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Guest Post: Our Money Is Dying
Submitted by Chris Martenson of Peak Prosperity,
A question on the minds of many people today (increasingly those who manage or invest money professionally) is this: How do I preserve wealth during a period of intense official intervention in and manipulation of money supply, price, and asset markets?
As every effort to re-inflate and perpetuate the credit bubble is made, the words of Austrian economist Ludwig Von Mises lurk ominously nearby:
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner, as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system involved.
(Source)
Because every effort is being made to avoid abandoning the credit expansion process -- with central banks and governments lending and borrowing furiously to make up for private shortfalls -- we are left with the growing prospect that the outcome will involve some form of "final catastrophe of the currency system"(s).
This report explores what the dimensions of that risk are. It draws upon both historical and modern examples to try to shed some light on how the currency collapse process will likely unfold this time around. Plus, we'll address how best to avoid its pernicious wealth destroying effects.
When Money Dies
In the book When Money Dies by Adam Fergusson, which details Weimar Germany's inflation over the period from 1918 to 1923, the most riveting parts for me were the first-hand accounts from the people caught in the storm.
So many people left their wealth in the system only to watch it get eroded and utterly destroyed over time. The reasons were many: patriotism, inertia, disbelief, and denial cruelly fed by hope every time prices moderated or even retreated momentarily.
The simple observation is that many people had a blind belief in the money system. They lost their wealth because they were unable or unwilling to allow reality to challenge their beliefs. It's not that there were numerous warning signs to heed -- in fact, they could be seen everywhere -- but most willfuly ignored them.
Most mysterious is the fact that in Austria and Germany, where the inflation struck most severely, there were numerous borders and currencies into which people could have dodged to protect their wealth. That is, protecting one's wealth was a relatively straightforward and simple manner. And yet…it did not happen.
The Many Types of Inflation
As always, the landscape of inflation needs to be carefully mapped before we can begin to hope to have a conversation with a destination. Where the symptom of inflation is rising prices – in fact, rising prices are the only things tracked by the Consumer Price Index, or CPI – the causes of rising prices are many, but they always boil down to the overexpansion of money and/or credit. Knowing the cause is essential to knowing what to do next.
Here are the main flavors of rising prices that we need to keep in mind:
Non-inflationary price increases – These are caused by demand exceeding supply. It happens all the time. A poor harvest driving up the price of corn is not inflationary, but it will show up in the CPI. These sorts of price movements reverse themselves as markets respond by chasing the price and delivering more of whatever was in short supply. The only exception is when there is some essential, non-renewable natural resource in sustained depletion -- which means that demand will always exceed supply and prices will rise and then rise some more. Excessive speculation can also lead to price rises and, as long as the speculation centers on the item(s) involved and not on excessive money/credit expansion, it, too, can be (and eventually will be) reversed.
Simple inflation – This is the 'textbook' case of inflation where too much money and/or credit is created relative to goods and services. Print too much money or make credit too cheap/easy and prices will rise roughly in proportion to the excess. Simple inflation operates in the low single digit percentages. Central banks openly target simple inflation in the 2%-3% range as that level of expansion allows banks to have healthy profits, prevents past loan errors from swamping the system, and generally keeps the exponential money system operating well.
Loss of confidence in money – A more severe stage of simple inflation takes over when enough people lose faith in the money and seek to actively spend their money on something, anything, before that money loses value. This type of inflation operates in the high single digits to low double digits, somewhere between 8% and 15%. This is just simple inflation on steroids. Not everybody participates in this game yet, as the loss of confidence has not yet reached criticality, but enough people do to keep this process locked in a self-reinforcing spiral that requires aggressive money tightening to halt. Think 'Volker' and '21% interest rates' and you get the picture.
Hyperinflation – Further along the inflationary spectrum is what happens when a critical mass of people within a society lose faith in their money and the monetary authorities are incapable of reducing the money/credit supply, either because there’s already too much of it out there to ‘call in,’ or because they lack the political will to do anything but print more money in response (i.e., there are no Volkers around). Once this critical mass is reached, every corner of society is participating, and it is no longer socially taboo to talk about the hyperinflation or how to escape its effects. Everyone is wheeling and dealing, speculation runs rampant in everything from stocks to pineapples, and you cannot possibly spend your money fast enough to avoid the ravages of inflation. The annual percentage rates for hyperinflation range from medium double-digits into the hundreds of millions.
