"In 1914 that pair of kicks cost 12 marks – that does not seem unreasonable, right? Well, by 1922 those sweet new kicks cost 1,400. In the following year of 1923, they went for a steal at 30 trillion marks."
Welcome back!In the last post I shared some more personal details about my adventures in Florida. My first hint that the foreclosure situation was out of control here: moving trucks everywhere, all the time. You couldn't go a day without seeing one or two. In the suburbs. Speaking of suburbs, there are whole ghost developments, never to be because of the housing market crisis. Cul-de-sacs to nowhere as far as the eye can see. Scary! To catch up with that last post, click here: Buying Silver Coins - Lessons Learned in Florida Should I Buy Silver? Lesson 1: What is Money?  There is a currency war going on right now. (That usually leads to a war war!) As for today, you are in luck! We are really getting into the meaty and juicy part of the story. And where does any story worth telling or being told start? At the beginning.
On Mike Maloney’s GoldSilver.com site, he points out that money is not currency. And knowing the subtle, yet MASSIVE, fundamental difference could affect the future of you and your family. Here’s a simple example: the US Dollar bills in your pocket are currency, but they are not money. Currency lacks the ability to provide a store of value throughout time.
A US Dollar is only worth what it’s worth (which is ever-decreasing by the way) because of the might/full faith and credit of the United States. There is no intrinsic or material value to the paper upon which our marks or currency is printed. It’s just a canvas–like paper material. Put it in a time capsule today and get out your shovel. Bury it deep down in the Earth. Now imagine another civilization unearths this priceless discovery 10,000 years from now. What would that US Dollar be worth? No more than the paper it is printed on.
When it comes to the distinction between money and currency, we humans always play the same game. They say that “history does not repeat itself, but it rhymes” and that is very true, especially when it comes to our money.
Throughout history GOLD and SILVER have been money because they store value. For all intents and purposes, an ounce of gold or silver will buy a similar amount of goods today compared to what they did hundreds of years ago. Of course, the price of any commodity or good can fluctuate relative to others. But the precious metals have been consistent stores of value for all of recorded history. They are scarce and highly coveted, yet easily divisible; they make the perfect monetary base for human civilization.
Now, what has happened time and again throughout history is that the “powers that be” print paper or fiat currency, which is meant to represent real money, just like our US Dollar. Usually, it is a case of the foxes watching the hen house. Those who have the power to create currency abuse this power by printing too much of it and making their friends and those loyal to them wealthy. You simply cannot print truth wealth. Think about it. You can dig more gold and silver out of the ground, but that is a long and arduous task. When it comes to paper currency, what we know as money today, it can be printed infinitely at almost no cost. Our current Federal Reserve Chairman, Ben Bernanke, has said as much in plain English.
So, increasing the number of existing units of a currency obviously does not create more total wealth. The basic laws of supply and demand dictate that the more units of currency you have chasing the same amounts of goods and services, the less each individual unit will be worth. Throughout history societies have created money out of thin air until they debased or devalued their currencies. All “fiat” and/or paper currencies eventually achieve their inherent value – ZERO.
It seems as if it is just a function of human nature. We usually resort to printing money to enable greed and war. We also tend to spend a lot of money on social or “public works” projects as a form of welfare to the unemployed. These are not just American problems. Greece did the same thing. So did Rome.
A particularly interesting example comes from the Weimar Republic of Germany. When a fiat currency is “pinned” or “pegged” to gold and/or silver, there are limits to how much money you can print. If that money is redeemable for precious metals, then the people would simply trade their paper for real money when they caught wind of the scam. That would constitute a “run on the bank” of their gold and silver, bankrupting the money-printers (bankers) in the process. The “powers that be” cannot have that! They need you to keep your confidence in their paper Ponzi scheme.
During World War I the Weimar Republic unpinned their currency from gold to print money. How much did they print? Well, they quadrupled the number of units of currency in circulation. (The US has done a similar thing since the year 2008). The effect of all the money printing can literally make prices go haywire. And this is known as HYPERINFLATION.
It’s truly wacky stuff, and very hard to wrap your mind around. The example Mike uses on his site is the price of a pair of shoes in Germany. In 1914 that pair of kicks cost 12 marks – that does not seem unreasonable, right? Well, by 1922 those sweet new kicks cost 1,400. In the following year of 1923, they went for a steal at 30 trillion marks.
