It’s become quite apparent to anyone paying attention that the American economy is in bad shape and is not getting any better. How could it? All the factors causing the economic stagnation – high taxes, regulation, corporate consolidation, financialization of the economy, corrupt government deficit spending, etc. – have only continued to grow in intensity. If the causes do not reverse, how could the economy?
Many are still confused, however, about whether we should expect depressionary effects or inflationary effects in the economy. How can you protect your assets unless you understand what is happening?
Given the common confusion, this explanation should be particularly helpful. Financial commentator Franklin Sanders, who was interviewed for the Beyond Off Grid documentary and has presented for our webinar series, addressed this issue last week in his daily commentary email on March 26th:
A reader wrote asking, “Many people are predicting a depression which will take down the price of almost everything. You feel that real estate & other tangible assets will also depreciate. Why don’t you feel that precious metals and other commodities won’t also take a big hit?”
Because silver & gold are not commodities. Silver & gold prices are driven by MONETARY not economic demand as commodities are (copper, lumber, tin). They rise when inflation is eating out the dollar’s value. So regardless of economic conditions, inflation will drive silver & gold higher, because people seeing their dollars lose value will seek refuge in silver & gold. Everything of value will NOT tank in the future, only those items whose value depends on economic demand, and that doesn’t include silver & gold.
It doesn’t overstate much to say we are already in a depression, & that will over time lower most assets’ value. However, the Fed & yankee government have shown that they will respond to every crisis by printing more money, so an inflationary depression will result. The underlying economic condition will be a depression (shrinking economic activity) while the monetary condition will be inflation resulting in rising prices. Although asset prices may rise, they will in fact be losing value or purchasing power, unless they rise faster than the dollar falls.
Purchasing power is all that counts. You can see this in the Dow yesterday at 16,367.88, which appears much higher than its 2000 peak at 11,722. However, corrected for inflation (even using the government’s understated & jimmied numbers), that 11,722 in 2000 equals only 15,982 today. Turn that around: 2014’s 16,367.88 would equal only 12,005 in 2000. The Dow has not gained (16,367.88/11,722 = 40%, but 12,005/11,722 = 2.4% in purchasing power. Adjusted for real inflation loss, the Dow is lower now than it was in 2000.
If I could teach y’all just one thing, it would be FORGET NOMINAL GAINS & LOOK ONLY AT PURCHASING POWER GAIN OR LOSS.
Y’all remember this, too: inflation does not stimulate the economy, any more than illegal counterfeiting would. Inflation always creates booms that go bust, and disrupts the economy in thousands of other ways. Inflation benefits only those near the source of the inflation, i.e., Wall Street, & the bureaucrats & politicians who produce inflation while it robs all others.
It’s important to recognize that what we’re seeing in today’s economy is an orchestrated effort by banking, corporate, and government interests to consolidate their power through the confiscation of the wealth of the people – primarily through inflation – thereby making them weak and unable to resist further growth in their power.
If you value your freedom, you will make a determined effort to study this issue and make wise decisions to guard your assets and your family’s well being from the elites that seek to enslave you.
Subscribing to Franklin Sanders’ Moneychanger newsletter is a great way to get educated about real money – gold and silver – and how to make wise financial investment decisions in the current climate of confusion.
Franklin Sanders quote (c) 2014 The Moneychanger, reprinted by permission. You may sign up for the Moneychanger’s free commentary on the gold and silver markets — and a lot of other things — at www.the-moneychanger.com.”