Precious Metals: What Could Possibly Go Wrong?

Platinum EagleThis is an OP-ED. Don’t lose your mind over it – but gold can’t hold at its current price at a ratio of almost 41 to silver. I’m sure everyone knows this, but there is a lot of platinum in the system. It’s used in manufacturing, but no country ever used it as a standard – so there isn’t much platinum coinage or rounds or ingots held privately.

Gold is still trying to hold at around $1620 which is almost exactly where I called a huge drop. I still expect it but suppose…suppose gold went off and gained another ~$200. At $1,800, gold becomes more expensive than platinum which LOST $10 today (July 28).

There is enough platinum in the world and there are no laws which say the US – or any other country – can’t adopt a platinum standard, require that it be sold in futures markets in lots of 50,000 ounces and banging out a few billion coins — and printing up a new fiat currency based on it. The new world currency would still be paper but it would be convertible to a metal which has really never had a huge individual market. There wouldn’t be a demand for the actual metal, but it would still be backed by something tangible – and more valuable than gold (usually). But right now platinum is going DOWN. Why? If I were a conspiracy theorist, I’d suggest that it’s so gold can overtake platinum before profit-taking in gold begins.

You think gold would keep going up? Silver? I don’t. And that’s just what I’d do. In one hour I could stabilize the national economy by locking the new currency to platinum but not releasing the platinum except to futures delivery contracts. Sure, it would start floating into circulation soon enough, but by then gold and silver will have tanked, everyone’s investment in those metals will be lost, and states might well decide to allow both of them as legal tender at a regulated price.

It’s brilliant. Your gold immediately goes to $300, silver to $8, everyone is wiped out, your ‘hedge’ is gone, and now, in order to redeem an ounce of platinum for $2,000, you need 7 ounces of gold or 250 ounces of silver and one tube of K-Y. So your choice is to sell everything you tried to hedge at a huge loss and use the fiat currency after all. Except nothing you have is worth anything no matter HOW you hedged it.

They got you again.

Dr. Tom is a retired scientist who is now farming on the Big Island of Hawaii.

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  • James Farrell

    Good to hear a ‘contrary’ opinion. Respectfully think you are wrong. Would be interested in your take on 5000 years of human history re money vs. the current worldwide fiat currency ponzi scheme owned by bankers. Another angle would simply be PM and dollar charts, PM’s are going up but the dollar has lost 97% of its value from the inception of the Fed in 1913. Why own a piece of paper with no intrinsic value created by bankers by the trillions from thin air?

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  • Tom Burnett

    Aloha Thomas.

    Nope. The Bureau of Engraving and Printing, a bureau of the US Treasury Department prints money and strikes coins. True, the currency is issued by the Federal Reserve and called Federal Reserve notes – but the Federal Reserve doesn’t print them.

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    • Thomas

      If that is the case its even worse. We print them (dollars/federal reserve notes)then give them to the Federal Reserve for free? Then they lend that same money back to us with interest and they make a profit on the transaction?

      This calls for a revolt…….

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      • Tom Burnett

        Usually. But this time they gave it all to the banks (QE1, QE2) to payoff toxic assets which never got paid off. Now the banks are all suing each other and yelling “THEY did it! It wasn’t US.” Of course it was them. All of them. Anyway, right now the FED is busy borrowing 2 billion dollars a day from China to keep from getting caught out. It won’t work. Greece will crash, Italy, Spain, France, the rest of the EU dominoes and then it will be our turn. OUR banks wrote MOST of the Credit Default Swaps in Europe and made billions in profits. But all of the banks AND the US government COMBINED don’t have enough assets between them to pay off all that bad paper.

        What has to happen is that every bank in the world has to mark their assets to market RIGHT NOW instead of marking them to fantasy. Most of the banks will immediately fail, but that is because of their business practices. They SHOULD fail. Instead, the government is making the citizens so the banks can live. It is an impossible task.

        Yes, it does call for revolution but I doubt enough Americans can summon up the courage.

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  • JoLouise

    I respectfully disagree with the critics. I for one am very interested in the viewpoint of this blog. Perspective is critical right now, and too much of the information floating around out there fits into the same agendas. The gold & silver arguments, which I followed for a few years, are now (to me) tired, worn out, and factually inaccurate. I stopped being in love with my own ideas. That’s what lead me to this site; a growing craving for alternative views. Think, and re-think.

