Silver vs. Fiat Currencies & The Debt Ceiling Delusion

hyperinflationAs the U.S. Government continues to waste time debating over the “Debt Ceiling Delusion”, the death of the fiat monetary system grows closer. 

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From the SRSRocco Report:

Since 2000, the value of gold and silver have increased substantially compared to the world’s fiat currencies.

Silver vs Fiat Currencies

According to GoldSilver.com article, Race to Debase 2000 – 2013 Q3 Fiat Currencies vs. Gold & Silver, fiat currency has lost on average of 78.16% of its value compared to silver.

You can check and see which currencies have lost the most of their value compared to silver and gold at the link above.  Below is only part of the table which includes 120 fiat currencies from around the globe:

Table Silver vs Fiat Currencies

If you had purchased silver in South Africa in 2000, it would be worth 563% more today.  We can see also why the Vietnamese have been buying the precious metals as silver is worth 519% more today than it was in 2000.

The world is now in the last stages of the Fiat Monetary System.  The debate on the U.S. Debt Ceiling is masquerading the fact that there is no solution or remedy except a grand collapse of the financial system.

 

Gold & Silver Will Be Much More than Stores of Value

As I have mentioned in prior articles, many precious metal analysts believe gold and silver are either “Insurance” or “Stores of Value” rather than investments.  They believe that the precious metals should be held as insurance against the collapse of currency or governments, while others believe that it will retain a store of value against inflation and etc.

While I believe these are valid reasons to own gold and silver, they fail to address the energy issues going forward and their impact on the monetary metals.  The Dollar was able to survive for another 3+ decades after gold and silver peaked in 1980, due to a rising global energy supply.

A Fiat Monetary System based on fractional reserve and compound interest needs a growing energy supply to survive.  Peak Oil should have already come and gone several years ago, however massive amounts of new debt allowed non-commercial oil deposits to be extracted.

Even though shale oil production from the Bakken in North Dakota has provided a great deal of oil to the United States, it has come at cost.  According to Rune Likvern of Fractional Flow, his estimated cumulative net cash flow of the Shale Oil producers in the Bakken is now at a Negative $16 billion.

July 2013 Estimated Net Cash Flow Bakken

The Red area of the chart shows the estimated cumulative net cash flow and the black bars represent the monthly net cash flow.  Thus, the shale oil companies in the Bakken had to acquire an estimated $16 billion of additional funding not providing by their operations alone.

Unfortunately, unconventional oil resources such as Shale oil and gas will not be able to allow “Business as Usual” in the world to continue as the costs are greater than what consumers can afford to pay.

This is indeed the reason why we have been witnessing the “Great Shale Energy Hype” by the oil industry and official institutions.  Without shale oil or gas, the Fiat Monetary System would have more than likely died a few years ago.

Gold and silver will become excellent investments as they will be the GO TO ASSETS as most others will become increasingly worthless as the global energy supply peaks and declines.  Furthermore, it may not be prudent to switch out of the majority of ones gold and silver investments and into other asset classes when the GREAT REVALUATION OCCURS.

I will explain why in more detail in the future.  However, most Real Estate values on average will decline substantially in a peak energy environment.  Real Estate in selected areas and regions will do better than others.  Moreover, warehouse and commercial real estate will suffer significantly as the market will deal with decades of overbuilding on top of dwindling demand.

Very few realize just how much a peak energy environment will affect the economy and their investments going forward.
The SRSrocco Report will provide information and updates on how energy will impact the precious metals, mining and overall economy.


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Comments

  1. For the immediate future gold and silver is a bad investment.  If you have the patience to hold onto your metals for the long term than possibly they will be seen as good investments a few years down the road.  For the immediate future manipulators want the price of gold as low as possible.  How long this will be the case is anyones guess.  Gold remains very good insurance and this is something that the Treasury Dept cannot take away from the concept of owning phyzz gold.  Ever.

    • Is that the way you start every post here?  PolloExcrementos?
      Paid Shill?
      Lucky I’m not the Webmaster, I’d kick you out.

    • @Silverhawk  Sorry my words didn’t comfort you.  If you want comforting words then you should try KWN.  They say all the right things.  I am glad that this site allows for the members to have an opinion.  Sorry you don’t appreciate this.

