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!