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  • Joseppi

    It’s quite obvious, even to the casual reader, that the author of this article has invested vast sums in platinum and is talking up his investment. I am most certain that he thinks he will get fabulously wealthy someday if enough rubes start feverishly buying platinum.
    I understand the way this type of investor works. After he liquidates his platinum he will probably then invest in lead in the form of projectiles.
    He will then talk up how the country is going to the dogs, and there soon will be social chaos with packs of wild dogs roaming the streets pillaging and plundering. He will tell us that only those with enough lead investments will survive.
    This OP-ED author is the kind of investor we must keep a wary eye on in the future.

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    • Tom Burnett

      “This OP-ED author is the kind of investor we must keep a wary eye on in the future.”

      Oh yeah? Yuan who else? [snicker]

      It so happens that I am already heavily invested in lead. I considered casting projectiles in silver like my pappy, the Lone Ranger, but I have decided it’s more effective to machine them out of the chunks of Depleted Uranium I dig up at Pohakuloa. They are heavier, more frangible than other materials, pyrophoric, and give the gift that keeps on giving if you survive the initial impact.

      I have some machined .50 cal DU projectiles as well as bar DU which I dip in molten lead (to contain the radiation), and them molten gold to create correct-weight gold bullion which I sell with certificates of authenticity to suck … investors.

      I just turned my AT&T Iphone off. It didn’t work most of the time anyway and they were charging me more than a New York hooker for using their service a few minutes a day.

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  • Tom Burnett

    “In fact your entire argument really makes little sense because it is no different than suggesting to use some Rare Earth Element to back a currency. 95% production comes from China, very scarce, and prices driven to high levels.”
    -Steven T

    I thought that too, but I began checking. China PROCESSES more ‘rare earth’ minerals than anyone else because they have built an industry around it. But they don’t HAVE most of it. ‘Rare earth’ isn’t really that rare after all. Cerium is more abundant than copper. There is more Yttrium than lead. With the exceotion of promethium (which is radioactive), ALL rare earth metals are more common than silver. My ‘what if’ (I wasn’t advocating for it) makes more sense than you might think. One of them could easily become a standard for metal-backed money.

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    • Stephen T

      Yes, “Rare” Earths are really not that “rare” in terms of actual metal weight that exists globally. But that is besides the point when referring to commodities because it is all based on supply/demand that determines scarcity. China currently produces over 95% of rare earths and about 45% of the global resources also exist there. Up until 2009 there has been enough annual production supply to meet global demand, but starting 2010 going forward indefinitely, annual global demand exceeded production supply with a huge shortfall expected in 2011 and 2012. So at this point, my REE example was merely used to highlight an important point with your platinum example, which is that there simply does not exist enough production to meet industrial demand let alone to allow investors to begin hoarding such strategic metals or allow Central Banks to buy enough metal to be used to back currency.

      I do admire your creativity for attempting to think outside the box with contrarian perspective that is typically at odds with general public thinking. But some basic research before conjuring the latest “solution” would easily identify the fundamental issues that exist with some of your ideas. Anyways, it fosters constructive debate, critique, and shows the many issues that exist with determining a proper long-term solution to the world’s problems.

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      • Tom Burnett

        So what, again, prevents the Treasury from striking a chest full of one ounce Platinum coins with a face value of a billion dollars each and backing the currency with them?

        Let me repeat that I write OPINION EDITORIALS. They exist solely for the purpose of making people think instead of sheep who are told what to think.

        Arguing with the premise behind them, especially when the possibility exists, is merely group-think and you are welcome to it.

        In point of fact, the US is spinning up rare earth mines again and, unless someone ties fiat currency to SOMETHING, it has no actual convertible backing other than the full faith and credit of the issuer, which is only good until it isn’t. When that fails, then what?

        The only long-term solution to the world’s problems is less people. We are rapidly approaching that endeavor. I have called the next major rapid-onset extinction event to begin in 2020 and peak in 2034. I imagine different problems will exist then.

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  • Stephen T

    Creating a platinum standard backed currency would never fly politically or practically. There exists very little platinum reserves worldwide, the global production of this metal only amounts to about 130 tons, and over 90% of this global production occurs in two areas: Russia and South Africa. The other problem is platinum has many industrial uses and over 50% of total production is being consumed with limited recycling. In fact if all platinum mining ceased today the above ground reserves would unlikely last even two years based on current global consumption.

