Wait Until We Throw These Rascals Out

I read a very depressing statistic last week. In a nationwide poll, some 63 percent of adult Americans said they do not think they will be able to maintain their present standard of living much longer, much less improve it.

This made me very sad — and a little bit angry, too. Sad, because for 200 years, this country held out the promise of a better life to everyone who was willing to work for it. We could argue for hours about what America means to each of us. But for all of my life, until now, it meant the opportunity to build a better life — and to expect that your children would achieve even more than you have.

My grandparents arrived here as penniless immigrants. They never took a dime of charity. They would have slit their wrists before accepting welfare. As new arrivals from Ireland in the early 20th century, they saw “Irish Need Not Apply” signs on many businesses. But they took what work they could find, kept all three of their children clothed and fed — and made sure that each of them was raised to believe they could do better.

And every one of them did. My mother was offered a full scholarship to college, but had to turn it down. Instead, her parents gave her a used typewriter for her 16th birthday and told her to go to work. Neither her brother or sister went to college either, but both went on to lead successful, productive lives.

My mother’s passion for this country and the principles on which it was founded was boundless. She was fierce, feisty and absolutely unshakeable. She was a friend to every refugee from communism, helping hundreds of them get settled in Cleveland, Ohio and start building a better life there. If you’ve been reading this column for very long you know I’m also a staunch advocate of the principles she held dear.

But now we’re told that two out of every three people in this country expect their lives to get worse, not better? That would have made my mother angry. It gets me mad, too — mad at the sick ideology that is perverting the American Dream.

I’m referring here to the left’s favorite gambit, the politics of envy. For more than a hundred years, their lackeys in the media, our schools, in labor unions and worst of all, in government, have used class warfare in their effort to divide and conquer us.

They’ve promised that, if someone has more than you do, just vote for them and they’ll take some of the “extra” and give it to you. For more than a century, the left has proven the wisdom of the old adage, he who robs Peter to pay Paul can count on the vote of Paul. As the left has proven, there are a lot of Pauls out there.

Their redistributionist philosophy is nothing more than theft. They steal from you, and from every other productive American, in two ways. First, by demanding half of the fruits of your labors in the form of taxes: Not just the income taxes you pay to the Federal government, most states and many cities, but also in the unseen taxes they levy on everything you buy, use and consume.

But their second way of confiscating your wealth is even worse. It is by creating “money” out of thin air — the massive inflation of our currency that destroys the purchasing power of the dollar. The deliberate debasement of a country’s currency is one of the worst crimes a government can commit against its own citizens.

God merely asks you to tithe — to give 10 percent of your earnings to Him and His works. He promises you a better life if you do, but does not threaten you (at least in this life) if you don’t. Government, however, is far more demanding. You are required to “voluntarily" surrender half of everything you earn. If you refuse, they will harass you, seize your property, confiscate your wealth and even send you to prison.

Ah, but you’ve heard this rant before. So instead of repeating it again, let me share some good news with you. Come next Tuesday, we’re going to throw a whole bunch of the rascals out.

Barack Obama and his supporters insisted on nationalizing the 2008 elections. That is, they made every race for the House and Senate a mandate about “the failed George Bush administration.” They succeeded beyond their wildest dreams, giving them the biggest majorities in Congress seen since Franklin Delano Roosevelt.

Ah, but now that snake has turned around and bitten them you-know-where. Thanks to the arrogant overreach of Obama and his allies, next week’s elections have also been nationalized. And a huge number of voters can’t wait to cast their ballots against our socialist president. Count me among them.

I’ve already made plans for the “Take Back America” party I’ll be hosting on Tuesday night. I think we’re going to have a lot to celebrate. I was in Atlanta last weekend for a family affair and loved seeing the headline in the local paper, “Election Day looking grim for Democrats.” The article below said that “Democrats [are] facing the possible loss of the House and trying to hang onto the Senate.” We’ll see, but I for one am hoping their worst fears come true.

By the way, permit a brief aside. For nearly 30 years, the Atlanta Journal-Constitution was part of my daily reading. I hated the liberal bias of the paper, but it was the only game in town. For more than four decades, the AJC tried to out-liberal The New York Times. The Cox family, which owned the paper, along with our largest radio and TV stations, considered themselves the southern Kennedys. And they were as subtle about their biases as their hero, Ted.

