Cash Is Trash

May 7, 2012

There will come a day when your currency will either not be accepted as money, or it will be so worthless it’ll make you want to cry.

When I first started driving gas was $1.30 a gallon, I feel pretty stupid paying $3.70 a gallon right now; I couldn’t imagine having paid $.30 a gallon like our parents and grandparents did at one time! The sad fact is that this trend will continue. One day you might wake up in 10 years and pay $10.00 a gallon. REGARDLESS of who wins the 2012 election. Or you may wake up and realize the currency you once used is no longer being used!

I don’t mean to sound demeaning, but as I tell my class – “Boys and girls, we are about to experience a huge change, and this will be a great time for you to create an empire of wealth for your family, or to continue the path of middle-class or even worse have your wealth transferred and you may be moved to lower-middle-class. The choice is yours.”

Now is a great time to buy!

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A few of my readers have remarked that they’ve been watching silver for the last two months and depending on when they got in, they could be down $5oz, which can add up quick if you have a lot “skin in the game.”

Well, I can’t argue with the facts that silver has gone up and down since January, but perspective is everything. The fair market price on silver right now I would estimate around $37. Regardless of what happens silver in reality is at $37 and will soon be there again before it takes off. With that said, I view these “pullbacks” as a gift!

I’m in the metals business for the long-term gain. I’m not looking to make a quick buck, I’m looking to set up a system for my family to have wealth for a long time in whatever cycle we’re in. There is always something going up in value, we just have to do our homework to figure out what it is and invest in only that. Right now the cycle is swaying to precious metals, they’re still cheap enough for everyone to buy, and in a few short months the momentum will swing and people will flood the market which will drive the price up. Get in now, before it’s too expensive to get in!

Inflation Explained

May 2, 2012

Inflation is not merely prices going up, but rather the value of the dollar going down. And even more than that your wealth depleting.

Imagine there was only $10,000 in America, and you owned $1,000 of them. You would own 10% of America’s money! Yay you! Now, let’s say America decides to print another $90,000, and doesn’t give you any of it. You still own $10,000 (yay you!) but now there is $100,000 out there and you now only own 1%. You just lost 9% of your wealth while not spending a penny.

Our current system has punished those who have saved and have now created a generation of debtors.

Get a financial education, get smart, protect your wealth and don’t be fooled into buying foolish things, or into saving your currency and allowing America’s inflation devalue your wealth to nothing.

While my primary argument will always be that gold and silver have been accepted as money for the last 6,000 years of human history, there are still extra things that can be said about why only gold and silver, and why not other metals that are valuable.

A recent trend has shown value in two things: platinum and rhodium.

If you remember your recent thief history, rhodium was being stolen from cars’ catalytic converters. Rhodium is a pretty and durable metal which is why people find it valuable. It is usually used to go as an outer covering on both silver and white gold. Silver to make it more durable and avoid tarnish, and on white gold to make it luster or BLING! Extremely reflective and well guarded against the elements.

Rhodium’s main problem is that it is only used by jewelers. Sure, it is valuable (to jewelers), but it doesn’t serve functional purpose like silver (cell phone, refrigerator, microwave), and it doesn’t have the history that gold has. It’s only purpose is to cover gold and silver, and it has already had its run to value, and the only place it can go is down.

Platinum, while extremely valuable is just TOO rare. If platinum became the backer of money, it would be valued at MILLIONS per ounce, and South Africa would be the richest country in the history of the world as it is only found in South Africa.

All of these other precious metals, metals are valuable and will remain valuable, but will not see the spike of gold/silver simply because of the history. While from a collector’s opinion, yes they’re pretty and they’re neat, they won’t have the investment run (bubble) that gold and silver will soon have!

Simple

April 30, 2012

Yes, it’s just that simple. It’s been going up and regardless of what happens; it will always go up.

The Exit Strategy

April 30, 2012

Yesterday, I received a great question regarding how/when to sell or as it’s being called “the exit strategy.”

