12 Warning Signs of U.S. Hyperinflation

[JackRiddler]

.

This is my last post on this thread for the next 11 days.

so, jack, why do you think gold and silver has been used as money for thousands of years and by various cultures of the world? was it just coincidence? accident?

Because of shared belief that it was money. Obviously. Especially strong among the ones who were in possession of the metal. Obviously. Not universal to all times, cultures, or situations. Because of social consensus often enforced by sword. As one of many other forms of exchange employed. All obviously.

Mostly in agrarian slave civilizations. Sorry. 90 percent of everyone worked a plot of land, traveled no further than a few miles in their lives, and consumed mainly stuff produced on the same plot of land. For those unlucky enough to be within the reach of an empire, tributes in wheat bundles kept the organized bandits of the nobility at bay, most years. Not all of them ever got to see one of the coins used as specie for transactions in the towns and castles.

Spartans sneered at gold because they were the first ones in their neighborhood to really get the hang of iron, which made them powerful. Worked for hundreds of years. Later they got overwhelmed by richer places that could buy power with gold. Those civilizations are now nice ruins to visit. Which was more real, gold or iron? Neither. Both. Depends.

I've added some color-coded commentary to your next passage:

the way you think the world should be is irrelavent to how it actually is. and for thousands of years gold and silver have been "real" money. money that can cross borders, won't rot in storage[also true of US dollars], is impossible to counterfeit[wrong] or simply manufacture,[why is this good? because you prefer mine-owners to bankers?] and can be readily melted down and cast into new shapes and sizes.[modern number-currencies are also very flexible] its certainly not just another commodity.

All of these reasons boil down to one: faith. Fiat or fetish? All money is money because you think it is (because these magic shiny qualities seem to make it so for you) and, more importantly, others are willing to accept it as exchange.

What's really fascinating here is that your "thousands of years" do not currently apply. Right this moment, gold is not money in almost any actual case. Gold trades are done by bookkeeping exchanges denominated in fiat currency. The gold stays in the same place after a trade, and may not be available to its current owner after the hyperinflation arrives (which will make you so very very right at last!).

So the PM-bugs go for the physical stuff. But physical PMs are not used as specie. Right now, they are not real money. Right now, real money are the fiat currencies. Right now, fiat is real and fetish is thousands of years of dead history.

In other words, you're storing something that isn't money today in the assumption that some set of unknowable contingencies will activate the conditions under which it turns into money tomorrow. As a medium of exchange, it's more real than the paper stuff only in your assumed future, not now.

It makes more sense if you're planning on selling the PM commodity once it reaches what you believe is its peak price in real money. Which is what a lot of people who have gone into the PMs hope to do, creating much of the demand that has raised prices.

An interesting feature of modernity is that its advent was still denied after several centuries in which no one lived as they had before and evidence of it was in everything from the dna to the shape of the earth. Your fetish of gold is based on the idea that it will be money after some future event, but you too know that it is not money right now. The thing that makes it money is yet to come.

In many of the wide range of possible post-collapse scenarios of our modern day varieties of apocalyptism, depending on how it plays out, joining a prayer group or the right cult and conditioning yourself to their mores and lingo and being part of whatever mutual exchange they set up may be more effective as a survival mechanism than storing physical gold. Because there is no way to tell what happens. Of course, because there is no way to tell what happens, people insist on having a certain answer to which they can cling and banish the horrible uncertainty. Fetish. Totem. Some accumulate gold as this thing that will help them after this thing that will happen. Others accumulate prayer-hours.

All wealth originates in nature. Labor and applied energy create use-value. Exchange value is adjusted by belief and struggle. In the long run, we are all dead.

.

[Canadian_watcher]

why 11 days?

