I don’t really know where this series will stop, because there is so much gobbledygook emanating from the bowels of Washington D.C. and its environs which have become headquarters of the federal government as it has expanded hundreds of percentages from the time of FDR. As a classic example of a federal agency, formed in 1970, and which was and still is supposed to guard against employers’ misdeeds by making the workplace unsafe, consider OSHA. With a budget of over $500,000,000, in its 37 years of existence has achieved about a dozen convictions. A case in mind is a self employed carpenter in Ouray Colorado a few years ago. He was doing a small job for someone. Had no employees and worked for himself doing odd jobs. An OSHA inspector came by as he was cutting a piece of lumber and fined him $1,500 for not having the correct blade guard on his table saw. He appealed but to no avail. He was not harming himself or anyone else. Anyone with an ounce of sense realizes that OSHA rules and regulations are impossible to obey, including blade guards, and most are simply absurd. All they do is raise the cost of doing anything. A man I know was having his hotel painted in Silverton. An OSHA inspector came by and fined him heavily for his painter not having himself buckled onto his ladder!
The 1960’s and 1970’s began to make government decide that no one was to be left behind and everyone was to be equal. Humanism gone berserk? Everyone should realize that the Declaration of Independence is wrong, when it says that, “All men are created equal.” They aren’t. There are stupid, fat, skinny, tall, short, intelligent, black, white, yellow, brown, male, female, etc humans, and equality is something that has never existed and never will. Even snowflakes are all different. All water, pieces of lumber, and even snowflakes are different and unequal. When two cars come off an assembly line, they will not be equal. I bought two Chevy Suburbans in the 1980’s for “Jeep Tours,” and one was a ’lemon’ and the other OK. Both looked identical, but weren’t. This brings us to the sore subject of “free trade,” which is supposed to be the good to end all good, but I think is a disaster. Government’s aim to equalize everyone and everything by handouts and taxation has been an utter failure. In a book titled “Who Gets What From Government?” the author points out that in spite of government efforts, everyone is still at about at the same level. I might add that the efforts to equalize have robbed us blind by currency devaluation and overpowering, interfering, inefficient, government, which spends continually like a drunken sailor, and without our permission.
“Free trade” between companies of relative equality in the same nation is fine. Let GM compete with Ford or Chrysler, and we’ll end up with better cars. Let Procter and Gamble compete with Colgate, and Maine compete with Massachusetts, for all I care. Competition is wonderful between virtual equals. But when a worker in China, making fifty cents an hour with no benefits, has to compete with an American worker making $15 an hour with full benefits, free trade falls on its you know what. Could a high school football team compete with the Redskins? Could a man with an IQ of 90, compete with a man with an IQ of 150? America has fallen by the wayside because of “free trade.” “The term “free trade” probably hadn’t even been invented in FDR’s time. There was no need for it. Our dollar was strong, and FDR hadn’t managed to increase the size, cost, and debilitating effects of huge government too much, so the world’s economies were free to raise themselves by their own initiative…if they so chose or had the freedom to do so. As each bureaucracy sprouted and grew (all bureaucracies grow), and each succeeding war took place, the dollar gradually sank like a leaky rowboat with a pin hole in it. As each year passed, thanks to dollar sinking, the hole grew larger, America became less competitive, and the free trade idea came forth. If we could buy cheaper elsewhere, our lifestyle would improve, was the theory. Our workers had to get salary increases, just to stay alive, which made them less competitive. When everything is made elsewhere, where will we get the dollars to buy their stuff, if no one has a job here? Think about that, you “free traders.”
As each year passed, each war was fought, and each new Congress and President took office, no one took a single step to reduce, cut back, or stop the process which kills a nation: Currency debasement and government growth. Ronnie Reagan knew that government was “the problem rather than the solution,” but he tripled the national debt while he was in office. Everyone loved Ronnie, because he was an excellent speaker, had a broad smile, and made everyone feel comfortable and at home with him. Still, he and his Congress tripled the national debt.