    This is the same reasoning why silver will probably never be used in the future to back a currency, but the supply fundamentals may not be as extreme as platinum.

    In fact your entire argument really makes little sense because it is no different than suggesting to use some Rare Earth Element to back a currency. 95% production comes from China, very scarce, and prices driven to high levels.

    And the paper futures market will be dead since that system will also get brought down coinciding with the demise of fiat currency.

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    • Tom Burnett

      I didn’t say it would fly. I said it was possible to do. I think I also said it would start a civil war, but I’m not going back to look. I don’t defend OP-EDs. Since everyone has a different opinion, what would be the point? Opinions are subjective. Practicality has nothing to do with it. Is borrowing 2 billion dollars a day from China in order to break even practical?

      I qualify for food stamps but I don’t have an EBT card. That isn’t practical either. I should suck off the teat of government until it dries up, but I won’t. I am a combat veteran. I can get free medical from the VA, and probably a disability pension since I qualify for that, too – but I don’t. Not one penny and only one clinic visit in 15 years because they wrote me and asked to screen me for Agent Orange. I was drenched in it several times and they confirmed it but I didn’t submit a claim.

      Fiat currency can never be eliminated because there is not enough metal to back it. If the dollar fails in the world market, everything fails – and we would continue to use it because it’s all we have as a barter medium. Silver won’t work NOW and the currency hasn’t even failed. The 10% of people who are buying silver are doing so to try and catch the market upswing so they can turn it back into dollars – but they won’t make a profit because the value of the dollar has decreased – it’s not tied to the price of silver.

      I’m thinking, and I agree with you, that almost all commodity futures markets will be dead, at least for awhile. We, on this island, can all survive and prosper. We just need to agree to be citizens for a year or two until we rebuild the infrastructure and re-make friends and develop trust relationships. This is paradise, even in a world run amok.

      I’m not religious, but there are a couple of lessons I cannot phrase more appropriately. The main one is “Do unto others”. When you come to my farm to barter, you will be treated like a jewel on the pillow of my hospitality. There will be no disharmony or confrontation unless you bring it with you. Because I want you as a trading partner and, when people ask, I want you to tell them how you were treated and that you were dealt fairly and that you prefer to trade with me – because even if you can’t come yourself, whoever you send will be treated the same way and you can depend on it.

      Ten people who have different goods and can establish that sort of handshake relationship form the moral and ethical basis for a society. We are over half way there already.

      .

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      • Belisarius

        If you think the banks and/or the dollar may go down, it does make sense to buy a little silver…after you have taken care of everything else. If you have no debt, and a reasonable stock of provisions and still have excess funds in dollars it makes sense to spread your risk. Silver might be usefull for barter before a new system takes hold or if it fails to, and it might not. Your old dollars and/or bank deposits might be convertable into a new currency at some meaningfull rate, or not. The Fed may find a way to keep the dollar going another fifty years.

        We cannot know what will happen. I do not view silver as an investment, rather as potential currency loss insurance without counterparty or guarantor. Depending on how things go, and people’s reactions; it could be invaluable, of marginable utility, or totally useless.

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        • Tom Burnett

          If you have disposable income, I suppose you may pick and choose how to spend it. Most of us don’t. I buy hard goods – things I can actually use. But, because there is no other standard of trade, the dollar is going to remain ours. But there remains one small issue. Silver is only currency at face value. Not at some imaginary bubble price. Your silver dollar is worth a dollar.

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          • Thomas

            That’s odd………I know someone who just sold a thousand ounces of silver and they got over $30,000.00 of your dollars in exchange……

            This particular person bought in the last big pull back for $9.00 an ounce. He turned his $9,000.00 into $30,000.00 and now has an additional $21,000.00 of your dollars that he is using to buy a farm….

            Your silver is worth what ever some one will pay you in dollars, rubles, pesos, yen, yuan, and so forth but in the U.S and around the world today that silver dollar will fetch you over 30 federal reserve notes form people that are happy to get the silver at that price…No one will sell or trade you a silver dollar for a single federal reserve promise of a dollar today…But if you find anyone willing to sell silver even at ten dollars give me a call I want it all…..

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          • Tom Burnett

            @Thomas:

            I know you are smarter than that because I know you personally. The scenario we are discussing is that the economy fails completely. Until and if it does, silver will be worth more than face value. WHEN it does, there will no longer be any measure of comparison. That is my point. Don’t compare apples to oranges. I know someone who won the lottery once.

