Wednesday, January 11, 2006
Buy some silver. Maybe some gold. Do it soon.
(If you happen to have any savings.)
Why? Because the US dollar may soon plummet in value. Will likely soon plummet in value. So if you happen to have any savings, the value of your savings is about to decline. Perhaps radically. It's hard for normal folks to comprehend, and for an idiot like me it's nearly impossible. But I've got some smart friends who have been patiently trying to explain these things to me.
And they say that the government is printing so much money the printing presses are melting. This means inflation. They point out that foreign governments are starting to quietly offload dollar reserves for other currencies. Uh oh! And there's that pesky Iranian Bourse that's firing up in March--that'll either start world war III in earnest or kick the legs out from under the ol' petrodollar. And speaking of petroleum, what happens when prices inevitably skyrocket? Hmmmm.
So buying gold or silver is a hedge against inflation. As the dollar loses value these metals gain in value. Still, it's not really an investment to make money so much as an effort to keep your money from going away. If you consider the costs of just three things: housing, heating and health care you'll get a sense of how drastically inflation is rising. Inflation means that your money is worth less and less.
Personally I dislike gold. I agree with the lepreuchan in Finian's Rainbow who says that it's not intended for mortal folk, it's too powerful and causes chaos and misery. Certainly the mining of it tends to result in environmental attrocities. Call me soft hearted. Or soft headed, I don't care. Silver, for me, just seems cleaner. On the other hand, if you have gobs of money you'd like to preserve, gold is alot more convenient--for example, $10,000 worth of gold weighs about a pound and $10,000 worth of silver more like 70 pounds.
Okay, so here's what you do: take your cash money down to the ye old coin shop and buy some pre-1965 half dollars or quarters. You can also buy silver bars or one ounce minted units, but I think you're safer with the old coins. And ignore all those pretty 'collectible' coins. Take a bag of silver coins home and stash 'em under the ol' mattress. Or if that's too lumpy dig a hole in the back yard or something. I don't care. Just do it. By the way, you use cash so the government doesn't know you have it. Especially if you are buying gold. They've confiscated gold in the past. They just might do it again. (Which is also one argument agains keeping your loot in a bank's safe deposit box.)
Now on the other hand--just on the off-chance that the banks all go bust (that your bank goes bust), it might not hurt to have some cash money too. That you can keep under the mattress. I doubt it'll happen (though it sure did in Argentina not so long ago). If it does happen though (perhaps if the real estate bubble really pops hard) your cash money will become very very valuable, at least for a time.
There. You've been warned. Now I can sleep peacefully.
Of course, maybe you don't have any savings anyway. In that case....Uh....Hell, I don't know.
Be of good cheer,
ps. Krista pointed out that this all makes it seem like we have thousands of dollars stashed under OUR mattress and I've just posted an invitation to robbers. So I had to take the money out of our mattress and bury it in the backyard.
Posted by rob at 9:37 PM