a case of soup?
CD thanks for the thoughtful article. Gold works, in a world where people value gold. The father character in Cormac McCarthy''s book "The Road" finds a small bag full of Krugerrands in an underground bunker, he stares at them remembering a time when they had value. Then lets them drop on the table, and starts loading his shopping cart with canned food to take with them, leaving the gold behind. That passage really changed my view gold and silver in a SHTF situation. In the worst of times, gold could have little or no value in trade.
It's a huge mistake (and a lazy dodge) to assume that the world becomes Mad Max: The Road Warrior overnight.
If that's what the world turns into, who cares whether you survive to endure it? Nobody lives to be 80 dancing the Apocalypso.
No, what you have to worry about and prepare for, is the far more likely scenario of a long, dreary era of sluggish economy, high inflation and grabby government interspersed with irregular systemic shocks.
Think 2001 Argentina, 1923 Austria/Hungary/1998 ruble crisis. When the value of life savings in paper instruments has collapsed, the main issue will be poverty--everywhere. With no trust left for paper, you'd better have something that people will accept in transactions.
Assuming that every one will slide gentaly into the shit abyss. I anticipate 100 Rodney King like riots happening at about the same time in every major metro area. Not quite Road Warrior, but a bit disrupting to the status quo.
Food is always in short supply in every crisis, you can't have too much storage food.
The twist to this discussion is that Gold has value in flight when, and only when, one emigrates to a setting where it has value.
Arguing that people will not give you what it is worth is no different than asking people to give you what your house was worth five years ago. Simply stated:
The marketplace decides Gold's value at and for a specific time frame......... not the owner.
In this scenario you are assuming that because the central authority breaks down that society will break down. The two are not the same. Society pre-existed the state. When Rome collapsed did gold become worthless? Do you think trade is going to stop because there is no ICC? Did gold and silver became money because someone declared it to be so, or because they are supremely suited for the role?
It all depends on your understanding of, and faith in, the emergent properties of human interaction.
As people say, human nature does not change, but gold and silver are products of the nature. As long as there are people gold and silver will be money until something that fills the role better comes along.
i bet dice would have shit all over himself if that guy had taken it...............ha ha ha
The point is, most sheeple have no clue what gold and silver are worth. Dice has done this before offering to sell a one oz coin for $50. when gold was $1,100. He asks dozens of people if they would trade him, with no takers:
http://www.youtube.com/watch?v=Gk5aRIz17fk
I like the way the MSM extract that little sound-bite by Dr. Paul where he offers to get you a gallon of gas for a dime. Makes him sound like Kusinich and his flying saucers. Problem is, he was talking about a silver dime. Dumb-ass media....
"dumb-ass media"
It's not stupidity, it's complicity.
The question is not just if you will be able to sell your Gold and Silver coins BUT for what price. If there is a confiscation, even if they make no effort to actually take your Gold, it will give them the opportunity to set an artificially low price. In effect they will have 'taken' the value from your Gold..........just as they do today with paper Gold low-balling physical.
Price suppression will be the goal. Hey... wait. Aren't they doing that now? Shouldn't the actual price be closer to its value than it is? I'd say the process is under way now. The question du jour is, can they keep it up for much longer (or down actually)?
I'm thinking that ultimately the elite will use gold themselves to 'transfer' their ill gotten gains in fiat to a 'new system'? At the moment the game is stretch it as far as possible, supress the price of PM's while pocketing ever increasing amounts of printed fiat. In the background they are converting their printed fiat to physical gold and other physical assets. When everything goes boom and fiat goes to zero they will want the price of gold as high as possible - this way they retain their relative advantage and wealth.
How else can they transfer it across? If the world at large loses faith in fiat currencies and paper instruments they can't just create a new fiat (straight off at least) without backing it with gold to give it legitimacy?
They will try everything to get everyone else out of gold and then shazam it will be the only thing worth owning ... of course they will already have posession of 90% of it.