            But let me use your own example. Silver is worth what someone is willing to pay you for it in SOME CURRENCY. When that currency disappears, the silver HAS NO INTRINSIC VALUE. It is only worth what someone is willing to convert it to in some universally acceptable medium of trade. If that medium does not exist, the silver is worth face value – exactly like it was inteded when it was minted.

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          • Belisarius

            I don’t consider income “disposable”, but do put aside savings before planning spending, have been doing so for years, and i agree many cannot. Just not using debt can save 10% or more a year.
            We also seem to agree on the “hard goods” and emergency preps that are priority “savings” of another sort. I also agree “dollar death” is unlikely, but plan for if i’m wrong medium to long term. The hyperinflationary end of the dollar is possible, just not likely very soon. I have no idea what silver would be worth in that event, (face value zero) and hope i don’t find out. Luckily for me some PM “true believers” live nearby to trade with. It could work for me, YMMV.

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  • Homo Vastator

    I am very sorry to see these pages graced with such a poor analysis. The author says “There is plenty of platinum in the world” but cites no numbers or sources. As for no law, check the US constitution.

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    • Tom Burnett

      I’m not quite certain how you managed to read the post while bypassing the first sentence, but I can help you since, apparently, your search engine is disabled. For your information, the Treasury has the authority to issue infinite amounts of platinum coins at any denomination it chooses (like fiat paper currency, far above the metallic value). a chest of $1bn coins, for instance. Look up the word ‘seignorage’.

      Here’s another one. http://fauxcapitalist.com/2010/01/30/platinum-the-overlooked-investment-metal-and-currency/

      For that matter, the Treasury could eliminate the Fed’s entire holding of Treasury bonds at a stroke, gaining an extra two years. This would be a simple accounting transaction. Bernanke might get an upset stomach, and gold might blow through $2,000, but it could happen.

      I don’t particularly need to read the Constitution again, but you might. Article 1, Section 8:

      The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

      To borrow Money on the credit of the United States;

      To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

      To establish a uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

      To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

      To provide for the Punishment of counterfeiting the Securities and current coin of the United States;

      To establish Post Offices and post Roads;

      To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

      To constitute Tribunals inferior to the supreme Court;

      To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

      To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

      To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

      To provide and maintain a Navy;

      To make Rules for the Government and Regulation of the land and naval Forces;

      To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

      To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

      To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;—And

      To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

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      • Nunuv

        Yeah but it makes coinage via the states and the constitution says: “No State shall …make any Thing but gold and silver Coin a Tender in Payment of Debts;” Article 1 Section 10

        Only gold and silver may be used for coinage.

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        • Tom Burnett

          UPDATED but it’s late and I’m tired. Forgive the typos. This is MY OPINION. I do not present it as fact. If you have editorial access, feel free to correct obvious typological confections.

          If you just said that the US mints coinage VIA the states, no. The US MINT strikes coins in various locations, all of which are located within one state or another, but the states don’t strike coins or print fiat currency. Only the federal government does that.

          Let me try this again.

          If you want to preserve wealth, you ain’t gonna with $1,900/oz gold. Apart from my estimate that a third of the bar stock in circulation is tungsten-filled, that is still $19,000 for ten OUNCES of gold. People who are running the price of gold up in an attempt to preserve wealth are going to get bitch-slapped by the market.

          Nineteen thousand dollars is one acre of farmland or one mid-sized farm tractor or eighty Ruger stainless 10-22 rifles or 40,000 gallons of water catchment or a thousand gallons of crude oil or 5 like-new, certified-for-use 40’x9.6′ Hi-cube steel shipping containers delivered to Hilo (or Kawaihai) or, if you could still get them, ~15 new, unfired, collector-grade M-1 Garands (which have increased in value at about the same rate as gold) or a chicken coop and 2,000 chickens which graze on coquis and produce up to 2,000 fresh eggs a day and sell (or barter) for about 40 cents per egg. That’s a better return than PM is going to give you.

          You can always sell a few egg-producing hens for ten bucks each but what can you buy with a $1,900 ounce of gold in a depression? No one can make change and WTF would someone who is worried about food want with gold?

