January Article 1 of 2

 

January Article 1 of 2

*

CRYPTO AND SILVER

( note: This was originally written in May 2021. At the time, our fracking production was down much further. It is still down to the point it assures an economic collapse, but rather than 75% loss we are currently at about 50%- fracking, not conventional. They were about half and half. So, that makes for a current nine million barrels a day total rather than seven. Still bad, considering how much we need and how much we still must import, if anyone is selling us oil )

*

If you've followed The Survival Podcast with Jack Spirko ( and I recommend that you do ), you know the guy is gay over crypto-currencies. I of course do not share his optimistic ollie high tech future where we can rely on a pretty glittery network of wires hooked up to computers to do anything, but Jack is a prepper in the Backwoods Home vein and I am merely the crazy guy on the street corner shouting the end is neigh. So of course we are not going to agree on a lot of things, like his projection of low crime out of ghetto areas.

*

But the thing about Spirko is, you simply cannot be mad at him for his views. He comes at any problem with so much logic and intelligence that any disagreement is only philosophical and you can listen to his without mentally melting down as you so easily can with so many other prepper guru's who have a great marketing campaign, but who conduct that from a position of their head up their ass. I won't mention any names, because you don't need me to. Any reasonably intelligence person can smell out the whiff of feces, without too much effort.

*

And Jack, well, no matter what he is talking about, if you don't learn anything- which you usually do, 99 out of a hundred times- he is at least always interesting. So, keep all that in mind as we discuss the latest detail he brought up on crypto's. He has come up with many justifications for crypto over the years. They MOSTLY make sense from his paradigm, I grant you. He compares the high cost of Oil Age warfare propping up the dollar to the high cost of the computer infrastructure behind crypto. That is true. I just think his LiberTardian views muddy his perception that global currency dominance is NOT free market based, but rather monopoly on force.

*

He kind of reminds me of Denninger at Market Ticker, who screams and yells at his readers for not being the pitchfork and torch bearers, burning out the corruption whenever he gets on his hobby horse of medical industry dysfunction. Not realizing the bigger forces behind the curtain the puppet show is in front of. Spirko's latest crypto justification is to compare them to diamonds. Diamonds have about zero worth, a mere commodity that an artificial monopoly gives value to. I agree completely. I have ALWAYS thought so, even as a very young adult spent in otherwise complete ignorance besides a few bugaboos ( college scam, mortgage scam, car scam ).

*

So, he is essentially saying that crypto are just like diamonds, only given value by an article of faith held collectively. Bravo! We finally agree completely on something he said about crypto. And no Jack, I do not care about all the other crap like secure remote purchasing. If I think the Internet will fail, as it has as much ignored maintenance as our bridges and dams and electrical grid, why would I think anyone but large corporations or government entities can continue being wired together ( in others words, hint, hint, as small Mom & Pop retailers are crushed by Corona, to shrink those eating the pie, Internet cost and availability will crush most small business owners using the Internet )?

*

I think we both agree about crypto. Or diamonds, or gold and silver. In that a trading chit can be anything everyone agrees on. The items themselves do not matter. ANYTHING can be used to trade. Gold and silver do hold the edge because of near indestructibility, relative scarcity ( especially silver from Industrial Destruction ) and about six thousand years of universal acceptance behind it. Of course, no, you cannot easily trade it at a distance without financial penalty. The Post Office spent many bankruptcy years panicking at its own irrelevance and threw subsidized postage at Amazon, and is now busy scalping all other customers to make up for that.

*

I think we can safely say after fifty years or close enough, looking at Amtrak and the Post Office ( and even LEO's, if you look at drug profit asset forfeiture as a profit center ), the only thing worse than a government run organization is a for profit run quasi government organization. Government entities are supposed to lose money. The government can minimize that. Add in “for profit” and inefficiency and incompetence spikes, if not also corruption. You USED to be able to cheaply and safely send bullion through the mail.

