That’s an old religious saying, or is it a song? I don’t know, but patience and fortitude, is what it takes to survive in these times. People ask me, “Why haven’t silver and gold gone up?” I don’t know, because all the signs are there. “How long can this stuff be manipulated?” I don’t know, except manipulation cannot last forever, and those manipulating, are sure to get caught eventually.
Look at the facts.
- The currency supply, and especially M3 is going up so fast, as to be actually similar to Germany in perhaps 1923. All prices are “going up” in dollars, so fast as to make one dizzy.
- Iran has troops stationed on the Iraq border, and has reneged on its nuclear non-proliferation promises.
- All US aircraft carriers are at sea, except for two, which are being recharged.
- China again swears it will retake Taiwan.
- Bloodshed, violence, rape, murder, and prisoner abuse continue in Iraq.
- Terrorism is threatened in the USA, and one sooth-sayer predicts it will hit DC before the elections.
- The stock market is overpriced.
- North Korea has the world’s 4th largest army.
- 12,000 troops are being sent from Korea to Iraq, showing how thinly spread we are.
- The dollar continues to be extremely weak.
- Ad continuum, ad nauseum.
I have this eerie feeling that something terrible is going to happen, and I don’t know what it is. I may be wrong, but if one thinks about it, even if nothing terrible happens, the economics of America are miserable. Washington DC’s Grandees and Magnificos, live in an entirely different world than us mortals.
As far as the “Beltway” is concerned, that is really a strange measurement line. Men as well as women who get elected to office in the House or Senate, go to DC with the grandest of intentions. “I’ll will show them how it should be done,” is their goal. “I’ll balance the budget, or see why.” “I’ll vote to end this nonsense, and return sanity to government.” Any or all of these promises are common. But once inside the halls of Congress, all changes. The DC area, or “inside the beltway,” is really an entirely different world, and its corrupting fangs instantly hook on to new Representatives or Senators, as if by osmosis. Maybe its letters or visits from constituents, or sad stories from home which corrupts the newly elected. Maybe it’s the glamour and glitz that does it. I don’t know, but I do know that no letter to a Congressman does any good whatsoever. They just push a button on the letter writing machine, and out pops a letter giving you an answer that probably says absolutely nothing. It is “signed” by the machine also, so don’t get puffed up about getting a letter from Senator Snort or Representative Windbag. No solutions from DC, or even answers for that matter. They just keep inflating, passing bills corrupted with pork barrel amendments, which none of them have even read mostly, so the dollar continues to plunge, and gold and silver should do the opposite.
They roar up, and then go down almost as quickly. Damned frustrating, I say. But perhaps we are looking for action, thrills, and instant profits. If so, please be aware, that these things may happen on occasion, but not often, and mostly are found in romance novels or comic strips. In the real world, things grind on, and happen at what seems to be a snail’s pace. But patience and fortitude have given us gold, even at $405, at a hefty increase over its low of $258. Silver, even at $6.35, is way above its low of a bit above $4.
Gold and silver always advance as in a ratchet. In other words, they will go up $5, and then retreat $4. Up $10, and down $8. Silver like wise. Why? Two reasons I suppose, since I can’t think of more. First is the immoral, criminal manipulation by a few traders on the futures market, who trade metals they don’t own, and in most cases don’t even exist. Far more silver contracts are traded than physical silver exists in the world, and the managers of the futures markets have so far refused to put a stop to it. Progress has been made however, and due to thousands of letters of protest, attention seems to be given to these traders. Time will tell, but I say time is on our side. Second is profit taking. If you trade for a living, rather than for your future security, when prices go up, you might sell your contract or even physical, and take a profit. This causes more of a product to be available than there is demand for, and it forces prices down. As prices go down, it is bargainsville, and buying increases, forcing prices up. The ebb and flow of markets always reflect buyers and sellers, for whatever reasons. Everyone wants to “buy low and sell high,” and this is why futures are bad news for all but the professional insiders.
The basic facts are still obvious to all but the worst dullards. The dollar is a piece of paper with ink on it, and represents nothing more than more dollars. It is a promise to pay dollars, not gold or silver. It is a piece of paper that is backed by nothing, and is a silly way to store one’s surplus assets. With a quarter point increase in the interest rate, will savings accounts go from less than, to one percent interest? One percent interest, when prices are going up ten percent, and the one percent is taxable? Makes no sense to me!
A client sent me a quote from Mark Twain, which is pertinent. Thanks Ted. “By the law of Periodical Repetition, everything which has happened once, must happen again, and again, but at regular periods, and each thing in its own period, not another’s, and each obeying its own law.” Will the dollar continue to fade in purchasing power? How could it not do so, since its numbers are going up by a billion a day. Can gold and silver stay at current levels, no matter how the manipulators work? They tried to keep gold below $275, and silver below $4, remember? They then frantically tried to keep gold below $300, silver below $4.50, etc. The numbers kept creeping up, despite the manipulators. The facts of the situation remain unchanged.
Those facts are that all currencies are unbacked, and will eventually become worthless. Everything which can be bought with a currency, (everything) has always gone through the roof pricewise in those failing currencies. No matter where in the world, and no matter what period of time all currencies have eventually become worthless. No exceptions. The worshipped dollar or euro will be no exceptions. If one has surplus dollars or currencies, it requires patience and fortitude to preserve one’s surplus assets in trying times such as these. It is so easy to become disgusted or impatient with the way markets operate.
The strangest phenomenon to me, is that when prices are at lows, like now, business is slow. Ho Hum. When prices begin roaring up to the stratosphere, the phone rings off the hook. It’s “buy low” time now. It’ll be “sell high” time some time in the future. Hind-sight is always 20-20. You’ll see as each month passes. Protect yourself.