This is an article taken from www.forbes.com
With the dollar in freefall, the monetary system is breaking down.
The international monetary system set up at Bretton Woods in 1944 is on the verge of breaking down. It could still be saved by heroic measures, especially if these were taken in the United States. They would include an immediate slash in projected Government Expenditures, an immediate balancing of the budget, and a halt in any further increase in the stock of money.
But in the present political and ideological atmosphere, these measures are very unlikely.
Parallel measures are even more unlikely in Britain or in France. The government in Britain will never give up its socialistic obsessions. In France, Nicolas Sarkozy is caught in a chronic dilemma of either yielding to untenable wage demands or having his country paralyzed by strikes.
And nearly every other country, in varying degree, now operates on the fixed assumption that at least some inflation, some constant increase in its stock of paper money, is necessary to prevent an economic slowdown or setback.
The four paragraphs above--substituting "Charles de Gaulle" for "Sarkozy" and adding "Labor" before "government in Britain"--appeared at the beginning of a Los Angeles Times editorial written by Henry Hazlitt in March of 1969. The editorial concluded that the U.S. was certain to leave the gold standard and commence an inflationary devaluation, with resulting economic chaos.
Two years later, President Nixon appeared on national television to "suspend temporarily the convertibility of the dollar into gold." The second part of Hazlitt's prediction took longer to manifest itself. In fact, the Inflation Rate as measured by the Consumer Price Index sank from 5.2% when Hazlitt wrote the editorial to 2.7% in 1972. Initially it seemed Nixon was correct that suspending convertibility would paradoxically "protect the position of the American dollar." A speculator betting on inflation 1969 would have gone broke.
But what Hazlitt knew, and Nixon didn't, is that inflation has great momentum. The price level can withstand significant monetary abuse, but once inflationary expectations cement they are impossible to dislodge without extreme economic and political pain, as Ford, Carter, and Reagan soon discovered.
The similarities between then and now are obvious. Despite the Republican takeover in the House, there is no chance of restraint at the Fed or a balanced budget. The tax deal passed in the lame-duck session will add nearly $1 trillion in deficits, most of which the Fed will be forced to monetize.
Although the Conservatives have gained power in Britain, their "austerity" plan is to return spending back to 2007 levels--in terms of projected GDP. Nominal spending is set to increase. Meanwhile, France continues to have strikes, as do Britain, Ireland, Italy and Greece.
has fallen for the past three years, as it did between 1969 and 1972, but monetary policy has caused commodity prices to surge back to 2008 bubble highs despite rising unemployment. Anecdotal evidence of pricing turmoil for foreign producers of intermediate goods suggests that inflation is already lurking just offshore, preparing to crash into the economy. The higher costs will cause commerce to freeze, as it did in 2008, or else the inflation spiral will again begin in earnest. Either way, European-style protests will soon come to these shores as well.
This is not the mainstream view, just as Hazlitt's view was not shared by mainstream economists. Only two months after he wrote the lines above Time Magazine ran an article titled "The Future: The Sizzling 70s," which cited a study by two dozen economists at the National Industrial Conference Board that predicted a 40% increase in the real standard of living over the subsequent decade. Instead, by 1981 real median income had decreased by over 6%.
Hazlitt got it right because he understood free-market economics and had studied the wreckage of numerous historical inflationary experiments. Only those with his perspective knew how to protect their wealth against the inevitable consequences of bad monetary policy. It will be the same now.
From 1969 to 1980 the dollar lost 96% of its value in terms of gold and 92% in terms of oil. The stock market was no safe haven: The Dow's nominal value in 1980 was the same as in 1969, meaning it lost similar value against gold and oil.
In the current cycle, the dollar and the Dow began deflating in 1999. With gold at $1,400 and oil at $90, the dollar and the Dow have declined by nearly 80% against both. To match the 1970s, they would have to lose another 80% against gold and another 60% against oil, implying gold at $7,000 and oil over $200. Given that the current monetary abuse is far worse than in the 1960s and 1970s, these figures are conservative.