In 1980, the federal government spent $591 billion, and in 1989 it spent $2,868,000,000, or 4.85 times as much. This was after eight years of Reagan. In 1980, a new home cost $76,400, and in 1989 it cost $148,800. In 1980, the average income was $17,710, and in 1989 it was $28,906. The Dow went from 1,000 to 2,700. One of the last things Jimmy Carter did before leaving office, was to deregulate the savings and loan institutions. This led to a collapse similar to what is happening now, only with different players. During the S & L debacle, the savings and loan outfits were doing what individual home owners have been doing today, and that is using real estate as a lever to raise money by endless borrowing as property values seem to increase, but really don’t. As the bubble now bursts on the housing situation, it also burst on the S & L’s in the 1980s, with the same results…drastic lowering of housing prices. Had government not been in the business of chartering and regulating industries such as the S & L’s, their crash might have been minor. The first savings and loans were established in the very early 1800’s in Philadelphia, and were operated with no government charters, rule making, legislation, and interference for 150 years without problems. All business and investments usually fail eventually. Some early, and some later, but nothing is perfect. An investment in anything, with the hope of a return, is a risk. All of life is a risk, be it marriage, dating, driving a car, eating food, buying a home, holding a job, starting a business, swimming, playing golf, or writing a book. Nothing is certain except death, and some say taxes. Left to work without government interference, we all will work better, businesses will thrive or fail, as will banks, stocks, and loans. With government controls, charters, and regulations; failures become monumental and earth shaking, rather than individual or small.
If a man is careless with his safety and cuts off his finger, it is his problem, and he will learn a lesson. If a company abuses its employees, they will quit. If a mine owner fails to install safety appurtenances, he will lose his miners, or even kill them and be liable in a court of law, besides losing his investment. The market works very well if left alone, and especially if the currency of a nation is stable, which ours isn’t. In 1980, the federal debt was $909 billion, and in 1989 it was $2,868 billion, or an increase of more than 300% under Reagan. He was such a lovable guy too. In 1980, the average cost of a new car was $7210, and in 1989 it was $15,400. Had you saved $100,000 in a bank at 5% interest over the period of 1980-1989, you would have earned $62,890 in taxable interest. Everything else went up three to four times in price, so you would have had a net loss of a lot of dollars. The same thing exists today, only the interest paid is a lot less than 5%, which was common in the 1980-1989 period. Saving dollars in a bank has made no sense in my entire lifetime, and that’s why I have never had a savings account.
In 1980, Bunker Hunt had the idea that he could corner the world’s silver supply. He was a rich oil man, and began buying silver in thousand ounce lots. Lots of them. He bought futures contracts by the thousands too. I helped count a lot of Bunker Hunt’s silver purchases and met him once. He was a large man. Tall, fat, and very sloppy looking. He looked like he was poor as a church mouse, but was rich…for a while anyway, At the same time Bunker Hunt was trying to corner the world’s silver supply, Iran had our hostages as prisoners, we were paying to get rid of our pride and joy, the Panama Canal, and under Jimmy Carter, interest rates were 21% for a mortgage, and the prime rate was 13%. I had been in the precious metals business but a couple of years, and we all thought the end was in sight. America, under Jimmy Carter, was a disaster and getting worse. Silver got to $54 and gold followed to $850. People were cashing in their stocks and savings accounts and buying protection in gold and silver. It was a bubble which was burst when Jimmy Carter went back to Georgia and his peanut farm, to be replaced in January of 1981 by Ronnie Reagan.
Bunker Hunt went bankrupt thanks to the COMEX, which when he was going gangbusters, instituted new rules guaranteeing him bankruptcy. Without his betrayal by the COMEX, he might have pulled it off. The Panama Canal is gone, thanks to one vote by an Arizona Senator named Dennis DeConcini. May God Rest his soul if he is dead, and if he is still living, I hope he has nightmares of his foul vote.
As gold and silver approach their 1980 prices, and they will reach them pretty soon in my opinion, remember this sorry fact. Since 1980, America has had at least 400% inflation, and probably more like 1,000%. Gold and silver, as other prices, should have risen by that much, and should now be from $3500 to $7500 for gold, and from $55 to $135 per ounce for silver, which they might reach, as have other prices. In other words, both gold and silver are under-priced, and especially silver. In 1980, the ratio between gold and silver was 16 to 1, which it has been throughout history. It is now 54 to 1, meaning that if the correct ratio resumes, silver might go up three times as far as gold. I believe it will happen. This is it till I return from a well earned vacation. We are cruising up the Columbia River for seven days and seven nights on a stern wheeler, and we will be in the owner’s cabin. I will have my cell phone if you need service, if cell phones work on the Columbia. The number is 1-970-596-1600.