You see, the prices of goods were not really rising. Once you unpin the value of your currency from any real store of value – REAL MONEY – that fiat currency will float against the market prices of goods and services. In fact, the price of those shoes did not rise at all in terms of gold and silver. It was the massive loss in purchasing power of their marks that made everything so expensive.
Historical note: the US unpinned our currency from gold in 1971 when Nixon closed the Gold window. The French, among others, figured out that the US was funding wars and deficit spending by printing more dollars than they had gold. Charles de Gaulle called our bluff by attempting to trade in his US Dollars for solid gold. Remember that if Nixon had allowed this, it could have bankrupted the nation's gold supplies.
That’s more than enough for today, but let’s just review what we have learned.
- Currency is not money because it cannot store value indefinitely
- All societies throughout history devalue their currency, which robs the people of their wealth.
- Devaluing currency implies unpinning currency from gold and silver.
- Eventually those currencies will devalue to the utmost, meaning they reach the value of NOTHING.
- Hyperinflation is an extreme example of this process, whereby a crisis of confidence in the currency causes a crash in purchasing power that can be astounding. Remember the 30 trillion mark pair of shoes.
- The US unpinned our Dollar from gold in 1971
- Since 2008 we have nearly QUADRUPLED our money supply. Sound familiar? (Weimar Republic)
Here’s where it really gets interesting. Never before in the history of civilization has hyperinflation occurred to a fiat currency serving as the GLOBAL RESERVE CURRENCY. No one knows exactly where we go from here. But I can give you one little hint – it cannot be pretty.
Next time we will delve more into silver specifically and start to analyze the basics of what are called the investing fundamentals. Now that you know what real money is, it’s time to take a closer look at what has been the PEOPLE’S MONEY for nearly all of recorded history – SILVER!
Stack silver!
AB
Want to learn more about investing in silver? Click here... "At best, the banks set a very bad example for people. At worst, they are financial terrorists, petty thieves (on a trillions-of-dollars scale), and fraudsters."
Welcome back:
In the last post I got a little personal and shared the first part of my story. It is a long and convoluted story, but I promise that it is going somewhere. Should you choose to follow it, I think you will be better off in the future because of it. I think most of us would agree that love is more important than money. I came to Florida for LOVE. Little did I know, there isn't much money going around here. To catch up on the last post, click here: Buying Silver Coins - Lessons Learned in Florida
When I moved to Florida, my reasoning went something like this. I found a good job here in Washington DC, so I can find a good job anywhere. I most likely was very wrong. I also rationalized that love was my way to lasting happiness, and not some great job (I did give up a great job!). I still stand strong in that conviction. No matter how much money I might have made by staying, I would regret not taking this opportunity to pursue love for the rest of my life. Kind of like in Good Will Hunting, I had to go see about a girl. How many acts of unspeakable courage are also fundamentally very stupid? Probably most. Yet, the world would be a different place if it were not for calculated risks.
Needless to say, high-paying jobs are not growing on trees, like the oranges, here in Florida. In fact, my searches were some of the most abysmal I have ever endured. I had to make my own opportunity by creating a job for myself. Increasingly, I predict that this will be the new paradigm in America's future. There's no more getting a respectable job with a good company and growing your nest egg. The majority of us have been abandoned by that system. You can do everything right - go to college, get good grades, pay down your debts, and be a responsible, law-abiding member of society and still find no means of generating sufficient cash flow to honor your duties. This is the new reality - the new normal. In fact, I was blown away when I saw a recent stat that, for one of the first times in a long time, college graduates are less likely to be employed than high school graduates in some demographics (particularly those under 30). They will give you the subsidized loan to pay skyrocketing college costs and they will encourage you to invest in yourself by getting an education, but there is no guarantee that there will be any paying job available to you when you finish. Ask the youth of America how frustrating that is. They feel like they have been lied to their whole lives. And in a sense, they have been. Those loans can never be forgiven remember. They don't like to mention that nearly all of the jobs added are in the service industry at low, minimum wage, or part-time pay. The government leaves out a lot of facts when they report on the economy. We'll come back to that in another post. Suffice to say for now that the unemployment rate is most likely 3X what they say is and inflation (higher prices) is anywhere from 3 to 5X what is reported by the CPI. See ShadowStats.com.