Bretton Woods II is collapsing. The seductive Keynesian policies that fiscal and monetary authorities have followed for decades will soon cause the end of dollar hegemony. The United States is entering its third consecutive year of deficits greater than $1 trillion coupled with continuing dramatic increases in the stock of money. Devaluation and economic chaos are guaranteed, just as they were in 1969. Fortunately, unlike in 1969, gold ownership is legal. Those who understand free markets can still preserve the capital that will be needed to restore American prosperity after the deluge.
Thursday, January 13, 2011
Wednesday, January 12, 2011
Possible New Currencies Being Investigated
Virginia Creates Subcommitte to Study Constitutional Money Alternatives to Fiat Federal Reverve Notes
GoldSilver.com
JANUARY 11,
It seems the idea of alternative gold and silver currencies continues to spread throughout the states. Today the Commonwealth of Virginia has introduced House Resolution No. 557 following the lead of state legislatures in Georgia, Indiana, Montana, New Hampshire, and South Carolina.
The legislation aims to form a subcommittee to study “the adoption of an alternative currency consisting of gold or silver, or both… make the alternative currency available, and enable it to be used competition with and preference to the Federal Reserve System's currency, to the degree that the need for such use became apparent.”
The decree also cites how ”the United States Congress, the U.S. Department of the Treasury, and the Federal Reserve System have taken and are preparing to take no action to provide the United States with an alternative to the Federal Reserve System's currency, in the likely event that the latter would be destroyed through hyperinflation.”
Legislatures around the country should take note of this resolution’s bold language, “the citizens of the Commonwealth will properly conclude that the members of the General Assembly will be primarily responsible if the Commonwealth is found to be without an alternative currency when the Federal Reserve System's currency collapses in hyperinflation, or some other related economic calamity supervenes.”
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The above article was taken from www.goldsilver.com all rights to the above material is their's. I just wanted to share this thread with you all because I find it to be extremely pertinent.
Thank you,
Donuvan
GoldSilver.com
JANUARY 11,
It seems the idea of alternative gold and silver currencies continues to spread throughout the states. Today the Commonwealth of Virginia has introduced House Resolution No. 557 following the lead of state legislatures in Georgia, Indiana, Montana, New Hampshire, and South Carolina.
The legislation aims to form a subcommittee to study “the adoption of an alternative currency consisting of gold or silver, or both… make the alternative currency available, and enable it to be used competition with and preference to the Federal Reserve System's currency, to the degree that the need for such use became apparent.”
The decree also cites how ”the United States Congress, the U.S. Department of the Treasury, and the Federal Reserve System have taken and are preparing to take no action to provide the United States with an alternative to the Federal Reserve System's currency, in the likely event that the latter would be destroyed through hyperinflation.”
Legislatures around the country should take note of this resolution’s bold language, “the citizens of the Commonwealth will properly conclude that the members of the General Assembly will be primarily responsible if the Commonwealth is found to be without an alternative currency when the Federal Reserve System's currency collapses in hyperinflation, or some other related economic calamity supervenes.”
------------
The above article was taken from www.goldsilver.com all rights to the above material is their's. I just wanted to share this thread with you all because I find it to be extremely pertinent.
Thank you,
Donuvan
Sunday, December 26, 2010
Secret Silver Santa
Santa delivers silver?
This holliday season I decided to give the gift of silver as a present in two ways. I did this as kind of an experiment . First of all some friends got together and had a party for the holidays and decided to do a "Secret Santa" gift giving exchange. If you are not familiar the secret santa gift exchange works as such. You bring a gift of a certain value or less (in this case it was $25 U.S.) You draw numbers from a hat for each person present that brought a gift and get to select in turn a gift from the pile. If you do not like your gift you may swap it for any other players gift that they had previosly chosen. there is no debate you must give up your gift and you cannot select your own gift. In this game it pays to be last so you may chose from all the gifts unveiled and so choose the best gift, ideally.
The gift I chose to bring was a Scottsdale Silver 1 oz. troy bar 99.9% pure silver. I drew number 2 so I knew there was no way that I would get the best gift. However, the gift I selected was an envelope with $25 of $1 scratch off lottery tickets. There were many other gifts when all was said and done however, my gift was selected by the person drawing nuimber 5 and for the next 13 people no one traded for the pure silver. On the other hand, everyone that came up traded for the lottery tickets from whomever held them. Everyone there was 35 or less years of age single people, couples and married folk. Yet none of them knew what the siolver was worth. questions ranged from "what do I do with this" to "what is it". It seemed that no one knew that silver weas even considered precious.
