Precious Metals Speculation Harming Coin Collecting

Thank you.

I rode gold from $400 to $1200. I remember buying every ounce I could at $400, with friends thinking I was nuts.
Yes, they've started calling, saying they've bought at $1500+. Yes I tell them "I dont have any gold now", to their bewilderment.

I used to read everything guys like Peter Schiff, Jim Rogers, Marc Farber, etc... said.

Until you come to realize, they are just one trick ponies selling a product. Schiff has no investing strategy. Gold goes up 30%, he says "buy gold", gold goes down 30%, he says "buy more gold". He's just a broken record with one tape. They all are. Just like token anti-gold guy Jon Nadler on Kitco. Just like Mr.Wave Robert Prechter. I've been watching this for years.

Even smarter guys like Jim Chanos and Hugh Hendry, cant always get things right.

Most people holding PMs right now and waiting for the hyperinflationary end of the world,
- probably dont know what a parabolic curve is, or looks like
- probably dont know that hyperinflations occur under extraordinary circumstances that involve war (often civil war), a cedeing of monetary sovereignty (foreign denominated debt, a currency peg), regime change with high public distrust leading to tax system collapse, and a collapse in the domestic economy.
- probably have no concept of European countries as currency users in a restrictive single currency system (and since they cannot issue their own currency, face a real solvency risk) vs currency issuers such as US, Japan, UK (who face no solvency risk) - and that these two monetary systems are completely different (thus you cant compare US to Greece).
- probably have no idea that neither China or Japan fund US spending via bond purchases, that the US govt is not revenue constrained, and that it has no solvency risk, or default risk. That is because the US govt is a monopoly supplier of its currency in a floating exchange rate system.
- probably have no idea that the bond market does not fund anything in the USA, that selling govt bonds is not a fiscal financing tool - it is a monetary tool that helps the Federal Reserve to control the overnight rate. That US bond auctions theoretically cannot fail, because they are designed not to.
- probably have no way to explain why "bond vigilantes" are gunning down European countries like Italy, Spain, Portugal, Greece with bond yields going through the roof, while they are non-existent in the US, even on the eve of a "US default". The bond market knew it was all a charade, a political joke. There was never a risk of "default".
- will know the exact date when the US went off the gold standard, and will scream that the US dollar is worthless fiat not backed by anything, while forgetting it is backed by 10,000 nuclear warheads, 700 military bases, most powerful army and navy in the world, and the productive capacity of a 300 million people economy, natural resources, etc...

The whole inflation/deflation/hyperinflation, precious metals, fiat currency debate is an interesting one and one of the most important, as it affects our financial well being.

I believe that without understanding the bond market and how different monetary systems actually work (US/Japan/UK vs Europe)...one has little hope of surviving financially, no matter what side you take...especially if you've gone "all in" on PMs, stocks, USDs, guns/ammo/canned food, etc...

I felt relieved when I asked my silver/coin dealer about what was done with all the "junk" silver coins they bought. He said they do not melt them but sell them bagged. Reason I felt so relieved was a) I HATE to think of all those old coins being melted! b) I had to sell a bunch of silver coins we got from my late father in law and let me tell you there was a LOT of nice ones in the hoard.I did keep most of the nice ones though!

Just an observation on PM: people pick their favorite pundit, who (predictably) lays out a future scenario that reinforces their position on PM. Conversely, there is room for a balance of opinions--instead of picking a far corner and defending that position against any contrary information. I saw a similar scenario play out in real estate from 2000-6. Investors were far too bullish on the future, didn't consider downside risk, and many lost everything by buying near peak prices. It's classic bubble psychology. Whenever there is a mad rush on an "unstoppable" investment, it makes sense to step back and see if you can poke holes in popular assumptions.

Because it's not my job to clean up after you, so I took the easiest route. It's your job to post responsibly, then we wouldn't even be having this conversation.

My take:

Gold is the currency of the virtual country: Republic of Gold. Central bankers have been trying to destroy this thinking for forty years. They want you to only think about fiat.

As the world races to debase, and ultimately inflates away their debt, gold's traditional role as storehouse of wealth will be very clear.

I can't figure out how anyone can look at Brazil, China and India and talk about deflation. Are people also going to argue that their citizens should trust their local currency, and ignore inflation?

Inflation in Brazil, China, India is a proven fact.

Inflation in US...is not. Housing market is down 50% from its highs and falling. This is the single biggest "asset" as well as expense for the vast majority of Americans.
No inflation here. Wages? No inflation there.

Its unfortunate that speculation in commodities, and rampant corruption in Health care and Education are being mistaken for "inflation".

The financial industry has spent a good 15 years dismantling all regulations and putting most Americans into historically high levels of debt, via easy credit and inflation by blowing multiple bubbles...until the credit bubble itself peaked and burst. Trillions of dollars of wealth have been amassed and stolen from the middle class...and you believe that the elite are now going to inflate that away? Destroy themselves and their own wealth, while helping the little guy back on his feet - by destroying the mechanism of his/her slavery..i.e. debt?
Really? LOL...

Inflation was the tool used from 1995-2008 to get you all into debt..via rising housing, rising stocks, even rising commodities...now that you're all stuck...deflation will be the vice that separates you, from every one of your assets :)...whether its you as an individual, your 401K, your pension fund, your house and its mortgage based securities, etc...