patrick.net

Ex-Central Banker and economist John Exter points out this is a typical pattern in economic collapse. People are running into dollars right now to gain liquidity in order to pay their creditors. Next phase will be into real money as paper value evaporates.

Yes, the article is dated. No, what is happening the US is nothing new. The only thing different is the extent of the leveraging, and thus the size of the collapse that will ensue.

https://the-moneychanger.com/articles/simplex_munditis?utm_term=here

Nice - gold not getting killed thanks to the FED's 75 bp hike, or rather, that 75 bp is way too little to staunch the inflationary flood.

It took almost 20% interest rates to kill gold the last time when it peaked above $900.

NuttBoxer says

Next phase will be into real money as paper value evaporates.

What will be this "real money?"

HeadSet says

NuttBoxer says

Next phase will be into real money as paper value evaporates.

What will be this "real money?"

It will be commodities, like it always is.

This isn't the first time this has happened.

There were tally sticks back in the Middle Ages, but that only worked in a feudal system. It was basically a loan.

richwicks says

It will be commodities, like it always is.

Well, at one time here in Virginia tobacco leaves were currency.

HeadSet says

richwicks says

It will be commodities, like it always is.

Well, at one time here in Virginia tobacco leaves were currency.

That's a commodity.

It might be liquor or sugar. Gold and silver are just harder to get, so they are more valued, so they can be traded for more.

Gold is down about 25% from its recent 52 week high and about the same it was in 2011.

ad says

Gold is down about 25% from its recent 52 week high and about the same it was in 2011.

No, it was below $1,400 back then, as I recall. It's $1,700 or so now. When it gets below $1,500 (if it does) back up the truck.

currency
kûr′ən-sē, kŭr′-
noun
Money in any form when in actual use as a medium of exchange, especially circulating paper money.
Transmission from person to person as a medium of exchange; circulation.
General acceptance or use; prevalence.
The American Heritage® Dictionary of the English Language, 5th Edition.

I suspect metal coins will still be in service after the fiat paper currency has inflated itself away.

Gold to silver ratio has been at 93 the past couple of days. Finally fell a tiny bit to ~91 today -- on the strength of silver. One thing we know is that a ratio that extreme WILL NOT LAST LONG. That said, there's two ways to correct: a falling numerator or a rising denominator.

Gold should only be worthwhile to buy if you physically have the gold. If you just have a piece of paper saying you have gold then you don't have gold. Buying the paper defeats the whole reason to even want gold.

And just to be clear, the 90+ ratio was reached with both gold and silver declining.

Gas station attendants wouldn't know gold from tungsten. Neither would the clerk at the supermarket.

Having physical gold would just get you robbed.

EBGuy says

Gold to silver ratio has been at 93 the past couple of days. Finally fell a tiny bit to ~91 today -- on the strength of silver. One thing we know is that a ratio that extreme WILL NOT LAST LONG. That said, there's two ways to correct: a falling numerator or a rising denominator.

Man, that was an epic trade out of silver in 2010ish. iTulip (RIP) to the rescue on that one.

GOLD! IS! THE! BEST! HEDGE! AGAINST! HIGH! INFLATION!

HeadSet says

What will be this "real money?"

Gold and silver, as defined by the Constitution. A dollar is not a piece of worthless paper, it actually refers to the standard measurement of a precise amount of silver. The fact that most people don't understand these basic concepts shows you how good central bankers are at lying.

EBGuy says

Gold to silver ratio has been at 93 the past couple of days. Finally fell a tiny bit to ~91 today -- on the strength of silver. One thing we know is that a ratio that extreme WILL NOT LAST LONG. That said, there's two ways to correct: a falling numerator or a rising denominator.

Anything over 75 is typically considered high, but that ratio has been holding for years now. The swing back to silver should have happened already, but manipulation keeps postponing it. Once it's hits, will drop hard and fast, as silver shoots up to never before seen values.

After the Mongols conquered China, they became quite enamored of the Chinese invention of paper money. They used and abused it throughout their empire. Once the Mongol empire fell, the Chinese stuck to silver for the next 800 years. OTOH, the insistence of China on hard money led to the Opium wars and eventual collapse of Imperial China (thanks you limey mfs).

