Back in August 2013, I wrote an e-book on the irrational fears of hyperinflation and dollar collapse that some Americans experience due to exposure in erroneous alternative media pieces. It also involves speculation on precious metal prices. Pretty much everything holds true to this day - in fact it is predicting the future progression quite adequately.

I'm posting it in its entirety (no breaking in parts).

Hyperinflation, Dollar Collapse & Precious Metals

Introduction
 
It is really hard to see a financial analysis that makes sense today regarding the subject of inflation and expanding money supply - especially in the USA. On the one hand we have the mainstream media which are reporting what they are told to report by the establishment and corporate interests. On the other hand we have the so called independent or alternative analysts, bloggers and everyday people who publish their opinion on alternative media and online platforms, trying to make sense of what is going on - with moderate success.

As far as the government, banks, rating institutions and media are concerned “everything is fine” - except when something happens, say the burst of a market bubble, which is claimed to be an unforeseeable event. Then everyone is reporting it as some kind of disaster and the same pattern repeats until the next financial disaster. 

Naturally, people should be wary of all those who claim to not have foreseen what is their job to foresee. How can anybody trust a rating agency on their ratings, or a government oversight institution when they act like being surprised by something that was evident and avoidable? The same goes for the media which should have rung the bells. 

On the alternative analysts side, many cry wolf all the time but things don't really happen often. Except when they do happen, so it does tend to be problematic to hear all the doom and gloom predictions which never manifest and which also cast a shadow on the validity of authentic warnings.

The subject of this e-book, which is intentionally rather compact, is the issue of the possible dollar collapse, the possibility of hyperinflation and the market potential of currencies and precious metals. 

The ever-decreasing value of the dollar, the accelerating monetary expansion and a drastic increase in precious metals prices over the last decade have led many Americans to erroneously believe that the dollar can be easily destroyed as their national currency, failing to see that the dollar is not just their national currency but a global currency. This broader perspective is necessary to shed some clarity in areas where mist prevails and confusion ensues as an unfortunate result. 

As a note, the basic premise of this e-book is that most, if not all, markets are manipulated by a rich/elite plutocracy which controls both global wealth and governments like puppets. So the book tends towards the more “alternative” end of the spectrum and deeper into what can be called “conspiracy” territory. Still, even that territory is gradually becoming common knowledge due to the multiple cases of market rigging. Despite that orientation towards the alternative/conspiracy model, some common myths and irrationalities prevalent in alternative analysis will be shot down.

The situation with the US debt is not ideal. Yes, the dollar is losing its value. Yes, the market of the precious metals is rigged to subdue their prices but many things that are said do not really reflect the truth of the matter: If anyone wants to support an anti-inflationary policy, or anti-inflationary investment, they'd better do it for the right reasons, not the wrong ones or for the common myths circulating around. The propagation of false arguments certainly doesn't help the cause of distributing sound knowledge between then non-mainstream crowd. So, in this spirit, I'll be contributing my own two cents on these issues and hopefully they can be useful for improving your own understanding.
 

Misconception #1: “The prices are rising fast and this is definitely a sign of a looming hyperinflation”
 
Many people in the USA have heard about the possibility of a coming hyperinflation and this causes them to worry about that prospect. What is not so well understood is that hyperinflation is a rare phenomenon in economics which is usually met in warring or embargoed countries. According to Wikipedia, economists consider hyperinflation as the phenomenon where there is an increase in inflation rate that exceeds 50% per month.

The USA has a huge debt and significant deficit but this is by no means able to produce this kind of inflationary increase without being coupled with some extraordinary circumstance. Anyone who says the debt can lead to short/mid term hyperinflation is either ignorant or trying to sell something - whether it is precious metals, a political agenda or sensationalist news for their blog. Many have accepted the “hyperinflation” scenario as true but having a strong inflation is not the same as having hyperinflation.

Is there an increase in inflation? Yes. Is there a large increase in inflation? Yes. Even the shadow statistics which show 10% real annual inflation rates could be conservative. We could have real inflation rising in the 15 to 20 percent range in the next years if things progress on a linear curve. But this is an annual rate and not to be confused with the monthly rate of over 50% (hyperinflation). 

This can't happen, or at least, it's not likely. Some important things to consider:
  

-1- The US Dollar is a world reserve currency. People use it for global transactions, commerce and as a repository of wealth. This provides a tremendous safety net for a possible decline of the USD compared to tens/hundreds of other currencies.

-2- Some say: “What if foreigners sell/dump their dollars and trillions of USD come flying back to the US?” 

