GOLDBUG: Time to diversify savings?


Bitcoin: The Inevitable Path Toward Global Adoption Of The Next World Reserve Currency

So, if the USD has a shelf life partially due to historical precedence and partially due to fiscal irresponsibility (overprinting of the money supply), what comes next? What replaces the USD? Another fiat currency? It’s possible, but my guess is the days of trusting a centralized party to maintain a stable supply of a currency have come and gone. Why trust, when you can just verify? An argument could be made that gold is today’s reserve asset as it is held by the majority of central banks.


Not sure what to say on this, it’s above my pay grade.


Me neither. But, with the Gooferment’s inflation destroying the U$D’s value, it would seem that “diversification” of savings is essential to preserving what little wealth one has. 

Pre-1913, people saved gold and silver coins.  Since there was a gentle price deflation in the USA during that interval, it was a great strategy for preserving wealth.  After 1913, the erosion began, I blogged in June of 2006 about Evy’s Dad and his Fifty Dollar bill  —

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My now departed father in law used to have a folded up fifty dollar bill in his wallet. He had carried it their since he was a young man, so that he’d “never be broke”. He was blue collar working guy. Salt of the either. Raised his family, paid his bills, and did the best he could. He was poor! BUT, he never realized, (I didn’t tell him cause he wouldn’t have believed me! I was just a child in his eyes.) that HIS beloved DEMOCRATIC (not that the R’s are any different), silently stole his “fifty in sunken city”. Yup, when he put that Fifty in his wallet if could buy lots of stuff: A hundred gallons of gasoline. Feed his family for a week. Ffity cartons of his beloved Lucky Strikes. Pay an entire hospital bill for an accident. It had value 60 years ago. After 60 years of inflation, I didn’t have the heart to tell him that his beloved Fifty was really was worth about 13 cents. Sad isn’t it.

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As you know I like gold and silver bullion coins, but recently I’ve been thinking about diversifying to bitcoin.  Now I’m thinking about GOLDBACKS. I’ve dabble in BITCOIN and ETHERIUM.  I’ll probably dabble in GOLDBACKs too.  My bullion coin dealer is shifting out of coins and into middleman.  (Why use him when I can go directly AMPEX or others?). Sigh. So in March, I’ll be shifting.  Not sure exactly what mix but I’ll do something.


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“Three hundred years from now where will you be and where shall I be?” — Thich Nhat Hanh


MONEY: A negative on bitcoin

26 Reasons Why I Will Never Support Bitcoin
By Silver Shield, on December 21st, 2013

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20. Then there is that anti government aspect of it.  Really? It seems the Anglo American bankers love it, including Ben Bernanke and JP Morgan.  It is right up their alley with something for nothing.  They may crack down on Bitcoin only to launch their own brand.  Look at the Lotto.  They went after the mob for running numbers, but then made it legal for them to profit off of.  They went after Charles Ponzi and then created their own Ponzi Scheme with Social Security.  I am telling you Bitcoin or something just like Bitcoin will be used to sell to the people after the dollar collapse, a new electronic worthless currency.  Who knows maybe we will get bonus points for watching TV and using it?  They already have millions hooked on EBT cards, get the corporations involved and the government muscle and you could see the final realization of a digital currency where they can cut you off if you get out of line.  How many stories do we already hear about bank bailins and IRS and NSA messing with people’s bank accounts.  Having real wealth outside of the system is the only antidote for that.

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It’s the “intrinsic value” argument that hits me hardest.

In POW camps of WW2, cigarettes were “money”.

Gold and silver have the advantage of “intrinsic value”. Junk silver, (i.e., pre-1964 US coins), will be the money of TEOTWAWKI (The End Of The World As We Know It)!

The survivalist community plans to use ammo as money. As well as commodities, like liquor, can be barter fodder. 

Remember barter will precede “money”.

So, save wealth in forms that are not paper!

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MONEY: Serious diversification

IT IS TIME: Move Your Money Out of the US Banking System
By Robert Wenzel
Economic Policy Journal
October 19, 2013

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It is time for serious diversification. Depending upon the size of your assets, there are different things that should be done. But almost everyone should have some cash and gold coins stored outside the banking system. Those with significant assets should begin international diversification now, while it is still possible. I don’t consider any country completely safe from the clutches of the US government so international diversification, among many countries, is also called for: Switzerland and Hong Kong for starters, but also other countries that are not known as tax havens, the USG has their claws into these countries, be creative.