Do I expect to see some substantial conservative gains next week? You betcha. But here’s something that may surprise you:

The most important elections next Tuesday won’t be reported on the network news shows.

Yes, the races for the House and Senate are certainly significant. You could even argue that the future of free enterprise depends on them. But consider this: The contests for 37 state governorships and several thousand seats in the various state legislatures are even more important.

I say this for two reasons: One, it is the states that will determine the redistricting that must take place next year. Whatever they do will play a large part in deciding congressional elections for the next 10 years.

You probably already knew that. But here’s something you may not have considered: It is the states, even more than the new Congress, that will decide how far to go in challenging Washington’s enormous appetite for power and pelf.

Already, the attorneys general in 18 states have sued to stop Obamacare in their jurisdictions. But that’s just the beginning. In a couple of weeks, I’ll be writing about one of the most exciting developments I’ve seen in the past 40 years — the growing interest in the nullification movement. Thomas Jefferson had the right idea about how the states could stop an out-of-control Federal government: Just say no!

The revolution starts next Tuesday. I hope you enjoy it.

Until next time, keep some powder dry.

— Chip Wood

The Unveiling Of Lady Liberty

Tens of thousands of New Yorkers crowded into the southern tip of Manhattan 124 years ago tomorrow — Oct. 28, 1886. The cold rain did little to dampen the enthusiasm of the crowd, which stared expectantly across the water to a patch of land called Bedloe’s Island.

They were there to watch the unveiling of an unusual gift from the country of France — a massive statue that would become a worldwide symbol of liberty. On cue, an enormous veil dropped and for the first time the crowd could see the 151-foot tall, 225-ton work of art that would become known as the Statue of Liberty.

An eye-witness account would later recall "a thunderous cacophony of salutes from steam whistles, brass bands, and booming guns, together with clouds of smoke from the cannonade, [that] engulfed the statue for the next half hour." In his remarks, President Grover Cleveland contrasted the statues of other nations, with their "fierce and warlike gods," with "our own peaceful deity keeping watch before the open gates of America."

Lady Liberty remains a meaningful and inspiring symbol to this day — and, we hope, for many generations to come.

— Chip Wood

Mainstream Media Bias, Wages In D.C., Texting And Stimulus Waste

*This is what the media calls the mainstream? Did you hear about the exciting rally the Democrats held in Washington last week? Neither did I. But some 400 groups participated, including the Communist Party USA, the Democratic Socialists of America, the National Council of La Raza, and even one called Queers for Economic Justice. None of them were called “leftist” by CNN or The New York Times, of course. They save their political epithets for those of us who prefer the right-hand side of the street.

*Guess whose residents make the most money? I’ve written before about the average wage of a government employee these days. Counting all the perks and benefits, it’s now double that of someone in private enterprise. And here’s another shocker: The median income of residents of Washington, D.C., is $85,198 — the highest of any city in America. That makes sense: This country’s greatest growth industry is government.

*Y U Luv Txtng. That was the clever headline in a Wall Street Journal story a few days ago. Among the interesting statistics were the following: Two out of three adults sleep with their cell phones next to their beds. One out of six cell-phone owning adults admits walking into a person or object while talking or texting. And the one that really gave me pause: The average teenager sends and receives a total of 3,339 texts each month. When do they have time to do their homework?

*In Chicago they get to vote, too. The more we learn about Obama’s $862 billion stimulus bill, the worse the news is. Recently The Associated Press reported that 72,000 stimulus payments, worth more than $18 million, went to dead people. Another $4 million in stimulus checks were sent to some 17,000 prisoners. But here’s the good news: Officials say they have recovered about half of the funds. Gives a whole new meaning to Joe Biden’s talk about a “summer of recovery,” doesn’t it?

— Chip Wood

More Profits Than You’ve Dreamed Of

As expected, I caught some flak from a few readers of my column two weeks ago, A Trillion Reasons to Buy Gold Now. Most, I’m happy to report, agreed with what I said. A few even had some dandy suggestions to add, such as the alert reader who strongly advised buying equal amounts of two metals — lead and gold. If you missed that column and the resulting comments, click here to see them.

Gold’s recent explosion in price — up almost 400 percent during the current bull market, far outdistancing almost every stock or bond — is really the story of what our government has done to our money. There is only one way to measure what a dollar is worth; that is by what it will buy. When measured against a basket of goods that you and I need to survive, the “value” of the dollar — that is, what it will purchase — has been plummeting like a rock dropped out of a skyscraper window.