*

The problem of course with diamonds is that not everyone thinks they have any value. You know the guy who sucked down too much crack, as he got older and weaker but still needed to keep his job comprising of some degree of physical labor, then in desperation goes to a pawn shop and wants next months rent from an old beat to crap power tool? And the guy there offers him like $10 on a former $200 item? Yeah, even adjusting for the profit mark-up, the pawn dude knows the worth of the tool. It is NOT what the owner would like to think. You didn't just buy the tool, you bought the rental cost of the space it was in and the labor it took to sell it, on top of the cost of manufacturing.

*

A $200 tool, if hawked on the street, sells for $175. He bought it for $100. The minute you buy it, you have a $100 tool. The minute you use it, it falls from there ( now, obviously, supply and demand play a part. I'm just pointing out mark ups ). A diamond is even worse than that tool, and you can get a fair assessment of its value as soon as you take it to a pawn shop. I was buying used jewelry for pennies on the retail dollar back in the day ( and I only did that because the then wife loved diamonds. To me, the little gold or silver in there didn't come close to its cost ).

*

Crypto is like diamonds in that the cost and price are so insanely far apart. Yes, BitCoin was born with artificial scarcity built into it, and now the tech sector guys are flooding the market for ANYTHING of value besides their central bank liquidity artificially pumped up dog crap stock, so the crypto prices are once again on the rise. Not only are we reliving the Tech Wreck, idiot day traders once again on a get rich quick tear, I'm noticing reverse mortgage TV commercials and radio ads for other exotic financing for housing, a rerun of 2005-2007. We can make excuses for them, desperately seeking returns, pensions in trouble, but no matter where you are in the financial market, you are playing with tulips.

*

Dollars are worthless toilet paper. But my criteria for a trading chit are what you can take with you on a trip, lost in the Amazon jungle, stumble into a sleepy village with one tiny store alongside a malarial swamp, and be able to use it to buy desperately needed medicine, food and medicinal spirits. Dollars fit that role, even as I know as we speak it is a dying global currency. Silver and gold qualify. Diamonds do NOT. I understand I am in a minority, but if I was fleeing the Nazi's I'd rather have a roll of gold coins stuck up my ass rather than a single diamond.

*

Never in my life have I seen a diamond, read about their market prices, or owned one, and said, oh, gee, wealth. NEVER. I have a complete LACK of faith in diamonds, as I do both credit cards and crypto's. Because none of them will do you a damn bit of good in the jungle store. Jack SHOULD have been old enough to live through the fear of thermonuclear destruction. Perhaps he is young enough that the demise of the Soviet Union meant the end of nuclear threats. He didn't live LONG enough for the threat to be life long. We grew up knowing all the pretty glittery machine could be wiped out instantly. But, I'm not picking on Spirko. Plenty of people, old decaying fossils barely shuffling along the golf course greens, they don't think all this can end in an instant, either.

*

If enough people think Digital Is Dandy, crypto WILL become a trading chit. I personally just look at it ( digital anything ) like the dying dollar. Convenient and cool while it works, cold cow crap when it doesn't. Does the radiation from a tablet phone fry your brain to the point you are living in a online role playing game? Because that is the only explanation I can think of that magically gives digital tools any value. I'm not speaking of computers, but online. Computers are bad enough. Online enslaves us all in its insipid spell. It can be used for good, and its evil minimized or ignored, but I think it does influence most of us. I was just as bad.

*

I have never touched alcohol again because I couldn't control myself with it. The same with the Internet. I was Half A Day Online Addicted. In a way I'm glad Google went Full Retard Censor. If there had been more programming in our industry, I never would have gotten off the recliner, or picked up a book again. Lots of folks limit online and just get the benefits and none of the problems, but I wonder what that ratio is. So, perhaps my hatred of crypto is unduly influenced by my former addiction. A very real possibility, I grant you. But, also, let's consider the possibility I'm merely Collapsing Now And Avoiding The Rush.

*

Even Greer is more paranoid than Spirko, and that ain't saying a whole heck of a lot. But, I'm REALLY honest not here to judge the man over his optimism. As he advises, ten percent of your wealth in crypto ( or whatever you can afford to gamble ) is probably something all of us can afford. I won't touch it with free money AND your dingus, but I'm just weird in that I think we have ZERO chance of avoiding the collapse. Your mileage may vary. But, let's refocus here. A store of value, or wealth, or just stable trading chits, CAN and will change in time. Up until and almost but not quite during and after World War One, the British pound was not only the worlds currency, it actually WAS backed by precious metal almost until the end.