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Time to store: water, beans, bullets, and bandaids … … not necessarily in that order.

Followed by bullion — nickels, silver, and gold.

Note: Not paper!

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GOLDBUG: 92.5% loss of value

OP/ED | 7/29/2013 @ 8:00AM |1,698 views
Gold Defined Money And Monetary History At The Cato Institute: A Velvet Underground Event?
Ralph Benko, Contributor

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“Since the end of convertibility in 1971, average real wages per hour of work in the United States have been stagnant. Average annual American economic growth since 2000 has been about half the average annual real growth of the previous two American centuries. The real purchasing power of a 1971 dollar saved in the bank, adjusted by the CPI, has declined to a value of about 15 cents. That is to say, the price level has risen from 1971 to 2013 by about six-fold, a rise unparalleled in the history of the American Republic. In a word the American middle class, relatively speaking, has been gradually dispossessed.

“The consequences of the collapse of real money worldwide are still unfolding. But let it be said that only one century of post-World War I financial disorder has been written.

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One can quibble about exactly how much a dollar has shrunk!

Personally, I’d suggest 30¢ for a gallon of gas in 1964 versus $4 on 2013 equals 92.5% loss of value!

Put it another way, a 13 fold increase in the price level.

No wonder an 8$ minimum wage doesn’t look good!

Retirees, the poor, the wage slaves, and anyone with savings is getting royally <synonym for the past tense of the procreation act> !

Convert currency and dollar denominated assets into things the Gooferment can’t print!

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GOLDBUG: Ugly chickens

The Daily Reckoning by The Daily Reckoning / 1d // keep unread // preview
Why Gold Will Make a Comeback

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You might be tempted to think that the global economy is recovering, the dollar strengthening and gold will finally sink into obscurity. Think again.

Central bankers like Ben S. Bernanke may tell you that banks hold gold bullion only for sake of “tradition,” but gold traders know otherwise — gold is real money, and despite what bankers, economists and mainstream investors have been saying, their actions show they are terrified of a coming currency crisis.

This Daily Reckoning video will show you exactly what is going on under the radar at some of the world’s biggest central banks, and how it is destined to affect gold prices.

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There are some very very ugly chickens coming home to roost.

All the “dollars” that the Federal Reserve has created out of thin air are sitting in the Big Banks. Just cause they are not “circulating” doesn’t mean that we are off the hook.

The Gooferment must inflate to “pay off” their unsustainable debt, unfunded liabilities, and spending.

So what are us “little people” supposed to do?

Prepare for hard times. Save and invest in things that preserve your “wealth” when the situation winds down.

Learn a real skill, economize, pay down “bad debt”, buy productive land, bullets, beans, band aids, commodities.

Gold, silver, and nickels.

Anything to preserve value.

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GOLDBUG: The true price of gold and silver

We’re a Long Way from the 1970’s
12 JUNE 2013 
By Greg Hunter’s (Updated)

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In the 1970’s, we had reporters investigating the White House. Today, we have the White House investigating reporters for doing their jobs. What Nixon did in the Watergate break-in is child’s play compared to the Obama Administration’s use of the IRS to target hundreds of groups considered political enemies. Let’s not forget the data collection on millions of Americans by the NSA and the brave souls that lost their lives in Benghazi. Revelations from multiple scandals seem to keep coming. This is, at the very least, a reflection of bad management of USA Inc. and not good for the U.S. dollar.

So, is the gold rush over? Not if you ask China, India, Russia and multiple hedge funds. Can precious metals prices still be suppressed and pushed lower? Yes, but only until the markets cannot or will not deliver physical metal. When that happens, there will be no more selling what you don’t have. It you want to sell 50,000 ounces of gold, you’ll have to produce it. The markets will be “cash only.” Then and only then will you get the true price of gold and silver.

We are a long way from the 1970′s. What is happening now has never happened in all of recorded history. No country has ever been more indebted than the U.S. Money printing has never been a coordinated global event. The risk to a black swan event such as nuclear war has never been greater in human history. So, when will the gold rush be over? The short answer: when there’s world peace and there is trust and integrity in the financial system.

