alan2102
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davefairtex post=7004 wrote: Alan –
I can see this will turn into one of those “internet discussions” I love so much.
If you had a chart or two – or even a fact or two – I might continue. If you were a seeker after the truth, ditto. But as it stands now, I think I’ll bow out now.Your post was of a speculative nature, offering no charts or links, just your opinion, WHICH IS FINE. I replied in kind.
If you want to converse in a non-hypocritical way, matching your actions with your words, I’d be happy to continue. But as it stands now, I think I’ll bow out.
gurusid post=7008 wrote:
So is it in ‘short supply’ or not?It is in short supply in Cyprus at this moment — or at least it is according to Skip, and I have no trouble believing that, given the crisis there. But it is not in short supply elsewhere. Go down to the bank and withdraw as much as you please. No problem. Provided you’re not in Cyprus.
davefairtex post=7001 wrote:
The 17 trillion euros in deposits, and the additional 17 trillion euros currently in euro-denominated bonds cannot possibly fit into the gold market. There’s just not enough liquidity there.At a paltry $1600/ounce, no; you’re right. But things change at a more realistic price. At $20,000/ounce, 17 trillion euros would buy about a billion ounces, or 1/7th of the global total. And so on. If you look at things solely in terms of the current depressed paper price, your conclusions will tend to mislead you.
I don’t expect gold to go to $20K, but then I would not expect ALL euro deposits, or even close to all, to go bidding for gold. Some of them will, however, along with a lot of other money from elsewhere, and gold will surely go to some multiple of its current price. That is, eventually, once the big guys have their fill at these artificially low prices.
My guess is rather than trying to race through the tiny door, they’ll go for the bigger one the way they always have done – US treasury bonds. Its a deep, liquid market, freely available and indeed, getting bigger every day.
A good deal of dumb money will do that, I’m sure. Getting in at the very tail end of a 30-year bull market, with almost no further upside, and catastrophic potential downside, is the very definition of “dumb”.
FYI:
https://www.zerohedge.com/news/2012-10-20/extraordinary-popular-delusions-and-madness-bond-and-gold-markets
Extraordinary Popular Delusions And The ‘Madness’ Of Bond And Gold Markets 10/20/2012
Whether its new-fangled Japanese stocks, hi-tech internet company valuations, multi-colored flowers, or mansions made affordable by criminally lax lending standards, Grant Williams notes that a bubble is a bubble is a bubble; and citing Stein’s Law: “If something cannot go on forever; it will stop.” In this excellent summary of all things currently (and historically) bubblicious – whether greed-driven or fear-driven – Williams concludes it is never different this time as he addresses the four phases of the classic bubble-wave: smart-money, awareness, mania, blow-off (or crash) and explains how government bonds are set to burst and gold is only just about to enter its mania phase. This far-reaching and entirely accessible presentation is stunning in its clarity and as he notes, while bubbles are always easy to spot ex-ante, understanding how they come about and why they are popped gives the few an opportunity to profit at the expense of the madness of crowds. From tulips to tech-wrecks, and from inflation to insatiable stimulus, the bubble in ‘safe-haven flows’ that currently exists has all the characteristics of a popular delusion.Rather than the Big Money, I think it’s the medium-sized money that will end up in physical gold.
The REALLY big money — hundreds of billions, and trillions — has been for some years, and is now with increasing speed, moving into gold. The central banks, and the huge creditors like China, are accumulating rapidly. Generally the gold is moving East; and with that, the global power. These are the twilight days of the anglo-american empire. The movement of gold is just one telling sign of the great sea-change afoot.
Gold’s big win: portability, concentrated wealth, international acceptance, hedge against government repression. But once you get into the ton weight range of anything ($100 bills: $90 million/ton, gold: $38 million/ton, silver $684k/ton, nickel $7k/ton) its no longer portable and/or concealable. At that scale the hedge factor no longer works. You can’t swim the Rio Grande with a ton of anything.
That’s true. You can’t swim the Rio Grande with your house or your car strapped to your back, either. Errrr… wait a sec. Why would anyone want to swim the Rio Grande? Oh, maybe in a future locked-down full-fascist prison-camp America. Right. Well, in that case — if that is what you’re prepping for — gold is the way to go.
At $3.70/pound, buying many food items likely requires more pounds of nickel than you will receive in food!
TRUE. Jeez. I’d rather go hungry than be forced to lug around 20 pounds of nickels. Besides, no one should ever be required to do any actual physical work. Our needs should be provided for us with the swipe of a Visa card or the click of a mouse — as a matter of social justice!
Hey, Skip: here’s a point of view that you might enjoy. This is Martin Armstrong, to whom I adverted some days ago in a separate thread. He is a very intelligent and perspicacious guy. When he talks, I listen. He says: “no hyperinflation!”. I’m listening. I’m not sure that I agree with all, especially when he says that “they have no intention of honoring their promises to the Baby Boomers” (depending on who the “they” are), but I AM listening.
I should add that he seems to be responding (without naming names) to Jim Sinclair, who suggested that the Cyprus caper was a deliberate (and desperate) attempt to stimulate money movement, globally.
Don’t you sometimes feel like you’ve got a ringside seat at the Greatest Show on Earth? :cheer:
https://armstrongeconomics.com/2013/03/29/cyprus-confiscation-of-assets-is-global-plan/
Cyprus & Confiscation of Assets is Global Plan
Posted on March 29, 2013
The Cypriot politicians will remain in the Euro at least for now. They are listening to Brussels and are afraid of retaliation if they try to leave. We submitted a proposal to try to save Cyprus, but the powers that be are doing as they are told by the European Commission. There is little hope of reversing the trend at this point and everyone should know that this confiscation of assets was NOT something out of the blue. This was seen as the alternative to “taxpayer” bailouts following the meltdown of 2008-2009. The bankers scared the hell out of government warning they would collapse if the big bankers failed for nobody would be there to sell their debt. At the Sovereign Debt Crisis Conference I warned of FORCED LOANS were next whereby they confiscated your assets and handed you a bond. By the end of that session, the confiscation was announced. This time, they just took the assets with no bond swap.
We will publish a report on this, but effectively this was discussed at the G20 meeting and this has been put in written documents around the world. It is the next step in the Sovereign Debt Crisis that EVERY country has followed. This is the VERY SAME measure that was done in M.F. Global. The court refused to hold the banks responsible and thus the losses from the firm’s illegal trading were taken from client accounts.
This is why there will be ABSOLUTELY NO HYPERINFLATION. This is not about stimulating a damn thing and they have no intention of honoring their promises to the Baby Boomers. Forget our children. This is about keeping the banks alive to service the debt of government. They will slash and burn pensions, whatever it takes to retain power. Just follow the breadcrumbs. Government is digging in its heels and will not relinquish power nor will they reform.