Besides the obvious lack of employment opportunities here in Florida, another thing became clear as day. Florida has a little bit of a foreclosure issue. When I say a little bit, I actually mean a lot. And by a lot I mean second worst in the nation. But I didn't need any government statistic to figure that out. Within 6 months of moving to Florida, I saw more moving trucks in our neighborhood than I have probably seen in my entire life! At least a dozen in a handful of months. Oh yeah, I almost forgot - then we were the moving truck. From a former marriage, my girlfriend was stuck with a mortgage that was impossible to pay. Remember the housing market that could never go down? Remember Fed Chairmen Bernanke claiming it was not a bubble? Unfortunately, little did she know at the time, but she bought high and now... The foreclosure struggle goes on. From what I have seen, just as a bystander to this situation, Bank of America is the devil. In fact, all of the "too big to fail banks" are the biggest hypocrites on Earth. They couldn't pay their bills, so we taxpayers bailed them out. We all know how this oft-repeated criticism ends - who bails out main street? No one. Well, in some ways the US Government does. We are approaching 50 million people on food stamps. Who pays for the government? We do. At best, the banks set a very bad example for people. At worst, they are financial terrorists, petty thieves (on a trillions-of-dollars scale), and fraudsters. For those who are awake and understand economics, it is no stretch to say that the banks and financial institutions of America have made an art out of pillaging the people's wealth. Only art is beautiful. This situation is disgusting. More on that to come later. Point is that Florida is currently one of the foreclosure capitals of the world.
There are whole developments with paved streets, electricity, plumbing, and the whole she-bang. You drive past and it almost brings a tear to your eye. The problem with these suburban neighborhoods is that there are no houses. They could not build them because nobody could buy them. In fact, they will probably never be built. The media propagandists will tell you that housing is in recovery. It's another lie. And for every house that is not built, there are hundreds of construction workers that will not work. My uncle is one of them, so it feels personal to me. Last I heard he hasn't worked for months and months. Maybe he never will. Everyone wants to put lipstick on the pig and try to be optimistic, but the truth is ugly. Things are not going to get any better. Don't take my word for it. Go over to my new Silver News page and read what some of the best and brightest economic minds in the world have to say about the future of the American economy. These guys (and gals) are people like Doug Casey, Peter Schiff, Marc Faber, Max Keiser and a hand full of other people who have no vested interest in selling you a fairy tale recovery. They predicted the 2008 economic crisis; and what they are predicting for 2013 and beyond is unprecedented in the history of the world. It is an ECONOMIC COLLAPSE that makes 2008 look like a hiccup. It's truly terrifying, but it is not all doom and gloom. The economy will finally be forced to reset. Our politicians will have to face the reality of our debts. There will be many questions about the future of America. And because I believe in the American people, I think there will be solutions. The trick will be getting the power-hungry politicians and bankers out of the way. The love the status quo because it is what has made them wealthy and powerful. The reset could be very bad for them.
So, before I end this edition of The Silver Tongue Blog, let me give you a taste of what's coming. I plan to lay out the full case for investing in silver, point by point, as I understand it. Remember, I'm not an investor and I'm not a financial adviser. I am a regular person, who wants to rise about the lies and find the truth, so that my family and I can survive the coming economic disaster. One way to do that is by buying silver coins. You don't have to buy silver coins, it could be anything made of silver. It's just that coins are easy to deal with, store, and verify for authenticity. You could go for gold, but many people just can't afford that, as it currently costs 50X what silver goes for. In fact, the "fundamentals" reveal that silver is probably the better investment anyway. But due to its affordability, it has been the people's money of choice for pretty much all of recorded history. Here's a preview of what you can expect:
1. Silver is severely UNDERVALUED. The historic ratio of silver to gold value, is usually 10 or 15 to 1. As stated, it is currently 50 to 1. That correction alone implies a 5 fold increase in value. Try getting that yield from another risk-free asset.
2. The silver market is TINY. Basic demand and supply dictates that price rises will be incredible.
3. Silver (as well as gold) IS MONEY. It never loses value, when compared to real goods. When it goes up and down in US dollar terms that is more indicative of the fluctuation of the fiat (flexible value) dollar.
4. INDUSTRIAL usage - silver is used in solar, biotech and medicine, as well as electronics. It will be needed.
5. The price of silver is MANIPULATED, much like everything else these days (LIBOR, interest rates, the stock market, etc...). JP Morgan has a concentrated short position that is fraudulent and gives them the power to cheat. An ongoing 4-year investigation has gone nowhere, most likely because our own government is complicit in the scandal.
