Chapter forty-one. But - what if we are wrong?

WHAT? No currency crash?

Is that a possibility? Yes, but only for as long as that fiat currency is accepted universally. But, can this go on forever?

So . . . if there is no crash - what about all of what I've been writing then? Haven't I said repeatedly "cash is trash"? Haven't I said the collapse of the dollar is inevitable? Yes, indeed I have. 

Cash is indeed just paper or just zeros and ones in a computer. It simply has no real value, just as I have said time and time again. But, if you accept it, it does have "a" value! That value being your faith in our system. Faith in our government. An imaginary value, but a value none-the-less.

So with that said, let's examine what you will have if you followed my pages and decided to do what I suggested (right above where I always say never take my investment advice!). 

As I explained on a page sometime back, IF you diversify and have 20% of your savings in precious metals (or some arbitrary percentage which you choose) and the dollar doesn't crash, you still will have 80% invested in currency based assets. How can that be a bad thing?

So . . . 

One possibility is that the dollar will be devalued enormously, but not actually crash. If that happens the precious metals will skyrocket in value against the dollar. A good result for you! If you own any that is.

Another possibility is the dollar crashes and becomes worth nothing. This is what I have focused on mostly. This is what I personally expect to see happen.

In this case you will become very wealthy! Wealth after all is measured in what you can afford to purchase and own. Buying with precious metals, when they are astronomically high in dollar value, can't be a bad thing for you. Another good result.

Yet another possibility is everything will stay the same as it is currently. No hyper-inflation. No change. In this case you will have a really nice collection of precious metals (and possible a nice coin collection) to have and to hold and do with as you please. You will eventually be able to pass it on to your children or grandchildren, or whomever. Precious metals never go to zero worth, so your collection will retain value no matter what happens. Plus, you will still have that other 80% investment to use as you wish. This becomes good result number three.

As a matter of fact, I can't think of a scenario in which investing in silver turns out to be a bad thing!

Many of us have inherited items from a parent or even a grandparent. Often some old coins or jewelry and maybe even a stamp collection. Remember how it felt to see that big jar of old dimes? Then you find out they are worth way more today than when people were spending them many years ago! Now just imagine how little Johnny will feel about grandpa(ma) who bequeathed a couple-hundred Morgan silver dollars to him! And remember this is only if things keep going and currencies remain stable.

WOW! Thanks grandpa!

So there it is. No possibility of making a mistake by investing in precious metals. As long as it is only a part of your portfolio that is. Everyone needs to make their own decisions. Some people buy into precious metals exclusively. If so, they could end up required to sell some of it before the prices go astronomical. I have suggested investing and placing just 20% in precious metals. Some suggest 10%. But, I have never suggested to buy into precious metals 100%. I haven't done that, and I doubt if you know anyone who is a bigger proponent of precious metals than I am. 

If you can tell me how (using the method of 20% as suggested) it would be a bad thing financially for anyone, please explain  in the remarks below. I would like to know.

Chapter forty. Buying and selling using precious metals

No. I'm not actually doing this yet. But I'm planning yo do so and I'm conditioning my mind-set to think in these terms.

I have written in here before that we need to stop thinking in terms of how much "currency" we need to buy silver. I'm simply trying to follow my own advice.

Recent financial events have driven me nuts! Silver is up, stocks are up. Gasoline is down. Food is up. What is it with this insanity? How can we tell what anything is actually worth today? 

The base standard is the value of precious metals. In my opinion, that means silver (as you already knew). Therefore, when we have inflation - which is in reality a deflation of the dollar's worth in terms of buying power - we should have higher silver prices. When we suffer deflation - which means the dollar will buy more (sounds back-ass ward but that is how it is) the value of silver should go down in terms of dollars.

Right now we appear to be having stagnation! The dollar buys more gasoline (which drives the liberals crazy!) but fewer eggs. So, it is neither inflation nor deflation. I call it "stagnation". A brief internet search confirms my word choice, as in this quote from someplace in the digital world: 

"DEFINITION of 'Stagnation'

A prolonged period of little or no growth in the economy. Economic growth of less than 2 to 3% annually is considered stagnation. Periods of stagnation are also marked by high unemployment and involuntary part-time employment."

They are describing what we see about as accurately as I could imagine. They didn't apply it to silver and the dollar but I believe it applies.

So with this all said, we still must consider why these values fluctuate. Both silver and stocks were going up drastically a few days ago and today silver is down some and stocks up. That is in dollars of course. Remember, silver's buying power and actual value is stable and in reality simply does not change. It is the dollar, and dollar based products, which are unstable and fluctuate - never silver.

Could it be that a manipulation of the silver markets in dollars is occurring? I feel certain this is what we are witnessing. Ponder the following scenario:

Let's say you are one of the super-wealthy. Not just a multimillionaire but a multibillionaire. You make investments all the time through your minions who place these investments (bets?). Right away you discover that with all that wealth comes financial power. You discover that if you purchase vast amounts of anything you can create an artificial shortage of that item. Now, you wouldn't want to buy up a bunch of milk or other perishable items. You could invest in a futures market for milk and gain control that way - but storing milk would smell bad fast!

So, you have discovered that by buying huge amounts of anything and creating a shortage of it, drives the price of that item way up. So, you buy lots of the product and watch the price go up, then sell while it is high. Gaining vast profits all along as you do this. Your minions prevent this being detected - and there are tons of history to learn from to avoid being caught manipulating the markets. 

