THE COMING SILVER STORM: The Public Is Not Prepared

The financial sky is growing dark.  The stock markets are experiencing volatile trade winds.  The barometer of the economy grows weak as indicators point to another recession looming on the horizon.

The Precious Metal Storm is coming… unfortunately, the public is not prepared.

I believe the U.S. and world are heading toward an economic collapse that civilization has never witnessed before.  Even though we have suffered greatly through World Wars and global depressions, we have always been able to pull ourselves out of the chaos and destruction by regrouping and rebuilding.

As I have stated several times before… this time will be different.

After reading the work of various precious metal and energy analysts, I am quite surprised how many of these individuals can posses a high degree of intelligence while making some seriously flawed forecasts and assumptions.

One of my readers asked me a question via an email, “How could I provide a lot of quality analysis and data… while being BULLISH ON SILVER?”  This person couldn’t understand why I could be fundamentally in favor of silver when typical orthodox analysis points to a bearish deflationary outcome for the shiny metal.

And… there lies the rub.

The U.S. and world are heading down the toilet because analysts, intellectuals and the movers & shakers running the show, have allowed their ignorance-greed rather than their intelligence-wisdom to guide monetary, economic and governmental policy.

FIAT CURRENCY ASSETS:  The Great Bamboozle

The chart below shows where the majority of U.S. personal sector monetary cash assets are allocated.  These do not include retirement or security investments, but are rather paper assets we may label as “Cash or Cash Equivalents.”

U.S. Personal Sector Financial Assets & Total Global Silver ETF's

According to the Federal Reserve Q3 2013 Statistical Release, the U.S. public held $1,174 billion in Money Market Fund Shares, $1,332 billion in Checkable Deposits & Currency and $7,723 billion in Time & Saving Deposits.  Thus, there is a total of $10,229 billion or $10.2 trillion in these paper cash assets.

You will notice on the left side of the graph a small pathetic figure of $14 billion.  This represents the total value of all the Global Silver ETF’s as of Q3 2013.  The data for that figure comes from GFMS Thomson Reuters Nov. 2013 Silver Update.

The next chart below details the holdings of the different Silver ETF’s from around the world:

Current Value of SIlver ETFs

As we can see there are 655 million oz of silver held in these Silver ETF’s. If we multiply the 655 million oz by $21, we would get a figure of $13.7 billion.  I rounded the figure to $14 billion in the first chart.

If we assume that this is the largest store of physical silver in the world (not including the LBMA or COMEX), its total value ($13.7 billion) pales in comparison to $10.2 trillion held in U.S. personal cash assets.

Now, if we were to include the current 182 million oz of silver at the Comex and let’s say there is another 200 million oz at the LBMA, that would add another $8 billion to the figure… giving us a total of $22 billion.

Whoopee…

The U.S. public has $7.7 trillion stashed away in digital Time & Savings Deposits.  I am going to disregard the other two categories as they are fiat currency assets that the public may use on a more “day-to-day” basis.

However, Time & Savings Deposits are “extra or surplus”  funds that are generally not used in the day-to-day business of Americans.  Thus, the total value of the Global Silver ETF’s are 0.2% (one fifth of one percent) of the value of all U.S. Time & Savings Deposits.

This may not seem so strange to the typical American today, but just fifty years ago (when I was a kid), the U.S. Dollar was backed by gold and the coinage had a great deal of silver in it.

After President Lyndon Johnson signed the “Coinage Act of 1965”, which removed silver from circulation, within a few years… it was difficult to find a silver coin.  Once silver was removed from official U.S. coinage, it went into hiding.

The term “went into hiding” means the public instinctively understands the implications of Gresham’s Law — bad money drives out the good.  When the U.S. Government starting minting base metal slugs as official money, it didn’t take long for the public to withdraw the real money (silver) from circulation.

A few years after the signing of 1965 Coinage Act (removing silver from circulation), the next shoe to drop was gold.  On August 15, 1971, Nixon closed the gold window, which meant foreign governments could no longer exchange U.S. Dollars for physical gold.

