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Professional Economic Advisors

June 15, 2001

I just completed a telephone survey of all the registered, approved, financial planners in my town. They have various degrees, diplomas, and certificates of achievement, which certifies them as experts in economics. They have all the answers. They know all…at least their certificates and diplomas say they do. They know a T-bill from a bond, and how to get tax-exempt investments. Wouldn't you trust your future to an expert with a certificate or diploma? How much more knowing could one possibly be? One of them, a local stock - broker, has spoken at my Kiwanis Club twice in the last two years. The first time, he was touting stocks to the high heavens. I asked him about the absurd PE ratios. "Oh, that doesn't mean anything, because these companies will begin making profits in the near future," was his reply. (The NASDAQ was 4800) I then asked him if, in history, the majority had ever been mostly right, as an example in 1987 or 1929. "Circumstances were different then, and it will won't happen this time," was his glib reply.

The second time he reluctantly spoke, it was just after the crash. He had been booked before the crash, and really didn't have a choice if he wanted to save any face at all. His speech was a jumbled array of confusion, apologies, and words to the effect that his future was dim, his clients had lost much, and (naturally) everyone should hold on, because it will all come back pretty soon. I won't quit my day job waiting,

I asked him, as well as all the other financial planners I called, what they thought about gold and silver. He, the stock - broker said, that when his clients ask him about gold and silver, he always gives them my name and phone number. I have yet to get a call. I buy my gold stocks from him, but don't ask for advice. The other 'experts' I spoke with, said that they were a terrible investment. Gold and silver don't pay interest, it is difficult to store them, and none of them would recommend precious metals to anyone at any time, even for a small part of their portfolio. I didn't tell them I am a precious metals broker, or their answers might not have been so didactic.

Tens of millions of Americans place their faith in financial planners. Tens of millions place their faith in stock - brokers. Hundreds of millions of Americans actually believe that the "buck" is worth something, and has actual value, other than from legal tender laws. The same thing holds true with every nation on earth. Billions of earth's inhabitants believe in pieces of paper with ink on them…known as currencies. These pieces of paper have absolutely no value of any kind, any more than does Monopoly money…except when playing Monopoly. Every day, hundreds of trillions of Monopoly type 'money' changes hands, is wired across the oceans, sent in check form, deposited in savings accounts, or spent in hundreds of 'China Marts.'

(I used to call them Wal Marts, and was really thrilled when they said that they would always buy and sell American when it was possible. I now firmly believe that Wal Marts are China's biggest customer, and without them China's economy would collapse. I mean this. Consider the thousands of China Marts, selling millions of Chinese items daily. Know of any other entity that does as much for China? Look at everything they sell that can be made in China, and it usually is. How much quarter an hour or prison labor is being financed by 'China Marts?' How many missiles and other military items are built or bought from profits made from selling to the thousands of 'China Marts?')

Between the stock - broker's and financial planner's advice, it is said that $7 trillion has been lost by the American public. Others say it is a mere $4 trillion, but why quibble? Still, they advise re-arranging the deck chairs on the Titanic, with every transaction being denominated in dollars. It's like a grand Monopoly Game, which will eventually sink like the Titanic, regardless of how the deck chairs are arranged, and even though the orchestra may be playing "Nearer my God To Thee." The Titanic was unsinkable, remember? Houses or hotels on Park Place? How about a White House on Pennsylvania Ave? No one wants Baltic or Mediterranean, but houses on Pacific or Atlantic may win the game for you. Little pieces of paper with ink on them, trading across the board, with the banker being Alan Green-pieces-of-paper-span. Will the banker give you a break? Will he lower interest rates? Will you go to jail, not pass Go, and not collect $200? Unfortunately, in Monopoly one can't land on the IRS, which surely is an oversight. Roll the dice, and place your trust in those with high community esteem, with certificates proving they have all the answers. Of course, everything's denominated with those pieces of paper with ink on them, known locally as dollars, yen, pounds, francs, or pesos. Some of them are really quite pretty, but all have zero behind them, and their "value" comes only from legal tender laws. All have the "full faith and credit" of the various sponsoring governments, which phrase alone should give the vapors to a logical person. As Henry Higgins said in My Fair Lady, "Why is logic never even tried?" Logic should say that a piece of paper, which is used in trade for valuable, tangible things, and supposedly as a store of value, should have some value. But none of them have any value. Not a single currency is worth more than the paper on which it is printed. Daily, worthless pieces of paper are used as exchange mediums for valuable properties, tangible items, and for preservation of hard won assets. It makes no sense. The time period between payment for valuable tangible items, and their physical acquisition could possibly be the period when worthless currencies are exposed as being such. Suppose currencies lost 30% of their value suddenly, as has happened hundreds of times in history, and you had your life's savings in a currency? The dollar is the world's best fiat money. and will purchase about 2% of what it did when your grandfather was a kid. My parents bought a new Ford with every extra accessory in 1949, for $1800. Catastrophe is the word for it, and it may happen. If a civilization uses what it calls "money" for exchanges of valuables for valuables or a store of wealth, that "money" must have actual value, or it becomes a sham.

If dollars were backed by gold, there would be no fears of the medium of exchange losing value, because it would have value. Value in beautiful condensed, concentrated form. A home may be worth $275,000, and occupy a 10,000 square foot lot, weigh hundreds of tons, and be immovable. On the other hand, $275,000 in fiat money can be burned, declared worthless, be debased, or manipulated by politicians at their whim. A thousand ounces of gold at today's prices is easily movable, storable, and is not going to be declared valueless per a politico's mistake, because it required capital, effort, skill, and labor to produce. Why don't financial planners realize what is truly valuable, and what is easily manufactured by the flip of a printing press switch? Why don't the financial planners I spoke with, know the difference between fiat money and real money? A bit of historical research is all it would take, but the schools of financial planning don't teach history…only paper shuffling.

The majority today watch sit-coms on TV, believe in fiat "money," and the advice of their various advisors who dress well, and sit behind huge desks in posh offices with well groomed secretaries. This alone must mean they are well informed and educated, correct? The very fact that those who currently trade pieces of paper with ink on them for tangible gold and silver are in the great minority, should make us feel quite secure. I am 67, and have never had a savings account. Why save in something that has no value? With very rare exceptions, the majority is never right. Take Biblical times, or the history of just about every nation that ever existed, and the majority has rarely ever been right. Are the British right in electing Tony Blair and his socialists? Was America right with FDR, LBJ, Lincoln, Wilson, or others? Was Germany right with the Kaiser, or Hitler? Was China right with Mao? Japan with Tojo? The majority believes in stock - brokers, financial advisors, and paper money. We should sleep well at night, knowing we have a supply of tangible, beautiful things secreted away, and have told the 'experts' to go fly a kite.

I feel quite comfortable with my way of making a living. I really enjoy helping my clients get out of Mr. Alan's Monopoly money, and in to historic wealth. It's great fun. When will silver and gold blow up in fiat money prices? I honestly don't know, but just as a weak dam will eventually break under certain pressures, gold and silver will go sky high in currency, at some time in the future. Then all the nabobs in natty attire will once again be proven wrong. Until then, it's bargain time folks! Take advantage. Protect yourself!

The world’s largest gold nugget is 61 lbs, 11 oz and is on display in Las Vegas.
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