Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Buying Silver in the Age of Transitory Inflation and Other Political Delusions

Commodities / Gold and Silver 2013 Jan 04, 2013 - 10:38 AM GMT

By: Dr_Jeff_Lewis

Commodities

Spokespeople for the U.S. Federal Reserve have been saying that rising food and energy prices are transitory. They have now been pushing that illusion on the market for ten years, and some traders are still waiting for inflation to fall.

Nevertheless, the fact is that these price rises are not transitory, and they are instead permanent, systemic and intentional. Furthermore, prices are going to keep on getting higher and higher by all rational indications.


Debt Expansion Policy Makes Inflation Inevitable
 
When Ben Bernanke was first appointed Chairman of the Fed by then-President Bush in February of 2006, the U.S. Treasury’s funded debt was ‘only’ $8.183 trillion.

Nevertheless, by last December, when the FOMC announced its latest monetary policy measures, the U.S. Treasury’s debt had more than doubled to hit the even more astronomical 16.376 trillion level.
 
In other words, the Treasury’s funded debt had increased by more than 100% over a period of almost seven years, averaging a rise of roughly 14.6 percent per year during that time frame.  Commodity price rises in U.S. Dollar terms have been relatively subdued in comparison with this remarkably high level of U.S. debt expansion.

Silver as the Financial Solar Plexus

The solar plexus of the human body is where the connection between the body and mind - the organic and the non-organic — come together. Silver is like the solar plexus of the world of economics and finance, acting as both a tradable commodity and a monetary asset.
 
In the silver market, the relatively primitive market laws of supply and demand interact with the higher level market-driving factors of faith, perception and behavior on the part of its human participants to determine a market price.

Although modern market-based finance still largely depends on faith, confidence and human perception, it seems that the silver market’s price discovery mechanism is being increasingly usurped by obsessive technical analysis and computer driven trading that largely amounts to picking up nickels in front of a steam roller.

Fiscal Cliff and the Debt Ceiling Debates Showcase Delusional Politics

The U.S. Fiscal Cliff debacle has made the situation as clear as mud, although just about anyone could dispassionately do the math. It makes little sense to run $1.5 trillion annual deficits when only proposing roughly $600 billion in spending cuts over 10 years.

The irony is that the next delusional political drama —raising the U.S. Debt Ceiling — has been put off, with some even proposing eliminating that mandate altogether. If done, this would remove the very last tenuous thread of confidence holding the U.S. Treasury’s finances together.

Modern politics and economics tend to offer explanations where the cause is not readily apparent as the workings of a lost tradition. For example, apparently “everybody knows" that the way to make a person or a nation "richer" is to create more money. The establishment never openly states that this is actually the case, but they instead just print and distribute a million dollars of un-backed, debt-based currency per person.

The end result is that financial markets are increasingly broken and fair price discovery in the commodity markets is becoming non-existent.  This means that buying physical silver in this day and age is like planting a seed in fertile soil.

Like oil, silver is a scarce — but very useful and densely packed — commodity that fulfills its various industrial and monetary functions well. Fortunately for long term silver investors, silver is much easier to store in its physical form than an equivalent value of oil.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2012 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in