Because the U.S. was printing so much money in the 1960’s to cover the costs of social programs and the war in Viet Nam, foreign countries were exchanging paper Dollars for physical gold.  During the 1960-1968 time period, the U.S. was apart of the London Gold Pool that attempted to hold the price of gold at $35 by selling thousands of tons of gold on the market.

The biggest loser in the London Gold Pool was the U.S. as it exported over 4,700 metric tons during that nine-year time period.  Here again was another example of bad money driving out good.

If we fast forward to today, Gresham’s Law is alive and well as the East continues to exchange worthless fiat Dollars for physical gold.  Not only did the Chinese import a record amount of gold in 2013, they also imported a stunning 247 metric tons in January.

According to Koos Jansen from the “In Gold We Trust” website:

Having said that; How can gold demand (I assume that’s what they mean by usage) be 1176 tons, when China mainland net imported 1123 tons just from Hong Kong, domestically mined 428 tons, and additionally net imported gold through other ports? Regular readers of this blog know the number 1176 tons of demand is false, it was in fact 2197 tons as my research has exposed.

….Withdrawals from the Shanghai Gold Exchange vaults in January 2014 accounted for 247 tons, which is an increase of 43 % compared to January 2013. It’s also more than monthly global mining production and an all-time record! China mainland mines about 35 tons per month which is required to be sold first through the SGE. The other 212 tons (247 – 35) had to supplied by import or recycled gold. My estimate is that scrap couldn’t have been more than 25 tons, so import in January was a staggering 187 tons. China is still draining the vaults in the west BIG TIME.

Currently, China and many other Eastern countries are focusing on acquiring physical gold… as it is the king of monetary metals.  However, this does not mean that silver will miss the huge transfer of wealth show because it is now just a supposed “Industrial Metal.”

Silver is still a valued monetary metal due to the fact that the Official Mints continue to produce both Gold & Silver Eagles, Maples, Philharmonics, Koalas, Kangaroos, Pandas and Libertads.  Do you see these Official mints producing these coins in copper??

Regardless, demand for silver is picking up as both India and China have increased their net imports of silver over the past several years.  This chart is from Nick Laird’s Chartsrus.com:

Chinese Net Silver Imports From Hong Kong

Here we can see that China has gone from being a big net exporter of silver, to a net importer since 2010.  In 2009, (last year being a net exporter), China had net exports of 1,260 metric tons.  However, in 2012, China became a net importer of 82 metric tons.

While this may seem like an insignificant figure presently, it is the beginning of another trend change that will more than likely continue to a greater degree in the future.

Furthermore, when the Indian Government cracked down on gold imports in 2013, its citizens switched to buying silver.  Indians imported a record 5,400 metric tons of silver in 2013:

Indian Silver Imports 2007 - 2013

This was a record amount of silver imported by India, estimated to surpass the 5,049 metric tons set in 2008.  This provides proof that citizens of the world will instinctively purchase silver if they cannot acquire gold.  When one monetary metal is unavailable, demand for the other will increase.

Did the Indians LOAD UP ON COPPER when they couldn’t buy gold?  Of course not.  Maybe at some point, the public will realize the monetary value of silver.

Unfortunately, the realization will be too late as available supplies of physical silver will dry up and blow away when the GREAT FIAT CURRENCY RESET finally arrives.

If we consider that the U.S. public holds $7.7 trillion in Time & Savings Deposits while the world has a paltry $13.7 billion in total Global Silver ETF’s, something is very wrong with the public’s ability to understand the wisdom of “real value.”

Again, less than fifty years ago, gold and silver were legal forms of money in the United States.  Today, if you talk about the positive attributes of gold and silver on CNBC, you become the laughing-stock on the set.

Gold and silver will become some of the best stores of value in the future as Peak Energy destroys the ability for the Global Fiat Monetary system to continue.

We must remember the KEY INGREDIENT that keeps a Ponzi Scheme alive is the ability to hoodwink a new batch of POOR UNWORTHY SLOBS to part with their hard-earned fiat currency.  When I say SLOBS, I am not trying to be harsh here (as I am one of the SLOBS myself), but rather to offer a term that the banking elite would use in describing their clients — the public.

