Yes, they are
connected.
Dollars are created as debt.
More dollars in circulation = more debt.
More debt means consumption is “pulled forward” from the
future so consumption can occur now.
This usually ends badly.
Commercial banks and central banks have created trillions of
new dollars. Each new dollar devalues every other dollar currently in
circulation, in savings, and in pension accounts. Prices rise!
Wars are costly, kill people and produce little. Governments like wars because they create
demand for production of war materials.
More production means a higher GDP (even if the concept means little). Politicians
point to higher GDP and claim it is good.
More production creates employment.
Everyone wins, unless the bomb fell on you. Unless the drone targeted you. Unless you
live on a fixed income and prices continue to rise. Unless you are a soldier and were injured or
killed.
As dollars are devalued, prices rise for most goods and
services. Yes, televisions are less
expensive, but have you checked the price of beer, medical care, cigarettes, cars,
Whisky, college tuition, food, and 101 other items we need?
As dollars are devalued, the price of silver rises. Each dollar buys a smaller piece of silver. Wars burn many dollars, many ounces of silver,
and consume other commodities, which rise in price. Demand for silver increases, dollars buy
less, and supply increases slowly, if at all.
Prices for silver rise because of supply, demand, and devaluation.
The DOW is higher because each dollar buys less. Central bank “printing” of many extra dollars
supports the DOW. Wall Street hype helps
also. Regardless of the hype, a good
crash occurs every decade or so, and after the crash the stock market rises
again. Most people buy high, watch it
crash, and sell low. How many people
will take profits near the top in this market?
BUY SILVER!
As prices rise, shirts cost more.
Debt, dollars, DOW, war, silver, and shirts are connected. They rise and will continue to rise, two steps
higher and one lower, as long as we use debt based fiat dollars.
Examples:
Money supply and debt increase. Look at official national debt since
1913. Can you think of a single reason
why it will reverse a century-long exponential trend (debt doubles every 8 to 9
years) and turn lower?
Wars will continue and prices will rise. The helmet for an F-35 will cost
$400,000. The price for a
World War II P-51
aircraft was $52,000.
Silver
prices have increased for 90 years and will continue to increase.
The price for shirts is higher, much higher. Dollar devaluation increases prices.
This dress shirt is currently
available from Nordstrom for $175.00
Debt,
dollars, DOW, war, silver, and shirts are connected.
Option
One:
Reduce Federal government
expenditures, declare peace, balance the budget, let it crash …
and DREAM ON!
Option Two:
More of the same. More debt, dollars in circulation, continuing
wars, and higher silver prices. Shirts will
cost $500 instead of $1.00 in 1934 and $175.00 today.
Option Two
– so what?
Taxes increase as dollar devaluation continues. Can you afford higher taxes? Will your income rise enough to meet your
increased expenses and higher taxes?
Will Social Security and your pension pay you in mini-dollars, or
micro-dollars? Can you live on pension
payments denominated in micro-dollars?
CONCLUSIONS:
- Debt, dollars, DOW, war, silver, and shirts are
connected.
- Prices for food, housing, transportation,
clothing and most other items will increase.
Believe the “low” consumer price inflation myth at your own peril.
- The future may look like the 1930s – where debt
killed. Or, more likely, it will look
like the 1970s – continual price increases, stagflation, weak economy, rapidly
rising gold and silver prices, and increased global stress.
- My bet is 1970s inflation and worse. Do you own due diligence but remember dollars
will be devalued further and higher prices are inevitable.
- Do you own
enough silver?
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GE Christenson is the owner and writer for the popular and contrarian investment site Deviant Investor and the author of the book, “Gold Value and Gold Prices 1971 - 2021.” He is a retired accountant and business manager with 30 years of experience studying markets, investing, and trading. He writes about investing, gold, silver, the economy, and central banking. His articles are published on Deviant Investor as well as other popular sites.
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The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