There is so much more. However, like any complex issue, I have to take this on a little at time. I hope you stick around to see where this goes. If you do, you will possess information that very few are privy to. Don't take my word for it. Who am I? I encourage you to question everything. That's what brought me to silver in the first place. Go to my Silver News page or check out Mike Maloney's excellent GoldSilver.com site. He makes so little money selling his silver that he's practically running a non-profit precious metals education service. Click on the articles and read the testimony of the world's smartest economists. Hint: none of them are running our government!
Come back next time and we will dive into some of the more interesting and juicy details about why silver is said to be the INVESTMENT OF THE DECADE.
Stack silver,
AB
"Wouldn't you know it if you were really aboard a sinking ship? Well, you'd think you would. In 2008, we hit the ICEBERG. The musicians play on, but this ship is going down."
Welcome friends and silver bugs!
I can’t even remember the last time I posted to this blog. When I created it, I simply knew in my heart that there was a need because so few people know anything about economics today. Fewer still know that gold and silver are one of the only ways to protect yourself in the current economic environment. At first, I questioned myself for offering financial advice, when I have handled my own personal finances so poorly for much of my life. However, I did some soul searching and decided that this is still something I want to pursue, not because it will make those who read it a lot of money (it can!), but because I care about truth. The truth is being hidden from you and I want you to see it. That’s what The Silver Tongue is all about. I am going to get real today. REAL real! By sharing some very personal details to help you understand where I am coming from…
Why Invest in Silver? Because You are Aboard the Titanic - Lifeboat Anyone? Wouldn't you know it if you were really aboard a sinking ship? Well, you'd think you would. In 2008, we hit the ICEBERG. The musicians play on, but this ship is going down. Read on to find out why...Here’s what I am not going to do: I won’t pretend to be a stock market analyst, an economic scholar, or a billionaire genius investor. There are plenty of other guys like that around. The reason that you should listen to me is that I am going to share with you the experience of an average person, with no background in these disciplines, as I penetrate the unknown territory of the silver market and learn how to participate and hopefully profit from it. I hope to offer you the reader the everyman perspective of the silver market. And I want to try to boil down the expert commentary to disseminate the information you need to understand the basics and protect yourself. Economic Crisis – Past and Present I’m not going to reinvent the wheel here. We all know that 2008 was a crisis in America. In fact, it became a crisis for the whole world because international banking has never been so entangled. When the US gets the flu, the whole world starts sniffling. I probably botched that paraphrase, but you get the point... Our banks are like giant squid with tentacles wrapped around and through every sector and market the world over. To put it mildly, things changed during that crisis. The powers that be, including the Federal Reserve and the US Government, papered over a black hole with tin foil. And then they proceeded to rebuild the whole “Too Big to Fail” system even bigger on top of their flimsy “repair”. It does not take a genius to see, not only are we not in an economic recovery, but that things are likely to get MUCH MUCH WORSE. The Problem The biggest problem is that there is too much debt. All you have to do is think of it in terms of your household budget. You simply cannot continue spending more money than you make and expect to remain financially solvent. All the governments of the Western world, in fact all of the most prominent ones in the world, are violating this simple rule. This includes, nay is pioneered by, the United States of America (US). They have been for decades. It’s a complicated problem and it’s easy to get lost in pointing fingers, but the simple matter of fact is that we have a serious problem that cannot be solved with the tools at hand. My Story I have struggled financially for my entire life. There is nothing I want more than to just be okay financially. I made every mistake in the book, thinking that money would always just be there for me. When I started learning about economics, it forced me to take a hard look at myself and re-evaluate a lot of things in my life. Having recently given up the starving artist life in Los Angeles, while working on a screenwriting career, I took another leap of faith. I moved to Florida to be with a girl. Now, from these few details about my life you can clearly tell that I am not a person who puts issues financial and monetary first. Right or wrong, I have often followed my heart, even to its own detriment. Courage often looks like madness to those who are unwilling to step out of their comfort zone. Since I have made a habit out of it, I suspect that many people have labeled me “INSANE” over the years. However, when I look at what passes for sanity these days, especially in economic terms, I have to take some pride in my stance. Once in Florida, I quickly realized that the economic landscape here was a God awful death trap. Was it insane for me to give up a good job in the Washington DC area to come here? Probably, but I can only hope that the solutions will find me if I standby the same courage that led me down here in the first place. The lack of gainful sources of employment forced me to learn new skills and to start a business. That business is not making me rich right now, mind you, but the learning curve I had to walk just to get from point A to point Z was educational in ways that I never could have imagined. I can comfortably say that I could start a profitable business in almost any niche in short order, now that I have done it once. In the new reality of America’s economic landscape, you cannot depend on other people to create your job. The days when a guy or gal could get started with a good company and retire in style with a nest egg are over. You have to be able to create your own opportunities. They sent all those middle class jobs to Asia. And they are never coming back.Sure, there are exceptions. For example, the Washington DC area that I just left! They are under the protective bubble of the ever-expanding US Government. The largess of our massively inefficient government has spilled into the Northern Virginia and Maryland areas, littering the place with people who are able to make more than double the median income of the country. I'm not hating on these people for being industrious. Heck, that's the point of capitalism, right? If only we really had a capitalist system to go with that philosophy. (More on that another day).