Currency destruction – There is another type of inflation that happens when your state currency is shunned by the rest of the world. While there may be no additional money creation and credit may even be dropping, inflation is still a very serious problem as everything imported goes up in price. There are many reasons that a currency may be shunned. It could be that other countries lose faith in the currency due to mismanagement and overprinting. It could be due to acts of war. Or it could happen at the end of a very long period of excessive credit and money expansion, when that bubble finally bursts and confidence in the associated currency unit(s) is lost. There is really very little that local authorities can do to fix things unless the country imports nothing, a condition that applies to exactly nobody. Prime candidates to experience this form of inflation are the US and Japan; the former because of massive imbalances fostered by its several decades of reserve currency status, and the latter because of persistent and massive over-printing enabled by domestic savings and a once-robust export surplus. The dynamic of currency destruction is for imported items to rise sharply in price first, with everything else soon following in upward price spirals. Policy responses are quite limited and are usually ineffectual at preventing a massive amount of economic destruction and wealth loss for the holders of the stricken currency.
It is this last type of inflation – currency destruction – that we’ll explore here, because it represents a severe risk and is very rarely talked about or analyzed.
Spinning In the Water
A modern case study of a shunned currency is Iran.
For a variety of reasons Iran finds itself the subject of a very sustained effort by the US to subjugate its nuclear program to international inspection and curtailment. Already the target of many overt and covert efforts to bring it to heel -- ranging from two highly destructive and invasive computer worms (Stuxnet and Flame), to stealth drone overflights, to an international ban on oil exports -- Iran now finds that its currency, too, is being internationally shunned.
The impacts are obvious and the lessons instructive.
Already Plagued by Inflation, Iran Is Bracing for Worse
Jul 1, 2012
TEHRAN — Bedeviled by government mismanagement of the economy and international sanctions over its nuclear program, Iran is in the grip of spiraling inflation. Just ask Ali, a fruit vendor in the capital whose business has been slow for months.
People hurried by his lavish displays of red grapes, dark blue figs and ginger last week, with few stopping to make a purchase. “Who in Iran can afford to buy a pineapple costing $15?” he asked. “Nobody.”
But Ali is not complaining, because he is making a killing in his other line of work: currency speculation. “At least the dollars I bought are making a profit for me,” he said.
The imposition on Sunday of new international measures aimed at cutting Iran’s oil exports, its main source of income, threatens to make the distortion in the economy even worse. With the local currency, the rial, having lost 50 percent of its value in the last year against other currencies, consumer prices here are rising fast — officially by 25 percent annually, but even more than that, economists say.
(Source)
There are several factors feeding into the current Iranian currency crisis, including mismanagement of the economy that has left Iran even more exposed to imports than it otherwise could or should be, and it is on the cusp of tipping over the line into outright hyperinflation. Ever since the revolutionary war when the British printed and distributed cartloads of Continental scrip, currency debasement has been a useful tool of war. All is fair in love and war and whatever corrodes your opponent’s strength is a potentially useful tool.
Note that in the above quotes we find that both the speculation already in evidence plus the 25%+ price increases support the idea that Iran has already tipped past simple inflation. Whether it can prevent a worsening condition is unclear at this point, whether or not international sanctions are soon lifted.
More from the same article:
Increasingly, the economy centers on speculation. In this evolving casino, the winners seize opportunities to make quick money on currency plays, while the losers watch their wealth and savings evaporate almost overnight.
At first glance, Tehran, the political and economical engine of Iran, is the same thriving metropolis it has long been, the city where Porsche sold more cars in 2011 than anywhere else in the Middle East. City parks are immaculately maintained, and streetlights are rarely broken. Supermarkets and stores brim with imported products, and homeless people are a rare sight on its streets.
But Iran’s diminishing ability to sell oil under sanctions, falling foreign currency reserves and President Mahmoud Ahmadinejad’s erratic economic policies have combined to create an atmosphere in which citizens, banks, businesses and state institutions have started fending for themselves.