Foreign countries are not really sovereign to make this type of decisions. Apart from a few non-globalized countries, all globalized countries act like being under one leadership and thus their moves are coordinated in order to execute a broader agenda of the elite plutocrats who rule the planet. What this means is that rogue action can only be taken by a few non-controlled regimes, and even then, it can be counterbalanced by >100 controlled countries. 

For example, if the dollar is threatened, a small crisis can suddenly emerge in Europe, Japan or the UK to drop the EUR/YEN/GBP rates and make the dollar, again, seem like a very “sturdy” option. The whole eurocrisis thing is, in effect, a very deliberate way to keep the EUR down while the fundamentals of the European economy are better than the US economy - which would automatically imply that the EURO should be the global currency of choice. But this is not serving the Elite's agenda at this point, so, the eurocrisis has been a good way to drop the USD/EUR rate and the confidence levels about the future of Europe. 

-3- Compared to other national currencies, with few exceptions, the US Dollar is considered much better. For the citizens of over one hundred countries, there is a belief that their currency is worse than the dollar and they would gladly have dollars rather than their currency. Why? Because the money printing of their governments does not absorb inflation in the same way that a global reserve currency does. When the US prints dollars, the inflationary consequence is reduced due to dollars being in global demand. But when the X small country prints more money, in a small national market, the inflationary effects becomes more tangible and in a much more immediate way.

Everyone is printing more money but the USD has a comparative advantage which makes it devalue less and is thus the currency of choice for many. Now, this comparative advantage means that you can't have US hyperinflating before tens of nations go into hyperinflation since their printing is more problematic for them than the Fed printing is for the US economy. And if these other nations go into hyperinflation, what do you think will the citizens of these countries want in order to protect themselves from it? Dollars, precious metals etc - things that they believe will endure as their own national currency devalues. 

So, from that perspective, the inflationary policies in all other countries, which run parallel to the US inflationary policies, are serving to keep the US inflationary policy under control by increasing dollar demand. When you watch the news around the world, what do other countries do when they have rampant inflation? They impose capital controls. They don't allow citizens to change their money into dollars etc. Why would their citizens buy dollars if there wasn't a global perception which says “dollars are better than our currency”? Americans should really understand that while the Fed may be printing[1] enormous amounts, the USD is still better in that regard compared to many other currencies, and as these other currencies are comparatively worse, it automatically improves the perception and stability surrounding the USD.     

-4- World Bank loans, IMF loans and other type of international loans are usually denominated in US Dollars. If the US were to hyperinflate before other countries do so, do you understand what that would mean for the global debt situation? Every country that has loans and external debt in dollars would be able to repay it in an extremely cheap way due to a revalued-to-nothing dollar. But global debt is THE way to control all the world's countries (along with puppet governments in the classic way). You can't have the instrument of global slavery (debt) be eliminated so easily by devaluing the dollar and converting the debt to an easily repayable one. 

The debt, in most cases, was put into place by puppet regimes over decades so that a global grid of controllable countries could emerge - no matter what their politic situation would change into (say, a nation decides not to elect a puppet politician - but still the debt situation would hold the country and its new leadership controlled through financial blackmail). This planning won't simply be jeopardized or eliminated because the Fed will print more money. The globalists don't work like amateurs. 

Some say “oh, they are trying to intentionally destroy the dollar”, but that would completely undermine the (shadow) global government through global debt-slave relationship. The global debt situation also allows the globalists to extract valuable resources through the instrument of debt/interest. When a country is overridden with a huge debt in foreign currency they'll automatically have to find foreign currency to repay their debt. This mechanism ensures that they will have to sell something for foreign currency. And what is it that they have to sell? Assets of value, infrastructure, minerals, oil, metals etc. 

In heavily burdened countries this selling is usually adjusted to such a level that it barely repays the interest. So, in a sense, the countries are being looted through a perpetual debt situation where they are losing assets all the time but not actually repaying anything, thus remaining subjects of indefinite looting. 

Why would the elite abandon such a scheme? They would happily sacrifice some of the debt of these countries but only to the extent that this would extend their grasp on their resources. How? By saying something like “if you accept a global currency, as your national currency, we will erase your debt...”. That would be something like a global-reset scenario for world debt, in exchange for implementing a world currency. 

The abandoning of national currencies opens the door wide for total financial domination over the course of time and that particular gesture is not so noble as it first appears. It could be presented as a blow to the US hegemony (which is irrelevant for the globalists as they would still control the global currency, economy and resources) who would not be able to print as much as they like, and a reasonable solution to the world debt problem, but the real world-control purposes would take a bit of time to become visible. 