There is no crazy scheme to stimulate anything. This is about protecting the banks initially (namely NYC) but is all about protecting the halls of government.
snip
davefairtex post=6998 wrote: Skip is right about cash. Here’s a chart (naturally) showing total currency and total eurozone bank deposits.
Yes, of course. The same is true of dollars. There’s far more dollars in the electronic system than there is physical dollars. If everyone went to the bank to withdraw their balances in cash, the system could not supply more than a tiny fraction of the demand.
Physical cash is better than cash in the electronic system, if you’re a little person (i.e. if holding physical cash is an option for you). I’m all in favor of little people withdrawing their cash from the banks. It is a good idea, at least as an interim measure. All dollars are vulnerable, but physical ones are clearly better than electronic ones.
Nickels (or even pre-82 pennies) are an even better idea — physical cash money, but with commodity value as well, so you are covered no matter what happens:
https://theautomaticearth.com/index.php?option=com_kunena&func=view&catid=15&id=6735&Itemid=96#6842
https://theautomaticearth.com/index.php?option=com_kunena&func=view&catid=15&id=6735&Itemid=96#6933
https://theautomaticearth.com/index.php?option=com_kunena&func=view&catid=15&id=6735&Itemid=96#6934skipbreakfast post=6995 wrote: Okay, Alan. You’re a hyper-inflationist. You said you could see it going either way, but in fact, you have clearly shown your hand, and sit very firmly in the hyper-inflationist camp.
I said I saw the end of the U.S. dollar as the world reserve currency. That does not mean hyperinflation, necessarily. It DOES mean at least some inflation, or devaluation in some terms (i.e. reduced purchasing power in terms of some things). As far as the “flations” go, I am a committed biflationist:
https://alan2102.wordpress.com/2012/11/05/inflation-deflation-or-biflation/We will see reduced purchasing power of the dollar in terms of some things, and increased purchasing power in terms of other things. We are already seeing this, in fact. It will intensify.
If you want to put me in the “hyperinflationist camp”, for your own emotional reasons, then go ahead. But it does not not correspond well with reality.
You aren’t interested in listening to some real, verifiable facts about deflation
Oh, I’ve listened all right. But you did not like my answers.
so I’m not even sure why you’re here.
Ah! The old “get the fuck out of here” gambit. That one always comes up when a forum is turning into an echo chamber, and cannot tolerate dissenting points of view — or perhaps just when certain individuals on it cannot tolerate dissenting points of view. Whatever. Maybe I’ll split. But for now, I am having fun.
By the way, this is not a thread about cash versus gold.
Then why did you bring it up to begin with, and then proceed to spend so much time on it?
The headlines clearly state that people want cash.
Yes, of course. They are scared.
They’re desperate for it because it is in short supply.
It is in short supply in Cyprus at this moment, yes. It is obviously not in short supply globally. Cyprus is not the world.
Cyprus makes it clear that the rush to get CASH has only just begun. There is some window of time wherein that must be played out.
It remains to be seen if Cyprus will be contagious or not. But regardless, something will precipitate the rush, sooner or later; I agree with you on that. And I agree with you that most of the little people will initially want cash money. And I agree with you that the little people in Cyprus want cash money. The big money has a different problem; physical cash money is not an option.
There is an exception to that: drug money. Drug money, which can be big money, is transacted in physical cash — upwards of $200 billion
per year, globally. But that is the exception. It is also only a small fraction of the total of global big money.As for the rich, I know very wealthy individuals who are liquidating hard assets for cash, and moving money around to safer and safer havens.
If they are liquidating hard assets for DOLLARS, with the intention of holding them, then they are either ignorant or stupid, and will not remain wealthy for long. Five or ten years. But I doubt if many of your wealthy friends are that dense. And it goes without saying that they are not liquidating hard assets for PHYSICAL cash.
The fact that some hard assets in some pockets might temporarily go up in value in the flight to safety does NOT mean there is a loss of confidence in fiat.
I look at things a different way. The fact that cash in some pockets might temporarily go up in value in the flight to safety does NOT mean there is a durable confidence in fiat. It is just a temporary phenomenon. People will soon realize, as costs of consumables spiral upward (as they have been for decades, but with increasing speed in recent years, and with still more speed in coming years), that cash is not the place to be. Cash is a guaranteed loser, just as it has been for many years. It is of course safer than money in the electronic system, but it is still a loser. Again, just talking about the little people, here, and physical cash versus electronic. The big money has a different set of problems, and as I said does not have the option of stockpiling physical cash. The big money MUST go to hard assets, sooner or later, although various currencies and select bonds and stocks might serve as interim havens.
The phrase “cash is a guaranteed loser” should be dissected, momentarily, as I did not intend it to be entirely pejorative. 1. Cash is GUARANTEED in a good way, i.e. you actually have it in your hand, which is good; and 2) cash is a LOSER, i.e. its purchasing power in terms of most of the things you need is eroding, progressively, as it has for decades, and this will get worse with time. It is a guaranteed loser, but at least it is guaranteed, I will grant that. It is better than having your bucks in some account that is about to be ripped off.
When banks close you out of your account, no matter how much you have in it, you want and need cash.
Initially, YES. And then…
Skip, you’re paying an awful lot of attention to the little people. You seem to be fixated on that, just like you are fixated on proving that cash is better than gold. But what I am trying to say transcends those things. I am going for the big picture, the macro picture, in which what the little people do, and this bickering about cash vs. gold, is much less important, if not trivial.
As I said up thread, what the little people do is not a big deal. What the big money does IS a big deal. The big money does not have the option of stockpiling physical paper money, because there is not enough paper money for that purpose. (And even if there were, the big money is smart enough not to do that, but that is another discussion.) The big money does have the option of holding dollars, just not in physical form; and they WILL hold dollars as long as it is advantageous to do so.
When the big money loses confidence, in EITHER the banking system (in given jurisdictions, or everywhere) OR fiat OR both at the same time, they begin to move their money to other vehicles and venues. I call that — the increase in the movement of capital from a formerly stationary, stable position; massive withdrawals from one account, and transfer to other accounts or vehicles, elsewhere — “increased money velocity”. And as I explained to Ilargi, and as is obvious, that movement has knock-on effects; it does not simply STOP after one move. Loss of confidence thus increases velocity of money. It may not do so with Joe and Jane Six-pack, stuffing FRN’s into their mattress, but what of it? Make an attempt to look at the big picture, and not just fixate on the people standing in line at the bank.