Misc says

Gas station attendants wouldn't know gold from tungsten. Neither would the clerk at the supermarket.

Having physical gold would just get you robbed.

So since the dawn of time, economies have only existed for smart people? No shepherds, no stable boys, no ship hands?

The belief that fiat currency is all that works is the height of arrogance and central banker brain-washing. A hundred years standing against thousands where gold and silver were the only recognized medium of exchange.

EBGuy says

Gold to silver ratio has been at 93 the past couple of days. Finally fell a tiny bit to ~91 today -- on the strength of silver. One thing we know is that a ratio that extreme WILL NOT LAST LONG.

I've seen it go to 120:1.

Buy then, but you will need to purchase on an index fund. There will be a huge divergence between physical and the index, that will not last forever. When the divergence calms down, if you really want the physical, purchase it then.

stereotomy says

After the Mongols conquered China, they became quite enamored of the Chinese invention of paper money. They used and abused it throughout their empire. Once the Mongol empire fell, the Chinese stuck to silver for the next 800 years. OTOH, the insistence of China on hard money led to the Opium wars and eventual collapse of Imperial China (thanks you limey mfs).

I believe it was a Chinese emperor who issued money made of wood. As with all bad money, there were laws and thugs forcing it's use.

Onvacation says

I suspect metal coins will still be in service after the fiat paper currency has inflated itself away.

Many civilizations thought the same thing. A huge problem with currency is there is a set amount in circulation, not at anytime but period. That's IT! There isn't any more available.
So when you get your sack of freshly minted coinage for your stipend for helping the Roman legion beat back the Anglos in the Isle of the Saxons, and you bury your loot and riches on a road to Damascus. While on a journey to help Emperor what's his face, beat back the Persians, then you die in battle. All of that coinage is forever taken out of circulation and will plunge the world into the dark ages.
I don't know why Archeologists are so dumbfounded on the Dark Ages, by time they came about. Most any metallic object that was worth anything, that could be collected or melted down and converted into the conquerors currency was stripped from the Civilized cities. They simply ran out of money to pay people to stay in the City and provide safety in numbers. So they all set out to the country side to fend for themselves. Where commerce and records weren't important.

This is one of the biggest lies ;perpetrated by central banking. That you need zillions of pieces of paper/number in a computer in circulation in order to flourish. Our most prosperous time ever as a country was the early 1800's after we dumped fiat paper and went back to real money.

The value of good changes very little over time, as the amount of work, as a measurement of time, changes very little. Gold and silver lend themselves to incredibly precise measurements. So stop thinking liking a central thief, and start thinking like a free man. Gum for a penny, and bread for five cents, this is the normal we need to return to.

If gold and or silver prices look like they are going to skyrocket because the major banks are short a few tens of thousands of tons, the government will simply outlaw the commoners from owning the physical commodity.

They have done it before. I will bet they will do it again.

stereotomy says

Man, that was an epic trade out of silver in 2010ish. iTulip (RIP) to the rescue on that one.

Here's the chart for the silver run up back then. Still in awe of Ducky as he traded physical...

Misc says

If gold and or silver prices look like they are going to skyrocket because the major banks are short a few tens of thousands of tons, the government will simply outlaw the commoners from owning the physical commodity.

They have done it before. I will bet they will do it again.

If this happens, I'll be visiting the Marina Trench.

This isn't 1933 anymore. NOBODY that has any precious metals trusts the fucking government now. They don't confuse patriotism with obedience to the government.

Want to bring down the government? Just get everybody in the US to buy 2 ounces of silver per year. That's the world's supply. Technically, under $70 but it will become unobtainable. If people band together, it's easy to drag the assholes to their knees.

I think people are starting to very slowly realize their power. There's a bunch of executive assholes, but if their underlings rebel, they're fucked. We saw it in Canada, and some poor woman is in prison to be made an example of. This is desperation.

The Fed keeps $juicing gold with their hand-wringing. Kissing $1780 as I post.

Yes, PM's are a rigged market. It's more about when they can't focus their attention on the rigging, because there's much bigger SHTF brewing. Gold is one of the singing canaries in the coal mine.

EBGuy says

stereotomy says

Man, that was an epic trade out of silver in 2010ish. iTulip (RIP) to the rescue on that one.

