Money stampeding out of the market

Keep in mind there are folks who come to sites and blindly and blithely do what is suggested. Most people are seeking gurus. The Buddhists say "if you meet the Buddha on the road, kill him." Back in the 70’s idiots sold all their belongings, bought the Nearings’ "The Good Life", and bought farms with animals. Most wrote plaintive letters to the Nearings when their animals started to die and they were broke.

I’m not worried about my preparations. I appreciate Chris’s work and am attending his Rowe conference but I’m not going to spend spend $$$ on gold as it plummets.

I’ve read all of the books now flashing by on the right side of the page. Orlov’s book, "Reinventing Collapse", was the only one that kept me up at night. He lived through the Soviet collapse. I don’t think gold is his first concern. My concern is 200 million weapons in the U.S., a military with citizens who will want to provide for their own families, and the breakdown of relatively civil society.



Hi Pir,

That link is dead; do you have another?




[quote=swittersMy question for those folks is, why are you glad you didn’t buy gold and silver? Were you planning on selling it at its low during deflation? Obviously nobody who owns gold or silver is going to sell it during a deflationary collapse - unless they’re in dire straits and they have to. They’re holding it as a store of value.
Are you certain that you’ll be able to acquire some at that magic point in time - just when deflation is ending and inflation is about to take off? If gold and silver are this difficult to find in our current market, do you think there will be an abundant supply when inflation kicks in?[/quote]

Lots of people will be in dire straits forced to sell. In the deflationary cycle, people will lose their jobs, they’ll be forced to sell thier PMs in order to put food on the table and pay the rent. I think there are lot of people that are buying gold that really can’t afford to. They probably have a little savings and likely have debt. Some might even be buying PMs on Margin, hoping for that "Get rich quick" belief. Currently on TV I see at least three gold pawn Ads telling people how to sell gold coins and jewerly for fast cash.

Consider the rise and fall of oil prices. Oil quickly ran up to $150 in 2007, and now its at a 14 month low, and still falling. If there is one commodity that has true value its Oil. Oil is essential to the global economy where as gold have very little economic value (it isn’t needed to power our economy ie Machinary, Trucks, Electricity, etc). I have a hunch that we may see a collapse in PM prices within the next twelve months that matches the price collapse in Oil. FWIW: I don’t have a crystal ball and its impossible to predict the future.

Inflation risks are being suppressed for the near term as the global economy is nearly in an uncontrolled decent. For now Foriegn Central banks are more worried about their own economies and US currency devalution is probably at their bottom of thier list of worries. On a scale of 1 to 10, where 1 is deflation and 10 is inflation we are probably at a 2 or 3, and the direction is towards 1.

  1. Asset prices are falling (Homes, Commerial Real Estate, Autos and Durable goods)

  2. Commodity prices are falling (Oil, Copper, Aluminium, etc)

  3. Unemployment is rising.

  4. Interest rates on consumer and corporate loans are rising fast (Making loans unaffordable for most).

As long as the the four trends continue the price of PMs should fall. The only reason why PMs are rising is because of irrational investing (the same irrational thinking that resulting in this bubble in the first place).



I agree that we are probably going to see a continued decline in commodity prices especially PMs. However, given the increases in the monetary supply I forsee this trend reversing. When the trend reverses, which isn’t going to happen immediately because we are headed towards a major recession, with unemployment rising, and more likely interest rates as well, inflation will be severe.
The Money Supply graphs are frightening. Once that money goes into the system I wouldn’t be surprised if we start to see hyperinflation. For all of our sakes I don’t want that to happen.
As for investing in PMs I think there are two types of people who purchase them. The first is the speculator, and the other the long term purchaser regardless of price. (I’m leaving out purchasers for industry and jewelry). As much as I don’t like to see the value in relation to fiat currency of my PMs decline my intent on owning them is for more of the oh shit situation. Throughout time gold, and silver to a lesser degree have held up as a store of value. They aren’t going to be worthless as can a paper currency backed by nothing. Politicians and those involved in the government don’t like PMs as they aren’t easily created. Having a currency backed by a scarce resource means that they have to control spending as they can’t print money to pay for various expenditures.
So, why gold and silver? What happens if the fiat currency fails? All of a sudden you and I have a bunch of roman numerals in our bank accounts. Sure we can go get paper currency, but it is better to use as heat. If this happens chaos will ensue until another solution is created or we go back to a currency backed by PMs. I doubt the latter case would occur as bureaucrats aren’t going to want that option.
My other concern is war with Iran, which is looking more and more likely. In this scenario gold and oil will skyrocket. Oil will also be much harder to obtain and the government will probably institute a rationing scheme instead of letting the price rise. I’d rather pay $50.00 a gallon for gas then not be able to get it or to have to wait in line for days. I presume many of you don’t agree, but gas or no gas you pick! Would I drive much NO… however, if I needed to go somewhere I could get the fuel I needed.
Lastely, beyond Gold and Oil we all need food and water. Don’t forget food.