If a typical Ponzi Scheme needs a new supply of victims’ funds to keep it going, the Global Fiat Monetary Ponzi needs a growing supply of energy to keep it from collapsing.  That is why a peaking global oil supply will destroy the ability for the Elite to continue manipulating the system.

The Fiat Monetary System and Derivative’s Monster are heading toward certain death…. it’s just a matter of time.

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38 Comments on "THE COMING SILVER STORM: The Public Is Not Prepared"

  1. Great article Steve. Keep up the good work.

  2. Good Article. Thanks. And it seems Chase is having new controls for CASH deposits. Must show I’d and cannot deposit cash into an account to which you are not a holder. A shame you won’t be able to make a deposit for a sick relative!

  3. And much of the physical Gold for China was supplied through depletion of Comex/LBMA stocks and the GLD. Especially from such a low asset participation rate, and assuming that the ETF’s are indeed stocking the correct amount of physical Gold and Silver to back the shares, when the MOMO crowd get on board, where will the physical come from? One thing is for sure, it isn’t coming back from China. This, together with short covering by Hedge Funds could result in an explosive move higher

  4. Silver Curious | February 17, 2014 at 7:09 pm |

    What’s happens to Silver demand/price if the South American countries remonitize Silver once again?… would New York & London still get enough Silver to keep flipping over their massive short positions?.

    Also, what’s stopping the Silver rich South American countries from remonitizing Silver? – as it seems to be in their extreme social&economic benefits to do so.

    • Silver Curious,

      The problem with foreign countries such as those in South America is that they are tied into the current U.S. Dollar World Reserve Monopoly. If the did decided to monetize silver in their country, it could cause more harm than good… AT THE PRESENT TIME.

      Furthermore, many of these countries don’t have much in the way of Gold or Silver reserves.

      I believe at some point in time we are heading back to a more PHYSICAL ECONOMY, which means the commodity producers of the world will no longer have to starve to death.

      steve

      • Silver Curious | February 18, 2014 at 11:55 am |

        I believe that Mexico, Bolivia, Peru, and a couple others still have relatively large in-ground Silver reserves (yet to be mined) …. Wikipedia says that Venezuela alone has an estimated 10,000 tons of in-ground Gold reserves yet to be mined ……… I might be wrong but it seems to me that if the South&Central American countries remonetized Silver again, and kept their Silver production internally, as opposed to shipping their Silver production to New York & London, that the Silver rigging game would be over in a New York minute.

        The amount of social&economic benefits of remonitizting Silver would create in the South&Central America would be enormous – as they’d need to be mining 24/7 to re-build their reserves.

        Possibly remonetizing Silver with a 2 tiered system to start; IE: keep the junk paper currency (to placate the US & intl. bankers) and also have a separate silver backed currency at the same time – let the people decide which system they want to use.

        The only negative I see in the short-term would be the financial retaliation by New York & London – they’d probably start naked short selling all the bonds of the select countries to drive up interest rates – as a form of punishment.

        • lastmanstanding | February 19, 2014 at 8:51 am |

          SC…they will need a nearly infinite amount of energy/fuel to get to it…and then to refine it…etc., etc. There are no guarantees on the amounts.

          The risks are becoming to great…even for the bad people who know that what they are doing cannot continue.

  5. Nitro Charged | February 17, 2014 at 7:16 pm |

    Great report Steve!

  6. Incidentally, there is a VERY typical Raid going on right now at a typical time for these capping operations. Probably orchestrated by BIS in HKG. When the short-covering kicks in, they just don’t have enough physical to sustain the capping game this time around.

  7. 2/3rd’s of silver is a by-product of copper and other base metals. When you see record stockpiles and collapsing end demand for those base metals…get ready for a slowdown in by-product supply of silver and the same time that primary silver producers are under significant pressure to cut exploration, cut cap-ex, close down high cost production. Prepare for supply collapsing as demand continues ramping due to loss of faith confidence in paper based “savings”. Epic.

    http://www.zerohedge.com/news/2014-02-17/chinese-iron-ore-stockpiles-rise-record-end-demand-plummets

    • Chris,

      I have stated several times that I believe GLOBAL PEAK SILVER will occur first in the base metal by-product mining industry. Many have this notion that a recession-depression will be bad or deflationary for silver.