As for the people you converse with in “real life” who say that “cash has no value, it is worthless, it’s just paper”, etc.: I say that they are having a premonition. Surely the idea that “cash has no value” is not true at this moment; the paper cash has plenty of exchange value for now. Nevertheless they are apprehending an important truth — that their money is unbacked by anything of worth, and thus is vulnerable; that the current grossly exaggerated purchasing power of the U.S. dollar cannot be maintained; that we are living on borrowed time (and dollars).
Those “real life” people are right. Their premonition is correct. The evidence is everywhere. Most recently in the movement of the BRICS to set up their own alternative to the IMF. But that is just one of many, many similar data points, all aligned and pointing in the same direction. The dollar is on the way out as the world reserve currency. This is obvious to anyone paying serious attention. It might take 5 or 10 years yet, but it is on the way out. The people that you converse with in “real life” sense this, even if they are not intellectuals and cannot articulate it very well. They know what is coming. They can feel it in their bones. They are right.
ilargi post=6988 wrote: People taking money out of banks to buy hard assets does not increase the velocity of money. That doesn’t make sense, since it doesn’t cause money to flow through the economy. You can’t measure the velocity of money in just one step. That step is more than zero, but it falls straight back to zero too.
That’s right, you can’t measure the velocity of money in just one step. So why would you attempt to do just that? The money spent on the hard assets has to go somewhere. It doesn’t get spent on the hard assets and then stop. At least not in that context; i.e. in a context in which confidence is failing. The entity that sold the hard asset takes the money and puts it somewhere; maybe into some other hard asset, maybe land, maybe into some other currency, whatever. And THAT transaction has a counterparty, who takes the proceeds and puts it somewhere, and so on. The capital continues to change hands, in some form or other. The point is, in the context of failing confidence, that money is moving. Fear is the prevailing emotion, and money is hot, looking for safety; while at the same time greed is not too far behind, looking as always for opportunity in arbitrage or whatever.
You say that the velocity of money falls “straight back to zero” after each and every transaction. That’s under conditions of perfect confidence. But what we were talking about — or at least what I was talking about — is a process precipitated by failing confidence with which money starts to move and, as long as the confidence problem remains unresolved, continues to move. If there is no confidence problem, then you’re right: the process stops, or doesn’t get started to begin with. It all depends on confidence.
Will confidence be maintained in the months ahead? As I said: I don’t know. But it sure will be interesting to watch and see!
skipbreakfast post=6985 wrote: [quote=alan2102 post=6983][quote=skipbreakfast post=6979] everything I say leads to the conclusion that ANY hard asset is better than a vapourized account…. put your money in gold, diamonds, art and anything but a bank account.
YES. Do you think other people are not on the verge of reaching that same conclusion, any moment now? It is called loss of confidence, and if it happens, it will lead to SUDDEN screaming increase in the velocity of money. As Jim Sinclair has pointed out, every hyperinflation on record was preceded by conditions of low money velocity, and arose as though from out of nowhere, suddenly. Confidence was lost, suddenly. As long as confidence is maintained, you will be right; velocity will remain low.
Do you think confidence will be maintained?
I don’t have an answer for that. Maybe yes, maybe no. It sure will be interesting to watch and see.
You’re being disingenuous here, Alan. You’re leaving out the best part of what I said without actually addresssing it or refuting it. I wrote:“So put your money in gold, diamonds, art and anything but a bank account. But fully expect to need cash more than any of the aforementioned hard assets. And fully expect liquidations of the aforementioned hard assets to free up much needed cash.“
And that was right after the part where I say “cash is better than all these hard assets in the current Cyprus circumstances (which circumstances are coming to the rest of us too).”
You’re being dense here, Skip, missing the point of what I wrote entirely. It doesn’t matter if we’re talking about gold, cash money, or diamonds. You’re so fixated on this shit about cash versus gold that you cannot see the forest — the macro-issue which is CONFIDENCE. I was talking about CONFIDENCE IN THE SYSTEM, and whether or not it is maintained. If confidence is lost, then money starts moving, i.e. velocity of money picks up. That is, with the exception of the few who literally stuff paper bills into matresses.skipbreakfast post=6984 wrote: Hm, as soon as capital controls are threated, people rush to extract their cash. They hoarde it. That is deflationary.
They don’t go out to restaurants and live it up with the cash they got out. Because they know they won’t get any more out.
And they don’t go and buy a villa with the $2 million in cash they got out either. Because they know capital controls are coming, so they feel lucky to have got cash out at all.
I do not agree that you have increased money velocity happen when capital controls are threatened. You’d have to demonstrate how this would happen in a real world example, where you fear that banks are going to close in your town and country.
They don’t go out to restaurants and live it up, but they do, or might, or probably will, seek to put their money into things that they think are safe and that will preserve their purchasing power, including the things you mentioned, and in some cases real estate. Some of them will literally stuff paper bills into matresses. How many? I don’t know. It depends on the prevailing level of confidence in the currency. If confidence is shaken, then more people will convert their cash into other things; i.e. BUY STUFF. Hard stuff. That increases money velocity. And the ones with serious money will move it to points of safety elsewhere, either leave it in cash there, or buy hard assets in that place; e.g. buy gold and leave it in a repository in Singapore, or Hong Kong, or what have you. Or else go into real estate. It is only the little people who might actually stockpile physical paper money. Serious wealth does not do that.
As soon as capital controls are threatened, money starts taking flight, rapidly. It starts being moved. It exits, seeking safety. If that is not money velocity, then what is?
I don’t know what you mean by “real world example”. I only have a real world argument, to wit: that you would have to be an idiot NOT to move your money, quickly (thereby increasing money velocity), if capital controls or bank closures or confiscations are threatened. But then, you could argue convincingly that most people are idiots, and I would not have much of a come-back. 😉
I should add that it is the “serious wealth” that is the real issue here. What the little people do with their paltry $10,000 or whatever is not important. If they stockpile paper bills or gold or whatever does not matter. What DOES matter is what the big money does. If the big money gets spooked and starts moving, then money velocity screams, suddenly.
skipbreakfast post=6979 wrote: everything I say leads to the conclusion that ANY hard asset is better than a vapourized account…. put your money in gold, diamonds, art and anything but a bank account.
YES. Do you think other people are not on the verge of reaching that same conclusion, any moment now? It is called loss of confidence, and if it happens, it will lead to SUDDEN screaming increase in the velocity of money. As Jim Sinclair has pointed out, every hyperinflation on record was preceded by conditions of low money velocity, and arose as though from out of nowhere, suddenly. Confidence was lost, suddenly. As long as confidence is maintained, you will be right; velocity will remain low.