When the gift giving was over I asked the guy to scratch off all of the lottery tickets to see how much "value" he had selected althought the silver with known value was passed by time and time again. His lottery tickets amounted to one $5 prize and two free tickets out of $25 worth of tickets. I got everyone's attention and asked them how much they thought this bar of silver was worth in comparison. Not one person seemed to know. I explained a rundown version of silver as a hedge and also as a commodity and told them the current spot price and how based of historic ratios the bare should be worth $115 U.S. I also told them about the gold/silver ratio, about tuff economic times, and the wealth cycle of commodities vs, stocks and real estate. All I can really say is there was only one person that seemed to get the idea however, his wife chose the $13 bottle of wine in spite of him telling her to grab the silver. Not to bad an investment if I do say so myself, since at the very least you know you will enjoy the wine some-what.
This opened my eyes dramatically, on Christmas day I decided to give 1 troy oz. of the same type of silver to my relatives, mom, dad, aunts, uncles, grandparents etcetera They were blown away from the gift. My uncle wanted to know all I knew about it as he was going to a seminar in the coming weeks about protecting assets in tuff economic times which would highlight commodities most likely. Yet, these were also people who had been around or were raised by people who knew what real money was.
To me, it's pretty interesting that time changes all things however experience lasts a lifetime. It makes me wonder how people of my generation will end up.
Just thought I would share this story with you. I hope you found it interesting please comment rate and follow my blog. hopefully in the ensuing months I will be able to post more about PM's.
Until next time, take care and Merry Christmas
Donuvan
This holliday season I decided to give the gift of silver as a present in two ways. I did this as kind of an experiment . First of all some friends got together and had a party for the holidays and decided to do a "Secret Santa" gift giving exchange. If you are not familiar the secret santa gift exchange works as such. You bring a gift of a certain value or less (in this case it was $25 U.S.) You draw numbers from a hat for each person present that brought a gift and get to select in turn a gift from the pile. If you do not like your gift you may swap it for any other players gift that they had previosly chosen. there is no debate you must give up your gift and you cannot select your own gift. In this game it pays to be last so you may chose from all the gifts unveiled and so choose the best gift, ideally.
The gift I chose to bring was a Scottsdale Silver 1 oz. troy bar 99.9% pure silver. I drew number 2 so I knew there was no way that I would get the best gift. However, the gift I selected was an envelope with $25 of $1 scratch off lottery tickets. There were many other gifts when all was said and done however, my gift was selected by the person drawing nuimber 5 and for the next 13 people no one traded for the pure silver. On the other hand, everyone that came up traded for the lottery tickets from whomever held them. Everyone there was 35 or less years of age single people, couples and married folk. Yet none of them knew what the siolver was worth. questions ranged from "what do I do with this" to "what is it". It seemed that no one knew that silver weas even considered precious.
When the gift giving was over I asked the guy to scratch off all of the lottery tickets to see how much "value" he had selected althought the silver with known value was passed by time and time again. His lottery tickets amounted to one $5 prize and two free tickets out of $25 worth of tickets. I got everyone's attention and asked them how much they thought this bar of silver was worth in comparison. Not one person seemed to know. I explained a rundown version of silver as a hedge and also as a commodity and told them the current spot price and how based of historic ratios the bare should be worth $115 U.S. I also told them about the gold/silver ratio, about tuff economic times, and the wealth cycle of commodities vs, stocks and real estate. All I can really say is there was only one person that seemed to get the idea however, his wife chose the $13 bottle of wine in spite of him telling her to grab the silver. Not to bad an investment if I do say so myself, since at the very least you know you will enjoy the wine some-what.
This opened my eyes dramatically, on Christmas day I decided to give 1 troy oz. of the same type of silver to my relatives, mom, dad, aunts, uncles, grandparents etcetera They were blown away from the gift. My uncle wanted to know all I knew about it as he was going to a seminar in the coming weeks about protecting assets in tuff economic times which would highlight commodities most likely. Yet, these were also people who had been around or were raised by people who knew what real money was.
