Thursday, August 9, 2012

Perspective on NO-Hyper Inflation or NOT

 So what do we have ? 1 oz of .9999
Silver.     So what do we have for indicated value ? $5.00, Five dollars.

Seems almost disappointingly shocking. 

Now lets go back to  2001, when the Elizabeth II colorized maple leaf was issued, or to 2010 when the GRIZ was issued.    Lets skip forward two years+ to 2015, and look back at when ARGENTINA defaulted on their external debt, and for every 4 peso's  you had in the bank, you lost the purchasing power of 3, you were  soooooo screwed..... except if you had Silver or Gold.

Now I won't bore you with the details but since I live in North America, that will be my perspective.

Something WILL happen.  If it is Hyper Inflation, we all know how that works.

Let's say it is NOT, but rather the sneaky kind of thing that has been ongoing
since the creation of the US Federal Reserve Bank, stealing your purchasing power since 1913.  Look it up, its sneaky cause you always think you trying hard and making more but it always ends up less and you blame your-self while the fat cats are laughing at us.

So lets assume that by some magic "THEY" let prices deflate and our Maples and Eagles are worth $5.00 or so.  The trick is, they will be worth $5 @1910 prices. ! ! !  "LOOK MA, no hyper-inflation ! ! !"  Wow.  OK now what.

Well if something like that happens there will be TWO SETS of PRICES, one for FIAT Paper, and one for REAL MONEY such as Silver and Gold.  Somewhere between 5::1 and 20::1 is how Silver might trade in relation to Gold.

IN Washington State, unskilled workers in  1912 were paid $2.50 a day, roughly equivalent to the 3 Silver Pennies labor got in the middle ages in strong economies.  So if a REAL were cut into 8 bits, it would be likely a worker would get 2 for a days labor, and each bit would, at the prices I am going to show, be worth about $1.25.  Now here are some Pre-FRB prices:

These are generally for 1 lb sizes, historically the norm, and noted if otherwise;

Sugar  5.5 cents @ lb

Cheese 17 cents @ lb

Ham, fresh or smoked 15 cents @ lb

Bacon 15 cents @ lb

Eggs 40 cents @ dozen

Florida Oranges 18 cents @ dozen

  Food for thought ? 

         If Gold is the money of the rich, silver the money of the people
       Barter the money of the peasants, and fiat/debt the money of those without other means,  then  there will be Three prices for goods people want:

        Gold and Silver will garner the lowest prices;

         Barter will arrive at prices negotiated then accepted as customary, slightly higher than Silver or Gold;

         Fiat/Debt will receive a price based on whatever the producers wish to sell for and for as much or little product they will release.  It will be the hardest with which to obtain the daily necessities for the masses.

If the debt cannot be destroyed through inflation, then it will settle on the masses like a yoke of misery, or destroy the monied classes through whatever means evolve.  Not a pretty picture, but you  know what Money  you need to have to secure the basic necessities of daily life.