Gold, Silver, And Tech: Utility, Form & Function Over Glitches, Bugs & Obsolescence…EVERY TIME!!!

A high tech society is very expensive, and not only does high tech frequently break down, but it also…

(by Half Dollar) On Friday, I explained how to both short the US Dollar and hedge against inflation, right now, for dirt cheap, with zero downside risk and zero counterparty risk.

Today, I want to talk about a different kind of risk that few people may be thinking about, and that risk is not the cost of keeping up with the Jones’s, but rather, the cost of keeping up with technology.

I was thinking about the cost of upkeep because this article caught my eye as I was scanning the news this morning:

Most manufacturers call it a “redesign”, but whatever you call it, the Model S has been around, more or less in its current form, since June of 2012!

Going on nine years!

What, is this the Nissan Frontier of performance all-electrics?

If a person took delivery of a Model S in June of 2012, they would have paid between $57,400 and $87,400, depending on the trim level (in 2021, the cost for a Tesla Model S is $70,620 to $140,690).

Now, I’m not sure about you, but I imagine the typical Tesla Fanboy is also a typical Apple Fanboy, and as such, the buyer of a Model S would have been rocking the latest and greatest iPhone at the time of delivery:

The iPhone 4S, that is!

Which makes me think about a few more things in regards to technology and, essentially, energy: Who else is rocking an iPhone 4S today?

The answer is nobody, of course, because that phone is super obsolete!

Here’s the more important question, however: Would the battery from an iPhone 4S from June of 2012 even be able to hold a charge today, and what about a Tesla Model S from June of 2012?

I would have to say “no” and “no”, at least not to their original potential, if at all.

In fact, there is this shuttle service company in California that uses Tesla cars, which put 400,000 miles on a particular Model S in just three years, and if you thought the cost to purchase the Model S was stupidly high, during those three years, on that one particular Tesla Model S, the company paid $19,000 in maintenance costs alone, which included replacing the original battery pack two times and other “regularly scheduled maintenance”.

In other words, that’s like paying for $20,000 of maintenance on a $60,000 car, and if Tesla’s known for one thing, it’s totally not “build quality”, but Tesla is big on software, for the die hard fans often describe Tesla not as a car company but as a tech company, and with that said, even if the argument is “you’re saving so much buy not purchasing fuel”, then I could come back and say that after three years, what will that Tesla Model S be able to do, computer processing power, storage capability, and network connectivity wise?

The tech expert in me says not a whole lot.

And it’s not like they’re sticking $54,000 Mac Pros in those Teslas:

Last I heard, they’re using the now ancient Tegra 3’s!

OK, “Hey Half Dollar, that Tesla Model S was being used as a shuttle car you big doofus, so you can’t say that would be the typical use of a Tesla!”.

Fair enough, so let’s consider the typical Tesla Fanboy buying a Tesla Model S, and if we look on Tesla’s own vehicle warranty page, we see Tesla will warranty the battery for 8 years or 150,000 miles, with a minimum of 70% battery retention, meaning, well, just like a person gets less use between charges with an old smartphone, a person similarly gets less range with their Tesla in between charges, which, according to Tesla, could be up to 29% less and, well, just deal with it Tesla Fanboy!

And who cares if the battery degradation over time means a Tesla Model S owner can no longer reach a destination, work, for example, on a single charge, because those are the terms, and that is what the buyer agrees to.

But wait, there’s more!

That’s right, because let’s say you “drive it like you stole it”, and if that’s the case, well, in Tesla’s own words:

It can affect your warranty if you receive a service alert and do not arrange a prompt appointment with a Tesla Service Center, and this results in further damage to your vehicle.

You see, that’s the other thing about high-tech stuff.

There’s plenty of nice legalese for Tesla to weasel its way out of covering a crappy battery pack!

Which brings me to my overall point: A high tech society is very expensive, and not only does high tech frequently break down, but it also becomes obsolete, and in the end, somebody has to pay for all of that upkeep, all of that maintenance, all of those repairs and all of those replacements.

OK, “Hey Half Dollar, how long has Bitcoin been around?”.

Well, I wasn’t going to turn this into a Bitcoin article, and I won’t, but if I was going to turn this into a Bitcoin article, I’d say that Bitcoin has been around for many years longer than the Tesla Model S has, which Bitcoin has, but if you really want to know just how old Bitcoin is in our era of high tech stuff, then you’re going to have to ask Satoshi, and good luck with that!

Silver is low tech, and old school, however, and all around the world, silver is money:

Furthermore, there is no upkeep or maintenance that must be done on a one ounce bar of fine silver.

It just kind of sits there until needed.

Gold does the same thing:

Gold is also more than a hundred bucks lower in price than it was when we began 2021.

The paper gold-to-silver ratio is glued to the mid-70s:

If $1400 Economic Impact Payments are coming, and if the cartel is going to continue to offer silver at such a crazy discount (down 6.6% since the year began), or at even more of a discount from here, such as silver priced in the low twenties, then I wouldn’t be expecting the ratio to stay in the mid-70s for long.

Palladium is straddling the resistance line of our sideways choppy channel:

Could it also not be argued that we’ve been in a generalized uptrend since the market mayhem last March?

I think it sure can be, especially if we look at platinum for confirmation:

In my opinion, I really don’t see the how the precious metals, in general, will be rolling over in any significant way.

Especially silver, which has basically been “correcting” since last August.

I do not think copper is going to crash:

Instead, I think we are due for an upside surprise soon, and possibly even this very week.

The same goes for crude oil:

Yes, people are travelling less, driving less, and generally consuming less crude oil, but also recall that many rigs and wells were shut down last year and have not come back online.

The Heartbeat of America Index will be interesting to watch:

While I’m not sure the other major stock markets in the US will crash significantly, because of the “Fed Put” (i.e. market intervention, manipulation and rigging), my suspicion is they will let the stock markets crash, and then they’ll prop up the ones that make themselves and their bestest buddies on Wall Street and in Washington richer, all the while letting the Russell 2000 lag or even languish.

Whatever the plan is, don’t look for clues in the VIX:

Although I’m sure The Beast would love soaking up all of the “free money” the so-called “Robin Hood Traders” find themselves with, courtesy of Uncle Sam.

By the way, you know the end is near, or the hyperinflation of the US dollar is near, or something is near, when your 13 year old son asks you what a “day trader” is, and, more importantly, if he can day trade.

The Mainstream says “the bond market is signaling inflation is coming”:

If it is true, however, that governments and central banks have chronically understated inflation for decades, then it will not be inflation coming, but rather, hyperinflation.

People still don’t get it, but that’s how it always goes.

Right now they’re too distracted with the propaganda pumping out of CNN and Fox News, so people are completely clueless that their entire life’s savings are about to vaporize, and when the majority of people finally do figure out what is going on and what to do about it, they will come to realize it is already too late.

You know how that trade goes against you, so you’re going to lose all of your money as those call options are now going to expire worthless, but they won’t expire worthless for four months, so you see the money in your account, but you realize it will soon be zero?

Um, yeah.

Kinda like that.

But remember: The dollar does not have to go to absolute zero:

Because there are infinite devaluations possible between one and zero, but in the end, it comes down to trust and confidence, and there will come a point in time when both are lost.

That point in time is approaching, and it’s approaching with cyber-speed.

It’s US dollar “forced obsolescence”, and it’s a lot like a 9 year old Tesla Model S, or an iPhone 4S, or other stuff.

Thanks for reading,

Paul “Half Dollar” Eberhart