Do you think confidence will be maintained?
I don’t have an answer for that. Maybe yes, maybe no. It sure will be interesting to watch and see.
skipbreakfast post=6976 wrote:
And as soon as you have capital controls you DO NOT have money sloshing around in the system. That is deluded.What you seem to be missing is that it is what happens BEFORE the capital controls are instituted, but when they are threatened. They do not come into being overnight. It is that interim period during which capital flight takes place — a huge gunning of money velocity if it occurs in any volume. Then of course it is a matter of where the money goes. Here is one view on that:
CYPRUS & THE MOBSTERS: why the descent into global panic is now almost unavoidable
The Slog plots the course of a deadly global chain reaction
How the rape of Cyprus will torpedo the banking system
I’ve been moving money around over the last few days. I still am, and I don’t know many people in my immediate circle who aren’t. We all seem to have the same aim: to be in the safest place with the safest currency. And the catalyst for all of us busily doing this is specifically, the Cyprus bank heist involving depositor confiscation; and leading on from that, the growing evidence that the political and financial Establishments globally have every intention of applying such glorified State theft in the future.
snip
Here’s how it will develop – in my view. Many US corporations will move their eurocash back to the US. Some, however – and millions of richer US citizens – will have been alarmed by Bernanke’s yes-no-maybe-hard-to-tell-panic-not-sure ‘answer’ to a question at his last Fed press conference about Washington thieving from private bank accounts. Throughout the West and the Anglosphere, in fact, evidence built up last week to demonstrate that almost every State in those regions had a Djisselbloem Plan to steal our money, and contingency plans to control money flows.
“Given the current atmosphere,” a senior wealth adviser told me this morning, “Why would you not get your money out?”
My hunch is that the vast majority of the capital flight will go to Asia. Once there, it will do one or more of the following things: buy property, buy gold, or buy dollars. Although we are talking enormous sums of property money here, we aren’t talking about anything beyond perhaps 100,000 people: the Glitz Bricks trend I identified seven months ago will simply heat up. Thus there is unlikely to be a bubble there: but there will, I’m sure, be a rapid advance in the price of gold bullion. And the Dollar must strengthen as millions of private investors in turn see that as the best currency for their liquidity to rest in while they think about it.
Another point of view: that the Cyprus episode will increase the velocity of money (see below). There’s also been the suggestion, elsewhere, that it was set up deliberately for this purpose. I’m not taking a position on this stuff; just reporting.
https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/27_Cyprus,_Money_Velocity_%26_A_Potential_Inflationary_Holocaust.html
Cyprus, Money Velocity & A Potential Inflationary Holocaust
snip
What we should see now is cash withdrawals from European banks in other troubled countries – Italy, Portugal, Spain, Greece, etc. That cash should then be used by those individuals to start transacting in goods and hard assets. That is in “stuff” which cannot be taxed easily. This may be the catalyst for inflation as it will impact heavily on the velocity of money.davefairtex post=6845 wrote: In the physical PM community, silver is considered to be a bit too weighty to be a convenient wealth savings vehicle.
Is that so? I had not noticed.
But here is my question for you, Dave: where should people put their money? What practical suggestion do yo have? I trust that it is nothing in the electronic system. I also trust that it is nothing in paper form. Given the current obvious systemic risks, such vehicles are highly problematic. But, regardless, what do you suggest?
This is a serious question. Most people have at least some savings, however modest. What should they do with them?
davefairtex post=6845 wrote:
Coinflation says the nickel is worth about 101% of face value right now.Yes, and that will change. It has been near 200% in recent years, and it will re-visit that level and much higher in coming years. Nickels will sooner or later be worth a quarter, eventually perhaps even a buck, in 2013 terms. Nickels remain a steal at only 5 cents each. The mint is letting them go at far below cost.
The real deal is pre 1982 pennies, which are 232% of face.
True, they are a good deal too. Only problem is somewhat more bulk. But not too bad, if you have a good source. And now you DO have a good source:
https://portlandmint.com
https://portlandmint.com/shop/product.php?productid=2&cat=2&page=1
68lbs of Copper Pennies
$100 face value
$170.00 + $16 shipping……….. ha! Free money! They’re selling pennies for LESS than melt value! Better deal even than nickels, for the time being, though as I say there is somewhat more bulk.
I still like nickels because of the compactness, and the neat “factory” boxes in which they come from the bank. The 50-roll boxes are a convenient unit for storage, measure and (eventually) exchange.
davefairtex post=6845 wrote:
Can you imagine saving $9000 in nickels? At 5 grams each, you get 90 nickels per pound, and 181,200 nickels per ton.Yes, I can easily imagine that. It is not as big a deal as you think.
Actually, nickels are much more compact for wealth storage than most other things — wheat, butter, whiskey, ammunition, etc. (Though ammo might come close these days.) If you have any money, you have to put it somewhere, and paper cash is obviously a terrible bet, as is anything in the electronic system. But where? Bolts of linen? Condoms? Canisters of propane? More compact is generally better.
You understand, surely, that we are talking about hedge against a very different kind of world — a post-dollar world, or a devalued-dollar world, or an extended-bank-holiday world, etc., etc. The appropriate comparison is not nickels vs. visa cards or hundred dollar bills, but nickels vs. other hard goods, or nickels vs. dollars of newly decimated purchasing power.
Plus, of course, the rock-solid protection underneath (as someone pointed out up thread) of nickels never being worth less than 5 cents. In other words, you are protected no matter WHAT happens!
Some very smart people have picked up on this idea. Millionaire investor and fund manager Kyle Bass bought 20 million nickels — $1 million worth:
https://www.cnbc.com/id/44788851
Kyle Bass’s Nickel CollectionSmart man! He knows what is coming. He also has large gold bars in his desk drawers, it is said.
Nickels remain a steal at only 5 cents each, or $100 per box at the bank — about 3″ x 4″ x 10″. $1000 almost fits into a cubic foot of storage space. Not that big of a deal, unless you are living in a studio apartment. Much better than most other hard goods.
good advice:
https://www.gold-eagle.com/editorials_12/greyerz031913.html
Get Your Assets Out Of The Banks – NOW
Egon von Greyerz
March 18 2013
snip
For well over ten years I have advised investors to get their assets out of the banking system. This doesn’t mean just their money but also all other investments (stocks, bonds, gold etc) which are likely to be lost when banks go bankrupt…. Gold (and silver) will continue to reflect the total destruction of paper money that the unlimited money printing will lead to. But investors must hold physical precious metals and they must be stored outside the banking system.Regarding bitcoin, a post over on TFMR that I think makes sense:
https://www.tfmetalsreport.com/blog/4575/cyprus-goldand-silver-too?page=6
Submitted by tmosley on March 18, 2013 – 9:24pm.