          I keep telling people they can’t use gold in an economic meltdown. Even hinting that you have gold is like telling people you are a Mormon and have a years’ supply of food and water in your house. When the shit hits you will never be able to sleep again or walk around without constantly looking behind you. Even then, someone will get you when you let your guard down for one second. Then the albatross is on their neck. Although I consider gold worthless in a subsistence economy, most people believe, through faulty reasoning, that gold has some intrinsic value and that it can be used to preserve wealth. Not so. The ‘value’ of gold has been below $300/oz as recently as 2001. NOTHING prevents it from returning to that level.

          But if you had spent that $19,000 to start a microbrewery, everyone would be your friend and you could barter a bucket of beer for anything you need – no one tries to steal a brewery.

          There is not enough gold and silver and copper and pearls in the sea to back the dollar anymore, so that’s not happening. It’s a dream. It isn’t real. Trade can’t happen unless everyone has access to the same medium of trade, even if it’s paper. Sure, fiat currency doesn’t have any intrinsic value, but neither does gold. It’s just a place-keeper. We can use anything as long as everyone has some of it.

          Bottle caps from Billy Beer, Confederate money, US dollars, it doesn’t matter as long as it’s something that isn’t easy to counterfeit – but everyone has to have access to it and agree to use it. OK…forget the Billy Beer bottle caps.

          Cognitive dissonance is believing that things WILL get bad enough to make gold worth $1,900 an ounce, in which case the 99% of people who don’t have gold can’t make change and don’t want it anyway, or things WON’t get bad enough to make gold worth $1,900 an ounce, in which case you are wasting your money because it is in a huge bubble which will burst.

          A friend just wrote back to me and said ‘They can make change with silver/silver coins’. OK, but that doesn’t change the issue. No one has $1,899 dollars in silver coins to make change for an ounce of gold. Or, if they do, they can only do it a couple of times and then what? Are you going to walk to a friend’s farm to barter one ounce of gold for a chicken and carry the chicken and 2+POUNDS of silver coins home? No, because without high-speed communications, no one knows the ‘value’ of PM. There is no standard and the price fluctuates wildly. So everyone will have to use the default, or FACE VALUE – there is no other way to do it.

          Suppose everything actually does tank and the Internet goes away. Five days later, what is your gold worth? $3,000 an ounce, or $300? You can’t know so how ya gonna sell it? But a dollar is still a dollar. What it will buy depends on supply and demand in a barter economy, but it’s a standard that everyone understands and will keep using. Your gold bar is a paperweight at that point. You can tell me it’s worth $1,900 but if someone will only give you face value, that’s all it’s worth.

          PM is going to tank right after the economy does. No small investor manufactures anything at all, much less anything that needs silver or gold. Most people don’t HAVE silver or gold. It ain’t practical unless you got into gold at $40 and silver at $8. Then you might have a cushion – but in order for that cushion to work you need to sell at the top of the market, yet no one will.

          My observation is that people who own PM fall in love with it and will always hold it, anticipating appreciation, until they HAVE to sell it to buy food – but then the food purveyor sets the value.

          Guaranteed, you bring a shiny silver dollar to me to barter and it’s worth a dollar. It’s only worth ~$43 to people who are in love with the word ‘silver’ – and your uncirculated $20 St. Gaudens double eagle? It’s worth $20. The entire purpose for issuing money is to create a standard – and that standard is Face Value.

          Remember, Grasshopper: PM has no intrinsic value. It is worth what someone will pay for it or barter for it at the time you need to trade it. People fall in love with PM and lose their perspective sometimes. PM is a good storage unit for wealth, but a subsistence economy does not confer wealth. When the national economy tanks, everything resets – including the price of PM. If you cannot hold your PM for twenty years, or you are buying at any price, you will be caught on the wrong side of the market correction.

          Let me give you an example. I assume, as a best guess, that the stressor will be economic. Suppose it isn’t. Suppose a nuclear accident or another unimaginable incident of some sort occurs on Oahu and shuts down the port. It can happen. Immediately there are no more barges coming to the outer islands. Within three days there will be no gasoline or propane or food in the stores or toilet paper or, really, anything else. Ever business will have to close because there isn’t any fuel. That stuff will now have to come from the mainland by ship. But it can’t come to the Big Island because we have no deepwater ports so we will simply not get a lot of stuff for a month or maybe much longer. We will also lose our electricity and Internet so everyone in the urban zones will lose power (lights, refrigeration, radio and TV) and, eventually, water. OK, you have prepared for this day by collecting 100 ounces of gold and a thousand ounces of silver. So? What are you going to buy with it? Where? How will you get the PM there and your purchase back home?

