Long Silver John

Weekly Recap: Is the U.S. Going Bankrupt?

If the Treasury is shifting to short-dated maturities to carry a growing debt load, and if the Fed is therefore even more reluctant to raise short-term interest rates, then if velocity starts taking off, what's left to stop the runaway train of inflation? How can reverse repos be undertaken in sufficient quantity to offset Treasury needs to borrow for both principal and interest payments? What tools would be left?

Saudis Drop WTI Oil Contract - But Why?

What would happen if OPEC priced oil in grams of gold?

Falling Dollar: Finally Front-Page News

There has been a tremendous bi-partisan break-down of leadership on fundamental issues for the past 25 years. Neither party, nor Congress, nor the Administration, has done their job of safeguarding the American public. It is an across-the-board failure of leadership and it will be registered as one of history's most tragic, and needless, break-downs of a promising society.

Unemployment: The Gathering Storm

I'd guess there will be an emphasis on less specialization and more self-improvement into generalists. This will cut down on the need for a regular cash generating job to pay taxes, and use the rest to pay cash to have specialists handle every little aspect of your life. I grew up on farm and bartering among friends and family is routine (as most folks lack ready cash). So you'll see more of that. There will be more emerging technologies that drive growth. When I got out of law school in 1982, there were no jobs. That was a year before the PC revolution took off like a rocket creating whole new industries, followed by the internet wave, etc..

Will the Dollar Decline Forever?

In 1923, as I recall reading, there was a fairly steep drop in the value of the Mark on world currency exchanges (down 2/3rds in four months). Then it paused with government intervention. Then, as the dam broke and faith evaporated, the value of the Mark simply vanished. The ones who survived were those who bailed out and converted into gold/silver. If the same pattern is happening here, look for a 3-4 month steep drop in the dollar (spike in gold/silver), followed by government intervention, then a swift demise of the dollar as the Chinese and others bail out of Treasuries. Just think of that. The Chinese are able to destroy our country by doing almost nothing. We can then expect to see political instability here, as the Internet makes organizing against government that much easier, accompanied by military adventurism by rogue states abroad (just wait and see as Iran gets the bomb). All this because our elected leaders believed their primary objective was to get re-elected.

Fed Unwinding Won't Be Easy

Chris, you state: "Either the counterparties no longer exist, or if they do, some will decline (read: refuse) to buy the assets back, because doing so would bankrupt them (due to the fact that the assets are worth a lot less than the price the Fed bought them for)."

This seems to be the crux of your article, yet it is stated very briefly. Can you enlarge upon that theme?

The Gold Standard: As Relevant as Ever

Thanks for sharing that article, Katy. I read Murray Rothbard's two volume economic treatise recently and this fiat currency blow-out has indeed occurred at regular intervals many times in history. The most viable way for gold to re-emerge as an active currency is if OPEC requires all future purchases of oil to be in GoldMoney.com electronic gold (or something like it). The combination of a gold-backed electronic currency (like PayPal) is workable. That would immediately impose an external discipline on fiat money governments.

Dollar Under Too Much Pressure. Decline Will Continue

It's pathetic that our "leaders" have put this great country into a financial position where all our enemies have to do to sink our currency is "nothing," just not show up for the bond auctions.

Reich Is Right: Watch Your Wallets

I read an article last fall that South Korea had a culture where layoffs were shunned. Instead, everybody took a pay cut but kept their jobs. I wonder how Korea is doing now, compared to the US? Anybody following that story?

Holy Cow! Look at the Treasury Auction Schedule

Things can happen quickly. In Weimar 1923, I read recently, the currency declined in value by 2/3rds in only four months. It then paused with some government intervention, then went on a rampage and simply evaporated into thin air. The upper middle class saw it coming and bought up gold and silver. The middle and working classes got wiped out.

Is Treasury's TARP Debt Already Monetized? Part III

Good insight by Mr. Ryskamp on the supply chain and how business failures by key participants could lock up movement of goods to market. I was worried about this last fall, as the short term credit markets froze up. But I think he's right about phase two: the cascading failures are going to remove certain key players in the supply chain. Very keen observations.

Move Over Fed, California's Now Printing Its Own Money

If you look at old Confederate Money, it promised to pay in gold 2 years after a peace treaty was signed with the United States.

Move Over Fed, California's Now Printing Its Own Money

The only difference I see between Registered Warrants and Federal Reserve Notes is that the Warrants pay a smidgeon of interest. It will be interesting to see if they start trading below par value.... wonder if the banks will redeem at par? Or if the local grocery store will take them at par?

Paul Volcker: The Voice in the Wilderness

Mr. Volcker should resign from the non-position he holds in the Administration (probably intended only to control him) and take a candid, hard leadership stance against the excesses of both political parties... time is running out. Speak up Mr. Volcker!!!

The Dollar's Long Term Trend Appears to Be Set in Stone

Isn't the focus on currency indices as a predictor of the future like looking at a car's speedometer to try to determine future speed? It seems like one needs to focus on what's under the hood (the engine and how many pulleys, etc. are putting a load on the motor) and the terrain, as well as how other cars are doing in the race?