Mercy! Mercy! That Dang Nabed PERCY!

Precious Metals

Precious Metals

When I wake up in the morning I look out to window and see if the leaves are blowing in a big oak in my back yard. If it is windy here that means I don’t fly, because it will be twice as bad on the flying field. Today it looks calm and I think I’ll take Linda out there and let her watch me fly (crash?) the new “Foamie” she bought me.

I have decided to devote an hour each day to cleaning up the Shop/Garage. It is a formidable task and more than I can hope to accomplish in a single day. Maybe if I start working on it, like a project, I will regain control of the cleanliness and order of my workspace.

As I was cleaning yesterday my John Deere Tractor quit running. I called the shop and they came over and picked it up. They think some of the filters are plugged. It sat unused for most of the summer and if it has to die on me, this is a good time. It gets plenty of use in the fall and Winter.

It is my suspicion that older citizens with savings are going to be the big bill payers in these times of economic woe. Already savings are being silently looted by unreported inflation. Food and fuel and not being included in the accounting voodoo by the Bureau of Labor Statistics. So if you don’t believe they are telling the whole truth than what is the actual inflation number? My suspicion is that it is running around ten percent. The current administration is playing the same kabooky dance with inflation numbers that they are using to report joblessness. They put a political appointee in charge of an Administration and he/she sees the numbers get spun in a way that makes the most of a bad situation.

My theory is that gold is a good gage of actual inflation. Look at what gold was selling for a year ago and compare it with what it is selling for today. That is something the government’s math wizards can’t tinker with. It is the old story that if you don’t like the way the numbers are coming out then juggle with the values that are used in the calculation. However, to disregard FUEL and FOOD costs gives new meaning to the word GALL. These are the two economic rules of thumb the average citizen uses to benchmark inflation. By comparing what food and gas prices were a year ago with what they are today…. that is “INFLATION!”

These days we are being deluged by commercials on TV about buying gold. On one hand this might not be such a bad idea and on the other it has a down side. The gold merchants generally buy their products at fifteen percent below bullion value and sell at fifteen percent above. Then there is the collector value if the gold is part of a coin. To keep the math simple say you buy a coin that is ninety percent pure. At today’s market value the bullion in the coin is worth the price of nearly an ounce of gold or silver plus some collector value, less fifteen percent.

So say you buy an old twenty dollar gold piece for $2500. The gold is worth approximately $1600 and the rest is in collector value. When you try and sell, you will be offered about $1400.

Now that might not seem like a very good investment, however it has some things going for it. First of all you can look at the price of gold and silver on the TV and know exactly what your investment is worth. This is better than trying to sort through a prospectus that has been juggled around by a mutual fund's chief financial officer to the point where you have no idea what they are doing with your money. Their attitude seems to be …. “Look we made you four percent, now shut up!”

Anyway, no matter who gets elected in the presidential race there will be a very slow transition from the current policies to ones that get enacted by a change in administrations, assuming that happens. So the Fed will continue to print money and inflation will get worse. As inflation continues the value of precious metals will go up. Eventually those coins will approach bullion value and become a reasonable investment that everyday people can understand. If the market tanks bigtime, old people will still have some of their portfolio's value hidden under the bed.