The Phaserl


Decentralization-The Future Of Monetary Value

by Andy Hoffman, Miles Franklin:

Of all the things I’ve observed in my three decades of financial market watching, none baffles me more than the idiocy of the Charlie Brown-like “traders” that buy paper gold and silver contracts on the COMEX, only to have the “football” pulled out by “Cartel Lucy” time and time again.

Albert Einstein put it best when he defined insanity as “doing the same thing over and over again, and expecting different results”; and in my view, nothing is more insane than betting against a “house” run by the government, with the explicit goal of destroying you. Which is why, amongst the countless fundamental reasons silver has bottomed – at a decidedly “higher low” – it’s no coincidence the COMEX “commercials” are covering en masse. And who do you think they’ve been buying back their (illegal, naked) shorts from? Yep, said Charlie Brown speculators; who, per this chart, are now stuck in their largest silver short position since…drum roll please…the ultimate bottom in December 2015 – when the Fed first started “raising rates,” I might add.

In other words, the odds of a strong move higher are very high, in my view – let alone, amidst a continuing dollar plunge; stagnant interest rates, near the low end of their six-month range; a U.S. economy on the brink of recession; a dead-in-the-water Presidency, fighting fiscal and political brigands from all directions; and massive, global geopolitical instability – as evidenced by yesterday’s largest UK terrorist attack in more than a decade.

This weekend’s Beijing summit cemented the ominous fact that U.S. hegemony is dying; and now that, LOL, Angela Merkel is calling the Euro “too weak” whilst Donald Trump laments the “too strong” dollar, the pressure for the Western investment community to hedge dollar weakness will likely generate strong paper gold and silver demand. This will serve as a tailwind for the sector, but the fact remains that paper Precious Metal trading is ultimately the dog’s tail; which, whilst “wagging the dog” in today’s futures-dominated pricing scheme, will ultimately be dictated by inexorably tightening conditions in the historically tight physical market.

By the way, since yesterday’s Audioblog was published, here as some of the dramatic PiMBEEB headlines of the past 24 hours alone. Aside from the aforementioned largest UK terrorist attack –which ISIS has taken credit for – since 2005, that is.

Greek debt relief deal collapses, putting it one step closer to bankruptcy
Rumors that South African President Zuma will be removed from office
New Trump budget deal declared dead in the water by numerous Congressional Republicans, setting up another prolonged budget battle (as the debt ceiling rapidly approaches)
Shocking Spanish Socialist Party election result sets up potential for new snap elections, Catalonian secession acceleration
Asia’s largest commodity trader, Noble Group, on brink of collapse
In ominously recessionary sign, China’s bond “double inverts”
China imposes 95% sugar import tariffs
Largest auto-backed loan issuer, Banco Santander (of Spain), only verified income on 8% of new auto loans
Obamacare subsidy battle to go back to court, further delay repeal/replace legislation
Dramatic plunge in U.S. new home sales, Richmond Fed Manufacturing Index

OK, now that said “housekeeping” is out of the way – as frankly, it’s mentally exhausting confronting the tsunami-like swarm of ominous news flow, no matter how empowering it is to my investment positioning – I can get to today’s extremely important topic. Which, for long-time readers, is not a new revelation; but instead, a synopsis of the “investment thesis” I have adopted in the past year, given the dramatic acceleration in the demise of fiat currency confidence, on a worldwide basis, and the impact the rising crypto-currency wave will likely have on future views toward, money, “monetary assets,” and the role of governments and Central banks in future “monetary systems.”

It started with my July 2014 article, “is gold money? Who cares?”; in which, I first hinted of my skepticism regarding the potential for a new “gold standard” when the current, historically destructive fiat Ponzi scheme inevitably, and violently, implodes. Clearly, in the back of my head, a realization that governments would no longer be trusted to administer any monetary systems – and Central banks, “monetary policies” – was starting to emerge.

“No, I am not waiting for a utopian, gold-backed monetary system – much less, a Star Trek world where money is no longer needed. Instead, I am simply waiting for the universal realization that gold and silver are the only assets capable of offsetting hyperinflation. In other words, while future monetary systems are not set in stone, the hyperinflation emanating from this, history’s largest ever fiat Ponzi scheme – is guaranteed. Literally, hundreds of trillions of soon-to-be-worthless fiat currencies – or at best, dramatically devalued – will be competing for the minuscule hoard of available for sale physical PMs; not to be used as ‘mediums of exchange,’ but to save investors from bankruptcy.”

In the ensuing three years, even I have been awestruck by the destruction caused by government monetary policies – from the hyperinflation of Venezuela, to the negative interest rates of Europe, and the Hari Kari destruction of the Yen. On average, the world’s 180 fiat currencies have lost half their purchasing power since the 2008 crisis alone; and given the accompanying, exponential debt explosion, the process of fiat purchasing power destruction must accelerate, ad infinitum.

Moreover, the level of political deception, market manipulation, geopolitical tension, social unrest, and economic decay – in my view, rooted principally in said monetary destruction – have surged to unprecedented levels; not to mention, the utter abomination the “Cartel’s” daily gold and silver suppression’s have become. To the point that, if there was any remaining belief that a “gold standard” could eventually be reborn from the fiat ashes, administered by one or more governments, it has been completely, and irreversibly, dashed. I mean, every gold standard ever enacted has been destroyed by lying, thieving, governments – for the exact same reasons every fiat standard has been destroyed. Thus, why would it be any different now – given that governments have never been more lying, thieving, or incented to renege on the monetary authority vested in them? This, per the referenced July 2014 quote, without any consideration for what monetary “alternatives” might be available – if any.

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1 comment to Decentralization-The Future Of Monetary Value

  • Videoctr

    With regard to decentralization; I believe I can get right to the heart of the matter of what Andy is talking about, I believe he is talking about the blockchain paradigm shift that is occurring which will enable trustless systems being adopted and implemented as evidenced by the new alliances forming on a daily basis. In particular I am talking about Etereum.

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