Q: I have seen a number of analysts – the latest being Bix Weir- recommend that coinage be stacked alongside other ’emergency’ supplies. The argument, as I understand it, is that while the paper fiat currency issued by the Federal Reserve might be devalued, coinage issued by the Treasury will retain its value. Do you agree with this ? If so, a few questions:-
– how much coinage should be stored ?
– which denominations – $1 coins to maximize value or perhaps nickels because of their copper content ?
– how would this work in practice – dual pricing with coinage having one value and FRN’s a lower value ?
Andy Hoffman’s Answer:
Coins themselves are simply fiat currency, too; only instead of being worthless, they’re worth the tiny amount of zinc, nickel, and copper in them. In other words, next to worthless – especially in a relentlessly inflationary world. That said, “junk silver” should be owned by everyone for the very reasons you mention. Junk silver refers to pre-1964 dimes, quarters, and half dollars – all of which were 90% silver, 10% other metals. In other words, real coinage, but made principally of silver. They come in bags of various weights, and currently trade for a few dollars above spot price, in terms of their silver content. They are the ultimate barterable item – in case the “worst case scenario” of a dollar crash occurs – and Miles Franklin can give you quotes on all amounts and denominations.
Q: Hi David or Bill
I was wondering about your thoughts re the Zerohedge article (today
April 13) on the secretive BIS bank which determines global financial
policy and is apparently quite open (to each other at least) about
manipulating precious metal values.
How does this fit with China’s aim to slowly taking over reserve
currency status for the yuan and pushing the dollar out of its reserve
Bill Holter’s Answer:
I believe this is the article you refer to? The BIS are the central bank’s, “central bank”. They have run the show secretly and behind the scenes to this point and done a bang up job in my opinion of putting the global banking systems (and economies) in a corner. They are well documented to have the power of collusion and authority amongst central banks.
That said, China in my opinion will always do what is best for China …in the long run. I do not believe the BIS could in any way force China into any actions that would cause long term harm. In the short term, maybe, but never in the long term. The BIS will end up with egg on their face when the euro goes down as they were instrumental in its creation. They have created and presided over a dysfunctional system where no options will remain except defaults and currency changes/adjustments/births and deaths. Will the BIS be blamed for what is coming? They should in my opinion but remain far enough behind the scenes and obscured, they will probably skate free.