TESTING POSITIVE FOR STUPIDITY AND IGNORANCE IS A PROBLEM. INSTEAD…
- Ride the bubble up and get out early. Leave some profits on the table. Easy to say, difficult to do.
- Remember history. Bubbles implode, fiat currencies never last, politicians are not trustworthy, fractional reserve banking adds to the currency in circulation and creates excess dollars chasing the same quantity of goods. Hence, we pay higher prices. Inflate or die.
- Back in ancient times, when Nixon was President, the dollar was worth 1/40th of an ounce of gold. Today it is worth 1/2000th ounce of gold. Consumer price inflation sucked the value from the dollar. Worse, wages for the lower 90% did not keep pace with the higher cost of living.
WHAT SHOULD WE DO?
- Invest is something safe, like 10-year Treasury Notes? Oops, excessive debt forced the Fed to lower rates so the U.S. government, corporations, and consumers could afford debt service. Your savings earn next to nothing, thanks to The Fed and excessive debt.
- Invest in Apple, Microsoft, or Tesla and hope they rocket higher instead of “doing an Enron.” Then exit at the top and smile. It’s easy to say in retrospect, but hard to do in real time.
- Invest in real estate. This works until renters stop paying rent, mortgages default, and tenants leave.
- Start a central bank. Create currency units from nothing, payoff congress to support your policies, buy Apple stock (or whatever) with newly created units (think Swiss Central Bank), and smile. This works for a limited time for very few people…
- Buy insurance to protect your savings from the actions of politicians, and central bankers, and from the consequences of excessive debt, consumer price inflation, bad policies, stupidity, and ignorance of history. That’s correct – buy gold and silver. They survived for thousands of years and, regardless of what CNN and CNBC say, precious metals protect your assets and savings.
Examine a log-scale chart of weekly gold prices, smoothed with a 40-week moving average. The trend on the log chart is upward for the past 50 years. Will gold continue to rise?