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The majority of today’s daily is devoted to Ranting Andy in the LeMetropole Café section.  Don’t miss it.  I have a few rants of my own, below.

Yesterday, Cactus Jack sent me an email.  It was titled “Never sell America Short.  God Bless America.”  He sent me the link to a parade, recently held in Grand Rapids, MI where the town’s people came out in number singing and dancing in the streets to the song “American Pie.”  The outing was a rebuttal to an article that implied the city of Grand Rapids was dying.  Here is the link, if you are interested:


It was all very uplifting and amusing, but very, very naive.

Jack is a heck of a guy – he is a real optimist and a real American.  He has lived his entire life, all 75 years of it, in affluence.  He grew up with money, he made big money and his friends and family all live the high life.  I can’t really fault him for seeing the bright side when that is all he has ever known.

I really want Jack to be right.  I too love this great country.  But a small group of very greedy and powerful men and women who populate Wall Street and Washington DC have set us all up for one massive failure.  It is unfair to lay all of the blame on the bankers, brokers and politicians for without the indirect help of the masses, this could never have happened.  The past several generations of Americans have allowed the American Dream to fade.  I fear we have become a nation of under-educated, over-fed, lazy uninvolved people.  Not everyone, but enough of the population to allow the current state of affairs to have happened.

Too many Americans refuse to get off their fat behinds and turn off Oprah or Judge Judy or Dancing With The Stars.  Too many Americans honestly believe we can change things – all we have to do is vote for Obama.  Or all we have to do is not vote for Obama.  I’ve got news for you – Democrats or Republicans, Liberals or Conservatives, none of them have the answers anymore.  All they care about is to spend enough of our tax dollars to stay in office, or get elected.  We will get what we deserve.  Those of us who do care, and even write about it, are greatly outnumbered by the masses that are addicted to their next welfare check, their super-sized McDonalds and their next trip to Walmart.

How many people do you know who have ever read the Constitution?  How many people do you know who would willingly lie down and die for their country?  Ask yourself what would happen if the draft were ever re-established?  There would be riots in the streets.  As long as we have an all-volunteer army, we are all patriotic.  But if most Americans or their kids had to fight for America it would be very different.  But it is fine to send someone else’s kid off to Iraq or Afghanistan.  Of course, we should not be there in the first place, but that’s another matter.

More than half of all Americans live off of the government and they EXPECT to be taken care of.  Don’t you dare tell them that we can’t afford it.  But the fact is we really can’t afford it.  Unless there are immediate and serious changes in Social Security, Medicare and welfare, all of us will suffer the consequences.  If you think that hyperinflation can’t happen here then I wish you a lot of good luck, because you will need it.

Most people understand that an individual or a country can’t continue to live beyond their means.  But most people want the next guy to be the one to foot the bill, not themselves.  Sacrifice is for the next guy!

Assuming that our politicians and the Fed will continue to inflate rather than face a mob of angry voters, then all of us, even those of us who have managed to put aside the funds to help us through these difficult times, will pay the price.  The standard of living in America is going DOWN, not UP and a parade in Grand Rapids will not change a thing.

Here is my reply to Cactus Jack:

Tell that to the one-in-five children who are currently HOMELESS, living in the back seat of the family car, in a motel, or worse.  Tell that to their parents who have gone a year or two without being able to find any kind of work – in spite of trying.  There was a tear in my eyes last night as I watched the 60 Minutes segment on these kids, who are living on hand outs and who watch their families being split apart in shelters.  One in five, Jack, one in five!! 

Did you watch the special on 60 Minutes?  You should have.  Screw the parade!  This 60 Minutes segment is where the rubber hits the road.  God bless the optimist, but being an optimist doesn’t put food on the table.  This is not about whether the economy is in a double-dip recession or whether it may get better in the fourth quarter.  NOW, TODAY, one kid in five goes to bed hungry and homeless in this “great country” you love so much.  Rather than sending me Emails touting how great America is, you should vent you anger on the Wall Street fat cats and bankers who have nearly destroyed this once-great country of ours.  I tell you once again, things are bad and we haven’t seen the worst yet.  Your reply is “no way, they aren’t that bad and will get better.”  Ask the 12 million kids who have lost their home what they think.  It is easy for you sitting in a beautiful home in an affluent suburb to say, “nah, it ain’t so bad,” – but Jack, it really is.