“The fact that all those Porsches are sold here is an indicator that some people are profiting from the bad economy,” said Hossein Raghfar, an economist at Al Zahra University here. “Everybody has started hustling on the side, in order to generate extra income,” he said. “Everybody is speculating.”
Some, like Ali the fruit seller, who would not give his full name, exchange their rials for dollars and other foreign currencies as fast as they can. More sophisticated investors invest their cash in land, apartments, art, cars and other assets that will rise in value as the rial plunges.
For those on the losing end, however, every day brings more bad news. The steep price rises are turning visits by Tehran homemakers to their neighborhood supermarkets into nerve-racking experiences, with the price of bread, for example, increasing 16-fold since the withdrawal of state subsidies in 2010.
“My life feels like I’m trying to swim up a waterfall,” said Dariush Namazi, 50, the manager of a bookstore. Having saved for years to buy a small apartment, he has found the value of his savings cut in half by the inflation, and still falling.
“I had moved some strokes up the waterfall, but now I fell down and am spinning in the water.”
(Source)
All of the important lessons you need to avoid a currency destruction are contained in those passages above.
- Savings are for losers.
- The more exposure you have to food and fuel price hikes the worse off you are.
- First movers have the advantage. Get your wealth out of the afflicted currency as fast as possible and then trade back in when needed to make purchases.
- Paralysis is a wealth destroyer.
- Fending for oneself is a wealth saver and so faith in authority is best shucked as fast as possible.
Be prepared to follow those rules and you will do better than most.
Barter, speculation, and wildly-gyrating prices as formerly expensive things are traded for basic necessities are all typical features of the end stages of a currency. Crime, social unrest, and sometimes war are handmaidens that accompany the death throes of money.
The basic strategies to protect one’s wealth are deceptively simple. As soon as the process of money destruction has begun, if not before, all savings have to be moved out of the afflicted currency and into things, especially things that those with wealth or barter items are most likely to want.
Turning our attention back to the Weimar episode for a moment, the Amazon summary for When Money Dies reads:
When Money Dies is the classic history of what happens when a nation’s currency depreciates beyond recovery. In 1923, with its currency effectively worthless (the exchange rate in December of that year was one dollar to 4,200,000,000,000 marks), the German republic was all but reduced to a barter economy.
Expensive cigars, artworks, and jewels were routinely exchanged for staples such as bread; a cinema ticket could be bought for a lump of coal; and a bottle of paraffin for a silk shirt. People watched helplessly as their life savings disappeared and their loved ones starved. Germany’s finances descended into chaos, with severe social unrest in its wake.
The parallels to the Iranian situation are obvious.
Those without the gift of foresight to identify what is coming, coupled to an inability to take decisive action that cut against the social grain (at least early on), will simply lose their wealth and not be in a position to buy or exchange anything but their own time and labor in the future. This leads to the assessment that owning or producing things that people need or want is a good strategy.
Food is always a good play. In the early stages we’d also lean towards highly socially desirable real estate and away from middle and lower income housing as ability to pay always get shredded from the bottom up. Gold performs well in terms of protecting purchasing power. According to the article above, Porches work too. That is, owning things that wealthy people will desire offers better chances than not.
I know this sounds harsh, elitist, and not terribly egalitarian, but it also happens to be how things tend to work out. Since I have a desire to be in a position to be helpful and of assistance in the future, protecting my wealth is a matter of both self and selfless interest. So I study what works and begin there, while also seeking a better future.
The cruelest part of a currency destruction is that it will sneak up on most people, their baselines will shift, and they will be confused by false hopes along the way. This is completely understandable and to be expected. There's a good chance you're well acquainted with the chart of the value of German Marks against gold during the Weimar hyperinflation. I want to take a closer look at it by focusing on the wiggles instead of the rise:
Imagine yourself there in that time, getting all of your information from the newspapers and your personal rumor network. Note that from the early part of 1920 prices fell, by a lot, over the next six months (note that this is a log chart, so even a little downward movement in the line represents a big price drop).
Headlines reported that the corner had been turned, that the government programs had been successful and brought inflation under control and people wanted to believe that story and so they did.
