SilencerTalk

i dont know how long everyone will wait to say enough is enough already!!!

I believe that there are those in power who are looking for an opportunity to rile up the masses enough to use an an excuse to pull the trigger on a takeover of the masses. Not sure what it would be or how it would be implemented. All I know is that I know a lot of really pissed off people.

VVV Read the sig VVV

What's the general view of Investors Business Daily? Mainstream, loony, left, right, center, ?
Want to know before forwarding the link - which has been getting a lot of play around the webs.

They are starting to see it. The American standard of living is beginning to fall for many as unemployment continues for years and the governments actions only inhibit a recovery.

Many people have replaced faith in god with faith in government.

What I think will be the definite breaking point will be when the US dollar, continuing its death spiral, really comes unglued and we see prices rising not by 5% a year, but 5% a month, or 5% a week, or 5% a day.

Right, like the WSJ.

Heard a good take on hyperinflation ...

As seen before, the government is pumping a LOT of money into the economy.
Problem is, it's not going anywhere. Those who get it are sitting on it.
So we sit here with stagflation, prices not really going up or down because money just isn't moving. People are confident in the dollar per se, but not in the economy so they hold on to what they've got.
At some point we may very well see that lack of confidence in the economy give way to lack of confidence in the currency - say, if the government starts printing a lot of currency in a desperate attempt to obtain money which it's not getting from taxpayers because money isn't moving, or, world markets start valuing things in euros instead of dollars.
All at once a whole lotta people are going to get rid of a whole lotta cash really quick, converting currency into stuff before the other guy does and while the currency still has value.
Supply and demand.
Lots of supply of cash, not much relative demand for it.
Value of a dollar drops like we've never seen.
Hyperinflation.

I doubt Euros are a stable enough currency. The thing is, I am not sure WHAT is stable. Seems like the groundwork is laid for a one-world currency if you ask me.

The Euro-dollar exchange rate has been all over the place in the last couple of years. High of $1.6 USD per € 1 in early 2008.... dropped to a low of $1.25 USD per € 1 in 2009 then back up to $1.5 USD at the end of 2009.

This year it has bounced from $1.5 to $1.2 USD already. Seems like a lot of movement to me.

ctdonath
Exactly, the value of the dollar has not dropped that fast because right now the velocity is low.


Gold and Silver.

Gold is the free market money. People realized that trading cows for a pair of shoes and an ax for a saddle did not work very well. They realized that if they could find one commodity that everyone could exchange for everything else, that trade would be greatly simplified.

Bread wouldn't work because it degrades over time and its value swings widely with the years and seasons.

Cows wouldn't work for those same reasons, in addition to the fact that Cows have a high maintenance cost.

Knives would be a possiblity. They are durable and have no maintenance costs, but one knife is not equal to another. Thus it's impossible to have prices in knives because each knife would have a different value.

Oil? No. Not only is it too abundant, it has significant storage costs and it's value fluctuates wildly because of usage. I can't carry a 55 gallon drum of oil to the store to buy food.

What about Iron? Well Iron is simply too abundant, meaning it's value per unit would be low. I'm not going to carry a pound of Iron around to go buy a load of bread. It's value is also too vulnerable to supply swings because of it's heavy industrial use. We are getting closer to something that will work.

What about Copper. A better choice, but it's purity is hard to determine and it's still too abundant and used too much for industry. It could work for small transactions.

What about gold and silver. Hmmmm. There we go. Both metals are quire scarce. Meaning that one unit would constitute significant purchasing power. Only a couple ounces of metal and I can take care of all day-to-day purchases and transactions. With only a pound or two of metal I can make large purchases.

One gold coin is just as good as another, meaning I can price things in ounces of gold or silver. Any supply increases are small and mostly predictable. Both are durable and difficult to counterfeit. Even better they only have a few uses, meaning that supply will not fluctuate widely because of industrial usage, meaning their value will largely be stable.

See: Spain destroys silver values through mining in new world



Also: There is only so much precious metals to go around.... while I don't think "Euros" is going to be the new "standard" to replace the dollar... I don't think gold is going to be it either. There just isn't enough hard inventory to go around to be a USD substitute for every demand for it to "back" all currencies. I do understand gold-back currency.... but is there enough gold for every country to back their currency? Too bad for every country that there is only so much gold and it is held by a few countries? It just doesn't seem workable any longer.

Seems like the perfect setup for an era of a centralized controlled FIAT one-world currency to me. The dangers to our country of such a thing controlled outside the power of the USA are staggering. A new centralized governance (not GOVERNMENT, governance) with only economic powers can institute carbon credits, sharing of the wealth, controls on trade... and all without one storming of any beach, one soldier, or one shot.

The Federal reserve has done ten times as much what the Spanish did.


Yes there is enough gold. We don't get to use the gold only once. The gold gets used again and again in transactions. I get paid in gold, I spend that gold at the store, the store spends the gold to buy new product.