          The argument that a hoard of precious metal can mitigate a disaster is is fallacious, but people simply refuse to believe a problem exists that gold cannot solve – or, in fact, that something they never imagined can actually happen until it does. Then it is too late.

          If you have a million dollars in the bank or a million dollars in silver and gold under your house, that’s great. But I have seen what happens when we ruin out of stuff on an island and it can’t be replaced immediately. So far, a week is about the outside before more barges come. A month would be a different ballgame. The local idiots forced the interisland ferry out of business and there is nothing to replace them as a life-line. They COULD have run between the mainland and a shallow-water port, but no more.

          My point is always the same. It never changes. If you cannot provide yourself and your family with food and water for a month. If you cannot PROTECT yourself and your family for a month if vehicular transportation stops. If you cannot amuse yourself constructively without a television, or take the opportunity to teach your kids that it’s OK without power and television and things happen and there are still books; and that they need to learn and practice sanitation skills and learn the personal responsibility they never had before, who, exactly, do you think is going to do it for you?

          What happens if a relative happens to drop dead at your house during the month? There is no one to call – the phones are out anyway. YOU had better know how to handle it. When something catastrophic happens – not ‘if’ – it will be too late if you aren’t prepared. Can you prepare EVERY meal without electricity, gas, or pre-packaged charcoal? What are you going to cook? Do you know how to gather enough food for your family unit within walking distance of your house? Only if you have a farm. How are you going to wash the plates? How are you going to wash clothes? How are you going to wipe your butt without toilet paper and running water? Do you know how to start a fire in the rain? Can you make charcoal? How dark is the inside of your dwelling if there are no lights and you have no flashlight? Oh. You DO have a flashlight? Suppose you drop it and it breaks or the batteries die or the bulb burns out? What happens if you sit on your only pair of glasses? Can you get water out of your catchment system and purify it without electricity? Farmers can.

          Now that you have thought about these things, all of which might be required of you within a week after a disaster, can you tell me what part precious metal might play in your potential survival plan?

          Thus far, all of this supposes that you are healthy and clever enough to actually think through problems calmly and logically while everyone else is having a permanent panic attack. It presumes that you can set goals under a serious hardship and accomplish them – and that you have no casualties during the critical period. If a member of your core group is injured, or someone’s appendix bursts, what will you do? Can your family survive if you become sick or injured? This is Hawaii and food falls off trees all year long. Finding it SHOULD NOT present a problem, but you will require a varied diet and you will have to be mentally prepared to succeed at this, whether it is for two weeks or two months.

          It may never happen. I hope it doesn’t. But something will. Shit happens, every day in every part of the world. We are not immune. I live my life as fully as I can and I do not fear the unknown. Challenges exist to be conquered. But neither am I oblivious to the possibilities.

          So…having presumably survived the first onslaught of whatever natural or man made disaster, which no one ever expected or even believed could happen just happened, triage. If you are near the center of the problem, your job is to help someone, right here, right now – because you would want someone to help you or your family. Then decide what can you do right now, from where you are, with what you have immediately available to you. The first thing everyone will try to do is get home. Can you get home right now or would tomorrow be better? Can you get home at all? If not, where CAN you go that would be immediately beneficial or reduce potential ongoing risk? Does your family have sufficient food, a plan, and the confidence necessary to survive whether or not you get home?

          In the case of an off-island disaster which will affect us here, what can you do to gather your core group and begin working through ACTUAL problems as they occur? People do not panic if they are tasked with a goal and are too busy working toward it to panic. Start doing it.

          The ‘official’ government document I have – and which you can read at http://www.ncddc.noaa.gov says this: “It may take 72 hours or more for emergency personnel to reach you”. That assumes that someone knows your status and is trying to reach you. Don’t figure on it.

          And don’t eat cold spaghetti-Os with canned corn and drink canned chicken broth for a week expecting that at any minute someone will come to save you.

          If there is no fuel forget about anyone coming for awhile. The military might well be busy, although they might eventually deliver some MREs. The good news is that there are now 24 entrees and 150 combinations and they are all self-heating. The bad news is that you may get a case of all chicken fajita meals which are actually worse than having none at all.

