When debt is rolled over and never repaid, how much is the debt truly worth? Would you lend money to someone who assured you he could only repay the debt by borrowing a larger amount from another person? Clearly not, but this is normal in modern “twilight zone” finance. Gold and silver are real. All paper currencies and fiat debt are less real, less solid, and less reliable. Worse, these are becomes increasingly less real and more unreliable every year as governments devalue their currencies.
The Western U.S. Dollar based monetary system is headed for a disaster. It is inevitable and just a matter of time. Investors who are chasing equities and bonds and who have ignored gold and silver due to the low paper price are losing out on the best buying opportunity of a lifetime.
Systems will reset and change when exponential growth at current or reduced rates becomes impossible. The transition is likely to be difficult, dangerous, and the ensuing trauma will not fade quietly into the night. Exponentially increasing debt supported by nothing more than exponentially increasing promises will end in national and/or global disaster. When the reset comes, and it may be years away, would you rather hold assets that are based on debt, trust in a possibly insolvent counter-party, and denominated in the currency of an increasingly insolvent government and central bank . . . . or physical gold and silver?
How do governments get away with what they do? Stupidity of the unquestioning and compliant masses. Each government that decided to give up their independent sovereignty in favor of a faux form of governing by a bunch of unelected [by the people], bought and paid for bureaucrats, is proof that stupidity goes well beyond US borders.
With so much attention surrounding the cryptocurrency, many people may be aware of the bitcoin revolution as it took hold of the Internet a few years ago. However, while they may have heard about how it spread and took hold, many are still not aware of how it works and what purpose it serves online.
Regardless of how the dollar fares versus the euro or other currencies in the near term, the dollar stands to resume the long-term trend identified by Warren Buffett. The dollar, over time, is destined to depreciate against real assets, including gold and silver.
The entire Western banking system is corrupt and bankrupt, held together by issuing more and more fiat, but only into the totally insolvent banking system. For as long as people are willing to buy into the lies spewed by the criminal enterprises, more commonly known as governments, the “emperor-is-wearing-no-clothes” mentality will keep the elite’s sinking fiat ship alive. There is obviously no known solution for world-wide stupidity.
Last week, global markets were dominated by the currency market as the U.S. dollar continued its unrelenting upward momentum impacting on dollar commodities including gold which ended the week at $1158.60 an ounce. Currently, the low interest rate environment has forced individuals to speculate and invest in equities in an attempt to generate some return for their investment. After all who in their right mind is going to pay a bank to keep their money? And, as the hard working individual continues to be penalised, global major banks are getting away with a list of crimes.
The argument that one cannot eat, wear, or build with gold is often used as an attempt to show that gold has no value in-and-of itself. The anti-gold crowd often claims that if it were not for gold’s monetary use, which it has not had since 1971, at least not formally, gold would be useless with little or no value. What is left unmentioned is its growing use in a growing electronic device market. If gold has no value beyond its monetary use, why did it not become cheaper than gravel when its monetary use ended? This argument against gold is stupid and is intended to deceive.
The key take-away is that the dollar can certainly go higher from here, but the rally is close to cool down. Also, no matter how impressive the recent rally has been, its strength has been historic, so it should not be realistic to expect a similar strength going forward. These factors make us think that the pressure on commodities, including the precious metals complex, is about to fade.
My take is that the dollar is at or close to a multi-year high and that the trip back down will be ugly. But most markets are managed and consequently what makes sense is often irrelevant when manipulated by High-Frequency-Trading and political agendas. It is far better to be an insider rather than an analyst peering through purposely distorted windows into the opaque world of international capital flows and currency manipulations.
Debt will increase substantially from here, until a massive reset occurs. Gold and silver, in spite of financial cartel resistance, will assert their real value and be priced much higher, depending on the quantity of debt created, loss of confidence in government and central bankers, and the amount of chaos that occurs during the coming storm. Exponentially increasing systems do not last forever. Gold and silver do.
The first two months of 2015 have seen turmoil in the currency markets extend from Russia and Ukraine to the heart of Europe. “Central Banks Now Open 24/7 Fighting Currency Wars and Deflation,” blared a February 12th Bloomberg headline. Against this backdrop, precious metals have been on the rise in terms of all currencies except the Swiss franc and the U.S dollar.
The S&P, crude oil, gold and silver have exponentially increased in price as fiat currencies have been devalued. Consumer price inflation destroys purchasing power, especially when interest rates are low or negative. Unbacked paper fiat currencies are well and truly on the road to oblivion, and the lambs are being led to the slaughter of assets invested in sovereign debt, fiat currencies, and leveraged paper assets.