Gold, Silver And Hyperinflation

Western money-printing is increasing exponentially and sovereign debt among these debtors is also increasing exponentially. The explosion of sovereign debt will result in debt-default and the explosion of money-printing will result in full-fledged hyperinflation.

Jeff Nielson
July 28, 2013

Most commentators in the precious metals sector still are not treating hyperinflation as a likely scenario -- as “competitive devaluation” continues to relentlessly drive all of this paper to zero. I can prove this. How? Because these commentators continue to issue (long term) “price targets” for gold and silver.

Indeed, many articles discuss “revaluing” gold at some arbitrary number as some Final Solution to fix these broken markets. Revaluing? Clearly a reminder of the definition of hyperinflation is in order.

Paper goes to zero (near-zero). Prices for hard assets go to infinity (near-infinity). Not “5,000.” Not “10,000.” Not even “100,000.” We are no longer talking about “high prices.” We are talking about Zimbabwe prices.

(Western) money-printing is increasing exponentially. Sovereign debt amongst these Western Deadbeat Debtors is increasing exponentially. Exponential curves only have one, possible ending: things blow up. The explosion of sovereign debt will (must) result in debt-default – and Debt Jubilee. The explosion of money-printing will (must) result in full-fledged hyperinflation.

adjusted monetary base

The only “question” here is which will come first.

The United States claims to be the most-successful among these Deadbeat Debtors in preventing its own financial suicide. It has a $1+ trillion per year deficit (and more than $200 trillion in debts/liabilities). And the only reason the number isn’t much, much higher is that by fraudulently holding interest rates on that debt at near-zero it is minimizing interest payments.

However, even if such fraud could be maintained permanently, it solves nothing. It merely delays debt-default (and hyperinflation) by a couple of years. The fact that massive manipulation of markets is slowing these exponential progressions in no way alters the inevitable outcome. Paper goes to zero; prices go to infinity.

What then? A new monetary system will rise from the ashes, with new currency(ies). What will the “price” of gold be in such a new system, with brand-new currency? It could very easily be “1”.

I’ve argued previously that when the current (fraudulent) system of banker-paper implodes that the People will tolerate nothing less than a return to real money – i.e. currency backed by a hard asset. For 5,000 years; the only practical commodities to back our currencies have been gold and/or silver. There is no reason to assume our future would/could be any different.

Apart from the specific attributes which make gold and silver perfect money; the equally powerful argument is “what is the alternative?” Are we going to “back” our currencies with oil…and remove large quantities from the global economy in the form of monetary stockpiles?

Any commodity which could be argued as important/strategic enough on which to base an entire monetary system (or any group of such commodities) is too important to have large quantities devoted to passive usage as monetary stockpiles. Indeed, it’s precisely for this reason that even silver cannot be a practical backing for our economies. It’s too important to industry and bankster shorting has almost completely destroyed global stockpiles.

The only monetary asset which can possibly be used to back our economies (and currencies) is gold, which explains why (alone among all commodities) it has continued to be treated as “money” by the global monetary system (and all the bankers corrupting that system) – despite decades of deceitful, rhetoric to the contrary from these same banksters.

My prediction for a “future price” for gold is 1; which is to say that instead of a world where we price gold (and all goods) in terms of the bankers’ fantasy-paper, that we move to a world where currencies (and all goods) are priced in relation to gold (and silver).

It is a world so conceptually different from our present one that even as the person describing (attempting to describe) this world, I have difficulty thinking in such terms myself. Yet it is precisely the paradigm which has been employed by humanity for approximately 90% of all our millennia of human commerce.

The “insane” paradigm is the current one, foisted upon us by the fraud of the One Bank, the lies of the propaganda machine, and the corruption of our Puppet Governments. We must leave this Insane World, and return to sanity. We must re-program ourselves.

Obviously the very first step is for people to stop living in denial and confront the (future) reality of hyperinflation. Exponential curves have only one, possible ending.

We know these (already worthless) paper currencies will officially go to zero – or close to it, before being removed from circulation. We know our morally/intellectually/fiscally bankrupt governments will default on their gigantic debts. And then a new system will emerge: the Post-Hyperinflation system.

Once we wrap our minds around the reality of this Post-Hyperinflation system, it becomes possible to (mentally) construct a new paradigm. This is a rational world where prices exhibit fixed, near-constant relationships with hard assets (and fundamentals) – rather than being the arbitrary (i.e. fraudulent) dictates of the One Bank, expressed in various forms of its own, worthless paper.

The peerless documentary, The Money Masters explains (in detailed, eloquent terms) why it is imperative for us to smash the central bank money-printing cartel if we ever seek to restore economic liberty to our societies. But as is the case with any paradigm-altering transition, first we must free our minds.

When we speak of gold at some fantasy-price of “$5,000” or “$10,000” we are helping to perpetuate this fraudulent system. There is no rational “price” for gold (or any other hard asset) in paper which will soon be literally worthless – and is arguably worthless today.

How many ounces of gold does that house “cost”? How many ounces of silver for that piece of furniture? This is the rational world which we all need to remember (from deep within our collective, genetic memory).

Late last year I wrote the commentary When Prices Have No Meaning, explaining how/why as these forms of banker-paper get very close to The End that prices will become even more perverted/detached from reality. What is the “correct price” for an automobile…in Monopoly Money? It is a nonsensical question, since any answer would be totally arbitrary.

This year we have seen precious metals prices perverted to a degree never before witnessed in our markets: prices going (virtually) straight down, while demand went (virtually) straight up. The bankers are advertising the fact that this sick system nears The End.

One part of our preparation for The End of Paper is the monetary insurance which investors in this sector (and readers of these commentaries) are obtaining in the form of physical gold and silver bullion. But equally important is our mental/psychological preparation.

Someone still looking toward a Future where the price of gold ends at $10,000/oz will inevitably experience the shock of deer-in-the-headlights syndrome should they wake up one morning to discover the price of gold at $10,000,000,000/oz (or higher). How many people can truly claim to be (mentally) “prepared” for when gold is $10,000,000,000/oz and silver is $1,000,000,000/oz?

“Hyperinflation” is not some fairy-tale which we tell to small children at night, to frighten them. It is the inevitable mathematical outcome of our current, irreversible policies.

How many barrels of oil should we be able to get for an ounce of gold? How many bushels of wheat for an ounce of our silver? We need to start practicing asking those questions today, so that we will be ready to provide answers to those questions tomorrow.

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