Tag Archives: economics

Digital Silver

1/11/2015 Portland, Oregon – Pop in your mints…

A belated happy new year to our fellow taxpayers. While the pages of The Mint have been quiet, The Mint himself has been pressing forward on a number of initiatives. Perhaps the most notable being our renewed interest in Tax Planning and preparation, which is a natural complement to our virtual CFO and associated services. More to come on that.

Long-suffering readers of The Mint are well aware of our views on monetary theory. Throughout the ages, true money has generally taken the form of gold and/or silver. However, for roughly 44 years now, mankind has been on an extremely dangerous experiment in which debt has come to take the place of money in everyday transactions. While it may seem a completely normal manner of transacting business today, it is lost on most that money and debt are actually polar opposites. They are meant to cancel each other out in trade and, in doing so, maintain the quantity of one another and by extension all of world trade and economic activity, in balance.

However, when money becomes debt, then debt can only be cancelled by the issuance of more debt, which means that the primary impulse of all economic activity is not a well thought out response to the laws of supply and demand, but a response to whether or not the supply of debt instruments in the world is increasing or decreasing.

The period between 2008 and 2013 has been marked by a relative stagnation in what was until then a steady wave of increasing credit post 1971. This stagnation was almost fatal to the debt based monetary system that, by definition, counts on an infinite expansion in the quantity of debt for its very existence.

The current expansion, which began in 2014 and is set to accelerate through 2015 and beyond, is already causing cosmic shifts in the economy. Old, established companies and brands are being supplanted by a phenomenon that is best exemplified by social media platforms: Hyper focused content delivery and a wholesale fragmentation of what were, just five years ago, long-established norms around consumer behavior. Large brands are losing the edge as consumers can increasingly tailor the content that passes by their eyeballs on social media and, further, consume almost any type of media on demand.

This shift is once again propelling a large wave of growth, which means that soon, consumers will begin to demand increasing amounts of credit so that they can underwrite their various individual activities necessitated by this shift.

What place does Silver have in this brave new world? At $16.57 an ounce, physical silver is taking a short breather as the world’s best investment. However, a new form of Silver is rising to take its place.

Silver Money
Digital Silver in the form of unsecured credit at your fingertips

Silver Money Service is a simple mobile app that filters hundreds of credit card offers to help you find unsecured credit that suits your needs. While at first this may seem an elementary concept, the utility of the Silver app, which is currently available for Android and iPhone, cannot be overstated.

As much as we are loath to admit it, most consumers will need to increase their credit footprint over the coming year in order to keep pace with inflation. What the Silver app does is simply save consumers tens if not hundreds of hours sifting through credit card offers in the mail and on the internet.  By asking a few simple questions, Silver guides the user to the current credit card offerings that are best suited to their needs.

How does it work?  As we mentioned above, the app asks the user a simple, multiple-choice question:

  1. Which type of card are you looking for?
    • Rewards
    • Cash back
    • Low Interest
    • Bad Credit

From there, it asks the user a second, again multiple choice question based on their response to the first in order to tailor its results to the user’s unique credit needs.  The app then presents a list of the relevant credit card offers alongside buttons that allow the user to contact the credit card provider directly via telephone, email, or directly at their website.


Silver’s refreshingly simple and intuitive approach to assisting consumers in expanding their credit footprint.  You can download this handy app that the Google Play store and the iPhone App Store today and get a head start on your peers.

While physical silver will always be a safe harbor, the Silver app may prove more useful over the coming years as a way to fund the next wave of credit expansion. Even if you are a gold or silver bug, you can use the Silver app to get a credit card to get ahead of the curve by ordering your next tube of rounds or silver bars from your favorite bullion dealer.

For in the blow off phase, it won’t matter how much unsecured debt one has to pay back, but what real assets one has on hand to confront the gradual disintegration of the real economy.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for January 11, 2015

Copper Price per Lb: $2.79
Oil Price per Barrel (WTI):  $47.58

Corn Price per Bushel:  $4.00
10 Yr US Treasury Bond:  1.97%
Bitcoin price in US: $276.80
FED Target Rate:  0.12%
Gold Price Per Ounce:  $1,225

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.6%
Inflation Rate (CPI):  -0.3%
Dow Jones Industrial Average:  17,737
M1 Monetary Base:  $3,157,800,000,000

M2 Monetary Base:  $11,769,400,000,000

A Brief Reminder of the Function of Central Banks circa 2013

An economist explains quantitative easing for the uninitiated, brought to our attention via Zerohedge:

Just in case you missed it earlier, the sovereign bailouts explained:

That pretty well sums up the political and banking sector’s strategy for dealing with the present crisis.
To quote Alfred E. Neuman:
“What, me worry?”