Euro-zone members who lost their monetary sovereignty by abandoning their national currencies, have taken a sneak peek at what is like to be in a template-currency which is broader than the nation. Most of these countries don't like it. In some countries, like Greece, Spain, Cyprus, Italy, Portugal etc, the wealth of the nation and the citizens has become a target of looting through the “broader” currency which is the euro and euro-denominated[2] debt. And this is exactly what can happen, after a time, with a world currency. When a country doesn't issue its own currency, it is unable to fund its own deficits with internal borrowing, therefore it has to opt for external borrowing which creates the condition of external blackmails and external control mechanisms which are implemented as a consequence: “If you want the money, you'll do as told”.   

{ Footnotes 1 & 2:

[1] It should be noted that “printing” is just a figure of speech. When the Fed creates more money this is not necessarily in a paper form. The bulk of newly created money is electronic and only a fraction of it is in paper notes and coins.

[2] European countries which adopted the euro essentially converted the denomination of their sovereign debt from national currency to euros. A debt denominated in national currency is far easier to repay through monetizing the debt / printing more national currency. When the debt is in a currency that a country can't issue then it is next to impossible to repay that debt without having significant trade surpluses. Actually, at that point, it's no longer sovereign debt. When a country converts its debt from a currency that it can issue to a currency that it can't issue, and it's also running a trade deficit at the same time, it's just a matter of time before the government puts a “FOR SALE” tag in everything. The need for liquidity in the foreign currency which is not issued by the state, but is still required for payments, is enormous. Thus the only way to acquire that currency is to have the country sell whatever it has, indirectly allowing those who issue that currency to loot the country. }

Misconception #2: “There is a Dollar collapse imminent”
 
The perception shared in the title of this chapter is based upon some of the following rationales:

a) the hyperinflation scenario, 

b) potential worldwide distrust towards the dollar, with other countries selling their dollar reserves or converting them to tangible assets, 

c) that, for some reason, it serves the global agenda of the planet's rulers to destroy the American currency, 

d) the US deficit and debt requires ever-increasing amounts of printing which will destroy the dollar.

Hyperinflation (a) is nearly impossible, as we've seen earlier, but the destruction of the American currency (c) is a really hard task. It also doesn't make much sense for the Elite since they use the US economy and war machine to control the world. A destruction of the dollar would reduce this capability.

As for (b), an increased monetary expansion of the dollar could make some non-globalized countries request an alternative to the dollar, after seeing that “Americans are printing mountains of money and our hard-earned foreign reserves in dollars are therefore devalued”. In that case, an intentionally problematic dollar could be equated with the presentation of a “problem” in a chain of problem-reaction-solution strategy for the introduction of a world currency that would supposedly be presented as a loss of US financial hegemony, but, in reality, it would be a total consolidation of power for the purposes of global governance.

The global rulers don't use the economy for the sake of it, but rather for the attainment of global dominance. Both economy and politics are tools for attaining dominance and not ends unto themselves. Thus they could, under certain circumstances, sacrifice a national economy or some of their profits if they had more to gain in the long-term in terms of money, power or both.

It is also important to understand that economic events of great importance are not always predictable based on purely economic data. For example, the Soviet Union supposedly “collapsed” economically in the early 90's. Yet, when you read the CIA Factbook for 1991, the Soviet Union had a GDP of 2 trillion dollars and an external debt of just 50 billion dollars. Now ask yourself this: Who goes bust with just 2.5% foreign debt? This is a ludicrous claim.

Note also that internal / sovereign debt is always manageable because a country can print money and pay it off, even by increasing their inflation. The same applies to deficits - just as the USA is doing right now. The external debt of the Soviet Union was at ridiculously low levels - multiple times lower than that of the west. So where did the economic collapse come from? Economically it can't really be explained and that's why it wasn't foreseen - except as part of a political design which was put into motion years or decades earlier: http://en.wikipedia.org/wiki/Anatoliy_Golitsyn#New_Lies_for_Old

Regarding (d), and the necessity for increased money printing to accommodate the American deficit and debt, it is true that this is necessary as there is no way for the US debt to be refinanced through the private sector or foreign countries. But does that mean that the dollar will collapse? Japan has had a worse debt situation for a protracted period of time but its currency was not destroyed.

If we make a projection of the US deficit / debt curve, we'll see that the situation will certainly escalate in the future, requiring tens of trillions that will have to be pumped into the system to buy US bonds. Over a longer period of time (a few decades) the internal debt will be consuming all of the American taxes, just for paying the interests. If significant growth doesn't occur, so that the GDP growth can increase the manageability of debt and deficits, then the debt is certainly on a path of non-sustainability. So, the government should stop printing and that's it. Right so far? Well maybe. Or maybe not. It's not as straightforward as it looks and here's why:

There are two major contradictions that are often repeated when analyzing US finances.

a) To Print or Not To Print

Some say “oh the government is printing money” and asking it to stop. Well, the question is: Do they really understand the alternative to this? You only need to look at the south of Europe, at countries like Greece, Portugal, Spain etc to see what happens when a country has to go into austerity instead of money printing.

