Gold: Use The Cockroach Strategy

Gold:  the monetary metal that central bankers, politicians, and Too-Big-To-Fail bankers publicly hate.

The Cockroach Strategy:  A cynical but depressingly accurate view of politics that can assist your investment decisions.  It assumes the following:

1. Cockroaches scatter in the light.
2. Politicians backpedal and lie when confronted with the truth about their actions, payoffs, deals, and loyalties. Like cockroaches, politicians run from the light of truth and facts,
3. Cockroaches are a successful species and have survived for many millions of years.
4. Politicians are a successful group, have been part of the human condition for a very long time, and are paid well for their “services.”
5. There is never just one cockroach, they are everywhere, and more are hiding.
6. There are always more politicians seeking office, because politics pays well in money, power, and status.
7. Regarding anything important, national politicians are likely to lie, or at least materially manipulate the truth.
8. The more important the politician, the more likely and more often s/he will lie.
9. Notwithstanding the above, a politician will occasionally tell the truth, particularly about issues that are unimportant or when confronted with verifiable facts.

STRATEGY – the Cockroach Rules or CR Rules:

CR #1:  If a politician is making an important announcement regarding money, the budget, deficits, gold, or financial risk, he is almost assuredly lying.

CR #2:  If a politician is issuing a denial regarding something important, it is probably true.

CR #3:  If you know that most important political pronouncements are lies, then you can guess much of the truth and invest accordingly.

CR #4:  Gold and silver are enemies of responsible banking, politicians, fiat money, central banking, and “borrow and spend” politics.  Politicians often lie about the value and importance of gold, and consequently it is wise to own gold stored in a secure location.

CR #5:  In our heavily politicized world of 2015, politicians, like cockroaches, are practically everywhere, including central banks, all governments, very large financial institutions, and the military.

EXAMPLES:

Jean-Claude Juncker, European Commission President, On Greece’s economic meltdown in 2011:

“When it becomes serious, you have to lie.”

He confirmed CR #1.

President Lyndon B. Johnson on July 23, 1965 regarding the act that removed silver from U.S. coins:

“Our present silver coins won’t disappear and they won’t even become rarities.  We estimate that there are 12 billion – I repeat, more than 12 billion silver dimes and quarters and half dollars that are now outstanding.  We will make another billion before we halt production.  And they will be used side-by-side with our new coins.”

 “Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coins.  There will be no profit in holding them out of circulation for the value of their silver content.”

Poppycock!  He was lying then and probably knew it.

See CR #1, CR #2, CR #3, and CR #4.

President Richard M. Nixon on August 15, 1971, speaking on the executive order to no longer exchange dollars for gold:

“I have directed Secretary Connelly to suspend temporarily the convertibility of the dollar into gold or other reserve assets…”

 “But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.”

 The “temporary” suspension is still in effect.  Does your 2015 dollar buy as much as the 1971 dollar?

See CR #1, CR # 2, CR #3, and CR #4.

Ben Bernanke regarding the real estate crisis in March 2007:

“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seem likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

One of his many banker-serving lies.

See CR #1, CR # 2, and CR #5.

George W. Bush Jr. regarding Iraq:  (May 2003)

“We found the weapons of mass destruction.”

What weapons of mass destruction?  Did he mean all the extra debt incurred to fight the war?

See CR #1 and CR # 3.

Lloyd Blankfein, President of Goldman Sacks:  (2009)

“I’m doing God’s work.”

And the opposite of God’s work is what?

See CR #1, CR # 3, and CR #5.

Hillary Clinton in March 2015 regarding her email scandal:

“I did not email any classified material to anyone on my email.  There is no classified material.  So I’m certainly well aware of the classification requirements and did not send classified material.”

 And the great pyramid of Egypt might be moved to Iowa next year…

See CR #1 and CR # 2.

President Bill Clinton in 1998:

“I did not have sexual relations with that woman.”

Of course he didn’t…  He was married to Hillary at the time…

See CR #1 and CR # 2.

Wall Street Journal article by Jason Zweig:  (July 2015)

“Let’s be honest about Gold:  It’s a Pet Rock.”

Intentional or unintentional stupidity?

See CR #1, CR # 2, CR # 4 and CR #5.

STATEMENT OF THE HONORABLE ERIC M. THORSON INSPECTOR GENERAL DEPARTMENT OF THE TREASURY:  (June 2011)

“Before I discuss the details of the audits that are the topic of this hearing, I would like to make one point very clear – 100 percent of the U.S. Government’s deep storage gold reserves in the custody of the Mint has been inventoried and audited.”

Protesting too much?  If the LIE is that the gold has been inventoried and audited, is the TRUTH that the gold is missing?

See CR #1, CR # 2, CR #3, CR #4, and CR #5.

CONCLUSIONS:

• The cockroach strategy and the CR rules will improve your investment decisions. Cynical or not, the cockroach strategy is relevant.
• Central bankers and politicians love control, fiat currencies, and hate gold. Act accordingly.
• The anti-gold propaganda is currently (end of July 2015) intense. Repeat:  “When it becomes serious, you have to lie.”
• The politicians, media, and financial elite have assured us that inflation is low, stocks and bonds are safe, gold should be avoided, and fiat currencies (in opposition to over 1,000 years of history) are solid. I suspect that CR # 1, 2, 3, 4, and 5 are relevant.
• Stack gold and silver. The cockroach strategy indicates the truth of gold and the illusion of fiat currencies.

Gary Christenson

The Deviant Investor