“Rain? What’s that supposed to be? Never heard that word. Water falling from the sky? What, are you nuts? Hey look man, I haven’t the slightest idea of who you are, or this “rain” stuff you are shouting about. Do you have a headache? Have you fallen on your head lately? Rain? Not me.” So they must have said to Noah. After all, it had never rained before. The very concept of it was absurd. “Water falling from the sky? Uh Uh, I don’t think so. And what’s that thing you’re building over there? An “Ark?” What is that? It “floats?” Y’know, this has gone on long enough. I’ve had it. Now peddle your goofy ideas somewhere else. Me get “saved?” Oh boy, there’s always one, isn’t there? I don’t need “saving,” I have no idea what “float” means, and your cockamamie “rain” thing, is just too much. Now get lost fella before I bop you one in the geezer. And all those animals you’re loading into that thing? What’s that all about?”
So it must have been. For 120 years, Noah preached, warned, and built that huge boat. Then it began to rain. It had never rained before, and the very concept was so foreign, that no one believed him. Water actually falling from the sky, and not just a Seattle drizzle, but buckets full. I mean it must have been frightening to those outside that ark. I imagine they were pounding on the door. “We’re sorry. Forgive us and let us in. This is terrible.” They all drowned. The above is true, if you are a Bible believer, and most are. Did it really happen? Well, every single civilization has records and tales of a huge flood, which wiped out everything, so it probably did happen. However, don’t argue with me or send me e-mails about Biblical accuracy or the like. The point is that something happened which had never happened before. Something happened, the very concept of which was impossible and absurd to the average resident of the earth at that time.
When the stock market crashed in 1929, it wasn’t like rain in Noah’s day, but it was surely a dreadful shock. People actually did jump out of windows, having lost everything. One of the world’s greatest showmen, Florenz Zeigfeld, whose Zeigfeld Follies were the top grossing shows on Broadway for decades, lost everything he had. Previous burps in the economy had hurt some, but had lasted only briefly. The crash of 1929, led into the depression which lasted till FDR got us into WW II.
The dust bowl, which was indirectly caused by the depression, was a totally new horror. Blinding dust, blowing dust, and trillions of tons of topsoil blown away. Many lost everything they had also, just like in the stock market crash. Lots of things have happened which have never happened before. Some delightful, and some hideous. Had someone told you about the internet forty years ago, you would have thought them to be a dreamer. A hundred years ago, if you had lectured about radio, television, computers, automatic transmissions, central air conditioning, microwave ovens, frozen food, or jet planes, you would have been thought to have a screw loose. New things constantly happen. Some good, and some bad. A remotely guided robot plane shot a missile, killing many, and this is new, as is a robot on Mars which has been working for far longer than anyone predicted.
Most economists say that the U.S. economy is strong and getting stronger. I disagree. The stock market is almost exactly where it was six years ago, and the dollar buys far less than it did six years ago. GM is barely above bankruptcy, and is burning its cash so fast, that it is maybe just a matter of time. Ford’s not much better. Travel agents in India, and everything one buys being made in China, isn’t too rosy as far as I am concerned. The dollar buys less each day. It buys about 2% of what it bought a hundred years ago. Could the dollar collapse? It’s never happened before, and is unthinkable to 99% of Americans. The Iranians are getting an oil bourse together, and they say the oil will be sold in euros. Saddam was trying to do the same. Some say they may eventually sell their oil for gold.
How can the dollar be strengthened? It could be done very easily, but it won’t. Just stop the presses, stop all welfare, stop the wars, bring the troops home, declare neutrality, eliminate earmarking, eliminate all subsidies to everyone and every group, make the airlines pay for their own flight safety and airports, sell the interstates to the highest bidder, sell the National Forests and BLM lands to the highest bidders, plus lots of others. This would balance the budget, and stop the dollar from falling. This would mean than millions of people would have to go to work who don’t work now, hundreds of thousands of useless government workers would be out of a job, and on it would go. D.C. would be a ghost town, and wouldn’t that be nice? In other words, it will never happen, and no nation in history, which has ever begun inflating, has ever been able to stop it.
Since the inflating can’t be stopped, and since every succeeding President and Congress continues to spend recklessly, the dollar’s fall will continue. It will continue, because the more they print, the less they will be worth, and the less they will buy. This is such elemental economics, that a second grader could understand it. Why can’t D.C. understand? Maybe they do. Alan Greenspan knows what is happening, and don’t be fooled. He was in the “inner circle” of Ayn Rand’s associates, and wrote extensively about the gold standard. I suspect that all of D.C. knows the handwriting is on the wall. The Joe Six Packs don’t. And for that matter, neither do the rest. If they did, they’d get out of dollars.
What is going to happen eventually, and I hope it is a long time in the future, is that massive loss of faith in the paper dollar will occur by Americans, and all around the world as well. Foreigners will refuse to loan us money, buy our debt, and trust us. Without foreign investors, we are sunk like the Titanic. Solvency requires the U.S. to sell billions of dollars of its debt every day, in order to maintain itself. You and I can do quite well in our everyday lives, without the gang in D.C. At least we could, if our currency kept its value. We can’t control that, and its value slips away magically, every day. Every day things cost more, and every day, the dollar buys less.
What will happen eventually, is that some trigger will be pulled, or something happen, which will cause a massive failure of confidence. What will it be? What caused the NASDAQ to suddenly crash in a matter of days? What caused the stock market to crash in 1929? Both had gotten far too high for value, and some mysterious thing caused everyone to lose confidence suddenly, and want to sell. When the dollar gets so low, will it suddenly lose everyone’s confidence? It has never happened before. Just like the people Noah preached to, most say “Nuts to you and your gold and silver. You can’t spend it, and the dollar is the reserve currency of the world. Gold is an ancient thing, and we are modern. We can wire dollars, write checks for dollars, and carry them around as we go forth. Gold is pretty, but it is heavy, and that silver you talk about is too big and heavy. Forget it. You’d better buy some mutual funds.”
No unbacked currency in history has ever lasted. They have all gone to absolute zero. Eventually, the faith and confidence will evaporate, and maybe even rather suddenly, as has happened in other places where confidence has suddenly been lost. NASDAQ? Stock crashes at other times? Failures of all other currencies? Katrina? The Titanic? Enron? They all came about rather suddenly, when the feeling of, “it can’t happen here,” quite suddenly was wrong. All I know is that the world is getting very uneasy about the buck, several nations are already getting out slowly, and it doesn’t bode well. The ark in Noah’s day, are tangibles today. Physical things not dependent on wise ass government bureaucrats, pieces of paper, and phony ’honest’ politicians, such as Trent Lott, who doesn’t want to do away with earmarks, as is typical of the rest. Of all the tangibles in which to invest, none are as historically valuable, recognizable, easily bought, sold, or stored as are gold and silver. Protect yourself.