Silver - $27 going to Zero! Call your boss..beg for job back

[68Camaro]

Back under 17 you mean. A 16 handle. This is a bit tedious, but we can either think of this as depressing and never ending and therefore give up, or we can realize that it has a finite life and to look at this as an incredible series of opportunities. Because it is manipulation it will go on until it doesn't, and it won't be obvious that we've left this stage until it is way back in the rear view mirror.

[johnbrickner]

A looong term outlook, very Loooooong. Set your buy and sell stops (if you sell at all) and sit back. May not happen in my lifetime. Some who are wiser than I, say 2020 . . . or sooner. I stopped being in a hurry when I left Los Angeles and am not in one now. The U$D will either have to be reset (it is hoped to a basket of IMF, SDRs additionally linked to an amount of gold or maybe not) or defaulted. Most of the rest of the world (save for those who's currencies are already pegged to the U$D, the UK, and Japan [but Abe has been making recent trips to some of these "other" nations for discussions so Japan may be making plans also]) are already making moves/plans to be away from the U$D in anticipation. It's insurance. We're not trying to make a profit, we're trying to make it out the other end/side as safely and as intact as possible.

[Thogey]

Eventually fiat will at least superinflate, if not hyperinflate. It's a mathematical certainty, and history shows that.

What is this? Is there an equation that expresses mathematical certainty? is there some sort of exponential function we can use to figure this out?


I've seen this before but never bothered to look it up.

[68Camaro]

Austrian economics. Von Mises.

[IdahoCopper]

The GSR has been rising as Ag drops. Presently at about 1:74, up from a long stay around 70.

[johnbrickner]

Eventually fiat will at least superinflate, if not hyperinflate. It's a mathematical certainty, and history shows that.

What is this? Is there an equation that expresses mathematical certainty? is there some sort of exponential function we can use to figure this out?


I've seen this before but never bothered to look it up.

Found this in James Rickards book The Death of Money (2014), paraphrased.

From John Makin around 2012, the Primary Deficit Sustainability (PDS): Borrowing costs or interest on debt (B); real output (R); inflation (I); taxes (T); and spending (S); are BRITS. (R + I) are total value of good and serviced produced in the US economy with inflation or nominal gross domestic product (NGDP). (T-S) are the primary deficit or excess of what is spent beyond collected taxes. PDS is used to determine if the US can afford the interest, hence the debt.

To determine if the debt is sustainable we ask if (NGDP or R + I) - B is > or < [T - S] or if real output plus inflation minus borrowing costs, are more or less than taxes plus spending?

Important is the trend or the direction of the above equation.

If (NGDP - B) > [T - S] then there is enough $$ coming in to pay the interest on the debt and something left over to service the debt or pay it down. This trend is considered sustainable.

If it is < then there will need to be more borrowing to make up the difference or deficit. This one is not.

The bond market is considered the ultimate judge here. If investors believe the borrowing is risky (or the possibility they will not be paid back increases) they will want more interest or not participate. Higher interest rates increase (B) and make the situation less sustainable. A bad feedback loop that ultimately causes default . . . Unless the fed decides and achieves inflating to make their borrowing more sustainable (or kick the can further down the road).

The people are the ultimate judge here regarding inflation. If the people become aware what they are getting paid is worthless . . . let's just say the system could collapse into chaos.

Unfortunately, we are trending the wrong direction and have been for some time.

Now, a lengthy and involved discussion can occur when we consider all the ways the fed or government can/are manipulate or moderate factors that effect the equation and the results but, I'm not going to start that one . . . Except to state the obvious you don't have to be a mathematician or economist to figure out: If we keep our borrowing low (less B) and (S) spending low, we wouldn't need (I) inflation and could have lower (T) taxes that would increase (R) real growth. DUH

[AGgressive Metal]

Eventually fiat will at least superinflate, if not hyperinflate. It's a mathematical certainty, and history shows that.