Bitcoin will serve as an excellent temporary money to move cash out of countries despite capital controls. For this reason, I am now bullish on it, though I would not hold it for the long term. It is best held during times of ever spreading capital controls ONLY. If I wanted to get dollars out of the USA after the SHTF, Bitcoin would be my first choice, with gold hidden in clothing and such a distant second.gurusid post=6896 wrote: if its things like gold, be prepared to give it up or do hard time:
[url=https://www.the-privateer.com/1933-gold-confiscation.html]
The Gold Confiscation Of April 5, 1933Boy, if there were ever a time NOT to worry about gold confiscation, (but rather to worry about everything-else confiscation), it is NOW.
TheTrivium4TW post=6800 wrote:
Your thesis is that “Money” will hyperinflate their trillions in wealth away because it is “easy” and “Money” wants to please government workers with paychecks.
I have news for you, “Money” has no motherland and no affinity towards government workers. Their sole object is gain for themselves AND HYPERINFLATING THEIR WEALTH AWAY IS CONTRARY TO THEIR PSYCHOLOGICAL MAKEUP.This argument comes up in different forms from time to time in discussions of inflation vs. deflation. The argument is: they (TPTB, the Money Power) will not let inflation happen because it would let the debtors off the hook; it would inflate-away THEIR wealth. Not a bad point, superficially — depending on who “they” really are, and in what form their wealth is stored (dollars?). But it goes without saying that they have clear plans to preserve their wealth, no matter what. And they will probably be successful.
I recently read an interesting point about this. Here it is:
https://www.tfmetalsreport.com/comment/264618#comment-264618
Questions about nickels…
Submitted by Katie Rose on January 28, 2013 – 12:30pm.
[…snip…]
A brilliant friend of mine is convinced that we are headed for
hyper-inflation. He has spent many months studying what
happens in countries when the currency rapidly deflates while
real goods and services rapidly inflate.
He told me the first things that disappear are the coins.
People begin to hoard them, thinking the metal/s they are made
of has/have some value. In the case of the USA, the only coin
that has any intrinsic value due to metal content is the lowly
nickel.
Next, he claims, TPTB get the legislature to pass emergency
legislation concerning bank loans and interest rates. He told
me most people think that they will be able to pay off their
home loans with debased money. Not so!
He told me that within 48 hours of hyper-inflation beginning,
legislation is passed tying/increasing loan payments of any
kind to the rapidly decreasing monetary value. If the dollar’s
value goes down 2% in a day, the house payment increases by
2%. He told me that folks have a 24-48 hour window to pay off
their loans, then the legislation is passed and they are truly
screwed. He told me this has always happened. It’s as if the
legislation is already written, just waiting in the wings for
the event to begin. Then the legislature moves with lightning
speed to accommodate their Masters.Interesting idea! Makes perfect sense. The moment I read it, I had one of those forehead-slapping “OF COURSE!” moments, like “yes, of course that is true… how could it be otherwise?”. The ravages of hyperinflation will be for the little people, not the elites, who will have multiple layers of protection. Their puppet politicians will immediately pass legislation (probably already written and ready to rubber-stamp) indexing interest on loans to the prevailing rate of inflation — “fixed rates” be damned. Hey, this is a National Emergency! We’re under attack by Financial Terrorists! You’re either With Us or you’re Against Us!
“Dateline 13 January 2014…. the U.S. senate, in emergency weekend sessions, passes the Financial Terrorism National Defense Act (FTNDA), calling for immediate…….”
Can you seriously imagine it being otherwise?
That is EXACTLY what will happen.
…………………………
PS: I left in the paragraph about nickels just because it remains an interesting quasi-investment or wealth-preservation opportunity. U.S. nickels, composed of 75% copper and 25% nickel, are currently worth more than a nickel, and can be bought at any bank in unlimited quantities; 50-roll boxes cost $100. Several proposals to debase the nickel have come and gone over the last few years; one of these years they WILL do it — i.e. replace most of the copper and nickel with (worthless) zinc. It already costs the mint nearly a dime to make each nickel, all costs included. So the clock is ticking on this idea. When hyperinflation kicks in, nickels will preserve and gain purchasing power. The gains could be great. The classic story about this is a guy, at the peak of the Weimar hyperinflation, who bought an entire city block in downtown Berlin for 10 ounces of gold. I’m not sure how true that story is, but it might as well be. It illustrates the general phenomenon of dramatically increased purchasing power of tangible commodities in a hyperinflation. Anyway, I’ll bet that nickels eventually have the purchasing power of a 2013 buck. Those boxes that you tucked away back in 2013 could come in mighty handy. 🙂
gurusid post=6838 wrote: By conflating inflation and price, one distorts the very notions of value.
Who is conflating anything? I am simply referring to higher prices as “inflation”, same as every other dictionary and reference work in the world. You can still have whatever causal theory about those higher prices that you please; I’m not taking that away from you. You just cannot call your causal theory “inflation” and still communicate effectively with the rest of the world, without cumbersome preliminary explanations.
Its not the ‘value’ that is increasing, but means to acquire that value that is inflating.
True. Who said otherwise?
It is a truism in investing, and in economic life, that price is not value, and pricing is not valuation. Everyone either knows this, or should know it.
But the point is (from my earlier post) that higher prices have several possible causes, and increased money supply is just one.
Trying to build a theory of cause into the word “inflation” is a non-starter; see discussion at comment #6833.
currently we have a situation in which price has become divorced from the money supply; it’s a bit like an authoritarian government ‘fixing’ the state price of bread, regardless of what is affordable or what the bread is actually worth, only here its called the ‘free’ market, and instead of party officials fixing the price, we have stock brokers and computerised algorithms. These are price rises driven by speculation on value (virtual digital value at that) NOT inflation of the money supply. The irony here as regards ‘energy’ prices such oil is that they would go through the roof as their value has been held down as regards their true worth, say when compared to the equivalent in human labour energy.
So, prices are being driven UP artificially, but are also being held DOWN artificially. Maybe you could explain in more detail.
gurusid post=6832 wrote:
Hi alan,alan: I am going by the dictionary definition of inflation — universally accepted, though rejected by TAE — of higher prices
No they don’t ‘reject’ it:
Alan’s dictionary ref:
http://www.bing.com/Dictionary in·fla·tion [ in fláysh’n ] — higher prices: an increase in the supply of currency or credit relative to the availability of goods and services, resulting in higher prices and a decrease in the purchasing power of money. Synonyms: price rises, increase, price increases, rise.Right. Synonyms: PRICE RISES. PRICE INCREASES. Those phrases, in common parlance, are SYNONYMOUS with inflation.