Hi Gauntlet,

I sure can’t argue with your scenario or your thoughts about PMs. Despite my hesitation, I’m sure I will try to acquire some AU or AG coins (easier if local) for the long term but, as you note, food trumps metal. Do you have a good plan or source for your food storage? I’ve read much in this area over the years (since the survivalists of the 70’s), am hampered by the fact that my wife thinks this thread is full of lunatics, LOL.

I would cheerfully buy a carload of stuff but that will be difficult. I could probably acquire a few hundred Powerbars, LOL. The Mormon plan of wheat, etc., etc…just not in the cards. Moving to an agrarian setting…not in the cards. Wide scale life change…not in the cards. Personal survival stuff…somewhat doable though unless you think anarchy is coming to the streets( a fair possibility IMHO), maybe not the way to go.

Then there is the "Black Swan" theory that we don’t know what we don’t know and random or unknown events can significantly alter our social reality.


Deflation, then inflation, seems to be the consensus though the time frame is not.



capesurvivor (Sun, 10/19/2008 - 21:25)

Here’s a working link to Dale Allen Pfeiffers EATING FOSSIL FUELS


As I read here and on many other places :

There seems to be a concesus that we are in "disinflation" phase ($ get scarce) and then at some magic point we will go to high or hyper inflation. I agree with this observation, but then the BIG questions is,


I have those clues :

  • Biggest resets on mortgage loans were Sep-Oct ! I think. This probably will have impact on the banks balance sheets within 3-6 months (deflationatory)

  • the other big deflationatory push is comming from unwinding of the CDO, 70trillion just in 2007, right?

  • ppl withdrawing money and buying assets (gold/silver/houses) or paying debt - this both inflaionary and deflationary.

  • printing money 250 bil Fed + 1.8trillion ECB * ~10 (leverage ratio) =~ 20 trillion at least (if they can lend it)

If you can provide more data… from the above I think that deflationatory pressure is more powerfull for now… but the question remains when it will turn ?

I think it should happen when the two forces collide big time i.e. when there is a BIG push to print money, I mean bigger than it was now… the current print of the Fed I think was decipated cause the other banks also printed money i.e. all the fiats lose value.

When this happen the confidence would be so low that somebody will start dumping $.And I think it will be very fast, much faster than current crisis, you know exponential :wink:


With what I read I think this could happen in ~6-7 months period.

If this is not the case the next closer moment to me seems like 2012 :slight_smile: Doomsday, you know what all the conspirators were saying. Seems pretty good candidate for me.


What do you think ?










I appreciate your link to Dmitry Orlov’s article, Surviving Peak Oil & Economic Collapse: Post-Soviet Lessons for a Post-American Century. As you mentioned, his article was very helpful to understand emotional and psychological effects this kind of sudden changes in a massive scale can bring about. I hope we will be lucky enough to have a new set of leaders at the top who will inspire the best in people instead of inspiring the worst (fear, greed, hatred, anger, etc. etc.) in us.



Thanks again Swan.

Read the printed book.

Still left with the same problem, can’t live next to starving people for all sorts of reasons and the 1kwatt of solar panels on our roof are a bit obvious.

Thanks for your writing and I hope again for all our sakes


Anyone can trade for what the want but only fools trade for what they need

Hi capesurvivor-

One link you might check out for emergency food supplies (and other emergency supplies) is <a href="" rel="nofollow"></a> .  They have freeze dried food with a long shelf life of up to 30 years.  It is like having insurance for any kind of an emergency situation when you may not be able to get food for a while.  They sell packages good for anywhere from a 72 hour supply  to 1 year's supply.  It is certainly not a long-term sustainable solution if the shtf, but it may be  a good  &quot;buy you some time&quot; kind if a thing, at least!


For me, that is the critical problem, Pir. It is like rewarding the failed banks and punishing the good ones. Those of us who think about and prepare for the future can be, oddly enough, the most vulnerable.


Low profile.



Thanks for the link to the article, JMCSwan; interesting perspective!


Thanks, pinecarr,

Will check it out.



capesurvivor - the only and the most obvious answer is to grow food with your neighbours or at least help those that aren’t yet to start. In doing so you might become connected and identify your safety together. Keep it in the hundreds at most though.


Peace of Earth