*

You could say the Pound died in the trenches, victim to the needs to finance a war an already diminished economy ( following the coal production ) was unable to afford. Or, you could say that the time was necessary for a OIL based currency to take over from a precious metal backed one. The Dollar was that, not because we had such a great economy, although we did, but because we were the biggest oil producer. A gold backed currency could never finance an industrial global economy, but an oil based one could. So you could argue that oil backed money was a TEMPORARY currency. How could it not be, as oil has to run out ( everyone DOESN'T say, as they believe in the Hollow Earth Theory, filled not with jungles and dinosaurs but petroleum )?

*

I suppose it is a very SHORT leap from a diminishing commodity backed currency to a digital currency, both backed by transient wealth. In the great scheme of things, one soon to be obsolete currency is as good as another, as long as we can all agree on it. One monopoly on force entity backed fiat is as good as any other, as long as Pedro in the jungle shack store is eager to accept it. NO currency, government backed ( fiat ) or private market acceptance backed ( gold and silver ) is really worth anything at all ever. It is ONLY worth what it can buy.

*

Your crypto is only worth what it can buy in a online globalization world. Your dollars or Euro's are only worth what it can buy in a world full of nation states. Your gold and silver are only worth what they can buy as long as SOME trade exists, be it by bicycle, boat or mule train can deliver over distance. So, for a time, your gold and silver will be worth ZERO, as the civilization collapse Dark Ages revert to total localization, no entity having enough surplus energy to divert to protecting trade. Your beloved Private Market will stipulate, long after the collapse, that gold and silver are valuable trade chits. But without government, no trade routes can be protected, to be able to use those precious metals.

*

Libertardians always make the fundamental mistake of assuming that because the market is more efficient, we can have private armies or police. No, we cannot. Use of force requires surplus energy, and the monopoly holder of that energy is the government. Private business could indeed own the surplus, but who protects it? It can protect itself only through use of force, and the only way to win that war is to prohibit all others from being able to deploy the same amount of force. Libertarians think there will be a gentleman's agreement among companies to NOT use excess force, or that consumers will boycott those breaking that agreement.

*

Well, guess what dissuades those customers from such an illogical view? The monopoly on force that protects trade. Because with trade, we can all survive nicely, and without trade we can all, mostly, live a nice Bush Bitch existence. Beyond a Stone Age life, you need trade. No one area provides everything you need to have any other advanced materials or supplies. So, government makes possible trade, with the threat of not allowing trade, and only a government can get the surplus energy, by force, to protect trade. And only government has the trade to protect all those private citizens and corporations or businesses from other attacking governments. You cannot philosophize away government.

*

( Short pause to remind everyone I was both an Austrian economist and a Libertarian for many years, before I realized my many grave mistakes ) Now, let us divert our focus to silver. You know I've hollered at you for years about buying silver yesterday, I warned of shortages prior to Corona, I kept bringing up Peak Global Silver in 2008 ( US Peak in 1998 ), and kept reminding you that we were ONLY at Industrial Cost, NOT monetary cost ( price discovery ruined by the derivatives market by the bankers ), and that would change soon. And, again, for you Deniers, I did all this BEFORE Corona or PetroDollar Death.

*

Well, boys and girls, it brings me great pleasure to wallow in my perfection. Today, as reported in the podcast Quoth The Raven # 246, we have a few issues when it comes to silver. One being, silver is selling at a price of 1/80^th that of gold. Not exactly, if you go by a different day, but I believe an Average was utilized. It takes 80 ounces of silver to buy one ounce of gold. Now, you know, I know and Ross Perot even six feet under knows, that is an artificial price. Back when we had gold and silver as money, the ratio was 20 to 1. All through ancient history prior to carbon fuels, you always got about 15 to 1 up to 20 to 1 when you engaged in mining. That is the ratio pulled out of the ground, and a currency based on that ratio is stable over time.

