Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Silver Outlook Is 'Excellent' - 23rd July 19
Why The Coming Silver Rally Might Be The Greatest - 23rd July 19
We Are in for Decades of Ultra-Loose Monetary Policy - 23rd July 19
Gold & Gold GDX Stocks Ripping. What’s Next? - 23rd July 19
Stock Market Breadth Warning Signs for the Stock Market’s Rally? - 23rd July 19
U.S. Recession Watch: The Six-Cycle Forecast - 23rd July 19
US Dollar Index tightly wound between: US Bond Yields down on safety flows - 23rd July 19
Stocks Bull or Bear? The Market’s Message - 23rd July 19
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Hyperinflation of the Union for the Unions 

Currencies / HyperInflation Feb 09, 2015 - 12:46 PM GMT

By: Dr_Jeff_Lewis

Currencies

One of my patients runs a travel section for one of the oil industry majors located in the San Francisco Bay Area. She was complaining about her vision while traveling on the plane. She contemplated that since she doesn't fly business anymore, maybe it's not that big of deal. Her company was cutting back on expenses. 

I found myself wanting to articulate 'the real' (paper-trading) cause for the oil price drop, but then I stopped. I realized in that moment how the view that futures trading and participant positioning as the central tenets of price discovery is such an abstract concept for most people.


Instead, most of us fall victim to the rationalizations after the fact. The ones that fit a narrative or preferred world view, until we are completely disconnected from anything useful. 

She quickly noted that the price decline was 'all about' Saudi Arabia. She may be right. 
But no matter the primary reason, in the beginning...

It's all very much a paper derivative wagging the dog of price discovery. This occurs in every market to a degree. Only silver more so. 

Who got the orders to get the oil price decline moving late last summer? That's anyone’s guess, and a thousand rationalizations follow. 

But whatever the reason for the orders, they started in the pits, not in anything close to a organic market. Nothing trades on fundamentals anymore. And everything trades to the the advantage of the elite – a financial or political concentration of power that cannot be held accountable to the letter or even the flavor of the law.

Until the whole unsustainable house of cards unravels, then implodes. We can see manifestations of this today.

Take this the story of the unions. 

10% of US Refining Capacity Offline After US Oil Workers Stage Largest National Strike Since 1980
http://www.zerohedge.com/news/,,,

"It's not exactly the same as if Wall Street were to unionize and demand higher wages, but when U.S. energy workers - supposedly the best paid profession away from those who BTFD or BTFATH for a living - go on strike. It is time to pay attention, which is precisely what happened yesterday afternoon, when U.S. union leaders launched a large-scale strike at nine refineries after failing to agree on a new national contract with major oil companies. It marks the first nationwide walkout since 1980 and impacts plants that, together, account for more than 10% of US refining capacity. The United Steelworkers Union (USW) began the strike on Sunday, after their current contract expired and no deal was reached despite five proposals."

It's a futile effort to strike when the economy is under the graviation force of deflationary cycle. The unions are maneuvering now that the oil companies are in retreat mode. 

At first, it seems rather counter-intuitive that the unions would demand wage increases as the industry is falling, but it may simply be a natural posturing. 

The unions - and especially those which are more or less strategic or outright government sponsored - are powerful enough to maneuver themselves into the most advantageous position as the currency begins to fail. This collective advantage works directly counter to the more isolated professional class. 

In the midst of a hyperinflation, which is in many ways the flip-side to the deflationary spiral in a Keynesian monetary system, these groups can demand higher and higher wages paid in an ever declining currency. This actually happened in Weimer Germany, as Adam Ferguson outlined in his book, "When Money Dies".

Large enough unions can paralyze the nation if they don't get paid. Of course, all the while, leaders get paid in stronger overseas currencies, or simply gold and silver (backed) money. 

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://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

    Copyright © 2015 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

6 Critical Money Making Rules