Systemic inflation has finally become intractable
Silver and Gold Update August 10, 2022 |Jack Mullen
The United States financial system is gasping for air and is on a life support system.
Systemic inflation has finally become intractable. The attempts of the Federal Reserve to paper over the problem are visible and it is having very little affect on rising yields and general prices in the system overall.
The news today tells that the price of eggs has risen 47%, year over year, for the month of July and the Senate just passed a bill mockingly called the Inflation Reduction Act.
This bill will throw a half trillion new dollars into a system drowning in currency with the intent to lower inflation. The bill claims to address inflation with more money – violating a simple principle of economics – you cannot spend your way out of inflation.
This bill and the Feds’ repeated attempts to keep the 10 year yield below 3% indicate a debt-based currency system taking its last gasps as it heads towards the so-called Crack-Up-Boom.
The core idea of the crack-up boom, in summary, describes the collapse of a monetary system, due to out-of-control inflation expectations by the market participants, that were in turn caused by extreme increases in the money supply.
Inflation is a systemic component of a debt-based currency and this inflation will eventually destroy the purchasing power of the currency. The US currency was engineered to self-destruct after 1971.
We are now in the early stages of what is always a quickly progressing currency failure.
Rising prices and desperate attempts to maintain liquidity require more and more currency being dumped into the system to prevent the liquidity lockup approaching. This method prolongs the transition from a currency of value to a worthless currency but will also make the ending more painful and catastrophic.
The “ catastrophe-boom” (original German translation of Crack-up Boom), spells the end of the middle class in America and, with that, widespread pain and suffering
Meanwhile, some of the money pumped into the economy will continue to flow into the stock market, pushing stock prices toward Zimbabwe highs while providing the mainstream media with happy talking points about the health of the economy.
Other financial headlines of the day include “U.S. non-farm labor productivity, as measured by the Labor Department, fell in the second quarter at a seasonally-adjusted annual rate of 4.6%. That was the biggest year-over-year drop dating back to 1947 and the weakest back-to-back reading following a 7.7% drop in the first quarter, according to the Peterson Institute for International Economics (PIIE).
Lower productivity in a time of rising prices is symptomatic of inflation’s toll on worker belief in the current economic system. When workers are fully aware of the loss of their purchasing power in an inflationary environment, their willingness to supply labor diminishes.
The price of gold is above $1800 and silver over $20.50, while the stock market soars on lower than expected inflation news that claims inflation has dropped from 8.5% from 8.7%. This is just the daily noise in a market that is completely insolvent. Just wait for the CPI to be revised higher going forward.
Friends, the dollar is doomed and its days are numbered. You can mitigate some of the pain of drastic dollar devaluation by wisely moving some paper assets into physical assets that hold their value during periods when paper currency falls in value.
For purposes of liquidity going forward, it is my opinion (only) that silver is the most undervalued inflation-proof asset available today.
Historically, people held gold and silver and other metals as part of their inflation and currency devaluation protection plans.
Silver is severely underpriced and has been known as the poor man’s gold. However in this market with silver prices deeply suppressed, silver might be the smart man’s gold.
Do your own research and I have great expectations you will survive the coming economic collapse