      If this was 1930 or 1980… I would agree. However, when the U.S. Dollar Fiat Monetary Regime goes belly up.. then deflation of fiat money is totally MEANINGLESS.

      steve

      • Hey Steve – something to ponder…

        What makes more sense –

        that the Fed ran (runs) a secondary QE program (perhaps equal to the on-books QE…perhaps double) through foreign financial centers of the world through countries like Ireland, Belgium, Norway, Taiwan, UK, HK, Russia, etc, etc. to maintain the US Treasury bid / yield and these purchases are “attributed” via TIC in the nation where they are purchased (not to purchaser)

        ie, who believes that our good friend Russia increased their holdings from $8 B in Jan ’07 to $140 B today??? Make sense???

        ie, how bout China increasing from $400 B in ’07 to $1.268 T now in US Treasury debt???

        ie, how about Norway who held $0 in June ’07 now holding $97 B in Treasury debt??? Make sense???

        ie, Ireland held $10 B in ’07…now holds $125 B??? Make sense???

        And on and on…

        OR

        These countries love american debt that yields nothing, will be paid back in inflated dollars, and ties them to a dollar based global system they are trying to move away from??? Since ’08 they have all supposedly massively increased their holdings for somebody???

        FYI –

        this data really is utterly worthless…read.

        Long and short of this is we have no idea who bought these, who owns these, only where they are purchased and being held. Nothing to stop the Fed or ESF or whatever to buy all the Treasury’s they want with free money and hold them in China or Japan or Belgium to attribute them to “foreigners” rather than Fed??? If this is 10% right, be very very afraid of the dollar.

        • If this is even a little bit true, the US dollar may be the dirtiest dirty shirt….

          • These nations are de-dollarizing asap via removing dollar trading (particularly China/ Russia), talking dollar down, but strangely their attributed holdings only go up…perhaps they really are moving away and we only see the facade of dollar stabiliteeeee’

            The biggest “red flag” in this is as the Fed is tapering, and they were buying all medium term Notes / all Bonds (up to their 70% limit) on their stated exit from QE, “Foreigners” who own $5 T+ (more than double Fed’s holding) would have seen rates would be rising and prices falling absent the Fed’s bid…if they were “investors” they would have been selling. But no selling…these are not “investors”. This is someone seemingly unconcerned with taking losses.

