-- Posted Wednesday, 22 October 2008 | Digg This Article | Source: GoldSeek.com
Note that the dollar is soaring like a rocket tonight.... All around the world the toxic waste exported by NY bankers is destroying the balance sheet of foreign banks. Those "disappeared" dollars need to be replaced by new dollars to meet margin calls, etc. The US FED is doing currency swaps in mind-boggling amounts to take in foreign currencies and dispense dollars where there are needed, to plug the black holes. This is the biggest rip off in the history of the world as far as I am concerned and the source of the apparent deflation, or soaring dollar. At the same time, genuinely productive enterprises are starved for capital and become easy pickings for the newly energized dollar and the gang of thieves who have a license to print it.
This process is guaranteed to destroy the concept of unbacked currency and the dollar in particular. One has to ask: What is going to stop it?
All the solutions that I have seen proposed only aggravate the problem. Therefore, I have to assume that in the end, all this money will be buying real things, especially real money.
What we have is not really an inflation/deflation story. This is the story of the largest criminal enterprise ever and how it is about to destroy our monetary system.
Bearing that in mind don't worry about bullion premiums over the COMEX price, just accumulate physical gold and silver.
The premiums for gold and silver bullion are coming down. This is normal when the COMEX price comes down and stays down for a little while, which is what we are seeing.
Silver is in more of an extreme supply deficit. Premiums are much higher (% over COMEX price) for silver than gold and seem to be staying up, at least for coins. I am pleased to see the premium for 90% silver coins go up. This is a sign of re-monetization of silver, which has to happen if we are going to see silver really perform. I talk about that in this recent article: http://news.silverseek.com/SilverSeek/1224161057.php
The dollar price of true monetary assets (gold and silver) in the current environment is unstable. As the prices goes up beyond a certain point, the situation will become explosive. Here's an article that I wrote a while back talking about this: http://news.silverseek.com/SilverSeek/1213458334.php
Those who benefit by having the right to print money have kept a lid on real money by 1) manipulation of the electronic markets 2) intimidation of the financial community and the press and 3) rationing of gold and silver bullion. Note that open interest in gold and silver on COMEX is dwindling. This is a good sign and I hope it continues. If speculative longs don't come in to the market, then they can't be flushed out later. If the only longs left are those who intend to take delivery, then we will see a price explosion, probably before we even get to the delivery period.
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