I well remember the prices of gold at about $250 and silver at $4 a few years ago. If we could turn back the clock and buy them at those prices, all of us would. Hind sight is always 20/20. If we could buy a new home for $76,500, or a gallon of gas for $1.25, which were the prices back in 1980, all of us would. The manipulators tried desperately to keep gold under $300, and succeeded for a while. When gold broke $300, thousands said to themselves, “I missed the boat and it’s too late to buy gold and silver.” The exact same thoughts and utterances were forthcoming when gold went through $400, 500, $600, $700, $800, and now $900. We have had at least 400% inflation since 1980, and I think it is fair to believe that all prices have gone up four times or more since 1980. Except gold and silver anyway. Gold is barely over 1980’s price and silver is way below. How can it possibly be “too late?”
Prices have gone up because of reckless spending by government, which causes endless amounts of un-backed dollars to be printed. Is there an end in sight? Look at history. Nations and world powers usually last about 200 years and then go down because they bit off more than they could chew, or from fiscal irresponsibility, both of which are virtually the same. This almost perfectly describes America today. If one could install a Ron Paul in the White House, and similar ones in the Congress, this all might stop and we might not have to hedge ourselves with tangibles such as gold and silver. And pigs also may fly. Since we have had this 400% inflation since 1980, is it also reasonable to conclude that gold and silver should be four times as high, or $3700 and $230 per ounce? They are a long way from that, so it isn’t “too late.”
On NPR this morning, a story pointed out that the defense industry has replaced the knitting mills, both of which supply jobs. But note the difference. Jobs created by taxpayers are non productive jobs, and jobs created by consumer demand are productive jobs. Building bombers and hiring soldiers create jobs, but the wages are paid by government which is a non-productive entity. Government spending, causes dollars to be printed, and the very dollars soldiers and bomber builders are paid with, go down in value, so nothing is gained and everyone is harmed economically. If taxes covered all government spending, there would be no inflation, but that ceased to happen decades ago.
If, when gold is $3700, and you can still buy a gallon of gas for maybe $5, you’d better think about selling your gold. If gold is $3700, and gas is $12, you’d better keep your gold and be glad you have it, because you will have ’hedged’ yourself successfully. You dollar devotees, think about this: Gas is now $3 per gallon, and you are going to get 4% interest on your savings or CD. If you actually believe that gas will be 4% higher a year from now, or $3.12, you might have come close to breaking even, except for the taxes on your 4% interest. If gold and silver were 4% higher a year from now, or only $956, and $18, you might as well have stayed in dollars. Surely no one actually believes that a year from now, anything will be only 4% higher in decaying dollars! Is it “too late?” I don’t think so.
As gold and silver continue to go up, with an occasional correction which no one can predict, the same ones may say, “It’s too late,” and they will be as wrong as those in the past when the $300, $400, $500, $600, $700, $800, and $900 levels were reached. Unless you can tell me when fiscal sanity will once again reside in D.C. and the dollar ceased being printed to pay the bills, there is no way that any price will remain the same, but continuously go up in decaying dollars.
I also get another question asked me, and it is about a ’correction.’ I don’t know when a correction will happen, any more than I know what will happen any other place in a day or even ten minutes from now. All I can say is that when you wash your car it rains, which of course is not true. Over the years, many who have waited for a correction, have done well, but far more who have waited, have lost big. I have no idea of when a correction will take place, but I do know that correction or not, a year from now, gold and silver, plus butter, lumber, and gas will be a lot higher.
A word about platinum and palladium, whose prices have jumped tremendously in the past few weeks. 80% of the world’s platinum comes from South Africa, and South Africa is having monumental power problems. They can’t get the electricity needed to mine the stuff, and I think palladium has followed platinum. Palladium has often been called the “poor man’s platinum.” Suppose they fixed the power problems. Would the prices of palladium and platinum go down? You decide.
