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Gold, Silver, and Hyperinflation

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Most commentators in the precious metals sector still are not treating hyperinflation as a likely scenario -- as “competitive devaluation” continues to relentlessly drive all of this paper to zero. I can prove this. How? Because these commentators continue to issue (long term) “price targets” for gold and silver.

Indeed, many articles discuss “revaluing” gold at some arbitrary number as some Final Solution to fix these broken markets. Revaluing? Clearly a reminder of the definition of hyperinflation is in order.

Paper goes to zero (near-zero). Prices for hard assets go to infinity (near-infinity). Not “5,000.” Not “10,000.” Not even “100,000.” We are no longer talking about “high prices.” We are talking about Zimbabwe prices.

(Western) money-printing is increasing exponentially. Sovereign debt amongst these Western Deadbeat Debtors is increasing exponentially. Exponential curves only have one, possible ending: things blow up. The explosion of sovereign debt will (must) result in debt-default – and Debt Jubilee. The explosion of money-printing will (must) result in full-fledged hyperinflation.

The only “question” here is which will come first.

The United States claims to be the most-successful among these Deadbeat Debtors in preventing its own financial suicide. It has a $1+ trillion per year deficit (and more than $200 trillion in debts/liabilities). And the only reason the number isn’t much, much higher is that by fraudulently holding interest rates on that debt at near-zero it is minimizing interest payments.

However, even if such fraud could be maintained permanently, it solves nothing. It merely delays debt-default (and hyperinflation) by a couple of years. The fact that massive manipulation of markets is slowing these exponential progressions in no way alters the inevitable outcome. Paper goes to zero; prices go to infinity.

What then? A new monetary system will rise from the ashes, with new currency(ies). What will the “price” of gold be in such a new system, with brand-new currency? It could very easily be “1”.

I’ve argued previously that when the current (fraudulent) system of banker-paper implodes that the People will tolerate nothing less than a return to real money – i.e. currency backed by a hard asset. For 5,000 years; the only practical commodities to back our currencies have been gold and/or silver. There is no reason to assume our future would/could be any different.

 

Apart from the specific attributes which make gold and silver perfect money; the equally powerful argument is “what is the alternative?” Are we going to “back” our currencies with oil…and remove large quantities from the global economy in the form of monetary stockpiles?

Any commodity which could be argued as important/strategic enough on which to base an entire monetary system (or any group of such commodities) is too important to have large quantities devoted to passive usage as monetary stockpiles. Indeed, it’s precisely for this reason that even silver cannot be a practical backing for our economies. It’s too important to industry and bankster shorting has almost completely destroyed global stockpiles.

The only monetary asset which can possibly be used to back our economies (and currencies) is gold, which explains why (alone among all commodities) it has continued to be treated as “money” by the global monetary system (and all the bankers corrupting that system) – despite decades of deceitful, rhetoric to the contrary from these same banksters.

My prediction for a “future price” for gold is 1; which is to say that instead of a world where we price gold (and all goods) in terms of the bankers’ fantasy-paper, that we move to a world where currencies (and all goods) are priced in relation to gold (and silver).

It is a world so conceptually different from our present one that even as the person describing (attempting to describe) this world, I have difficulty thinking in such terms myself. Yet it is precisely the paradigm which has been employed by humanity for approximately 90% of all our millennia of human commerce.

The “insane” paradigm is the current one, foisted upon us by the fraud of the One Bank, the lies of the propaganda machine, and the corruption of our Puppet Governments. We must leave this Insane World, and return to sanity. We must re-program ourselves.

Obviously the very first step is for people to stop living in denial and confront the (future) reality of hyperinflation. Exponential curves have only one, possible ending.

We know these (already worthless) paper currencies will officially go to zero – or close to it, before being removed from circulation. We know our morally/intellectually/fiscally bankrupt governments will default on their gigantic debts. And then a new system will emerge: the Post-Hyperinflation system.

Once we wrap our minds around the reality of this Post-Hyperinflation system, it becomes possible to (mentally) construct a new paradigm. This is a rational world where prices exhibit fixed, near-constant relationships with hard assets (and fundamentals) – rather than being the arbitrary (i.e. fraudulent) dictates of the One Bank, expressed in various forms of its own, worthless paper.

The peerless documentary, The Money Masters explains (in detailed, eloquent terms) why it is imperative for us to smash the central bank money-printing cartel if we ever seek to restore economic liberty to our societies. But as is the case with any paradigm-altering transition, first we must free our minds.

