Simple, nothing! You can barter with gold and silver when paper money becomes worthless, as it has in 100% of the world’s history. America, and most, if not all other nations, knowing their currency can and will eventually become worthless, have passed “Legal Tender Laws,” which say that if you want to purchase anything, you must purchase it with their paper money, be it euros, dollars, pounds, etc. All governments want to protect themselves, and legal tender laws help their efforts, or prolong the ultimate collapse. There are a lot of people who believe that the dollar will collapse quickly, and I totally disagree. The ‘buck’ is the world’s most popular and stable currency. What’s it backed by? Same as in the first words of this paragraph. “Simple, nothing.” Correction, the dollar is backed by ‘The full faith and credit of the U.S. government.’ Does that give you lots of confidence?
I have friends and customers who call me on occasion, and it’s nice to renew friendships. A friend from Texas called me last night (Thursday) and we talked for about a half hour. He has an IRA, and some paper stuff, plus some gold and silver. He asked me what I have to retire on, and the answer is simple: “Gold and Silver.” No stocks, IRAs, savings accounts or the like. Just gold and silver. ‘If you can’t buy anything with it, what value is it?’ Ask another customer who lives about 21 miles from me. A few years ago he bought a lot of gold and silver from me, and a month ago he called me and said he wanted to sell a lot of it. He was buying a new home. He brought it up, I sold it for him, and locked in the price. Like I have done a hundred times I guess, I got out a flat rate post office box, put in the gold, stuffed it with ‘peanuts’, and placed a trade number inside. He took it to the post office, and paid to ship it. A few days later, after it had arrived at my supplier’s offices in Las Vegas, I received a wire, called him and gave him a check. I guess he has bought his house, but haven’t heard from him since. He bought a house partly with gold. If you bought it from us, we charge a measly $25, to cover our costs, and that’s all. Since I have retired, occasionally, I sell a bit of my own gold or silver. I am debt free, but a few bucks here and there is nice.
Have gold and silver done OK by those who bought from me in November, 1977 when I began doing this? In November 1977, gold was $165 per ounce, and silver was $4. (The ratio was 41.25 to 1 then, and today it is 79.85 to 1. Gold has gone up further than silver). Other prices in 1977 were:
Cost of a new home – $54,200.
Cost of a dozen eggs – 82 cents.
Cost of a gallon regular gas – 62 cents.
Cost of a gallon of milk – $1.68
Median household income – $13,572.
Dow-Jones went from 800 to 999 during 1977
Federal debt – $706 billion
Federal spending – $409 billion.
Today the price of gold is $1325, and obviously, you can figure the rest of prices to compare today with 1977. In 1977, and basically throughout history, to make a generalization, an ounce of gold has always bought a good man’s suit. A silver dime today, is worth $1.20, so a silver quarter will buy a gallon of gas today. 327 ounces of gold in 1977 would have bought a new home, and today, 327 ounces of gold will still buy a new home. Last year, for a friend, I bought a very nice three bedroom home in Delta Colorado with a double garage in a nice neighborhood for 68 ounces of gold. She will repay me with 68 ounces of gold. I bought a home with gold. The Dow Jones has a bit more than doubled. Gold has gone up 800% and silver has gone up over 400% since 1977. The federal debt has gone up 29,000%. How does that grab you? Makes you glad the buck is backed by ‘the full faith and credit of the federal government,’ huh?
Have you ever watched something which is so stupid that it makes you angry? I understand what an acceleration lane is, but most drivers haven’t a clue, and it makes me boil. See, with an acceleration lane, you don’t even have to slow down and look for cars coming your way. YOU ARE IN A SEPARATE LANE. Get into the acceleration lane, and if cars are coming, fine. Just speed up to their speed and blend in. I daily see cars waiting at acceleration lanes, waiting till there are no cars approaching in their lane. But approaching cars aren’t in their lane. They should proceed, gain speed, and blend in. Oh no! They just sit there and drive me nuts. See? I am a nut case in some instances. Well, acceleration lane waiting, to me, is similar to having a savings account, obviously in dollars, which are backed by…..you know what.
What are gold and silver backed by? Go to the first sentence in this column. I’ll quote it for you. “Simple, nothing.” Gold and silver are self backed, and regardless of the flimsiness of any government around the world, gold and silver can be converted into any paper currency. Gold and silver require exploration, mining, milling, smelting, fabricating, distributing, selling, transporting, etc, all of which require lots of capital. Paper dollars, to quote Susan B. Anthony in the previous column, “Cost only the paper and printing.” You need dollars to buy everything you need, including gold and silver, but people who save in dollars, I’ll bet, stand still at acceleration lanes, and may ‘go the way of all flesh’ if their savings account, and the dollars it is denominated in, lose any more value. To me, it’s common sense: Don’t stand still at an acceleration lane, and don’t save your hard earned dollars in dollar denominated savings devices. Dollars have already lost 97% of their value of 125 years ago. Will it stop? I doubt it, but you do as you please, but please don’t stop at acceleration lanes! – Don Stott – 1-888-786-8822