US Debt Ceiling Vote to Ignite Armageddon in Bond Markets? Key Indicators all Point to Inflation – A Mint Classic

Today we are taking a break en route to Bolivia.  Breathing in La Paz is hard enough, let alone attempting to dissect what is occurring in the World economy.  As such, we offer a look at things which we wrote about 14 short months ago which came to pass just 8 short months ago.  A much ignored number which is peculiar to America, the debt ceiling.
 
Today, the number is mostly ceremonial but it is important to remember that the US is likely to breach the $16.2 trillion symbolic limit in the near future.  Will we have  repeat of the events we described?  Enjoy!
 
1/18/2011 Portland, Oregon – Pop in your mints…
 
For some months now we have been wrestling with the notion that there will be a major collapse in the Bond Markets.  We have speculated as to the causes and possible effects in these chronicles, comparing the coming events to the battle of Armageddon, famously prophesied by John in the book of Revelation, Chapter 16.  Bondholders have been lured into a valley, and our guess is that they are about to get slaughtered.
 
When and how will this occur?  This is the subject of our speculation today.  Be forewarned, fellow Gambler, that we do not have any sort of inside information.  Rather, we rely on our own wild imagination and questionable powers of deduction.  Actual events may differ dramatically from what we imagine, and we pray that they will!
 
Our current speculation has its origin in digesting the reality of the upcoming Congressional vote as to whether or not to raise the debt ceiling.  In the past, this would barely have been news.  The government almost always, without fail, spends more money than it takes in. This is one of the few things that you can count on a democratically elected government to do.  To cover the deficit, the government must issue debt.  Since there is almost always a deficit and there is almost always interest to be paid on existing debt, the amount of debt owed by the government must always increase.  This is the basis of our current insane monetary system.
 
 But wait!  Along comes a group of Congressmen and women that either don’t understand the game or are unwilling to play along any longer.  They appear, at least from their rhetoric, to be set to vote AGAINST raising the debt ceiling (the total amount of debt that the US Government can officially borrow).  In theory, this would mean that Government expenditures would have to be immediately reduced by $1 Trillion, the projected deficit for current fiscal year, and further reduced to give them the ability to roll over the roughly $3 Trillion dollars worth of US Treasury debt that is set to mature in 2011, even assuming that it can be rolled over at 0% interest.  Both of these are plausible but highly unlikely scenarios.
 
 
As an aside, you can watch all of the dizzying US Debt statistics here.  We advise you to take some Dramamine beforehand.
 
However, a “NO” vote on raising the debt ceiling would make these highly unlikely scenarios not only likely but absolutely necessary.  A “NO” vote would likely trigger a sell-off not only in the US Treasury Debt Markets but also in every fixed income and equity market on the planet.  This sell-off would lead to an unprecedented amount of cash chasing around a finite number of real goods.  
 
In short, the end result of a “NO” vote would be a paralyzed Government and hyperinflation.
 
On the other hand, a “YES” vote is no picnic either.  Many of these Congressmen and women were around the last time they had to vote on a measure with such broad reaching financial implications.  Does the TARP Fiasco of 2008 ring a bell?
 
On the bright side, a “NO” vote would bring an abrupt end to the insanity of the present world monetary system.  A system that is based on debt, not real money, which causes the productive forces of mankind to cannibalize themselves.  After the initial shock, a “NO” vote would be a great thing for mankind.  Do today’s politicians have the backbone to do this?  Only time will tell, but here at The Mint, we believe that at this point a “NO” vote or a stall tactic (which is practically the same thing) may in fact be likely to occur this spring.  We are not alone in this boat, as back in November former Treasury Secretary Robert Rubin alluded to this vote as a possible “trigger for a “rout in the Treasury Market.”
 
While all signs in the Bond Markets point to an implosion, either this spring or at some unspecified date in the future, all of our Key Indicators here at The Mint are continuing to point to Inflation.  It is for this very reason that we observe them daily, to ensure that our hypothesis is correct.  These are the “cards” the we hold as gamblers.  Each one merits in depth study as to its economic significance but we will spare our fellow gamblers this depth for now and jump directly to the practical application. 
 
