WAITING FOR THE NEXT CARRINGTON EVENT

Re-Blogged From http://www.SpaceWeather.com

In Sept. 1859, the sun unleashed a series of solar flares so powerful that telegraph offices caught fire and auroras were seen as far south as Cuba. Known as the Carrington Event, this iconic solar storm is a touchstone for discussions of extreme space weather.

Could it happen again? In a paper published May 10th, researchers from the University of Birmingham use Extreme Value Theory to estimate the average time between “Carrington-like flares.” Their best answer: ~100 years. In other words, we may be overdue for a really big storm. Read the original research here.

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Here’s What Inflation Could Look Like In 2020, Based On Past Surges

By Jeff Clark – Re-Blogged From http://www.Gold-Eagle.com

Rising inflation has hit the headlines, sparking some attention from journalists. What most mainstream investors don’t realize, though, is that history shows inflation can quickly get out of control, and not just in some mismanaged third-world country. Surprise spikes in inflation have occurred right here in the US—and given the massive amount of currency dilution around the world over the past decade, a jump in inflation could easily kick in again.

From Zero to Raging in Two Years

Most historical inflation studies only go back to the 1970s. But as Mike Maloney has always taught, the further back you go in history, the more you can learn about the future.

I ran across a study by Amity Shlaes, an author with an impressive bio. Her research found several examples from the past 100 years when US inflation started mildly but then soared to alarming levels. What’s perhaps even more startling is that those inflationary spikes occurred within just two short years.

Check out how much the rate of inflation rose during these periods:

Based on an earlier version of the CPI-U, Shlaes says US inflation was at 1% in 1915. Within just two years, it soared to 17%. She reports this runaway rise in prices was because the Treasury “spent like crazy on the war, creating money to pay for it…”

The official inflation rate in 1945 was 2%, but surged to 14% within a mere 24 months, a 7-fold increase.

The CPI registered 3.2% in 1972, and hit 11% by 1974. Worse, it continued to march higher over the decade, peaking at 14.7% in April 1980, in what amounted to a near 5-fold rise.

In other words, there is clear historical precedence that inflation can rise suddenly and rapidly, and that prices can quickly spiral out of control. It would thus be dangerous for us to assume that inflation will stay subdued indefinitely.

In fact, you’ll notice these inflationary spikes occurred roughly 30 years apart. And it’s been over 40 years now since the last one…

What Inflation Could Look Like in 2020

Many analysts believe inflation will continue to rise, so let’s apply those historical increases to today and project how high inflation could potentially be two years from now.

If we matched any of those prior rates, here’s what inflation could look like by the year 2020, based on the current 2.38% CPI reading.

If we matched the 1917 rate, inflation in the year 2020 would hit a whopping 40%.

The 1947 increase would take us to 16.6%, exceeding what we saw in the 1970s and ‘80s. The 1974 rate would push us to 8.3%.

Even the least of these increases would catch most people off guard; even though real inflation (when calculated with old formulas, including items like tuition, healthcare, and energy) is quite a bit higher, when’s the last time North America was in a soaring inflationary environment?

Any of these scenarios would be good for gold, of course. And if we tip into hyperinflation, gold will still protect our purchasing power. One of the surest predictors of when the gold price will rise is when inflation takes off.

  • Given the massive amount of currency abuse that’s occurred around the world, soaring inflation is not some farfetched theory. Sooner or later we could easily become victim to a rapid and scary decline in purchasing power.

Friends, history has a clear warning: Inflation will not stay dormant forever, and will likely pay a personal visit to your household soon. Do what Mike and I and everyone else at GoldSilver are doing and protect your purchasing power.

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Origin of Fracking Dates Back to the Civil War

By John Manfreda – Re-Blogged From Business Insider

Over the past decade, the biggest story in the US energy sector has been hydraulic fracturing, also known as fracking.

This drilling technique has enabled oil and gas producers to extract oil and natural gas from shale rock, thus increasing oil and gas production inside the US.

Media pundits have claimed that this form of oil and gas extraction is a technological breakthrough, which has enabled the US to become the world’s largest oil and gas producer, and will enable the US to become energy independent by the year 2020.

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Climatic Irony Found in An Old National Geographic Magazine

By Doug Ferguson – Re-Blogged From http://www.WattsUpWithThat.com

Having moved from Minnesota to Alaska this past summer, we have been making the rounds of thrift shops, stores and other venues to restock our home with things we left behind to reduce our moving costs.

Before heading out to one of our recent forays, I caught up on the news on the well known climate blog, “Watts Up With That” and read the 10/30/17 article, How Google and MSM Use “Fact Checkers” to Flood Us with Fake Claims by Leo Goldstein. You should read it. The link is here

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Use and Abuse of History

By Reva Goujon – Re-Blogged From https://worldview.stratfor.com

A lot of history is being casually tossed around these days. We see it from energized segments of the “alt-right” throwing up Nazi salutes, calling for a “revolution” against “the Bolsheviks” and marching to chants like “Jews will not replace us.” We see it from their anti-fascist adversaries on the left, branding themselves antifa, a movement that draws its roots from the Antifaschistische Aktion resistance from 1930s Germany. We see it from world leaders when Turkish President Recep Tayyip Erdogan brazenly calls his German and Dutch counterparts Nazis and fascists and when U.S. President Donald Trump ardently defends Confederate statues as symbols of “heritage not hate.” We see it from jihadist groups like the Islamic State when a member of the Barcelona attack cell calling himself Abu Lais of Cordoba spookily reminds Spanish Christians to remember “the Muslim blood spilled” during the Spanish Inquisition as the group fights to reincorporate “Al Andalus” into a revived caliphate.

