40 Miles Deep
July 5, 2010 by Bob Livingston
In the past we have sought to demonstrate how inflation (devaluation) of the currency is the perfect crime.
We said that your paper money can be inflated (devalued) to zero even if it is locked in a concrete vault 40 miles deep and no one knows where it is. You may think it is safe and secure and that it is your stored currency paper money, but little by little its value declines.
The money creators (those who print paper money) can steal the purchasing power of your paper money no matter where it is. All they have to do is pour more water in the milk—dilute the value of all paper money by printing more.
What if you have gold and silver in a vault buried 40 miles deep? Well, as the money creators destroy the value of your paper money as we described, the value of your gold and silver increases in value, as related to the depreciating paper money.
Your gold and silver appreciates and gains in value even buried deep in your vault with no risk and no interest. It is safe from manipulation.
Bankers say gold (which they hate) is a very poor investment because it pays no interest. They don’t say that it gains in value as paper money is depreciated. So holding gold and silver is the ultimate asset/investment during times like now when governments all debauch their own currencies.
Cash pays no interest and it depreciates. There is no risk to holding gold. There is great risk in holding paper money (cash). You own your gold. The money creators own your paper money.
How long will the Keynesian central planners last? No matter what these people do or how much they destroy or steal, they still believe that they can create an eternal boom.
At the present time there is a deflationary process going on in the private economy. In trying to prevent liquidation Federal Reserve Chairman Ben Bernanke and Company are forcing more “money” into circulation on a massive scale.
“The people’s real debts are heavier than 1929, heavier than 1932, heavier than ever before in history but their real income and real wealth are less,” according to economist Heinz Blasnik.
But nothing has changed. The same mistakes are compounding which caused the last crash. Money printing and credit expansion is the only thing Keynesians know.
At the same time the power elite are aggressively moving toward destroying private business with controls, taxes and bureaucratic harassment. Government is doing what it always does. It destroys value and production.
I do not believe that things just happen. If we back off and look at the whole picture we see organized chaos that will end with all substantial wealth transferred to the power structure. Only a few will preserve their assets.
The political order has the appearance of insanity which is the perfect cover for a hidden agenda. The next crash will be much greater than previous crashes and will probably be fatal.
Has anyone stopped to think that all modern booms are inflationary illusions? Even though the economic undertow at this time is deflation, massive quantitative easing—money printing—plus unprecedented spending by the political administration has so far kept monetary inflation going.
Bernanke knows more than anyone that the Fed by itself can create inflation. The fox is in charge of the henhouse.
We should not look to future for default, for it is happening now. We should prepare for the worst outcome.
There is no certainty as to when. But this regime could go on for months or even years should an intervening bull market occur, though it would be another false one based on the massive inflow of newly-printed money. It should be obvious, however, that risks are at an all-time high.
This is why we have for several years recommended the accumulation of precious metals, stored food and Swiss annuities… and continue to do so.