  8. “WICKED DEBT FRAUD” The one and ONLY answer to the debt problem is to declare it null and void because of FRAUD! It is fraud because it is mathematically impossible to repay ! It can not be repaid because the interest is never created on the loan and that is fraud ! And fraud voids all ! If we don’t void all out of thin air debt the bankers will own almost EVERYTHING ! And we will be homeless slaves ! They have a license to counterfeit ! Can I counterfeit the money to repay the loan ? Why not ? If we even attempt to repay a impossible debt (the national debt) all we do is show our ignorance ! The way to fix this mess is so simple a 3rd grader can figure it out ! We void the fraudulent debt! and everyone keeps ALL the items they have so called debt on ! And then we start to use a debt free currency and / or gold and silver ! And then we will have a robust economy like never before — OR WE LET THE BANKERS STEAL EVERYTHING !
    I was in about the third grade when the news was talking about the national debt and I asked my dad who do we owe money to and who could possibly be richer than the United States? and where did they get the money? And then my dad took a gulp off his beer and said we owe it to our self ! I said that’s the dumbest thing I ever heard of ! that’s like me borrowing from my right pocket and setting fire to the interest and putting the rest in my left pocket ! This was about 1972 ! But Dad was wrong! We owe it to international Bankers running the biggest Ponzi scheme on earth called The Federal reserve system! And yes it really is this simple ! The bankers have a shoe in on ALL loans they make ! All they have to do is stop lending and then start foreclosing on ALL debts!-meaning they now own everything that has a debt by having a license to counterfeit ! So we” 1″ keep getting fleeced by continuing to pay this fraudulent scheme ! OR” 2 “we declare ALL out of thin air debt NULL AND VOID because of FRAUD ! And we keep everything we have so called debt on! MOST people don’t get this part Every car, boat, house, machine, tool, farm,ect. has already been paid for by the fraudulent paper! So no one looses ! WE sure as hell cant give it to the banksters! (let them steal it) AND IT DOESENT MATTER IF YOU WANT TO REDUCE THE DEBT 99% ITS STILL UNPAYABLE! So when we void the FRAUD This will be the ultimate FRESH start for everyone ! Share this if you want THE solution to the WORLDS problems! If not everything will continue to get worse until we have HONEST DEBT FREE MONEY /and GOLD AND SILVER ! And there is plenty of gold and silver! just Divide the paper money (FRN) by the gold /silver and you have the value of them! NO MATTER WHAT IT COMES TO per OZ ! Then we would be happy to work for SAY A ONE OZ. SILVER COIN A day ! Because a one OZ. silver coin ( REAL MONEY ) will buy what $100 – $200 did before the reset! THINK ABOUT IT! This is what Scripture calls the jubilee ! “WICKED” Debt And the amount and size of the debt has nothing to do with it being mathematically impossible to pay This fraud is so “WICKED” that even a $10 loan is a Ponzi scheme here’s how it works ! I’m the new banks first customer ( CHUMP ) I borrow $10 @ 1% interest I now owe the bank $10.10 but ALL the money in the world is $10 the .10 cents doesn’t exist so some one else has to borrow some so called money and I have to find a way to get .10 cents from them so I can repay my loan ! Now say they borrowed $10 also now I somehow get .10 cents from them to pay my loan back ! But now he is short .20 cents to pay his loan ! so now you can see how a $100,000. house that will cost you $ 265,000 to pay off because you have to pay $165,000 in interest is a GIGANTIC PONZI SCHEME ! Now multiply that by millions of people in the U.S. and you can see how It turned into the monster debt we see today ! And for the loans that do get repaid multiple people have to default on there loans for you to pay off your loan ! NOW you can understand why we have a rapidly growing homeless problem ! Now that is a WICKED debt money system that we must declare Void !

  9. Love Silver, always will. Have made mistakes before not anymore.

  10. Some people think when China cannot get anymore gold from the west, they will reflect the true price of gold. However, I think China will hold on to that and instead switch to deliver silver from the west. Once they cannot suck anymore silver, then it is truly game over.

    I think China currently propping up shadow bankings is to keep the gold & silver manipulation, market rigged game going as long as it can, so they can take the dirt cheap PM delivery with toilet papers.

  11. The dollar global reserve currency is no Ponzi scheme and nor is the USA like Zimbabwe or Argentina. The currency is backed by something very real which grows more globally dominant everyday and which meets all of Aristotle’s criteria of money. It is the Unit of Destruction or as an over-simplification the USA military. Full details can be seen by reading my posts on Hiddensecretsofmoney.com.
    This is why the technical insolvency of the USA (and all other countries as all currencies are derivatives of the dollar) is irrelevant. The Powers That Be know this so whilst they pretend to care about the debt limit, fiscal deficit, balance of payments, quadrillions of derivatives etc, in reality they don’t.
    The UD simply rises in value to back the amount of dollars created which is why the currency it backs is actually UP against most other currencies since 2009 as more dollars have been create than every before via QE, Twist, Zero interest rates, etc etc.
    The Pentagon is the real World Bank, not the IMF, the BIS or the Fed.

    • Edmund Law,

      Actually I agree with you. However, as I mentioned in the article, ENERGY IS THE DRIVER OF THE ECONOMY, not FINANCE. It doesn’t matter how much more they print the DOLLAR, when the Major Oil Companies are selling Assets rather than exploring and producing oil… you know we are heading for serious trouble.

      I really could care less about the debt, but the collapse of PAPER ASSETS will occur as there won’t be the energy to settle or pay these back in the future.

