Thursday, August 26, 2010

Hyperinflation, Part II: What It Will Look Like

Now let’s return to the possibility of hyperinflation in the United States:

If there were a sudden collapse in the Treasury bond market, I argued that sellers would take their cash and put them into commodities. My reasoning was, they would seek a sure store of value. If Treasury bonds ceased to be that store of value, then people would invest in the next best thing, which would be commodities, especially precious and industrial metals, as well as oil—in other words, non-perishable commodities. 

Some people argued this point with me. They argued many different approaches to the problem, but essentially, it all boiled down to the argument that commodities and precious metals have no intrinsic value. 

Actually, I think they’re right. In a strict sense, only oxygen, food and water have intrinsic value to human beings—everything else is superfluous. Therefore the value of everything else is arbitrary. 
Yet both gold and silver have, historically, been considered valuable. Setting aside a theoretical or mathematical construct that would justify the value of gold and silver, look at it from a practical standpoint: If I went to a farmer with five ounces of silver, would he give me a sack of grain? Probably. If I offered him an ounce of gold for two or three pigs, would he give them to me? Again, probably. 
Where there is a human society, there is a need to exchange. Where there is a need to exchange, a medium of exchange will soon appear. Gold and silver (and copper and brass and other metals) have served that purpose for literally millennia, but then they were replaced by paper. 


  1. Just a question and don't jump all over me for asking it. What happens if they want to confiscate it, outlaw its use in barter and take it from you if they know you have it. Short of complete chaos, what happens if they take it from you if they introduce a new currency?

    Don't kick me in the balls now, help me out here.

  2. the ancient and only legitimate purpose for gold is the adorn the dwelling place of the god. The god of cannibalism and blood.

    Bring your offerings to the pyramid and watch as the glittering surfaces are made pure with the sacred metal.

    Soon we will need sacrifices. All are welcome to offer themselves or another as a victim.

    The sacred college of federal reserve chairmen is ready to examine and approve the sacrificial victims. Take the meth and cocaine concoction.

    Mount the pyramid to immortality kicking and gouging and screaming, your blood will transport the fedheads to ecstasy and divine vision.

    Their oracle of interest rates will descend through the agony of your cries.

  3. Total Economic Collapse

  4. "Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."

    Alan Greenspan
    1966 - Gold and Economic Freedom

  5. 2:58 that has to be the best quote i have ever read. Thank you so much for sharing it Love to ask greenspan about it.

  6. "If I went to a farmer with five ounces of silver, would he give me a sack of grain? Probably. If I offered him an ounce of gold for two or three pigs, would he give them to me? Again, probably."

    Just also be aware that if said farmer is lacking enough grain himself and pigs to feed his own family then even gold and silver would be essentially worthless to him. IOW, it's all relative to one's particular situation, what he can afford to give up, and what he's willing to risk towards the future to own what you and he believe is valuable today and tomorrow.

  7. Anybody want to form a mini community? Alliances in the new world to defend against the hordes will be important.

  8. Mortgage interest rates will continue to fall resulting in homeowners refinancing and paying much smaller monthly payments. The federal government will continue to do massive borrowing of budget to prop up the economy. There will be a push to buy USA products.

  9. 3:58 Where are you at? I'm in the Phx area.

  10. 326 Genius, have all the grains, food, water, protection and everything you need, then buy silver, Moron. The object is to have everything, so you need nothing, then you are in charge, get it?

  11. DC gangstas gotta go.

  12. Sorry people but 3:58 has the right idea.

    I disagree in the fighting off hordes mentality however.

    Gold and silver are going to be good objects to throw away in a garbage can or perhaps hand to a little kid to run off with.

    Municipalities will be the objective, there will be no police, no soldiers, no government, no one to be the judge over some lame ass Earth minerals. You might get shot in the back of the head for them however by someone else who is deluded into thinking they will have value.

    If you have family you will definitely want to get into a location now that is faraway from inner cities or violent areas. Your neighborhood will become the government! After you evaluate your locality focus on this:

    1) What do you have to offer? Muscles for labor? Are you a craftsman? Builder? Mechanic? Cook? Gardener?

    2) What kind of addictive patterns do you have? Have you begun weening off things that won't be available soon?

    3) Do you have reserve? Manners? Politeness? Can you help integrate people who are panicked or in an uproar by maintaining a cool head yourself?

    And no, this is indeed VERY different than any other time a nation has collapsed. This is the apex of a 104,000 year period and the decision as to where it will all go from here.

    We might even be looking at a new species of man emerge from this. Homo Luminous.

  13. Lol! 3:58 and 4:56 are humorous in an Orwellian sort of way. Your clan can all dig down and establish colonies underground and maybe someday emerge on the surface of a new world as a hybrid race of mole people all ready to take charge of the stone age knuckle-draggers who will be left. Musta read too many Doc Savage books as kids.. lol

  14. @4:56, you are too far I'm in the PA area but keep up the good work in planning for the catastrophic times ahead.

  15. Axle and Slash sang to us in the 80's. A lot of 80's music had a message unlike the crapola today.

    "Welcome to the jungle
    It gets worse here everyday
    Ya learn ta live like an animal
    In the jungle where we play
    If you got a hunger for what you see
    You'll take it eventually
    You can have anything you want
    But you better not take it from me"

  16. I lost respect for any validity as soon as the F-bomb was used in the article.

  17. I did not mind the f bomb, but when the word god was used it lost all validity

  18. Captain, sensors indicate jesus freak in the vicinity.

    Anger and swearing is an understandable response to the structural thievery and criminality that makes hyperinflation a possibility. It doesn't negate any of the intellectual points of his article. Maybe the author should check with you first before he writes another. We wouldn't want you to feel uncomfortable.

  19. Taking God out of the picture and mocking him is exactly why this nation will fall hard. Enjoy the feeble little pathetic human scumbag that replaces him as your leader.

    I bow to no man. No king but Jesus.

    Enjoy licking the dog crap off your master's boot you pagans.

  20. 11:02 I would suppose you fall into that class of those who also believe it's okay to steal and kill when you are hungry. I mean, we're in hard times, right? Obviously, since you are the master at metering out justification, how low do we go as a society? Who is the real "freak" here. Your logic is lacking.

  21. @7:35 Treating others like you do makes you unworthy of Jesus. He would have never talked to another human beeing like you do. He'd be a shame of you. Go read his teachings.

  22. You're reaching a bit 827. Now I'm saying it's ok to steal and kill? Really? Anyone who can't handle the "F Bomb" as some call it, is in for a rude awakening. There are some that will kill and steal in coming years, ignoring good discussions on the future of the economy because the author swears is very shortsighted.

  23. I'm stocking up on just the goofy, day to day things you never think about. Shampoo, aluminum foil, coffee and coffee filters, powdered milk, TP and rolled paper, water, water, water, motor oil, sheets of plywood (your window is blown out, you'll want that plywood), and my secrect weapon: bottles of cheap whiskey and vodka for barter. If society collapses and a neighbor wants a snort, I'll be the man to see. For further reading, see the price the Grandpa Joad paid for whiskey in The Grapes of Wrath.

  24. Too many Jehovah`s Witnesses on here! You guys get back to work beating on doors, cutting through hedges, and stepping in dogshit like your ordained to do.

  25. 12:16 Would you drink a glass of water with a small piece of phlegm or fecal matter in it? Neither would I. If an article has feces in it, I disregard and look toward something else that stimulates my intellect a bit more than search in the dredges amongst the feces.


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