Posted on 09/26/2011 6:14:52 AM PDT by blam
Edited on 09/26/2011 6:21:00 AM PDT by Admin Moderator. [history]
The Hyperinflation Meme Has Turned Into A Nightmare
Cullen Roche, Pragmatic Capitalism
Sep. 26, 2011, 3:41 AM
Nothing has represented the rise of the hyperinflation meme more than the price of silver has over the last few years. At every twist in the market the rise in precious metals and silver in particular, has been used as the cornerstone of evidence of “money printing”, debt monetization and raging inflation that was guaranteed to ravage the US economy.
But as Treasury bond yields crater (and prices surge), the dollar rises and precious metals collapse, the hyperinflation theory is turning into a nightmare. As of tonight, the price of silver has reached a -48% decline since their April highs – just shy of where I referred to it as a bubble and said it was an excessively risky market….
Unfortunately, millions of people have bought into this meme and “invested” their hard earned money in the false analysis of the doom sayers who sold this hyperinflation theme to an unwitting public. It’s all another case of misunderstanding the modern monetary system as much of this theory was predicated on complete falsehoods regarding the actual workings of our monetary system. And now millions of people are getting hurt. It’s a shame. And it didn’t have to happen.
Hyperinflation was never coming. It’s still not coming. But the theory was easily misunderstood and even easier to sell. What’s most frustrating about the hyperinflation meme is that it was not sold to the American public by Wall Street or bad salesman. Rather, in most cases it was sold by average joes and boutique firms looking to cash in on what they thought was rigorous and accurate analysis (usually based on Austrian economics). But as we’ve seen time and time again here, misunderstanding the modern monetary system is bad for your portfolio’s health….
Wow! Time to buy. It’s at $28 right now.
“The Point of No Return”
http://www.youtube.com/watch?v=qBYoarsGLXc&feature=related
well, if we keep buying on the dips, eventually we’ll buy on the final dip!
I think I am good now, unless we get down to very low $20’s or less.
All this fluctuation from $41 to $27 has mattered at less than $10 per coin for a silver eagle and from $1900-$1650, about $100 -$150 per coin for a gold eagle.
No one buys those for short term turnaround
Time to buy.......Gold will be on par with the Dow when it crashes to 3000.
There was a good chance that it was coming. I agree that it's not coming now. With Bernanke and the EU ready to print several trillion more dollars and euros, it still might come down the road.
Money does matter. It is not, as some believe, neutral.
People who buy precious metals should understand that they may be a longer-term hedge than they thought. With a world-wide fiat money system cranking out liquidity at ever-faster rates, it is not foolish at all to plan for a collapse.
Silver’s gone up $2 in the last hour.
Amen. While I have taken some positions, it was always in the back of my mind that at some point, panic might overwhelm the printing presses and drive us in a bad replay of 1929.
As others have posted, precious metals are for the long haul, or until this country rights itself. Don't bet the farm, but have some.
Sure it will. Until people realize that large numnbers of people being gulled and pushing up the price of gold, doesn't change the fact that the substance's primary commercial use is ornamental and frivolous, it just isn't that intrinsically valuable or useful, and it isn't in short supply.
Here's an idea. Stay away from bubbles caused by hysteria; unless you are real sure you are one step ahead of the dummies who's hoarding is driving the expansion and are ready to exit at just the right moment; which isn't easy
Margin calls and liquidation explains all of the drops in PM's lately and it's a pretty pathetic attempt to scare money back into the USD and treasuries.
The REALLY smart money will hold their PM's and wait for the inevitable bounceback after the Pan Asian Gold Exchange opens in October.
If you invested in paper PM's (ETF's, SLV, GLD, margin accounts) you completely missed the point of having PM's.
If you don't HOLD it in your hand you don't OWN it completely.
"If you can't pick it up and run with it, you don't really own it." Robert Heinlein
I tried to buy American Eagle 1 oz. coins today and the dealer wouldn’t sell any. He said he bought a large quantity at $41 and wouldn’t sell at today’s prices.
Go online and purchase them.
www.apmex.com
http://www.providentmetals.com/
http://www.silver50.com/
Just don’t waste their time. Search the pages, pick your product and go.
The good thing about this dealer is he only charges $2.00 above spot per ounce.
And if anyone ever comes after you "Sorry Officer, I liquidated them to pay bills and buy some hopium." :)
"It might help to think of the US government as an alchemist. The alchemist can create as much gold as she pleases (from nothing) in order to buy up productivity and satisfy the growing monetary demands of the people she supplies currency to, but she has to be very careful not to debase her gold (you’ll notice that our trusty alchemist is female in this example as males have proven throughout history that they are not trustworthy overseers of government money). Most importantly, there is no solvency risk for the alchemist – only a pseudo form of default via currency collapse (hyperinflation). The alchemist only debases her gold when she issues an amount of gold that is in excess of productive capacity (inflation). But most importantly, she can never “run out” of gold. Therefore, she is never constrained in her ability to spend as a household, business or US state is. And more importantly, there is no solvency constraint on the state in the traditional manner that we think of for a household or business. That is, there is no such thing as the state becoming insolvent or not being able to meet its obligations – all of which are denominated in a currency that it alone can create."
This is from the author's site Pragmatic capitalism which smells like retro Fascism to me but I'm no "expert". Gold and silver are real. Note how government has to be an alchemist so that it can create fake real money. Also, this is the only monetary theory I know of that has gender confusion as part of its theory.
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