    • Relax, Pollo.  Many of us here DO value your comments, whether or not we agree with them.  :-)
       
      I have a lot of opinions, some of which are shared here, and some not.  The ones that I choose to share are the ones that fit the basic theme of this web site.  Being neither a shill nor a troll, if I had any anti PM sentiment I would keep it to myself.  Not that I don’t believe in having a decent asset allocation that includes both of these metals, of course, because I do.  I would feel very comfortable having up to about 25% of my wealth in gold and silver.  But not more than that.  It’s my opinion and choice that this is a good allocation that fits into my over-all financial plan.  If others disagree, that’s fine.  They are more than welcome to allocate their resources as best they see fit and I do enjoy reading and thinking over their reasons for their choices. Since none of us knows when the S will HTF, no one can say that their plan is inherently better than someone else’s plan.  Much depends on timing and we simply cannot time this.
       
      Like you, I GREATLY appreciate that when The Doc says, “SPEAK YOUR MIND”, he really means it!
       
       

  2. There is silver and then there is everything else! What other metal or commodity or currency has all of the attributes of silver? It’s money, it is an industrial NECESSITY,  it’s medicine, it’s energy, it’s an antibiotic sterilizer,  it’s durable,  it’s rare, and above all the other precious metals IT’S AFFORDABLE TO ALMOST EVERYONE RIGHT NOW!

    • SOLD!  lol
       
      Yes, silver is potent medicine.  Once again, I had an eye infection coming on this morning when I woke up.  After washing up, I put a couple of drops of a silver-containing eye drop in the eye that was itching and burning.  I repeated this at hourly intervals.  By noon, it was no longer itching or burning.  Will use another couple of drops at bed-time to finish this attempted infection off.  It tried to screw me but the mighty silver kicked its @$$!  :-D
       

  3. And don’t forget to spray Silver Biotics under your tongue?

  4. Hey Guys,
    IMO there will be no scuttle of he debt ceiling until late December and January15th area. Main reason……Holiday Season and Santa Claus must come. If they do scuttle air traffic, retail sales will go to the tank along with riots and other chaos. I believe that Congress and The Great Oreo will kick the can down the road and Oreo will back off implementation of his ridiculous healthcare program for another year. Of course Oreo realizes that elections are coming next month and he may lose control of the Senate if the Sheeples will come to their senses.And if the Repubs gain complete control of Congress his shitty laid out plans may come to an abrupt end with a total throw out of Obamacare altogether. Next if he rules National Catastrophe in a takeover, the sumbitch will be impeached and thrown over. His ass is between a rock and a hard place and he knows it!
     
    With his grand approval rating at 37% hers’s something to consider.
     
     
    Decide for yourself

    The below summarization of Barack and Michelle
    Obama’s 5 year reign in the White House is by far the best I’ve
    ever read as …it squarely hits the nail on the head. And it took a black
    reporter writing it to make it as effective as it is. A white man’s
    account would be instantly criticized by the liberal media as pure racism. But,
    how can anyone scream Racist when an exacting description of the Obamas is
    penned by a well known journalist of color?

    BEST SUMMATION OF BARACK AND MICHELLE EVER!

    Mychal Massie is a respected writer and talk show host in Los Angeles.

    The other evening on my twitter, a person asked me why I didn’t like the
    Obama’s? Specifically I was asked: “I have to ask, why do you hate the
    Obama’s? It seems personal, not policy related. You even dissed (disrespect)
    their Christmas family picture.”

    The truth is I do not like the Obamas, what they represent, their ideology, and
    I certainly do not like his policies and legislation. I’ve made no secret of my
    contempt for the Obamas. As I responded to the person who asked me the
    aforementioned question, I don’t like them because they are committed to the
    fundamental change of my/our country into what can only be regarded as a
    Communist state.

    I don’t hate them per definition, but I condemn them because they are the worst kind of racialists, they are elitist Leninists with contempt for traditional America. They display disrespect for the sanctity of the office he holds, and for those who are willing to admit same, Michelle Obama’s raw contempt for white America is transpicuous. I don’t like them because they comport themselves as emperor and empress.

    I expect, no I demand respect, for the Office of President and a love of our
    country and her citizenry from the leader entrusted with the governance of
    same. President and Mrs. Reagan displayed an unparalleled love for the country
    and her people.

