I wonder when Friday’s Journals go to bed. I wonder, because when I got up Friday, Jan 30th, I was surprised that Gold and Silver were crashing, and Friday’s Journal had a glowing report on how everyone was ever so happy about the metals being such a bright spot. The Journal obviously went to bed Thursday afternoon. Such are the hazards of a daily newspaper! Crashing they did, and one of my suppliers’ brokers, said that in all the years he’s been doing it, he’s never seen anything like what just happened.
Now, everyone who doesn’t have physical gold and silver, but have ETF’s, futures contracts or the like, have possibly lost their investments. That’s why my safe may have lost some of its value, when gold went down $500 and silver about $33, but since it is physical wealth, paid for. and has no debts or anyone’s knowledge of it but myself, I know it will go up and cover its losses and go up even higher… in dollar costs; which is the same as saying that as gold and silver go high in dollars, the dollar is getting lower in value and purchasing power. “Elementary my dear Watson,” as Sherlock Holmes might say. Both prices are diametrically opposite each other. Gold and silver go up, and the dollar’s value goes down.
Another column in Friday’s Journal speaks of Trump introducing some sort of program for kids’ investment, I assume for their adult age? As I was editing this, I just saw one of the funniest movies ever made, (Adam’s Rib) and In this 1949 film, a woman bought a new life insurance policy for $3,000. How short sighted, if she knew what 2026 would bring. Just like Trump’s idea for kids. Dollars invested in anything not physical, is sure to be futile. Real estate, or anything requiring a Social Security number, means that big brother knows everything about you.
Your home is an inflation hedge. It requires numerous taxes, utility costs, repairs, lawn maintenance, insurance, and interest if you have a mortgage, and in some cases an HOA, et al, but you have a place in which to live, while you are enjoying an inflation hedge.
I’m about half way through a 650 page book on John Adams, our 2nd President. He was married to, and deeply in love with Abigail, and in 1777, the small government even then, was printing the “continental” currency, which of course, like the dollar, were backed by nothing. In a note to her husband, she noted that “Our dollar is not worth what a quarter had been, and our money will soon be as useless as blank paper.” John studied law under several tutors, and became not only a crack lawyer, but was promoted into various offices, and traveled around the world. John became very close to Benjamin Franklin in Paris. Franklin had grown fat but still was loved by the ladies, and close to universally loved by the French. Benjamin Franklin had many illegitimate kids, probably by his devoted French lady loves. One son, William, became a lawyer and a governor of New Jersey. He was a devoted loyalist, and always thought that America should stay loyal to Britain. William and his father, Benjamin, never spoke to each other because of their political differences.
John Adams was not loved by everyone in France, like Franklin, and one note from Franklin about Adams, reminded me so much of Trump, that I have to quote it. “He (Adams) means well of his country. is always an honest man, often a wise one, but sometimes and in some things, absolutely out of hi senses.”
Getting back to the crash of metals: As I have told everyone, all of the time, when they ask me ‘if prices will go up,’ my answer is always the same. “If I knew what would happen ten minutes from now, I’d be the richest man on Earth, because if I knew it was going down, I’d sell everything and buy it lower.” Think about it for an example. If I knew gold was going to go down in ten minutes, I’d sell 100 ounces of gold, and buy it back $5 cheaper. Sell 100 ounces for $5500 an ounce ($550,000), and buy it back for $5000.($500,000). Counting shipping spread, etc, I’d buy 100 ounce back for a $4,000 per ounce ($400,000) profit or $100,000 profit after expenses. But last Thursday, (January 29th) I had no idea that I would wake up Friday, January 30th and see that the markets were crashing, and neither did the Journal. NO ONE KNOWS WHAT WILL HAPPEN IN THE FURTURE.
We can safely predict of course, and that is that politicians will always vote for more largess from the public treasury, (as in all of known history), and that also, (in all of known history), no government will spend only what it takes in via taxes, so, (in all of known history), that government will slowly go bankrupt, and take its citizens with it, unless those citizens had protected themselves with a hedge, un-related to that government, so it couldn’t be legislated against or confiscated. Nothing is more compact, or universally loved, (in all of known history), than gold and silver. 2,000 years ago, when the Roman Empire went bust, it was exactly the same thing which is happening here, as did the Soviet Union in 1991. Our dollar has already lost 95% of its value, since I was born in 1934. Those morons who save in dollars, are vindicating history!
“Jesus Saves, but Moses invests.” An old saying, much older than me. Try a different set of words. “Smart people save in gold. Stupid people invest in dollars.”
Many years ago, In Philly, a friend of mine told me that he had just read an incredible book, and that I should get one as soon as possible “What is it Lou?”
“Atlas Shrugged,” Don, and you must get it and read it.” I didn’t then, but a few years later, I had moved to Colorado, was in Durango, and saw a book store. There was “Atlas Shrugged.” I bought it, and I think I spent maybe 20 hours reading every one of its 1157 pages. It truly changed my life. If you have never read it, please get one and read it!
As old Warner Bros. Cartoons used to say, “That’s all folks.”
“Illegitimus Non Carborundum”
-Don Stott. don@coloradogold.com 1-970-249-4646