To me, it's pretty interesting that time changes all things however experience lasts a lifetime. It makes me wonder how people of my generation will end up.
Just thought I would share this story with you. I hope you found it interesting please comment rate and follow my blog. hopefully in the ensuing months I will be able to post more about PM's.
Until next time, take care and Merry Christmas
Donuvan
Wednesday, December 8, 2010
Silver Drops!!!
Relax, a pull back is necessary when testing new thresholds. As stated before and shown to be true, a pull back is a sign of strength. Don't sell your position in silver just because the price dropped slightly. A lot of times pull backs are due to exit strategies for investors and their confidence in the investment.
Basically speaking, as an investment strengthens or the price goes up rapidly, some investors who may have bought early on and set their exit on a fixed price or percentage that once hit will the sell their position. Also, those who were planning on getting in tend to wait as the new cost may seem a little to high for them until they see it hold and then will buy-in causing prices to go up again due to new demand. Remember, fear and greed are the predominant market movers seconded by supply and demand. As the fears of the economy continue to loom so will safe havens such as silver and gold tend to strengthen. As greed for investors to make his wealth or store it for that matter heightens so does the cost via lesser supply of a commodity due to higher demand. Thus, the cycle of wealth and market moving continue.
Since silver has been testing a new threshold of $30 lately, and has doubled it's low in February of this year (just over $15.00), a pull back is expected. It ran up 27% in the last 3 months alone so a pull back and reemergence and then hold above $30 for at least a week or two before year's end will show significant strength. However, due to the holiday season we may see a bit of decline as the press and Wall Street will undoubtedly report a come back of the American consumer due to holiday shopping. However, that consumer is likely buying on borrowed money and will likely add to the economic burden. Once again raising silver again in the first quarter of 2011 once those reports die off.
I am no expert but that is my own prediction of what will happen over the next few months.
Basically speaking, as an investment strengthens or the price goes up rapidly, some investors who may have bought early on and set their exit on a fixed price or percentage that once hit will the sell their position. Also, those who were planning on getting in tend to wait as the new cost may seem a little to high for them until they see it hold and then will buy-in causing prices to go up again due to new demand. Remember, fear and greed are the predominant market movers seconded by supply and demand. As the fears of the economy continue to loom so will safe havens such as silver and gold tend to strengthen. As greed for investors to make his wealth or store it for that matter heightens so does the cost via lesser supply of a commodity due to higher demand. Thus, the cycle of wealth and market moving continue.
Since silver has been testing a new threshold of $30 lately, and has doubled it's low in February of this year (just over $15.00), a pull back is expected. It ran up 27% in the last 3 months alone so a pull back and reemergence and then hold above $30 for at least a week or two before year's end will show significant strength. However, due to the holiday season we may see a bit of decline as the press and Wall Street will undoubtedly report a come back of the American consumer due to holiday shopping. However, that consumer is likely buying on borrowed money and will likely add to the economic burden. Once again raising silver again in the first quarter of 2011 once those reports die off.
I am no expert but that is my own prediction of what will happen over the next few months.
Thursday, October 21, 2010
Recent drop in Silver costs
The recent drop in silver is nothing to be alarmed at. Most times when a stock or commodity break a new threshold in price there is a slight pull back. This slight pull back is actually a sign of strength, it shows that the stock is re-adjusting its recent high and is going to move forward again a lot of the time. So please do not panic or sell of what you have to try and reap from the run that silver has made over the last few months. Be prepared for silver to go up even further. A lot of people are estimating that silver will head even higher and buy the end of 2011 will be over $30.00 U.S. so be prepared for a wild ride in the near future.
Thursday, October 14, 2010
Free silver at your local grocery store - YouTube video
The other day I posted a video on my YouTube account about Free Silver at the grocery store. Well, I had a few people say I got lucky or they don't believe me and what have you. Truth be told, I am not lying when I said I was being paid in silver.