TAE does not accept this. TAE wishes to go with a definition which includes factors thought to be causal. TAE suggests that their definition is “traditional”. That may be true. I said in the thread where we discussed this: THEY MAY BE RIGHT. Their definition may be superior in every way. And YOU MAY BE RIGHT that the non-TAE definition is an evil Orwellian conspiracy to capture our brains and turn them into mush. And yet, TAE’s definition is TAE’s definition — it is not the commonly, universally accepted definition of today, found in all dictionaries and reference works. ALL dictionaries and reference works. They ALL define inflation as a general rise in prices of goods and services. EVERY ONE OF THEM. Google for it and see for yourself. Sometimes causal factors are alluded to, such as increases in currency supply or increases in demand for goods, but the bottom line, the sine qua non, ALWAYS, IN EVERY CASE, is price increases. That is now what the word means, in common parlance. Sorry about that. I did not make it so. It IS so.
Further: Although I did not get into it much on that other thread, I actually find TAE’s causal analysis to be limited and inadequate. Inflation is said to be an increase in the supply of money relative to goods and services — but that is only one of several critical factors that can drive prices. Here they are, succinctly, compliments of about.com:
https://economics.about.com/cs/money/a/inflation_terms.htm
inflation is caused by a combination of four factors. Those
factors are:
The supply of money goes up.
The supply of goods goes down.
Demand for money goes down.
Demand for goods goes up.You’ll note that TAE’s definition is limited to only the first one listed: money supply (or, credit), and perhaps the third (demand for money). What about the rest?
In any given situation multiple factors are involved and it is not possible to say in advance what their relative weightings will be; i.e. it is not possible to build a SINGLE definition of “inflation” that includes a causal explanation that will be correct in every case.
The phrases “demand-pull inflation” and “cost-push inflation” introduce causal theory, and do so with more granularity and nuance than does the TAE view. I suggest you read the about.com link.
It is this nuance, this complexity and malleability (depending on circumstances that change), that makes it impossible to try to retain a single, narrow theory of causation in the word. No doubt causation has been dropped-off in contemporary usage for that reason. If one wants to discuss causation, they can to do so using modifying phrases like “cost-push” or some other.
Anyway…
I already talked myself hoarse on this subject so I will now shut up about it. Except to say that I will continue to use the word in the commonly-accepted contemporary way, and I will point out that I am doing so as I do so (just for clarity, in this context). For my purposes, inflation means higher prices, regardless of cause. Period.
If you want to use the word in a different way, fine. Do it. Just indicate what you are doing as you are doing it.
davefairtex post=6821 wrote:
I happen to have a chart on this (naturally) and indeed it shows that food has gone up perhaps 230% since 2000, and perhaps more shockingly, about 60% over the two years of 2007-2008. While 60% isn’t hyperinflationary, its definitely disturbing. But then what happened after? If we eliminate the 2009-2010 period, food isn’t much more expensive now than in 2008. That 30% per year move hasn’t continued.
How does John Williams explain this? Its all monetary? Hyperinflation? GAAP deficits? Fed money printing? None of it washes. Our GAAP deficit hasn’t changed since 2008 – if anything, its gone up. Money printing hadn’t happened in 2008 yet. So what then?
My explanation: its oil – at least 80% anyway.Good hypothesis.
However, looking at the charts, I have a question. Would it not be true that food prices would tend to LAG oil prices by a year or two? That is, it would take that long for fuel to be reflected in food prices. Increased fuel utilization for a given year’s crop would not be fully priced-in for many months, perhaps a year or longer. This would be especially true of the more energy-intensive secondary feedstocks such as beef, where grain has to be grown first, then converted to meat on the hoof, then butchered, etc. — the whole process taking at least 1.5 years. Anyway, as I look at the charts, I see no lag, and in many places I see the opposite: food is leading rather than trailing. This observation is not consistent with the thesis. I’m not saying that higher energy prices do not impact food prices; of course they do. Just saying that that may not be as big a factor as was suggested.
Further: higher energy prices are themselves part of the inflationary mega-trend, which is not exclusively about currency creation. Here again, I am going by the standard dictionary definition of inflation: increased prices. Higher energy prices will redound broadly, spurring inflation throughout the economy since everything depends more or less on energy, from raw materials to finished goods and everything in between. When you combine this with the Fed’s open-spigot policies (likely to be reflected in higher prices sooner or later) it is quite easy to see inflation from here to whenever (eternity? no, that’s too long 😉 ).
pipefit post=6818 wrote: we are six years into this credit bust and CPI inflation is running at about 9%/yr if you used the same methodology as was used in the 1970’s…. Our current rate of CPI inflation is approaching the rates of the 1970’s. It is called stagflation.
YES. Stagflation, which includes inflation. The inflationary mega-trend has not skipped a beat, for decades. Actually, it did skip one beat, in 2008, but it was brief, and it picked itself up and continued on as though nothing had happened. Remarkable, but true.
Unlike some of the dogmatic voices around, I have an open mind and therefore I realize this could go either way.
Ditto. The inflationary way is the most likely, but nothing is certain.
It hasn’t been determined yet. As long as they keep up the pretense of representative democracy, a hyperinflation outcome is assured. They have the legal right to print whatever quantity of federal reserve notes as is required to meet any all obligations, and they will.
Should there be some sort of military takeover, the odds tilt toward deflation.That IS the sad truth, is it not? Deflation. to some extent, is probably what SHOULD happen, but not at all necessarily what WILL happen. More likely to go the other way, since that will be far more politically expedient and palatable. Very very sad that it would take some sort of fascist putsch to do what actually needs to be done.
I don’t think it matters all that much. There are over 300 million people here, and enough productive assets to support about half that at the present standard of living. Presumably there will be some combination of population loss and standard of living reduction to reach a lower equilibrium. In fact this process is already well under way, with the big drop in gasoline usage, big drop in new home construction, etc.
On this I disagree. The present standard of living could easily be supported on a much lower resource footprint. The current system is so massively wasteful that wringing out even a substantial fraction of the waste would allow a reasonably comfortable transition. However, this would be (like deflation) politically near-impossible. The waste is “necessary” to keep the whole insane system going.
pipefit post=6785 wrote: Alan-IMHO, we are very close to entering the ‘hyper’ part of this inflationary trend. One indicator that I gave you already was that the 2012 fed. budget deficit, using GAAP accounting, was 40% of GDP.
Another indicator is the oil:ng ratio….All good points. And maybe you are right that we are CLOSE TO ENTERING the hyper part. (I’ll bet that you are right.) But we are NOT THERE YET, was my point. So why call it what it isn’t?
