You know that inflation is rising and getting worse, but what is the real inflation rate in modern America? The latest “official” report says the inflation rate is now 8.6% (first link), a very high number compared to recent decades. However, with so many things going up by double-digit rates, how can the inflation rate only be in single-digit numbers? The simple answer is: It can’t. The real rate of inflation is considerably higher than the officially-reported total. Governments have a vested interest in reporting low inflation rates, and various statistical games and tricks involving the subjective weightings of the individual components of the goods and services included in the inflation calculations can be utilized to arrive at almost any final figure the government will accept. Such is the case with the reported inflation rate figures.
The second link is from the financial analysis group, Shadowstats, which is an independent entity not affiliated with the government. Their website has an immense amount of data and the information is periodically refreshed so I am citing the data as it appears while I am writing this post. I recommend the Shadowstats website to everyone as a source of accurate economic data. Shadowstats states in the right-hand column that there is currently a “CPI inflation of 16.8%” It reports the real rate of inflation is almost twice the officially-acknowledged inflation rate. While statistical manipulation can result in an artificially-low inflation rate, there is another way that inflation rates can be higher than reported. The third link contains an article on “shrinkflation,” the practice of manufacturers retaining the same price on a package of products but reducing the contents within the package (a box of cold cereal, the weight of a sports drink, etc.) The third link states shrinkflation is “the inflation you are not supposed to see,” and it adds the practice is “accelerating worldwide.” Manufacturers use such “tricks” to lull consumers into not realizing a price increase has occurred in the products they are buying. Obviously, if a package retains the same price but has 10% less contents, it represents a hidden 10% inflation rate in that product. It is entirely likely that government statisticians do not take into account any “shrinkflation” data when they calculate and release “official” inflation rates.
A real-world inflation rate of 16.8% reminds me of the Jimmy Carter years when inflation rates were also that high. How long will inflation rates stay this high? No one can say for sure, but it seems to me that inflation cannot come down significantly until the costs of gas and diesel fuel dramatically drop. Everything you buy at stores has to be transported to those store shelves via a transportation system involving mainly trucks but also airplanes, merchant ships and railroads. All these transportation options run on some kind of oil-based fuel, so retailers have to include high fuel costs in the price of whatever it is you are buying. Trucks need gasoline or diesel fuel, and the costs of both those commodities are still rising rapidly. It does seem that high inflation will continue at least until the American elections in November, and this bodes very ill for the incumbent Democrats.
I vividly recall the high inflation years during the Carter administration, and very high interest rates were used to counter inflationary increases. That is not happening today as the biggest borrower and debtor is the US Government itself and any interest rate increases help propel the federal budget to a budgetary doomsday where the US currency could implode. Any interest rate increases by the US Federal Reserve Board have so far been so small they amount to mere tokenism. To me, today’s economic crisis has a different “feel” than the crisis in the Carter years. The current one seems much more ominous. Let me explain why it feels that way to me. In the Carter years, the prices of gold and silver skyrocketed to new highs as investors sought safety in the precious metals from raging inflation. In today’s economic crisis, precious metals prices have actually been going down (especially silver’s price) in an inflationary environment that should be propelling their prices up substantially. Their prices are dropping even though we have not only raging inflation but also a Russian-Ukrainian war which could drag Europe and the world into a much more dangerous conflagration. No similar war was present in the Carter years so the prices of gold and silver should be rising even faster now than they did in the Carter years. They would be if we had normal markets.
The fourth link contains an analysis of whether the price of silver will hit $100/ounce. The fact that it has not already hit that price argues that the precious metals markets are heavily manipulated to keep the metals’ prices down. Historically, the US government once set an official price of 16:1 in the relationship between silver and gold (fifth link). In other words, it would take 16 ounces of silver to purchase one ounce of gold. In the Carter years, gold peaked at about $800 per ounce and silver peaked at about $50 per ounce. That ratio still reflected the historic 16:1 ratio between the two metals even though there was then a free market in them. Today with gold prices at about $1850 per ounce and silver at $22 per ounce, the ratio has gotten so “out of kilter” that it is now about an 84:1 ratio, meaning silver is egregiously under-priced. The situation reeks of market manipulation to keep precious metals prices down, especially the price of silver. The Central Banks and Big Banks can take actions to rig the markets to suppress precious metals prices. In a post I wrote in 2016, I cited media reports that Deutsche Bank admitted it had participated in rigging precious metals markets to keep their prices suppressed, and the Bank of Nova Scotia and HSBC Holdings were also then implicated (sixth link). People have likely forgotten the Big Banks admitted six years ago they were suppressing precious metals prices, and, given the high inflation and dangers of a wider European war today, I believe that governments and Big Banks are again working very hard to keep precious metals prices artificially suppressed. Indeed, by driving their prices down during a time when they should be skyrocketing gives the game away that such manipulations are occurring. My previous post in the sixth link discusses a very deceitful practice called “naked short selling” that can be used to drive prices down via manipulations in the futures markets. Governments and Central Banks always have a motivation to keep precious metals prices down in order to keep confidence up in fiat currencies that have no intrinsic value. However, I think something much more than that is at stake in today’s bizarrely “out of kilter” markets.