It’s easy to understand why. Keep making more of anything and the price of each one will drop. Create several trillion more dollars, to finance all sorts of government spending schemes, and Economics 101 teaches that the value — that is, the purchasing power — of each individual dollar must fall.

Of course, this harsh reality drives our liberal brethren crazy. They want to believe that government is the solution to all of mankind’s problems. They want you to believe that rising prices are caused by greedy capitalists, not by their profligate spending. And worst of all, they genuinely believe they have a God-given right to take money from you and give it to those who deserve it more.

Well, scratch part of that statement; most of them don’t believe in God, much less that He has anything to do with granting us rights. But I’ll stand by the rest of that statement.

Of all the reasons my critics gave for not buying gold now, there is one I want to address today. That is the argument that gold has already gone so high it is bound to come crashing down. “It’s a mania, folks!” some critics insist.

What we’re seeing is a lot of things, ladies and gentlemen. But one thing it’s not is a mania. Unless someone tells Ben Bernanke to turn off the printing presses, I firmly believe that we will see a mania in the price of gold and silver. But we’re not anywhere near that point today. When that day arrives, you’ll want to sell your precious metals to the people who are clamoring to buy them. For now, keep accumulating more. When the mania arrives, you’ll be glad you did.

How will you know when the time to sell is here? In a recent column Jeff Clark, the highly regarded senior editor of the Casey Research publication Big Gold, told us what it would look like. Permit me to quote him at length:

You log on to your brokerage account for the third time that day and see your precious metal portfolio has doubled from last week. Gold and silver stocks have been screaming upward for weeks. Everyone around you is panicking from runaway inflation and desperate to get their hands on any form of gold or silver. It’s exhilarating and frightening in the same breath. Welcome to the mania.

Daily gains of 20% in gold and silver producers have become common, even expected. Valuations have been thrown out the window. Investors clamor to buy any stock with the word “gold” in its title. Fear of being left behind is palpable.

The shares of junior exploration companies have gone ballistic. They double and triple in days, then double and triple again. Many have already risen ten-fold. You have several up 10,000%. No end is in sight. Your portfolio swells bigger every day. Your life is changing right in front of your eyes.

Every business program touts the latest hot gold or silver stock. Headlines blare anything about precious metals, no matter how trivial. Weekly news magazines and talk-radio hosts dispense free stock picks. CNBC and Bloomberg battle to be first with the latest news.

Each tick in the price of gold and silver flashes on screen, and interruptions offering the latest prediction seem to happen every fifteen minutes. Entire programs are devoted to predicting the next winner. You watch to see if some of your stocks are named.

The only thing growing faster than your portfolio is the number of new “gold experts.” It’s a bull market in bull.

“It’s a bull market in bull.” Thank you, Jeff, for a wonderfully memorable expression. At first, the people who were smart enough to invest a sizeable chunk of their wealth in gold and gold-related assets, such as mining stocks, will be dazzled by how much money they’re making. But then, Jeff warns, their joy will turn to worry.

At first it was exciting, then breathtaking. Now it’s scary. You’re drowning in obscene profits but are becoming increasingly anxious about how long it can last. Worry replaces excitement. You don’t know if you should sell or hold on. Nobody knows what to do. But the next day, your portfolio screams higher and you feel overwhelmed once again.

You begin to worry about the security of your own stash of bullion — those clever hiding spots don’t feel quite as secure as you first thought they’d be. Is the bank safe deposit box really secure? Shouldn’t they hire a security guard? Should I move some of it elsewhere? Is there anywhere truly safe? You find yourself checking gun prices online.

As Jeff points out, a gold mania will only be a symptom of much more serious problems in this country:

Your wife calls and says the $100 you gave her that morning isn’t enough to buy groceries for dinner. Prices change often on everything. She urges you to get some bread and milk before the store raises the price again.

Citizens are furious with government. Agencies have been swarmed with bitter taxpayers and revolting benefit recipients. One government office was set on fire. A riot erupted in Washington, D.C. last week and martial law was temporarily declared. It’s too dangerous to travel anywhere.

