Gold & Silver vs. Hope & Change. Place your Bets!

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Gary Christenson - Deviant Investor

The BIG Perspective: Examine the following “Point & Figure” chart from Ron Rosen. This type of chart plots price on the “y” axis while the “x” axis shows time but without uniform distance between years. The long term trend has been up since 1970 and 2001, while the intermediate trend has been down for the past 26 months.

The following are logarithmic charts of the official U.S. national debt, gold, silver, and crude oil for the past three to four decades.

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Clearly the long term trends are up. Why?

  • A debt based paper currency system must expand to survive!
  • The Fed needs an increasing money supply and more debt.
  • Congress and the administration aggressively spend money, borrow money, and increase the national debt. It will take a real crisis to change this – much worse than a phony debt ceiling crisis.
  • The financial industry wants to churn more paper assets, debt, derivatives, and volatility to increase their profits.

The inevitable conclusion is that, over the long term, money supply, debt, and prices will increase until there is a systemic reset or crash. What will endure throughout the inevitable inflation, deflation, and crash? Gold and silver will endure. Paper assets are only as good as the collateral backing them, and many of those assets could vaporize in a systemic reset. Gold and silver will survive and maintain their value, while the dollar and Treasury Debt may lose a good portion of their value and purchasing power.

Hope & Change

Hope is not a good basis for an investment plan. Hope is not a viable foundation for a political philosophy or for the actions of a government. Hope will not pay the bills, reduce the debt, or return sanity to an out-of-control spending process.

Ask yourself how well these are working:

  • We spent the rent money on lottery tickets and booze. We hope something good happens soon.
  • We spent a few $Trillion on useless wars in the middle-east. We hope it helped.
  • We spent $17,000,000,000,000 more than our revenue. We hope it is not a problem.
  • We sold or “leased” much of our accumulated gold and sent it to China. We hope nobody noticed and that it will not matter.
  • We hope we don’t have another stock market or bond market crash.
  • We hope to increase taxes and reduce benefits while increasing consumer prices and we hope to keep the people happy and voting for the incumbents. (This is also change.)
  • We hope to actually pass a budget real soon. (Congress has not passed a budget in the past five years. Did anyone notice or care?)
  • We hope to reduce the deficit real soon.
  • We hope the Federal Reserve and the politicians will make it all better.
  • We hope that hope and change will begin to work real soon.

As for “CHANGE” – it can be positive or negative. Not all change is good. We “HOPED” for better government and we received Obamacare. Was that a positive change?

Gee, we hope that the 10 Million or so people whose insurance plans will be cancelled and who will be forced to purchase new health insurance policies at much higher rates are okay with the change, increased deductibles and the increased costs. We hope they don’t get upset or angry or think someone lied to them.

Gold and Silver!

Dr. Phil says that the best predictor of future behavior is relevant past behavior. Using that thought it seems clear that:

  • The official national debt will continue to exponentially increase like it has for more than four decades.
  • The dollar will continue to decline in purchasing power like it has for the past 100 years.
  • Gold and silver will continue to (erratically) increase in price like they have for the past 40 years.
  • Gold and silver will hold their value and purchasing power like they have for 5,000 years.
  • Government deficit spending and borrowing will continue.
  • There will be another budget crisis, and another, and another.
  • Politicians will talk, make promises, and become much wealthier while the middle and lower classes find their expenses increasing far more rapidly than their incomes. We will re-elect those politicians.
  • Hope and change will continue to produce what they have so far – nothing but more debt.
  • Gold and silver will outlast hope, change, paper money, treasury debt, and political promises. Most people do not and will not understand why!

So, place your bets!

Paper currency or gold and silver.
Debt based paper assets or real money – gold and silver.
Political promises or something of lasting value.
Futures contracts on a corrupt exchange or land.
Credit card debt or stacked silver in a safe.
Social security income in a decade or gold in hand now.
Obamacare or good health.
Nutritionally empty fast food or healthy nutritious food.
Artificial and phony or real and valuable.
Reality television or the Holy Bible.

