My wife Bonnie, and I, went to an expensive, really classy restaurant the other evening, and we had a great time. I looked around, and there were perhaps 20 tables, and most of the diners were obviously well dressed and enjoying the rewards of great incomes. We do this many times, but this time, I looked around, and realized that probably 100% of the restaurant’s patrons, had their surplus assets stored in stocks, bonds, CD’s, and many other dollar denominated investments. I checked on the internet, and it says that 35% of adult Americans are invested in stocks and bonds, and another 35% use financial advisors to invest for them, I am certain charging, at least 10% for their services.
Fox Business News, is watched by me weekdays. I watch the metals prices, stock market prices, and the latest fraud in the form of bitcoin. Regardless of which host is being broadcast, never are there any worries about the future. In Friday’s Journal, a full page spread about one of Europe’s biggest bankruptcies in many decades, has taken close to a billion dollars out of multiple banks, individual investors, unions, retirement funds, and even some government funds. All ‘investments’ have evaporated, and one bank ‘wrote off’ $700 million. China is in ever more hot water, as its real estate sector is hundreds of billions in debt, no way to pay it off, other than the printing press. GM has lost big, as has Ford on electric cars, and Tesla’s head has been found out to have turned on many times in hallucinogenics, not counting losing billions on Twitter. I read the Journal, and as opposed to most other media, the obvious economic news is printed, and as an aside, Trump’s stupid speech, and Biden’s obvious mental decay.
I’ve recently read an elaborate summary of what happened in 1929, and I never thought it could be as bad as it really was. Hundreds of people, 98% men, were jumping out windows, their plight had become so hopeless. People who were formerly well off, and an example of this, might have been the restaurant diners I observed, suddenly, and with no warning of any kind, had lost everything. Banks closed, some never to re-open, and my parents lost money in a bank which never re-opened, but they weren’t harmed too much, as their drug store kept on doing O.K. Every sector of the world’s economy crumbled, and it is today, beyond anyone’s even most vivid imagination, to comprehend what went on as a result of the 1929 crash.
What causes a crash? It’s really pretty simple. Economic crashes of anything denominated in paper money, be it stocks, bonds, CD’s, futures, et al, depend on general approval of things. When buyers and holders of various items, lose respect, goodwill, distrust of management they crash. It can be bad profits, huge bankruptcies, horrendous earthquakes, disasters of all kinds, or just the general attitude of holders of the investments, causing them to sell, to ger out. Massive selling, causes a chain re-action, and a severe depression occurs, which can take may years to recover, and generally, only at a level many percentage points of where it was before the crash.
Did gold and silver crash during the great depression? No, because the spot prices of metals, are close to their mining, milling, smeltering, and distribution costs, and there is no fluff, printing press, ‘blue sky,’ massive retailing, advertising, and huge physical properties involved and interest costs of all the borrowing. NO, I AM NOT PREDICTING A STOCK MARKET CRASH, but it will be a hundred years since the massive 1929 horror episode in five years. When it eventually happens, and it will, I hope you readers will not be hurt.
P.S. the internet also says that 10.8% of adult Americans own gold and silver, which is not nearly enough, and that’s why we’re here. I hope your team won the Super Bowl!
-Don Stott, don@coloradogold.com