“This is no thaw,” said the dwarf, suddenly stopping. “This is Spring.”
This past week the steady USD devaluation increased its pace. Silver has now risen about 40% in the past 3 months; 8% alone in the previous week. Gold, copper and other commodities have been a bit slower in their progress, but equally steady. Over the course of the past year even previously semi-pegged currencies such as the Thai baht and Malaysian ringgit have been revalued by around 20%.
This chart created by Casey Research illustrates the state of affairs quite succinctly. Price rises such as those cited are anything but an anomoly; on the contrary, they are part of a general picture of broadbased inflation.
Instead of one day one-off measures, in our era time frames of weeks and even months seem to have become the norm. The constant ups and downs of markets of course serve to conceal the beginnings of such major moves, but by now anyone paying attention can hardly fail to see the truth of the matter.
I suspect that observers from previous eras would likely be amazed at the slow pace, given that it allows even the dullest to escape at least part of the brunt of the devaluation. And yet, how many are actually taking action??
These price changes affect all Americans and ultimately – for the time being at least – most people around the world. Paper assets, including cash and accounts receivable, are all being devalued. Bubble-weary real estate asset values are following cash, not commodities. Yet only a small minority are in a position to protect themselves against its negative affects: those with substantial liquid assets. The rest are likely to be impacted in terms of reduced real wages, but there is little they can do about that.
By contrast, for those with substantial debt burdens (like the US Government), devalued US dollars mean less debt to repay. And in fact, in light of the massive debt overhang dominating the economies of Europe and North America, a massive devaluation IS the obvious solution.
- One way to avoid being devalued: https://faneros.wordpress.com/2010/12/12/options-as-insured-futures/