Buy gold as a smart insurance policy
You don't hear the phrase “gold bug” anymore. It's not a compliment. It refers to somebody who believes in owning gold as if this is a pitiful, half-comical obsession, like being a miser.
But now we've had four years of a national debt growing at more than $1 trillion a year. Forget billions, we've grown numb to trillions. Unfunded pension and health care liabilities stretch farther than your grandchildren's eyes can see. Will these ever be redeemed, except in cheaper dollars?
Craig R. Smith's book title for this dilemma is “The Great Debasement.”
The way we're speeding toward a crash has picked up with President Obama driving, Smith says. But the wreck's been in the making since 1913, when America in “Progressive” mode took two terrible turns. We set up the Federal Reserve System. And amended the Constitution to allow Congress to get its mitts on a graduated income tax.
“The 100-Year Dying of the Dollar and How to Get America's Money Back” is the sub-title of Smith's book (Idea Factory Press, Phoenix, AZ., 283 pages).
His how-to for the country starts with putting the U.S.A. back on the gold standard. No more reckless printing of money.
For individuals it's to “create your own gold standard.” Transfer some savings into gold and silver coins and bars. He doesn't say how much. Some. Let your comfort level dictate.
In fairness, Smith has a wee bit of bias to sell you gold as chairman of Phoenix-based Swiss America Trading Corp.
As he sees it, the dollar has lost 98 percent of its value since the Federal Reserve came into being. Only 2 cents left.
Which isn't totally fair. It misses enormous quality improvements since 1913. But efforts to control inflation via an “elastic” money supply have indeed often missed. Keep in mind, though, the Fed was set up to head off bank runs and panics, which did plenty of damage, too. Still, as the dollar has dived, precious metals have seesawed upward.
Gold was just $20 an ounce when President Franklin Roosevelt, as Progressive as they come, made it illegal for Americans to hold gold in 1933. Now it's over $1,600 an ounce and has peaked higher.
The only way to stop Washington's chronic expansion of the welfare state, cheapening the dollar all the way, says Smith, is to make it convertible again into gold.
Impossible, forget it, scream many critics. But a fixed conversion price between $1,600 and $5,000 an ounce, in Smith's view, would restore the dollar as a trustworthy global reserve currency — and force Democrats and Republicans alike to kick the “spendaholic” habit.
If Congress magically balanced the budget tomorrow, it would take at least 10 years of 4 percent annual growth to pay off the national debt of $17 trillion already accrued, says Smith. A dollar crash, “hyperinflation” and accompanying social chaos look likelier.
And who's prepared? “Our Politically Correct schools leave young Americans untrained in how to survive when things break down,” writes Smith. We promote helplessness “precisely to make us dependent” on government.
Don't think of gold mainly as a profit opportunity, he advises. Rather, as “an insurance policy against further debasement of the dollar.” But depend on politicians and news media to call you an old fuddy-duddy gold bug.
Jack Markowitz is a Thursday columnist of Trib Total Media. Email email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Penguins trade for Toronto’s Kessel; lose Martin, Comeau via free agency
- Pitt’s Boyd waives right to preliminary hearing
- Pirates’ Cole not fazed by remarks from Tigers’ Martinez
- Second Blair County friar commits suicide in province under sex abuse investigation
- Dragon boat competition canceled at Three Rivers Regatta
- Steelers submit application to host Super Bowl
- FBI searching for Homestead man indicted for sex trafficking in children
- Judge revokes bail for Plum High School teacher
- Marinucci sentenced to life in prison with no parole
- Donora-Webster Bridge plunges into Mon River after 106 years
- In historic vote, Legislature approves bill selling state liquor stores