Federal Reserve Dares Itself to Raise Rates and Not Destroy Economy

Friday was a nice big gain for both gold and silver.

They have slid back from the highs but have held on for the better part so far here into Thursday.

Still looks like lots of sideways chop action in a downward trend.

In addition to that the dollar is in an uptrend and interest rates are supposed to be going up at some point in an effort to prove that we can raise interest rates at some point without blowing up the world.

Kind of interesting that is almost like the Fed is daring itself to raise rates at this point.

Political Correctness

We live in a hyper PC world right now.

I don't get it.

The politicians and the media poll lower than pond scum.

Why does anyone want to be politically correct when politicians are so hated?

More importantly, why do we care what laws they pass?

Silver back above $14, not that you can buy it at that price

Silver is back above $14 tonight.

Still in a big down trend.

Probing the $13's was not a good sign and I'd expect more of it.


I'm not a seller though, I'm a buyer.

I don't see silver online priced anywhere below $15 tonight.

In junk silver I am seeing roughly 12.5x face value where melt value is is basically 10.2x face value.


Some premium above melt value is expected.  I think of melt value like salvage value.

While the premium above spot is important, it is more important to see what the spread is on buying and selling.  The tighter the spread and the more liquid the market the better.  I don't mind paying a premium for junk silver if I can sell it for a premium when needed, and I can.  Generic silver I can't really sell at a premium so all that premium is lost.

Either way.  The down trend continues.  For those who save in silver and gold or just have a monthly budget for coins, more bang for our buck.  For those looking to make short term profits guessing which way the price is going to change, good luck to you.

Silver Says Hello $13 and Dead Beats Beating Debts

So much for those $14's.

I am looking at $13.94 on silver with gold just a shade above $1050.



This is more about King Dollar than the precious metals.

King Dollar will thrive in the near term as the best safe haven among paper currencies.  As long as there is faith in any paper dollar, the US Dollar will be King Dollar.  It really was a great system they set up for Americans coming out of Bretton Woods.  I don't like being the generation that gets to unwind that as it had to end eventually, but it probably was the best way forward at that time.

Going forward I expect more deflation as demand destruction takes hold in the centrally planned global economy.  Throw in the flight to safety that fuels King Dollar and a potential increase in interest rates and things look ugly for gold and silver, from the point of view of an American anyway.  In other countries where their currency is depreciating relative to King Dollar, gold and silver will likely be looking pretty good.  If you believe that the strength in King Dollar is fleeting, or just want to hedge against tail risk in the event of the death of King Dollar, gold and silver make a lot of sense.


After the deflation is wide spread, then we get to paper over the problems and that should cause inflation or perhaps hyperinflation / death of King Dollar.  The Bernanke helicopter money drop if you will.  That probably isn't enough to cause hyperinflation in my book.  Even Yellen giving every American citizen $50,000 wouldn't cause hyperinflation.  For that you will need a loss in the faith of the US Government to pay its obligations going forward.  Considering that we print the dollars out of thin air, that means that people won't accept them anymore.  This is more of a geopolitical risk.  China or Russia doing something crazy.  Maybe the death of the petrodollar with Saudi Arabia getting exposed by Russia in this whole mid east mess, who knows.

Do I think we will see the end of the dollar soon?  No.  It is possible and more possible than at any point since the short time after August 15, 1971 when Nixon closed the gold window temporarily forever.


I really think we will see some type of default on our debts to someone.  Maybe we can stuff everyone's MyRA retirement account with items in the Social Security trust fund / lock box.  Who knows.  To me though, the dollar being devalued against something (gold, oil, productive nation's currencies, SDR's, bitcoin, etc) is what is going to happen.  An economic collapse isn't a collapse of society or even the government, just dead beats beating debts.