When we speak of gold at some fantasy-price of “$5,000” or “$10,000” we are helping to perpetuate this fraudulent system. There is no rational “price” for gold (or any other hard asset) in paper which will soon be literally worthless – and is arguably worthless today.

How many ounces of gold does that house “cost”? How many ounces of silver for that piece of furniture? This is the rational world which we all need to remember (from deep within our collective, genetic memory).

Late last year I wrote the commentary When Prices Have No Meaning, explaining how/why as these forms of banker-paper get very close to The End that prices will become even more perverted/detached from reality. What is the “correct price” for an automobile…in Monopoly Money? It is a nonsensical question, since any answer would be totally arbitrary.

This year we have seen precious metals prices perverted to a degree never before witnessed in our markets: prices going (virtually) straight down, while demand went (virtually) straight up. The bankers are advertising the fact that this sick system nears The End.

One part of our preparation for The End of Paper is the monetary insurance which investors in this sector (and readers of these commentaries) are obtaining in the form of physical gold and silver bullion. But equally important is our mental/psychological preparation.

Someone still looking toward a Future where the price of gold ends at $10,000/oz will inevitably experience the shock of deer-in-the-headlights syndrome should they wake up one morning to discover the price of gold at $10,000,000,000/oz (or higher). How many people can truly claim to be (mentally) “prepared” for when gold is $10,000,000,000/oz and silver is $1,000,000,000/oz?

Hyperinflation” is not some fairy-tale which we tell to small children at night, to frighten them. It is the inevitable mathematical outcome of our current, irreversible policies.

How many barrels of oil should we be able to get for an ounce of gold? How many bushels of wheat for an ounce of our silver? We need to start practicing asking those questions today, so that we will be ready to provide answers to those questions tomorrow.



[Readers are encouraged to join me for my daily dialogue on precious metals markets – and the events which drive these markets – in The Daily Grind]

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Jeff Nielson
...
written by Jeff Nielson, July 29, 2013
Jeff: the majority of global QE has gone to prop up the reserves of the TBTFs; it certainly hasn't impacted Main Street because of the lack of velocity, although it has caused some insidious inflation in emerging markets and even the US. True inflation in the US since 2008 has been at least 7% compounded per year (per Shadowstats) and in Argentina may be as much as 10% per month. Recent reports on inflation in Brazil and in Asia are also of concern. So, it's definitely beginning. Much more alarming is the incremental and concerted effort to produce mass genocide through GMOs, Agenda 21, and other depopulation agendae and the purposeful non-reporting of Fukushima radiation which, for the Americas anyway, will result in millions losing 20 years (at least) in life expectancy from various cancers, due to the unstoppable radiation pouring into the Pacific and carried by the trade winds. But if the derivative market implodes, TPTB won't be satisfied with incremental action; WWIII will be most definitely needed to thin the herd. So the question in my mind is really how much of a window will the PM stacker have to enjoy the wealth preservation factor of PM ownership when the SHTF? Perhaps too much of a existential question for this blog, but it has been weighing on my mind lately as I plan and contemplate the future of my grandchildren.



Correct Abperusdisvet.

The agenda of The One Bank goes well beyond mere stealing. There is a "New World Order": a single, global, criminal regime (controlled by the One Bank), and devoted to stealing as much of the world's wealth as possible.

Of course these Thieves could/can steal a lot more...if they decrease the world's body-count by a billion or two along the way. But even if they don't KILL billions; malnourished Serfs are much less likely to rise up against their Oppressors than those with the strength to WIELD their pitchforks... smilies/wink.gif
Jeff Nielson
...
written by Jeff Nielson, July 29, 2013
Right you are Jeff about the specture of a "world war"(although the U.S. runs a never ending war thanks to laws enacted after 9/11). That is the best way to remove creditors (us- the people) from the debt/ pledge system. At the same time, the "One Bank" and other financial houses along with their corporations, will be poised to reap giant profits off humanities suffering.


Lol Rockwork! Thanks for the reminder.

Yes, I keep forgeting that our official "War on Terror" is supposed to be a war -- since you can't have a (real) "war" with an ill-defined enemy, which has no borders/boundaries of any kind, and where there is no "objective".

