Thanks for joining us here at TPS and congrats for taking time to see if owning precious metal is a wise choice for you. I view silver & gold as wise to own but ultimately it is you that must find comfort in trading cash for history’s oldest true source of money. The reason I mention “comfort” is because this is what it takes to not lose faith in something highly volatile and definitely necessary. Gold was considered volatile when I first bought it over ten years ago at less than $400 per ounce. Maybe this is why a close friend said I was crazy to take tens of thousands of dollars and trade it for something so risky.
Few realize how politics play into the price we pay for precious metals OR how political miscues will drive both metals (silver & gold) higher. My emails stacked earlier this week when US presidential hopeful Mitt Romney picked Paul Ryan to share his November ticket. I guess optimistic senders found encouragement in the above ticket but failed to realize how insignificant government officials are in the cure to a failing economy.
Please don’t misinterpret this last paragraph to mean voting is insignificant, it is not. But the facts show your local election has a greater impact on you personally than the presidential election of 2012. Why you ask.
Because the direction in motion is long determined and regardless who leads this great country the plan must be to borrow, spend and divert attention away from constituents.
Most of you read a post like this for one reason. You’re looking for legitimate reasons to prove gold & silver will grow in value or price. You really don’t care what PM (precious metals) have done but only what they will do in the future, I understand. But even the most diligent reader sometimes misses the signs signaling gold and silver upward. Please let me explain.
Right now political decisions affect nearly all aspects of your life. Their decisions for war send our youth to fight. Their decisions to raise taxes take more of your hard earned paycheck. Their decision to use eminent domain can take ground your grandfather worked seven days a week to amass. Everything from speed limits to chlorinated water rests in the hands of a growing entity called government that has grown too large to support.
I personally like a young man like Paul Ryan and view his plan for fiscal restraint as a step in the right direction. But even his plan, as I see it, doesn’t address ever increasing deficits in this decade, or the next, or the next. We can’t wait 30 years to deal with the one burden that saddles us all, sorry.
What young politicians, like Ryan, are realizing is a truckload of sandbags will not hold back rising tides of debt. The ill effects of debt know drag all economies downward and 90% of those making decision recommend adding more debt to solve old debt problems. So, where does this leave you and your growing stack of silver & gold? Let me explain.
Everything supported by government will decline or suffer as tax revenues and borrowing lessen (yes, borrowing is not bottomless and will decline or cease). This means wealth invested in industries or corporations depending on government revenue will dramatically decline. This decline will create panic selling and then panic buying of real assets like silver and gold, nothing new here, just history repeating itself.
Those buying silver and gold now are far ahead of the curve. Owing PM today is no different than investing in industries of the future. Some readers ask what such a day will look like but actually some cities already offer a glimpse of tomorrow. Take Oakland for example. Oakland can’t pay its police force so law enforcement has declined around 30%. Crime hasn’t declined so the market still exists for protection of life and property. This is why private companies now service the businesses and fine folks living in the city of Oakland.
Even taxing 100% of wealth cannot forever support the level of spending most municipalities or states now need to operate.
Here is yet another example of too much government spending what we don’t have. The Department of Agriculture just announced it will buy $170 million of pork, lamb, chicken and catfish to help support farmers suffering from the drought. Now, let me ask you a question. Does it sound prudent to spend $170 million when we’re borrowing over $.40 of each dollar spent? Does this sound like a political favor in order to shore up more voters?
I spent the last couple of days fishing and enjoying my state’s population of deer and elk with the owner of a large West coast farming business. He described this year as one of millions in profits but also mentioned years in the past far less than profitable. He then mentioned something each of us must grasp and keep in mind each time we hear of another politically motivated bailout. He mentioned that in good years or bad, he understands and accepts the risk of farming. When governments (politicians) take or borrow money, in your name, and then dish it out they are creating a dependency regardless if it’s handed to a multimillionaire or the unemployed.
Your decision to own gold is a preparation for tomorrow. Owning real wealth (not dependent on taxpayer support) allows us to prepare for a future when a government can no longer support all those it promised. The value of silver and gold doesn’t hinge on stimulus or government support. This is 100% why I have readers who divested from traditional retirement accounts and into gold. Assets supported by government will decline and assets “real” will hold or grow true value, regardless who wins the next election or the one after.
QUESTIONS & COMMENTS:
Question: I couldn’t disagree more with your opening chapter in Why Silver & Gold Will Go Higher. You downplay the importance of elected leaders when you know good and well our liberal ideology is what brings down this country. Why not say it like it is? The rest of the book is right on but the chapter on politics is way off!!
TPS Reply: Thanks for your comment and question. Yep, I realize you and many others feel this way but I’m sticking with my first chapter and here is why. Conservative minded folks blame overgrown social programs and the liberal minded for too much debt and destruction of our economy. Liberal minded folks blame our failing economy on war capitalists and greedy Wall Street executives.
The fact is both sides are correct but this doesn’t change my opinion in the least regarding politics and gold. My belief is both sides of the political aisle will support more spending, regardless why, and this will drive gold prices higher by driving our economy deeper toward the abyss. We can argue all day who is to blame but the newly elected folks repeat the same monetary mistakes and until we the people roll heads this will not change. Until then, my friend, stay focused on things of value and less focused on one disagreeable chapter.