SILVER LINING 2
If you accept that the supply of gold and silver will soon be falling from the ore running out, then the price increases from that alone will be substantial. India, even while no where near the fabled BRIC economic power that was a short lived phenomenon as partially reported by boots on the ground at the Green Mountain blog, still has a lot of its wealth tied up in silver. And China, even if a fading coal powered export juggernaut of old, still has far more economic power than we do and is busy buying up as much gold as it can as a national strategy. So those two, the wealthy classes in India ( which might be shrinking but still with a billion friggin folks over there is still a sizeable number of consumers ) and the Chinese leadership which even if somewhat retarded still means their retarded engineers beat our retarded lawyers, will bring a lot of pressure on the demand side as the supply side shrinks. Gold and silver will go up in price. Even if nothing else, even if we only repeated the last decade and only extraction costs rose, the prices will increase. Buying now just means you beat the price of increased energy needed for mining.
But, aside from a fall in supply and an increase in extraction price, there is the banker elite manipulating the prices as they do with all the other markets they are able to ( the Seven Sisters of oil, now less than seven, are in big trouble and control little in the way of oil anymore ). To these bastards, silver and gold in electronic form are just another sandbox toy to make profits off of. Right now, there is 233 ounces of gold in electronic trading for every ONE physical piece. Silver is about double that. The thinking goes that the price is kept near mining extraction cost in order to minimize the cost of those physical assets ( while at the same time the companies extracting are also being financially manipulated to keep THAT cost artificially lowered. Mining boom towns are in for a VERY rough ride very soon ) as well as to keep the precious metals from becoming a store of wealth, pushing more assets into the stock market where it can then be manipulated into more assets for more derivatives profits. It is a dangerous house of cards the banks are constructing.
The mine goes deeply into debt and plays such games as raiding pension funds to pay dividends to increase the stock price which increases the debt, etcetera, to keep extraction costs lower ( which increases short term profits at the expense of long term viability-a corporate staple right now ) which allows the bankers to buy more to leverage their electronic metal into more trades. If you are making millions on each nickel move on silver or every dollar move on gold, you care a lot more about the minute swings than a individual buying a few coins for a rainy day fund. If you own a million ounces and can leverage that into four hundred million ounces of trades e-silver, and the price moves earn you a nickel ( it could be less, this is an arbitrary figure ) an ounce, you would try to leverage that into 450 million ounces for a much tidier profit each day. Then you’d take that extra profit and buy more derivatives bets on the other financial bets you have. Banks aren’t making money on you and me being in debt. Our disposable income has dropped. They are riding the derivatives markets.
Banks have had to lower the interest they collect on debts. That is the only way that a federal government earning two trillion a year buy spending three or four can keep borrowing more money to keep paying the interest on the old loans. That is the trouble over in Greece and Italy and Portugal. The interest on the old loans was decreased so they could still pay the interest ( forget the principle. That will never be repaid ) yet they are in such debt and earning so little that they are still in financial trouble. And our poor friends the central bankers are earning LESS as the interest rates are lowered in desperation. Which, isn’t JUST greed. They took such an asset wipe out in 2008 that they have little choice to stay afloat than playing in the derivatives markets for profit and asset replacement. Yes, of COURSE they are still paying insane bonuses and such, that is just how bankers roll. But a lot is desperation.
When your E silver is five hundred to one physical, and your gold is 233 to 1, you are in 2007 real estate backed securities territory. You are in Orange County. Derivatives bets always blow up in your face past a certain point. We can argue that this is not yet that point. But it WILL happen. And when it does, your physical precious metals will go from just above extraction cost to Emergency Store Of Wealth cost. When all your electronic assets such as savings accounts and pensions and stocks go to near worthless, folks with wealth run to gold and the peons with jobs run to silver. If you think $20 and $1200 are bad now ( and they are compared to twenty years ago ), just wait. The price will go a lot higher. And that is even without government dollar inflation. Which could be an entirely unrelated force. As could the rejection en masse of the PetroDollar. And this is good news. It means precious metals are at last free from central bank manipulation which kept prices artificially low.
The Chinese might love low priced gold, a gift from our bankers, but it helps out those bankers as well. As well as the prepper with extra cash. So if you can buy now, you’ll need to own very little if the value is about to increase. The real value, not the dollar price. Because we are almost at the end of too much more mining. And because the price is way too low historically speaking ( just as wheat is ). Lower supply and increased demand. What you have on hand will be equal to having ammo after the civilization collapse. And just a reminder if for some bizarre reason you read this second part of the article but not the first, PM buying is the LAST of your preps. Also, thanks to SRS Rocco Report web site for the usual flow of priceless information.
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Barns (cheap land),ReplyDelete
Beans(wheat and other food),
Band Aids(basic medical and hygiene supplies),
Bullets (self defense supplies),
and Finally last prepping item-
BULLION (taxes/bribes/carry wealth to future generations).
That is IMHO the general order.
the only reason that Bullion should even be included is because it is so nicely portable- With bullion you could bribe the jackbooted thug into letting you off the cattle car to use the restroom (and run for it!) or the local warlord to skip taking your ugly daughter for the entertainment of his men, or the border guard into letting you out of the country that is in the middle of a civil war, or buy a room for a while away from the massive wildfires sweeping through your neighborhood. Etc. etc.
It is PORTABLE in modest amounts, Concealable (to some small extent), mostly Legal and doesn't cause harm (unlike most pharmaceuticals or ammo), and can be recognized as valuable by most (unlike artworks).
What it can not do is get you anything that isn't available on the market at the time you try to use it.
So it can't provide you shelter, food, water, security, medical care, etc. if those things are not available on the market (open or black).
So buying bullion can only happen after you have the rest of the 'Bs'
Bullion is useful when you reach the point you can't conceive of needing more of anything else. And still have investment cash. I nice problem to have.Delete
Where's the B for Boobs???Delete
Are you guys monks?
It is assumed you are prepping for a pair of boobs already :)Delete