So, let’s leave it at that for now. In the next edition I will share with you my personal insight into the “Housing Recovery”. I have witnessed firsthand the tragedy of the massive foreclosure volume in the state of Florida (one of the worst in the country). Eventually, we will get back around, full circle, to why you need to invest in gold and silver to give you and your family any hope of surviving the next economic crisis to come. Remember, I am not a financial adviser and I do not give financial advice. My goal is to help you understand the facts about our economy, so that you can make better choices with your money. Until next time… Stack silver, ABhttp://www.thesilvertongue.org Get Silver Tongue Updates by Entering Your Email Below...
Hello friends!
A friend recently offered the unsolicited suggestion that maybe I should hold my SILVER TONGUE because no one wants to take investing, finance, and/or money advice from the likes of me. While it is VERY ACCURATE that yours truly has not been the most cautious or responsible with money in the past, this does not change the fact that the world is headed for a major global debt crisis. No one would ever have accused AB of over-saving or pinching pennies in my past. I have always sought to seize the moment literally at the expense of tomorrow. However, there comes a time when you have to look in the mirror and make some harsh evaluations. When I did this about a year ago, I did not like what I saw. It was time for a CHANGE. (Not your Obama-approved no-change "CHANGE", but a real change)
So AMERICA has reached a point of no return. As a country and as individuals we need to face facts and come to terms with the REALITY that we cannot continue to borrow against the future at the expense of our children and grandchildren. What we are doing is no less than selling them as debt slaves to the highest bidder. I will not stand by as this increasingly CORPORATE STATE takes physical possession of our lives, our children, and all of our wealth. The American debt problem is a powder keg sitting at the edge of a vast forest that is being engulfed by a raging wildfire. Since our government will not take responsibility for the problem it has caused, the American people must stand up and do it for them.
Were your house on fire, I could not simply walk by and pretend not to see. We can no longer lower our heads and distract ourselves with apathetic consumerism and reality entertainment zombie-ism. There are powers at work that challenge our fundamental rights as stated in the US CONSTITUTION. Those who would love to enslave you and your progeny into eternal debt slave serfdom would love for you to remain distracted by American Idol while they transfer even more wealth directly out of your bank account and into the hands of the BANK-RUN CORPORATE STATE. If you think I am a conspiracy theorist, all you need to do is look at the things that our Forefathers feared most. They have all happened.
It's easy to get caught up in the doom and gloom. I enjoy the role of contrarian, but I promise it is not for the sake of the contrary that I say these things. The smartest and most adroit money minds on the planet are calling for the implosion of the global debt bubble and the downfall of the American dollar, economy, and financial system. I do not claim to be one of these great money minds, which gives me even more reason to listen when they speak. More millionaires were made during the 1st Great Depression than ever before. The coming crisis is an opportunity. If you hold the right assets you will not only retain your wealth and monetary value, but see it increase exponentially. Should you be caught holding the wrong assets when the music stops, you will lose everything you have. Not just your retirement (401K, if there's anything left by then), but your own savings. There is an upside to all of this.
I have no faith whatsoever that the US Government will ever stop power and money-grabbing. I am thoroughly convinced that they will stop at nothing short of absolute control in every way. If unchecked I have no doubt in my mind that they will become as dangerous and notorious as any fascist, totalitarian, or communist power that has stained the history books with the blood of its people. Even saying these words, speaking up for the American people and the Constitution could be considered "domestic terrorism", for which Obama now possess the ability to detain, torture, and execute American citizens with no hope of jury trial or justice as sanctioned by the US Constitution. I am not optimistic about our government or the parade of smiling puppets lined up to lead it into the abysmal future.
