Always a good thing.

Debt is a four letter word.

I went through the first few in the series. They make some points but I have to point out a few flaws. First, the videos are being pushed by people trying to sell you silver. As if precious metals were not subject to manipulation. Simple question: why is it people telling you about how profitable metals are are always trying to Sell you them? If they were going to be profitable wouldn't they be Buying them?

Second, the argument is clearly being shaped semantically. It is an old debating trick. If you control the terminology used you control the outcome.

The whole money as debt argument is an oversimplification. Calling it debt spins it as intractably negative and infinitely so. You could as accurately, and effectively, call it 'confidence'. Which is much more positive and inherently self limiting. That it is functionally accurate ought to tell you something.

Yes the banking system has a lot of flaws. Leveraging money is potentially problematic if it isn't controlled. But being able to get credit, and funds finding more productive places than under the mattress to spend time, are both good. But as with all things it can be pushed too far.

When the leverage is leveraged and the leveraged leverage is leveraged it is obviously getting skeevy. When a homeowner can't figure out who holds the mortgage it is a problem. When the bank listed on the loan can't, because it has been securitized and sold and resold as part of a tranch with a thousand other mortgages, you know your down the rabbit hole.

Credit, debt, or confidence, can become addictive. Real estate wasn't an issue before people took it to be such a sure thing that it was guaranteed to pay off big and could be used as an ATM.

It isn't the desire for a simple, steady profit that runs thing into the ditch. It is the constant demand, largely coming from the stock market, that demand not only profits, but increasing profits. At some point the profits that can be physically and legally squeezed out of a system are realized. The only remaining course to gaining increased profits is to cheat. And once you get into cheating it get easier, even accepted. Which is the bind.

It is far easier to show a profit, and an ever increasing profit, by manipulating the accounting like Enron, churning a market to a froth like what was done with real estate, or simply making it all up like Bernie Madoff.

The natural tendency is to avoid asking too many questions about systems that are making you money. And high profits in one area justify high profits in another. In such a market the honest businessman making a small but steady profit is the odd man out. The grifters and scammers look like heroes and the honest man looks like a laggard in comparison.

But remember that precious metals are not immune to manipulation and cheating. Going back to a gold based monetary system is a pipe dream. Markets for precious metals can be run up. Physical products, particularly those not used in a functional devices where the physical properties are tested, can be faked. Nothing is assured.

For all the problems with fiat money, confidence based money, the benefits easily outweigh the liabilities. The key here is regulation and both strong accounting and reporting standards. Adam Smith in the 16th century, considered to be thee father of capitalism, knew that regulations, government regulations, were vital.

The things that are clear are that sellers will always be serving their interests before yours. There are no simple solutions.

"one word Benjamin, one word...nickels..."

With due apologies to Calder Willingham and Buck Henry the screenwriters of "The Graduate", Mike Nichols, Dustin Hoffman, Paul Simon and Art Garfunkel.

Whenever I see, hear or read about anyone wanting to sell me something that guarantees that I'll make money with it, I ask myself why in the world anyone would sell such a thing and not buy it themselves.

Thank you all for the insights you offer in this thread, it is great food for thought.



Apart from the speculation issue, buying silver is just replacing one kind of money with another. Both silver, gold, paper money and clam shells works on the confidence we put into them. To me it seems kind of naive that we should loose confidence in some kind of money (paper money and electronic numbers in the bank), but not in others (silver and gold). Apart from making pretty jewels and physical conduction paths for heat and electricity, silver and gold have close to zero practical value.

"Money is hardened sweat". A. O. Vinje (wikipedia)

I would tend to agree. In a SHTF mode, I would think copper and lead would be of more practical value than silver and gold.

Wow. . . fiat currency has an intrinsic value of the paper it's printed on versus precious metal being a tad more difficult to conjure. . . there's a reason central banks deal in gold.

And their launchers.

"You can get further with a kind word and a gun than you can with just a kind word."

"There's a reason central banks deal in gold"

Actually that notion is becoming quite antiquated. They deal in electrons now. Sure, they have their "reserves", but the reason for using precious metals in the first place was their limited availability. If you are going to put a value on something, make sure it is something "intrinsically" rare to begin with. Bankers don't use sand because the vault size would be too big. Precious metals are practical, but not intrinsic, other than perhaps for electro-conductive and decorative reasons. At $1,000 an ounce, I can be content with using copper or paint. With the advent of the electronic age, Banks don't move coins and bars around, they use wires.

"Credits" is the new coin of the realm. In Vegas, it is credits or chips, depending on how high you roll. When they convert to Quatloos I will be really worried.

Never mind, we're going off topic.

I want to know what the future holds. Last night I ordered two used books on the Great Depression. There are several hundred available on www.half.com ...no affiliation. I need to learn to be more like my grandfather.