What is this? Is there an equation that expresses mathematical certainty? is there some sort of exponential function we can use to figure this out?


I've seen this before but never bothered to look it up.

Its as simple as take a calculator and multiple 100 (your starting monetary base) by 1.05 over and over again (for 5% inflation). At first its adding $5 to your money supply, then a little more, a little more, when you get to 200 now 5% is adding $10 per turn, so it takes you less than half the time to reach $300 from $200 as it did to reach $200 from $100 - an accelerating growth.

[scyther]

Just barely over 16... I bought some recently, I wish I had waited longer. Oh well.

I've been seriously considering buying an ounce of platinum, but it's so expensive...

[Thogey]

Eventually fiat will at least superinflate, if not hyperinflate. It's a mathematical certainty, and history shows that.

What is this? Is there an equation that expresses mathematical certainty? is there some sort of exponential function we can use to figure this out?


I've seen this before but never bothered to look it up.

Its as simple as take a calculator and multiple 100 (your starting monetary base) by 1.05 over and over again (for 5% inflation). At first its adding $5 to your money supply, then a little more, a little more, when you get to 200 now 5% is adding $10 per turn, so it takes you less than half the time to reach $300 from $200 as it did to reach $200 from $100 - an accelerating growth.

Thanks for the tutorial. But I understand math.

The mathematical certainty of the numbers (variables) is what I was curious about.
Something supported by math either is or isn't. History does not ensure the future.
Someone posted that is was a mathematical certainty the fiat will hyper-inflate.
I did not know this was possible to predict with certainty. What if we deflate for the next 50 years?
I was told for years that the exponential function proves oil would be gone soon. or $100+ oil was here to stay.
The future, near future could see internal combustion engines become totally obsolete.

I don't read enough about it.

[68Camaro]

Pragmatically, there are assumptions behind any statement that the math leads to a definitive inevitable conclusion. We're not talking about a fundamental theorem of math but a derived behavior. For example, for that conclusion to be "inevitable" it has to be in the context of an earth where the sun hasn't gone supernova, the earth's core hasn't solidified, we haven't been hit by a killer asteriod, etc. Any of those situations - while possible and perhaps inevitable themselves given a few more billion years - would invalidate the basic unstated assumption that humanity exisits.

A less dramatic assumption is that human behavior is self-serving, and will go to great lengths to look for the easy solution and avoid pain.

[Thogey]

So basically you're saying there is certainty people are going to #uck it up because that's what people do.
The math simply describes what the slope will look like?

[Treetop]

Who knows what our leaders will do. while being corrupt as it gets, they certainly arent stupid. I honestly expected a reset to have happens by now. I dont really see how we would possibly get on a sustainable course with our ponzi scheme of an economy, but so many wild cards who the heck knows.

[68Camaro]

So basically you're saying there is certainty people are going to #uck it up because that's what people do.
The math simply describes what the slope will look like?

Not a bad way to describe it.

[Rodebaugh]

Thread title brought up to speed.

BTW: I have the immediate floor pegged at $15 and change.

[johnbrickner]

Who knows what our leaders will do. while being corrupt as it gets, they certainly arent stupid. I honestly expected a reset to have happens by now. I dont really see how we would possibly get on a sustainable course with our ponzi scheme of an economy, but so many wild cards who the heck knows.

It appears "they" have to get the IMF basket of SDRs in alignment (including the BRICS and followers, with China leading to be satisfied) along with a big financial fiasco. The really big one or at least as big as the last one. Additionally, those who control the U$D finally have to either agree (also be satisfied) or capitulate with no choice. At that time, all the big boys step in and we get a one world currency or a facilitating derivative thereof because the IMF (world central bank) with SDRs are now the bail out currency of last resort as all the central banks at the country/EU level are virtually tapped out . . .