Here's the chart for the silver run up back then. Still in awe of Ducky as he traded physical...

That was an epic trade.

Gold holding strong, kissing $1800 briefly earlier today. Where are those multiple 75 bps hikes? I want gold at $2500 and mortgage rates at 10+%!

Misc says

They have done it before. I will bet they will do it again.

Like outlawing guns, and shutting down the Pirate Bay? Good fucking luck.

richwicks says

They were paying for storage, so yes.

You are saying that it makes sense that a commodity like oil can be valued at $50 one week and the next week its valued at $0 and the week after valued at $100. That seems kinda crazy to me. But i do agree that "paper oil" could be manipulated like that, just like all other paper commodities. I'd like to see if something like "lean hogs" could go down to $0.

stereotomy says

Here's the chart for the silver run up back then. Still in awe of Ducky as he traded physical...

You mean when he claimed to have bought at the bottom and sold at the peak a few days after it nosedived? Like the BTC players..

Gold/silver ratio at 96. Silver is at a 2-year low, but it’s not gold that will determine what happens next, this analyst says.

komputodo says

Like the BTC players..

For a while the "market cap" (calculated by multiplying the price of a stock by its total number of outstanding shares) of BTC was more than silver, and many major companies. The price of BTC crashed.

The spot price of silver is currently around $18 an ounce. If you actually wanted to buy an ounce of silver you would have to pay a premium. If you wanted to buy a Silver Eagle you would have to pay over $30 per Troy ounce. If you wanted to buy a thousand ounce bar (smallest premium) you would still have to pay a couple thousand over the spot price.

Dollars, Euros, crypto, and the paper metal market ounces can be created ad infinitum by fiat. I suspect the difference between the spot price of gold and silver and fiat will increase until paper and e-money become worthless.

This fiat system can't go on forever.

Channeling MEGA from iTulip here:

GOLD IS GETTING KILLED!

I guess now that the pound and the Euro are going tits-up, the USD is the last man standing. The fed funds rate increases play in nicely to dollar strength. It might end up just like the housing bubble implosion. Gold tanked initially-mostly because of liquidations to satisfy margin calls, then hit $1920.

I want to see mortgage rates top 8% - that represents a 40% decrease in housing prices based on 10% price reduction for every 1% 30 Year MTG rate increase.

stereotomy says

GOLD IS GETTING KILLED!

SPDR Gold Trust
peak in 2011: $183
current price: $151.45

It's kind of bizarre how the dollar is doing so well against everything as the world turns to shit.

Patrick says

It's kind of bizarre how the dollar is doing so well against everything as the world turns to shit.

Adjusted for inflation, the S&P 500 is only about 2.3% above its February 2020 level. So many stocks having taken a +50% beating reminiscent of the dot com bust.

,

Patrick says

It's kind of bizarre how the dollar is doing so well against everything as the world turns to shit.

The reason is that most central banks have been printing far more money than the Fed, Japan, ECB etc. Everything is relative and while pretty much all currencies are being debased the Dollar may be stronger than most. Actually a little.bit of money printing is fine to make up for those notes that get destroyed/lost each year, but it's probably 0.0000001% of the Feds yearly printing.

mell says

Patrick says

It's kind of bizarre how the dollar is doing so well against everything as the world turns to shit.

The reason is that most central banks have been printing far more money than the Fed, Japan, ECB etc. Everything is relative and while pretty much all currencies are being debased the Dollar may be stronger than most. Actually a little.bit of money printing is fine to make up for those notes that get destroyed/lost each year, but it's probably 0.0000001% of the Feds yearly printing.

Inflation isn't directly linked to prices, it's directly linked to the money supply. If the Fed increases the money supply by 2%, that's the inflation rate, they are the same thing. Keynesian economics has perverted this definition.

The reason the target inflation is 2%, is that at the time the Fed was allowed to be created, that is how much more gold was added to the system at the time. The Fed just printed more dollars than they had gold, and they went bankrupt in 1933. Instead of beheading these assholes, or even just jailing them, or even firing them, the US government just debased the dollar and did nothing.

The criminals continued to act as criminals, and once again they defaulted in 1971.

And this is our final default coming up. This is why there's all this stupid talk about "the great reset".