Does the name Sam Upham ring a historical bell? Mr. Upham imprinted his name into history books in the most unusual fashion. In fact, Mr. Upham learned, well before Mr. Bernanke I should add, that the power to print is more profitable than the effort to work. Maybe this is why our gentleman of the hour printed nearly 15 million counterfeit Confederate dollars during this country’s Civil War over 150 years ago. Some respected historians believe our Civil War’s outcome was offhandedly determined by one “Yankee scoundrel” with the power to print money.
History is a road map seldom followed. So many readers are asking what it will take for physical PM (precious metal) to rise without questioning what happens when fake money rules the world. Like a wave building, the ill effects of fiat printing will soon position those holding sound money into a posture of wealth accumulation. Our country’s history is the only proof needed.
I would like to expand our history lesson for a paragraph, or two, before comparing a circa 1862 American currency to today’s precious metal alternative. The Confederate South created a fiat currency to afford a war. This new fiat currency, commonly called Confederate dollars, held no gold restraint because of a 100% reliance (sound familiar?) on those with the power to print.
Over creation, or over printing Confederate dollars led to rapid inflation as confidence in the money dropped all while volumes of Confederate dollars increased. It is worth mentioning that the cost of a man’s suit ran just under $3000 Confederate dollars as inflation gripped……. and then crushed this fiat money of the South.
For the record, the aforementioned Mr. Upham didn’t work for the Confederate Treasury. In fact, Mr. Upham was nothing more than a money bootlegger who realized the potential of combining cheap paper with barrels of ink. His ability to create fake money accelerated the Confederate currency into an inflationary spiral that led to the end of the Civil War!!!
I’m not a conspiracy theorist but it’s worth mentioning Mr. Upham was never caught, even with a $10k bounty on his head, and rumored to be protected by our country’s secret service till his death, hmm.
Not a day passes without the mention of our country’s national security. The War on Terror rages long after September 2001 and the argument of a safer world is debatable. Less debatable are the costs of wars under the pretense of national security. To put it bluntly, we continue to borrow/print money in order to fight rotating wars.
The parallels between an extinct Confederate currency and today’s US dollar have reached an undeniable state of similarity. The very act of overproducing our currency is now a compromise to our national security. This realization grows more haunting when we factor growing Middle Eastern tension and other threats of war.
Only a thin line separates the power to print, and then wage war, with the vulnerability of over creating a fiat currency that intensifies the threat to our national security. The Federal Reserve Bank promotes control but their actions say otherwise.
I’m not sure who tomorrow’s history will blame for the demise of today’s reserve currency. Will we print our dollar to death in order to sustain our consumer-based economy or will we destroy our currency in the name of national security while fighting never-ending wars?
Regardless why, physical silver and gold will protect the wealth of the few willing to accept today’s historical monetary lesson.
QUESTION: DC, are we talking about someday trading pricey PMs back into a fiat currency (US Dollars)? Not sure I’m comfortable exchanging sound money for paper promises.
TPS Reply: Thanks for the comment and question; not a week passes without someone asking the same “what to do when it’s time to move on” question. You are correct, there will come a time to leverage wealth stored in silver/gold for another asset. We often envision this step, or process, transitioning through dollars first but this most likely will not be the case.
Complications arise the minute we convert an asset back into dollars. This complication could be a tax consequence (red flags or capital gains), wealth exposure, even security issues. The word that comes to mind is discretion. Discretion is a key component to owning, storing, and someday trading precious metal.
It’s worth mentioning that the same forces soon to propel PM higher will also have an adverse effect on other assets now over leveraged; real estate, stocks, and many businesses are a perfect example. When a business or property becomes overly leveraged it becomes vulnerable to a decline in revenue. The burden of leverage remains the same even if profits decline. This is the number one reason small businesses fail when a consumer-based economy cuts back on spending.
The potential to buy (trade) severely discounted property, stock, and businesses for precious metal will increase over this decade and probably the next, too. Those storing wealth in silver and gold will eventually realize the financial benefit of trading PM for another distressed asset. This trade bypasses the need to liquidate PMs into dollars, if structured properly.
This site will discuss many other options to trade, or sell, physical silver and gold in the near future. Thanks for the question.
QUESTION: How does someone new to PMs know the best time to buy? I hear experts mention a “bottom” but how is the bottom recognizable?
TPS Reply: Great question, thanks. The PM bottom is not recognizable…….. anyone claiming to know differently is nothing more than a paid PM spokesman. Too many forces now control day to day PM fluctuations, unfortunately. This means we must keep our eye on the long-term goal of wealth preservation by creating our own personal gold standard.
If you’re new to PM, and unprotected, please consider buying ASAP. No one knows when some event will push our economy to the brink…… just like the days in September 2008. The world’s banking institutions are now risky investment houses and highly leveraged. Sure central banks have rolled billions in dollars of liquidity into some banks but this cushion is pale compared to the exposure of most financial institutions.
My opinion is regardless the price paid PMs are worth it, especially when we consider the potential to preserve wealth ever so discretely. No need complicating this gift by guessing an actual PM bottom that will someday soon seem irrelevant.
Contrarily, I often recommend those PM protected to exercise patience when adding to their growing stack. The trend of late is declining. This means, in all probability, the same dollars will buy more metal in the very near future but only recommended for those already PM protected. Thanks for the question, and reading TPS.
DC Carlton is founder of The Prospector Site and author of the Amazon Kindle #1 Bestsellers Why Silver and Gold Will Go Higher and Storing Silver & Gold. If you’re looking for trustworthy PM assistance feel free to contact DC regarding his personalized consulting service. TPS doesn’t sell silver or gold; we represent you, the buyer, looking for affordable precious metal from honest trustworthy sources. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.