    The Reagan’s made Americans feel good about themselves and about what we could accomplish. Obama’s arrogance by appointing 32 leftist czars and constantly bypassing congress is impeachable. Eric Holder is probably the MOST incompetent and arrogant DOJ head to ever hold the job. Could you envision President Reagan instructing his Justice Department to act like jack-booted thugs?

    Presidents are politicians and all politicians are known and pretty much
    expected to manipulate the truth, if not outright lie, but even using that low
    standard, the Obama’s have taken lies, dishonesty, deceit, mendacity,
    subterfuge and obfuscation to new depths. They are verbally abusive to the
    citizenry, and they display an animus for civility.

    I do not like them, because they both display bigotry overtly, as in the case
    of Harvard Professor Louis Gates, when he accused the Cambridge Police of
    acting stupidly, and her code speak pursuant to not being able to be proud of America. I view that statement and that mindset as an insult to those who died to provide a country where a Kenyan, his illegal alien relatives, and his alleged progeny, could come and not only live freely, but rise to the highest, most powerful, position in the world.

    Michelle Obama is free to hate and disparage whites because Americans of every description paid with their blood to ensure her right to do same. I have a
    saying, that “the only reason a person hides things, is because they have
    something to hide.” No president in history has spent millions of dollars
    to keep his records and his past sealed.

    And what the two of them have shared has been proved to be lies. He lied about when and how they met, he lied about his mother’s death and problems with insurance, Michelle lied to a crowd pursuant to nearly $500,000 bank stocks they inherited from his family. He has lied about his father’s military
    service, about the civil rights movement, ad nausea. He lied to the world about
    the Supreme Court in a State of the Union address. He berated and publicly
    insulted a sitting Congressman. He has surrounded himself with the most
    rabidly, radical, socialist academicians today.

     
    His constant playing of the race card has emboldened blacks
    to perpetuate and elevate bad race relations unequaled since the 1950s. He came center stage with the Travon Martin case and has not said a word about the three black youths who beat a young white boy on a school bus, nor the two black youths who beat an eighty nine year old white man to death.
     

    He opposed rulings that protected women and children that
    even Planned Parenthood did not seek to support. He is openly hostile to business and aggressively hostile to Israel. His wife treats being the First Lady as her personal American Express Black Card (arguably the most prestigious credit card in the world). I condemn them because, as people are suffering, losing their homes, their jobs, their retirements, he and his family are arrogantly showing off their life of entitlement – as he goes about creating and fomenting class warfare.

    I don’t like them, and I neither apologize nor retreat from my public
    condemnation of them and of his policies. We should condemn them for the disrespect they show our people, for his willful and unconstitutional actions pursuant to obeying the Constitutional parameters he is bound by, and his willful disregard for Congressional authority.

    Dislike for them has nothing to do with the color of their skin; it has
    everything to do with their behavior, attitudes, and policies. And I have open scorn for their constantly playing the race card.

    I could go on, but let me conclude with this. I condemn in the strongest possible terms the media for refusing to investigate them, as they did President Bush and President Clinton, and for refusing to label them for what they truly are. There is no scenario known to man, whereby a white president and his wife could ignore laws, flaunt their position, and lord over the people, as these two are permitted out of fear for their color.

    As I wrote in a syndicated column titled, “Nero In The White House” -
    “Never in my life, inside or outside of politics, have I witnessed such
    dishonesty in a political leader. He is the most mendacious political figure I have ever witnessed. Even by the low standards of his presidential predecessors, his narcissistic, contumacious arrogance is unequalled. Using Obama as the bar, Nero would have to be elevated to sainthood…

    Many in America wanted to be proud when the first person of color was elected president, but instead, they have been witness to a congenital liar, a woman who has been ashamed of America her
    entire life, failed policies, intimidation, and a commonality hitherto not witnessed in political leaders. He and his wife view their life at our expense as an entitlement – while America’s people go homeless, hungry and unemployed.
     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     
     
     
     
     

    • Ranger, reading the article you posted made me think of something that the articles author did not mention.  If I remember correctly, didnt Obamas white grandmother or grandfather die just a few months before the election, or sometime there abouts?  At that time, my first thoughts were of hiding something.  Oh my, how we might have been entertained to such privy. 