It wasn't until the end of 1921 that prices began to rise again spiking into early 1922 before stabilizing again for approximately 8 months. Again people were calmed by the apparent success of the authorities in controlling the inflation.
Because there were three pauses and rescues along the way the price spike from late 1922 and into 1923 caught many off guard. It was truly shocking. This is when the critical loss of faith finally happened. Yet far too many remained paralyzed certain the government would again get things under control soon. After all, three times before there had been a recovery, why not this time too? One must have hope after all.
In the middle of 1923 with very aggressive government intervention there was a three month dip in prices and a pause in the hyper-inflationary process. Again, another hopeful moment, but it was the final trap for the unwary.
To put this in context, imagine if next month (August) gasoline prices shot up by 300% to roughly $10/gal. But then, between August 2012 and May of 2013 the price of gasoline fell back to $5/gal. I'd be willing to wager that many of your friends would be telling you that everything was fine and that 'they have everything under control.' Perhaps your continued concern would be ridiculed or dismissed.
Then, when prices finally did again breach the old $10/gal highs some 19 months after the first price spike (in Feb 2014 in this example), many would have been habituated to the new prices, routines would have been altered, and many would have already inserted a rationalization process into their thinking that would have all of this make perfect sense, albeit uncomfortably.
While not tracking the percentages closely, this example tracks the time frame.
An important insight here is that baselines will shift, rationalizations will be formed, and explanations adopted principally by those unable to accept that their money is in the process of dying. Avoiding this yourself will require tuning those people out and trusting yourself.
In Part II: Positioning Yourself For When Our Money Dies, we identify the most probable markers for identifying when a full-blown currency collapse is imminent.
What indicators should you watch for? Where should you place your capital to best preserve its purchasing power? What will a collapse of the US dollar look like and what will the likely aftermath be? These and other implications are explored.
Click here to access Part II of this report (free executive summary, enrollment required for full access)
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So fucking stupid! You'll be old and dead with a warehouse full of expired adhesives and sealants (not lube, that shit never goes bad) leaking out of barrels having never done anything interesting or useful with your time on earth other than being a complete dupe for the assholes selling you fear.
No, bro, I'm not talking pallet loads or anything of the sort. I just buy a few extra of stuff I already use or know neighbors who use them. For want of a nail and all that...
Your better off storing consumables that will be hard to find and produce in a collapse, these items are sure to trade well and be in high demand:
Sugar
Cocoa Powder
Cinnamon
Salt
Tea/Coffee
Baking Soda/Lye/Detergent/Soap
Whisky
Smokes/Tobacco
Marijuana/Hemp/Seeds
Vegetable seeds
Bullets & Gun oil
Disposable Razors/Shaving cream
Just to name a few...
@ Paul Atreides
And where does one safely store these barter items to be used at a future date?
Once it's know that you're a source of goods you'd better have a squad of mercenaries to protect your stash. Even worse, the gov, having passed laws that enable it to confiscate as it sees fit will likely do just that in the name of public interest. Perhaps though you're just talking very small time rather than as a means for any appreciable income.
Martenson's article does bring up a good point that I don't see well addressed, exactly what is a "safe" store of value these days. Farm land and ranches are for the wealthy, one with an extra 20k-50K doesn't qualify. Stocking up on barter items has storage issues. Moving USD to another currency has effectively been shut off for American citizens by US hegemony in banking laws.
The ol standby PMs are oh so vulnerable to the introduction of purely electronic money and the all seeing eye of so to be introduced --mini-flying drones and government Internet snooping data centers (including the cability to break encryption) to sniff out attempts to barter either in person or via Internet.
Much as FOFOA paints a pretty picture for the revaluation of gold, what if it's Central Bank revalued gold that is backing the new electronic currency and personal gold is locked out by the Powers That Be?
Why would they do this? The old story -- control. FOFOA seems to ignore that these people don't care about the economy, it's control of the world that gets them off.
Real Estate is likely to keep falling (except in expensive wealthy enclaves), so even if one has positive cash flow from a rental the principal is dropping.
Stocks/Bonds ? HaHaHa ... we know their issues and dangers. Zerohedge details that everyday.
