When I turned on the financial channel (CNBC) this morning I discovered that the price of silver has finally topped $20. (Silver is at $20.14 and gold is at $983.) Oil remains cleanly above the $100 mark and natural gas is at an all-time high. All commodities, including food, are at remarkable highs. But this means much more than just higher prices. What we are actually seeing is a continuing loss in the purchasing power of the dollar (and all fiat currencies.) As the dollar falls, it buys less and less. We witness this in the form of rising prices. Most people do not make the real connection here. Don’t be one of them!
Most people think that the problem is rising prices. The real problem is the falling of the dollar. Our politicians promote this misconception because it allows them to divert the blame to all sorts of scapegoats – greedy corporations, higher oil prices (Bernanke’s favorite), increasing demand from China and India, etc. The real cause is the flooding of the economy with unbacked paper money (fiat currency), something that the government has been doing since they took us off the gold/silver standard (when the dollar was backed by gold and silver, and our coins were actually made out of precious metals.) Going off the gold/silver standard allowed them to create unlimited amounts of money, taking the country hopelessly in debt, so that they could enjoy short term benefits by spending money they didn’t have, at the expense of future generations who would have to eventually pay those debts. Well, the dance is over and now the musicians are asking to be paid.
Although you will not here this in the news, and you will never hear it from our politicians, what we are experiencing is the collapse of the dollar! This is first manifest as inflation (where we are now) then hyperinflation, then panic, then exponential hyperinflation, then total economic chaos and everything that that will lead to. We will not wake up one morning and read in the headlines, “The Dollar Has Collapsed.” It doesn’t happen like that. It happens gradually, like a snow ball rolling down a hill gradually gaining mass and momentum. It happens when we wake up one morning and discover that the price of silver is over $20!