Now, I understand that this was a rare and not very reliable way of getting silver, however the point of what I'm trying to say is that you may very well have silver just lying around in a change dish and not really know it. Also, it was very common place for people around in 1964, the year the last silver coins were being made in the states, to start collecting these coins and stowing them away.
Estate sales and auctions are usually listed in the paper classifieds section some will give mention of coins some will not. What I look for is estate sales/auctions that have been owned by the same person prior to 1964. You can find this out by simply checking sites like Zillow and performing a search for the address listed. sometimes you have to call for the exact address. If and or when you call you can ask the auctioners if they are selling any items such as coin collections etc. also.
Another place that I check is garage sales. Every Saturday and Sunday I have available to go garage saleing I just go from sale to sale and just very plainly ask if they have any silver items or coins that I might be able to take a look at. This way I don't feel like I am wasting their time. I also ask if they have any silver items such as tea sets, plates, candle holders you know the stuff that is customary anniversary type presents. Many people, sad as it may be give up their families heritage/relics after a few generations. Also, in the current economic climate people have been brought to desperate measures and are selling off their heirlooms. I am a bullion Bull so I only look at the silver's value not numismatic. That being said I only am concerned with it's weight versus silver continuity of the item/coin. So it may be handy to have a a fairly reliable scale to measure the weight.
If it is a lot of silver or seems particularly old, I will take a lot of photos of the pieces and the continuity stamps and also manufacturer's stamps as well. Tell the people selling that I am interested in purchasing the whole lot but I have to check with a few of my sources to verify the value of the items and if they could set these pieces aside I would be very gratefully in helping them get these items sold. This takes a little faith and some selling, so establishing a bit of raport with them is essential. Then I will take the photos to a antiques dealer to see if they can give me a rough value of its' worth. Of course they will want to see all the items together in person especially if it is a complete set. I will also take them to a coin seller and a local pawn shop to see what they would be willing to give me for the items. If all goes well you will set up a buyer for yourself and also be a buyer for the customer.
If the total sale goes through I will take the profits and reinvest them in silver, gold or hold on to it for other investments. And thus, another form of free silver and gold.
Watch the video here:
Now, I understand that this was a rare and not very reliable way of getting silver, however the point of what I'm trying to say is that you may very well have silver just lying around in a change dish and not really know it. Also, it was very common place for people around in 1964, the year the last silver coins were being made in the states, to start collecting these coins and stowing them away.
Estate sales and auctions are usually listed in the paper classifieds section some will give mention of coins some will not. What I look for is estate sales/auctions that have been owned by the same person prior to 1964. You can find this out by simply checking sites like Zillow and performing a search for the address listed. sometimes you have to call for the exact address. If and or when you call you can ask the auctioners if they are selling any items such as coin collections etc. also.
Another place that I check is garage sales. Every Saturday and Sunday I have available to go garage saleing I just go from sale to sale and just very plainly ask if they have any silver items or coins that I might be able to take a look at. This way I don't feel like I am wasting their time. I also ask if they have any silver items such as tea sets, plates, candle holders you know the stuff that is customary anniversary type presents. Many people, sad as it may be give up their families heritage/relics after a few generations. Also, in the current economic climate people have been brought to desperate measures and are selling off their heirlooms. I am a bullion Bull so I only look at the silver's value not numismatic. That being said I only am concerned with it's weight versus silver continuity of the item/coin. So it may be handy to have a a fairly reliable scale to measure the weight.
If it is a lot of silver or seems particularly old, I will take a lot of photos of the pieces and the continuity stamps and also manufacturer's stamps as well. Tell the people selling that I am interested in purchasing the whole lot but I have to check with a few of my sources to verify the value of the items and if they could set these pieces aside I would be very gratefully in helping them get these items sold. This takes a little faith and some selling, so establishing a bit of raport with them is essential. Then I will take the photos to a antiques dealer to see if they can give me a rough value of its' worth. Of course they will want to see all the items together in person especially if it is a complete set. I will also take them to a coin seller and a local pawn shop to see what they would be willing to give me for the items. If all goes well you will set up a buyer for yourself and also be a buyer for the customer.
If the total sale goes through I will take the profits and reinvest them in silver, gold or hold on to it for other investments. And thus, another form of free silver and gold.
Watch the video here:
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