In case you didn’t know, O.P.M. stands for ’other people’s money.’ As Maggie Thatcher so eloquently phrased it, “The trouble with socialism, is that eventually you run out of other people’s money.” O.P.M. runs the gamut of the entire civilization, and not just politics, but it’s the political O.P.M. that hurts all of us the most.
In the business world, when a firm holds your check for two weeks or more before shipping your merchandise, they’re using your money to capitalize their operation. In the precious metals field, that holds true also. There is a firm in the northwest U.S. that has a reputation of taking months to deliver, and we have taken a lot of their clients from them because they love to use O.P.M. There are lots of precious metals and other firms who have “F” ratings from the Better Business Bureau, because of shady dealings and dishonesty. O.P.M. keeps a lot of businesses alive….literally…and undeservedly.
T.P.M.
Tax Payer Money might be a better term. Politically, it has been ruinous to the American prosperity, of which we seem to be lacking so much of now-a-days. All welfare is paid with T.P.M., and the tax payers money, is yours and mine. All bureaucracy is paid for with the same money, and absurd rules and regulations, never voted upon Constitutionally, uses your and my money for enforcement. Since all taxes are literal theft, (taking your money without your permission), all government uses T.P.M. whether you think it is logical or not.
Then there is P.P.M. or ’printing press money’. It used to be a kept secret in D.C.’s financial circles, but now, with all boldness, the news proclaims that “The Fed is buying Treasury Bills.” Borrowing from ourselves, or simply printing money, to make it all so simple. No longer hidden or shame.
Which brings up the fact that if someone uses your money and pays you for it, that doesn’t fall under the O.P.M. designation. A bank will loan money, which it created out of thin air, (but that’s another subject), and charge interest for the use of it. Credit cards, mortgages, time payment plans, car loans, etc, are all money transferred from one hand to another with charges for its use, called interest. As far as banks are concerned, they’re in a league all of their own. A department store lays out dollars for its merchandise, and if you don’t pay cash for it, that department store has credit cards and all the bureaucracy and partial losses that come with charging, so their interest charged if you don’t pay in full each month, is logical.
The U.S. Government owns Freddie and Fannie, and they have hundreds and hundreds of billions of dollars of credit, with which they loan money for 90% of the mortgages in existence, 20% of which are currently if default, and will never be paid. T.P.M. and P.P.M. is that credit, and it is your money which has issued those mortgages. If you look up the national debt clock, you will see that currently, the U.S. debt is well over $13 trillion. The interest on money borrowed from others is far greater than taxes collected, plus those who loan to the U.S. are paid interest, whereas us taxpayers are paid nothing. Long term, committed payments in the future by the U.S. for Medicare, Social Security, pensions, interest, and the like are close to $200 trillion, an amount incomprehensible to even the brightest minds.
The entire economic system of the world and United States, is so scrambled and complex, that no one knows what it is all about, or can even remotely interpret it, much less give an eventual outcome. I can! They’re all just so much paper. Bonds, stocks, currencies, notes, and all that can be printed on paper, are just pieces of paper with ink on them. Backed by the full faith and credit of GM, Enron, or maybe The United States Government? Doesn’t that give you confidence when the U.S. has sent out checks to tens of thousands of dead people? Their actual value is the piece of paper. Germany, Argentina, and many others’ paper monies went to zero because of irresponsible spending. If a government is a business, why shouldn’t businessmen run it, rather than politicians? The outcome, assuming history always repeats itself, and it does, is that all paper money which is unbacked by gold or silver, eventually reaches absolute zero. “Nonsense,” you say? Then, just think for a minute. Why do you think there is such a mad rush in the world for gold? Not paper gold, gold mine stocks, or ETF’s, but real, tangible, physical gold? Because, even if the world, or a small fraction of it anyway, can’t exactly figure it out, they have a sneaking suspicion that all’s not right, and that their paper money value is dubious at best, and they want to get out.
If even 2% of the world decided to get out of their paper currencies and paper denominated investments, and into gold and silver, the price of gold and silver would reach the sky, and there would be none left to buy. You just do not comprehend how little of it there is in the world, even if all the dormant mines re-opened. Even 1% would empty the mines and supplies. Most of the world is economically illiterate, and mostly trusts their various governments. This translates into the fact, that buyers of gold and silver, are a small fraction of the world’s population, who have enough savvy and logic to want to preserve their assets, rather than see them evaporate into thin air, as currencies go to zero. The buck has already lost 99% of its value in the last 75 years! An often asked question, is “What portion of my portfolio should I have in gold and silver?” The answer is; the portion you want to hold its value and not get sucked down the drain of hyper-inflation, which is coming.
R.I.P to Dame Joan Sutherland, who died at age 83. Dame Joan, one of the greatest of all opera sopranos, brought tears to my eyes many times, and especially when she starred in Manon Lescaut.