I well remember the prices of gold at about $250 and silver at $4 a few years ago. If we could turn back the clock and buy them at those prices, all of us would. Hind sight is always 20/20. If we could buy a new home for $76,500, or a gallon of gas for $1.25, which were the prices back in 1980, all of us would. The manipulators tried desperately to keep gold under $300, and succeeded for a while. When gold broke $300, thousands said to themselves, “I missed the boat and it’s too late to buy gold and silver.” The exact same thoughts and utterances were forthcoming when gold went through $400, 500, $600, $700, $800, and now $900. We have had at least 400% inflation since 1980, and I think it is fair to believe that all prices have gone up four times or more since 1980. Except gold and silver anyway. Gold is barely over 1980’s price and silver is way below. How can it possibly be “too late?”
Prices have gone up because of reckless spending by government, which causes endless amounts of un-backed dollars to be printed. Is there an end in sight? Look at history. Nations and world powers usually last about 200 years and then go down because they bit off more than they could chew, or from fiscal irresponsibility, both of which are virtually the same. This almost perfectly describes America today. If one could install a Ron Paul in the White House, and similar ones in the Congress, this all might stop and we might not have to hedge ourselves with tangibles such as gold and silver. And pigs also may fly. Since we have had this 400% inflation since 1980, is it also reasonable to conclude that gold and silver should be four times as high, or $3700 and $230 per ounce? They are a long way from that, so it isn’t “too late.”
On NPR this morning, a story pointed out that the defense industry has replaced the knitting mills, both of which supply jobs. But note the difference. Jobs created by taxpayers are non productive jobs, and jobs created by consumer demand are productive jobs. Building bombers and hiring soldiers create jobs, but the wages are paid by government which is a non-productive entity. Government spending, causes dollars to be printed, and the very dollars soldiers and bomber builders are paid with, go down in value, so nothing is gained and everyone is harmed economically. If taxes covered all government spending, there would be no inflation, but that ceased to happen decades ago.
If, when gold is $3700, and you can still buy a gallon of gas for maybe $5, you’d better think about selling your gold. If gold is $3700, and gas is $12, you’d better keep your gold and be glad you have it, because you will have ’hedged’ yourself successfully. You dollar devotees, think about this: Gas is now $3 per gallon, and you are going to get 4% interest on your savings or CD. If you actually believe that gas will be 4% higher a year from now, or $3.12, you might have come close to breaking even, except for the taxes on your 4% interest. If gold and silver were 4% higher a year from now, or only $956, and $18, you might as well have stayed in dollars. Surely no one actually believes that a year from now, anything will be only 4% higher in decaying dollars! Is it “too late?” I don’t think so.
As gold and silver continue to go up, with an occasional correction which no one can predict, the same ones may say, “It’s too late,” and they will be as wrong as those in the past when the $300, $400, $500, $600, $700, $800, and $900 levels were reached. Unless you can tell me when fiscal sanity will once again reside in D.C. and the dollar ceased being printed to pay the bills, there is no way that any price will remain the same, but continuously go up in decaying dollars.
I also get another question asked me, and it is about a ’correction.’ I don’t know when a correction will happen, any more than I know what will happen any other place in a day or even ten minutes from now. All I can say is that when you wash your car it rains, which of course is not true. Over the years, many who have waited for a correction, have done well, but far more who have waited, have lost big. I have no idea of when a correction will take place, but I do know that correction or not, a year from now, gold and silver, plus butter, lumber, and gas will be a lot higher.
A word about platinum and palladium, whose prices have jumped tremendously in the past few weeks. 80% of the world’s platinum comes from South Africa, and South Africa is having monumental power problems. They can’t get the electricity needed to mine the stuff, and I think palladium has followed platinum. Palladium has often been called the “poor man’s platinum.” Suppose they fixed the power problems. Would the prices of palladium and platinum go down? You decide.
(I am having to rewrite this column, because my #$@%& computer erased the first one, and this one isn’t nearly as good.) My son David is taking his lovely wife Cathy and twins to Florida and Disney World Wednesday afternoon for a week or so, so you will have to call me, Don, for service. I am the second number on the web site, or 1-888-786-8822.
Meantime, protect yourself.