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Deflation Doesn't Exist


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#46 Metamucil

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Posted 15 December 2002 - 09:12 PM

'Successful' reflation would have to swamp debt destruction (which is highly leveraged), in order to have any theoretical usefulness.

This would mean that The Empire (regardless of political leaning, this is a fact) has elected to destroy its currency, in the name of fighting a losing battle with Mother Nature.

The commodity index is perhaps misleading, in that gold and energy are propelling the breakout. I want to see almost all commodities broadening the potential secular commodity bull.

Also, long term rates are declining....for now.

Monthly ten year rates:




Truth is stranger than fiction. This is going to be fascinating.
"I know the human being and fish can coexist peacefully"____George W. Bush, 7/29/2000

#47 Guest_yobob1_*

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Posted 16 December 2002 - 06:48 AM

Now kiddies this isn't a recipie for making your own bars at home, but it isn't too hard too come up with a low cost alloy slug that mimics the density of silver. It needs to be balanced so the bar feels natural. Not much silver is required, just enough to pass a reasonable scratch test. It's all very low tech, the equipment required is minimal and can be had for not a lot of money. For a small scale operation with silver at $50 an ounce you could recover the costs with a single 100 oz bar. From there on out, it is all gravy. Having done some metal casting myself, I can tell you it is not difficult.

My bars are to cover the possibilty of closed banks and markets. In that scenario I think the coins will be discounted due to the prevailing psychology of the times.


The value of the coins is the melt value. Silver has been in a very long production deficit and the remaining stocks are dwindling. This is the primary reason silver should rise in value as time wears on. With a global recession there is a lower demand for silver, however that is offset by a lower demand for base metals. That will curtail mining of those base metals which is the primary source of freshly mined silver. That will leave the production deficit still at high levels. The mostly pure silver mines are for the most part not operating....they can't make money at current prices. It will take much higher prices to make silver mining profitable and the time lag to reopen existing mines could be very long. Many mines will never be reopened due to flooding. The modern industrial world demands huge quantities of silver in thousands of applications and there is no lower cost substitute. Silver becoming viewed as an investment metal, like gold, would only add to the demand and pricing pressure. I'm not of the opinion that the coins would become valuable as a trading medium necessarily, though with a total wipe-out of the global fiat scheme, they may. I seek maximum leverage by minimizing the initial premium percentage and actual price of the premium. Premiums generally will not increase or at least not at the same rate as the spot price of the metal.

#48 Guest_AssMaster_*

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Posted 16 December 2002 - 09:19 AM

If coming up with a personal "banking holiday" proof stash, one should probably have some paper money for a month's expenses & perhaps some traveller's checks.

I'm thinking gold coins in a variety of denominations, silver dollars/bars, some platinum. Some bags of 90% silver coins are rather hard to store. Maybe one should also have your passport in order? Might need to get out of Dodge in a hurry.

#49 Hypertiger

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Posted 16 December 2002 - 02:39 PM

Silver is cheap enough that there is no real need to fake it. The stuff is dirt cheap...
"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money (at the request of the consumer) we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." --Robert H. Hemphill, Atlanta Federal Reserve Bank,1938...





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