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Why fiat paper money is always trashed in the end

January 7, 2010 2 comments

Because govts can.  So they will.

Which is why gold and silver are God’s money, real money, honest money, money to have in a crisis like today, money to hold in your own hands secure in the knowledge no embezzling shyster is going to take it away from you or counterfeit it or overprint it.

As Jeff Clark explains here:

Bottom line: after all the bailout programs, housing initiatives, rescue efforts, stimulus schemes, bank takeovers, wars, unemployment benefit extensions, and numerous other promises, the biggest financial deception of the decade is what the U.S. government is doing to the dollar. Nothing else even comes close.

This reckless activity has spooked our foreign creditors, weakened our global standing, diluted our currency, is punishing savers and retirees, and ultimately sets us up for a level of inflation this country has never seen before.

Yet, what is the guardian of our economy and money telling us now?

“Will the Federal Reserve’s actions to combat the crisis lead to higher inflation down the road? The answer is no; the Federal Reserve is committed to keeping inflation low and will be able to do so. In the near term, elevated unemployment and stable inflation expectations should keep inflation subdued, and indeed, inflation could move lower from here.” (Ben Bernanke, December 7, 2009).

This is pure rubbish. If inflation could be controlled by just thinking stable inflation thoughts, then Ben should be able to grow a full head of hair by just thinking scalp follicle thoughts. This is so ridiculous, it’s insulting.

Government actions make a mockery of their words; what they say and what they do are diametrically opposed. It’s clear that inflation is not a question of if, but when.

Any level-headed individual has to conclude that there will be a steady – and likely accelerating – decline in the dollar’s purchasing power. It’s inevitable.

The great masses don’t quite understand it yet, but they will. There will be no escape from the cold, hard slap in the face citizens will receive when a high level of inflation arrives. And when it does, it will make a mockery of any opposing viewpoint.

So the question before you is simple: Will you be a prepared survivor for what lies ahead, despite what our government leaders tell us, or will you be a complacent victim of the biggest financial deception of the decade?

For me, there’s only one solution. Don’t kid yourself into thinking a man-made asset will protect your purchasing power. This is the time to be overweight gold and silver. I advise letting them serve their purpose for you.

I don’t like the term “man made”.  Everything is man made, and valued by man.  I prefer this expression: “Don’t kid yourself into thinking an easily debased paper asset will protect your purchasing power.”

Because in the end, it never has.  Ever.  In the history of paper currencies every single one has eventually ended up worthless.  Every.  Single.  One.

Think about it.

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Jack Douglas says what I just said: Retiring baby boomers = fiscal Armageddon

January 6, 2010 Leave a comment

I just spent a whole blog post talking about Old People!  And now Jack Douglas has exactly the same thoughts! 

Amazing.  Perhaps I’m not as mad as the doctors say I am?  I hope no one is copying my stuff out there in the blogsphere!  Give me attribution if you’re going to copy my stuff, please!

James Quinn’s predictions for 2010: Double dip by year’s end

January 6, 2010 Leave a comment

James Quinn (he of TheBurningPlatform.com) has some interesting predictions for 2010 here at MarketOracle.

Essentially, he’s predicting a double dip. higher unemployment, broken ARMs blowing up all over America, a massive CRE bust, higher interest rates and a surge in gold and silver as the US dollar tanks.  He also predicts the fringes of Europe will be on fire by the end of the year and the big EU banks will start to melt in the heat. 

I also predict a Japanese boa-constrictor-style double dip and a CRE bust in Oz and the US, but don’t see a big hike in interest rates coming up in the US, where the bond market is controlled as tightly as the price of milk in the old Soviet Union.  I suspect the Marxist central planners at the Fed would prefer to let go of the US dollar rather than kill the economy through a spike in real interest rates.  They’ve shown themselves to be completely gutless on controlling growth in the money supply over the past decade.  What will give them the requisite courage this year?  I doubt they’re going to get religion and allow the market for bonds for fall freely without intervening to save at least the short end of the market.

Let’s see what happens.  I thought it couldn’t get any worse than the last two years, but the blindness, the short-termism, the venality, the stupidity, the plain madness of govt can never be underestimated, and it looks like we’re in for another downdraft from the idiot-savant govt’s “good intentions” this year.  The only thing this idiot-savant is good at is lying and displaying extraordinary amounts of chutzpah.

There is no God.

Peter Schiff’s predictions for 2010: The worst is yet to come!

January 6, 2010 1 comment

Peter Schiff’s predictions for the U.S. economy in 2010: higher unemployment, higher interest rates, and higher inflation (oil and gold higher, possibly much higher).  A dollar crash (a drop of 50-70%) is inevitable and will possibly occur in 2010 rather than 2011.

Nice.

[Note: You can watch the full video here if the embedded video below doesn’t work due to blocking by YouTube.com]

Silver: The Bargain of the Century!

January 6, 2010 Leave a comment

Let me add an addendum to my Trade of the Decade: 

Silver, the longtime poor cousin to gold, is $et to $oar!

There are so many industrial applications for silver it’s not funny.  They are growing by the day, especially in nano-tech.

The shorting of silver by the bullion banks is insane and unprecedented.

The historical gold:silver ratio over the last 700 odd years appears to be around 30:1.  Some say it’s as low as 16:1.  It’s currently around 70:1.

Wow.

Admittedly, the Makian Distribution predicts massive volatility in commodity prices with increased leverage/debt, and that’s exactly what we’ve had in the silver market over the last 50 years.

But something tells me silver is due to switch across to the right hand side of the bifurcating normal distribution very, very soon.

I would love to see a short squeeze in the silver market.  It would be like watching fireworks on New Year’s Eve.

We have lift-off!

January 5, 2010 Leave a comment

When you see a chart like this, you just know gold’s going to US$1,200 in a matter of weeks.  You just know it.

Categories: Gold, Investment tips

Stop press! Gerald Celente’s Top 10 Predictions for 2010

January 5, 2010 2 comments

When Gerald Celente talks, I listen.