Frankly, I am at a lost to see the point of attempting to increase ones "wealth" these days simply because anything you attempt to store wealth into is highly vulnerable. At this point, at least to me, the path to follow is to become as self reliant as possible with items immediately under ones control and in possession. A rental cash flow perhaps for old age. Stored long life food, off grid capability. Enjoy life as much as possible with what you already have rather than jumping on the grind and attempting to grab the brass ring. Going "Galt" in other words.
Geez, this sounds like I'm posting on some prepper site rather than a financial blog.
What was it David Stockman said about an investment strategy ... "ABCD ... Anything Bernanke Can't Destroy"
I'd be interested in the ZeroHedge communities take on best means to store wealth these days and the PM bugs out there plan B if/when electronic money (i.e. no paper bills at all) is introduced and makes tracking everything a cinch.
What constitutes a "valuable" item years from now is anyone's guess. Personally, I think it's reasonable to have a stake in beans, bullets, and bullion. Beyond those basics, my preference is for collectibles. If it's quality made, no longer produced, and/or has some practical use, that's a good start. A good example is an authentic WWII vintage 1911. It offers appreciating value (likely), and personal defense. That being said, I can't think of anything the gov can't tax, restrict, etc. I expect to see at some point VAT-like taxes on anything we use to preserve wealth. As the population ages, and the number of retirees (many of whom did'nt plan well, or had retirement savings wiped out) increases, funds for entitlements will be increasingly scarce. Politicians most likely will pander to this group, and devise ways to extract more from those of us who are still working.
The store of wealth is anything you can use that can be safely stored for medium or long term.
And for Dog's sake, don't tell everybody how smart you are to have a stash of such stuff. Just use it quietly as you need it when nobody's looking. Nobody needs to know except those who can easily stumble across it when they raid your underwear drawer looking for condoms or porn.
The silver and gold are for dealing with other people like yourself who are better defended and therefore not so shy about letting people know they have 'stuff' to swap for your 'stuff.'
Thr whole system is failing.
http://confoundedinterest.wordpress.com/2012/07/03/an-ike-1959-velocity-recovery-factory-orders-surprise-for-the-moment-ny-pm-business-conditions-fell-goldman-lowers-q2-2012-gdp-forecast-to-1-5/
Our Money Is Being Deliberately Strangled To Death by the New World Order Banking Cartel
there, fixd the title for ya
it isnt broken, its doing EXACTLY what it was reformatted to do
planned deindustrialization of the west, does that phrase ring and fing bells
A-ffrimative, Dio.
God forbid we should ever be twenty years without such a rebellion. The people cannot be all, and always, well informed. The part which is wrong will be discontented, in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions, it is lethargy, the forerunner of death to the public liberty.... And what country can preserve its liberties, if its rulers are not warned from time to time, that this people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to the facts, pardon and pacify them. What signify a few lives lost in a century or two? The tree of liberty must be refreshed from time to time, with the blood of patriots and tyrants. It is its natural manure.
-T. Jefferson
The solution is there ripe for the picking, but please subscribe first. Sounds like the how to become rich I'll tell you if you pay me $50 scheme.
The answer; duplicate the scheme.
By the way you may have noticed that we are already constantly duped by. Bankers, politicians and a whole spectrum of people coming up with solutions. These solutions often only improve the situations of those suggesting them. Thank you very kindly Mr. Martenson, but no thanks.
Ps. I have no doubts you will come out of this mess quite well. I'd rather you'd endeavour to ensure kids, who have no blame in this worldwide giant Ponzi scheme and who will end up eventually footing the entire bill for it, are prepared and have a semblance of the future most visitors here had when they themselves were children. Let's face it our parents and our own generations fucked up the world big time and our kids will receive the bill. It is brilliant we should feel very proud of ourselves. For that reason and that reason alone I think we should speed up the process by collecting all our cash on receipt from our banks, give them the finger and see the entire system go poofffffffffffffff. A little suffering follows and we might have saved their future. I think it is worth it.
Are there really still morons that believe the US dollar will collapse under hyper-inflation before the political/social system collapses? Really?
more likely through devaluation than hyperinflation, Heinz. kind of putting the cart before the horse there.
