In Jim Cook's Archive


No matter how much money has been printed sometimes there doesn’t seem to be enough.  When market forces neutered a recent Spanish bond auction the European debt dilemma was back in the news.  The bond vigilantes are just getting started.  Spain is going to go, then Italy, Japan and France.  Eventually the inability to sell government debt will come here.  The fear of default will create a cascade of new currency. The dollar will plunge and inflation scream.  That’s when you really need silver (and gold).  There’s no way for the U.S. to escape this approaching financial armageddon.  It’s already too late.

Debt did it.  If we took a meat axe to government spending, if we stopped money printing, if taxes were slashed and capitalism was freed from its chains we’d have a chance.  But none of that is going to happen.  Our biggest crisis is government spending.  There’s talk about cutting but there is no serious cutting.  In fact, there’s only more spending.  It’s not going to change.  We will only stop spending when we can’t borrow anymore, tax anymore or print anymore.  That’s why you need silver above all else. Our fiat money experiment is going to end badly and hard assets and tangibles will be mainstream.

When the response to every financial crisis is to merely create more dollars you can’t help but see the handwriting on the wall.  To stop an outbreak of runaway inflation you must stop the printing presses.  With the world’s central banks inflating more than ever this option has no serious chance.  Get your inflation hedges now.

There’s a huge contingent of the populace who favor spending and inflating.  In Wisconsin the governor may be removed from office because he wants to tame government spending and thwart the unions who care not about deficits.  Nobody gets madder than someone who has something taken away that they expected to get.  Huge constituencies can already be seen foaming at the mouth over the possibility of cuts.  Intense lobbying, political posturing, envy and media attention serve to thwart any real spending cuts.  Mr. Krugman at the NY Times jacks up his readers to believe in greater government spending and massive inflating.  The Left buys in, especially when government employees get the goodies and their definition of social justice is served.  It matters not that this is the blueprint for national ruin.

Oddly enough, Wall Street loves this spending and inflating.  If you can’t trust them with the nation’s money how can you trust them with your money?  Fortunately, you can trust silver and gold and the way it’s going that may be all you can trust.  Eventually there comes a limit on how much spending and currency creation a country can undertake.  Eventually the bond vigilantes strike and free market forces bring on an atonement.  It’s all so clear and inevitable I hope that you can see it.  America is heading full steam towards an iceberg.  Our advice:  don’t go down with the ship.

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