Here are the latest items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of JWR. (SurvivalBlog’s Founder and Senior Editor.) Today’s focus is on greenback cash.
Precious Metals:
Spot silver took a 0.65% bounce on Friday, up to $16.608. But it is still grossly under-valued vis-a-vis gold. For the time being, I recommend that you make any new precious metals acquisitions in the form of either silver or platinum, not gold!
Stocks:
Over at MarketWatch: The stock market will remain glued to the inflation story
Commodities:
Next, at FarmFutures.com: Grain market week in review – March 9, 2018
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India may see record sugar production of 29.5 MT in 2017-18: ISMA
Economy & Finance (Greenback Cash):
With all of the recent talk about digital currencies, I want to spill a little e-ink and extol the virtues of greenback cash. By that I mean printed Federal Reserve Notes (FRNs.) While still subject to the invisible taxation of general price inflation, paper Dollars still have a few advantages over competing currencies–including electronic currency. The first of these is the most important:
- Privacy. (Cash transactions in and of themselves do not create a paper trail or electronic trail.)
- Readily recognizable.
- Good design features that have kept a low rate of counterfeiting
- A fairly low inflation rate.
- Acceptance beyond our shores. (Dollars are de facto currency in several other countries. They can also be traded for local currency in nearly every country.)
- Compactness (versus barter goods, which tend to be bulky.)
- Light weight (versus barter goods, which tend to be heavy.)
- Legality for settling “all debts, public and private”. (Although this is now slipping away.)
- Utility in the midst of a power failure.
- Utility when away from cellular phone coverage.
- Utility for conversion into precious metals.
Of course there are just as many drawbacks. For example, the inclusion of a metallic thread in FRNs now makes them capable of being detected if sewn into clothing. But I am thankful that I’m not now carrying a pocketful of Bolivars!
Tangibles Investing:
I found this piece quite useful: Classic Car Inspection Checklist by Schumacher Secure.
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And here is a brief video concentrates on car bodies, doors, and paint: Inspecting Classic Cars Before You Buy
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. So please see our Provisos page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often “get the scoop” on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!
Gold is great but the post ya’ll had about the $20 piece from 1850 being worth$1830 today is very misleading. Annualized evenly that return is 2.38% average year over year. People who bought and held beginning in 1975’ish forward have a real rate of return (beginning of outrageous gov’t spending). 1850-1974 prices are essentially flat and a loss when weighted against inflation.
Not bashing, just say’n. 😉
Take a $1 bill out of your pocket and stare at it really hard…it won’t ever be more than $1 (it has no yield), and gold is no different. To produce any kind of interest on a $1 bill you must give it to the bank, and then you take on the risk of fractional reserve lending, businesses unable to accept credit cards during disasters, bank failures, etc.
You are right, nobody is gonna get filthy rich off of gold, but it wouldn’t hurt to have a small portion (5% of investible assets?) to hedge against trouble.
Cash….I’ve been having difficulty lately with stores accepting $50 and $100 bills due to forgery problems. Supposedly these bills will pass the ink test.
I never use anything larger than a twenty.
Might take up a little more room in the wallet but at least the stores will accept them without question.
On precious metals vs-a-vie fiat currency:
Paper money in the end is basically just toilet paper or kindling. Precious metals will always, always have value. It has been so for at least 5000 years. Nothing has changed. If the worst happens, there will be someone who will always accept precious metals in trade for goods. That will be in preparation for a time in the future when a new currency based on precious metals replaces fiat money. Until that time, use your fiat currency wisely while it still has its imaginary value.
In the end, paper is just that, paper.
Read Ferfal on the siege in Yugoslavia. After a few weeks, only gang leaders (who had soldiers to protect their assets) would take precious metals, and even so, only at a huge discount. People would only accept usable or edible items to barter. A lighter was worth more than a gold coin.
A water purifier (which no one had) would have been incredibly valuable.
If I remember the book, he lost a family member to bad water.
I was in Cambodia recently. Dollars are the medium of exchange with the local currency regulated to being given as small change.
Do be beware that dollars have to be perfect. Even slightly worn bills or a bill having a small tear of a quarter inch in one edge will cause banks and shops to reject it.
All paper- bills, checks, bonds, stocks, equities, and all contracts denominated in units of fiat currency are merely IOUs, and are only as good as the person or entity who promises to pay.
If they refuse payment of goods or services for their IOU, you are OUT the amount of the IOU.
If the government says that green money is obsolete and this new red money is the new legal tender, all your cash is no good. If a company defaults on its bonds, you are OUT. If the bank refuses to honor a check, you are OUT. Et cetera, et cetera, et cetera.
The only REAL acceptable payment is tangible assets- gold, silver, diamonds, land, food, ammo, etc. . Can you convert your sweat, mental labor, or payments owed to you to these ?
EVERYTHING ELSE is an IOU and relies on someone”s honoring their obligation.
Regarding gold not “going up” much in value since 1850, until 1971 we were on a de facto gold standard. Gold served its purpose as being money during this time. Most of the inflation has happened since 1971 when gold was officially $42/oz. If you bought gold in 1976 when it was legal to do so again, you would have done very well.