Sometimes I think the dismissive attitude many people have towards gold is due to an arrogant attitude that bad things only happen to people in other countries, and that they are somehow invulnerable.
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.
I and many other gold/silver folks believe there is a long term, concerted move away from the dollar - by the Chinese, the Russians and even regular investors that don't think it will be a good vehicle for saving. These two articles are just a couple of examples of the bearish outlook for the dollar.
The first is just a general prognostication by some investment folks at PIMCO and the second is about how Russia is looking to get away from exposure to the dollar, just like the Chinese. In this case, they are shorting the dollar in a kind of indirect way that would not be quite as obvious as if they were to alter their central bank reserves.
I hope more people begin to see the US dollar as only a medium of exchange for goods and services but not a way of saving. People ought to save with things that will retain their value, like precious metals (in sensible quantities) and land, which is real wealth.
This is a link to a podcast I am fond of called The Survival Podcast, hosted by Jack Spirko. He does a great show on retirement here and makes some good points. Namely, that the advertisements you see on TV give you a picture of retirement that is often not realistic. Strolling down a beach with your wife and living life to the fullest.
Often people who are 65 or more have health problems and may have to deal with loneliness. The idea of waiting for most of your life to finally get out of the rat race seems stupid and Jack offers some suggestions on how you can go about planning for retirement (and rethinking what retirement is) so that you can achieve freedom and independence earlier.
I think a reexamination of what retirement is and what it should be for YOU is long overdue. With the problems we have with Social Security (a generation put its faith in that and it looks like Uncle Sam may have trouble paying out), I think people will become more and more receptive to this message.
I know this is not really connected with precious metals investing but I want to occasionally post articles and commentary that I think are important for an overall understanding of finances and the world we live in.
This article talks about something I myself think about : Should I try to earn as much money as possible? If I work extremely long hours in a 5 or 6 day week, miss time with my family and friends and neglect projects and interests that I enjoy, is it worth it? It's not just a mathematical calculation for me, it's a question of what is really important in life and what makes one truly happy and fulfilled.
I generally don't like the government and I don't like paying taxes to finance its often stupid and occasionally evil initiatives (I recently saw a commercial for some government organization called the National Fatherhood Institute or something - do we need government to tell us to spend time with our kids?). Maybe if we weren't taxed so much to pay for the National Fatherhood Institute we could spend more time being fathers!
But I digress. I think that one does not need a lot of junk and extravagant expenditures in order to be happy and if we did not chase after money and prestige we might have a better chance at achieving freedom and independence. We need to think outside the box not only when it comes to investing, but also to work, retirement and life.
There has been a lot of talk about a new currency for the world, something to act as an alternative to the dollar. The article I am linking to today is just one out of countless articles now swirling around the net where some official person or bureaucracy calls for a new currency.
The one thing I can say on all this is that we should not get ahead of ourselves. By that I mean : Yes the US dollar is and will continue to decline into insignificance, but that is a long process. The world has been using the greenback for oil and other things for quite some time now and you don't just switch over to something else in one fell swoop. Moreover, China and others have significant dollar holdings and though they would like to get out of them, that too cannot happen instantaneously.
I'm sure many gold bugs are pleased as punch to see gold now well over 1000$ but this process we have been predicting will happen over years.
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