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:
- 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.
- 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