ARE WE ALL TOO BIG TO FAIL?

March 8, 2010

By Jim Deeds

Greece is bankrupt? Spain, Portugal, and Italy…will they be next?

And the most credible numbers we can find tell us England, Japan and America are in ever worse shape. But since the whole rest of the world is depending upon us…we’re too big to fail…right?

Over the past 10 years gold has gone up an average of 15.1% a year when measured in dollars. And over the past 5 years, gold shows a 20.4% annual return in dollars. In our personal experience, since 2000, the leading gold and silver mining stocks have done even better than gold and silver bullion coins.

But that was yesterday…right? In 2009 the world’s leading “capitalistic nations created over $20 trillion in new debt-backed credit/money to bail out their banks and insurance companies (led by over 4 trillion – U.S.). Things look a lot better now…don’t they? You don’t see any future need for this magic “money-from-heaven”: in our nation’s or the free-world’s future…do you? Naw!!! And besides, a dollar has been a dollar as long as we can remember…we’re too big to fail! (When I was a kid, a double-dip chocolate ice cream cone at Doc Good’s drug store soda fountain cost 10¢…last week when Barb and I got one at B-R a big single dip cost $2.50.) Keep REPEATING…a dollar saved is a dollar is a dollar!

Last week in a positive feature gold article in USA Today, a gold “expert” said, “It could be prudent for longer term investors to have 5% of their investment portfolio in gold, silver, or good precious metal mining company stocks.”

We’ve personally been 70-90% invested in precious metal and natural resource stocks since year 2000…and we know we’re in a less than 1% minority of American investors. Hasn’t worked out too badly so far. Gold, silver, and oil (energy) investors who sold out on the way down in 2007-08 and missed the 2008-early 2009 worldwide market crash and then bought back early last year have seen once-in-a-lifetime returns on their investment portfolios. And the gold and silver bugs who didn’t sell during the 2008-early 2009 crash? Those portfolios have now all recovered and are touching new all time highs.

GOLD…MUST BE A BUBBLE! That’s what 97 out of 100 Americans who have never owned anything gold, silver, or platinum say!

When we look at the interest on the new TRILLIONS of dollars of DEBT being created each new month worldwide, and the added worldwide debt being created by compounding interest rates, this debt gives us a headache. Will the exponentially expanding government-created debt and compound interest overwhelm the limited supply of “something real”…“store of value silver and gold” that has been the most respected “savings” for the past 6000 years? Only you can answer that question…in your own personal defense.

Own Gold? Own enough?

If not…maybe we should talk.