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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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November 26, 2012

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By Adam Hamilton

All throughout world history, debt monetization ended in ruin for the countries that foolishly played this dangerous game.  Central banks create new paper money out of thin air to buy bonds, thus monetizing them.  The big problem is this grows, or inflates, the money supply.  The result is inflation. When the money supply grows faster than the underlying pool of goods and services on which to spend it, their prices are bid up.  The more new money the central bank creates to monetize debt, the worse the resulting inflation.  Even though its impact on price levels isn’t apparent immediately, it is inevitable.

Inflation is devastating, an insidious plague that stealthily impoverishes the great majority of people whose incomes don’t rise fast enough to maintain real purchasing power.  Inflation slaughters the poor, who already struggle greatly to survive even without rising prices.  Inflation crushes everyone on fixed incomes, nearly all retired people.  And inflation robs savers blind, stealing their lifetimes’ hard-earned surpluses.

Thankfully there is a refuge for the prudent, a safe haven to protect their accumulated wealth from inflation’s vile predations.  All throughout history, gold and silver have maintained their real purchasing power as money-supply growth lifted prices all around them.  They are like battleships on the seas, no matter how high the ocean of paper currencies under them rises they still float commandingly on top.

The Fed’s brazen debt monetization in recent years has already created massive inflation.  This deluge of new dollars that never existed before is already baked into the pipeline, and its economic impact is just beginning to be felt.  Yet gold and silver have already seen fantastic gains during the Fed’s initial pair of quantitative-easing campaigns.  This new open-ended third one is very bullish for these precious metals.

While QE3 started out small, odds are it will be expanded considerably.  After its initial launch QE1 was nearly tripled, and QE2 was tripled.  For political reasons the Fed is reluctant to fully unleash its inflationary plans all at once.  And the open-ended nature of QE3 has reignited inflation expectations like nothing we’ve seen in many years.  It is going to ultimately drive traders to flock into gold and silver.