I am optimistic that the American people will wake up and do the right thing, even if it means putting to question the very system by which we have come to accumulate insurmountable debts and corporate police state status. My hope is that We the People wake up before the government has accumulated too much wealth and power to be stopped. Part of the responsibility of being an American is having the guts to question what THEY say we must stand for. It is NOT un-American to question our government. It's un-American not to. When we wake up and realize this fact, then and only then will we be able to claim what is rightfully ours.
Never forget that the government serves us. They are servants to us, who we have appointed. Should we deem them incompetent or unfit for duty, we can just as easily fire them. Do not become lulled into the apathetic warmth of the WELFARE STATE'S bosom. What we need now is to show the self reliance, pragmatism, and straight up low-hanging, brass balls that it took to take on the British in our American Revolution, to help save the world in World War 2, and to challenge the status quo of history in creating a government by and for the people to shine a beacon of liberty on the world.
That beacon is dimming. If we fail to bear the sacred and privileged burdens of these responsibilities, we will have forfeited our freedom, our lives, our dignity, the future of our very country, and everything for which our Forefathers toiled, fought, and died. So, if you see your neighbor's house burning down and they and their children are sleeping in their beds, what do you do? Go on listening to your iPod and walk on by? Or take matters into your own hands for the greater good?
Respectfully, I refuse to hold my silver tongue. The onus is on you to avert your eyes if you have no interest in reading the truth. I don't give a shit if you don't want to invest in silver and gold. In the end, it would be your wealth, your very life savings that will be literally transferred out of your bank account and into the pockets of the corporate banking state. Currently, there are no safe investments, save one. Historically, gold and silver have intrinsic value as stores of wealth. At near zero interest rates, every dollar you have in a bank account is being siphoned into someone else's pocket.
Your choice is simple. You can do something about this truth or you can ignore it. Your life savings and personal liberty are all that's at stake.
Your friend,
AB
http://thesilvertongue.org
Where do you fit in? Hello Friends: If the above graph didn't completely scare the shit out of you and totally piss you off, then I will try to do so with the rest of my blog. I just want to throw out a few highlights of this "RECOVERING" US ECONOMY to let you know what's really going on.
Who's Profiting from the Collapse of the Average American Family? The stock market has approached all time highs and there's this ubiquitous mass media propaganda that the US economy is recovering. Who is benefiting from all of these equities (stocks) surges? Well, it's not the AVERAGE AMERICAN. Depending on who you ask unemployment is something like 8% or (most likely) more like 20%. In case you didn't notice, oil prices are going crazy as demand plummets. That's right, American's are en mass just giving up on driving because we cannot afford what will likely soon be $5.00 per gallon gasoline. A large number of the unemployed have simply given up on finding work. And the government has clearly given up on them. The BLS (short for Big Lump of Shit) keeps pumping statistics about lowered unemployment. Essentially what they are doing is writing off more and more UNEMPLOYED AMERICANS by fraudulently claiming that they are not included in the workforce. Prices on everything are rising. Let's review before we move on: Stock marketing booming. Oil prices high. Oil demand low. Unemployment much higher than reported. Average Americans getting no wage increases. Inflation RISING. Why is INFLATION going through the roof? The FedSince the financial crisis of 2008 the Fed has been printing money out of thin air hand over fist. If you think about this for a second, it amounts to increasing the money supply of US dollars. Every new dollar created takes that much worth out of all previously existing dollars. This includes the ones in your savings account! Your money is not safe anywhere. With near 0% interest rates you cannot earn any return on your money without making risky investments. In fact, adjusted for inflation, you are actually losing money by putting it into a bank or savings account. Not to mention that you are LITERALLY dealing with the devil. Remember why we are in this whole crisis in the first place - THE TOO-BIG-TO-FAIL BANKS. The recent MF Global scandal has revealed that big banks will have no problem making up for their losses with YOUR DOLLARS. If they can't run their business profitably, they can always just dip into your savings and balance their books! If that doesn't work, well they just go to Congress and lobby for your tax dollars instead. What would you call being forced to give up all of your hard-earned money to the banks? Sounds like serfdom or