[anothershamus]

From: http://tfmetalsreport.blogspot.com/

http://tfmetalsreport.blogspot.com/2011 ... close.html

Friday, April 8, 2011
Into The Close
We should all be very enthused by the action today....a little sad and apprehensive, too. Days like these just make it more obvious that we are correct. Yes, the current economic system is ending. Fortunately, there is still time to prepare but prepare we must. Hard times lie ahead.

Here's your gold chart with a level to watch into the close. Watch $40 silver, too. I'll be traveling this afternoon so I won't be able to update again until this evening. Good luck!! TF

[82_28]

Jack, I wish you could talk some sense into my friend who is buying silver like a retard right now and destroying his family with this obsession. I've basically said what you said above to him, but in person and far less concise. He emptied his kid's savings account for christ's sake. To buy silver.

[2012 Countdown]

Until Jacks imaginary, transforative utopia transpires, I'd be buying PMs (on any dip, of course).

Silver just hit $40.52, btw.

[Stephen Morgan]

Silver just hit $40.52, btw.

And I hear it makes a lovely sandwich.

Just don't eat too much, or you'll turn blue.

[2012 Countdown]

Silver just hit $40.52, btw.

And I hear it makes a lovely sandwich.

Just don't eat too much, or you'll turn blue.

Yeah, and I hear that comment about how you can't eat it as well. These pople are the ones who ignore all the other preps as well. They don't stock up on food supplies, they don't try to build a safety net, or any other of the obvious precautions. BTW, what is the nutritional value of cotton/paper (dollar bills)?

[Stephen Morgan]

Silver just hit $40.52, btw.

And I hear it makes a lovely sandwich.

Just don't eat too much, or you'll turn blue.

Yeah, and I hear that comment about how you can't eat it as well. These pople are the ones who ignore all the other preps as well. They don't stock up on food supplies, they don't try to build a safety net, or any other of the obvious precautions. BTW, what is the nutritional value of cotton/paper (dollar bills)?

Of much greater use as kindling.

[Nordic]

hm well let me do some quick math here. that ounce of silver i had a couple of years ago would have bought one pretty good sandwich. today it will buy four! if i had kept my money stored in paper dollars instead of silver, that money would still only buy one sandwich, and due to inflation of food prices it would probably be smaller.

so yes i can get fat storing my money in silver rather than in dollars. for now.

money is an energy. there's a reason they call it "currency". you can store it in various ways. or not.

silver and gold is just a way to store the energy of money the way you can store electrical energy in a battery or as potential energy as water behind a dam or as gasoline or whatever.

jack, you are still blinded by your perceptions about this, which are not necessarily "wrong" per se, but ignore the fact that with humans, perception is reality. sure its all based on belief, but that's beside the point. it's the belief that creates the reality that is the energy of money.

with all due respect, jack. i don't say that very often.

[barracuda]

There's nothing wrong with buying gold as an aspect of an investment portfolio, but you might as well buy GLD shares, or mining stocks.

At the moment, twenty dollars worth of gold weighs out to about 375 millgrams, which is 0.0132 ounces, or 13/1000ths of an ounce, which is roughly smaller than a mouse turd. Better stockpile digital scales while you're at it, because these amounts are tough to deal with on a daily basis.

Anyway, the very first thing that will happen in a gold-based economy is that the value of the gold will be redetermined according to acceptance between participants in exchanges. Expect to take a huge haircut on the trade value of your gold the first time you try to buy something with it. Very quickly, the value accorded will probably drop to five or ten percent or less of what you paid for it. During a Mad Max-type scenario, I'd say that very rapidly the worth of a gold coin will revert to about what a similar coin would purchase around 1850, at which time a twenty-dollar gold piece weighed 34 grams, or 1.2 ounces.

[Nordic]

There's nothing wrong with buying gold as an aspect of an investment portfolio, but you might as well buy GLD shares, or mining stocks.

I disagree, because those are no more tangible than the words on this screen right now as I type them (and god knows those are worthless).

