I am friends with a really smart, great guy. He has a wonderful job, fine home with a delightful pool, nice cars, and is a really nice fellow. He told his wife the other day, when she tried to get him to buy some gold, that “I DON’T NEED GOLD, I HAVE CASH!” I am sure he does have a lot of cash . Probably in a savings or checking account. Lots of security? Not to me. I have so little cash, that most people wouldn’t believe it. I hate cash! Damn cash. A pox on cash. Cash is for the birds. Of course 99% of Americans, and the rest of the world, feel very secure with all their cash in euros, dollars, or whatever.
Here’s a quote from my book “Consequences,” page 83, which I will send you free by e-mail (no printed copies left) if you will e-mail me at gold@gwe.net. “Here is a quote from Walter Levy, an internationally known oil consultant who was born in Germany. “My father was a lawyer, and he had taken out an insurance policy in 1903, and every month he had made the payments faithfully. It was a twenty-year policy, and when it came due, he cashed it in and bought a single loaf of bread.” From page 74 and 75. “A more or less typical case of printing huge amounts of, and inflating a currency that became worthless after the backing had been removed, was Germany, who removed the gold backing from the mark in 1914. The value of the 1914 German mark was about twenty five cents US, or four marks equaled one American dollar. When the backing was removed, monsoons of marks came off the presses, and the decline began. By 1923, the mark had lost all value, the ratio being 1 trillion marks to the dollar. A man buying a cup of coffee in a restaurant might pay 5,000 marks, and by the time he asked for a second cup, it had gone up to 10,000 marks. The presses were running night and day in Germany.” Nixon removed the last smidgen of gold backing of the dollar in 1971, and the presses have been very busy ever since!
People are usually honest, and operate their lives with the best of intentions, not wanting to harm anyone, or be dishonest in any way. People want to care for their families and be responsible. They want to save for the future, and plan for old age. That’s why they buy insurance. In case they die prematurely or have an accident, their families will be cared for. The reason people save, is because they have a sense of honor and wish to protect themselves. Those who are stupid, live for the present, and care only for instant gratification. The more intelligent a person is, the more he realizes that there is a future, and he cares for it by attempting to insure that future’s security and solvency. How very honorable.
One of the best books I ever read, was way back in 1968, and it is titled “The Unheavenly City.” The author, Edward Banfield, characterizes class, not by how much money one has, but how one behaves in life. Banfield notes the differences of class by writing, “The individual’s orientation toward the future will be regarded as a function of two factors: (1) ability to imagine a future, and (2) ability to discipline oneself to sacrifice present for future satisfaction. The more distant the future the individual can imagine, and can discipline himself to make sacrifices for, the “higher” his class.
“The Upper Class. At the most future-oriented end of the scale, the upper-class individual expects a long life, looks forward to the future of his children, grandchildren, great grandchildren (the family “line”) and is concerned also for the future of such abstract entities as the community, nation, and mankind. He therefore, has strong incentives to “invest’ in the future. That is to sacrifice some present satisfaction, to enjoy greater satisfaction at some future time.” Upper-classes usually save in a big way.
“The Middle Class. The middle-class individual expects to be still in his prime at sixty or thereabouts. He plans ahead for his children and perhaps his grandchildren, but, less future-oriented than the ideal typical member of the upper class.” They save too.
“The working class. The working-class individual does not “invest” as heavily in the future, not in so distant a future, as does the middle-class one. He expects to be an “old man” by the time he is fifty, and his time horizon is fixed accordingly. Also, he has less confidence than the middle-class individual in his ability to shape the future and has a stronger sense of being at the mercy of fate.. He is self-respecting, and self-confident, but these feelings are less marked in him than in the middle-class individual.” They save as well.
“The Lower Class. The lower-class individual lives from moment to moment. Whatever he cannot consume immediately, he considers valueless. His bodily needs (especially for sex) and his taste for “action” take precedence over everything else. He works only as he must to stay alive, and drifts from one unskilled job to another, taking no interest in the work. He feels no attachment to the community, neighbors, or friends, and resents all authority. The stress on “action,” risk-taking, conquest, fighting, and “smartness,” makes lower-class life extraordinarily violent.” They don’t save.
It’s a marvelous book, and if you can find a used one, you will be well rewarded. Obviously, I abbreviated Banfield’s remarks on class, but the point is made. If one has class to any degree, he saves for the future. Saving in dollars, is simply absurd, and the fellow who says, I don’t need gold, because I have cash,” may be of a nice class, but he is woefully ignorant of basic economics. Save? Yes, but not in a fading currency. Save and prepare for the future of you and your kids? Yes.. Save, save, save, but not in a currency whose value is going down almost daily. Save in historic money, which depends on nothing and cannot go bankrupt or lose its purchasing power. Save in gold and silver, as all classes have throughout history, when their currencies were fading.
In January, the new Fed Chairman will be Ben Bernanke. Here is a direct quote from Bernanke, who spoke before the National Economist’s Club in November, 2002. “Like gold, US dollars have value only to the extent that they are strictly limited in supply. But the US Government has a technology, called a printing press, (or today, its electronic equivalent), that allows it to produce as many US dollars as it wishes, at essentially at no cost. By increasing the number of US dollars in circulation, or even by credibly threatening to do so, the US government can also reduce the value of the dollar in terms of goods and services, which is equivalent of raising price in dollars of those goods and services. We conclude that, under a paper money system, a determined government can always generate higher spending and hence positive inflation.” Probably his most famous utterance is that the US government can drop money from helicopters if it wishes to do so.
So aside from a lesson in class, which I find very true and interesting, those who save, are to be admired. Those with the most class, often are the wealthiest and save the most. However, regardless of wealth, class is determined by one’s outlook and vision of one’s future, and the future of one’s family and surroundings. The classiest people are the savers. The stupidest savers in this day and age, are those who save in a failing currency. One needs to save in a different denomination than dollars. Save in ounces, pounds, acres, square feet, gallons, or tons, but save in a different denomination than dollars. It so happens that gold and silver are the easiest to buy, sell, and store., plus are compact and beautiful. They are the true money for thousands of years, and are not denominated in dollars, euros, pesos, or any other currency, nor dependent on them for value. When you buy gold and silver with currencies, you are out of those degenerating dollars.
Finally, a quote from page two of Richard Russell’s October 19th letter. “In New Orleans they’re cursing those cops who left the flood scene and never returned. Those cops shirked their duty and they turned their backs on the citizens they swore to protect. Is the Fed any better? Not in my mind. They’re the keepers of our hard-earned money. And as I see it, they’re selling this nation down the river, and we poor slobs have only one way of protecting ourselves – and that’s by buying gold.” Protect yourself.