PAPER CAPER
The great Austrian economist Ludwig von Mises thought that gold and silver had one single redeeming quality when used as money. They could not be printed. In other words, the politicians and central bankers could not create these metals out of thin air the way they could paper money. It was much harder to run deficits and pay for runaway social spending. That’s why socialists hated gold and silver. That’s why they got rid of it as money.
Today silver can no longer be used as money. There isn’t enough of it. Gold, on the other hand, still exists in quantities above ground that makes it feasible for gold to play a monetary role once again. For many years Central Banks were shedding gold. Canada and Britain sold at around $300 (shrewd leftists). Now Central Banks are buying gold (especially our rivals). The gold in Fort Knox acts as somewhat of a de facto money. It gives the dollar some backing (assuming the gold is there). When you hear politicians proposing to sell our national patrimony you have to wonder about their intelligence.
Frankly, I think gold is quite expensive these days. I’ve thought about selling mine, perhaps to buy more silver. What keeps me from doing so is the government’s never ending creation of indebtedness and new money to pay the bills. It’s almost like governments the world over are fighting a rear guard action to keep their money from becoming worthless. They prop it up by creating more of it. In the U.S. the government throws money at everything that moves. You can’t begin to comprehend the number of wasteful and useless extravagances. Furthermore, they will print money until they run out of paper to insure that welfare and social spending continues. (The term printing money describes the bookkeeping entries that create billions out of thin air.)
Price inflation applies itself unevenly. Although it’s higher than the government tells us it has not exploded into double digits as in 1979. However, it’s likely to get much worse. The government wants to steer this inflation into assets. A stock market and real estate boom would jack up taxes and give them some cover. It’s worked in precious metals, commodities, art and collectibles but these are asset bubbles that don’t excite the tax collector.
If paper fails (sovereign debt) where are you going to be? Nobody should be totally dependent on bonds, annuities, insurance or stocks. My winter neighbor in Florida confessed that the one thing he fears the most is hyperinflation. For someone on a fixed income that’s a pressing concern.
Paper money can become worthless. In fact it always has. Silver, on the other hand, will always have value. While paper money explodes to unfathomable quantities the amount of silver shrinks. While the amount of paper assets and investments becomes even more numerous the amount of silver available for investment diminishes. While most people climb aboard the paper express of Washington and Wall Street a small minority understand the power of contrary opinion. Silver buyers have more than offset the depreciation of paper.
Is there a lot more to go in silver? As long as the liberals have any say so then we are at grave risk. Governments can’t be trusted to have a monopoly on money. They create an excess of money to pay for the socialism that is well on its way to ruining America. The liberal agenda is the blueprint for national ruin. The current crisis is one that can’t be papered over. Printing press money and the political system it finances are failing. The left has bankrupted us. A continuation of their policies will pull the whole edifice down on top of us. When the circus tent collapses you want to be away from the crowd. Our concession stand sells silver. That’s the place to be.