There is far more cyber-gold and cyber-silver in the world right now than there is actual physical stuff. Which means when TSHTF, everybody is gonna want to trade that in for the real thing, and the real thing won't be there. Oops!

Then watch the price go up.

[2012 Countdown]

There's nothing wrong with buying gold as an aspect of an investment portfolio, but you might as well buy GLD shares, or mining stocks.

I disagree, because those are no more tangible than the words on this screen right now as I type them (and god knows those are worthless).

There is far more cyber-gold and cyber-silver in the world right now than there is actual physical stuff. Which means when TSHTF, everybody is gonna want to trade that in for the real thing, and the real thing won't be there. Oops!

Then watch the price go up.

You and I are on the exact same page. You've thought through all the varying degrees of collapse and countermeasures. Stocks are great for short term trading. And if you don't think things will get that bad, you'll be fine. I'd go with a basket of junior miners (GDXJ for example). If you hate metals for whatever reason, buy oil and food stocks. Any commodity, really. But what if TS really HTF? My guess is you won't be able to buy any physical no matter what the price. And having a piece of paper or electronic entry in your portfolio is not very comforting.

(silver $40.91 as I type)

[barracuda]

Which means when TSHTF, everybody is gonna want to trade that in for the real thing, and the real thing won't be there. Oops!

When the shit hits the fan, you might as well have baked beans in a can. If one man has beans and you have gold, you're gonna starve, not the bean guy, because he won't be selling.

Again, in Mad Max-land, gold is not power. It's baggage. Very heavy baggage.

(silver $40.91 as I type)

Awesome. In another year or so it might be back to the price it was in 1979 - $50.00/oz.

[2012 Countdown]

Which means when TSHTF, everybody is gonna want to trade that in for the real thing, and the real thing won't be there. Oops!

When the shit hits the fan, you might as well have baked beans in a can. If one man has beans and you have gold, you're gonna starve, not the bean guy, because he won't be selling.

Again, in Mad Max-land, gold is not power. It's baggage. Very heavy baggage.

(silver $40.91 as I type)

Awesome. In another year or so it might be back to the price it was in 1979 - $50.00/oz.

I got the beans. Actually One should get the beans BEFORE the metals.
As far as the 1979 price, one can say that about any stock as well. I've had these debates with non buyers enough to know such exchanges are pointless and can go on forever. I seldom talk about any of it. Not sure why I chimed in on this thread really. I guess it was only to echo Nordic's OP, but really it is futile.

[vanlose kid]

didn't want to start a new thread, but the developments are bothering me.

-- Soros' Bretton Woods II scheduled for this weekend
-- Possible US federal government shut-down this weekend.

I just don't like it.

*

With One Day Left, Reid "Not Nearly Optimistic" Shutdown Can Be Avoided: A Run Down Through The Implications
Submitted by Tyler Durden on 04/07/2011 10:32 -0400

The picture for the ongoing operation of US government is looking bleaker by the day. According to The Hill, "Senate Majority Leader Harry Reid (D-Nev.) said that he'd grown pessimistic since last night's meeting at the White House about the chances to avoid a government shutdown. During a speech on the Senate floor, Reid said that in the hours since a meeting last night at the White House with President Obama and House Speaker John Boehner (R-Ohio), he'd grown less optimistic that a deal could be reached to avoid a shutdown. "I am not nearly as optimistic -- and that's an understatement -- as I was 11 hours ago," Reid said." And while the adverse effects of a government shutdown are appreciated by all, the good thing is that such a move will likely freeze the financial picture of the government at a snapshot of Friday's terms. This will be in advance of a week of heavy bond issuance, amount to over $70 billion. If one were to add $20-30 billion in refund issuance, the debt ceiling (and we mean the real deal - based on debt subject to the limit) which now has an $84 billion buffer until breach as of yesterday, could be busted as soon as next week. What better way to prevent that than to shut down the government completely.

