News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

The Long View

Making the Case for Silver


June 8, 2020 - (Gold Market Wire) - History repeats itself with staggering similarity. The Crises of the 3rd Century and today have much in common. All empires have the seeds of their own destruction within them. So if we look back almost 2000 years to the Roman Empire we will find exactly the same symptoms as today.

Deficits, debts, excessive military spending, debasement of currency, breakdown of trade, plague, revolts, wars, and hyperinflation.  This is exactly what happened in the Crisis of the 3rd century and right now the world is facing the same disasters. When Marcus Aurelius’ son Commodus became Emperor in 180 AD, the silver content of the Denarius coin was almost 90%. But then gradually costs were soaring and revenues declining and the empire was running out of real money or gold and also silver. More and more money was required to bribe a disloyal army. By 235 the situation became serious as many Roman legions were defeated by the Germanic peoples. The Roman generals also fought each other for control of the Empire. Between 235 AD and 284, there were more than 50 emperors most of them murdered or killed in battle. The finances of Rome declined rapidly and debts increased substantially. Taxes were continuously raised but there were fewer and fewer who were in a position to pay tax. From 250 AD there was also a plague that killed major parts of the population.

By changing the names and years to today in the above paragraph, the situation is almost identical. From the creation of the Fed in 1913,the US and the dollar have gradually gone downhill but the acceleration phase started in 1971 when Nixon closed the gold window. 

Again the similarity with Rome is astonishing. The real decline started in235 when the Crisis of the 3rd century began. At that time the Denarius had 50% silver content which over the next 50 years declined to 5%, a 90% fall. Emperor Gallienus presided over this final fall in the 260s AD.

The situation today is even worse. In the 50 years between 1971 and today, the dollar has lost 98% of its real value, measured in gold. The fall is now accelerating as the graph below shows. The dollar has lost a staggering 83% in the last 20 years since 2000.

What is absolutely extraordinary is that the symptoms of the 3rd century are identical today: Deficits, debts, excessive military spending, debasement of currency, breakdown of trade, plague,revolts, wars, and hyperinflation. 

Each one of the above symptoms is present today. We obviously have the debts, deficits, etc. We also have social unrest in many countries and right now rampant in the US. We  also have the plague in the form of Coronavirus. So far there are no major wars but sadly with the current geopolitical tensions, the risk is major.


We don’t have hyperinflation yet which is typically defined as prices going up by 50% per month. But with the dollar having lost 98% over 50 years and 83% since 2000, it only has 2% to go to ZERO. And with the massive money printing and credit expansion that is now taking place, I cannot understand how anyone believes we can avoid it today. 

Human beings always think that it is different today just because we are here. But how can anyone think that we can solve a debt problem with more debt? And when we look back at history, currency collapse and hyperinflation is a very frequent event. Just in the last 100 years,there have been over 60 hyper-inflationary events in the world. And in the last 2000 years, the number could easily be over 1,000. What is totally different today is that the whole world is in a similar situation and when hyperinflation starts, very few countries will be able to avoid it. A global hyperinflation will clearly be both spectacular and devastating.  It is not a question of IF only of WHEN. 


Debts and money printing have been driving stock markets to ever dizzier heights for decades. Economic fundamentals and reality have little importance. Just give investors another injection of fake money and they euphorically invest it in the market. It is a perfect  end to a fake world. You print worthless money and then buy shares that have a fake value hoping that the carousel will spin ever faster not realising that all the riders will soon fall off. And then the music stops and all goes dark. 

But before the music stops, it is so loud that investors cannot hear all the warning signals. 

And we certainly have had enough warnings. It all started in 2000 with tech stocks crashing 80%. That was also the time when stock markets peaked in real terms. But nobody noticed and most people still haven’t.  STOCKS ARE DOWN 70% How can any investor with even an ounce of analytical ability not notice that since 1999 stocks are down almost 70% in real terms? Real terms obviously means gold since it is the only honest money and the only money that has survived in history. It is also the only money that over the millennia has maintained constant purchasing power. An ounce of gold 2000 years ago bought a good suit for a man and still does today.

It seems that for a great number of investors, stocks are the only investment they look at and believe they understand. But they don’t understand enough to realise that stocks in this century have been an extremely poor investment in real terms. What they can’t fathom either is that stocks are now entering a major secular bear market which will be devastating.  

To measure stocks in a fiat currency like US dollars, does not reveal what actually happened to the investment. Since stocks seem to have gone up substantially in dollar terms this century, investors feel both rich and content. But in purchasing power terms they have been a losing investment as measuring stocks in gold reveals.

Since all the currencies are in a race to the bottom, it is always difficult to predict which one will win. And it doesn’t really matter since the destiny is the same for all of them. It serves no purpose to hold worthless paper money which will be printed to death. Much better to hold physical gold and some silver. Still, it looks like the dollar is turning down now. The trend is not confirmed yet technically. But although I recommend to investors to not hold any major amount in any currency, I believe that the dollar is the most likely to fall first. This is based on the major economic and political problems the US is facing including a massive debt that is galloping higher. 


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