As crazy as things are, it’s hard not to smile. You’re in the middle of a mania. Your life has changed permanently. You’re thankful you bought gold and silver before the mania, along with precious metal stocks.

As night settles and your house quiets, you log on to your brokerage account one last time. Even though you’re ready for it, your mouth drops when you see your account balance. It is truly overwhelming. You stare at the blinking screen, hand on the mouse, the cursor hovering on the sell button… 

Is this an accurate description of what the future will look like? No one knows for sure. As Yogi Berra once remarked, the future is awfully hard to predict. But it seems to me that betting on more inflation and higher gold prices is as close to a sure thing as you’re going to see in this life.

If you need more convincing, let me suggest you order the CDs from Casey’s Gold & Resource Summit which was held earlier this month. And then listen to them. The all-star line-up included John Hathaway of Tocqueville Gold Fund, Eric Sprott of Sprott Asset Management, Richard Russell, of Dow Theory Letters, and more than two dozen others, including Jeff Clark, Doug Casey, Rick Rule and Bob Bishop.

I’m happy to report that Personal Liberty Digest has arranged a special deal on Casey’s Gold & Resource Summit CDs for Straight Talk readers. To learn about it, just click here.

Remember, knowledge is power. And it’s tax-free to boot. What’s more, the CDs should be a tax-deductible expense for you. I call that a win-win.

Until next time, keep some powder dry.

— Chip Wood

The Black Monday Crash

It was 23 years ago this week when the stock market suffered its biggest one-day loss in history. On "Black Monday" — Oct. 19, 1987 — the market plunged 508 points, or 22.6 percent, on a then-record 604 million shares. The point loss has since been exceeded, but not the percentage.

The crash began in Asia, with the Singapore market falling 33 percent. That was followed by a 17 percent drop in Tokyo and an 11 percent decline in Hong Kong. When the markets opened in Europe, London fell 22 percent, Zurich lost 14 percent and Frankfurt fell 13 percent.

When the New York Stock Exchange opened, the Dow Jones Industrial Average fell 104 points in the first hour. By mid-day the losses had leveled off around 200 points. But after 2 p.m. the Dow lost 100 points every 30 minutes, finishing the day down 508 points.

It turned out that October, 1987 did not mark the start of a bear market, but the end of one. The Dow actually rose 2 percent for the year. Within two more years it was setting new highs. We don’t know if that will turn out to be true of this period, of course. But a lot of very smart and very successful investors, from John Templeton to Warren Buffet, say that the best time to buy is during "a period of maximum pessimism." Does that sound close to where we are today?

— Chip Wood

My Crazy Aunt Ida

Let’s take a break from all of the political mudslinging for a few minutes. Let me tell you the story of one of the most amazing characters to be found in the branches of the Wood family tree. I think you’ll enjoy it. And you may even learn something about wealth that thieves cannot steal and moths and rust cannot corrupt. We’ll see.

Technically, Ida Mayfield Wood wasn’t really an aunt. Not even a great aunt. Cousins who have studied genealogy much closer than I have tell me she was actually “the wife of a half-5th cousin, three times removed.”

I’ve got to admit, I don’t have the faintest idea what that means. All I know is that I found the story of Ida Wood absolutely fascinating. A century ago, she was the subject of literally thousands of newspaper articles.

At least one best-selling book was written about her and the historic inheritance case that resulted from her death. The subtitle of The Recluse of Herald Square promised “A stranger-than-fiction report of intrigue and greed that resulted in one of the most important and exciting inheritance cases in American law.” That it was, and then some.

Ida Mayfield captivated New York society when she appeared on the scene in the mid-1800s. She claimed to come from the family of wealthy plantation owners in Louisiana. Since she was young, lovely and vivacious, she was welcomed at the soirees and balls of the day. There were newspaper accounts of her dancing with Edward, the Prince of Wales, and Samuel Tilden, the Democratic candidate for President. She wore dazzling gowns and jewelry to balls in the New York City.

Ida was pursued by several young men but finally settled on a millionaire businessman and former U.S. Congressman, Benjamin Wood. Benjamin was the brother of Fernando Wood, the mayor of New York City at the time, and owned a popular newspaper, the New York Daily News (no relation to the paper of the same name today). For a while the couple lived the high life — elegant dinner parties and fancy balls and lengthy trips to Europe, with Ida always draped in the most fashionable clothes and wearing the most expensive jewelry.

