Bullwinkle Economic Solutions

The impending reality of financial collapse was clearly evident to me and plenty of other common people back in 2005 when I wrote about it on this blog and then in my book, “Writings of a Deliberate Agrarian,” (page 80):
”My guess is that a worldwide economic crisis will be a major part of the story. It is only fitting since industrialism in all its many forms is rooted in greed and the love of money.”
That impending reality is now a present reality. The conventional financial wisdom of so many “experts”—most notably those who advocated that investing in the stock market was a wise thing for people to do with their life savings—has proven to be foolish advice. The oft quoted adage that “you can not lose money in the market if you invest long term” was and is utter nonsense. It flys in the face of that boilerplate disclaimer which states, “past performance is no guarantee of future results.”

Those amazing stock market profits were an anomaly. They were the result of “irrational exuberance.” They were founded on greed and fraud. They were a bubble that has now burst.

Remember blowing big soap bubbles when you were a kid? They float gently in the air, a delightful marvel to behold. But they eventually pop. And when a bubble pops, it’s gone. You can’t put it back together.

Back in 1999, prior to the Y2k “thing,” you could purchase a 1/10 ounce American Eagle gold bullion coin (roughly the size of a dime) for $34. A One ounce silver Eagle coin (the size of an old silver dollar) sold for seven bucks. Today on Ebay, the same 1/10 gold Eagle sells for $132 and the 1 ounce silver eagle goes for $20. Some precious metals dealers no longer sell the 1/10, 1/4, and 1/2 ounce gold Eagles because demand now exceeds supply.

It wasn’t long ago that the typical television and radio investment advisors were telling people it was unwise to invest money in precious metals. Or, at most, that only a very small percentage of their money should be in such a contrarian investment. Those who bought precious metals were thought to be ignorant and kooky.

Now I am hearing these economic advisors on the radio say that owning physical gold may be a wise move. They are saying this to the masses of people who have lost a large portion of their life savings in the stock market. That which was considered foolish a short while ago is now seen as prudent.

But actual reality has not changed. Precious metals have always been a safe store of wealth in a world of paper impostors.

I do not trust the government to do the right thing—to tell the truth—to responsibly deal with economic reality. They have shown themselves to be the actual kooks, and dangerous kooks at that. When they broke with the Constitutionally mandated gold and silver money standard in America, the government set us up for this destruction we are currently seeing.

Now the conventional wisdom is that the government must spend billions and trillions of dollars it does not have in order to reignite so-called prosperity. This is akin to trying to reassemble a soap bubble. These people appear desperately insane to me.

I happened to hear Glen Beck on the radio recently. I like Glen Beck. He had a big graph that showed the volume of paper money in circulation since 1929. The graph showed that the money supply was essentially flat for decades. When Richard Nixon severed all connections between the American dollar and gold, the money supply started to go up. Prior to Y2k is soared. After Y2k it dropped a bit. Then, starting late last year, the line of the graph spikes straight up. You can See It For Yourself Here.

If that graph is true, it represents a chilling reality coming our way. All that paper money dilutes the value of the dollar. It will likely lead to Inflation.....inflation like this country has never seen before.

Granted, I may be wrong. I’m a simple man looking at simple facts and momentous events. But the way I see it, the kind of thinking that created this debacle is now trying to fix it with more foolishness. It reminds me of the old agrarian idiom: "You can't make a silk purse out of a sow's ear."

Perhaps the government’s economic magicians will surprise me. Perhaps they will pull a rabbit out of their hat. Or perhaps, like Bullwinkle Moose, they’ll pull a lion out of their hat. The lion of inflation which will devour what is left of the wealth of so many Americans now shellshocked and paralyzed by their stock market losses.

Those of us who are old enough to remember Bullwinkle Moose know that he immediatly stuffed that lion back in the hat. But Bullwinkle is a cartoon. And cartoons are not reality.


James said...

It's great to see you back Herrick.

Yesterday I introduced my business english class to the "Whizbang Chicken Plucker" as an example. We brainstormed a promotional sales letter about the WCP(saves time, no more sore fingers, etc). They thought I had made up the example, then I showed them the online video... mouths hung open. They thought it was pretty funny. This morning, someone in the class mentioned, "Hey, there is also a whizbang garden cart."
These are mostly rural kids, so I'm guessing that SOME of them have butchered a chicken in the past... but none were willing to admit it!


StefRobrts said...

The sad thing about this economic crisis is that it reaches out and touches people who have been responsible with their money, who didn't squander it or invest in risky ventures. All those who made poor choices are taking everyone else down with them. And the gov bailouts and stimulus seem to be aimed at helping the worst off - putting money back in the hands of those who made the poorest decisions. I agree, we could see the downturn coming, but had no idea it would be as big as it is, or that the fallout would reach out to so many.

Abigail said...

It really makes the point of reconsidering what we term as an asset. For most of your readers, it will be a simple conclusion to switch from stock to chicken plucker as a REAL piece of hard currency. Skills, knowledge, tools, and other like 'assests' may soon be very important to the regular folk too. Seemes like we all know the story of the 'seed-surge' of this season that is back-logging Seed companies. It is time to wake up and get agrarian! Some may disagree with making Agrarian Law a basis of our country, (though it has worked before), they cannot disagree with the cold, hard fact of a cold, hard winter...in the new depression.

Anonymous said...

Economic crisis is flooding the news for a few months now. I'm gettin' sick of it actually. Oh well, I'll better grab my shovel and get messy with my plants out here. This is more fun rather than checking all the negative things lingering on earth. God Bless.

Steve said...

You're right about precious metals. It's becoming increasingly difficult to buy gold and silver as demand is so great. And it looks like the magicians are manipulating the gold and silver markets. Here's an article that explains what is going on:

In short, it seems that there are a couple of banks which are selling as much gold and silver as they can in the form of stocks, but they are selling the stocks "short" (meaning that they don't possess the metal that they're selling) which is artificially keeping the price of gold and silver (especially silver) down.

I must say though, that it worries me that economists are now telling us to buy gold and silver. Given their track record, doing the opposite of what they say is probably the best course of action.