even SLAVERY to me. So, the financial crisis was actually caused by risky mortgage loans sold by the bank to make huge profits. A complex financial product called DERIVATIVES played a starring role in the collapse. Derivatives are too complex for me to wrap my brain around (try if you want). But essentially they are complex ways of hedging your bets. You can take out insurance policies to counterbalance risky investments you have made. The problem is that if a large number of derivatives are triggered at once they simply cannot be paid off. That is how America's biggest banks basically went bankrupt in 2008. Luckily, the American people are very forgiving. Not only did we let them saddle huge chunks of the population with toxic debs, we offered up our hard-earned tax dollars to bail them out when they mismanaged their finances. Then out of gratitude, the banks paid huge bonuses out to their executives and RAISED THEIR FEES on their customers (the same people who just bailed them out) to make EVEN MORE PROFITS! The Second Great DepressionFed Chairman Ben Bernanke claims that he averted the Second Great Depression. The world's leading economists know that he hasn't prevented anything. He has only put it off for a little longer. And he's sold out the American people for the health of our biggest banks' balance sheets. At the very least, we must have learned our lesson about DERIVATIVES, right? These numbers are from the article "Bernanke Claims That The Fed Has Averted A Second Great Depression By Bailing Out The Too Big To Fail Banks": According to the Comptroller of the Currency, the biggest U.S. banks have exposure to Derivatives that is absolutely mind blowing. Just check out these numbers, which Have Just Been Released.... JPMorgan Chase - $70.1 Trillion Citibank - $52.1 Trillion Bank of America - $50.1 Trillion Goldman Sachs - $44.2 Trillion So what is going to happen when that bubble pops? Bottom line: The next bailout may require tens of TRILLIONS OF DOLLARS! At least the banks stopped making dangerous subprime loans, right? Wrong again. As the housing crisis's mortgage foreclosures fall like dominoes, the banks memory has somehow failed them. The new trend is subprime AUTO LOANS TO PROP UP THE FAILING AUTO INDUSTRY! Let's not even mention the STUDENT LOAN BUBBLE. I truly pity those college students who are taking "free money" to get an education. When they do graduate, and the 6-month grace period is up, they will find there are no jobs and they will learn that all that FINE PRINT in those student loans basically says that they can never get out from under the debt. Where are we headed?The massive debt bubble will burst. How we claw our way back from the next stock market crash, I do not know. No one knows. Worst of all, in an election year the powers that be are even more reluctant than usual to admit just how bad things are and how bad they could get. Who are you voting for? To be honest, it really doesn't matter. None of these clowns understand how the economy works and none of them will fix it. I promise. They all pay lip service to PAYING OFF THE NATIONAL DEBT. Our whole system stays afloat because of that debt. If we paid it off, the whole economy would implode and America would be a third world country in short order. Of course you don't believe that this can happen because it never has in our lifetime. Ever seen a loaf of bread for $100? You might. Hyperinflation is on its way. Meanwhile, Mitt Romney says Russia is our number one enemy. Are you fucking kidding me? Who is this guy GI Joe? Our number one enemy is DEBT. And since we are addicted to debt (to the tune of something like $1.8 trillion per year now) we can actually identify our NUMBER ONE ENEMY differently. Look in the mirror. The Emperor is naked. This country still looks and feels like the America of old, but it's not. While politicians fix their eyes on Tehran or Russia or whatever "enemy" Big Brother wants us to hate this week, Americans are actually suffering. The rich are richer every day. The poor are poorer. The middle class are joining the latter by droves. The only way to protect yourself is to invest in things that have real value. Ask yourself this simple question: What would you do if you woke up and your bank account - savings, 401 K, etc - were all GONE? What would you do? Do you own anything of real value that can't be taken away by the corporate state? They say an ounce of gold could buy a man a new suit and a pair of shoes a hundred years ago. Today, that same ounce will by a man a new suit and a pair of shoes. That's real value. A dollar will only buy 5% of the goods it would have in 1913. Think about that for a while. Are prices going up or is the VALUE OF THE DOLLAR sinking to all time lows? Or worse - could it be both? Stack silver now, AB http://thesilvertongue.org
Undervalued Silver
Traditionally, throughout history, SILVER has been worth anywhere from one-tenth to one-fifteenth the value of GOLD. As of this exact moment, the spot prices of gold and silver are as follows:
GOLD - $1662.83 per ounce
SILVER - $32.21 per ounce
Let's quickly divide the latter in the former, in order to get the CURRENT GOLD TO SILVER RATIO.
