Lemmings and Sheep

Walt Disney did a great disservice to the animal kingdom in his “White Wilderness” film, by picturing lemmings as committing mass suicide and jumping off a cliff, or marching off to sea in a mass suicide march.  Lemmings do indeed, when they become over-populated, march off to the sea in search of a less populated area, and hoards of them do die, because they haven’t the stamina to endure the long crossing.  Similar to the current masses sticking with dollars as they fade away?  Looking for a new dollar refuge, but there is none, so they will die bankrupt?  Maybe.

Then we have sheep, undoubtedly the stupidest of the animals, who will follow the leader, no matter how ridiculous.  Watch a line of sheep, and if the leader jumps up,  all followers will do exactly the same.  Actually, sheep have been known to jump off of a cliff, following their leader, killing whole herds of them.  That’s assuming their leader has a brain jump trigger.  It has happened.

This why we in the metals trade call most people out there, ’sheeple,’ because they will follow the leader of the pack, no matter how dumb may be the advice.  I hear far too often, that a person’s ’financial advisor,’ has told them that gold and silver are poor investments, for a number of reasons, such as, “You can’t spend gold or silver.”  How true!  You can’t spend a T-Bill, or share of stock either, but the advisors, (who are licensed and have to pass tests), never seem to realize that.  You have to spend dollars, euros, or the like to buy things, which means that you have to get rid of a share of stock, cash in a T-Bill, or sell some silver or gold to get the currency to purchase what you want to purchase.  That is so logical, as to defy any but the lamest brains.  Yet the sheeple follow the licensed advisor’s advice, and believe, like lemmings, there is a new dollar place to preserve wealth.  There isn’t.

Financial advisors know only one thing, and that is dollars.  They fail to realize that the dollar is a failing measurement.  If the inch or foot grew a bit shorter over a period of years, there would be no manufacturing or repairs of anything possible, because the measurements on which all things are geared, would be false.  Imagine a machinist or carpenter trying to build or repair something…anything… if the inch or foot changed its length.  Imagine the chaos that would result if the weights and measures were not stable, as the dollar was for 150 years.  A pound of sugar or flour not being a pound?  Imagine what that would do to grocery prices or recipes.

We measure our wealth in dollars, and the dollar is a shrinking measurement.  Financial advisors know nothing but dollars, and things measured in profits or returns in dollars.  If we have the dollar losing value by 10% a year, and you get a return on your investments of 5% a year, where is the profit?  Of course financial advisors and managers charge a percentage of the whole package they manage each year, even if they lose your capital.  Buy some gold or silver from us, store it away, and pay to ship and a commission one time only, and none if you sell, and that’s so simple.  Gold and silver are historic, beautiful, universal money, throughout the ages, and when you own them, they just sit there in all their glory, and go up in currency prices. Store your dollars under your mattress, in a bank, or trust them to a financial advisor or manager, and you are guaranteed to lose.  Sorry, but that’s the way it is.

In ten years, gold has gone from $250, to $1300, and comparing it to other consumer prices, it has gone higher.  In ten years, coffee has gone from 97 to 188, pork bellies from 51 to 108, wheat from 263 to 684, crude oil from 20 to 76, orange juice from 97 to 155, etc.  Why did gold and silver go so much further, and is this a peak, with a correction of major proportions sure to follow?  I think not, because of a couple of reasons.  (1) Paper monies around the world are in deep trouble, and there is no limit as to how many can be printed, and therefore how low or valueless they can go, with obvious escalation in all prices.  There is a finite amount of gold and silver, and they don’t grow on trees like paper.  (2) As a result of the ever increasing distrust of paper, masses are turning to gold and silver for safety.  Prices of everything are totally dependent on “supply and demand,” and the demand for metals doesn’t seem to have any limit, but the supply does.  (3) Governments everywhere, have spent far more than is possible to ever repay other than by printing, so to think that any item can decrease in paper money price, defies all laws of economics.