One must consider the the present state of the global economy at this time, particularly what is presently happening here in the USA.
Inflation is is effecting economies worldwide at this time, not only here in the USA. If Inflation was calculated using the same parameters used since the 70'- 80's, it would be hovering around 14-16% today. Not the 6-8% that it is stated to be. The present calculation omits the cost of food, fuel, and housing/rent exspeses, where most of us are feeling it the hardest.
The Fed started raising intrest rates from 0% to so far about 5% or so today and what they do in the next adjustment coming soon is unsure. Speculation says perhaps another 25 basis points or no change at all. No change would indicate a pivot in their strategy to cool off Inflation. To be effective, interest rates would have to exceed the rate of inflation to bring things under control. And that would have to be above the actual rate of about 15% not the newly invented rate calculation of 6%. That is the only way to reverse the current trend and you can bet that is not going to happen
The recent collapse of SVB, highly invested in tech, Signature Bank, highly invested in crypto, and Silvergate Bank all within the same week were directly tied to the increase of intrest rates by the Fed. SVB and Sinature Bank being the 2nd and 3rd largest banks to fail in US history respectively.
These banks held a vast majority of their assets invested in long term govt. bonds paying about 3%. Once the Fed rate exceeded 3%, they were underwater. When depositors realized this they began pulling their deposit, a run on the banks.
The banks had to dump their bonds at a loss to cover the demand as none of them had sufficient, if any, reserve to cover withdrawals. Thus became insolvent.
Keep in mind that there are hundreds of banks nationwide in the same situation. Not just the big banks but all the way down to your local and regional banks.
The government bailed out SVB & Signature Bank whom both had uninsured deposits of more than 98% in the case of SVB.
Remember, SVB (tech loans), Signature (crypto loans).
The government will not be bailing out the smaller banks.
They will use a bail in to remain solvent if need be. That is they will use depositors funds to remain afloat. Your money! How many will be able to stay afloat remains to be seen.
Consequently, my most recent order from
SD Bullion has been delayed for three weeks! The CEO has informed customers that this situation seems to have been a direct result of the present banking crisis in an unprecedented increase of orders for physical product and not having the staff to fill orders in a timely manner. They have had to increase their staff to do so. And as a result have temporarily increased their minimum purchase to $500.
Continuing to raise intrest rates will only exacerbate the problem and reversing course back down on the rates will lead to hyperinflation. A lose lose situation for our economy. The proverbial can can no longer get kicked down the road at this point.
Next, one must consider the global situation. Consider that during the last 18 months or so the COMEX and the LBME have experienced the highest demand for physical gold and silver delivery since their inception. Their vaults are being rapidly depleted. Where is it going to?
At the same time, Russia, China, and India have been stockpiling PM's at a tremendous rate. Why?
Nations around the globe are increasingly expanding the BRICS. China has just received its first delivery of LNG paid for in Yuan. The leaders of China and Russia recently held a summit to discuss methods to replace the US $ as the world reserve currency. Russia has accepted payment for fossil fuels to India in rupees. Saudia Arabia has recently announced accepting other currency as payment for fossil fuels. China is already using a centralized crypto currency backed by the Yuan which they are planning to back with commodities such as gold. To do so the price of gold would have to be adjusted maybe 100x higher or so. Whom ever has the most of it can determine its price. All of those Paper contracts will not control the price any longer.
All of the cards are falling in place to remove the US $ as the reserve currency. When this happens none of these nations will have to hold on to US $'s which are mostly held in US Treasury Bonds. When these nations dump these bonds and they flood back into our economy the results will be devastating. Again, hyperinflation. Remember the Weimar Republic. And yet the Fed continues QE to the tune of billions and billions of dollars backed only by the full faith and trust of those dollars.
In conclusion, the collapse of the US $ seems inevitable and rapidly approaching. Plans are already in motion to replace the dollar with a CBDC that will be completely in control of the govt. How much you can spend and where you spend it will not be your choice and can be turned on and off with the click of a button. One of the obstacles to full implantation of a CBDC is the transition process complicated by an across the board acceptance of all of the banks and financial institutions getting on board with its inception. The best way to bring it about is to eliminate all of these banks and institutions and convert to a handful of centralized banks controlled by the Fed such as SVB heavily invested in tech companies that would be needed to develop the CBDC, and Signature Bank heavily in invested in crypto start ups, both institutions that are now under control of and indebted to the Fed. Go figure.
So the bottom line becomes, will there be any dollars for you to exchange for PM's 10 years from now? Things are rapidly changing world wide and we are here to witness it in our lifetime.
Scoop up all the PM's you can afford when you can. Hold on to it. And who knows, maybe 10 yrs from now you may be able to purchase that house with 4 silver dollars, if it avoids confiscation.
Just my humble opinion and a little food for thought.
I'll save my opinions on the stock market for another day.
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Posted 02/12/2023 3:29 pm
.. However, for investing, there are other options that will return better results.
