first majestic silver


August 19, 2002

We all have "assets" of various kinds and types. We have our looks, and this seems to be especially important to women, who go to great lengths and expense to maintain them. Us guys have looks, sort of anyway, which most do not go to any great length to maintain. But these assets we all have, to some degree or other, so we must examine other assets for the subject to have any meaning.

An asset can be a good job or profitable business. Hard work or an efficient business operation safeguards these assets, hopefully. We have assets in our homes and autos. We should change the oil, lubricate, polish, paint, clean, decorate, cut the lawn, fertilize, and do various maintenance chores, to safeguard our assets in our homes and autos.

Clothing, furniture, appliances, dishes, flatware, carpeting, and other household items, are assets also, if maintained. We all have assets, from the poorest to the richest of us. The homeless wretch, has assets he feels are valuable, even if it is only a spot near a steam vent, or a ragged coat. Assets are extremely valuable for our psyche or mental stability. It is natural for even animals to protect their assets. Dogs will not let anyone take their bone, mama bears guard their cubs, and birds will protect their eggs and young. Assets are supremely important to every living thing.

Then we come to the additional thing called "surplus assets." A surplus asset, is one that is in excess of what one needs for daily life. A dog burying his bone for future use, maybe. In a home, a surplus asset may be an extra bedroom, or in the garage, it may be an antique auto, or piece of wood furniture one is restoring. Many of us stored extra water, food, or even a generator for the potential Y2K disaster. These were surplus assets...for a bad time, for which all surplus assets can be used. Note that all the assets mentioned were physical, identifiable, tangible things, that one could put ones hands on, see, feel, use, profit from, or enjoy. Surplus assets can be rare stamps, original oils, books, or the like, but all of the above, and a lot more the mind may conjure, are physical things, that can be used, sold, or in some way converted into cash, which can be used to tide one over in a time of stress, disability, or difficulty. Tangible things can give one great joy. Fakes can make one extremely angry, as in a copied artist's signature, deceptive knockoffs of a fashion designer's clothes, or fake brand name wristwatch, as examples. Counterfeit pre-1933 double eagle gold coins, which were made by the tens of thousands, and shipped into America back in the late 1970's, caused a lot of numismatic collectors to blow a fuse, and rant at the dealer who sold them.

I am amazed that about 99 44/100 % (which product used to use that figure in advertising?) of Americans store their surplus assets in the biggest fake of all, and that is paper currencies. Dollars aren't even pretty. They burn easily, are backed by nothing, can be stolen with impunity, never identified if the thief is caught, spent instantly if stolen, and are not possessed of any of the attributes of the above mentioned antiques, or other collectibles. You can't "restore" a pack of dollars, as with an old auto or piece of furniture, which can give one thousands of hours of pleasure. Dollars can't be hung on a wall and pleasure derived from looking at them, as with piece of art. One can't eat with dollars, as with Sterling flatware, or China. Dollars are not an enjoyable or fun method to store surplus assets, as they will give no physical pleasure of any kind, as can other surplus assets. Suppose you took some surplus assets, and bought wonderful perennials for your garden? You could watch them blossom and bloom year after year. Wouldn't that be a wonderful place to spend and store surplus assets?

You might say, "Dollars invested can grow, like your plants, and I can have more of them when I invest them in a CD." So what? Think about it. No one argues that the dollar supply is increasing at from 8 to 10 percent a year, meaning their value decreases by that much. Your 2% interest CD, or money market account doesn't increase your dollars as fast as they are losing purchasing power. Where is the "growth?" It is actual "shrinkage." Plants and trees grow, make your home more valuable, and there are no taxes on them. Lilacs or silver maples, are a better investment than a CD or money market account, at today's interest, debasement, and tax rates. A "whole life" insurance policy, is a guaranteed loss. By the time you die or even borrow on it, the comparatively speaking 'sound dollars' you paid in, will be taken out as dollars of far less value…meaning a loss.

The tangible assets of which I spoke, had value in themselves, and required no "backing" to assure validity. Dollars, or dollar denominated instruments, depend on their issuer for value, and have none in themselves. A million German Mark CD in 1924, would have bought a slice of bread, whereas a few years earlier, it would have bought a mansion. The German Mark was dependent on the German government to maintain its purchasing power. Thanks to gross mismanagement and the treaty of Versailles, they became worthless. Every war America has engaged itself in, thanks to politicians and presidents, has decreased the dollar's purchasing power by an enormous amount. 50% in WW II alone. It is said that the buck will buy but 20% of what it bought 31 years ago, when the last backing was removed, so where is the "growth?"

Original oils, magnolias, or an antique dresser, aren't dependent on the frauds in DC for their value, and are self-backed. Their values remain the same, only their prices in dollars go up. Naturally, I am now getting to gold and silver, because they are not dependent on any government in the world for their value. They themselves are valuable, because they are beautiful, and require capital to produce. Isn't it strange, that women love gold and silver jewelry, but when hubby wants to take surplus assets, and convert them into gold or silver bullion coins or bars, the little lady often argues against it.

Words cannot express my total dislike for dollars. At age 68, I have NEVER had a savings account. What for? Extra assets of mine, go into tangible things. Right now I am working a 1974 Mercedes which I found beside a local road. It had been sitting there for several years, and I kept watching it. I finally gave $350 for it, towed it away, and when finished I will have maybe $3,500 in it, but it will be worth a lot more, give loads of pleasure, last forever, and no GD government snoop will know if I sold it for a huge profit. Like Scrooge McDuck, who used to go into his vault and play with his gold and silver coins, surplus assets can be great fun. Note that Scrooge didn't have a vault full of dollar bills. He had gold and silver coins.

The IMF and US treasury are sending big bucks to Brazil, and Uruguay. This may relieve some of the pressure from the poor citizens who are in such dire straits, correct? No, because the bucks will never be seen by the Brazil or Uruguay citizenry. They will be used to salvage the bad loans made by Robert Rubin's Citibank and JP Morgan-Chase, among others. Uruguay and Brazil will be in no better shape because of billions sent to them. They'll just owe it to the IMF, instead of Citibank or JP Morgan-Chase. Joe Blow goes into Citibank to borrow a few thou for a new set of wheels, and is turned down because he doesn't make as much as they think he should, or he was a day late with a payment three years ago. They then loan billions to Brazil, and the debasement of your dollars goes to pay their bad loans. See why I like an old Mercedes or a hundred ounce bar of silver?

While I believe we will have a real estate crash, and that it has already started, if you owe a lot less than your home is currently worth, don't sell, as you then may not have a place to live. If, as my friend in California did, you can sell, walk away with huge dollars that are tax free, and can live elsewhere free and clear from your profits, by all means do so. My home isn't for sale, even though I may never be offered $400,000 for it again. I paid $150,000 for it, and feel very safe. The tangible asset of a home is security. Just don't speculate in real estate.

Protect yourself with tangibles, and enjoy them in whatever form they may be. Remember "Sherman," of my old column "Sherman and the Half Bag?" (At the bottom of this, look at other stuff I have written, and you can access that column.) We are taking Sherman on our vacation next week, as it goes 100MPH effortlessly, and rides so smoothly, with such luxury, that any other auto would be foolish to travel in, and besides, it is a lot of fun.

China is the world’s biggest gold producer with more than 355 tons annually. Australia is second.
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