Canadian Currency screwed, Plus bullish signs for silver

Today I was working on my truck when I realized I was short some washers to use for bolting on some mud-flaps. I looked around the shop for a while and there were no washers to be found. What I did find however was a pile of old Canadian coins laying on a window sill. Being the innovative person I am I decided to drill a hole in the middle of the nickles, dimes and pennies and use them as washers. While the change worked great as washers it sure made me think about just how devalued our currency has become. When I go to the store a washer the size of a dime costs more than 30 cents and a washer the size of a quarter costs 50 cents. Our currency has become so devalued it can be made into washers and be worth more than it’s face value. This trend is getting worse and accelerating. Bills of course have nearly no intrinsic value and unlike coins, which can at least be re-purposed to some use, paper currency can not even be burned and is uncomfortable and ineffective as toilet paper, believe me I’ve tried. Finally and possibly most dangerous of all we have the new frontier of money, electronic fiat currency backed by nothing with no tangible way to even hold it, this kind of currency can be inflated ad-infinitum with no physical constraints. In the hyperinflations of the past even paper ran out constraining, though not effectively, just how much money could be printed.

Canadian Coins used to make washers for screws.

Canadian Coins used to make washers for screws.

This story also highlights how real money ie. gold and silver do not lose value over time. If I had drilled a hole in a silver dime I had laying around that would cost my at today’s value around a $1.55 Canadian, so a real silver dime today could still buy me around 5 good quality steal washers. The purchasing power of silver remains unchanged overtime compared to the constantly devaluing currency which we use and are taxed on via inflation. If our Currency was still real money one would have to think much harder about the benefits of using coins as washers!

mud-flap

Mud Flap installed using Canadian Coin washers

This brings me to my next point, as our money system really begins to spiral out of control the purchasing power of silver is going to sky-rocket. For starters production of silver is beginning to slow down, last year alone there was a supply deficit of 129.8 million ounces. This has been the third year in a row of silver being in a supply deficit while simultaneously losing ground price wise. Second off silver is a very small market financially speaking compared to the monetary base, stock market or global debt, not to mention derivatives. It would not take a huge move into silver as a alternative to fiat currencies to really make silver skyrocket, in nominal terms astronomically. Jeff Desjardins of the Visual Capitalist blog has a great iconographic that really shows just how undervalued silver might be. With more than one person in the world able to buy up the entire above ground supply of all silver mined in all of History! Don’t you think perhaps it’s time you looked a little closer at this shiny silver metal!

DISCLAIMER AND CONFLICTS
THE PUBLICATION OF THIS LETTER IS FOR YOUR INFORMATION AND AMUSEMENT ONLY. THE AUTHOR IS NOT SOLICITING ANY ACTION BASED UPON IT, NOR IS HE SUGGESTING THAT IT REPRESENTS, UNDER ANY CIRCUMSTANCES, A RECOMMENDATION. THE AUTHOR IS NOT AN INVESTMENT ADVISER AS DESCRIBED BE CANADIAN LAW OR THE LAW OF ANY OTHER JURISDICTION.  THE CONTENT OF THIS LETTER IS DERIVED FROM INFORMATION AND SOURCES BELIEVED TO BE RELIABLE, BUT THE AUTHOR MAKES NO REPRESENTATION THAT IT IS COMPLETE OR ERROR-FREE, AND IT SHOULD NOT BE RELIED UPON AS SUCH. IT IS TO BE TAKEN AS THE AUTHORS OPINION AS SHAPED BY HIS EXPERIENCE, RATHER THAN A STATEMENT OF FACTS.

 

Article by YFP Editor   Micah Hoeschele

 

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