Remember back in the spring of ’06 when the housing market was in a craze. People who were tens of thousands of dollars in debt began “finding” money to “buy” houses. It didn’t matter if you used Watson, For Sale Buy Owner, or Craigslist, if you listed your house for sale, someone would soon buy it and pay a premium on it! Then, in a few months by the end of ’06 you couldn’t sell your house to save your life. There were 100’s of houses for sale within miles of each other. The law of supply and demand worked against the seller and for the buyer.

Now, with this “bull market” of gold and silver I think we’ll see a lot of the same trends. People will begin to rush the market. There is no reason to be scared as in by this time our investments will have not just double or tripled, but realistically you could be sitting on 10x’s the money you originally invested (yes, even if you invest today with silver being $32 an ounce). With that said, my exit strategy will go in 4-6 waves. When things start turning straight up I will probably sell 1/6 of the silver I have. More than likely I’ll probably sell, to buy something specific. Sell some silver, buy a house. Sell some silver, buy a car. Etc..

There is no monetary value which is my “mark to sell.” I just think when the time is right, we’ll all know. Stores will no longer have signs that say, “WE BUY GOLD NOW!” They’ll read, “We sell gold! Protect yourself!” And when those signs are everywhere and silver and gold are experiencing shortages because of the demand, that my friend, is when it is time to sell, sell, sell!

Are You Crazy?

April 28, 2012

This is the question I get asked most often and semi-understandably why, although I don’t condone it!

Promises always sound better than reality until the truth punctures the false promises, and the only thing that’s left is the truth.

Let us quickly look at where we’ve been the last 15 years as a country. In 1997 the country was strong under President Clinton, life was busy, but easy. By the end of the 90s we weren’t sure if Clinton was a good person, but presidentially he had sustained the nation, and with the threat of Y2K (google this if you forgot) looming closely, surprisingly, the stock market was still going up, and at a rapid pace. Y2k came and went and nothing happened, but the stock markets continued to rise! Companies like Enron were sky rocketing through the roof, a measly $500 could have returned you $10,000 if you invested and pulled out at the right time during this short year cycle before the stock market went BUST!

With the new millenium and the stock market crash behind us, the country then began to rally in something sturdy, something that will always go in value, something that is tangible – LAND! People were taking out second loands on their homes to buy new homes, hold them for 3 months, then sell them for $30,000 more! My childhood neighbors listed their home at 2x’s what they paid for it just 10 year prior, and then 3 people got into a bidding war and their home sold for $10,000 OVER ASKING price! New home buyer began flooding this market. People making a dual income of $50,000 were taking out loans of over $200,000 on 3/2 homes thinking that the house would soon be worth $250,000 if they ever couldn’t make their mortgage it would be an easy sale! Well, in 2006, this all came down. Houses dropped faster than they had risen, and “no one saw it coming.” For the last 6 years people have been walking out on their homes, because the housing market HAS NOT RECOVERED, it is in a dead cat bounce. A dead cat bounce is like a bouncy ball when you were a kid. You’d drop it, it’d hit the ground and bounce back up, but not as high as before, and it’d pause in the air for a second, then it falls again, then bounces back up. This process repeats a couple of times. We’ve seen house prices drop and they’re still dropping. We haven’t come close to bottom out! Your house may be worth the same US currency it was in 1990, but since 1990 the government has admitted to raising inflation by 24%! Your house isn’t worth as much as you think it is, and it’s going down.

Well, what’s going to bubble next? Precious metals. Precious metals aren’t the answer for everything, but the next year will be a great time to accumulate! If you’re reading this and it’s 2014, I’m sorry, but it will be too late. You’ll be the people buying stock in the late part of 2000 and buying a house in early 2006. You’re getting in right as smart people are getting out and the average person is getting in, and you’ll be stuck with the bill.

The world works in cycles. A modest investment of $16,000 – 500oz of silver will soon in the next 2 years be able to equal the price of a single family home. When something gets inflated, something must deflate. When silver hits an astronomic bubble, real estate will be at a new low. Maybe not US currency wise, but in the ratio of gold/silver, oil, wheat, and the stock market.

Everyone has the money to buy, you just have to retrain yourself how to invest, realizing great wealth can be found in a short amount of time and your retirement fund will not save you, neither will the government.

So, am I crazy? If I am, I don’t want to know what sane looks like. History is just repeating itself, learn from it, capitalize on it.