My Water Bill Went up 30% Overnight

I support ‘Stacking Phyzz’, because the principle, largely works. It demonstrates that you’re a saver, operating a surplus and choosing to save that excess in a hard asset, rather than bank credit. Good. Someone with a productive, industrious nature, adding value to society. Taking charge of your savings is a pragmatic thing to do, especially since banker-based debt is just really another way the government can take charge of your savings for you and consume it, as a matter of policy.

FOFOA’s latest post describes some details of how the debt works to create an 'exorbitant privilege', it's a good read and kind of sobering to see his exploration and expectation of a coming hyperinflation (I secretly hope he is wrong). For those who don't have time to read it, I thought I might post a few snippets, with a few bits from Victor The Cleaner who has been on fire in the comments section last week.

The savers of the world, the big ones, the ones who buy large chunks of government debt (like the chinese) are actually the ones, in part, allowing the ponzi).

"... As long as the producers continue to lend to the consumers, they neutralize the adjustment process and cause massive misallocation of capital on both sides. The misallocation on the side of the consumer is such that it gets more and more difficult for them to service that debt." – Victor the Cleaner

When a savers asset is debt, this helps create that one-way cyclical wealth pump that is so very convenient to those in charge of the money supply (the ‘exorbitant privilege’), but one day it will come undone.

"... you cannot fix it by dealing with the debtors. The debtors just borrow what they can get and then spend it. You can force them into labour camps or whatever you can think of - they will never be able to service or pay back this debt in real terms - even if they wanted. It is too much.

The only way of fixing it is that the savers learn their lesson." - Victor the Cleaner

The pending (mathematical) collapse of debt will come as a surprise for many, and up until recently I was a little smug in figuring that these changes would need a lot of time to filter through societal ‘pipes’ before they became reality (i.e. in order for the 'collective conciousness' to accept a new societal paradigm).

I realise now that events will not necessarily wait, and that fairness is never guaranteed. These were being handed out in the shopping mall the other day – it demonstrates the current estimation of the masses ignorance:

Cash for Gold, made convenient by a little yellow plastic bag and alluring with a replica of a plastic bank credit.

After reflection I realise it’s not so much a government program to get physical gold; it’s just an arbitrage trade on people’s naivety – after all the advertised rate is around $25 per gram. I can only assume most folk will think ‘hey that’s more than I paid for it’ and happily trade away the one bit of wealth that would otherwise keep them with healthy reserves in the future. Here’s a quote to describe these folk:

"There are always the 90% who don't care and who don't know. They will get wiped out. This is one of the truths of history." – Victor the Cleaner

I feel sorry for the general public unsuspectingly giving up their gold - most likely they are striving to save their wealth nominated in bank credit, yet all the while the government is bleeding them dry through inflation. This guy said it best (my emphasis):

"By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some....The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose."

- John Maynard Keynes Economic Consequences of the Peace, 1920

And it’s not just currency debasement by itself – sometimes its ‘inflation in the stuff you need’. Here in my city, everyone's water bill suddenly jumped *&#!ing 30% not through excessive water usage but by decree of the local government. Annoyingly, (upon research) the price rises appear to be planned to continue year on year for the next 6-7 years. What to do? The middle class is being forced to run faster and faster on the hamster wheel!!! As far as I can see, the only way to hang on to your wealth in the long term is through physical gold. The ride will be particularly scary if paper gold contracts sell off like most expect to, but fortunately it doesn't take a whole lot to understand and thanks to FOFOA's great expositions, the big picture is becoming clearer. Take for example, a selective view of the recent gold chart.

Regardless of the reasons for the movement of the gold price, those who bought back in 2002 are doing great today. Some like Victor suggest the reasons for the rise are political and this bears attention for future projections as well. A great 7-paragraph summary of the political side is here. For the savers (like myself) who realised they are savers and not really investors, it may be easier to resist all the noise (like Dan D) and just keep stacking phyzz. This quote from USA gold sums it up nicely for me:

"... hence, it is best that you work to actively establish your desired gold position without undue delay, and then with peace of mind you can turn your full attention to the business of living your life as it was meant to be. Spending significantly further time obsessing over currencies and investments is a fool’s errand." - Randy Strauss