And for those wondering what would be affected in a shutdown, here is a convenient summary from Stone McCarthy:

Obviously, the longer a government shutdown lasts, the more disruptive it will be. Many government services would continue despite a government shutdown, including those related to law enforcement, defense and national security. Most benefits, including Social Security would be paid, although those claiming benefits for the first time or requiring other assistance from the Social Security Administration would probably be out of luck.

Many other services that citizens may take for granted would also stop. For example, it wouldn't be possible to get a passport or visa. According to an Administration official who briefed the press this morning, the IRS would suspend processing of tax returns that are not filed electronically. At this point in the tax refund season, that suspension would affect a lot of returns. As the tax season progresses, the number of returns that are filed electronically tends to decline. Borrowers seeking mortgages insured by the FHA would have to wait for the shutdown to end. The Small Business Administration would also stop processing loan applications

Some economic releases would be disrupted under a prolonged government shutdown.

The release of economic data that is compiled by government agencies would likely be delayed. As a consequence of the 1995-1996 government shutdown, the December 1995 employment data wasn't released until January 19, and December 1995 retail sales data wasn't reported until January 30. (The blizzard of early '96 may have also played a role.) In some cases, it took a month or two for a normal release schedule to resume, even after the government shutdown ended. Economic data compiled by the Federal Reserve wouldn't be affected since the Fed isn't funded through the Congressional appropriations process. Also, data releases compiled by non-government entities wouldn't be impacted. An example would be existing home sales, which is reported by the National Association of Realtors.

Treasury auctions would not be affected.

According to a memo written by former Reagan budget director David Stockman in 1981, activities exempt from a shutdown include those "essential to the preservation of the essential elements of the money and banking system of the United States, including borrowing and tax collection activities of the Treasury." That memo was in effect, according to the Congressional Research Service in 1996, and we assume it would provide guidance for any shutdown that might occur in the current environment.

Significant numbers of federal workers could be furloughed.

In the five-day government shutdown of November 1995, 800,000 workers were furloughed. That number of workers amounted to just under 40% of the federal workforce of 2.04 million employees (excluding Postal workers, who would not be affected.) That shutdown wasn't a "full" government shutdown because three of 13 appropriations bills had been passed.

In the longer government shutdown of December 1995-January 1996, only 280,000 workers were placed on furlough; that's because another four appropriations bills had been passed since the November 1995 shutdown.

The White House official that briefed the press this morning said that about 800,000 workers would be affected by any shutdown that occurs after Friday. That seems to be smaller share of the federal workforce than was affected in 1995-1996 shutdowns, which were partial. Perhaps a larger number of federal workers are now deemed as essential, which wouldn't be surprising, given stepped up security efforts and our involvement in two wars. (Recall in 1995-1996, there was no Department of Homeland Security.)

Those workers who are furloughed during a shutdown don't get paid (Congress and the President still get paid) during the shutdown. In the past, they have received retroactive pay once they return to work, although our understanding is that Congress must act to make that happen. In other words, the retroactive pay is not automatic.

In other words: the POMO/equity MOMO party will most certainly continue even as most non-stock market speculators find their lives just modestly inconvenienced.

http://www.zerohedge.com/article/one-da ... mplication


More Details On What Government Shut Down Would Look Like
Submitted by Tyler Durden on 04/06/2011 13:01 -0400

*DJ Obama Admin Says IRS Would Shut Down If Budget Not Passed
*DJ Obama Admin Says National Parks, Smithsonian Would Close
*DJ Obama Admin: Cherry Blossom Festival Wouldn't Happen If Budget Not Passed
*DJ Obama Admin: Roughly 800,000 Govt Employees Would Be Affected By Shutdown
*DJ Obama Admin: EPA Permitting Would Stop If Budget Not Passed
*DJ Obama Admin: Social Security Beneficiaries Would Continue To Receive Payments
*DJ Obama Admin: Electronic Tax Refunds, Collections Would Continue
*DJ Obama Admin: Military, Law Enforcement Will Continue To Function
*DJ Obama Admin: Military Personnel Would Earn Paychecks, But Not Receive Them Immediately
*DJ Obama Admin: White House Staffing Would Be Lower During Shutdown
*ZH: POMO will continue come rain or snow: Russell 36,000 will not be denied, US bankruptcy notwithstanding