$1663/$32 = 51.96875
So, every ounce of silver is AT THIS MOMENT worth only 1/52 of an ounce of gold. It shouldn't take a genius to figure out that silver is currently UNDERVALUED. Since silver is essentially a form of currency, this means you can "BUY MONEY AT A DISCOUNT".
If silver were to correct to its traditional value of 1/10 to 1/15th that of gold, silver would be worth MUCH MORE:
$1663/10 = $166.30
Silver could actually AT THIS MOMENT be worth $166 an ounce, even though it only costs $32/oz to purchase!
Even if it is only worth 1/15th the value of gold, silver would CURRENTLY be worth $110/oz. That means that for every $32 ounce you purchase, you could instantly PROFIT...what about $80?
The reason that this is TRUE is because the price of silver is manipulated and controlled by certain parties that could be devastated by the price of silver rising to its TRUE VALUE.
One such bank is JP MORGAN CHASE. Essentially they fraudulently claim to have far more PHYSICAL SILVER in their vaults than they actually have. If the price were to go up, they would be forced to cover those shorts and it would be revealed that they are PRICE FIXING AND LYING about their silver holdings.
Why Gold and Silver?
When the Fed prints unprecedented amounts of US DOLLARS, as they have since 2008, you actually GET SCREWED in the process. Think about it for a second. YOUR SAVINGS sitting "safely" in YOUR BANK gets drained of value every time the Federal Reserve creates another dollar OUT OF THIN AIR. This is how your savings can literally be robbed without ever being touched.
A little background: It took AMERICA well over 200 years to create over $800 BILLION PHYSICAL DOLLARS. Since the 2008 crisis, the Fed has nearly DOUBLED and may even TRIPLE our total supply of dollars. That means that your existing MONEY has been drained of value. And this has become a Fed tradition, since they have drained over 95% of the dollar's value since 1913. And that was before all this new money printing!
When they PRINT MONEY, the only safe place to store the value of your wealth is in precious metals, which basically never lose value. The price in dollars of gold or silver may fluctuate, but it's actually the dollar that is floating. At the very least, gold and silver will store your wealth until better times.
At their current prices gold and silver are still currently UNDERVALUED! How can this be, given that they have increased in value for about a DECADE? Some analysts will try to tell you that they are in a "BUBBLE." It simply is not true. The only bubble around here is the DEBT BUBBLE - our growing national debt - the device that actually causes gold and silver to increase in value as people invest out of fear.
Politicians like to pretend that they want to PAY OFF THE NATIONAL DEBT. This only reveals how little they understand about economics and our current situation. Paying off the debt would actually COMPLETELY IMPLODE THE US ECONOMY. Debt is the only way to keep the status quo going. The LIE of the CURRENT US ECONOMIC RECOVERY will fall apart once the Fed stops printing and handing out BILLIONS AND BILLIONS OF DOLLARS hand over fist.
The smartest people in the "room" say that you should invest in silver. Yes, doing so NOW is buying money at a discount; but more importantly, this investment is more about PROTECTING YOUR MONEY, than it is about making money.
The stock market is currently rigged. Playing that game is like trying to BRING DOWN THE HOUSE at a Vegas casino. You will lose.
Dow to Gold Ratio
One way to see things more clearly: Look at the DOW. How is it approaching records HIGH when the whole rest of the US economy is FALLING APART? The answer: it's artificially inflated by the intervention of the Fed. Once they stop, like a meth-addicted tweeker, the stock market will COLLAPSE. Gold is currently undervalued in terms of the Dow. That means that history will likely repeat itself and gold will hit a point at or close to a 1:1 ratio with the Dow. That could look something like this:
Dow - $5,000
Gold - $5,000
Many smart world-renowned economists put that figure even higher. Assuming the above were true, if silver for the lion's share of history has been valued to gold with a ratio of 1:10, SILVER WOULD BE WORTH $500 AN OUNCE! Let me remind you that it currently sells for $32 per ounce!
You don't have to wait 10 or 20 years for this to happen. They are calling for $2,000 per ounce gold by the end of the year. Very soon the banks will no longer be able to suppress and control THE PRICE OF SILVER. It will break out and could even enjoy a higher ratio than the traditional 1:10 or 1:15 because it is EXTREMELY SCARCE due to the fact that it is used heavily in many industries.
Bottom line: Buy money at a discount by INVESTING IN SILVER.
Hope you enjoyed your first silver lesson. Much more coming!!!
Your Friend,
AB
Coming Soon: A blog about investing in silver bullion to hedge the coming economic Armageddon!
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