At the end of every Mint, we present the Key Indicators.  We encourage you to compare them with the Key Indicators from previous Mints.  If the Key Indicators are generally higher (with three exceptions) than they have been in the past, we expect inflation, maybe a lot of it.  If they are lower, we would expect deflation.  The magnitude of the inflation or deflation depends upon the magnitude of the changes in the numbers.
The three exceptions, of course, are the “FED Target Rate”, the “MINT Perceived Target Rate”, and the “Inflation Rate (CPI).”  In the case of these three indicators, if the number is lower than it has been in the past, we can expect inflation.  If they are higher, we would expect deflation.   
 
You may also click on each data point below for a link to its source to better perform trend analysis.
The timing of what is to come is a mystery.  Based on recent data, inflation is walking up the drive but still a ways from the door.  If we had to guess, we would expect inflation in full force by January 2012.  If Congress pulls the trigger with a “NO” vote this spring, it could arrive quite a bit sooner.
 
As Kenny Rogers wisely said, “Know when to walk away and know when to run!”
 
Stay Fresh!
 
 
 
 
P.S.  If you enjoy or at least tolerate The Mint please share us with your friends, family, and associates!
 
Key Indicators for Tuesday, January 18th, 2011
 
MINT Perceived Target Rate*:  4.5%
Unemployment Rate:  9.4%
Inflation Rate (CPI):  0.5%
Dow Jones Industrial Average:  11,787
M1 Monetary Base:  $1,954,500,000,000
M2 Monetary Base:  $8,881,000,000,000 (this numbers stands roughly $2 trillion higher today, about the same amount that the debt ceiling was ceremoniously increased back in August.  Coincidence?  we think not!)

True Capitalism: Superior to and incompatible with the Nation State

11/2/2011 Portland, Oregon – Pop in your mints…

Recently we have submitted for your consideration, fellow taxpayer, that Anarchy is man’s reality. It is not a choice, it is an ultimate given, it simply is.  All understanding of the current political and social structures is greatly facilitated by one’s acceptance of this simple fact.

In fact, one’s ability to act and react to the changes in the current political and social structures depends upon accepting and embracing Anarchy as the basis for reality and learning to operate in the True Capitalistic system which organically emerges as men learn that mutual trust and cooperation are in their rightly understood self interests, and that he who is to lead must truly become the servant of all.

To truly embrace this, for, as we have established, it useless to reject it, we must first understand something about the nature of mankind.  First and foremost, man, left to his own devices, is completely devoid of the ability to do the right thing.  He doesn’t have it in him.  He is lazy, self-serving, and completely evil.  He needs God and his fellow man to be able to do anything productive, altruistic, or remotely good.  A full defense of this statement is a subject for another day (although the evidence is all around us), we mention it here only to underscore the need for a framework within which mankind can avoid both self and mutual destruction.

The only reliable framework which has emerged out of Anarchy not only addresses the problem of human nature but also serves to turn man’s weaknesses into strengths.  This framework is True Capitalism.  By allowing market forces to work with as little hindrance as possible, mankind can insulate itself from descending into chaos and catastrophe.  As we have stated previously: 

Out of Anarchy, the Truly Capitalistic System would ORGANICALLY emerge, and with it a new dawn for humanity, built on mutual interest and almost endless capital formation which will engender a spontaneous and dynamic social order, and a society without borders that would enjoy freedom and prosperity that we cannot even imagine under current conditions.

How would this work?  In some cases, it may be that the catastrophes simply cancel each other out.  In others, it may be that a counterforce in the market arises to crush the catastrophic force before it can do much damage.  No one can truly say.  Yet the fact that no one person can say what will work is precisely why it works. 

The greatest virtue of True Capitalism is the speed with which it corrects errors in judgment.  Bad idea, malinvestment, frauds, and even violent and property crime are quickly dealt with.

Market Anarchism

But who sets the rules?  By definition, there are no rules apart from what has been mutually agreed upon by consenting parties.  That said, it is easy to imagine how quickly a myriad of rules may spring forth in True Capitalism.  The key difference between these rules and those declared by a governmental decree is that compliance with the agreed upon rules in True Capitalism is voluntary, making compliance likely.  For to violate the rules of an agreement is to forfeit the advantage imagined to be gained by entering into the agreement. 

