Insurance Anyone?

All states now require auto owners to possess insurance. Unfortunately, there are many irresponsible ones driving without insurance, often with revoked licenses, possibly drunk, and who seem to be totally irresponsible. Responsible people automatically have insurance, in the main, to protect themselves from those who don't, or who are lousy drivers. Those who have home mortgages, are required to have insurance by the holder of the note, to protect them from a fire destroying the lender's equity. Insurance companies are probably the wealthiest businesses because they insure most things in the world, and their rates are dependant on the risk. The greater the risk, the higher the rates, making a virtually assured profit. Insurance is a wise thing to have…just in case. In case of a fire, an auto accident, or whatever, insurance is a small price to pay for protection.

Some of us are self-insured. Self-insured, by having a few loaded guns at appropriate places around the house, or by having surplus assets saved "for a rainy day," as our Moms perhaps used to say. Some call their savings a "nest egg." Savings are important, because one can never tell what time and circumstance may befall any of us. It could be sudden death by accident or disease. Disaster can happen at a moment's notice, as in a fire or auto crash. It has been said that "class" has nothing to do with money, but with one's concern for the future. "Upper class" people are concerned with the future of their children, grandchildren, communities, and nation. "Lower class" people, are into instant gratification of all sorts, such as alcohol or drug consumption, violent behavior, and nary a thought beyond the current time period. There are dozens of in-betweens, and for a thorough consideration of "class," one should read, "The Unheavenly City," by Ted Banfield. It is a superb consideration of what went wrong, why, and of the different classes. Unfortunately, it may be out of print, but perhaps a library would have one. (Little Brown & Co. - 1968, 1970)

Being concerned about yourself as well as your family and descendents, means you are upper class, and to be congratulated. Being upper class, you naturally think of the future. What will happen in the future? Lots of things could happen. Among them are that Bush's war growling and threats, could get America into a war no one wants, and which we are unprepared to fight. We could have a further economic melt-down, via the stock market crashing again, or continuing its downward spiral. We could have natural disasters such as earthquakes, floods, weather anomalies, or even a huge asteroid crashing into Earth. Israel could be bombed, which could precipitate untold fratricidal warfare, bringing in the rest of the world. I could go on, and on, but no one knows what the future may bring. We show our concern for the future, by making plans for any possible scenario. We paint our homes to preserve them, weed the garden to preserve it, bathe and take vitamins to preserve out health, and exercise our minds to preserve them. We save; to carry us over when the unforeseen happens.

The question is not what brand of paint or weed killer to purchase, but how to save. "Simple, you open a savings account," is the answer of 99% of the world's population. That solution is in grievous error. The error is not in saving for the future, but saving in currency denominated vehicles, which are terrible insurance. There are denominations other than dollars, pesos, francs, pounds, or yen in which to save. There are many other measuring devices that do not change their values, as do all currencies. Saving in currency denominated devices, is like measuring with a ruler that is constantly shrinking in length. Is there any way to measure the strength of a currency, other than by what it will buy? Can you measure the value of a dollar in any way, than by what it will buy? Its weight, dimensions, or color don't tell one anything, so it must be what it will buy. It constantly buys less and less, because their numbers constantly increase. After all, a hamburger was 13 cents at McDonalds in 1962. I bought many of them. Today, different cows supply the sandwich, but it is the same burger, at maybe 10 times the price…in dollars and cents. This is known as inflation; and a decrease in purchasing power of a currency, is its result. Saving in a currency is silly, as not only do you have to pay taxes on any microscopic interest you may earn, but the very currency itself is declining in value, or purchasing power. Saving in currencies, is poor "insurance" with which to protect yourself. What else is there in which to save?

You could save in acres of land, or square feet of home, and especially if you live in it, or depend on it for a living, because as the currencies inflate, the land and home will "go up" in those currencies. This means you will have "hedged" yourself against inflation. If there is a fixed rate, long-term mortgage on the property, you will pay it off in ever cheapening currency, which will make the payments easier to make each month. Other tangible things that it may be wise to "hedge" yourself in, might be antiques of all sorts that may appeal to you. These "go up" in currencies, as the currencies lose value. The ones many use to "hedge" themselves are gold and silver, for which I am a dealer. Gold and silver have been actual money for thousands of years, in all nations. Gold and silver are beautiful, compact, fungible, desirable, and can't be endlessly multiplied as with printing press, fiat, "money." "The More Of Anything There Is, The Less They Will Be Worth." (Stott's Law) This applies to every single thing on earth, be it farm produce, paper money, antiques, autos, and everything of which your mind can conceive. It is logical then, to save in something that can't be counterfeited, and which is not in overabundant supply. This is sound insurance. It is also nice not to have to pay taxes on it, furnish a huge area for storage, and maintain it. Gold and silver can just sit there, "going up," as currencies "go down," with no grass cutting, property taxes, painting, or maintenance of any kind.

I realized the beauty of gold and silver a long time ago, and have been a dealer in them since November, 1977. It's fun to sit at my desk and talk to people from all 50 states, and help them to "hedge" their surplus assets, or insure themselves against what the future may bring. It makes sense as well. The dollar is a shrinking measuring device, as are all other currencies. Not a single currency in the entire world is maintaining its purchasing power. None! All are being inflated by their respective governments and central banks, and there is nothing the citizenry can do about it…other than protect themselves. So I urge you to do just that. PROTECT YOURSELF.

This sounds terribly elemental, I know, and even simplistic, but it seems to be necessary, because millions of people, just in America, don't get it. Forward this or print it and send it to them! They continue "investing" in government bonds, stocks with poor or no profits, and savings accounts or certificates of deposit, paying perhaps a bit over 1% interest, which is taxable. The dollar is losing its purchasing power at 10% a year. According to the St. Louis Federal Reserve bank, this is the amount its numbers are being increased each year. If an investment is taxable, it must produce at least a 13% return, just to break even. Which stocks, bonds, or savings devices do that? None.

Antiques of all sorts, and possibly homes may go up 13% a year, but not usually. Since the stock market crashed, many think real estate prices will burst will also, as it is over priced, just like the stock market still is. Numismatic coins certainly do not. Gold and silver have. Suppose a medical emergency came up, and you needed immediate dollars to meet the crisis? It's difficult to sell an antique Ford or coffee table quickly, and the same with any antique item. Gold and silver can be converted into dollars almost immediately, so can be considered extremely liquid. Currently, the difference between the buy and sell price for a one-ounce gold coin is only $3. Bad things happen to all of us at one time or another, so we save for such occasions, if we are wise. We insure ourselves, in other words. We insure ourselves for large amounts, should a catastrophe happen, and for small amounts, we self-insure. Our self-insurance in gold or silver can be passed along to our offspring if we don't use it, and they won't have to pay taxes on it. Make sense?