I am going by the dictionary definition of inflation — universally accepted, though rejected by TAE — of higher prices, and (hence) of hyperinflation as much higher prices, typically 10% rises per month, or more. By that definition, we are certainly not in a hyperinflationary state.
pipefit post=6779 wrote: Viscount asked, “How can everything be so bad if the market is so good?”
Because we’re in a hyperinflationary depression. Bought any groceries lately, or anything else for that matter. Notice how the packages are smaller and the prices are higher? This is the logical outcome of unrestrained money creation by those in charge.
Pipefit, please. It is obvious that we’re in an inflationary mega-trend in commodities and most of the things that people buy and use — i.e. with respect to real costs of living — and this goes back many years. But it is equally obvious that we are not in anything like HYPER-inflation, which would see prices rising at (say) 10% per month, or more. Be reasonable. Do not abuse the word “hyperinflaton”.
Why should China call us out now? We’re suppressing the price of gold, enabling them to get in cheap. When the time is right for them, they will dump the dollar, don’t ask me when.
Right! Either that or THEY are suppressing the (paper) price of gold, allowing them to get physical on the cheap. In any case, they are accumulating massive amounts of physical, far in excess of stated amounts, while the west is being bled. The big wealth and power shift is dead ahead.
Meanwhile, you can protect yourself by becoming your own central bank, even if it is to the extent of only buying one single ounce. In the coming years, you might be astonished at how very much that one ounce will buy, and how much trouble and grief it will save you. It might even save your life. It is easily the best single “prep” you can make.
What G.O. said. Don’t fight the Fed. Buy gold. Then: relax.
And read Walayat:
https://theautomaticearth.com/index.php?option=com_kunena&func=view&catid=15&id=5752&Itemid=96#6713Shorting the market could be a terrible mistake.
Just a reminder: walayat says dow down to circa 12,000 this summer, then up up and away:
https://theautomaticearth.com/index.php?option=com_kunena&func=view&catid=15&id=5752&Itemid=96#6652We shall see. Exciting times!
alan2102 post=6652 wrote: Not to over-hype Nadeem Walayat (marketoracle.co.uk), who I’ve mentioned here a few times recently, but he is a smart cookie* and quite accurate, generally; he says that the Dow will take a hit this summer, perhaps back to 12,000, then up up and away to new highs in 2014, possibly as high as 20,000 by 2017: https://www.marketoracle.co.uk/Article38931.html
In case anyone is interested, Walayat just released a greatly expanded version of this writeup in pdf form, available here:
https://www.marketoracle.co.uk/Article39189.html
direct link to the pdf, which may or may not work (without signing up for the newsletter):
https://www.marketoracle.co.uk/pdf-d/Stocks-Stealth-Bull-Market-2013-by-Nadeem-Walayat.pdfAgain, it will be more than a little interesting to see just what transpires over the next 5 years. Inflation? Deflation? Stagflation? Collapse? Business as usual? Who knows? I’ll bump this thread yearly at least for an update.
Rapala post=6626 wrote: most of my savings are in gold
Smart person.
You are rich, but the world has not quite recognized it yet. It will, soon.
Be sure it is physical metal.
SteveB post=6628 wrote: [quote=Rapala post=6626]So is this trend just temporary or is there another way to explain rising cpi index?
Hi Rapala,
If inflation is happening at all, it’s temporary. Deflation has been underway for more than a decade. Look at a graph of any financial asset in terms of gold, i.e., “real money”, relative to dollar-denominated prices in order to see this.
Defined THAT way, then yes, deflation certainly does prevail! Prices are collapsing in terms of gold and silver. Have been for the past 12 years — and will probably continue to do so for at least another 5 years. In terms of dollars, it is a different story. The only thing that dollars buy more of is real estate.
The Dow topped
We shall see. Not to over-hype Nadeem Walayat (marketoracle.co.uk), who I’ve mentioned here a few times recently, but he is a smart cookie* and quite accurate, generally; he says that the Dow will take a hit this summer, perhaps back to 12,000, then up up and away to new highs in 2014, possibly as high as 20,000 by 2017: https://www.marketoracle.co.uk/Article38931.html
Yes, I know, not the usual fare here at TAE! But who knows? This is a crazy world, for sure. It will be interesting to watch it all unfold. I will bump this thread on a yearly basis and we’ll see whose predictions are most accurate.
PM are headed generally downward as well, but they aren’t likely to lose as much value as financial assets, as I understand it (won’t reach 0, in any case).
Won’t reach zero? Are you sure? 😉
…………………………..
* smart enough to publish Ilargi’s stuff, so that has to count for something, right?
ilargi post=6618 wrote: I’d say anyone who thinks what drives today’s economies is some sort of inflation megatrend has some catching up to do. Of course, if they were, sitting on cash might indeed be that guaranteed loser.
Ilargi, sitting on cash has been a big loser for the last 70 years. Of course, that could change. But I don’t expect it to. If it does, it will not be for long.
SteveB post=6610 wrote: [quote=alan2102 post=6608]…Nadeem Walayat, the proprietor of
marketoracle.…
A few of his recent pieces:
https://www.marketoracle.co.uk/Article38807.html
…The pitfall in his analysis in this article is in thinking that the “big picture” begins in 1996.
Actually, Steve, as you know, the very same trend that
he highlights there goes all the way back to 1980 (33
years), or even back to 1942 (nearly 70 years). From the
low of 93 in 1942, the DJIA has gone now to 14,000, for
a 150-fold return. Viewed another way, that’s 7+ doublings,
a little more than one every 10 years. Of course, during that
time the currency has been debased considerably, so that
purchasing power is much less; i.e. you’re much less rich
(if you were a stock holder) than those figures would
suggest. The way to stay ahead of the inflation megatrend
is not to buy and hold forever (like buying and holding stocks
since 1942), but buy distressed/depressed value and hold
for long secular bulls (10-20 years), then rotate out when
the bull has reached exhaustion.ted post=6585 wrote: Wow the dow up 150 well I guess it is all over…can they just keep this going…is the trillions of dollars they gave the banks in there just floating around…the media is so giddy about it…saying that all the money lost in 09 is back. I have to say I missed the boat on that listening to here I pulled my money and am sitting on cash…I have to say I am secretly hoping for a crash but so far the opposite is happening..I just
Ted, you might do well to read Nadeem Walayat, the proprietor of
marketoracle. He’s a very smart guy, and right more often than
wrong. He talks a lot about the inflation mega-trend, in the
context of which the decline of 2008 was just a minor blip. I’m
afraid he is right about this. Sitting on cash is a guaranteed loser.