    • Pardon the word but they act like a couple of niggers on welfare spending the working classes money

    • Once we understand that the Obamas are true Marxist psychopaths, all of their behavior becomes stunningly clear.  They don’t care about anyone or anything in this world except themselves and their insane ideology.  We should not expect them to, else we certainly WILL be disappointed.

    • wow after reading that long article, I have now found a new “King of the stupids!”
       
      Now correct me if I am wrong, but don’t all presidents love to boast how they have ancestry back to Ireland or some nonsense like that? Whats wrong with having your roots in Kenya? We all come from some place.
       
      So what if he is Kenyan? Why is that a problem? he is hardly going to amass an army of Kenyans to come and take over America now is he? What they going to do? Prove how fat and stupid you are, by running multiple marathons, breaking every known record known to man?
       
      You ever been to Kenya? Its a wonderful place. A bit hot for my white fat body, but a truly wonderful place, with lots of lovely people.
       
      Have you ever read anything about Marxism, apart from the propaganda that was forced into your head during the 70′s and 80′s?
      If you honestly believe that Obamacare is Marxist, then we need to get you to a private hospital right now, and get your insurance company to start paying lots and lots of bills. I don’t know how much you paid for your lobotomy, but I am sure they can put it all back in there, honest!
       
      And please don’t praise Ronald the fuckwitt Reagen, Hes the twit that got us to this point in time in the first place, with his Reaganomics. You can’t play free market economics unless you have a currency that is truly free from manipulation. Let the Markets run free, oh yeah, do any of you guys remember the inflation in the 80′s?, I sure do!

  5. SilverHawk, Pollokeeper is indeed a fan of PM’s and is well-respected here on SilverDoctors, no need to dismiss him as a Shill.
     
    And despite being a believer in PM’s myself, I will share some contrarian thoughts:
    I would like to buy more Silver right now.  Never mind, property taxes are due this month.

    Maybe next month? Never mind, the in-laws are coming for their annual visit and I have to pay for their airline tickets.

    Perhaps in December? Never mind, I will need the money for Christmas shopping.

    How about in January then? Never mind, the Christmas bills that didn’t get paid in December will need to be paid then. Oh and also it costs a lot to feed two extra mouths for three months.

    I’ll think about purchasing in February.
     
    How many would-be stackers are feeling similar sentiments?  The economic weakness that is washing over the US is helping to keep PM prices down by reducing demand for Phyzz.

    • To busy stacking food for PM’s right now

    • “How many would-be stackers are feeling similar sentiments?”
       
      I can definitely relate to your comments even though they do not apply to me at this time.  As an old geezer I once knew once said, “I’ve been rich and I’ve been poor.  Rich is better.  A LOT BETTER!”.  lol
       
      But then, “rich” and “poor” are relative terms.  The poorest man I ever knew had all kinds of money but no love and no family with whom to share his fortune.  If all I had in this life was my loving family, I would still consider myself to be rich beyond all measure, whether I had much money or not.
       
      But I can certainly see why silver buying has tapered off some.  With limited funds, people have to allocate what they have where it will do them the most good.  While silver will very likely do them considerable good at some point in the future, one must also live today and until the future arrives.
       

  6. difference between silver and gold? You can buy stupid amounts of silver for relatively little money. You can buy very little gold for a whole lot of money.
     
    And as for medical uses of silver, yeah right! I seen the pictures of the people who look like smurfs out there! go for it, drink it everrrryday! I think the blue man group could do with a couple of new members.
     
    Oh and can we please stop the racism. I thought we lived in an age where colour means nothing. Whats all this Oreo and Nigger shit that I have been reading. Stop it. You sound stupid, like something from the 50′s. Barrack Obama is a man and your president. Just because his views are not expressed as your own, does not mean that you can instantly exhibit racist views.
     

  7. To Answer the article though, Does this not mean that weighed against a selected basket of currencies, that Silver is over priced? Isn’t that what free market economics teaches us? when something is over valued, or under valued, it looks like the odd man odd?
     
    I have now stopped buying silver, my loft can not hold any more. I backed the truck up a long time ago, I now only buy gold. Its smaller, lighter, and easier to store :)

  8. nothing wrong with me, Fit as a fiddle, who cares if I am blue! I drink Silver solution!

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