Not to rule out the possibility of the democratization of money via cyber currency provided we still have electricity and the internet. As this is a trend definitely taking shape to take the power of money out of the hands of the banks. I'm guessing it will act more like the straw that broke the camel and force the elite go one world in order to maintain control over the monetary system. We'll see.

But I agree Zac, what we are doing is SO NOT sustainable and we have way to many wild cards . . .

Doc, thanks for the floor peg. Such info is appreciated.

[Treetop]

Yeah Ive been wondering about the IMF for awhile now. BRICS seems kinda dead in the water last I read on it. More of a token thing. None of the wealthier nations involved seem to want to give the funds to get the ball rolling, seemingly since it might help nations they dont have express control over. China last I looked appeared to be doing similar investment instead for just itself. I could have read this wrong I havent been reading as much on it as I used to. So correct me if Im wrong.

Meanwhile the IMF seems stalled on this? China isnt in the best spot economically itself. Way over extended just like the US, and they did this much much faster without the benefit of having the world reserve currency. Maybe the IMF wants to see which giant falls first? Or just waiting for the right crash to justify more power for a new reserve currency? No idea.

Sadly had to sell a bit of the stack the last few years, and havent replaced it all. For unexpected events, but I still have a fair amount. (at a nice profit atleast) Was going to replenish next year if I could have found a way to refi our home, but no luck on that. Oh well, will be paid off in 4 years this way atleast.

[InfleXion]

I can't really see the IMF being able to create any currency that people would actually want to buy, and if the intent is to bail out insolvent nations, well there is no such thing as an insolvent buyer of last resort. WIth a buyer of last resort, you take take whatever they are willing to spend, and it's not goig to be face value that's for certain.

I think SDRs are just something to make people feel like there is another stopgap, when there really isn't. Only gold and silver are the ultimate extinguishers of debt. SDRs are another form of leverage, and that will only make the problem they are trying to address worsen. If SDRs are needed, it's a sign of that the leverage model doesn't work any longer.

[johnbrickner]

if the intent is to bail out insolvent nations, well there is no such thing as an insolvent buyer of last resort. With a buyer of last resort, you take whatever they are willing to spend, and it's not going to be face value that's for certain.

If SDRs are needed, it's a sign of that the leverage model doesn't work any longer. <snipped throughout>

The intent is the one world currency. Other countries are already buying, selling, [edited to add: Perhaps I should say "trading"] and holding SDRs. They've already been used to bail out. And you are correct, the reset will not be at face value nor is the leverage model working.

[68Camaro]

Buy it cheap(er) while you can... It will go up and down, but it doesn't stay down for long. When gold is >$2000 and silver >$40 (or more), we won't worry a lot about whether it was bought at 1300 and 17.

[aloneibreak]

what was up with that -10% flash crash ?

[bankmining]

what was up with that -10% flash crash ?

Read somewhere that it happened in Japan. Sumo wrestler finger?

[Robarons]

There is a quick write up on kitco on what may have happened. Interesting to say- it was a decent amount so curious how may orders got filled at 10% off

[henrysmedford]

Way up this morning!

[Recyclersteve]

Treasury Secretary said something about preferring a weak dollar, something that most Treasury Secretaries probably agree with but won't say in public. This apparently shocked the markets a bit. Many were saying it slipped out, but then someone on CNBC said it was intentional. If true about wanting a weak dollar, I'd think that could potentially be bullish for precious metals.

[InfleXion]

They want a stronger dollar, but they need a weaker dollar, because how else are they going to pay for all these social programs and keep us safe. The debt ceiling comes up every so often for discussion, but it's mathematically impossible to pay back exponentially growing compounding interest with linear GDP once you go beyond the event horizon. So there are things like haircuts. I haven't heard much about those lately. Some people seem to think bonds are due to get some of the stock market's money, and that would be one way to stave off a haircut I suppose, keep the lights on a bit longer. So much for the end of QE, as if there was much doubt. I think QE2 was the big catalyst for metals before. I missed the usual December dip, but I'm still happy to buy at these prices.