Totally agree - devaluation. But Weimer / Zimba style hyper-inflation not possible in USA.
Hyperinflation results when nobody wants your currency, but you have to swap it for another one to pay your debts. That is when the exchange rate becomes untethered.
Exactly. That's why the USD will never be hyper-inflationary. Relative to what!? Gold backed Rubles? The nukes will be flying long before that happens.
As long as OPEC only takes dollars for oil, no worries.
I am more concerned about the Post-Present Political System. We cannot permit the current Banker-POlitician Class to continue in office.......maybe even living......there has to be a clean Break and a New Start after clogging up the system from Y2K to Dot.com to Housing Boom to Credit Bust
Ok I'll add my 2 cents in here...what creates value for the dollar, business intelligence formulas...formulas...math. I can hold the dollar in my hand but the value depends on the formulas we use today for economics and we are a little too heavy on intangibles. Software and anaytics has value, but look at how it is over rated on Wall Street, "how much is that algorithm in the window". One that peice of paper leaves your hand all the technology goes to work.
I did a post, and keep in mind I'm a geek so it's slanted toward SQL queries and code modules that create the IT infrastructures we work with today. Banks charge for their algorithms aka trading software.
So in my little tiny mind I came up with de-valuating some algorihtms here and working with real values and not these over inflated items, like the value of Facebook for one example. That entire fiasco belongs in my group of "The Attack of the Killer Algorithms" as they have teeth and bite.
http://ducknetweb.blogspot.com/2012/04/devaluate-algorithm-and-tax-data....
Companies are making bigger percentages on profits now than ever...data selling algorihtms help that out a lot and thus I say we need to tax it as even Walgreens reported in 2010 that they made just short of $800 million, selling data only, so look at the size of this pot to tax..billions and it's become a way of doing business and with uncertainty companies hire a few geeks, mine data, query and put it in data base format and sell it. There's not much incentive to build factories and hire people when they can do this for little output. So again devaluate some of those algorithms out there:) I wrote a tongue and cheek post back in August of 2009 asking if we need a Department of Algorithms to keep things straigh and have code written for accurate results and not just desired results...lot of those types of algos floating aorund out there today without the secondary "accuracy" mode plugged in:)
We all need data trails and so does the dollar in reference to what the algorithms say it is worth. As the game gets faster and more data is connected, we will see disruptions and just this morning I read where Salesforce.com had some issues and were down for a while, so it's everybody. But again, the formulas in trading, business intelligence and so forth are in a round about way what set's this value, so let's go to the root and fix some math and stop the spasmodic algos and get some data integrity back so at least we may all have a better idea as to where we stand. We all know that banks can't handle or figure out there own algos they created and keep referring to faulty business models, it's the algorithms that go into them.
Well thanks for letting me talk a little math and code and remind all of what goes on behind the scenes that nobody really talks about to a big degree. Maybe if the economy were really based on dollar values and not algorithm values we could catch up:)
Ok I'll add my 2 cents in here...what creates value for the dollar, business intelligence formulas...formulas...math. I can hold the dollar in my hand but the value depends on the formulas we use today for economics and we are a little too heavy on intangibles. Software and anaytics has value, but look at how it is over rated on Wall Street, "how much is that algorithm in the window". One that peice of paper leaves your hand all the technology goes to work.
I did a post, and keep in mind I'm a geek so it's slanted toward SQL queries and code modules that create the IT infrastructures we work with today. Banks charge for their algorithms aka trading software.
So in my little tiny mind I came up with de-valuating some algorihtms here and working with real values and not these over inflated items, like the value of Facebook for one example. That entire fiasco belongs in my group of "The Attack of the Killer Algorithms" as they have teeth and bite.
http://ducknetweb.blogspot.com/2012/04/devaluate-algorithm-and-tax-data....