      China isn’t soaking up the majority of the world’s gold supply just for KICKS & GIGGLES…

      steve

    • Anyone that thinks the Pentagon & the U.S. military is the unchallengeable world power in military might hasn’t been keeping up with Russian and Chinese missile technology. It is an easy matter for Russian supersonic anti-ship missiles to sink one of the U.S.’s billion+ aircraft carriers.

      And China has hypersonic missile — mach 5 and above.

      We didn’t invade Syria because Russia has strategic interests there; China probably does too. The days are past when we can be the hedgemon with our military as the big stick when these countries’ interests don’t want us there.

  12. “Did the Indians LOAD UP ON COPPER when they couldn’t buy gold? Of course not. Maybe at some point, the public will realize the monetary value of silver.

    Unfortunately, the realization will be too late as available supplies of physical silver will dry up and blow away when the GREAT FIAT CURRENCY RESET finally arrives”.

    I think the supply will dry up BEFORE rather than WHEN a fiat currency reset [or whatever the impending crisis will be called] finally arrives. I also think before even a quarter of the public realizes the monetary value of silver, big money interests will have sucked up ALL available physical supply not locked into production contracts. Then the leveraged paper trading like ETF’s and industrial users will find they can’t renew those contracts at anywhere near what they paid before. Or the supply contracts may be reneged on.

    Yes there is currently 10+ ounces of silver produced for each ounce of gold. But with a current price that doesn’t reflect that ratio or reality, small stackers can afford a few ounces or more per month, and large investor interest is currently very few. Estimates are the small stackers may be around 1-2% of the U.S. and Canadian population. One to two dozen large industrial users or billionaires could exhaust all physical supply with orders any day. Right now they are not interested. Before the public gets a chance they will be.

  13. Wonderful stuff, Steve! You’re one of the good guys, and a man who truly offers something different in the analyst community. Your take on energy and how that couples with the forward view on precious metals is what sets you apart. Keep up the good work!

  14. When gold and silver get priced beyond the means of most people, copper coins will be the new silver. Take a look at Zombucks.

    • EVERYONE,

      Just wanted to thank everyone for the comments. There is this notion that the BANKING ELITE will not allow the Fiat Monetary System to collapse. While I agree that they will fight tooth & nail, the PEAKING of GLOBAL OIL PRODUCTION will force their hand.

      People have no idea how much a falling energy supply will implode the system. The Peaking of Global Oil Production will not be a steady decline as was the upside part of the graph. Below is how the collapse will look

      According to the ancient scholar Lucius Anneaus Seneca:

      “increases are of sluggish growth, but the way to ruin is rapid.”

      steve

      • “Just wanted to thank everyone for the comments. There is this notion that the BANKING ELITE will not allow the Fiat Monetary System to collapse. While I agree that they will fight tooth & nail, the PEAKING of GLOBAL OIL PRODUCTION will force their hand”.

        We [the world’s population, the oil companies] could have been better stewards of oil for producing the devices to help us harness wind and solar…but we weren’t. Oil can provide the hydrocarbons used it plastics, carbon fiber, etc., and the energy to make the devices to harness wind and solar. Now we are way behind on alternative energy development.

        • David,

          Agreed on the better stewards of oil consumption. One major problem with alternative energy sources such as SOLAR & WIND has to do with their lousy ROI – Return on Investment.

          Actually, the majority of solar and wind projects in the U.S. are unable to pay for themselves over the life of the project unless there are huge subsidies and or long-term energy contracts that pay 2-4 times the going wholesale electric rate.

          David… would you or I fork over say $1 million in a Solar or Wind Project to receive $750-$900,000 back in 20-25 years?

          steve

          • UK Silverstackers | February 18, 2014 at 5:16 pm |

            Yes but when the oil supply becomes constricted, won’t the prices of alternative energy rise and therefore the ROI increase also, subject to oil supply diminishing in 20-25 years

            Keep stackin’

          • Steve,

            Maybe we can make solar and wind more cost-effective if we worked on it.

            When oils is scarce, costs a multiple of what it does now, or is virtually gone, what are the energy source alternatives?

            I’m for well-engineered nuclear. Geothermal. Hydroelectric. Let’s get on with the safest, most cost-effective alternatives to oil.

