Posted on 12/06/2009 7:15:16 PM PST by blam
Deflationary Economic Depression 2010, Ready Or Not Here It Comes!
Economics / Great Depression II
Dec 06, 2009 - 08:31 PM
By: Darryl R Schoon
Much has been written about the Great Depression and the present crisis. There is much that is similar and some that is not. The differences explain why events have unfolded differently. The similarities explain why the end will be the same.
Deflationary depressions occur after the collapse of large speculative bubbles. The collapse of the 1920s US stock market bubble, then the largest bubble in history, caused the Great Depression of the 1930s. The collapse of the far larger dot.com and US real estate bubbles will cause the next.
WAITING FOR THE OTHER SHOE TO DROP
A daisy chain of disaster
The present economic crisis is similar to that of a patient who has suffered a massive near-fatal heart attack. Presently surviving only because of constant care and unprecedented levels of medication, it is the unprecedented levels of medication that will ultimately cause the patient’s death.
The amount of monetary stimulus keeping the global economy afloat has never been greater. Two of the largest economies in the world, the US and Japan, now have interest rates close to zero and, along with the UK, are engaged in “quantitative easing”, a monetary phenomena akin to self abuse, i.e. self-stimulation.
Extreme measures of monetary stimulation via money printing are necessary to counteract the deflationary pressures set in motion by declining asset values against which massive amounts have been borrowed. But, in the end, creating money out of nothing will reduce the value of money to exactly that—nothing.
This is the path upon which governments and central bankers have embarked. Fraught with danger and pitfalls, it was not their first choice—it was their only choice—and the rising price of gold is a measure of how far on the path they have traveled. Just prior to the collapse of the dot.com bubble, gold was $300 per ounce. Today, it has exceeded $1200.
It is not a coincidence that as monetary debasement has reached unprecedented levels the price of gold has also reached unprecedented heights. As money printing has increased, so, too, has the transparency of its fraud.
Money printed in increasing quantities becomes increasingly worthless; and, gold, as an intrinsic store of value, reflects the accelerating debasement of money in its price.
Not all believe, however, that gold is a function of monetary debasement.
[snip]
I just built a root cellar - not a bad thing to have out here in the Alaskan Bush. I have a feeling that we’ll be eating a lot of cabbage, potatoes, carrots, and turnips in the upcoming years.
Deflation would mean FALLING gold prices. So which is it?
Why dimes?
Keep in mind that if we hit a bad situation, those selling what you want to buy may very well only give you face value for the 90% silver coins.
I was in a store tonight and was pretty depressed because I came to the conclusion that many Americans are just idiots. You have too many illegals and too many idiots plus welfare freeloaders.
The country is going to hell with a muslim leader and they are more interested in NFL and college ball games. Pathetic.
In the name of saving some they’ve screwed us all.
Sold a 100 oz. bar last week. Nobody knows what will happen. I put my cash in a hard asset that has a stable value to me . I made 600 dollars on it in the last eight months.
A silver dime is a smaller unit of silver, so it's easier to spend on everyday items.
Keep in mind that if we hit a bad situation,
WHEN we hit a bad situation . . .
those selling what you want to buy may very well only give you face value for the 90% silver coins.
Then you give those sellers paper, not silver.
I watched an auction of silver dollars last week. It really didn’t matter what the dollar was, Peace, Walking Liberty 1880 or 1927, they all brought $18.00 each. $18.00 an oz.
Dimes would weigh out the same. The actual coin has no more value than the silver content, unless it has a rare misstrike, or some other unique characteristic.
The thing about gold or silver, there are no guarantees it will be worth market value if you have to sell. And if dollars are worthless, what other unit of value will give you a fair exchange rate?
>>I put my cash in a hard asset that has a stable value to me
Ammo?
...how much are silver dollars going for these days?....also dimes?....I’ve got some I bought during Carter....back then the dollars were $13 apiece.
I’m sorry, but this article did not impress me one bit. It seemed like he was making the case for inflation, not deflation.
In which case you tell them "OK, I have some shiny new dimes right here. Face value, right?"
Watch their heads spin.
Good move, blam. I am doing the same. Small denominations of silver coins will always be accepted, even at deflated face value. I would rather get 10 cents for a silver dime than to get .01 for a copper-clad counterfeit coin.
I have an ad in the local paper this week selling some of my “extra” ammo and am offering the option to purchase it with U.S. silver coins at a 10:1 ratio.
I notice that gold have taken a downward plunge this past week while silver continues to barely move. Silver is $18.49 right now.
You invest in “junk silver” as a prepper for when people won’t take silver.
If you need to buy $50 worth of absolute necessities, it’s going to take a lot of dimes. Or only 100 1964 Kennedy half dollars.
That’s the point I was trying to make.
"Will 2010 be a 1930 or, comparable to 1937? Is it different this time? When one nation state of a formerly high productive stature destroys itself with inflation, the untouched others can soften the blow and in time bail out the fallen one. This was Germany’s fate in the 1920’s. In our current instance, most all of the world’s economies are on their knees with some hurting worse than others. Who can help with recovery this time? There is no one. It will not be China as some suppose as China shall suffer the same systemic collapse as the U.S, and all of Europe, Russia, and South America. China’s neighbors Japan, Taiwan, Korea, India, Indonesia and others will join the fallen."
"“A Great Collapse. The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing…debasing the U.S. dollar…"
My purchase of junk US silver coins is betting that they will hold their value against other goods. See the article in post #17 about hyperinflation.
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(I only watched chapter #19 & 20 but found them beneficial)
We've been putting in 400 lb seed tatoes for 7-8 years; yukon golds & iditareds. I always have 1000 lb in basement, they stay good till march; need a root cellar too; wife won't let me dig up cement in basement. The Indians help me dig them and I give alot away to friends actually. We always put up 75 gal bags of carotts, grow cabbage & brocc.
Wife and I have our teaching certs, forever get offers from urban Ak; can't bring ourselves to leave here. Ya know, livin is cheap here, and quite safe; hard to leave now the kids are grown and off to school.
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