All readers have heard of the “Green New Deal,” Green Energy, etc. Electric cars are being pushed on consumers more each year, but they are expensive. What consumers are not told is that electric cars and all kinds of electric engines need large amounts of silver in their construction because silver has a very high electric conductivity ratio so it is critical to all electric/electronic circuitry (seventh link). Silver is also needed in large amounts in military “smart” weaponry, all civilian “smart” technologies, etc. If silver was priced at where its normal market value would be in a free market with today’s bullish fundamentals for it, the Green Revolution could end suddenly because all electric products would go ballistic with price increases. Even at today’s approximate $1850 per ounce price of gold, the historic 16:1 silver-to-gold price ratio would call for silver to be priced today at about $115 per ounce. If gold and silver prices were not being suppressed, silver prices could proverbially “head for the moon.” I suspect the entire gamut of corporations, governments, foundations, etc. which are pushing Green Energy are cooperating in an effort to keep silver prices as low as possible to keep Green Energy vehicles and projects priced at a much lower level than free market prices would call for. You, of course, are also entitled to your opinion, but the above reflects my current thinking. I’m not a licensed financial advisor so discuss all your investment decisions with your own advisor before making them.
One thing that could radically and quickly upset the global markets is if Russia and China cooperate in establishing gold- and silver-backed currencies. This action has been rumored for years. If the Ruble and Yuan were suddenly to be backed by precious metals, the prices of those metals would go vastly higher, and it would put pressure on all Western nations to back their currencies with gold and silver as well. If this happens, there will be no silver left for Green Energy products and projects. Think of the effect it would have on global markets if the Green revolution is suddenly short-circuited by the introduction of a precious metals-backed Ruble and Yuan.
We are not living in normal times, and the markets are not functioning normally by any historical standard. In a time where the markets are being manipulated into a badly “out of kilter” condition, a collapse is possible. Indeed, as biblical scholars know, Revelation 17-18 foretell that a global financial/monetary collapse is going to occur in the latter days of our current age. Readers can see the extensive evidence that we are now living in this prophetic time by reading my article, Are We Living in the Biblical Latter Days? Revelation 18 predicts in verses 10, 17 and 19 that a global financial collapse will occur within “one hour,” and verse 8 states it will happen in “one day.” “Babylon the Great” is a biblical term for today’s global world financial/monetary system. A related prophecy in Isaiah 47 also foretells that “Babylon” will collapse “in one day” (verse 9), exactly paralleling Revelation 18:8. A simultaneous global financial collapse would have been completely impossible until the world developed a globally-interconnected digital economy in banking, finance, trade and commerce, equity and bond markets, etc. Today we have a globally interconnected financial and monetary system which could collapse within a day or an hour as a result of some event which cascades suddenly through all world markets due to counter-party risks. Obviously, I have no knowledge of what the specific “trigger” will be which will cause such a global collapse, but it will inevitably come. When the all-powerful Creator decides it is time on his schedule for it to happen, it will happen.
According to many media articles in recent years, the global insiders think they are about to impose a global “Reset” which will give them all power. Their attitude was also prophesied in the Bible. Isaiah 47:1-8 describes an arrogant and complacent attitude that “Babylon” will have that it cannot fall or be destroyed. Revelation 18:7 also describes that same arrogant attitude. However, the Bible prophesies it is the global insiders of Babylon the Great who will have their power destroyed and that they will be replaced by a new global network of power-brokers who will take over the global economy. The power-brokers who will overthrow the current world financial system are described as the “seven heads and ten horns” in Revelation 17:7-18. These seven heads and ten horns are described as representing “mountains” and “kings” (verses 9-12). In biblical prophecy, “mountains” can represent strong nations and “kings” would mean modern national leaders or modern Big Tech leaders (who often wield far more power than many national leaders). Revelation 17:16 has prophetic language which is quite violent in its terminology, so the overthrow of the current global system may be a bloody one which includes warfare and conflict. The new global system is called the “beast” in Revelation 17, and Revelation 13:1-5 limits its reign to a mere 42 months–after which it will itself be destroyed by Jesus Christ’s Second Coming with a heavenly army to establish a thousand-year millennial reign or Messianic Age (Revelation 19:11-20:4). You can read more about the prophesied fall of Babylon the Great’s system and why it is called “Babylon” in biblical prophecy in my articles Is “Babylon the Great” about to Fall…Ushering in a Global “Beast” System and The Babylonian Origin of the Modern Banking System.
We are not living in normal financial or political times. The world is looking increasingly unstable in many ways. It is in such a time that the apocalyptic biblical prophecies could begin to be fulfilled.
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