    • “When gold and silver get priced beyond the means of most people, copper coins will be the new silver. Take a look at Zombucks”.

      Copper isn’t remotely close to a rare or precious metal, so it won’t be the new silver. And while it has a lot of industrial uses, it has far fewer than silver.

  15. Paradisal monk E | February 18, 2014 at 2:09 pm |

    I cannot believe two things:

    1. *The mass of humanity has no idea* how currency (their master or god) is created from thin air through fractional reserve banking at central banks (or derivitives, or debt, or exploitation of natural resources, or whatever fundamental reason you can identify or prefer) it is still obviously counterfeit, thus going to CONTINUE inflating until it finally disappears (relatively soon) in its current form, and

    2. If the dollar has already inflated 95-98%, why should pm etf’s (PAPER METALS) be so reliable? How can anyone actually believe that their soon-to-be-worthless fiat could possibly be safe with paper silver or gold iou’s?

    Raise your hand if you believe there is actual metal behind all of those iou “certificates” as you look in the mirror. Really do this, as there are apparently many cowboys who have already anted up, judging from the statistics above. Say “Hi Cowboy!” or girl when you do it for fun with a big smile on your face! Take a picture of yourself, because you will probably want to see it some day!

    Where are these poor lost sheep? Probably not here, of course. I seriously doubt many of the readers here dont know this already, but a little sarcasm or mockery is really appropriate about this wildly mis-placed gamble on the paper-card table!

    I am going out on a limb here to suggest that now dollars are only worth supplies that will help you survive the coming crash in their own value, before they are inflated all the way to Zimbabwe. Spend them now for good use. I would guess food and water will be most immediately important.

    Get creative about what your needs are after that. Do you suppose all of those owners of paper metals are out of debt? I wonder if they have any food around or what do you suppose might be more important than dollars? Toilet paper is much softer, and it flushes better. Get some of that, because its a better quality paper with a reliably needed use. Now there’s a paper you can count on!

  16. Robert Happek | February 18, 2014 at 5:59 pm |

    Steve, your rhetorical question

    “David… would you or I fork over say $1 million in a Solar or Wind Project to receive $750-$900,000 back in 20-25 years?”

    is based on a fallacy: The fallacy of cheap energy. If the supply of fossil fuels goes down in the future as you and many others predict, the demand for energy will not go down. This means that the future price of energy will rise. We see that already today. The price of oil has risen three to fourfold during the past ten years, yet production of oil barely increased. That trend will continue. So if you invest $1 million today into Solar or Wind, the total return during the next 20 years will be a multiple of the sum invested (inflation adjusted), not the paltry $900,000 you mentioned. That will be the result of a historical revaluation of the price of energy. Today, energy is very cheap. In the future, it will be very expensive. Today, precious metals are cheap. In the future they will be expensive, partly because the embedded energy in precious metals will be revalued.

    I have invested into Solar myself, so I know a little bit about these matters. The expensive part of Solar is not the production of the equipment. The expensive part is the cost of the labor force installing this equipment. So even today, Solar is very cheap if you do the installation yourself.

    • Robert,

      While I appreciate your insight and opinion, I believe your logic is incorrect on this subject. I don’t have the time to get into this today as I am really busy working on my U.S. & GLOBAL COLLAPSE REPORT.

      But in a nutshell, I have had a very interesting email exchange with a mechanical engineer who has spent a great deal of time doing CASH FLOW ANALYSIS on many of the solar & wind projects in his state and throughout the country.

      He has proven using inflation adjusted energy prices that just about all of the Solar & Wind projects that he has analyzed will not pay for themselves in the future.

      Furthermore, your assumption that the price of energy will become very expensive in the future may be true… but the majority of people in the world will not be able to afford it. 10 of the last 11 recessions were due to oil price spikes.

      We are hitting peak energy because the market cannot afford the expensive stuff. I will be explaining this in my report. Already the Oil Majors are dropping projects and selling assets because their shareholders could care less about GROWING PRODUCTION and more about POSITIVE CASH FLOW & DIVIDENDS.

