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Author Topic: Is the Crack-Up Boom Beginning?  (Read 959 times)
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tamo42
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« on: 2011 Apr 19, 09:36:42 pm »



We've been talking a good amount about the dollar recently and whether the end is near for the current formulation of it or not. In this post I'm going to talk a little bit about how a currency dies and the signs I'm seeing that might indicate we are beginning that phase.

All currencies throughout history have collapsed. The causes are simple: those in charge of the currency keep making more and more of it so they can spend new money at old purchasing power levels. When Nero recalled the silver coins of the Roman empire to put his own face on them he also introduced impurities, i.e. lessening the amount of silver in each coin. Presto! he had 10% more coins than he took in. He used those to pay his soldiers because, after all, the soldiers are the one group that you absolutely have to pay. The soldiers accepted it because they believed the coins they were getting were worth the same as the old coins. Only time would prove this assumption wrong.

The form has changed over the years, but the principle has remained the same. Create more money so that you can give it to people who think it's worth what the old money was worth.

A currency dies when enough people recognize that the currency's purchasing power cannot be relied upon. These people will spend as much currency as possible in exchange for something, anything, that will maintain some value over time. This period of rampant buying is called the crack-up boom. Prices for everything skyrocket as competition among bidders becomes fierce.

All of this was going through my mind today as I was perusing an ad on my local CraigsList. In this ad, the vendor said he was sold out of silver and gold bars but has half-pound copper bullion bars available. I thought, who is buying copper bullion? We have reached a stage where one of the most basic base metals is being treated as a store of value!

This is one indication that we may be in the beginning stages of the crack-up boom, the period where anything physical will be bought simply because it is real.

Only time will tell if the monetary authorities come to their senses and halt this process or if we are headed into monetary oblivion... again.


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Neal McSpadden
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