*

I told you, when I was buying silver ( not a lot, but what I could afford as I was also buying Lead and Brass ), that silver should be a minimum of $100 in 2019 purchasing power, NOT the $18 I was spending. That would have been bringing the 15 to 1 or 20 to 1 ratio back. And that price was JUST the mining cost differences. Both precious metals should be oh so much higher, if it was valued as real money. Today, the banker manipulation treats it as mere industrial metal ( to artificially prop up the dollar ).

*

If you inflation adjusted the 1980 cost of silver ( the Hunt Brothers price increase, a good gauge of what silver could do during an economic collapse, as a high demand low supply reflection ), you would have about $200 an ounce silver. And gold, twenty times that. IF gold and silver truly followed free market pricing. So I told you, near two years ago, $100 silver was a minimum true price, and that is without inflation adjustment, JUST 2019 purchasing power.

*

So, what happened in the last two years? We had a tiny deficit of supply, the two year total of Five Hundred MILLION ounces shortfall, demand to supply ( if I'm recalling correctly, global mining of silver is about 700 million ounces a year-but double check me on that ). But would you like to know what is exponentially worse? Exponentially, as defined by the man on the street, meaning Metric Butt Tons MORE. The mines are only producing eight ounces of silver for each ounce of gold, ONE HALF HISTORICAL PRODUCTION!!!

*

You could throw a lot of static at that, distorting the signal. Corona shutting the mines for months, decreased demand of regular metals means silver as a piggyback product not mined. But let us not lose the Big Picture. China recovered economically a good six-ten months ago, and while not factory producing at peak, they are producing at new normal. Yes, tin and copper and etcetera metal will be mined less to reflect lower finished product production, and 70% of silver is from those mines ( only 30% comes from silver only mines ), but demand for silver is huge.

*

I'm not stressing about the silver supply contracting. It WILL rebound, somewhat. I'm afraid of the cost of the rebound. Let me make this very clear. The world wants silver. The western banks want a very low silver price, to defend the dollar ( only a dollar monopoly gives them their wealth ), a price below production. Of course production is crap, the price is too low. In the end, one is going to win, either dollar control or silver price discovery. And not only is silver demand exploding, because the supply is on a downward trend even with a rebound of the current low supply ( and hence, it looks as if industrial users are joining monetary value buyers pushing up demand ), the other pressures on the dollar are exploding.

*

I've told you for years to expect the death of the PetroDollar. I know, I realize that is VERY frustrating, because anyone can call the collapse, but without an idea of a timeline it is difficult to do any planning. As far as I was concerned, 2005 was the only date you needed to know. As in Peak Global Oil, after which everything HAD to fail. Hey, I'm not a stopwatch, I'm only a crier of wolves. Sorry. But I do realize your frustration. Why do you think I'm so happy to be getting files from the experts, who are much better at the timing ( in years, rather than decades )?

*

I've kept you updated on the PetroDollar decline, such as when the Saudi's started taking Chinese currency. Just the fact that they had the balls to break the dollar monopoly tells you that the US is now a weak ass bitch, that the PetroDollar IS a zombie already, and that if we cannot keep a few Sand Negro's in place, we have no leverage against real threats such as Iran, Russia and China. Who are the key players in the New Eastern World Order. As in, everyone in the Old World, and the US was NOT invited to play. Do NOT mistake my reporting this as any kind of joy on my part, past the regular gloating. The end of US hegemony means I'm just as screwed as the rest of you.

*

The newest reports seem to be pointing to the end of the US led SWIFT system, replaced by the Chinese Digital Yuan and the Shanghai Gold Exchange ( think of SWIFT as the government version of Western Union, how governments pay each other ). Our control there let the US embargo those not playing ball geopolitically. Its initial partial replacement, now years old, let Russia and China and friends pay each other without being controlled by the US. Yes, ANOTHER death blow to our Force Monopoly along with the Saudi's replacement of the dollar. And remember, US Treasuries are held by countries to use as currency buying oil priced in dollars. It has been at least five years since any of those were sold by us. We're just buying it ourselves.