I respectfully think you are wrong. Gold holders are a very small minority, and therefore, are easy to punish/steal from/victimize, etc. When J6P hears about gold confiscation, the first thing he thinks is, OK, doesn't affect me. Second thing he thinks is, good, make those "rich" people suffer.
People today are really dumber than then as well. They have no idea what a FRN really is or care what backs it. They aren't going to notice the collapse until it is too late... so few of them have noticed what has happened so far.
Confiscation is a serious threat to those who hold metal, especially if it can be traced back. Sadly mine is traceable, but I lost the GPS coordinates to the old Tocks Island Dam site where I buried it, so good luck, kiddies...
Good stuff as always, but to play devil's advocate, what should one have in one's pocket when the storm subsides and Atlantis Redux emerges if not PMs? Fiat? Equity investments? Arable land, the right to enjoy and ownership of which are only as good as the new masters permit, property taxes having been paid in full, of course? A good attitude and a pair of strong hands? A combination of them all? It's an exercise in relativity, and relatively speaking all of the options suck.
The Limerick King is getting there with one of his limericks in the end. Let me try:
When dollars are worth merely cents
And baubles just make no more sense
You must trust in your mind
Bond with others and find
A perimeter you can defense
Thanks for pointing that out. I had missed it the first time through somehow.
But what of liquid or semi-liquid assets?
Vodka, scotch, gin, rum and whiskey are a few good liquid assets for an uncertain future, extremly long shelf life. Honey is good too, unlimited shelf life.
As a last resort, making your own will be the key. Right now the resources and instructions are plentiful on the internet. Grab those resources while you can!
The amazing thing about The Limerick King was that I simply gave him the title and the briefest of outlines of what I might write about well before I even wrote this article and The Limerick King went to town. He captured every nuanced and twist I would take even before I wrote it. It is truely remarkable how talented he is.
Bravo to The Limerick King.
Verse and song has a power all its own. Pity there is not more being done to educate people with it in this day and age. Way back when balladeers and poets did a great job commenting on society and it's ills. Some do still now, but a modern commercial industry geared toward mass consumption and the advent of idealogical groupthink on so many 'artists' has taken its toll.
There is hope about educating people. The younger generation gets their information from the web. The MSM influence is diminishing rapidly.
The overwhelming majority of Ron Paul supporters are young. They know they will not be able to collect SS and they will opt out soon.
Thanks CD.
As a person somewhat familiar with the drug market, I'm hoping my experience(s) in that realm will allow me to do whatever is needed with my holdings. I'm not a huge investor, though, even with all my savings tied up in PMs and other things. I'm just hoping to acquire a house for a relatively "cheap" price as I'm only 29 at this juncture.
While I am not putting all my chips in one basket I am counting on organized crime and their political connections to once again pave the way for a black market to enable my PM redemptions.
We shall see how it all works out.
Good article. Yes, of course PMs will be attacked by taxation, regulation and (perhaps) confiscation. All the tools. The problem is - what are the alternatives?
For sure there will be devaluation. In this case, PMs protect you. This is the most likely scenario... actually 100% guaranteed to occur.
"End of system" scenarios are low probability and impossible to hedge -- total unknowns about what lies ahead. For that, diversification is key -- good to have some PM's/guns/food/water, etc. However, it's extremely impractical for most people to be growing all their own food, learning to live like a pioneer or moving to a foreign land.
I truly believe the more extreme scenarios are extremely unlikely. We've had depressions before. We have countries like Greece and Ireland way past the tipping point. None of them turned out like a Mel Gibson movie. Nobody's starving or being shot for a gallon of gas.
CD, so we all live in "Mexico City"? No other way out?
Thanks for sharing.
@ CogDis, #199239, 17:59
The criminal mafias (organized crime) ARE bad, but they are a different power center that would be hard to get under any elite thumbs. Diffsuin of power is generally a good thing.
Which raises the whole issue of how does one get to know (without getting arrested or killed) our local Black Markets?