Most people will stick with what they know – paper currency, debt based paper assets, political promises, hope and change, and reality television. The choice is yours, but you will have a better financial future and more peace of mind if you invest in something real and valuable.

More to consider:

Created Currencies … Are Not Gold!
We Have Been Warned – Part 3
What You Think Is True Might Be False and Costly

GE Christenson
aka Deviant Investor

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8 thoughts on “Gold & Silver vs. Hope & Change. Place your Bets!

  1. The long-term gold and silver charts in your article clearly show that the multi-year uptrends are broken. Until and unless they resume, it is safer to stay away from these precious metals. IF they resume, there will be plenty of time to buy again. The charts cannot tell us the future (i.e., whether the trends will resume) but they can tell us the present (i.e., whether they have resumed).

    The fundamental reasons you provide are meaningless, because there are so many “fundamental” reasons that anyone can pick a set that supports his or her point of view. (And don’t even get me started on the subject of “faith-based investing”.) Only the charts tell the truth, because they illustrate how people are “voting” with their wallets.

    • Thank you for your comments, but we will have to disagree.

      1) The long term gold and silver charts as shown in the article are NOT broken. Silver and gold prices are all included in the light green parallel trend channels that are clearly moving upward on the log charts.

      2) Yes, the short term trends are down and have been for over 2 years but the long term channels are still intact. If gold and silver substantially break their June lows, then the trend channels will have been broken. We can renew our discussion then. Until then, the trends are up.

      3) “Safer to stay away from these precious metals” is a matter of opinion and perspective. Since you believe that gold and silver are no longer a good investment, yes, you should stay away. Since I do not believe the trend channels have been broken, I think they are a good buy. Buy low, sell high still works. If the trend is up, then buy at the bottom of the channel and sell some at the highs.

      4) Re your comment that “the fundamental reasons you provide are meaningless” I must disagree again. In essence you are suggesting that decades and centuries of history are meaningless and only what has been happening in the past few years is relevant. I think that perspective will be proven wrong. It is dangerous to suggest that “this time is different” and that centuries of history are not longer relevant. You might be correct, and time will tell, but I strongly doubt it.

      5) As for “faith based investing” I finally have found an area upon which we can agree. Faith and hope are not a good basis for investing, but since nothing in my article encourages faith based investing, I think your comment belongs elsewhere.

      I wish you good luck in your investing.

      GE Christenson
      aka Deviant Investor

  2. Hello!

    Your list of values and non-values has validity but what’s the bible doing on that list? Teaching “faith” does not improve level of knowledge. In fact faith is the anti-thesis of knowledge.
    Remember it was all the bible-thumpers with dubya that wanted to go to war, and it wasn’t the first time either!

    • Thanks for your comment, but I think you are unfairly discounting the value of the Bible. To hundreds of millions of people it is the word of God. Even if you don’t accept that viewpoint, it is valuable as wisdom, philosophy, good literature, allegorical interpretation of history, and for many people it is a plan for living their life. I think that stands in good contrast to Reality TV.

      GE Christenson
      aka Deviant Investor

      • Very good article first of all!

        When or if people read the Holy Bible they will understand it is the best form of reality anyone can get. If faith does not teach knowledge( and knowledge is the know how to do, or of something), how does one know they have knowledge without faith? Hmm now that’s interesting! It is also the greatest trading book ever written. Is it not in the land of Havilah where the gold is good? Hmm and does not the word “Silver” mean money in Hebrew?(I wonder why the call it the devils metal when it is commanded to be called money?) Well, honest weights and measures are what are to be considered sound money(according to that same rejected bible which does teach knowledge and faith together with understanding) and I do see that as being gold and silver coins(which by the way are made by weight).

        Finally, the first ever recorded stock market crash always happens at the times of famine. See Genesis and Ask why did Joseph collect all that wealth for Pharoah? By the way the people became slaves to Pharoah because they could not eat, hence, we have Obama today “The god of all things” which was a name for a Pharoah back in the day! He too shall do to many people in the same way if they do not prepare accordingly.

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