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 U.S. Dollar Inflation.
Precious Metals:
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At Seeking Alpha: Are The Precious Metals Percolating For A Big Move?
Cryptos:
Australia to Expand Regulatory Domain Over Cryptocurrency Traders
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Bitcoin warning: US taxman to crackdown on cryptocurrency loophole
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Buffett bashes bitcoin as nonproductive, thriving on mystique
Economy & Finance (U.S. Dollar Inflation):
What is “Stable” inflation? The average annual inflation of the US Dollar was was 3.22% between 1913 and 2013. The Federal Reserve banking cartel is continuing to target an inflation rate of 2%. They call that “a responsible policy” and evidence of “monetary stability”. But even if they are successful, then it is still organized theft of spending power. If they were truly “responsible” bankers, then the inflation rate would be zero. But with the full consent of the U.S. Treasury, the central bankers rob us through inflation, year after year. This is is a hidden form of taxation that benefits both the bankers and the Treasury.
Say that you are a newlywed just out of college and you have an inheritance windfall of $100,000 (after taxes). You choose to be a responsible parent and set that money aside for your new-born son, to pay for for his entire college education. So you put it in the bank–where most accounts presently pay no interest. At the end of 20 years, with constant 2% inflation what will you have? The equivalent buying power of just $67,297.13. (Not enough money to put your son through college.) They will have stolen 32.7% of the spending power of your savings. Now if your local bank teller pilfered 32.7% of your account balance, then he’d surely be charged with Felony Theft. But when the Fed-Treasury cabal does it through inflation, they commend themselves for their “responsible monetary stability”. And the Cheering Section at MS-NBC glows about “low inflation.” Most recently, the Fed has begun talk of targeting an inflation rate that will possibly be higher than 2%–what they now call a “symmetric” rate of inflation.
As you read headlines in the coming months about “higher prices” for everything from crude oil, to beefsteak, to .45 ACP, keep currency inflation in mind. Remember: These items have not become more valuable. Rather, most of the “rising prices” are attributable to your inflated Dollars simply buying less. Back when I was in college (in the early 1980s) a brick of 500 rounds of .22LR rimfire ammunition could often be found selling for $9. And now, after the big buying multi-year frenzy is over and the market is seemingly awash with .22, a brick sells for $35.
The bottom line: We are being legally robbed, in slow motion, and very few Americans realize it. This is just one reason why I recommend investing silver and other tangibles. Something tells me that the “money” I invest in silver today will far outperform constantly-inflating “Dollars” (Federal Reserve Notes), over the course of the next 20 years. The United States government no longer circulates sound money. Nay, they issue funny money. But you can buy some real money, for yourself.
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With no letup in home prices, the California exodus surges.
Commodities:
U.S. oil breaks through $70, dollar hits fresh 2018 high
Tangibles Investing:
BNP Paribas: Protecting Against Inflation Risk Via Tangible Assets
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!
For Precious metals, the time is ripe for Platinum to make a comeback. That market has dipped and should be starting it’s climb, thanks to an overpriced palladium market, and an oversold gold market. Platinum is rarer than gold, and traditionally valued higher until recent years, when gold has been king. The market for platinum took a hit when palladium became more popular as a catalyst in vehicle emission systems and was less expensive. But now palladium has been overpriced for a while, and a market correction should be imminent. If the gold market does start to decline, then I would expect further market correction on platinum to put it above gold eventually as it should rightly be. if you buy platinum now and it returns to it’s historical gold ratio, you could see 30-50% ROI. Silver likewise begs for a market correction. It may well be time to get out of gold.
When the oil market tanked in late 2014, 10,000+ people lost their jobs in Prudhoe Bay in less than a year. Given the state of the 40+ year old infrastructure of that location, and the other difficulties in operating in that environment that translate to higher operating costs, oil at $70 a barrel is probably not enough to compel Conoco/BP to ramp up yet. But I reckon it is definitely on the table in the Houston offices, should the price go up another $10. Meanwhile, a lot of the idled pump jacks in the Permian Basin and elsewhere are getting their on-switch flipped to the up position.
Greed is a politician’s pry-bar. When we were on the gold standard (before the Fed was created), there was no inflation. An ounce of gold pretty much bought the same box of goods for over a hundred years, more or less (accounting for production efficiencies for goods and services during that time, offset by the ever increasing availability gold on the market as it was being continuously mined). A silver dime (intrinsic value) pays for a loaf of bread today same as it did in the 1920s. But we sold ourselves out on the prospect we might be able to beat the competition if we just bent the rules a little. Like Mr. Rawles might say, if it ain’t tangibles, it’s value is suspect.
if I had a spare $100k and didn’t want to put it into the homestead, I would be putting it into PM for sure. Never sit on cash in a fiat based economy. Convert it as soon as you figure to be holding it for future investments, like a newborn’s college fund. The moment you stick greebacks in the billfold, they are already losing value. The quicker you unload them for something real, the less you lose.
Maybe someone here could help me. I have a lump of unknown metal, silvery colored, an ounce or two, from my Army days. Nothing nefarious about how I got it. But I have tried over the years to find out the background of it, to no avail. Is there someplace that I could send it, or a sliver, a sample, for analysis at reasonable cost?
Thanks
Re unknown “silver”: Take it to a high school or college chemistry prof. Or, try at a coin shop.
Ok. Thanks. I’ll give those a try.
Maybe I was “aiming beyond the mark”. I was thinking of professional company analyzers and assayers.
Buffet also missed Amazon and Microsoft…
Be very careful of all the people leaving Calif. I was in the Fl Keys when the dot,com bubble was building and people came in with lots of money to buy property. After all it was so different and fun. All was fine until the new people decided they didn’t like the chickens walking the streets and crowing all hours of the day and night. And didn’t like the people who lived in the mangroves, who had been there way longer than me. And we had to start doing things like they had done where they came from.
So be careful of excess new people moving into an area. I think Washington and Oregon first enjoyed the new people coming from Ca until they started changing those places as well.