Even the primordial requirements of the right to life and property would organically be honored, for they are primordial to all humans, whether they readily admit it or not.  Being primordial, securing of the life and property of others would be amongst the first series of contracts that any person would enter into, whether directly or indirectly.

Of course, mankind is completely subject to natural (or divine, as one prefers) law, True Capitalism simply allows the fullest and most complete expression of the operations of natural law to operate in the dealings of men.

Did God not warn the people not to desire a king?

To fight True Capitalism, mankind’s least flawed response to his Anarchic surroundings, is to cause or submit to chaos and misery.  Yet every nation on the planet is devoted to some degree in the fight against True capitalism.  Why?  Simply because the nation state, under the guise of being the most perfect expression of man’s good intentions, today occupies the throne which rightly belongs to True Capitalism. 

The two are the antithesis of one another.  A nation state regulates by edict, True Capitalism regulates by example.  A nation state is rigid, where True Capitalism is pliable.  Hence, where True Capitalism will bend but never break, the nation state is repeatedly smashed to pieces when faced with change.

Moving to a less philosophical level, how can we be sure that Anarchy is the basis of man’s current existence?  Because the institutions which supposedly offer the best option to embracing Anarchy are beginning to succumb to the punishments they have built up in their losing fight against True Capitalism.

Yes, Anarchy is now trumping the nation state.  We urge you to watch closely the phenomenon which is currently playing out in Greece, for it is highly likely to play out in nearly every Western Democracy before Anarchy comes in to give its people a bear hug.

Thankfully, natural (or divine) law will not change.  One’s time would be better spent understanding the immutable truths of natural law, for they will prevail.  What is natural law?  We’ll give you hint.  It involves supply and demand, and loving one’s neighbor as himself.

Believe.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 2, 2011

Copper Price per Lb: $3.58
Oil Price per Barrel:  $92.81

Corn Price per Bushel:  $6.45  
10 Yr US Treasury Bond:  2.01%

FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,737 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.3%
Dow Jones Industrial Average:  11,836  

M1 Monetary Base:  $2,071,500,000,000 RED ALERT!!!
M2 Monetary Base:  $9,607,200,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Watch “Harry Browne – Unavoidable Economic Consequences” on YouTube

Brilliant explanation of the consequences of inflating the money supply:

Dual Entry Accounting – Man’s Greatest Innovation, Modern Central Banking – Man’s Greatest Catastrophe – Part V – Final Catastrophe and Hope for the Future

10/21/2011 Portland, Oregon – Pop in your mints…

As the western world braces for a full scale currency collapse, we have endeavored here at The Mint to offer an explanation as to why these events are taking place and, along the way, offering the obvious solution to the chief problem, mistaking credit for money.  

For those of you who have missed Part I, Part II, Part II, and/or Part IV, you may read them by clicking on the following links:

Dual Entry Accounting – Man’s Greatest Innovation, Modern Central Banking – Man’s Greatest Catastrophe – Part I

Dual Entry Accounting – Man’s Greatest Innovation, Modern Central Banking – Man’s Greatest Catastrophe – Part II – Irony

Dual Entry Accounting – Man’s Greatest Innovation, Modern Central Banking – Man’s Greatest Catastrophe – Part III – Money or Credit?

Dual Entry Accounting – Man’s Greatest Innovation, Modern Central Banking – Man’s Greatest Catastrophe – Part IV – The Catastrophe at Hand

If you require only a brief summary, Part IV above offers a relatively brief and comprehensive summary of the previous three.  Now where were we…

Ah yes, in the United States, circa 1968, a time not so unlike our own.  The Vietnam war was becoming increasingly unpopular and the social climate was ripe for protest.  The US had run up a large and increasing trade deficit with the rest of the world.  It was becoming clear that if foreign dollar holders were to redeem a significant amount of their Federal Reserve Notes, which we now understand to be banknotes and not money proper, for gold, which we now understand to be money proper, the Federal Reserve would not be able to deliver enough gold.

The solution, if it can be called that, was to gradually increase the amount of Federal Reserve Notes required to obtain an ounce of gold from $35 to $41 between 1968 and 1971.  Then, in 1971, with the US dollar collapsing in value and the Bretton Woods system falling apart at the seams, then President of the United States Richard Nixon announced that US dollars were no longer convertible into gold.  The event is now referred to as the Nixon Shock.