      Robert, you have made some excellent points in the past… but I believe your assumptions here on energy in the future may not turn out the way you believe.

      steve

      • “We are hitting peak energy because the market cannot afford the expensive stuff. I will be explaining this in my report. Already the Oil Majors are dropping projects and selling assets because their shareholders could care less about GROWING PRODUCTION and more about POSITIVE CASH FLOW & DIVIDENDS”.

        The market will have to pay for the expensive stuff when the cheaper stuff is gone. I guess like silver the commodities futures’ price will have to go up to create more mine production?? I don’t know how that works.

        I know Americans [and any presidential administration] don’t want to pay $5+ for a gallon of gasoline; prices have been fairly stable lately despite general inflation. Higher prices are inevitable. l guess I will have to part with that ultra-low mileage V8 Cadillac I got when my mother went into a retirement home! It is from the era of “to hell with everyone else; I’m an American”. A real land yacht. Thank God it’s only seven miles to work!

  17. Steve – as you show above, there is so little silver (Rick Rule believes $2 B (cash) would buy out all silver available @ the margin).

    Increases in US Treasury debt “foreigners” have amassed…something to consider as Fed “tapers” out QE…and to consider as a measly Billion or two is all that stands between silver today and a “market” based price!!!

    Individual country / regional increases (as “assigned” by TIC. below TIC data based on where these are bought / held, not nationality of buyer),

    Global
    Jan ’00 —> ’07 —> Dec ’13:

    $1 T —> $1.6 T —> $5.6 T

    ASIA
    China $60 B —> $400 B —> $1.27 T
    Japan $315 B —> $600 B —> $1.18 T
    Taiwan $35 B —> $38 B —> $182 B
    HK $39 B —> $52 B —> $159 B
    Singapore $30 B-> $30 B —> $86 B
    India $15 B —> $69 B
    Thailand $13 B -> $16 B —> $52 B

    TOTAL $497 $3 T (600% increase, ’00-’13)

    AMERICAS
    Brazil $54 B —> $245 B
    Canada $15 B —> $28 B —> $56 B
    “Carribean banking centers”
    $ 35 B —> $68 B —> $291 B

    TOTAL $55 B $592 B (1100% increase)

    MENA
    “oil exporters”
    $45 B —> $112 B —> $238 B (500% increase)

    EUROPE
    Russia $9 B —> $139 B
    Norway $20 B —> $97 B
    UK $50 B —> $100 B —> $164 B
    Switzerland $18 B> $34 B —> $175 B
    Turkey $25 B —> $52 B
    TOTAL $83 B $627 B (750% increase)

    BANKING EURO
    Ireland $5 B —> $19 B —> $125 B
    Belgium $28 B –> $13 B —> $257 B
    Luxemburg $60 B –> $134 B
    TOTAL $38 B $516 B (1350% increase)

    CORE EURO
    Germany $54 B —> $50 B —> $67 B
    Italy $20 B —> $14 B —> $30 B
    Netherland $13 B-> $15 B —> $37 B
    France $27 B —> $10 B —> $54 B
    Spain $20 B —> $ $23 B
    TOTAL $134 B $211 B (57% increase)

    I wonder who really owns all these T’s…”foreigners” is simply the term TIC applies to Treasury’s purchased / held in “overseas custody accts”…the data is provided by US based “custodians”…data “may not be attributed to actual owners”…”data may not provide “precise” acct’ing”…

    The data in this table include foreign holdings of U.S. Treasury marketable and non-marketable bills, bonds, and
    notes reported monthly under the Treasury International Capital (TIC) reporting system. The data are collected
    primarily from U.S.-based custodians. Since U.S. securities held in overseas custody accounts may not be attributed
    to the actual owners, the data may not provide a precise accounting of individual country ownership of Treasury
    securities

  18. Peak oil, my foot. There are over 400 BILLION barrells in SW Australia. Google the “Officer Basin” for starters. Saudi Arabia only had 260 billion barrels of oil.

  19. I’m a report designer for a big company, the first “no-no” is not 3D graphs!!! They are impossible to compare side by side, and no-no on ink saturation

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