There are huge problems with recession / GDP contraction / more deficits and debt (as the debt/GDP and deficit/GDP ratios grow because the GDP shrinks). Liquidity evaporates, loans are stopped, credit card limits are slashed and people only buy with cash - if they have any cash left (after a while, they don't). That's when people turn to “I'll do this for you and you'll do that for me”. This is not fiction, it's happening right now on a daily basis in countries like Greece where an exchange-based economy is developing due to scarcity of money.

When the banks don't lend money to citizens (but do ask for their loaned money back - with interest), a situation is created where all liquidity is pulled out of the system (credit crunch). The problem is exacerbated by the government increasing taxes and reducing spending - which further reduces the money in circulation to ridiculously low levels. This lack of liquidity prevents people from engaging in consumption, since they simply don't have money. Naturally this results in a dramatic drop of GDP, which is essentially consumption-based. At the same time, real estate prices, car prices, stock prices etc, all go down tremendously, as everyone is selling all they have for getting some cash. The recession levels could be staggering (more than 20% or 30%).

Now, ask a citizen of Greece whether they prefer the above scenario (which is their daily reality of lack of cash) or printing, and they'll take printing any day of the week. Americans desiring to not print or go the Greek route (improving public finances by decreasing spending / increasing tax income), is really absurd - but I do understand the logic of saying “no” to printing as printing allows those with the printing press to cheat everyone else with monopoly-type money. So if the people have 10 trillion paper notes and the Fed prints another 10 trillion, that's effectively a 50% wealth confiscation through devaluation. 

But the problem is that the system is carrying a debt and the debt has to be repaid. How can the debt be repaid? Either austerity (taking the existing money out of the system and repaying them) or printing. There is also the refusal to pay the debt to avoid the other two situations but it leads to a reset scenario.

Whatever the US government does, there is a “damned if you do / damned if you don't” reasoning which goes like “oh these clowns and fools do this (print) or that (austerity)”. Both situations represent problematic consequences that originate in the problem of having a large debt in the first place. It's not like the government has thousands of options. You either pay the debt or you don't. And if you choose to pay it, you will either pay it with money taken from taxes or the market (austerity / lack of liquidity / collapse of GDP) or you will pay it by inflating the money supply and monetizing the debt, devaluing people's bank accounts and cash in hand, while printing more.

Some think that austerity is not necessary and that just a slashing of public spending is enough to eliminate the deficit and go into a surplus, which would somehow allow the government to reduce its debt. Well here's the deal: Imagine that the government has one pool of money (say $100) and the private sector (citizens and businesses) have another pool of money (say $100). 

Government deficit is when the government is giving more money to the public sector. Government surplus is when it is siphoning out more money from the private sector. If the government ends the year by having $105 in its own pool and the private pool of citizens and business has $95, that's a government surplus. But at that point, the citizens are actually poorer because they are paying to the government more than the government is giving back to them. It sounds good in the media as a “responsible” strategy but this process dries liquidity up, hampering buying power and putting the GDP into recession. So, the GDP shrinks and the debt/GDP ratio is not reduced. In fact that ratio might actually increase. And, if you are the government, what do you do then? You increase taxation or cut back more on the spending. And then people are paying more to the state and getting even less from it, reducing their wealth and cash even more, so that the government can pay the debt by a drying-up liquidity of the private sector. And the debt, no matter how much money goes to it by siphoning out of the people, will still remain large compared to the GDP -despite the payments- because the GDP will be going down fast. Take a look in Europe and their austerity programs. Does it seem to work? 

b) False Inflation Reporting

Another contradictory element that many “experts” mention is this: They blame the government for having a hidden inflation rate of, say, 10%, and that this fixing of stats is an indication of approaching an inflationary dollar collapse. I'm not to argue that the real inflation is not above the stated inflation - because it is. But the conclusion is wrong for reasons which we'll analyze in a while. By the way, it is not only the US which is tampering inflation data. Most governments in the world are doing the exact same thing.

Under-reporting inflation has several effects. I will mention three of these as they are relevant to what is discussed:

 1) Growth is the increase in GDP minus inflation. If inflation is under-reported, growth seems larger. Consequently many countries are measuring inflation as “growth”. Remember that the GDP is just an “estimate”, not an actual number. If actual inflation is rampant and under-reported, while the GDP growth is small, you can rest assured that the economy is probably contracting instead of growing.

 2) A country with severe inflation is not really “triple A” material as far as its sovereign bonds are concerned. Who would buy a bond of 1-4% performance when inflation is at 5% or 10%? That's negative  performance. For example, if you are a pension fund manager buying such bonds, in just a decade or two the pensioners' fund will have evaporated in terms of actual buying power. Under-reporting of inflation and pretending that the national currency is strong (when it might have lost 20-30% against other currencies and even 70% against gold) makes a country's bonds eligible for being considered the “safest” of investments, which, in turn, provides a massive inflow of cash from various investment funds. For the USA economy, the triple A rating requires some help from the rating agencies - but these are apparently always willing to provide it. For other countries it's not so easy to do the same.

 3) If a country which has a steady or growing GDP (real, not tampered) is running 10% real inflation on an annual basis (which is under-reported as 1-2%), yet it can still borrow with 1-4% interest, then that's great for that country. Normally the bond performance should be above the (actual) inflation, but if that happened the country would have to pay enormous sums on interest (at least three to four times more) which would make the debt servicing less viable. Since interest rates are close to zero the debt is much more viable. 

It is important to understand this: When there is a growing economy, with a low reported and high actual inflation, and the government can borrow with small interest rates, that economy can actually reduce its debt. How? Through the negative bond performance which incurs loss for the bond-holder (and real debt reduction for the bond issuer). 

On paper the bond holder has a profit (say +3% of the bond's performance), but, in fact, he's losing money due to inflation (10%). If the lender is an actual person or entity that's problematic for the bond-holder. But if it is the Fed, which can print as much money as it wants, and still show “profits” in its balance sheet without caring about the negative actual return, that's O.K. for them and O.K. for the state also - because this is a mechanism which prevents huge interest expenses for the state. It can also reduce real debt for the state against the Fed's “losing” investment, which, on paper, is not losing. It's an interesting situation. 

Now, you'll notice that when actual inflation is high, citizens and private parties do not get low rates for loans - no matter what the official government inflation data are. You can't simply max out your credit card and beat the inflation by buying inflation-resistant things because the credit card will have an adjusted interest rate which is close to or above the actual inflation rate. You can do that, in some cases, for example when there is a burst in the prices of some goods but you must have a good understanding of when that's about to happen before committing to buying them on credit. 

The point here is that those who understand the problems of a high actual inflation are not really connecting the dots with the low-interest-rate situation and how this helps avoid a dollar collapse, which goes against their basic argument. It is the same for those who cite exponential debt without factoring the devaluation of the debt (combination of low interest rate and high actual inflation) into the equation.

High inflation & high interest rates is a much better case for a dollar collapse - but even that means a reduction in liquidity as people may send money to bank accounts, bonds etc to preserve their wealth against inflation. So, then, the liquidity squeeze suddenly makes the dollar more desirable for people who will be having problem finding it. It's a complex situation and far from being black and white, as it is often simplistically portrayed. 

Misconception #3: “Due to the coming hyperinflation and dollar collapse, Gold could reach 10k-50k/oz, while Silver could reach $100-$2000/oz”
 
This is not so much a myth but rather a scenario contingent on having hyperinflation. With 50% inflation per month (the lowest percentage which is needed for a large inflation to be considered hyperinflation), if gold starts at $1000/oz in a given year, by the end of that year it will be at $87000/oz - without co-factoring any increased demand for the metal from those buying it to protect themselves against inflation. 

Likewise, the prices for silver would be $20/oz at the start of the year, and the closing price at the end of the year would be at $1730/oz - again without factoring increased metal demand. The same would happen with a loaf of bread too. It would start at $1 and reach $87. A gallon of gasoline would start at $4 and reach $346 by the end of the year. That's what real hyperinflation actually looks like.

As we saw earlier though, the hyper-inflationary scenario for the dollar is not so plausible, at least with the financial parameters that are known today regarding the political and economic situation in the US and the world. In fact, it is almost an impossibility. 

Does that mean that the metals will not rise? Well, the world is not binary. It doesn't work with “No inflation” and “Hyperinflation” as the only two possible modes. There is a huge spectrum in-between, regarding the various possibilities. Did it require hyperinflation to take gold from $35 to $1900 /oz in 40 years - despite the increase of above ground quantities? No. Just normal inflation, much money printing and lowering confidence in various currencies, including the USD. 

For all the outrageous price claims of Precious Metals, consider the following:
  

1) Just like countries are debt-slaves, so are many individuals. The debt-slave mechanism has been designed and implemented in order for citizens to be easily controlled and exploited. By having people owe so much (mortgage, student loans, car loans, credit cards etc) they create the ideal conditions where the individual's work can barely pay one's life expenses plus the debt's interest - so their work comes essentially “for free”. 

If someone could simply sell a gold chain, a cross, a ring, and then get something like $50000 for these and become debt-free, guess what: They'd go for it. Why would the globalists allow such a scenario where people can get off so easy? The answer is: They wouldn't. They want to buy people's gold for peanuts. Make people suffer economically and sell all they have at rock-bottom prices. 

Remember that nearly half of the world's above ground supplies are in the form of jewelry etc. It's an easy target to get it (compared to mining another 80000 tons) but you first have to make people sell it. And in order to do that, you have to strike a very fine balance where the money supply is inflated (to cover public deficit and rolling debt) but the real market liquidity is reduced (for the citizens) so that they can't finance or refinance their needs through loans. When people experience a credit crunch, where the credit card will not give any more, the banks won't give any new loans, and no refinancing of old loans is possible, the selling of the gold ring may become the only option if someone wants to make it to the next month.

2) Similar to selling a gold ring or chain that would bring a lot of cash, a large increase in silver prices would lead to some unfathomable paradoxes like selling a set of silver forks and spoons or a silver dish for something like $100000 due to their weight and (new inflated) price. It's too much money that could easily bail out individuals with even small precious metals possession. People who have forgotten junk-silver (90%) coins, would suddenly become “rich” (thousands of dollars for just a few of these coins) in a $500-$2000/oz silver scenario. Besides, if prices did go up to these levels, how many would not cash out their metals and take the money? Most would take such an opportunity with both hands and that would automatically send the prices tumbling down as a “correction”.

Today people are buying silver at $20-$25 (incl. premium) and hoping to sell it at 40-50$. Can you imagine $100-$200-$500 or $1000-$2000/oz? It's not impossible to see far higher prices as the money supply increases and the value of money is slashed, but is it something that can happen in the short term? Some say silver has a greater potential to rise due to the 10:1 extraction rate or the historic ratio of 16-19:1 compared to 60+:1 which is the current ratio. This could be true but the level of manipulation is immense. 

Even on the industrial level, where silver can be used, there are manufacturers who would like to offer products with silver cables or coils yet they don't. Except for some silver cables for audio, which are sold with huge premiums, there is no serious silver use in electronics (except where really necessary), when, in fact, entire PCBs (Printed Circuit Boards) could be printed with silver instead of copper, thus increasing performance and selling at a premium. A phone manufacturer could be making the phone PCB and wires out of silver, and it would not cost them more than $20 to do so as it'd require less than an ounce of silver. They'd be able to sell such a phone with over $100-$300 premium for being “silver”, compared to an equivalent copper model and it would also have some slightly better characteristics, for example lower power consumption and slightly longer battery life - due to less resistance in the circuits. 

The same applies for PC motherboards, more effective transformers, power supplies and small electric rotors with silver coils. Again, manufacturers could be selling stuff like that at two to four times premium compared with the added cost of silver, and people would buy them for showing off or due to the increased performance - as silver is the best electric conductor and also has the ability to produce increased magnetic flux through silver coils. But it is not happening. Why? Because if the manufacturers started using silver en mass, and consumers got just an extra 10 grams of silver in the equipment they are buying each year (that would cost each consumer about $6), that would equate to +10.000 tons of silver demand for one billion consumers buying electronic devices. 

Now, 10.000 tons is close to 6 months mining supply which would lead to a tremendous silver supply deficit. That deficit would send the price of silver through the roof. As a consequence, gold would also rise as a side-effect due to their interconnected ratios. And when gold goes up, people will start asking questions about the real value of the fiat currencies compared to Gold. If silver goes to ~$100, then gold must go to $3000-$6000 / 1oz. 

People will wonder “Why are the fiat currencies so tragic performers against precious metals? It's probably the inflation, so let's buy PMs to protect ourselves”, leading to a cycle of ever rising prices as more people would buy precious metals, seeing the trend of increasing value in PMs. So the whole financial control scheme of the Elite could be ruined by such a simple thing as an increased use of silver in electronics, wires, cables, coils, even small heat sinks. This is effectively the “conspiracy of the silver wire”. 

Some will say “oh, but the gains are negligible for the extra cost”, or that “manufacturers would want to eliminate silver costs” and I will ask you this: If the manufacturer is pricing a product with a large premium that not only covers the metal cost (say $20-$30 for a silver smartphone), but also creates a huge profit for them out of thin air due to premium market placing (+$100 to +$300) which covers “new needs”, why would they care about the extra silver cost? It doesn't make sense as a counterargument. It only makes sense from the perspective of seeing that this type of marketing strategy would soon escalate to much increased prices which would have an unbalancing effect on silver, then gold, then fiat currencies. The manipulation in metals is not only about preventing contract holders of “taking physical delivery”. It is also about managing their physical use as well, so that physical use remains at a low. This requires a firm control over the industry so that precious metals are used in a specific way. Additionally, by controlling the industry and the metal uses, the Elite can also “predict” trends and can better control the relative markets, by planning ahead of time the market demand and supply.  

3) Some countries have acquired too much physical gold, as of late, and therefore could become quite rich if gold was to be revalued 10-20-50 times upwards. That is of no concern for the Elite, as far as globalized countries goes, because these are all controlled under the same rule and different puppet governments. This is evidenced by coordinated central bank activity. It is however a concern for non-globalized countries. For them, the menu includes manipulation, blackmail, outmaneuvering, invasion, coups etc.

4) The plutocratic Elite have a way of manipulating events, markets, governments, peoples in such a degree that it's becoming ridiculous. For example, in the mid-2013 smash of gold they wanted the price to go down but also prevent the physical buying. You'd think that some financiers in New York would not be able to pull this off, but these people are not financiers. They are the Elite and the financiers simply work for the Elite. Thus they control tens of governments and central banks and have gold moving around from central bank to central bank, or even tell the government of certain countries, like India, to halt[3] or prevent physical sales through a whole sort of preventative measures.  

5) For tens of countries experiencing inflation, foreign currencies seem a better option to protect themselves from inflation compared to precious metals, as they are more “liquid” than metals. The average Joe of those countries doesn't care if Bernanke prints all day, what Joe sees is that his currency is being constantly devalued compared to the dollar and thus the dollar is more desirable.  

6) The gold and silver trade can be easily banned or taxed if things get out of control. It's not like this hasn't happened before. Confiscation is not out of the question either.  

7) It's quite possible that the end-game scenario for the globalists is to have one government, one economy. In this scenario, a global currency seems inevitable. If this is coupled with an electronic system of payments, the exchange of gold and silver would be automatically tracked, controlled and/or taxed. 

Needless to say that the electronic payments and banks are a huge scam of the elite plutocrats as they are always charging fees. Their efforts against Bitcoin demonstrate their panic: “Should people be allowed to have a world electronic currency where we are not controlling every transaction? Having a competing currency which charges NO FEES during transactions? Unacceptable”. 

These people see humanity as their flock of cattle and sheep and they don't want things that jeopardize the control of the flock. By the way, it should be mentioned here, that people, in general, don't realize the big picture with the business of money-related services. Even when just 1% fee is applied, over the long run, most of the money ends up in the banks. 

Case in point: Two family members move between themselves $100 with 1% fee (1$). After 100 times of back and forth, these $100 will have generated $100 in fees for the bank. Now imagine this in a global scale where people make billions of transactions each day and trillions of transactions each year. As the money goes back and forth, the money is looted from the people through this scam. 

Initially there might not be such fees, so that people won't argue against a wide implementation, but they can slowly increase the charges as it is proven in psychology that we tend to accept negative change when this is administered in small doses (the boiling frog of Al Gore). They did the same with what is established today (credit cards, bank wires, deposits, checks, ATM withdrawal fees, online payment instruments etc) - in some cases with fees exceeding 3%. 

Global taxation on every transaction is also a “good reason” to implement electronic transactions so that people can be charged, taxed and monitored. Given that cash transactions cannot be monitored, it'll be easy to blame cash for tax evasion and (official) electronic currency as the solution to it. Bitcoin, gold, silver etc could also be smeared for being “instruments of tax evasion”. 

The global push for a small transaction tax also points to this way. Everybody's saying, “OK 0.1%, so what? It's nothing” ...but this is just the start - and it's also a way to make it acceptable. Then they'll say, “why only bank transfers and not cash transfers? It's unfair for those who pay electronically, so we should equalize the field with all-electronic money and outlaw non-electronic type of money”. And there you have it... A perfect system of global control and economic looting of the people, rendering them perpetual debt slaves. 

8) Some people say “precious metals are definitely manipulated because what is transacted is just 1% of the actual stuff... the lack of actual supply, compared to the abundance of paper supply, signifies that in a metal squeeze, things could go out of hand and the price could go boom”. Something like the COMEX default scenario. 

Yes, in theory this is right. But again, if gold goes to, say, $10000 or $20000 due to discovering that there is a gold-squeeze, wouldn't a lot of people sell at that level? And I don't mean investors or bullion buyers who may act like traders - I mean ordinary people. 

If one sees that their gold ring or bracelet can bring him a small fortune which they can use to repay their car, mortgage etc, wouldn't they go for it? And wouldn't this selling increase the physical supply immediately (which is leveraged many times as paper) thus reducing prices? Additionally, who would have the necessary cash to buy at elevated price levels and push prices even higher? How can you convince a gold bug who was buying 10 1oz Gold Eagles at $1400 per coin to buy just one 1oz Gold Eagle coin with $14000. That guy would probably sell one or two of his ten, so that he makes a complete recovery of his buying cost plus lock a profit - having another 8 or 9 in  storage. 

This is all about perception and psychology at that point. What we perceive as having X value we can't suddenly accept it as having 10X times that value - even if we are prepared for an upward price movement. These changes in perception take time.  

9) Some analysts say that the energy cost for mining operations should be co-factored when analyzing future prices for Gold. In the short to mid term that might be sound. Personally I believe that the energy sector is a huge bubble as the price for energy is artificially higher than it should, by suppressing cheaper alternatives or artificially increasing the cost of natural abundant fuel like coal with bogus CO2 charges. If that bubble bursts at some point, the connection between energy and gold price won't be very “beneficial” for gold prices. 

{ Footnote 3:

[3] I was reading an article which was saying something to the effect, “oh, the Elite won because they had the government of India increase the tax by something like 5% from April-May to June, and that reduced the imports from 200 tons to 20 tons”. I mean, seriously? The gold price drop, during the same period, was from 1300-1380 to 1180-1250, so it would more than accommodate the increased tax. A 5% increase would do nothing as a prevention, and people would still buy cheaper gold in June than in April. So the drop of something like 200 to 20 tons is NOT a result of taxation. Perhaps it's a result of not actually delivering any more physical to India, rather than India not importing due to “increased price” - which is not the case. The various analysts are scrambling to put the blame on the tax instead of finding out the real reason, which is suspect. The drop was enormous while the final over the counter price was cheaper. So, how did that reduction happen? }

Conclusion
 
We've seen why the case for hyperinflation doesn't hold much water - unlike the almost certainty of a normal inflation, even if its rate is high and under-reported. 

We've also seen the assumptions behind what would be required for a dollar-collapse scenario and why some of these assumptions are not really sound. The dollar is definitely going to weaken but this is going to be masked by the simultaneous weakening of most other currencies thus allowing for the perception of a strong dollar. 

We then analyzed what goes on with precious metals and how their value is, in some ways, prevented from being a reflection of the dollar, but also why outrageous price spike claims don't make much sense.

So, what is the bottom line? Well, the bottom line is we don't know what is going to happen but it's safe to assume that unless a catastrophic event happens, and if things progress in a more-or-less linear fashion, we will not witness hyperinflation and dollar-collapse in the short and mid-term.

As far as precious metals are concerned, precious metals are a sound investment and they have been money for thousands of years. Their performance over the past 5-10 years has been tremendous and that was despite the manipulation of their price to stay down. The current prospects on a linear-progression scenario seem to be in their favor. The global debt is more likely to be repaid with inflation (monetizing the debt) rather than being paid by cuts and taxes. The self-acceleration of debt and inflation is what will be causing the PMs to rise - if the market operates normally, which is not what usually happens. 

In non-linear scenarios, it may be far better for the Elite to opt for a global reset route and implement a global financial system which “forgives” the debt and allows for “a new start”, with consolidated control in their hands. Or, we could see black swan events, like 911-type events (or worse), which would allow the Elite to bring down the system and claim “well, it was not the system that was flawed, it was these black-swan-events that brought the markets and the economy down”. 

After the system is brought down, then they'll build another flawed system (it'll be good from their perspective of controlling the globe) to replace the failed one. Besides, isn't 40-45 years the time period when a monetary system change is expected? 

What we do know, for the time being, is that the price of PMs can't be manipulated at too-low a level because then the Asians (primarily non-globalized countries that act out of sync with the shadow global control) will come and pick up tons of PMs for a very low price. Since that “hurts” the Elite, it probably won't be allowed unless there is a way to block access to physical buying.

We also know that the money supply is inflating at a much quicker pace than the available supply of PMs - which can only mean the rise of PMs, in a non-manipulated market. Rigged markets are an entirely different beast and we should already have prices which are much higher than the current prices, yet we don't. But even so, manipulation can keep the price low for a certain level and not below it - otherwise mines will start shutting down (which they already do). 

What is the most important thing to keep from this ebook is that some of the things shared in both mainstream and alternative analysis are based on flawed reasoning and yet they are repeated all the time like being some self-evident and undeniable truth. For mainstream news or analysts it is something to be expected because managing public perception by injecting it with fallacies is their job. But alternative analysts should know better than claiming “hyperinflation” and “dollar collapse” on a 24/7 basis. It's much better to promote one's cause by basing the arguments on real facts rather than sensationalism or fiction. 

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