Did everyone notice that Alasdair said that gold was trading at $5,300 per ounce when he gave the interview and a day later that price was $5,500? Has the collapse begun?
Alistair, Good morning and thank you for a timely update. I am relatively new to using precious metals for capital preservation and have question on the strategy of buying silver instead of gold when the silver to gold ratio is high, and then swapping silver for gold when the ratio drops. The ratio was 60 oz of silver to one oz of gold when I started buying silver, this morning Money Metals lists gold at $5542.40 and silver $121.45 for a a ratio of 45 to one. First question what do you think about this strategy? Secondly, is the ratio from the early 1920s of 20:1 possible?
The Report of the Deutsche Bank for 1921 showed clearly how greatly inflation had reduced the gold value of dividends, in contrast to the illusion of prosperity which high paper dividends caused. The bank’s paper turnover of 2,125 milliards in 1921 had a real value of 85 milliard gold marks. In 1913, when the bank’s ramifications were less extensive, the turnover had been 129 milliards. The 1922 dividend on a capital of 400 million was equivalent to 1.5 million gold marks, against the 25 million dividend distributed in 1913 at 12½ per cent on a capital of 200 million. October 1922, however, was the nadir for shareholders. From then on not only did money find its way back into shares, but people who could obtain cheap credit, or were unable to send their money abroad, began to realise the advantages of buying up their own country’s industrial and other assets at a fraction of their true value. Although in real terms the stock market began to go up, the mark’s purchasing power continued to go down. ‘By the end of the year,’ said Erna von Pustau, my allowance and all the money I earned were not worth one cup of coffee. You could go to the baker in the morning and buy two rolls for 20 marks; but go there in the afternoon and the same two rolls were 25 marks. The baker didn’t know how it happened … His customers didn’t know … It had somehow to do with the dollar, somehow to do with the stock exchange – and somehow, maybe, to do with the Jews.’ Mr Seeds’s chauffeur can have been no less confused. He and millions like him still instinctively regarded the mark as being as good as gold, failing to realise how desperately sick it had become. Milk which had cost him an unbelievable 78 marks a litre in the first week of November cost him 202 marks a month later. Butter had risen from 800 to 2,000 marks a lb.; sugar from 90 a lb. to 220; eggs from 22 each to 30. Although potatoes were still available for 8 marks a lb., an increase of only 1 mark, he had to pay 1,400 marks for 1 lb. of eatable sausages to go with them.
The social cost of the DM collapse was horrible. Older widows from the Great War, who had been able to live on the interest from a life time of saving, found out that their savings were worthless. Since there was no one to help them--all killed in the Great War--they put their heads in gas ovens. Younger widows sold the only thing they had of value--their bodies; i.e., they became prostitutes in order to live and put milk on the table for their children. It was the collapse of civilized society. Do not for one minute think that it cannot happen here.
I 💯 agree Patrick. Our modern high level of entitlement at all levels across the West leave me very apprehensive about individual financial preparedness and psychological, emotional fortitude to deal with the circumstances fast approaching. The domestic household debt levels across the West (apart from boomers) are such that retail will NEVER be a factor in PM pricing. How many have spare change of £5k for a little shiny coin ? Some silver perhaps but negligible retail impact
Succinct , completely accurate and right over the target . I am equally as concerned as to what will actually happen when the S.H.T.F. = utter chaos / societal collapse and millions of people unable to comprehend what's just hit them - why , and at whose hands - and no idea as to what to do next ......other I suppose to grasp at the straws of salvation offered up in the forms of U.B.I. & C.B.D.C.'s
Yes - but for how long at $ 5 k . Rather think this very recent correction and shake out to get as many of the weak hands out of the tree as possible - is going to be short-lived and that we'll soon be progressing to daily upward spikes in the mutli ten's / hundreds & then potentially thousands of dollars until we reach true price discovery whereby no metal's owner in their right mind will accept payment in FIAT for any of their sound money
YES - Adam Ferguson's widely respected treatise on what happened to the reichsmark and the economy / financial system in the ' Weimar Republic ' from the end of the Great War and more especially the treaty of Versailles and all it and the expertise of Rudolf Havenstein's during his tenure ( he was a Lawyer ..!! ) brought about between 1919 - 1922 / 23 - has to be the the foremost analysis of this debacle .
Alasdair & D.K., always a treat. Thank you, gentlemen.
Did everyone notice that Alasdair said that gold was trading at $5,300 per ounce when he gave the interview and a day later that price was $5,500? Has the collapse begun?
