In Jim Cook's Archive


I have a friend who recently sold some assets and was boasting about his total liquidity. “I have nothing to worry about,” he told me. I disagreed. “You have one thing to worry about, it’s called inflation.” In other words, if inflation gets bad enough, his pile of money will shrink.

Another friend just retired. “Do you have enough money?” I asked. “Yes,” he assured me, but when we went to lunch he hid in the line behind me so I would pay for both of us. It was actually his turn to buy. He’s typical of some retirees, he’s become cheap. That’s because with reduced income retirees worry about their savings eroding from inflation and a big decline in their living standards.

One of my salesmen just retired. I tried to talk him out of it. “Do you have $5 million saved up?” I asked him, “Because that’s what you’re going to need to last 25 years.” He didn’t, but he said his wife was working and he had started getting social security. “That may not be enough if we get a big inflation,” I advised. Most assuredly that won’t be enough. Inflation destroys savings, insurance, social security payments and bonds; all the main assets retirees count on.

I have friends who have been forced to scale way down. Once they retired, their regular income stopped and it was a whole new ball game. These people who were once affluent and enjoyed dining out, shopping and traveling are pinching pennies and are worried sick about their finances. When incomes fall, retirees look to their savings to help them through tight spots and emergencies. A few years of high inflation can destroy their future. If you’re over sixty, you must have a plan for steady income and a nest egg. To protect that, you should have 20% of your net worth in silver. Inflation can’t ruin you with 20% of your assets in silver.

You might think you can get by with stocks or with your money under management by a successful stock picker. That has plenty of risks. In a severe inflation, you could be whipsawed with excessive losses. How good will stocks be in a hyperinflationary depression? That’s what stagflation can turn into. Let me stress this important lesson to everybody who wants to have a happy retirement: There’s a big chance of runaway inflation that will wipe out most conventional assets. To avoid unhappiness, a reduced living standard, and even destitution, you must own tangible, liquid assets like silver. You can get silver now at a decent price compared to where it may be in a crisis. A falling dollar and soaring inflation can devastate your financial plans. Don’t gamble on me being wrong about this. Get silver now.

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