Several millennia ago in, a different life, I sat in an economics class in college while we discussed the planned economy of Russia. Our professor told a story about the nail industry. The central planning committe set a goal for that industry to produce a set number of nails by year's end. Well, the industry leaders knew not to argue their point, even though the raw materials allocated for the task were not adequate. They simply complied. At first everyone was happy, until they tried to hammer the nails. Every time carpenters tried to drive the nails, they broke. The problem? The nails were too thin! The nail industry sacrificed quality in favor of numbers. That was human nature in action. Governments can make rules and pass laws, but they cannot dictate human nature.In recent years governments around the world have try to incentivize a lagging economy with an unprecedented infusion of good old money, wads and wads of money, heaps and piles of the greasy grimey green stuff, that is, speaking of dollars. World economies have been awash in extra printed notes. Has anyone refused to be "incentivized"? Of cours not! That's human nature. Stimulus money always works, but only as long as the tap is turned to the On position. Pay unemployment benefits, and out of work folks have money to spend, which keeps the wheels of industry moving, but only for a while. The problem is, few people on unemployment go back to work because they are being paid not to work! That's human nature. Banks love the stimulus money, not so they can lend it out, but so they can hoard it with the hope that when the economy turns around they will be in a favorable position to lend again. Again, that's human nature. They also love the money so they can continue to pay high wages to people at the top. Talented leaders demand big paychecks because they are paid to make decisions that are designed to increase the bottom line. Stimulus money works only until the money, or more correctly, the borrowing power of nations lasts. At some point those countries, like China and Germany, get tired of footing the bill for everyone else, then the tap begins to turn in the opposite direction. When that happens, look for prices to knock through the roof and shoot for the stars.
So what
does all this have to do with the silver market? Human nature has created a truly unversal currency. It isn't sanctioned by any government, and no government on earth can stop its use. We call that currency, precious metals. Because silver has value that everyone recognizes, it is a true indicator of inflationary pressures. The more money is pumped into an economy, the higher the price of silver. Silver is a true hedge against inflation. People who own significant amounts of silver remain mostly unaffected by prices of regular commodities that everone buys. They simply convert some silver into ready cash when prices are high, and buy more silver when silver prices drop. They recognize the value of always keeping some bullion on hand. In normal times and in times of inflation, your silver will protect your buying power. Silver is always in demand and is easily converted, that is if you get your silver from a reputable dealer. Silver bullion rounds from Quality Silver Bullion are universally recognized. Buy your silver from a trusted friend.-by Tim Murdock
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