But it turned out that Benjamin was a philanderer and an inveterate gambler. After a few years he lived apart from Ida most of the time. He continued to lavish large amounts of money on her, which she put into stocks and savings accounts.

When his fortunes turned and he subsequently asked her for some of that money back, she loaned it to him on very strict terms. When he needed even more money, she paid him $100,000 (over a million dollars in today’s money) to purchase a controlling interest in the Daily News.

Ida became one of the first female publishers of a large metropolitan newspaper. For a while she took a direct interest in the day-to-day affairs of the paper, even writing many of its editorials.

When Benjamin Wood died in 1900, Ida’s mental state began to deteriorate. She became increasingly reclusive and paranoid about her finances. The financial panic of 1907 apparently set her over the edge. She sold the newspaper for $340,000 (making a hefty profit on her investment), and withdrew all of her money from the banks.

Ida took her cash — estimated at more than $1 million (the equivalent of more than $10 million today) and moved into two rooms at the Herald Square Hotel. Her sister Mary and a woman she identified as her daughter Emma later joined her. The three women cooked their own meals and rarely ventured outside their rooms. Mary and Emma died in the late 1920s, leaving Ida alone. She became increasingly reclusive, refusing to open her door even when the bellman brought the food she ordered. She insisted that he toss it over the transom.

By 1931, Ida was 93 years old, partially deaf and nearly blind. She had not left her room at the Herald Square Hotel for several years. One contemporaneous account described her as “feeble and emaciated, weighing 70 pounds and bent over like a question mark.” She hoarded her cash, living on pennies a day. Her diet consisted mainly of toast and condensed milk. She lived in constant fear that someone would rob her.

Finally, in the fall of 1931, her closest relative — Otis F. Wood, the son of her husband’s brother, Fernando — petitioned the court to declare his aunt incompetent and make her his ward. The judge agreed and Otis Wood became her guardian. And here is where the story really gets interesting.

When Ida refused to permit Otis to go through her possessions he ordered a sedative put in her food. While she slept he had her rooms searched. What they found astounded them. Hundreds of thousands of dollars in cash was stuffed into various pots and pans. Ida had hidden 50 $10,000 bills in a pouch tied to her waist. (The bills had been printed by the U.S. Treasury more than 50 years earlier.) There were shoeboxes filled with yellowed stocks and bonds worth tens of thousands of dollars, some with interest and dividend coupons that had not been redeemed in decades. A diamond necklace was found in a cracker box.

The discoveries made newspaper headlines around the country. Typical of the coverage was this story from the Brooklyn Standard Union of October 7, 1931:

“RECLUSE, 93, HOARDING MILLION DEFIES TREASURE SEARCHERS

“A frail but spirited little lady of 93 years, once the belle of mid-Victorian days, today stomped her defiance of searchers spurred by discovery of nearly a million dollars in currency she hoarded in her hotel room ‘because she was afraid of banks.'”

Otis Wood told reporters that he wanted to move his aunt to better quarters. In the meantime, he hired guards to patrol the hallway outside her room 24 hours a day. Ida refused to move and, because of her failing health, Otis was reluctant to use force to relocate her.

Ida died five months after the story broke. A will was found, in which she left everything she owned to her sister and her daughter. But both women died before Ida and neither left a will. The New York Surrogate Court referred the case to the city’s Public Administrator, the official charged with settling the estates of people who died without valid wills or verifiable heirs.

Within weeks more than one thousand people named “Wood” or “Mayfield” had filed claims on the estate. Joseph A. Cox, counsel to the Public Administrator, was assigned to conduct an investigation into the family lineage of Ida Wood.

It took Attorney Cox several years to unravel the mystery of Ida Wood’s antecedents. After a search that took him from boxes of dusty documents found in Ida Wood’s hotel room, to an overgrown grave in Massachusetts, to a bakery in Ireland and long-ago births in England, Joseph Cox told the court he had discovered the truth:

“Ida Mayfield” was in fact Ellen Walsh, the daughter of Irish immigrants. She was born in England and raised in Massachusetts. She was not related to anyone in Louisiana; in fact, as far as he could determine, she had never visited the state. Instead, she had left home in Massachusetts in 1857, a lovely and determined lady of 19 years, whose wit, beauty and vivaciousness bought her entrée into New York society under her assumed name.