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Silver Price Massively Undervalued From Historic Perspective

By Mark O’Byrne – Re-Blogged From http://www.Silver-Phoenix500.com

– What wages in ancient Athens can tell us about the silver price today

– Wages paid in silver in ancient Athens compared to wages today

– Silver massively undervalued compared to the past few thousand years

The cost of building the Parthenon was 469 silver talents, or about £5.6m.

by Dominic Frisby

Today we look at the wages paid to oarsmen on warships in ancient Athens in 450BC.

I bet you’ve never read a Money Morning that began like that before.

Why on earth would I want to do such a thing?

Because it tells us a great deal about the silver price today…

How Wages In Ancient Athens Compare To Today

In The Economy of Ancient Greece, historian Darel Engen describes how the Athenian unit of money – the talent (about 26kg of silver) – could purchase nine years of a skilled man’s labour. If we assume 250 working days in a year, that works out at about 11.5g of silver per day – a little under 0.3 of a troy ounce.

A kilo of silver today is about £460, so nine years’ skilled labour would amount to about £12,000 in today’s money. That makes a year’s skilled labour about £1,333, and a day’s £5.29.

Fast forward to today. The average wage in the UK construction industry, which I’ll use as an equivalent, is about £30,000 per annum, or £120 per day. It seems that today’s British labourer is earning considerably more than his ancient Athenian counterpart.

We must, however, factor taxation into our calculations in order to appreciate what the worker actually took home with him. Enlightened souls that they were, there was no direct taxation on income in ancient Greece. The large part of the expenses of the city were shouldered by the rich, who made their donations voluntarily – sort of – through the system of liturgy.

In the UK today, on the other hand, somewhere between 40% and 55% of the average worker’s income is taken, one way or the other, to pay for the state, depending on whose figures you use (and that’s before you factor in inflation taxes).

For the sake of simplicity, let’s use a 40% figure and go with an after-tax income of £72 per day – or £18,000 per annum. So even after taxes, the modern labourer would seem to be earning considerably more than the ancient – over ten times as much.

As Greece was the most advanced civilisation in 450BC, perhaps we should only be comparing it to the developed world. But even if we factor in less developed nations, the modern worker appears to be earning more than the ancient.

Globally, according to the United Nations International Labour Organisation (ILO), the average salary is $18,000 – say £14,000, or £56 per day. That would be £34 after 40% taxes.

An Athenian warship, the trireme, cost about a talent to build (£12,000). A trireme’s unskilled oarsman would be paid 4.3g of silver each per day (£2). The cost of building the Parthenon was 469 talents, according to Professor Thomas Sakoulas. That works out, according to my maths (469 x 26 x 460) at about £5.6m. The cost of building the Shard, by way of comparison, seems to have been around £435m.

Silver Price Is Dirt Cheap Compared To The Past Few Thousand Years

To compare modern and ancient prices might seem like a ridiculous and redundant exercise – the two worlds are so different – but there is a point to all this. Measured in silver, salaries actually remained fairly constant until the 20th century.

The Babylonian worker might have been looking at 2g of silver (92p). The Roman unskilled worker, like the Greek, might have been on around 4.2gs of silver, at least until Romans started chipping their coins.

The wages of the medieval English worker seemed to have fallen back towards Babylonian levels by 1300. He got 2.8g, while a skilled city craftsman might have expected 5.6g – about half what an Athenian was paid.

That would grow, however, over the next 500 years, until by the 19thcentury the skilled labourer might be looking at around 24g of silver per day, according to author David Zucherman, and an unskilled between a third and half that. The labourer in the 19th century was getting around double the pay of his 450BC Athenian counterpart. It’s more, but it’s not that much more.

Compare that to today. I used the figure of £30,000 earlier – the average wage of a construction worker – £120 per day. That amounts to 260g of silver, compared to 11.5g for that Athenian worker. Today’s pay dwarfs that of any pre-20th century worker in history.

Wages have risen, of course they have – but not by this much relative to the cost of living, status and so on within a society.

The issue is not that wages have soared. It’s that silver – now that it no longer has any monetary role – has fallen to absurdly cheap (on a historical basis) levels. (It’s also absurdly cheap on a geological basis, as I argued here

If today’s wages of £120 were to equal the Athenian equivalent of 11.5g (say 12g for simplicity’s sake), you could make the argument that silvershould be £10 per gramme (currently 46p per gramme). That’s over 20 times higher than today’s silver price of $18.50 an ounce – more like $400 per ounce.

At $400 per ounce, not only do wages correspond, but so does the cost of building a ship or a landmark city building.

One day we will get some kind of silver reversion to its historical mean. Does that mean we should all go out and buy shedloads of silver with the expectation of making 20 times our money?

Not really. That day of historical mean reversion probably won’t come in our lifetime and most of us invest within three to five year time frames. But you should all own a little bit, just in case it does.

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