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 Nickel Ranttm:
I Know I Don't Know -
(Sort of ... Why Silver is a Slacker)

by Edgar J. Steele

October 21, 2007  

Downloadable audio files of I Know I Don't Know:
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"There will be no repetition of the break of yesterday... I have no fear of another comparable decline."
  --- Arthur W. Loasby (President of the Equitable Trust Company), quoted in the New York Times, Friday, October 25, 1929

My name is Edgar J. Steele.  This is a Nickel Rant.

Black Monday came on a Friday this generation.  What I find amazing is that financial markets manipulated to the degree that America's have become can show any spontaneity at all. 

October 19, 1987 marked the largest single-day drop in the history of the stock market - ever (beyond, even, any day leading into Depression I).  Twenty years later to the day, last Friday, the market showed a similar, albeit lesser, desperation on the part of sellers during the closing hours of trading. 

Coincidence or simple mass hysteria?  I consider it simply to be a reflection of the general lack of imagination prevalent today that makes movies like Rocky VI or those modeled on comic books possible.  "Well, gollee, Martha - it happened 20 years ago, so it jist might happen agin, right on the very same day.  We better sell!  And let's go see that terrific Silver Surfer movie agin."

Will the stock market carnage continue tomorrow?  Who knows, but I doubt it.  Perhaps down another couple hundred, but more likely back up a hundred or so.  After all, WhirlyBen need fling only a few hundred billion dollars to his friends yet again and some of it will have to find its way into stock prices. 

Will the stock market crash?  Only upwards, I think, as its measuring stick, the dollar, disappears in the flames of hyperinflation.

Flat-Footed Financial Finaglers

I noticed that, early in the day on Friday, the governmental and banking (but I repeat myself) forces busily were shoring up the dollar, hammering down gold and silver as usual.  It may well be that the sudden market swoon caught them flatfooted while endeavoring to close the dollar just above the magic level of 78 on that index of 6 international currencies.  I'm sure the surprise market decline distraction led to the dollar closing on a Friday below 78 for the second time this month (just the second time this generation, in fact, and only the third time ever).

Undoubtedly, the US dollar will slip even more today (Sunday) in the overseas markets, leading into tomorrow's festivities.  I think that 78 now has been breached for good.  Coming up soon:  76.  Then a slow grind into 70, but even that will yield, eventually, with all precious metals, especially gold, silver and lead, skyrocketing.

Dead Dollar Walking

As you well know, WhirlyBen Bernanke has announced His clear intention to levitate the general markets at the expense of the US Dollar.  This past week that party line was taken up by others in the Administration and by other key Western leaders, with the added explanation that the dollar's decline now, miraculously, is seen as both desirable and beneficial to all and will occur "gradually."  What's more, Japan now has joined Iran in announcing that it no longer will use the dollar as its own reserve currency (does that mean we will be invading Japan after Iran?).  Now it is set in concrete: Dead dollar walking.  In fact, expect another round of interest rate cuts from the Fed real soon.

Ah, it seems like only a few short days ago that America still was touting the concept of a "strong dollar."  Wait a minute!  It was just a few short days ago.  How quickly the party line can change in the Bush leagues, eh?

I Know that I Don't Know

That brings us to silver.  "I don't know."  That's my answer to all your questions concerning silver just now.  I simply don't know why it isn't keeping pace with - outstripping, in fact - gold, as the dollar twists in the wind.  I have seen others speculate, some that it has become just another industrial metal these days, others with even more ridiculous notions.  They don't know enough, even, to admit that they don't know, either.

Just a single notion keeps bobbing up in my fevered brain about silver's recalcitrance:  maybe they are letting gold slip upward faster than silver so that there won't be as much of an outcry when they announce its confiscation.  After all, they did it through FDR, and for the only logical reason, the very reason that still exists today:  why let us rubes profit from the bulk of gold's increase in value when all they have to do is declare it illegal to own, then "buy" it from us at what history will show to have been a ridiculously low price, then finally clean up after they massively devalue the dollar? They laughed when I first warned about the possibility of gold confiscation, but now I see the topic increasingly being thrown about on Internet forums and web sites. 

The REAL Silver Surfers

They have made clear that silver will not be confiscated, of course.  Keep the price of silver knocked down in order to force out as many weak hands as possible, then swoop in and clean up just before the price goes hyperbolic.  It's been done, time and again, folks, just like that, with all manner of commodities.  I dunno, but that is the only explanation that makes any sense to me.  Problem is, it is inconsistent with a gradual decline in the dollar's value. 

Sigh.  I just don't know. 

However, I do know that the dollar is doomed and gold is at risk.  Only silver and, to a degree, numismatic coins (now defined to be those worth twice their melt value), seem to me to be safe conveyers of purchasing power from this side of the economic chasm now yawning before us to the other side.  The profit opportunity, though significant, is secondary to the need to preserve your purchasing power through Depression II.

  Lead, the Other White Metal

And all the foregoing, of course, is secondary to location, location, location, safety, nutrition and protection, in that order.  Keep your priorities straight:  you can't eat silver and you won't be able to buy your way to safety with it from the bowels of the cities when the time comes.  That's why I now classify lead as a precious metal, too.

Your mileage may differ.  And keep in mind that I am the guy you see standing on the corner wearing the sandwich board that says, "Repent now, for the end is near!"  Also keep in mind that even a stopped clock is right twice a day.

New America.  An idea whose time has come.

My name is Edgar J. Steele.  Thanks for listening.  Please visit my web site, www.ConspiracyPenPal.com, for other messages just like this one.

-ed

Copyright 2007, Edgar J. Steele

Forward as you wish.  Permission is granted to circulate both the written and audio version of this Nickel Rant among private individuals and groups, post on all Internet sites and publish in full in all not-for-profit publications.   The audio version of this Nickel Rant may also be freely used in its entirety by for-profit broadcasting entities, but is not to be included in any recorded format which then is sold to others.  The audio version may be rebroadcast, either live or archived on the Internet, either copied or linked directly to my web site, profit and nonprofit alike, so long as it is used in its entirety.  In fact, I encourage any and all radio hosts to use it freely.  Contact author for all other rights, which are reserved.

 

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