The wife and I usually seek out organic foods. We eat eggs, which are cage free, and fed grain without any chemicals. We shower under a shower head which filters out chlorine. We do all we can to keep healthy, in other words. A client of mine in Iowa gave me the name of a beef company whose cows are fed on pasture which has had no chemicals for several years, and who never go to a feed lot. Best beef we ever ate, even though it was $13 per pound. We drink non chlorinated, non fluoridated water also. Actually, we try to keep clear of meat most of the time, but pure, or organic foods are the way to go to keep healthy. Of course, one can’t keep totally free of pollutants, because we must live, go out, breathe polluted air, and the like. In my opinion, we do all we can to stay healthy. Maybe that’s why I sound like I am 30, look like 50, and am 71.
So why not organic money? Not so silly, if by organic you mean pure and unadulterated. I save about $40,000 a year, and I trust you do the same, either more or less, depending on your circumstance. At 71, I have never had a savings account, and never will. Long before I ever started dealing in precious metals, (1977), I may have been a dullard about economics, but never had a savings account. I always had marvelous things to do with my dollars, and could never abide saving them in banks. I always wanted tangible things to multiply either my dollars, or give me enjoyment. Cars, as an example. I have owned close to 70 over the years, down as early in years as an 1918 Mack “bulldog” truck. I have owned but 6 new cars, and 5 of them were Mercedes. Most of the rest were antiques, which I bought and sold, mostly at a large profit, after giving me a lot of pleasure. The latest was a 1941 Plymouth Coupe, which I bought for $2600, and sold for $7100, just a few weeks ago, after having a good time with it and spending about $1,000 on it.
Did I earn interest on my $2600 investment? Certainly. Had I placed $2600 in a savings account, I might have earned under $100 in interest (taxable) in the two years I owned that 1941 Plymouth. As it was, I made $3500 on that $3600 investment over two years and had a lot of fun doing it. Will I pay taxes on that profit from the car? If you bought an old sofa at a yard sale for $100, discovered it was worth $1,000 and sold it for that, would you pay taxes on the $900? Would anyone know? Was my profit on the car, or your sofa, “organic money?” Let’s call it that, OK? Why? Because it wasn’t polluted with Social Security numbers, IRS forms, accountants, or 1099 forms. It was sort of “organic,” or unfettered money.
The largest economy in America, probably is the underground economy. Think of the millions of yard sales every weekend in America, plus the millions of classified ads in newspapers, E-bay, etc. I know of a lot of people who make good livings buying and selling on E-Bay. Do they pay taxes on those profits? I don’t know, nor do you, but I have an idea. Hemmings Motor News, has tens of thousands of ads every month for antique cars, parts, and services. Cars advertised, run into the hundreds of thousands of dollars in some cases. Do these sellers report sales or profits to the IRS? I don’t know, but if they don’t or do, there isn’t any way anyone would know. Do the yard sale people report profits? Do the drug sellers report profits? Do the workers who work for cash with no taxes deducted, for mowing lawns, cleaning houses, or sewing, report profits to the government? I don’t know. Maybe they do, and maybe they don’t. Various newspapers called “shoppers,” come out each week and are crammed full of things for sale, probably at a profit. Are these profits “organic?”
If you have a job, and work for a company, your wages are certainly not ’organic,’ because what you end up with, is far less than your wages are. If you make $20 per hour, you might end up with $10, after all taxes, unemployment, hospitalization, etc are removed. And your boss has to pay an equal amount of the Social Security he takes from your pay. Your wages are polluted; and you are left with maybe half of what you earned. Free wheeling dope sellers, E-Bay sellers, and yard sale profits, are organic money to me. Totally unpolluted.
And how about the money itself? The dollars we all deal in, in other words. Are they polluted and non-organic? It is said that all hundred dollar bills have traces of cocaine on them, they have been handled so much by drug dealers. That may be, but even if they don’t have cocaine on them, are they pure? Not in my book, because during Sir Alan’s 18 year reign, that hundred dollar bill’s purchasing power has been cut in HALF. Is that pollution? If a hundred dollar bill will purchase what a $50 dollar bill would purchase 18 years ago, is that money polluted and debased? Is it unhealthy to deal in it? We try to eat unpolluted foods, but we can’t avoid the rest of the polluted world. We need to spend the polluted dollars, and even deal in them, but we should do so as little as is possible to stay healthy.
On Bloomberg this morning, the stock geniuses say the average stock return is 1.9%. That’s average, mind you. Some stocks give more than 1.9%, and others give you not only less, but make you lose your shirt. Check out Pfizer, GM, IBM, Wal Mart or a lot of others, if you want to see losses. One of the great financial geniuses bought millions of shares of GM at $35, and this morning they were $21. But let’s assume the 1.9% return, which is the average. The dollar has lost purchasing power at over 4.5% per year, over the last 18 years of Greenspan’s tenure. The 1.9% ’profit’ on your stock investment is taxable as well. I ask you then, a broad question. Does anyone really make any real, unpolluted money on the stock market? Of course some do, but do most? It is said that 95% of players in the futures markets lose. I know of several who do and who have, and I don’t know many people. A friend of mine, who is nuts for the stock market, said a few years ago, that even though he lost heavily when the NASDAQ crashed, “It will go back up.” It hasn’t. He bought a few Gold Eagles from me at $301, in April of 1999, and now they are $505. He’s made quite a few percentages profit every year in organic money on his gold, whereas his stocks have gone nowhere.
Sure, I save $40,000 a year, but not in the fading, polluted, going down, filthy, untrustworthy, absurd dollars of the realm. Just remember Germany in 1924, when it took a wheelbarrow full of reichsmarks to buy a loaf of bread. Now, it takes a hundred dollar bill to fill the tank of a SUV. It took a ten dollar bill to buy the same amount of gas when I was a kid. I remember 19 cent gas, and a 1953 Mickey Rooney film I saw yesterday, had gas at 5 gallons for $1.27. The nickel cup of coffee with free refills, now can cost $3.50 at a Starbucks, with no refills. Has coffee gone up? No, it’s the SAME COFFEE. The buck has gone down, PRICES HAVE NOT GONE UP.
The strange thing, is that today, 99% of the world’s population don’t ’understand’ gold. At a restaurant in Salt Lake City last weekend, when we were eating with a client, John had a Mex 50 and a silver round with him. He placed them both on the table, and asked the waiter which was most valuable. He didn’t know. Hadn’t the slightest idea. One was worth $8, and the other $550. All he knew about was waiting tables, spending his tips, and living from day to day. He had no concept of the value of the dollar going down, but thought that prices were going up. That’s all he knew. Prices were going up, and isn’t that terrible? Why can’t the world wise up and realize that the only real money, is gold and silver? All the rest are merely pieces of paper with the “full faith and credit of the (fill in the blank) government” in back of them. Might as well place faith in a termite riddled home, flat tire, or a share of Enron. Protect yourself.