Wow!
By now, you’d think that I’d have this whole columnist thing down pat. But I am still astounded by the frequency and ferocity of readers’ reactions to certain topics.
I seldom address issues like religion, regions of family origin or the marriage status of politician’s parents because their ratio of relevance to reaction is so poor. But I swear to you that I can get just as many heated letters if I say something bad about the brand of car a sizable group of readers parked in with their first date. Touch on guns (yeah OR nay!), and folks will flood my inbox with the strangest commentaries.
And then there is the ultimate third rail – the one subject that is virtually guaranteed to stir up violent sentiments: Gold and silver vs. paper currencies.
Taking Offense
In my last article of
Taipan Daily, I dared to tread this holy ground (with head bare and shoes on, no less!) by noting that the
value of gold and silver was truly just as fictive as dollar bills.
The responses ranged from incomprehensible splutterings, suggestions as to my own lineage and accusations that I was a stooge for the Wall Street Machine to some really rather informed discussions as to the relative value and purposes of silver, shoes and goats.
Allow me to clarify a few issues…
First to “Jimbo”: I am not now, nor have I ever been, in the employ of the brokers. As for that silver play you excoriated, the options I mentioned have gained as much as 70% over the past few days.
What’s more, I’d be willing to bet you a snifter of decent port (or a good-sized mug of beer if you prefer) that I have held down more “real jobs” than you would or could ever manage – and have the busted back to prove it!
Waiting for the Next Dark Age
Next to Linda T.: As mentioned in the column, I do not readily discount the possibility that things could really fall apart. As a student of history (and as a descendant of the Irish monks who preserved Western culture during Europe’s Dark Age), I know all too well how frequently – and quickly! – complex societal systems can degrade into chaos.
And in point of fact, I too own adequate land for produce and livestock (and was looking into goats just the other day at a local 4H affair!). At Seven Oaks Farm, we draw (and store) our own water, and deal with about 90% of our own waste on site.
My wife even keeps her hand in textile production (although to a modest extent these days, as the kids put incredible demands on her time). And yes, we are quite prepared – and reasonably well trained – to defend our holdings.
But these pages are supposedly reserved primarily for investment opportunities. As such, I am encouraged by the folks in the C-suite to keep discussions on such topics as science, history and economics at least somewhat germane to same.
Which brings us neatly to my feelings on monies and metals…
The Fantasy That Is “Money”
You will NEVER find anyone more distrustful of fiat currencies – period.
No, that’s not right:
I should say that I absolutely do trust all central governments – to debase their currencies, as this is the only practical way to pay off the massive debts they inevitably incur as they curry favor with the populace that can ensconce or displace them.
It’s a simple enough formula, repeated so often as to have become an accepted psychosocial trope. (These tropes could be said to be the rails on which memes ride – but that is another day’s discussion.)
The Rails to (Economic) Hell
A candidate promises benefits – houses, bridges, jobs, food, cheap thrills, whatever. Once in office, they borrow X number of bills to pay for the aforementioned emollients that greased the skids to office.
Since no populace willingly taxes itself, rather than risk expulsion from the seat of power, our new governor simply engenders more specie to “pay off” the debt. The lender receives X number of bills as promised – perhaps even X plus Y, so as to foster the illusion of profit.
However, that payoff is being made in debased monies, so even though the quantity paid complies with the terms of the loan, the value of that payoff is actually less than what was borrowed.
Unfortunately, this cycle inevitably renders the specie held and banked by the populace at large just as valueless as the bills paid to debtors. Inevitably, inflation ensues until all commerce engendered by specie grinds to a halt, and the central government is displaced either by election, coup or invasion.
You can absolutely count on this cycle to repeat itself ad nauseam. This is why many folks seek out a safe harbor from same in precious metals. Gold and silver are reputed to contain inherent permanent value against which all other commodities and currencies can be measured.
Brace yourself, because I am now about to repeat my supposed sin against nature.
They - Are - Just - Rocks!
We have attributed value to them for a very long time because they are pretty, durable and somewhat limited in supply. But it is still we who attribute that value, and therefore that value is just as much a meme – a shared thought – as the value imputed to fiat currencies.
This meme is demonstrably extremely durable in nature, and has and will continue to outlast most fiat specie. But the value of gold and silver – compared to the inherent utilitarian nature of commodities as copper and steel – is now and always will be a shared hallucination.
Thus we see the price of gold and silver rise and fall violently – sometimes contrapuntally to our own dollar, and sometimes in lockstep with it – but always in accordance with the value large numbers of folks place on these metals at any given moment.
The Trader’s 70% Solution
From a trader’s perspective – the perspective that must undergird any column in this space – the meme that is gold and silver must outweigh its reality.
WaveStrength must – and fortunately for my
WaveStrength Option Weekly readers, did – track the increase in the rate of acceptance of the “Metals” meme, and produced immediate and tangible 70% gains from the effort.
Nor was this a fluke: a variation on the same methodology enabled our VIP readers to purchase put option contracts against a group of financial stocks a mere three days before the recent carnage on Wall Street, and sell them for 100% gains the
day before this group rebounded some 6%.
I will grant that some things do have permanent value.
Goats come to mind.
3 Hot Stocks for Fast Gains During Today’s Volatility
If you’re looking for another way to post gains (other than with goats) during today’s volatility, consider fast-moving penny and small-cap stocks. Some investors are beating the market by more than 2 to 1… and some are even retiring early – thanks to penny and small caps.
Learn how you could also win and see potential gains of 255%… 525%… even 600% in our new exclusive report,
3 Penny Stocks for Triple-Digit Gains in 12 Months or Less. It’s yours FREE… all you have to do is
tell us you want to receive a copy.
And as a bonus, we’ll also make sure that you’re receiving Taipan Daily, the free e-letter I write for… the investment e-letter that’s easily the most profitable five minutes of your day.
Join Us Today… It’s All Free!
Adam Lass is the editor of Taipan Publishing Group’s WaveStrength Options Weekly and a contributing editor to Taipan Daily . He has written numerous articles and special investment reports for several major financial publications, including Taipan, Fleet Street Letter (US), Strategic Investment and Penny Stock Fortunes, on topics ranging from long-term market forecasting, crude oil pricing, and currency speculation to precious metals investing.
Adam appears on national television and radio, and has been quoted on The Wall Street Journal Web site. His last turn on CNBC’s Squawk Box on July 18, 2007 was marked by controversy when he predicted that the Dow would fall from 13,965 to below 8,000. He was never invited back.
You can read more from Adam in Taipan Daily. Simply sign up, and you’ll start receiving Taipan Daily... plus you’ll receive the Free Special Report, 5 Hot Stocks for 2010. Register Now! 