Enter silver. Applying what I just hypothesized, you buy tons of silver in pretty much any form. What happens then? Prices jump, of course.  Then while they are up, you sell off and reap huge sums of currency. Meanwhile, many people buy at the inflated prices and are stuck holding when it goes back down suddenly.

Look at the recent shortages of the American Silver Eagle.

US Silver Eagle. Often "Out of Stock".

"Out of Stock"

From time to time this appears when trying to buy one of these. If you were that dealer (this is cut and pasted from a dealer web page) why would you run out of something you were selling? Because the product is no longer available. Or, sometimes it's just that they can't produce it fast enough to meet the demands. So, you look around and find it, for a little more currency, someplace else. Prices go up.

As the little guy we must buy at the higher prices and help the super-rich get even richer!

So, what to do? The answer is simple. Never sell off! Stay the course. In the long haul you will win. The losers are those who give up. Eventually even those who manipulated the markets will lose some of what they acquired. They go on and buy up properties and other tangible items with these huge profits so don't feel sorry for their losses! They will never be poor.

When the dollar fails you will be "sitting pretty" as they say.

Getting back to buying and selling in silver . . . You may have a few rolls of silver dimes with which to buy gasoline. Two silver dimes for a gallon seems about right today, and will probably always be right. Buying groceries with silver means you may need four or five quarters for a big bag of food. A nice used car? Break out the big guns! Maybe two ounces of gold (Yes, I know - it's "gold", not silver - so use two hundred-ounce bars of silver then!). No financing available nor needed! Just drive away, and fill it up for a couple silver dimes.

As I have repeatedly said - nobody knows what exactly will happen when the financial system collapses. We all know we will still have our homes. Our cars. Our furniture. And, if you are wise, some silver or gold! Jobs? Some will be needed no matter what happens. Our people will still require services when currency no longer exists. We need trash picked up, cars repaired and of course food. All these things will require some medium of exchange. Maybe a new "dollar" will become our new medium of exchange? One valued in terms of silver and gold perhaps? 

If nothing else the crash of the dollar is going to be exciting. Buckle up and hold on - we are in store for a roller coaster ride beyond imagination!

Chapter thirty-nine. Market manipulation

If, as I believe, the dollar is doomed, why aren't the super-wealthy doing anything to stop this from happening?

By "super-wealthy". I am not referring to millionaires or multimillionaires. Those people will be hard hit in a crash and, if knowledgeable, will be trying to prevent it. But they are relatively powerless in this matter. Why? Because THEY ARE WAY TOO POOR!

There are families - dynasties if you will - who are far richer than a simple millionaire. They own huge things such as the Federal Reserve Bank. Yes - the Federal Reserve bank has owners! It sells stock. Not to you nor me of course. But just to select insiders who are among the super-wealthy, about whom I speak.

Here is a quote from: Board of Governors of the Federal Reserve System.

"The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year." (Emphasis mine of course.)

So, there you have it. A guaranteed 6% on a stock purchase! Why would anyone buy anything else? Well, for starters - YOU can't buy in! It is for insiders only. Not for we the people. Is JPMorgan Chase

a member bank? Yep. Of course they are. Other well known big banks are as well. You can go to the aforementioned web site and become utterly confused about the Federal Reserve and its owners. I suspect that confusion is deliberate. What do you think?

Next step in understanding why the super-wealthy aren't worried about the looming dollar crash:

Those people aren't investing just in currencies. They buy properties. They buy tangible assets which will continue to exist after the dollar is history and worth its weight in paper.

They buy gold. They buy silver. This in addition to buying land, buildings and most of all POLITICIANS! Yes, political "influence" is a top priority. How else can anyone explain how they get a 6% guarantee, PLUS the fact that our government borrows from them to print currency.

Think about that last part a little. Our government borrows from the private Federal Reserve to print currency. WHY? Couldn't the government simply turn on the printing press and create currency? The answer is YES! It COULD. and - it did! 

President Kennedy issued an Executive Order regarding the creation (printing) of money which put an end to borrowing from the Fed. It was Executive Order # 11110.

Here is a great web page explaining what he did: Kennedy defies the fed. Then - you know what happens to him . . .

Top is a United States Note (read on the top of it). Bottom is a Federal Reserve Note.

That being said, can we see what is going on? The super-wealthy are going to survive quite well when the dollar collapses. And it is going to collapse!

Is there a sure way for "US" to survive and prosper in the coming calamity?

NO! No sure way. 

Sorry. I'm sure my readers expected me to say yes, buy silver! But, no, that isn't a sure thing. The super-wealthy can manipulate even the precious metals markets. We see some of that happening even now. Silver drops from $34 to $15 an ounce in a few months. Why?  It is manipulated - that's why.

But if you persevere in your strategy, you may possibly come out on the other side well-to-do. The key is just that - perseverance. If you succumb to the market and sell off too soon you will lose. You need to hang in there. Never give up your stash. Until . . .

So, when do you sell? How do you know when? I haven't a clue. I do know that silver and gold have never been worthless throughout man's history. I know that calculating the value in dollars etc. is foolish. It has intrinsic value. It is worth bread and butter not fiat currency. So, when to sell is up to you. You must decide. Should you trade off for dollars when the dollar value of silver reaches $100 an ounce? If you do that and the next day the dollar is devalued or crashes what do you have then? Paper.

I am not writing this blog to give you instructions for investing nor for selling off your store of wealth. I am doing this for two reasons. One, is to make you think about these things and prepare in your own way for future possibilities and/or probabilities. Two, is to make ME think these things through as well. I don't have all the answers. Plus, I am poor as the proverbial Church Mouse.