Companies are making bigger percentages on profits now than ever...data selling algorihtms help that out a lot and thus I say we need to tax it as even Walgreens reported in 2010 that they made just short of $800 million, selling data only, so look at the size of this pot to tax..billions and it's become a way of doing business and with uncertainty companies hire a few geeks, mine data, query and put it in data base format and sell it. There's not much incentive to build factories and hire people when they can do this for little output. So again devaluate some of those algorithms out there:) I wrote a tongue and cheek post back in August of 2009 asking if we need a Department of Algorithms to keep things straigh and have code written for accurate results and not just desired results...lot of those types of algos floating aorund out there today without the secondary "accuracy" mode plugged in:)
We all need data trails and so does the dollar in reference to what the algorithms say it is worth. As the game gets faster and more data is connected, we will see disruptions and just this morning I read where Salesforce.com had some issues and were down for a while, so it's everybody. But again, the formulas in trading, business intelligence and so forth are in a round about way what set's this value, so let's go to the root and fix some math and stop the spasmodic algos and get some data integrity back so at least we may all have a better idea as to where we stand. We all know that banks can't handle or figure out there own algos they created and keep referring to faulty business models, it's the algorithms that go into them.
Well thanks for letting me talk a little math and code and remind all of what goes on behind the scenes that nobody really talks about to a big degree. Maybe if the economy were really based on dollar values and not algorithm values we could catch up:)
Another dumb ass article talking about how PM's will be the savior. WRONG - FAIL... What the article fails to explain , and what every paper I have ever read FAILS to explain, is that on a GLOBAL scale, everything shuts down. JiT stops, civil unrest, etc. PM's will NOT be traded for commods that are required to keep you alive day in and day out. PM's will have no inherent value at this point.
It will be martial law, rationing, anti hoarding laws and a black market at that point. Bic lighters and airplane bottles of liquor under that scenario. I don't think it will get to that.
I hope not, but I have a feeling it will. hell, just look at the grain forecast reports. Crops are GONE!!! Expect a larger percentage of income to get sucked into the CPI basket - will the Fed even acknowledge that - probably not. If we hav another dust bowl scenario like many farmers are indicating we are FUCKED!!!! Add in some financial doom at the wrong place and at the wrong time, and its anyones guess where this ends up...
As long as OPEC only takes dollars for oil, no worries.
Human nature dictates that as long as there is ANYTHING of value, some 'investor' is hoarding a lot of it. Probably using force to defend it and acquire more. Those people WILL accept metals, weapons, ammo and other useful stores of concentrated wealth.
Think about your local sheriff's department. They're the guys in charge of the local FEMA stuff. They will have things of value. They will also be just as honest and dishonest as their counterparts have been throughout history, around the world.
As long as there is anything of value, there is a black/gray/chartreuse market. And the people who will bring it to you are:
Guys and gals with ghastly guns.
Some of them are the video game psychpaths who post here. Most of them are just people with a life and a family that they want to take care of the best way they can. And the gun and a little training can help a lot in their effort. They generally don't want to kill you, they just want a little respect while you do business. Just like a routine traffic stop.
Learn how to do business with them and you can probably get through almost any emergency. Try to steal their stuff and find out how real life doesn't give you a free reboot when you lose.
"...For a variety of reasons Iran finds itself the subject of a very sustained effort by the US to subjugate..."
anyone who thinks that iran is being bullied because of the nuclear program has been flying on the horn of a unicorn too long.....iran is in trouble because of its oil and because of its acceptance of gold for payment of oil....anyone defying the grand imperial wizard of wall street will very quickly find an m1 abrams tanks straight up his ass.
Ever heard of a Mint?
Why does everyone assume a local bozo in the street will pay you $ for your Silver and Gold
He doesn't have a clue about money.....
you sell it back to the Mint or a pm dealer.....then you buy what you need......of course if you want real estate - perhaps you can convince the seller to take the metal.....its really not that hard to explain to someone who is desperate to sell his stuff.
Exactly how do you sell back to a dealer when all dealers have been outlawed? The scenario these people paint in such articles are not, I repeat NOT, micro, STATIC events, ie bubbled with no other external forces. If PM's hit very high prices other, more serious problems are taking place. THINK....
Money is always scarce......
when money is no longer scarce...
it is no longer money.
Cash is scarce. Me thinks they simply tell the people with 1's and 0's to pound sand, while making sure their buddies in the know have cash in hand. Default on loans, bonds, etc. - or pay pennies on the dollar, and start over...