          Many of us have sufficient communications capabilities to talk to a quarter of the world. We will be able to get the word and pass it along and to summon help if help is available. This is a good time to consider becoming a HAM radio operator and rigging a bicycle-powered generator to power your equipment. It is also a good time to consider solar and wind power options and solar heating. If you have those things, you will have lights, a refrigerator and maybe a functional stove, washer and dryer. You may not know how important those things are until you no longer have them but life without them will make the problem worse. Maybe MUCH worse. People tend to thrive if their home, which is their main comfort zone, functions as normally as possible.

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          • Thomas

            Tom are you sure the federal government prints fiat currency (dollars)?

            I was under the impression that the Federal Reserve (a private banking cartel) printed the dollars (federal reserve notes).

            Here is how I think it goes.

            Article I, Section 8, Clause 5, of the United States Constitution provides that Congress shall have the power to coin money and regulate the value thereof and of any foreign coins. But that is not the case. The United States government does not issue money, control the flow of money, or even distribute it – that is done by a private corporation registered in the State of Delaware – the Federal Reserve Bank.

            With the advent of the Federal Reserve (in 1913)a new currency was issued – Federal Reserve notes, which at the time were based on the gold standard. The Federal Reserve was to unite and supervise the entire banking system, control the expansion or contraction of currency, and regulate the flow of money to the commercial banks. That power comes through the Federal Reserve Act and the establishment of 12 Federal Reserve Banks. The Federal Reserve is controlled by private banking interest and by Presidential appointment – but it is still a private organization and not a government entity. In 1913, President Wilson’s creation of the Federal Reserve System established a three-tier monetary system in the United States – the holders of money (public, government, business and institutions; the commercial banks that borrow from the public and issue loans; and the central bank or Federal Reserve that has a monopoly on the issuing of money. The Federal Reserve is technically owned by the commercial banks.

            THE FEDERAL RESERVE CONTROLS THE MONEY, NOT THE GOVERNMENT

            “Because of the unsound practice of relying on the private manufacturing of monetary credits by private groups, you are preparing to lay heavier taxes on the shrunken income of the people, without hope of balancing the Budget perhaps for years to come,” was the testimony of Allen B. Brown, chairman of the New Economic Group.

            The testimony was given in 1936 on April 27, 1936. The hearings were held by the House Committee on Banking and Currency. The preamble of the bill – HR 9216 of the Seventy-fourth Congress, states, “The committee had under consideration the bill (HR 92163 to restore to Congress its constitutional power to issue money and regulate the value thereof; to provide monetary income to the people of the United States at a fixed and equitable purchasing power of the dollar, ample at all times to enable the people to buy wanted goods and services at full capacity of the industries and commercial facilities of the United States; to abolish the practice of creating bank deposits by private groups upon fractional reserves, and for other purposes.”

            The bill would have allowed the nation to pay off its national debt and stay out of debt. In one year’s time, with this bill, the national debt could have been paid, and without any tax increases, plus it would have allowed for full employment.

            “By this bill, Congress resumes its constitutional duty of issuing money and regulating its value, a duty and a right which it has long been abdicated to the private banking system,” read the preamble of the bill. The bill would have eliminated the private manufacture of money – a direct contravention of the mandate of the Constitution, which places the right to coin money in the hands of Congress.

            Allen B. Brown, chairman of the New Economic Group said that the bill before Congress would “put a stop to this process of privately manufacturing monetary credit for the use of business out of added government debt.”

            Under the Federal Reserve System “The banks manufacture, without borrowing it, the monetary credit which they loan to the Government. For every dollar they themselves contribute to the loaning process, they manufacture 10 credit dollars, and call them their own, although they base the credit dollars on human sweat and labor and productive genus that is not their own” said Brown. This was a direct slap at the Federal Reserve System – that was only 23 years old, at the time. “The crying fault of our prevailing money system is its impermanence. It fluctuates wildly in volume, because it is debt-money, loans, and subject alternately to the fears and the sanguine expectations and speculative propensities of its private owners who have become the debt-masters of all business.” He added, “We need to be delivered of the curse of a money system that is not owned, as a cash-credit system, by the American people. We want no longer a system that can at any time be canceled out of existence with the dumping of pledged securities and, simultaneously, with the depression and deflation of all the physical and intangible assets of the American people.”

            As is evident by the situation we now find ourselves this bill never became law in 1936 – the banking interest was too powerful.

            As far as I can tell the government does not print the dollar (fiat currency) still.

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