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It’s interesting when you thing of the giant Ponzi scheme that the dollar represents.

Once upon a time, a “dollar” was:

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The U.S. dollar was created by the Constitution and defined by the Coinage Act of 1792. It specified a “dollar” to be based in the Spanish milled dollar and of 371 grains and 4 sixteenths part of a grain of pure or 416 grains (27.0 g) of standard silver and an “eagle” to be 247 and 4 eighths of a grain or 270 grains (17 g) of gold (again depending on purity).[36] The choice of the value 371 grains arose from Alexander Hamilton’s decision to base the new American unit on the average weight of a selection of worn Spanish dollars. Hamilton got the treasury to weigh a sample of Spanish dollars and the average weight came out to be 371 grains. A new Spanish dollar was usually about 377 grains in weight, and so the new U.S. dollar was at a slight discount in relation to the Spanish dollar.

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What is it worth now?


Is the answer “not much”?

And shrinking every minute.

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ECONOMICS: No free lunch

“Mr Stockman’s new book, The Great Deformation , highlights the enduring conservative appeal of a kind of economic primitivism that harks back to the days when laisser-faire ruled and macroeconomics had not been invented.“The modern Keynesian state is broke, paralysed and mired in empty ritual incantations about stimulating “demand”, even as it fosters a mutant crony capitalism that periodically lavishes the top one per cent with speculative windfalls,” wrote Mr Stockman in the New York Times article that set off a minor furore in Washington this week.”

Seems like he has nailed it! They might not like it but it accurately describes the hole we are in. Getting out of it is going to be painful for the young, old, and not-rich. But we’ve been scammed with “free lunch”. Now there is a very ugle chicken coming home to roost!

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MONEY: Is Retirement Just Too Dang Risky?

Is Retirement Just Too Dang Risky?
Wednesday, 8th February 2012 (by Robert Brokamp)

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3. Savings to the rescue…or not.I won’t trot out all the stats about how people don’t save enough, or how the baby boomers, as a group, are entering their golden years with too little gold (that is, net worth — I’m not suggesting that every retiree hoard the shiny metal). That’s bad enough. My concern is that for these (often-too-meager) savings to last, investment markets have to cooperate, and, as we’ve seen over the past decade or so, they often don’t. I’m not predicting Armageddon or anything like that; most of my longterm savings are in the stock market. But investing can be risky; we just don’t know for sure how much a certain stock or even a bond will be worth a decade or two from now. Yes, you can play it safer with CDs or Treasuries, but only if your money will last as long as you do — and keep up with inflation — while earning 2%.

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Funny, he stumbled on my hot button. Gold. Specifically bullion. Silver. Even nickels!

On FBC, there’s an add where the retired couple goes to their bank to get their retirement savings and the teller gives them stacks of blank paper.

Maybe my depression era grandparents are too much on my mind, BUT, (and there is always a BIG butt), they loved cash and savings.

I remember the Metropolitan Life guy calling on my grandmother when I was being watched for my Mom. (Maybe I was 4 or 5?) And, she pay him some small amounts for “insurance” on a whole bunch of people. “Eddie”, my paternal grandfather, would called to pay for “his relatives”, and he’d come out with his Chock Full A Nuts coffee can where he had “his change”. He had gold coins in that. I remember they’d argue cause “he was going to jail if the government found out he kept them”. (Wonder what ever happened to those?) And, later, I remember she’d go weekly to the Harlem River Savings Bank, to put something away or even just to have her interest “put in the book”.


And you wonder why I have a tin foil hat?

So, even some of the most conservative financial writers don’t spurn 5 – 10% in “metals”. Of course, they mean “paper” (e.g., a gold ETF).

How did that work out for the counter-parties of MF Global?

Imagine my favorite mental experiment? Henry Hackel’s “box of money.” or my mythical pirate’s’ chest. “Open that pirate’s chest and what do you want to see: greenbacks, Confederate currency, or gold coins?”

At the very least, every time, you go to the bank, buy a roll of nickels. 2$. Put them at the back of the “junk closet”. Even today the melt value is 7½¢ each. How can you go wrong?


Lest you hit retirement and one of the many risks in this article comes to pass. You’ll always have your “bullion” stash. Your own personal “pirate’s chest”.

And, no estate tax if I am wrong.

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