*

Lastly, not only is the SWIFT system and the Petrodollar under more pressure than ever before, the COMEX is failing, badly. That is the precious metal exchange we use to derivatives manipulate the silver price. That was in trouble years ago, prior to Corona. Remember when Germany wanted its gold back? I believe it took about four years to give it all back to them. Because despite its claims, the exchange AND the banks controlling it have no precious metal reserves. None. Or, if any, probably almost none, each ounce tremendously leveraged by electric claims of metal.

*

Remember 2008? Of course you do. Well, everything that caused that, the banking system doubled down on. Derivatives, leverage, fraud. When our system failed to grow ( and the fracking oil that was our only growth was ONLY enough growth to diminish the amount of negative growth, not real economic growth ), we had to flood the system with printed wealth, as the only way to kick the can on total economic collapse. Inflation at a minimum of ten percent a year ( it would have been much worse with any kind of money velocity ) was GREAT, as the alternative was Greater Depression. But the Fall of 2019 was THAT rescue operation failing.

*

Everything you are seeing is proof of concept, the economic collapse of the American Empire finally at hand. Corona was tapping the brakes, but our economic competitors we can no longer control are taking advantage of our troubles ( that, really, we only have ourselves to blame for ) and those trends already five to seven years old are accelerating. And like Hemingway's bankruptcy, they are Very Slowly, then All At Once. You've already been warned, multiple times, so do NOT be surprised with the coming Cliff Plunge when it happens. The timing? Well, again, all I can say is Prepare Yesterday for the collapse Tomorrow.

*

In 2019 I told you to buy even just five ounces of silver, if you could afford nothing else ( $100 at the time ). That locks in your $200 an ounce purchasing power store ( I tell you $100 an ounce, as that is a MINIMUM, but I cannot help but think twice that is not only feasible, but STILL might not even be paranoid enough ). That was a ten to one return, but this isn't about investing. It is about purchasing power protection. It will be how you can still eat, before the total collapse. And unlike crypto, it takes a much smaller leap of faith. With crypto, you are betting on everything NOT going wrong. With silver, you are better on everything getting worse.

*

I simply have zero comprehension as to how anyone could be confused as to what bet is better. Did you miss the part about Saudi Arabia winning its bid to replace our currency ( of course, yes, the bulk is still dollars, as far as I know. The point is, taking a competing currency means we lost the monopoly. Just like Britain lost its global currency to the US dollar, and their loss of empire followed. Still confused? We are ONLY pumping one third to one quarter of our own oil. The rest of it that we use comes from foreign lands. The PetroDollar was FREE oil, oil for our debt. If they do not take dollars, we cannot get their oil. 75% of our oil, gone. DO THE MATH!!! )

*

Now, don't misconstrue all of the following with instructions to go All In on silver. As I said, silver is only worth what it can buy, and you can only buy what is available through trade. I would not touch gold or silver until you have no more room for food, and you have more ammunition than you'll ever need in two generations of tribal warfare, plus a collapse, Boogaloo AND die-off. I would buy ammunition at $2 a round, if you didn't have enough, before I bought silver at $20 an ounce ( and we know it is going way above that, real street price ). I would buy flour at $2 a pound ( NOT a bag, as currently it is priced, a POUND, if I didn't have enough food and couldn't find rice or wheat ) before I bought any silver. Silver is just surplus wealth inflation proofed.

*

And if you do NOT have an embarrassing surplus of food and ammo, you do NOT have any surplus wealth, period, the end. I'm just assuming, you all mostly make more than me, even if your net is crap, you've had a full year to go stupid on food purchases ( even if it isn't the food you want to store, at least get what you can eat ). The ammo, not so much, ha! LOL. I've seen 12 gauge and rimfire for sale at the expected increases, but from what little I can tell everything else is even worse than just a month or two ago. Still want that high capacity semi-auto ammo hoser? Whose the paranoid loser now, bitches?

*

Okay, I'd kidding! You need a sense of humor more than every, as civilization collapses around you. If you are stressed now, imagine how much worse it is going to get. So it is time to start practicing to keep and use your sense of deliciously ironic humor. Laugh at yourself, and everyone else. What a bunch of dumb asses! Am I right?

( .Y. )

*