He has a free newsletter, which you might want to sign up for.A few of his recent pieces:
https://www.marketoracle.co.uk/Article38807.html
https://www.marketoracle.co.uk/Article38458.html
https://www.marketoracle.co.uk/Article38697.htmldavefairtex post=6561 wrote: Golden Oxen –
Had a great conversation over at Chris Martenson’s site about hyperinflation. Came up with a bunch of metrics to detect it. Executive Summary: not happening right now, but size of monetization is getting closer to being worrisome.
Here are the indicators we came up with:
* monetization of at least 40% of US govt spending + increasing consumer confidence
* TIPs yield rising
* Loss of reserve currency status
* US Dollar dropping
* Money velocity increasingSee the page I constructed to show these indicators. Note that some of the timeseries on the page only update every 3 months, so they haven’t spotted the current monetization effort just yet. But you will get the idea.
* Monetization: was zero, now (about) 25% of spending
* Consumer Confidence: rising, but still low (below 2000-2008 levels)
* TIPS yield: at all-time lows
* USD as reserve currency: very slowly dropping, at 61% of global CB reserves
* USDX: moving sideways
* Money velocity: droppingNote that the degree of formal acceptance by central banks
of the USD as reserve currency is one thing; the acceptance
(and probable coming non-acceptance) of the USD as
universal currency in trade is another. Vis:Pitched Currency War & USDollar Rejection
https://news.goldseek.com/GoldenJackass/1360270800.phpThe Coming Isolation of USDollar
https://news.goldseek.com/GoldenJackass/1356642000.phpStoneleigh: “How would people feel if we ran open threads, like the Drumbeat at The Oil Drum? If they appeared on the front page, say, once a week, they would attract a lot more participants than topics buried in the forum.”
Great idea!
You know, these internet fora are like PARTIES. They are not like schools, where you break things up into separate classes: here’s the English class, and here’s the Math class, and so on. It is a party, where you discuss whatever the hell you want, and the discussion takes whatever twists and turns it takes, including English, math, anthropology, peak oil, sex, drugs, the fiscal cliff, and so on, in no particular order. It is chaos, glorious chaos. So mote it be.
……………………….
added:
I’ve noticed over the years, on scores of fora, that there are usually a dozen or two dozen classified subject discussion areas, but there is usually ONE area (of those 15-30 areas) — usually something “general” — that gets 70%, 80%, or more of the total posts. Like:
general discussion: 23,944 posts
everything else (27 different specific subject areas): 1,722 postsOr, sometimes there are 2-3 “general discussions” in a few broad areas, such as (in the peak oil and collapse venue): peak oil and energy, economics, and general news. But no more than about three. Beyond that it gets too specific, too fragmented.
People don’t want to be limited. They gravitate to the general discussion, and then use that area to discuss anything and everything that pops into their heads. They want to go to “where the action is” — where everyone else is. THEY WANT TO GO TO THE PARTY, not to some 7/8-empty classroom.
You can easily verify this by surfing around to different fora. It is the same everywhere. In 17 years of forum-cruising, I can’t remember ever seeing an exception.
I might add that the old TAE (back on blogger) was a party by default. There was only ONE place for all discussion.
I might also add that communicative parties of this sort are, in my view, *real communities*, even though they do not involve meat-space/in-person contact. This is important, and valuable. They should not be broken up casually. I know that the TAE proprietors are well-intentioned and did not anticipate the fallout of the changeover. But it was highly ironic, given that one of the themes of the site is the nurturing of community. The lesson of this is that cyber-communities are, again, real communities, of an organic nature, and must be dealt with carefully. We cannot abruptly impose upon them radical new systems — forcing them into wholly new and unfamiliar modes of doing and being — any more than we can do so with physical communities, without grim (probably destructive) unforeseen consequences. (Witness, for example, the fallout of “urban renewal” projects, and mass expressway-building, cutting through historic urban neighborhoods, in the 1960s!) In other words, cyber-communities are ECOLOGIES. Not to be messed-with too casually.
Vulcanelli: The big watershed was after the move from blogger. Before that, it was a very lively, vibrant community (albeit rather insular and intolerant of dissenters, like me). After that, it almost shut down. The community never really recovered. I don’t know what it was about the new format that caused all the problems, except to say that everything is now scattered. TAE used to be, so to say, an organic whole, and now it is chopped into a bunch of little pieces, and people never really found a way to put it together and find each other again.
Stoneleigh wrote: “People have fewer babies when they don’t think they’ll be able to look after them, or when they don’t like the look of the world they would have to bring them into.”
Actually, the opposite is true. People have more babies under those conditions. As conditions improve, they have fewer babies. This has been proven time and time again, all over the world, over many decades. There is no doubt. It is a paradox, but it is true: women in chaotic and resource-poor environments, suffering from existential insecurity, are much more fertile than women in more stable and resource-rich ones. You would think it would be the opposite, but it isn’t. It is counter-intuitive.
An interesting sidelight on this: there is an ugly streak in neo-Malthusianism, characterized by a “let ‘em die!” attitude toward the third world, or impoverished populations. The idea is that we should not support the starving or impoverished; we should “let nature take care of the problem on it’s own”, or something like that. Maybe I should not say that this is just an “ugly streak in neo-Malthusianism”; maybe this is intrinsic to all neo-Malthusianism. In any case, my point is that that idea does not work. “Letting them die” does not work. They will not just die; they will have more kids. (They WILL die, but they will have more kids before doing so.) The problem does not solve itself. It gets worse. However, the opposite approach DOES work. Want lower population? Simple. Feed ‘em, clothe ‘em, etc. Presto! Lower fertility. And several decades later, falling population.
And it happens at a VERY low level of consumption and SES/GDP. It is not necessary to bring people up to anywhere near the level of the modern west/north. Something on the order of $U.S. 5000 per capita per year is plenty. A good example is China: their fertility has now fallen BELOW replacement at a per capita GDP of under $U.S. 5000. (That is down from fertility of 5-6, before the revolution, when most of the population was living in desperate poverty.) It will go even further negative as the poorer rurals are lifted up. India is headed in the same direction, though they are still slightly above replacement. They are like China, but 20-30 years behind.
More signs of the times: China dramatically
accelerates its gold accumulation. Preparing for the
end of dollar hegemony.https://www.zerohedge.com/news/2013-01-10/chart-day-chinese-november-gold-imports-soar-91-tons-2012-total-720-tons
“If last year is any indication, the December total will be roughly
the same amount, and will bring the total 2012 import amount
to over 800 tons, double the 392.6 tons imported in 2011.”