http://www.zerohedge.com/article/more-d ... would-look


Gates, in Iraq, Talks of Effects of Budget Fight

By ELISABETH BUMILLER
Published: April 7, 2011

BAGHDAD — On what he described as probably his final visit to Iraq, Defense Secretary Robert M. Gates on Thursday turned from eight years of war here to the fight raging at home. If the United States government shuts down this weekend and into next week, he told American troops, there would be a delay in their pay...

http://www.nytimes.com/2011/04/08/world ... ss&emc=rss

*

following up on this aspect with a post by Mac from here: viewtopic.php?p=394225#p394225

Hudson didn't just predict the current "budget impasse" nearly six months ago; he also explained why the vampires will not stop short of shutting down the government, and how the Creep-in-Chief Obama and his equally-despicable Democratic Party will support them.

Neofeudalism, here we come.

Schemes of the Rich and Greedy
November 24, 2010
By Michael Hudson

Tax-Avoidance – The Worst is Yet to Come

“Let me tell you about the very rich. They are different from you and me.”
“The Rich Boy,” by F. Scott Fitzgerald

The 30-year campaign of the wealthy to rig our economic system – especially the tax component – for their own benefit will accelerate with the GOP capture of the House of Representatives and the likely capture of the presidency and Senate in two years. For a foreshadowing of what is to come, a dress rehearsal has been conducted in Latvia, Iceland, Ireland and other financially strapped countries. Latvia has been burdened with the world’s most regressive tax system, while Iceland and Ireland have become record setters in tapping taxpayers to bail out financial crime syndicates, a.k.a. banks.


[..]

Can a regressive flat-tax be pushed through U.S. Congress?

Returning to the U.S. economy, the wealthy want just what bankers want: the entire economic surplus (followed by a foreclosure on property). They want all the disposable income over and above basic subsistence – and then, when this shrinks the economy, they want the government to sell off the public domain in “privatization” giveaways, and they want people to turn over their houses and any other property they have to the creditors. “Your money or your life” is not only what bank robbers demand. It is what banks themselves demand, and the wealthy 10% of the population that owns most of the bank stock.

And of course, the wealthy classes want to free themselves from the share of taxes that they have not already shed. The flat-tax ploy is their godsend.

Here’s how I think the plan is intended to work. Given the fact that voters have already rejected the flat tax in principle, it can only be introduced by fiat under crisis conditions. Alan Simpson, President Obama’s designated co-chairman of the “Deficit Reduction Commission” (the euphemistic title he has given to his “Shift Taxes Off Wealth Onto Labor” commission, STOWOL) already has suggested that Republicans close down the government by refusing to increase the federal debt limit this spring. This would create a fiscal crisis and threat of government shutdown. It would be a fiscal 9/11, for the Republicans to trot out their “rescue plan” for the emergency breakdown of government.

The result would cap the tax shift off finance and wealth onto wage earners. Supported by Blue Dog Democrats, President Obama would shed crocodile tears and sign off on the most right-wing, oligarchic, anti-labor, anti-black and anti-minority, anti-industrial tax that anyone has yet been able to think up. The notorious Flat Tax which would fall only on wage income (paid by employees and employers alike) and on consumer goods (the value-added tax, VAT), while exempting returns that accrue to the wealthy in the form of interest and dividend income, rent and capital gains.

If you think I’m too cynical, just watch …[/b]

http://michael-hudson.com/2010/11/schem ... nd-greedy/

The whole post makes grim but essential reading, like practically everything by Michael Hudson.

*