The various Woods and Mayfields were understandably upset by the news and filed suit to get “their fair share” of the estate. The subsequent trial before Surrogate Judge James A. Foley resulted in the finding that Ida E. Mayfield was a false identity assumed by Ellen Walsh, who died with no direct heirs. Therefore, the court awarded her estate not to descendents of the Wood family, nor to the hundreds of Mayfields who claimed they were related, but to Katherine Sheehan and nine other living relatives of Ellen Walsh, an Irish lass who ran away from home at age 19.

In addition to Sheehan, two O’Donnells, three Kennedys and a McEnearney, Murphy, Gallagher and Reynolds each received a share of the estate valued at about $90,000. Again, this would be the equivalent of around $900,000 in today’s dollars. It would be a hefty sum today. During the depths of the Great Depression it was a staggering amount of money.

After he retired, Joseph A. Cox wrote the story of his quest to find the truth about Ida Mayfield, nee Ellen Walsh. The Macmillan Company published The Recluse of Herald Square in 1964. I found a copy of the first printing, signed in September 1964 by the author himself, on Abebooks.com, my favorite source for used books. It is from that account, as well as newspaper stories of the day, that this column has been drawn.

I hope you found the story of Ida “Ellen Walsh” Mayfield Wood interesting. And that at least for a few moments, it helped you forget the cares and concerns of our world today. And who knows? Faced with today’s market worries, it just might encourage you to hide some loot yourself. As you know from last week’s column, personally, I prefer gold.

And here’s another idea: Why not do some genealogical research into your own family tree? Unless you do, you’ll never know what heroes and scoundrels you might find there.

Until next time, keep some powder dry.

— Chip Wood

What’s Behind The Symbolism?

*What so proudly we hail. Thanks to all of you who enjoyed my column Honoring Our Country’s Flag that ran two weeks ago. You made it one of the most-read columns in the history of Personal Liberty Digest. (If you missed it, click here to see it — and maybe share it with a friend.)

That article has gotten nearly 500 comments and more are coming in every day. I’m sorry I can’t reply to each and every one (yes, even the ones from those loony liberals, who keep attacking all of us who still value patriotism).

One of the best suggestions I saw was to explain the symbolism behind our country’s flag. What do the stars and stripes mean? What do the colors represent? These are great questions and I’m glad to say they have great answers.

Back in 1777 Charles Thompson, the secretary of the Continental Congress, said this about the colors red, white and blue, which were used in the Great Seal of the United States, as well as our first flag:

“White signifies purity and innocence, Red, hardiness & valour, and Blue, the color of the Chief [the broad band in which the stars appear] signifies vigilance, perseverance & justice.”

The U.S. House of Representatives, in a book about the flag published 300 years later, added:

“The star is a symbol of the heavens and the divine goal to which man has aspired from time immemorial; the stripe is symbolic of rays of light emanating from the sun.”

So you see, there’s a lot more involved here than just 13 stripes representing the original 13 colonies that formed the United States of America; or 50 stars, representing each individual state. Aren’t you glad you asked?

— Chip Wood

“Girl Crazy” Included Many Stars

On Oct. 14, 1930, "Girl Crazy," a new musical by George and Ira Gershwin, premiered at the Alvin Theater on Broadway. The show made stars of Ginger Rogers (who sang "Embraceable You") and Ethel Merman (who belted out "I Got Rhythm," among other numbers).

But the real cavalcade of stars appeared not on stage, but under it, where George Gershwin conducted an orchestra that included such future greats as Benny Goodman (then 21) on clarinet, Jimmy Dorsey (26) on sax, Gene Krupa (21) on drums and Tommy Dorsey (24) and Glenn Miller (26) on trombone.

"Girl Crazy" would run for 272 performances. It contained more hit songs than any other Gershwin musical. Other hits from the stage show and movie included "Bidin’ My Time," "But Not for Me," and such forgotten gems as "Goldfarb, That’s I’m!" and "(When It’s) Cactus Time in Arizona."

"Girl Crazy" was also the only Gershwin musical comedy to be turned into a movie three times, including 1992’s "Crazy for You" and a 1943 version starring Mickey Rooney and Judy Garland. In the 1943 movie, Garland’s role combined the parts — and songs — performed by Rogers and Merman on Broadway.