Alistair, Good morning and thank you for a timely update. I am relatively new to using precious metals for capital preservation and have question on the strategy of buying silver instead of gold when the silver to gold ratio is high, and then swapping silver for gold when the ratio drops. The ratio was 60 oz of silver to one oz of gold when I started buying silver, this morning Money Metals lists gold at $5542.40 and silver $121.45 for a a ratio of 45 to one. First question what do you think about this strategy? Secondly, is the ratio from the early 1920s of 20:1 possible?
Thank you!
The Report of the Deutsche Bank for 1921 showed clearly how greatly inflation had reduced the gold value of dividends, in contrast to the illusion of prosperity which high paper dividends caused. The bank’s paper turnover of 2,125 milliards in 1921 had a real value of 85 milliard gold marks. In 1913, when the bank’s ramifications were less extensive, the turnover had been 129 milliards. The 1922 dividend on a capital of 400 million was equivalent to 1.5 million gold marks, against the 25 million dividend distributed in 1913 at 12½ per cent on a capital of 200 million. October 1922, however, was the nadir for shareholders. From then on not only did money find its way back into shares, but people who could obtain cheap credit, or were unable to send their money abroad, began to realise the advantages of buying up their own country’s industrial and other assets at a fraction of their true value. Although in real terms the stock market began to go up, the mark’s purchasing power continued to go down. ‘By the end of the year,’ said Erna von Pustau, my allowance and all the money I earned were not worth one cup of coffee. You could go to the baker in the morning and buy two rolls for 20 marks; but go there in the afternoon and the same two rolls were 25 marks. The baker didn’t know how it happened … His customers didn’t know … It had somehow to do with the dollar, somehow to do with the stock exchange – and somehow, maybe, to do with the Jews.’ Mr Seeds’s chauffeur can have been no less confused. He and millions like him still instinctively regarded the mark as being as good as gold, failing to realise how desperately sick it had become. Milk which had cost him an unbelievable 78 marks a litre in the first week of November cost him 202 marks a month later. Butter had risen from 800 to 2,000 marks a lb.; sugar from 90 a lb. to 220; eggs from 22 each to 30. Although potatoes were still available for 8 marks a lb., an increase of only 1 mark, he had to pay 1,400 marks for 1 lb. of eatable sausages to go with them.
The Death of Money
by
Adam Fergusson
The social cost of the DM collapse was horrible. Older widows from the Great War, who had been able to live on the interest from a life time of saving, found out that their savings were worthless. Since there was no one to help them--all killed in the Great War--they put their heads in gas ovens. Younger widows sold the only thing they had of value--their bodies; i.e., they became prostitutes in order to live and put milk on the table for their children. It was the collapse of civilized society. Do not for one minute think that it cannot happen here.
I 💯 agree Patrick. Our modern high level of entitlement at all levels across the West leave me very apprehensive about individual financial preparedness and psychological, emotional fortitude to deal with the circumstances fast approaching. The domestic household debt levels across the West (apart from boomers) are such that retail will NEVER be a factor in PM pricing. How many have spare change of £5k for a little shiny coin ? Some silver perhaps but negligible retail impact
Succinct , completely accurate and right over the target . I am equally as concerned as to what will actually happen when the S.H.T.F. = utter chaos / societal collapse and millions of people unable to comprehend what's just hit them - why , and at whose hands - and no idea as to what to do next ......other I suppose to grasp at the straws of salvation offered up in the forms of U.B.I. & C.B.D.C.'s
Correction $5k
Yes - but for how long at $ 5 k . Rather think this very recent correction and shake out to get as many of the weak hands out of the tree as possible - is going to be short-lived and that we'll soon be progressing to daily upward spikes in the mutli ten's / hundreds & then potentially thousands of dollars until we reach true price discovery whereby no metal's owner in their right mind will accept payment in FIAT for any of their sound money
I very much think that ' Weimar MKII ' could and most likely will happen here and across
all nation's whose currencies are pegged to the Dollar . Possibly " Baked into The Cake "
YES - Adam Ferguson's widely respected treatise on what happened to the reichsmark and the economy / financial system in the ' Weimar Republic ' from the end of the Great War and more especially the treaty of Versailles and all it and the expertise of Rudolf Havenstein's during his tenure ( he was a Lawyer ..!! ) brought about between 1919 - 1922 / 23 - has to be the the foremost analysis of this debacle .
Excellent ( as ever ) - Thank You & thanks to ' DK ' .