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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

Commentary Of The Month
June 1, 2015
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By Mark J. Lundeen

CNN reports that Michael Jordan joined the exclusive list of billionaires because of his part ownership of a professional basketball team.  But let me tell you the only reason a basketball team could make anyone that “wealthy” is the trillions of dollars created during and since the credit crisis are now flowing into presumed inflation hedges such as 19th century Impressionist art and professional sports teams. 

Which is fine with Janet Yellen and the FOMC as it allows clueless network news organizations, like CNN, to report on the growing numbers of billionaires in today’s “growing” economy.  But all of these dollars flowing into today’s popular “inflation hedges” are just creating new bubbles and bubbles don’t expand forever.  I expect that eventually, even Michael Jordan’s billion dollars will flow out of his basketball team and end up where all units of inflation, throughout history, have: in gold and silver.  The “policy makers” are very concerned about this, so have taken extreme action in containing the price of gold and silver.

If you believe the way to make money is to buy low and sell high, in a world where central banks continually create trillions of new dollars, euros and yen every year, silver is very cheap.  Since silver was demonetized by act of Congress in 1873, silver hasn’t seen a free market.  At first it was hoarded by governments to prevent it from circulating as money to prevent price inflation.   However in the 20th century silver became an important industrial commodity due to its unique physical properties (chemical, reflective and electrical).  Huge multi-tonne hoards of government held silver were sold gradually over many years, suppressing prices and satisfying industrial demand until the U.S., and other national treasuries supply of silver became completely exhausted.  The U.S. Treasury sold its last ingot of treasury silver in 2002.  This is absurd as we live in a world where gold is still hoarded while the silver production of thousands of years has been consumed and not recycled.

Here’s a 1965 quote from President Johnson on the topic of silver: “Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins.”

Silver has been horribly mispriced for decades.  One day we will see why the silver bulls have been so optimistic about the long-term prospects for silver.  Everyone should have a position in physical silver before the next monetary fiasco erupts.

Someday, somewhere, something unexpected by most investors will happen; this will most likely occur in the fixed-income or derivative markets and the repercussions will change the world we live in.  Expect to see the Dow Jones collapsing just as it did in the early 1930s.  And expect to see gold and silver break out of their current funk, a rise which will make market history.