To show you how much things have changed, back then you could have gotten a balcony seat for a Saturday matinee for 50 cents. Today, a decent seat on Broadway can set you back one hundred bucks or more.

— Chip Wood

Running Away, Outside The Main, HIIC And Gold

*Running from the president.  When I lived in Georgia, Governor Roy Barnes was not my favorite politician. He was too much of good-ol’-boy power broker/dealer for my taste. But I’d take 100 of him over Jimmy Carter, I must add. And he just went up a notch in my regard: When Barack Obama visited the Peach State, Roy (who is running for governor again) wouldn’t get within 100 miles of him. And he’s the Democrat nominee. Wonder how many other Democratic contenders are doing the same thing?

*The far left of the so-called “mainstream.”  The latest smear campaign from the left-hand side of the political spectrum is that those nasty Tea Party candidates are “outside the mainstream” of American politics. Right. The same folks who will spend us into bankruptcy and welcome avowed communists to their rallies claim that these libertarian/conservatives are just “too radical.”  I wish John Adams or Patrick Henry were around to show what being a radical really looks like.

*Are we becoming a hick nation?  Oops, sorry, the acronym isn’t HICK, it’s HIIC. And it stands for Heavily Indebted Industrialized Countries. In case you didn’t guess, it’s not a good thing. According to many analysts, the U.S., Europe, Japan and Great Britain are becoming very poor credit risks. And that ain’t good. Speaking as a concerned American, what’s to become this HIIC nation from becoming a HICK? I suspect we’ll know more come Nov. 3.

*Could you price that in gold, please?  Just as I was putting the finishing touches on today’s Straight Talk, a friend sent me this fascinating factoid: Ten years ago it took 498 ounces of gold to buy the typical home in the U.S. Today, that same house will cost you 138 ounces. Would anyone like to argue that houses have dropped in value by 72.3 percent in the past 10 years? Or maybe the problem is with our yardstick — that is, how we measure how much things cost.

— Chip Wood

A Trillion Reasons to Buy Gold Now

I can already hear some of you saying, “Now Chip really has lost his mind. Doesn’t he know gold is the most expensive it’s ever been? It’s been hitting new highs day after day for weeks.  Why on earth would he tell us to buy some now?”

I can answer that objection in one sentence: If you don’t own any gold, you need to. The sooner the better. Yes, gold may come down in price a bit. In fact, I’d be surprised if it doesn’t. But not far. And not for long.

If you’re waiting to buy when gold is back under $1,000, you’d better put some money in your will. Then tell your great-grandchildren to buy some with it. Because I don’t believe you’ll see that price again in your lifetime.

What makes me so certain? Refer back to the headline above. I’m talking about the trillions of paper dollars that will be cranked out non-stop by the U.S. Treasury and the Federal Reserve over the next decade. The lowest estimates for our deficits over the next 10 years come to $10 trillion.

The more dollars that flood into the economy, the less each one will buy. You see it in higher prices for everything. Why is a loaf of bread or a bottle of milk 20 times more expensive than when your parents were young? Because our government has caused the dollar to lose 93 percent of its value in the past 100 years. I’ll save the lecture on Keynesian economics for another day, but many of you know the quotation by John “Candy” Keynes that explains what’s happening.

And please don’t count on Congress to solve the problem. Sorry to put any die-hard Republicans on the spot, but can you tell me how much Federal spending was reduced under Ronald Reagan? Let me hear a chorus of “Zero!”  Right you are. How much did the two Bushes cut spending? Can you say “they goosed it to the moon?” Right again.

Even if the Republicans gain control of both branches of Congress this November, there isn’t much they can do to slow down the spending spree. Almost every entitlement is not only written into law, increases in those same entitlements are also written into law.

Now, don’t get me wrong. I do believe there will be a political solution to our country’s runaway spending. There has to be, because there are only two other possibilities: a total economic collapse or an armed revolt. And frankly, I don’t want to be around for either one.

Solving the economic mess that the Democrats and Republicans have created won’t take place overnight. It will be like turning around a giant ocean liner.  First you have to slow it down and then you have to start very gradually moving in the opposite direction. Depending on how far you’ve gone, it can take you a long time to get back to port.

Folks, it’s going to take a long time to get back to Constitutional government. Heck, it took the socialist schemers more than 150 years to get us to this point. How could we possibly believe we can undo everything they’ve done in one election? It can’t happen.

