Keep in mind that the silver price rise is going into the teeth of a massive silver short position. Silver futures involve 1.2 billion ounces of silver. While there may be some overlap, 1.2 billion oz. is 4 times the annual production of silver, suggesting that most of the shorts are "naked". (The known world inventory of silver is 300 million oz.) Every week the short side of the contracts grows even larger. This is also true (but to a lesser degree) in the gold market.

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The dual whipsaw of rising prices and falling purchasing power represents a genuine threat to very stability of our society...

Worse, the ones hardest hit by these twin demons are the folks who do the 'heavy lifting' in our society...

Which is to wonder how long those folks will be able continue to do what needs doing for paychecks that no longer crack their nut?

Perhaps more 'problematic' is the widespread 'distress' we are seeing in local government, budget shortfalls are everywhere and the only way for a city or town to rein in spending is by reducing/eliminating services.

The 'race to the bottom' has turned large swaths of this nation into an economic desert...leaving communities across the nation without a taxbase to support them.

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If it was shown on CMSM would rock the faux status quo to its foundations. Then the index of confidence would fall to its true level.
The economy has been in recession since 1999 with growing pockets to depression. The disaster based capitalists are rubbing their collective hands in anticipation.
I look upon it with dread. See 1934 for a less severe analogy. Today they,the fascists,hold all of the cards.

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Anyone trying to maintain a budget, on a fixed income!

I won't bore you with personal stories, like 2% at best interest on savings! Then they say, why doesn't anyone save?? Electric Bills for the same kilo-watt hours that triple!

I'd like to see a chart, of basic cost-of-living the essentials, food, shelter, heat, ect. vs. income, since Bush has been in office!

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Investors would do well to look back to what happened in the 1970's for clues about what's ahead. Uncle Sam is in debt up to his ears and all indications are he's going to engineer a partial default via inflation and dollar depreciation.

Lessons to remember: avoid bonds, invest in tangible assets like commodities, land, gold and silver and strong foreign currencies.

Don't borrow at a floating rate; rates are going up!

In the 1970's people talked of a "wage price spiral." Today we have only a price spiral. If prices continue to rise without wages, we will have to go back to the 1930's for a historical precedent.

Many investors have been aware of these issues for years. When Greenspan recommended adjustable rate mortgages a few years back, I knew it was bad advice and that Greenspan knew full well it was bad advice. Something was up--but I didn't find out what until several years later. Greenspan (and Bernanke) aren't stupid--they're spinning us. Subprime didn't "just happen," regulators turned a blind eye and allowed it to happen.

The ultimate cause of the debt bubble is the trade deficit.

America MUST go into debt as long as it runs a trade deficit. This isn't intuitive but think of it this way: an economic transaction is a swap; something of equal value must go each way in the transaction. If a nation won't buy our exports, they must take an IOU. In theory, that IOU is a way to "time shift" consumption to some future date. For some oil producers with small populations this is somewhat true. For Asia lending to us is a strategic tool for attaining power via rapid industrialization and financial leverage over a predatory superpower.

But things aren't so simple. There's an old saw in banking circles that "if you owe the bank a thousand dollars and can't pay, you have a problem. If you owe the bank a billion dollars and can't pay THEY have a problem." Our relationship with OPEC and mercantilist Asia and been called a dysfunctional "codependence" by one economist, and a "balance of financial terror" by another. It's the result of a big chessgame played by elites in which the losers are workers both in the US and overseas. All that debt that's going to be inflated away should have gone into Asian worker's paychecks which they could then spend on imported goods. Our pundits make a big to do about how Asians save, but in fact they are often robbed of a decent return on those savings by too low interest rates (to keep their currency down) as well as banking crises caused by bad loans.

In order for the US to stop going into debt, we must reduce the trade deficit. There are two ways we can do that: we can stop buying imports because we've run out of money and fallen into a deep recession, or we can sell more exports to the surplus nations. We have limited control over what foreigners buy from us, so politicians have an obvious incentive to keep the debt bubble going.

An economy as a whole can not save or borrow, it can't live beyond or below its means. That means for every lender there is a borrower, for every surplus a deficit, for every nation living beyond its means there must be another living beneath its means. Do Asian workers really want to live below their means?

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