Ever notice that when something happens, no one ever thought of it till it is a matter of fact? Teen-age boys think they are invincible and nothing could ever happen to them. “Why my reflexes are so good, that I can avoid accidents.” That’s why their insurance premiums are so high. When the dot com balloon was in full swing, CNBC and Bloomberg personalities always put on the air those who said the stock market would continue into the stratosphere, and America had finally overcome the problems that happened in 1987 and 1929. All was well. Day traders were in abundance. I met one from Telluride, and I warned him, but it was no use. I had a 1951 Ford for sale, and he wanted it, and offered me cash. I said that he should drive it first. He didn’t know how to shift gears! Before he destroyed the clutch and transmission, I took over, and sent him on his way. Before he left, he was telling me glorious tales of his sudden wealth, his day trades, and how he was so smart, and clever, that nothing could stop him. Oh yeah? He went bust. I saw him a year later, at a concert, and he was so glum. You do remember the gloating day traders, don’t you? You know, those that quit their day job, and now can’t find a job.
When something disastrous happens, it is strange, but few ever thought of it before hand. Be it fires in California, collapsing balconies in Chicago, or catastrophic floods; few had considered it till it happened. When I tell a stranger, during conversation perhaps, that the dollar is a failing measurement, they look at me as if to say, I’m nuts. When we have faith in something, it is really hard to break it, and especially something we have had faith in for a lifetime. This is why few ever change religions, or for that matter move far from where they were born and raised. Logic doesn’t matter to a mind that is set in cement. The reason that probably .01% of the population, or even less for that matter, are turning their dollars into gold and silver, is because for their entire life, they have saved in, traded with, bought with, sold for, and carried with them dollars. Old George Washington, Ben Franklin, and Andrew Jackson, have been our friends for a lifetime. “Why it is sound as the dollar,” is a phrase I was raised on, as were you perhaps.
The photo below is hilarious to a lot of people, and I can’t blame them.
Maybe the Statue of Liberty will eventually be on the million dollar bill, I don’t know, but aside from its fake value and the picture, it looks pretty genuine, doesn’t it?
Is this really preposterous? Is it absurd to picture a million dollar bill? When the builder of my home spent $2.40 per square foot to build a brick home with high ceilings and fancy trim, in 1887, I am sure he thought the builder was taking him to the cleaners if there were cleaners then. When my Dad bought his new 1949 Ford for quite a bit under $2,000 with every known accessory, I remember he was screaming at the dealer, calling him a robber. I have a lot of clients who bought Gold Eagles at $280, and are torn between glee over the increase, and doubt about buying more at $400. Can they go higher? Richard Russell thinks gold and the Dow will possibly cross at $3,000. I think they can go higher.
When the national debt crossed the billion dollar level, many thought the world was at an end. Now it is hundreds of trillions. I was outraged when nickel phone calls went to a dime, and I could no longer buy a new tire for $9.95.
It is difficult to picture the unknown. What does the future hold for us? No one can tell what will happen tomorrow. All we can do is base our decisions as to what to do, by past history and facts. If our custom and habit get in the way, we will many times make a mistake. It is our custom and habit to save our surplus assets in dollars. Bank savings accounts are at an all time high. More people buy stocks, regardless of P/E ratios, lack of dividends, and poor performance, than will ever buy gold and silver. It is the “American way” to invest in American industry and corporations. The fact that thousands of jobs are disappearing and going overseas weekly means nothing to those who, by habit and custom, buy stocks and place dollars in savings accounts. How many Americans look at labels and “buy American,” where possible? Few.
As all the signs on the horizon give portent of difficult times ahead, few pay attention to them, because they are not readily visible, as are storm clouds or bald tires. One has to read and look to different sources than the Daily Blab, or CNBC, to figure out what is going on in the world of economics. The fact that the dollar is on a roller coaster down-hill, means nothing to the average Joe. They still buy a six pack don’t they? The national debt of hundreds of trillions of dollars, means nothing to the average man on the street. “Don’t we owe it to ourselves?,” might be a common reflection. “What do you mean the dollar is a measuring device that is shrinking like a ruler than gets shorter every month? Look at this dollar. How can you say it is shrinking? We measure with tape measures, not dollars,” “You’re a nut ball.” “I remember when gold was $800, and you want me to buy some at $400?” “The stock market will go up. See, it went up again today.” “What’s a P/E ratio?” “That gold coin is $400? Not me buster.”
Figure it this way, and tell your friends, ’cause readers of me already know it. Gold was $850, 23 years ago. It was a fluke, and we all know it, but if we have another “fluke,” gold will be comparatively as high as it was then. We’ll have that “fluke,” believe me. We have unquestionably had 400% inflation in the last 23 years, if not more. Multiply $850 by four, and it comes out to $3,400 per ounce of gold, which is now priced at about $400. While we are into pictures, see the Ad below for a new Plymouth for $645.
Like to buy one now for $645? When gold is $3,400, will you wish you had taken some dollars out of the bank and bought some at $400? With butter now over $3 per pound, don’t you wish you had filled your freezer with it at $1.25, less than two years ago? Yes Victoria, the dollar is indeed a shrinking measurement. Better get out and turn them into some other measurement. Protect yourself.