By Jeff Nielson:
In Part I, I presented readers with a very strange scenario. We have had the price of gold and silver surging higher for a decade - as a response to unprecedented currency-destruction by our desperate and reckless central bankers, and endorsed by our political "leaders", who serve those same bankers.
Thus, the surge in bullion prices has had little to do with the (absolute) "value" of gold and silver rising, and everything to do with the crisis of our paper-money being relentlessly driven toward zero. The monetary phenomenon where currencies approach zero is referred to as "hyperinflation".
The Wikipedia "definition" of hyperinflation notes that there is no consensus on a definition of this term, but puts the most emphasis on the particular definition of "at least" 50% inflation per month (and compounding). This equates to well over 1000% per year, or roughly 100 times as much as almost any of us has experienced in our lives. Many precious metals commentators (including myself) have warned that hyperinflation in one or more Western economies (starting with the U.S.) is a highly likely result - if not a near-certainty (and yet few of us endeavour to specifically define it).
Now we get to the "strange" part. As a matter of simple arithmetic, we know that as a currency goes to zero, the price of goods (such as gold and silver) goes to infinity. Yet despite a plethora of hyperinflation warnings, when we look around for estimates/predictions of the future price of gold, we see numbers that go no higher than about $10,000/oz. Even those who never excelled at math know there is a gigantic gulf between the number 10,000 and infinity (starting with millions, billions, and trillions).
There are only a few ways in which we can attempt to resolve/explain this logical paradox. The price-targets could be only "medium-term" rather than long-term price targets, but I personally don't recall seeing use of the phrase "medium-term" in most such analyses. The price-targets could be the "predictions" of these commentators if-and-only-if hyperinflation does not occur. Again, my own recollections are that most other authors are not making this distinction.
This leaves only one other possible explanation for this logical disconnect: precious metals commentators (including myself) are unable to truly understand hyperinflation, and therefore our "predictions" for future prices are a reflection of this lack of comprehension. I will argue that this is not only the obvious answer, but the only answer which fits - given our level of comprehension of such economic (and mathematical) phenomena.....read on