What is the U.S. going to do? Defeat "terror"? That's about as realistic objective as us seeking to "defeat" the greed of the One Bank. smilies/cheesy.gif
apberusdisvet
...
written by apberusdisvet, July 29, 2013
Jeff: the majority of global QE has gone to prop up the reserves of the TBTFs; it certainly hasn't impacted Main Street because of the lack of velocity, although it has caused some insidious inflation in emerging markets and even the US. True inflation in the US since 2008 has been at least 7% compounded per year (per Shadowstats) and in Argentina may be as much as 10% per month. Recent reports on inflation in Brazil and in Asia are also of concern. So, it's definitely beginning. Much more alarming is the incremental and concerted effort to produce mass genocide through GMOs, Agenda 21, and other depopulation agendae and the purposeful non-reporting of Fukushima radiation which, for the Americas anyway, will result in millions losing 20 years (at least) in life expectancy from various cancers, due to the unstoppable radiation pouring into the Pacific and carried by the trade winds. But if the derivative market implodes, TPTB won't be satisfied with incremental action; WWIII will be most definitely needed to thin the herd. So the question in my mind is really how much of a window will the PM stacker have to enjoy the wealth preservation factor of PM ownership when the SHTF? Perhaps too much of a existential question for this blog, but it has been weighing on my mind lately as I plan and contemplate the future of my grandchildren.
rockworx
...
written by rockworx, July 28, 2013
Right you are Jeff about the specture of a "world war"(although the U.S. runs a never ending war thanks to laws enacted after 9/11). That is the best way to remove creditors (us- the people) from the debt/ pledge system. At the same time, the "One Bank" and other financial houses along with their corporations, will be poised to reap giant profits off humanities suffering.
Jeff Nielson
...
written by Jeff Nielson, July 28, 2013
I and my "Lunatic fringe" friends have postulated about if and what and when new currency comes to light. Firstly, I believe that less than, or around only 2-4% of the population have any physical P.M.'s at all. That makes any P.M. standard out of reach of the masses. Now, if you're the IMF, and have all of Fort Knox's (USA), Lybia's ,Greece's etc. gold, then a gold backed SDR might be a good idea (for them; at interest of course).
Silver is apparently in the next 20-30 years to become extinct due to industrial demand. So in the short term, values should skyrocket, but it might not be the best solution for a currency.
There is a possible sovereign solution in a resource based currency (ie. minerals, oil, food stuffs) of some sort. This might be a good idea for a country like Canada, but not for a country such as the UK, or any without much natural resources.
This brings me to the current debt/pledge system we are all currently apart of. Like you say jeff, the wheels have to fall off at some time; when, how and what are the big questions. I personally think the Dutch had it right with tulips. At least then you could "stop to smell the roses" as they say.


Rockwork, I think it's very important for people to understand that we are talking about two scenarios here.

I was writing about the End Game: what the world would/should look like "after the dust settles." Conversely, what you describe in the first part of your remarks is the (chaotic) Transition Phase -- as the current system crumbles and (eventually) a New System emerges.

The other point here is the (key) difference from bullion used as monetary backing, versus bullion used as currency. With respect to the former; it's irrelevant that only 2-4% of us Peasants do/will actually hold bullion.

However, with respect to bullion-as-currency; yes, your point explains exactly why the Transition Phase is likely to get very, very ugly -- and will likely be hidden (to some extent) through the One Bank starting another "great war" (world war?). The People will have no money...

rockworx
...
written by rockworx, July 28, 2013
I and my "Lunatic fringe" friends have postulated about if and what and when new currency comes to light. Firstly, I believe that less than, or around only 2-4% of the population have any physical P.M.'s at all. That makes any P.M. standard out of reach of the masses. Now, if you're the IMF, and have all of Fort Knox's (USA), Lybia's ,Greece's etc. gold, then a gold backed SDR might be a good idea (for them; at interest of course).
Silver is apparently in the next 20-30 years to become extinct due to industrial demand. So in the short term, values should skyrocket, but it might not be the best solution for a currency.
There is a possible sovereign solution in a resource based currency (ie. minerals, oil, food stuffs) of some sort. This might be a good idea for a country like Canada, but not for a country such as the UK, or any without much natural resources.
This brings me to the current debt/pledge system we are all currently apart of. Like you say jeff, the wheels have to fall off at some time; when, how and what are the big questions. I personally think the Dutch had it right with tulips. At least then you could "stop to smell the roses" as they say.

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