As I write this on January 3rd, I don’t think it’s an outrageous prediction, to say that the Biden administration will attempt to reverse all the things that Trump did. He will resume the Obama type of spending, government size increasing, and possibly, as did Obama, double the national debt, which Obama did in two terms. Biden will only have one term, if he indeed finishes his first one, and if he doesn’t, his vice president will spend even more and increase the size of government even more.
Since inflation is merely an increase in money supply, and without a shadow of doubt, the paper money supply will increase in the next four years, as it did during the Obama years. It did during the Trump administration also, but came no where near what Obama and previous administrations accomplished. He did his best. Inflation then, makes prices go up, and that’s why saving in gold and silver, is the only logical way to hedge against inflation. Any savings device denominated in dollars, such as savings accounts, will lose value as the dollar loses value and prices escalate. Logical?
I’ll be 87 next month, and when I was a kid, a Hershey bar was a nickel as was a Coke. Are Hershey bars or Cokes any different now than in the 1930’s? In 1941, Mountain States Telephone and Telegraph Co, bought a new truck for $400. I’ve got one. A new telephone truck today, costs perhaps $36,000, and it now has an automatic transmission, power steering, brakes, and air conditioning, plus other improvements, but 90 times as many improvements, which is 90 times $400? You decide, but the answer is obvious. The comparisons are endless, but one other comparison needs to be made before we go any further.
For a hundred years in America, gold was $20.67 per ounce, and silver $1.25 an ounce. As I write this on January 3rd (Happy New Year!), gold is $1900 and silver $26.47. A ratio of 71.77 to 1. When metals prices were $20.67 and $1.25, the ratio was close to 16 to 1, as it has been throughout history. Also, throughout U.S. history, at least for the last hundred years, an ounce of gold has always bought a good man’s suit, and 2 or 3 silver dimes has always bought a gallon of gasoline. THEY STILL WILL! If then, you had saved your surplus assets in dollars, the saved dollars would have bought but a fraction of what they bought even a few years ago.
I just read an autobiography OF Sam Walton, who of course founded Walmart, which now has over 11,500 stores, is the largest employer in the U.S. and has the largest truck fleet in the U.S. also. Sam said he never advertised, because it would make his merchandise too expensive. He relied on word of mouth, and as I think about it today, I still don’t think Walmart advertises. Colorado Gold doesn’t advertise either, but until I read the Sam Walton book, I never even thought about whether Walmart advertises or not. We don’t, just like Walmart doesn’t, as it makes gold and silver cost too much, like Walmart’s merchandise. Our word of mouth has been OK for us for over 40 years so far, and we’ll keep it that way.
-Don Stott
don@coloradogold.com