Now, were gold re-monitized the price would probably skyrocket to reflect how much the currency has been inflated so gold may very well be $10,000 on ounce in such a situation. That's not a fault of gold, that's a fault of governments.

A gold standard is far more workable than a fiat standard over the long term. Besides, the US gold reserve will be quickly depleted at current trade deficit levels. If not gold then silver can also serve that function.



Are you saying that such a setup is good idea or a bad idea, I'm not sure if you had a typo in there somewhere.

The Euro is showing the problems with such a situation. Individual countries are able to borrow and spend beyond their means. Had Greece not been in the Euro it would not have gotten to that point because interest rates would have shot up for Greek debt years before. Individual currencies compartmentalize the different countries and prevent such malinvestment from taking place and such imbalances from becoming too large.

Fiat currencies DO NOT WORK. They are always debased and always go to zero. Every example of a fiat currency has done so.

A central bank cannot control interest rates without creating problems. Interest rates serve a vital function in an economy. Low interest in a market economy mean that people are saving more of their earnings for future consumption. This also means they are not consuming as much. Thus there is both capital and resources available for businesses to expand to meet that future consumption.

In a controlled market, forcing the interest rates lower artificially means businesses still expand, but there are no extra resources available for them. Consumers are still consuming and thus the prices on those resources gets bid up as businesses try to attract them away from consumers. The cycle continues in various asset bubbles until the whole mess come crashing down.

Boy, it seems you have a lot more knowledge on the topic than I do.



Actually this was a reference to Spain mining so much silver that it caused problems with silver prices. Only so many goods produced to buy and an increasing silver supply caused problems.

Just a reference that metal-based currency can have some problems too.


Well, I meant this is as a bad thing. For the same reason Britain stayed out of the Euro... loss of control.... we should not adopt a one-world currency. Subjecting ourselves to the whim of others isn't in our nature to say the least. It does appear that the power we have received in the past of being the currency of choice may be coming to an end in the next several years.... like it or not.

With the adoption of FIAT currency over the world during the last 200 years and the current government/bank structure I can't imagine the financial system going to anything other than a one-world currency based on FIAT. I understand your desire for gold-backed currency.... but those in power can't have gold-backed and retain "power".

Next 10 years I bet you are going to be getting your bank statement in "North American Dollars" or "Region NAU dollars" or something like that.

Um, about going back to the gold standard, before you do that you need gold which may not be there.

About Fort Knox Gold

http://www.apfn.net/Doc-100_bankruptcy10.htm

Yeah, the big mystery. I see that coming out two ways.

1. Knox is EMPTY or nearly so. That is BAD NEWS. Like Crosshair said, we have trade defecits. Without gold, no monetary based trade in a gold system.

2. Knox has more gold than anyone realized and every administration since WWI has been stockpiling the stuff so our country will be ready to institute a gold-backed currency when everything collapses. We can remain the economic power having all the gold.

I seriously doubt #2. That vault is empty and the armored units are protecting nothing.

Much like the Federal Reserve... we are never going to find out what is inside Fort KNox or the Fed.

Well then that means we won't be able to import unless we export something to earn the gold or goods.

That's the unfortunate reality. If someone has no assets and just their credit card. Once the credit card gets taken away they have to under consume until they can earn a decent amount of money.

Likewise with countries. The whole point of exporting is so you can import. Japan exports computer chips so it can import oil.

The dollar was the reserve originally because it was gold backed. So if you exported goods to the US in exchange for dollars, you were in essence exchanging goods for gold. You could then spend those gold dollars to import goods.

The reason things have gone on without the backing is because of bureaucratic inertia. They have been buying dollars for so long they have forgotten the original reason for doing so. The major problem right now is that the supply has been inflated so much, but the velocity is so low on trillions of dollars that simply sit in Chinese and Japanese vaults. If those trillions suddenly get spent it's going to immediately cause a sharp jump in prices because those dollars will now be circulating.

That all makes sense. I wonder though, it is actually the volume of currency contained within our banking/corporate system that is the problem, no? I mean sure the Chinese and Japanese hold debt and some dollars.... but isn't that pocket change compared to the cash contained in banks, insurance companies, and corporations?

It is the released of those funds that are really going to screw things up.

Western Rifle Shooters Association blog.

The first paragraph start's; A second civil war in the United States would be an unparalleled disaster. Nobody who is sane and who has studied modern civil wars from Spain to Lebanon to the Balkans and beyond would ever wish to see one occur. But if political, cultural and demographic trends are sweeping us toward that unhappy destiny, it would be wise to at least cast a weather eye over the possible terrain.

http://westernrifleshooters.blogspot.co ... rrain.html

Good post zeezee. Who knows what the future holds. I wonder, will things happen slow enough that this kind of thing can be avoided? Who knows.