And a shock it was.  The US dollar, the benchmark of Central Bank currencies throughout the world, was now officially backed only by the faith that it would continue to be accepted in trade.  The Federal Reserve had defaulted.

Most of the world still lives by this faith today, and if anything, the delusion that a banknote issued by a Central Bank which has defaulted on its obligation to deliver real money on demand has only grown.

The reason that the large scale catastrophe of modern Central Banking lies before us is that over the last 40 years, the lack of gold and silver to back the banknotes in circulation has been replaced by the expectation that governments, and by extension their subjects (citizens), will produce enough goods and perform enough services to repay the obligations represented by the banknotes. As the unrestricted quantity of banknotes and obligations to deliver banknotes in existence will always tend to exceed the stock of available goods and services, these obligations are impossible to satisfy.

Human beings are fallible.  It is normal and should be expected that they will not be able to deliver on certain obligations.  The natural beauty of banknotes redeemable in gold and silver was that, if it was suspected or observed that a person or entity would be unable to pay their obligations, the creditor would move to seize the gold, silver, or other assets that the debtor had pledged as collateral.

The seizure of collateral or the threat of seizure was often enough to correct the failed human action or decisions that were leading to the net loss of wealth incurred by the activity which was undertaken.  In economic parlance, we would call this the correction of the malinvestment of resources.

Without gold and silver to act as a natural limitation on the supply of banknotes and other forms of credit, the bad decisions that lead to the malinvestment and the activities that lead to the destruction of wealth and resources can continue for a very long time.

The use of gold and silver as money had another, more important function that is often overlooked.  Gold and silver are inert, non-consumable objects.  Their hoarding and use as money will not generally cause starvation or want.  In fact, the hoarding of gold and silver as money would have the effect of lowering general prices as productivity increased, naturally creating an incentive to decrease production which in turn would raise prices, making the expenditure of more silver and gold necessary and in turn raise prices, creating a natural  incentive to produce.

Gold and silver allow the economy to naturally regulate itself and, by virtue of the difficulty in extracting them, cause the rest of the earth’s resources to be used in harmony with each other.

Finally, gold and silver are inanimate objects.  Their recognition and possible seizure as collateral does not threaten the liberty or life of a person.  However, because modern central banking has replaced money proper and placed credit in its place, it will become increasingly common to entire societies held as security for a debt that many of them had no direct hand in creating. This is the logical end of using credit as money.

It is the truth that will bring tragedy to the earth.

Without the natural counterbalance to trade and growth which gold and silver money had provided for over 9,000 years, man’s activities, whether productive or destructive, have continued nearly unchecked for the past 40 years.  It is staggering to think of the catastrophe that awaits if man is truly on the path to destruction.

Man, by nature, is always on the path of destruction, but the use of gold and silver as money served to correct him before he strayed too far down it.

Most people alive today have been trained to believe that using Gold and Silver as money is an unnecessary and environmentally harmful process.  Even Adam Smith believed that if the effort expended to mine metals to create money could be directed to other, more useful activities, that humanity would be better off.

What Smith did not realize was that man would not always direct its energies to useful activities.  Like modern Socialists, he underestimated the power of self interest inherent in all human action.  Today we are preparing to reap the consequences of 40 years of unrestricted and more often misguided human actions.

While it may be too late to avoid the catastrophe that Modern Central Banking may bring upon us, it is comforting to know that a return to the understanding and use of gold and silver as money offers hope for a future of truly infinite possibilities.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

P.S.  For more ideas and commentary please check out The Mint at www.davidmint.com

Key Indicators for October 21, 2011

Copper Price per Lb: $3.23
Oil Price per Barrel:  $87.40

Corn Price per Bushel:  $6.49
10 Yr US Treasury Bond:  2.20%

FED Target Rate:  0.07%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,642 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.3%
Dow Jones Industrial Average:  11,809  

M1 Monetary Base:  $2,056,000,000,000 RED ALERT!!!
M2 Monetary Base:  $9,570,500,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Watch “Ron Paul: We Have Crossed the Rubicon towards Empire and Tyranny” on YouTube

Ron Paul further expounding on his platform of Liberty at the National Press Club.  Brilliant: