We all read a lot of data from many different sources. A lot of what we read is a comparison of to day to similar situations of the past. I have come to the conclusion that there has never been a similar situation in the past. Some indications of why I believe this to be true include:

1 Derivatives. There has never been a time in history where the global dominant financial entity was unbacked bets on real or derivative happenings; interest rates, ratios, defaults, price movements.... I have read upwards of $800 Trillion in derivatives exist between just the US and Europe.

2 The amount of US paper that has been sold and is now considered worthless is about $3.6 Trillion! About half of that is still on the books of US banks. About $.4 Trillion is on the books of German banks and another $1.4 on the books of banks elsewhere in the globe. This tells me that the time that the rest of the world will no longer continue to buy worthless paper form the US is near.

3 The overall US banking system is essentially bankrupt. I Love this quote: “If that is true, it means the US banking system is effectively insolvent because it starts with capital of $US 1.4 TRILLION,” “This is a systemic banking crisis.” New York University Professor Nouriel Roubini. This was in a response to the estimate (as of January 20 2009) that US financial losses may total $US 3.6 TRILLION. And there is this quote from buckler: “What Professor Roubini’s research also shows, ... is that the US banking system is deficient in capital to the tune of $US 1 to 1.4 TRILLION. There is no way between heaven and hell that the missing capital can be found. “ Remember the chart posted here last week showing the capitalization of the major banks comparing mid last year to end of Dec? Bank troubles are no secret.

4 Global economic data is showing every sign of collapse. The Chinese National Bureau of Statistics reports annual growth shrank from 13 percent in 2007 to 6.8 percent in 2008! Japan’s current account surplus shrank by $US 65 Billion or 65.9 percent November to November. South Korea’s economy shrank 5.6 % in the last quarter. Singapore’s GDP declined 16.9 (APR) percent during the fourth quarter.
And this from Buckler: “The US economy lost 2.6 million jobs in 2008, making it the worst year since 1945. This has brought the official annual unemployment rate up to 7.2 percent. For the fourth quarter, industrial output fell at an 11.5 percent annualized rate! Compared with December 2007, industrial production was down 7.8 percent, the biggest 12-month drop since September 1975. US December sales at US retailers fell by 2.7 percent, the sixth consecutive drop, extending the longest string of declines on record, the Commerce Department said on January 14. US consumer price inflation was -1.7 percent in November, and -1.0 percent in October. Falling consumer prices is classic sign of a deflation, in this case a credit deflation. In 2008 as a whole, nearly 800,000 US manufacturing jobs were lost. Shadowstats.com suggests that if unemployment were tallied the way it was in the 1930s, the jobless rate would be closer to 16.5 percent.”

5 National debt. Central banks of Japan, the US and the Swiss official interest rates approach 0 and the rest of the world is on the way. All central banks are loading up the helicopters to pay off the crooks. Trillions have been dumped so far! Each of thes dollars, yen, pounds, marks, pesos etc. add to the national debits of the respective nations and the globe as a whole. So far it seems that the taxpayers of the world have just been screwed out of untold trillions with no accountability except for the occasional notes of junkets, bonuses, massages, banquets, take overs, etc.

6 Fiat/debt. We have a global system of fiat. Fiat is debt, pure and simple. The amount of fiat supply today dwarfs that of just 10 years ago. It is many orders of magnitude larger than that of the crash of 29 when gold and silver were used as money.

There are numerous other signs, but the point I am trying to make is that we have never seen this kind of financial condition, ever in history! We all want to protect ourselves, but we have no precedent other than the indication by history that physical gold and silver will never be worth nothing. Good times or bad, gold and silver are globally recognized for their value. What we may see is that value beginning to be recognized. What we hope is that enough of the “system” survives to make our ownership of pm mines return value to us.