But we can get started. We can put a freeze on new government hiring; we can eliminate hundreds of programs and put limits on thousands more. We can stop acting like the world’s policeman (or in the eyes of many, like the world’s bully), close scores of overseas bases, and bring thousands of our boys and girls home.

Even more important, we can stop killing the goose that lays the golden eggs. Stop taxing producers to death. It’s that simple. We can encourage new businesses to open, new investments to be made and new jobs to be created. We can encourage the same thing that’s worked dozens of times before in our history: Get government out of the way so free people will go to work and solve our problems.

A robust economy will mean more money for almost everyone — definitely including the ones who collect it for Uncle Sam. We won’t have to borrow more; we won’t have to flood the country with worthless specie. We can pay our bills and start reducing our deficits by doing things that get the economy growing again.

And yes, I’m simple-minded enough to believe that lowering taxes, slowing spending, reducing regulation and letting free enterprise work will do all of this… and more.

But in the meantime, I urge you to own an asset that can protect your purchasing power against both inflation and deflation. My earnest recommendation is that you own some of the world’s best and oldest money — gold and silver. People have trusted it for more than 5,000 years as a way to protect their wealth. Can you think of anything else that has worked as well or lasted as long?

While there are many ways to exchange some of your depreciating dollars for non-depreciating assets like gold and silver, let me mention two of my favorites. Go to the Internet and you’ll find many, many more:

  1. For gold, I prefer the coins issued by the U.S. Mint. The gold Eagles are, in my opinion, one of the most beautiful coins ever made. There is no such thing as owning too many of them. But also consider the Buffalo, another one-ounce coin from the U.S. Mint. This is one of the world’s few 24-karat gold coins, which means it is .9999 pure, without a bit of alloy added to it.
  2. For silver, while the silver Eagles from the U.S. Mint are also lovely, the bags of so-called “junk silver” are a much better value. These are circulated dimes, quarters and half-dollars made by the U.S. Mint before 1965. These 90 percent silver coins come in bags of $100 or $1000 face value. They are instantly recognized, impossible to counterfeit and, unlike gold coins, have never been confiscated. And they happen to make an unmistakable “clink” when dropped on a wooden table.

The “spot” price of gold and silver changes throughout the day; so do the premiums various dealers charge. That is why it is important to shop around for the best deal. When you do, make sure you’re comparing apples to apples, not apples to kumquats. Unless you’re picking up your purchases locally, they should come to you via insured, registered U.S. Mail with a return receipt requested. Know all of these costs before you buy.

There are thousands of dealers around the country who will be happy to sell you all of the gold and silver you want. You probably have some in your own town or city. Here are four national dealers I know and trust. All of them have been in business for years and have excellent reputations.

*Asset Strategies International is a boutique precious-metals firm based in Rockville, Md. They’ve been around for 28 years and are known for good prices and even better service. Find them at www.assetstrategies.com or call 800-831-0007 or 301-881-8600.

*Camino Coin Company was founded by Burt Blumert, one of my personal heroes in the battle for liberty. His successors are doing a wonderful job of maintaining the same high standards and low costs for which he was famous. They’re in Burlingame, Calif., at www.caminocompany.com. Phone 800-348-8001 or 650-348-3000.

*Gainesville Coins in Tampa, Fla., also comes highly recommended. Although I’ve never been a customer, I have many friends who are. They all speak very highly of the staff and the service they receive. Check the firm out at www.gainesvillecoins.com or call 813-482-9300.

*Kitco is a giant operation based in Toronto, Canada. I’m told their website gets more than a million hits a day — in large part because they’re one of the best places in the world to find stock and metals prices. I know some people who go there two or three times an hour. The company is busy and so is their landing page. But their prices and service are also good. See for yourself at www.kitco.com or call 877-775-4826 or 514-876-4202.

And to anticipate an accusation I know that some of my liberal readers are just itching to make: No, I do not make a penny on any of your purchases from any of these people. I wrote this piece because I believe, like the Wise Men of old, you should own some gold.

But this time, don’t give it away or let it be taken from you. Put some of your depreciating dollars into real wealth. Put it into gold and silver. Then start enjoying the “sleep at night” comfort that comes from knowing you have some wealth that rust can’t corrode and politicians can’t inflate.

Until next time, keep some powder dry.

— Chip Wood