In Jim Cook's Archive


The whole point in owning gold or silver is to have something that cannot see its value destroyed by events. Stocks, bonds and real estate could under certain circumstances have much of their value obliterated. It’s not probable, but it’s possible. Because much of the world’s population holds a strong affinity for precious metals, its value will not disappear in our lifetime. In the case of silver, strong industrial demand ensures that its value will hold up. Every other asset can have the rug pulled out from under it by nasty surprises.

We don’t know the future of the welfare state. Is there a price to be paid for our generous relief of everyone impacted by the pandemic? A century ago the flu outbreak occurred prior to social welfare. We called it “rugged individualism.” In the following decades government programs were initiated to make life easier. The people wanted and endorsed these protections and payments. Once a social program is initiated it can never be rolled back. Imagine trying to curb welfare payments or stop unemployment checks. And there’s always more of these programs. Now we have the welfare state on steroids. If the explosive growth in subsidies continues, it’s likely to erode the purchasing power of the currency. Too much of a good thing threatens the dollar’s role as the world’s reserve currency. That would take a monumental increase in our digital money-printing, but it’s possible because the welfare state has no theoretical limits other than national bankruptcy.

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