An example illustrating more truth than fiction:
Suppose you discovered an envelope jammed behind the drawer of a family heirloom. In it, your great Grandfather had placed $40 in the form of one $20 bill and one St. Gaudens $20 gold coin. Which preserved its purchasing power?
Here are three must see videos. The first is titled Eurocrats Carry On Up The Khyber, Determined and Delusional, says Farage:
The second video you should watch is titled Money-printing, central banking scammers should be locked in prison, says Bloom:
And last, but not least, reader Melanie sent me the following Gerald Celente interview where he discusses the rise of Fascism in the United States, Crony Capitalism and the crisis in Europe:
For my readers who do not regularly follow Andy Hoffman’s afternoon Rants, here is a portion of his Friday newsletter and it is a classic on hyperinflation. It puts to rest the myth that stocks will protect you during hyperinflation.
By Andy Hoffman
I have been repeatedly asked about Weimar Germany, the most noted hyperinflation of the modern era. I cannot purport to be an “expert” on the politics or Central Bank dynamics of the day, but little expertise is required to interpret the final result. World War I reparations imposed on Germany, Austria, and Hungary siphoned every last penny from these bankrupt nations, causing them to resort to the printing press to pay them off. Per the chart below, the cost of living index soared by a factor of one billion, causing mass starvation, poverty, and social unrest (hence, the rise of Hitler).
Among the myths of hyperinflation is that stocks are a good place to invest, holding their value in the face of such maniacal money printing. I don’t have enough supporting data to draw comprehensive conclusions, but I do have the most important data point, the stock market index itself. As you can see, the German stock market rose from roughly 200 to 40,000,000, or a factor 200 million, just one-fifth that of the cost of living index. Thus, on average, stocks were NOT a good hedge against inflation, and I’d like to take it a step further.
Just as the Dow is propped up by survivor bias, you can bet the Weimar Stock Index was as well. Consider the hype about the Dow passing 13,000 this week (entirely due to the PPT, of course); however, if Eastman Kodak, AIG, Citigroup, and General Motors were not deleted by bankruptcy or nationalization, it would probably be no more than 11,000 today, and no doubt countless German companies failed amidst an explosion of input costs and collapsing end demand, causing their deletion from the Weimar Stock Index.
Don’t forget the chart in my March 14th RANT, “GOLD INVESTMENT EXPLOSION,” depicting the ongoing collapse of financial companies as a percentage of S&P 500 capitalization, despite countless trillions of U.S. government bailouts. In an occurrence of hyperinflation, no sector is more exposed than banks (particularly today’s insolvent crop), financed nearly 100% with short-term, low interest debt (care of government subsidies) and holding trillions of low quality mortgages collateralized by overvalued real estate. Not to mention, heavy exposure to the global banking system via deteriorating sovereign bonds and, of course – the pink elephant in the room – DERIVATIVES.
…the Weimar cost of living index rose by one billion times and the survivor bias-boosted stock market 200 million times, so let’s see what gold and silver did. For gold, it rose from roughly 200 to 100 trillion, or 500 billion times, while silver rose from 11 to 900 billion, or 80 billion times, starting at a gold/silver ratio of 18:1 and ending at 111:11.
Below, I’ve made the comparison in tabular form, for better clarity so as to end the “inflation good for stocks” myth once and for all…
Weimar Germany Inflation, 1919 – 1924 Market
Stock Market Index1
Cost of Living Index
1Includes survivor bias
PROTECT YOURSELF, and do it NOW – from THIS!
Ted Butler says, “It is clear to me that HFT is being used in silver (and gold) to artificially rig prices in order to force others to sell, as I’ve outlined in the interview with Jim Puplava and on these pages.” If you want to hear what he has to say about JPMorgan and the manipulation of silver, here is the link to his recent interview with Puplava on the Financial Sense network:
While you’re on Puplava’s site, you should probably listen to the interview with Martin Armstrong: