Inflation is transitory, huh? Don't be too sure of that.
Retail profits must pay for overhead, including - in many case - "free shipping."
Is this price blip heralding an inflation prompted run? Possibly. But don't count on it. It may trigger a selloff people who bought gold at a lower price bail out and take their profits. The true gold bug, however, is expecting to see the precious metal fetching $3,000 per troy ounce.
(Bloomberg News) - - "While the Office of the Chief Actuary at [Social Security] said it is still too early to assess the impact from Covid-19, the year-over-year change appears to reflect excess deaths. About 447,000 people who died from the virus were 65 or older, according to data from the Centers for Disease Control and Prevention, or about 80% of total deaths."
Notice the sharp uptick in claims just prior to 2010. That's when Baby Boomers began to apply.
We are often told that Social Security's Trust Fund will save the day. However,the Trust Fund is mostly government bonds (IOUs). If you expect government bonds to hold value through thick and thin, you'll rest easy. If you have doubts you may encounter some sleepless nights. ~JW
it's being examined by the Fed and other central banks.
. The adoption of a FedCoin card could certainly be useful for government tracking of citizen financial affairs and save the IRS no end of time and humanpower in collecting taxes. Calculation of taxes due could be done by computer and the amount due removed from one's FedCoin account.
But what about the underground [blackmarket] economy? Wouldn't FedCoin drive them out of business?
No. Racketeers would switch to something valuable and not nearly as traceable as digital fiat currency.
Maybe even gold or silver or palladium or diamonds. As the old saying has it, "Where there is a will there's a way." Anything that is scarce can be used for money.
"What if the government declares such things illegal and confiscates them?"
It's highly doubtful even today's political majority would agree to outright confiscation of people's personal valuables. If you owned a South African krugerrand what right would the U.S. Treasury have to take it from you? For that matter, under present law, how could the U.S. government confiscate the U.S. gold and silver bullion coins it has been selling to the public since the 1980s?
Stay tuned for more on this divisive topic.
"Visit the Bullion Dealer Locator to locate a dealer – bullion coins are not sold directly by the U.S. Mint."
Popular bullion retailer APMEX is presently pricing U.S. $50 face gold coins at $1,965.00. Each contains 480 grains of goldand is more expensive than the daily spot price of the precious metal. But if you wish to actually possess the gold you buy you must pay the retail price. Shipping is often "free." When you sell it back to the dealer you receive a wholesale price.
"That members of both major political parties favor an unbridled borrowing and spending approach to government is unconstitutional and destructive but not surprising. Giving away cash and pushing the cost onto nonvoters — generations as yet unborn — can make members of Congress popular. It can also turn the public treasury into a public trough. Thomas Jefferson warned of the dangers of this as it would become habit-forming for politicians, and voters would grow to expect it." ~Andrew Napolitano
Actually, we all have. We're been doing it since 1936 when the U.S. Supreme Court declared that Congress could borrow and spend all the money it wanted to as long as long as it was for the common good. Judge Napolitano understands what happened and writes about it in a clear way, although not many of the voting majority will comprehend his criticism of the runaway federal borrowing scheme. Perhaps former governor Lamm of Colorado said it best when he pointed out that our ever-increasing federal debt is based on the idea of "Christmas in reverse." We get all the things we want and send the bills to our children, and the unborn for it is they who must eventually clear the debt. UNCONSTITUTIONAL DEBT.
| |
Upon spying a large jug filled with 1-cent
coins the boy asked, "Hey, Dad. Why are we saving all these pennies?"
"Well, first of all they are one cent coins, not pennies. That nickname comes down to us from Colonial days when English and other foriegn coins jingled in our pockets. The English penny got its name from the old Roman denarius, often called 'dennies.' Eventually "pennies" fell into use, but the U.S. system has never minted coins bearing the name "penny." "Now, the coins in that jar were minted before October, 1982, and most of them are 95 percent copper which is valued at nearly three times the face value of the cent. Today it is $0.291033. That's just the value of the METAL, not the cost of mint production." "But didn't Ben Franklin say 'A penny saved is a penny earned'?" "Yes, he did. But that was prior to the establishment of the present U.S. coinage system. At the time English pennies widely circulated in American pockets." |
<
Saving
copper cents with the present price of copper per pre-1982 cent nearly
3 cents is a logical thing to do. Don't bother hoarding post-1982
U.S. cents. The are made of cheap zinc coated with a thin veneer
of copper. Are any 1982 one cents coins worth saving? Sure! A cent minted from January through September 1982 is mostly copper. But from October of that year to the present the main metal in the one cent coin is zinc. There is a small movvement afoot to cease minting the pesky cent However, the zinc industry is happy with the present system. |
We were personally attracted to libertarian ideology in the 1960s when the U.S. government yanked silver coins from our pockets and replaced them with cupro-nickel facsimiles. Private ownership of GOLD was made unlawful in the early 1930s but we always felt secure at the sound of silver coins ringing on a counter top. The silver completely disappeared from general circulation in 1965 despite Lyndon Johnson's promise that the old silver dimes, quarter-dollars, and half-dollars would circulate with the new base-metal coins and represent equal purchasing power. With the public hoarding the silver coins and the government pulliing them out of circulation as fast as it could, there was rarely a common silver coin in circulation by the end of 1965.
Murray Rothbard and other libertarian economists explained the money questions very clearly and we found ourselves falling in with their contention that doing business with fiat currency would one day lead to heavey inflation. By the 1970s the inflation rate reached double digits! A new Federal Reserve chairman, Paul Volcker, applied the brakes by raising interest rates sky high.
The chances of libertarianism "catching on" with the general public are nearly nil. The Welfare State has long been following a socialist scheme and a voting majority have long held that the founding era in which the people supported the government (and wrote a Constitution to reflect it) the present notion is that the federal government must support the people, borrowiing trillions of dollars to pay the bill.
A $1.5 QUADRILLION TIMEBOMB
Writing from Switzerland Egon von Greyerz examines the fall of Archegos, the gfinancial firm whose decline has made headlines lately. This article may help readers understand the certain danger that playing in the derivatives market can produce. Von Greyerz reminds us that derivatives are not the ASSET. They merely derive their value from the asset.
TIP OF THE ICEBERG.
"Trillion
Here. . .a Trillion There."
"During 2020, the federal government provided a total of $3.2 trillion of Covid relief, starting with a mere $8.3 billion, then adding $104 billion, then adding $2.2 trillion, and finishing off the year with another $900 billion.
"We’re now three months into 2021, and the federal government has
provided yet another $1.9 trillion in Covid relief; and, the Biden
administration has just asked for $2 trillion for
infrastructure."
Clifford Theis, economist with the
American Institute of Economic Research is reminded of the late Sen.
Everett Dirkson, a long-serving
Minority Leader of the Republicans in the U.S. Senate, famously
quoted as saying a billion here, a billion there, and soon we’re
talking real money. That was back in 1969. At the time, a billion
dollars was about one-tenth of 1 percent of GDP. And, to make it
clear to the average reader, we add that $1 billion is 1,000 million
dollars. It takes 1,000 billion
to equal $1 trillion.
Mr. Theis does a good job of explaining the immensity of the impact of continuous monetary inflation since Mr. Dirkson's "a billion here" remark of more more than a half century ago: A TRILLION HERE...A TRILLION THERE
...but most of us don't have the words to describe it.
J. Howard Kunstler has the words.
Franklin Roosevelt overwhelmed Hoover in the 1932 election, called in
the people's gold in 1933 and promptly devalued the U.S. dollar in
terms of gold - which Americans would not be allowed to possess again
for more than forty years. Borrowing continued to rise in the
1930s and the economic depression persisted. By the time the nation got
into World War Two its annual deficit was nearly $50 billion. But
the borrowing went into overdrive when war dragged on. The federal debt
had piled up to $259 billion by 1945...122.75
percent of GDP.
There
were a few years in which the national government ran budget surpluses,
but the debt pile grew until it reached $995 billion in 1981. Converted into millions that's 995
thousand million. Still quite a lot
of money - - even today.
The
debt pile began to be measured in trillions in 1982. By 1995 the
accumulated debt was $4.9 trillion!
Politicians have chosen to
ignore the debt accumlation. The Treasury Department says it is
presently more than $28 trillion,
A Sword of Damocles
swings over our heads and something ought to be done about it. But he
main objective is to make
voters happy....and voters have no wish to cough up the thousands of
dollars per capita
to
pay down this towering national debt. The voting majority knows very
well the politians will never ask them to pay back the debt. They'd be
run out of office at the next election.
So - what happens? Can't the debt be declared null and void and just disappear? No - not without wrecking the lives of all those investors in the US and around the world who have invested in all those IOUs in the belief government will make good on its word to redeem them.