For those of us who have been advocating gold and silver for some time now, one of the 'turning points' we wait for is when the general public starts to get interested in precious metals. The trouble, currently, is with the Euro. And no doubt, many Europeans are wondering if they should 'save' with Euro bucks at all anymore. Well, America is next. I feel like I'm at the gold party, more people have just entered the hall, the music is a bit louder, and the revelers are dancing with a bit more energy. I'm still drinking my drink and enjoying the spectacle, but if it was possible to have a nice recognizable juncture where the party goes into a new phase - this is it.
Gold is a sensible part of any investment portfolio but I encourage people to look at other alternative investments that will work commensurate with gold in securing and safeguarding your life and wealth.
One of these is food. There are various reasons why it makes sense to store a reasonable supply of food in your home.
1. Your going to eat it anyways. It is simply practical to have 20 cans of tomato sauce if you make pizza often. Storing it means you don't have to go to the shop as often.
2. The price of food has consistently risen over time, and many think it will continue to rise. If you buy a can of beans in January and come August when you actually eat it, the price of beans has risen, you saved yourself money.
3. Buying opportunities. When you have to buy some canned corn for the dinner your planning, you have to buy at whatever price it's selling at in the store you go to. When you have corn stored up, you don't have to buy at random times; you can hold off until you see a really low price at some store that is trying to unload a bunch of extra stock (this happens with regularity). Storing foods allows you to take advantage of these opportunities.
4. Food shortages. History is replete with cases of food shortages and (just like with the story in the previous post) it is hubris to think that it can never happen to you, your community and your nation. Having food stored up means you have a cushion against any such 'disruption' in the food supply. Remember, food production and harvest is subject to all sorts of variables and changes in weather and can cause many people to go hungry.
Marc Faber is back in the guest chair at Bloomberg Asia and talking about the economic state of affairs. I always find it interesting how much his comments on the future diverge from the slick BS of CNBC. He has made some pretty harsh comments on the US dollar in the past - such as saying there will be Zimbabwe-like inflation.
Here he speaks about the dollar and the future of the US. He points out that the US can be expected to continue to devalue the dollar in order to pay for all their imperial excursions in the mid-east. It is important to note that just about every empire has devalued their currency as they decline into insignificance. Simply chanting "USA, USA" at the sight of the star spangled banner, like the proverbial Pavlovian dog, could cause one to be fleeced - whether they are in dollars or the DOW.
Dr. Faber also talks about how the dollar shouldn't be seen as a store of value, but perhaps something like property or other tangible things could be used to save - a point that has been made on this humble blog and many other websites.
He also mentioned the concept of a currency 'based on discipline'. If only there were such a thing! Many have argued for a currency that is printed and issued by the government, rather than one issued by a cartel of private banks (The Fed). That would certainly be better than the current system, but I don't really trust government to exercise much discipline in any field, especially not in the greedy realm of money. I think things like precious metals and land should always be seen as stores of value above money.
Is gold useless? It isn't a company so it doesn't actually do anything. That makes it a decidedly un-sexy investment. As well, it is true that some have taken an excessive interest in gold, marveling at it and lusting after it like Golem and the Ring of Power ("My precious!").
However, Golem's obsession was a metaphor for man's greed and lust for power. And these days, people's greed and lust for power has been expressed in a host of other securities and activities (too numerous and complex to delve into here). Owning some gold on the other hand, is a smart way to diversify your assets and avoid piling all your savings into paper money (or Lehman Bros).
What's more, gold is a very defensive asset, whereas many other securities are purchased by people with dollar signs in their eyes, thinking they're going to get rich and retire at 45.
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