This is the worst it’s been since the Great Depression and that is an acknowledged fact.  Yesterday, I felt guilty that I have so much and so many have so little.  Wait until the inflation that is hiding beneath the surface starts to make itself felt.  Maybe your affluent kids and friends (me included) will weather the storm, but for most Americans, the worst is yet to come.  Too many people are “living” on Social Security and/or a small pension.  They are barely making ends meet.  What will happen when food and fuel costs double or triple, which I expect they will (due to continued debasement of the dollar by our idiotic politicians).  They will go hungry too.  And then, America will become like Greece or Egypt and there will be food riots and austerity riots in the streets.

Your grand parade in Grand Rapids will turn into riots in Grand Rapids.  You see, it’s not that “Grand Rapids is dying,” – the fact is, for most Americans, the ultra-high standard of living we have been blessed with our entire life is fading fast.  The rust belt is further down the road – an example of what awaits most other sectors of America.  

Our state has a $5 billion deficit.  We are broke.  Not as bad as California, New Jersey, New York or Illinois, but by the time our clueless politicians balance the budget here, in the next week, many state employees, teachers, policemen and others we rely on, will be out of work.  Out of work means relying on government welfare to survive.  It means fewer people with money to spend to help along the state’s economy.  It is a vicious cycle.  When you cut expenses by laying off people, tax revenues will fall and more layoffs will be required.  It has already started.

I love ya, Jack, but you are missing the big picture here.  Yesterday Sinclair wrote, “You can’t eat your investments!  Forget about doubling down, get a hobby farm.”  Some day we may be joining you up at Rim Rock, (Jack’s retreat on the shores of Lake Superior, in rural Northern Minnesota) far away from all of the havoc in the cities.  We will take turns standing guard over a small food-producing garden, where your front lawn used to be.”

I don’t think Cactus Jack will hear what I am saying.  It is simply not possible for most people, even well educated and intelligent people, like Jack, to visualize what they have never known in their life.  To Cactus Jack, hard times would mean not having enough extra money to spend two weeks in Hope Sound or Scottsdale on vacation.  That has yet to happen.  At least Jack has acquired some gold and silver – and even some food, though he makes fun of me every time the topic arises.  He says he agrees with “95% of what I have to say,” but he and I view America’s future and the direction of the economy in a completely different way.

Unlike Cactus Jack, I came from humble beginnings.  My family was middle class and my father never made more than $10,000 a year in his entire life.  He was a hard-working insurance salesman with a route and a collection book.  I can only remember one new family car, a 1951 maroon Chevy, and that was a gift to my father from his brother who was very successful.  We lived in a small two-bedroom home with one in-the-window air conditioner and a small black and white TV.  I walked to school every day, and in the 1950s, winters in Minneapolis were COLD.  It was a three-mile walk, each way.  I never had a car until I started college in 1959, and believe me, it was nothing to brag about, but it ran, and that was good enough for me.

I worked my way through school – paying for my clothes, cars and tuition.  Yes, it was possible THEN to succeed with hard work.  The America I grew up in allowed for success with nothing more than hard work, and an education, which was available to nearly everyone.  But the America of the late 1950’s is NOT the America of today.  Half of all college graduates from the class of 2010 still do not have a job.  One fourth of our children are homeless and many go to bed every night hungry.  Too many of the high paying jobs are gone and are not coming back.  The middle class is vanishing.  You should all be mad as hell, and worried too.  I certainly am.

When I graduated college, in 1964, I dreamed of someday owning a $20,000 home, of earning $10,000 a year and being able to afford a sports car.  From those humble aspirations, I ended up owning a nationally respected precious metals company that does some $150,000,000 a year in sales.

For the first time in my life, I am starting to feel guilty of my success.  I don’t even understand how it happened.  Susan and I still can’t believe how well things have worked out for us.  Honestly, I never expected this.  I guess I have been blessed, and lucky and made some wise choices along the way, but I still haven’t a clue why things worked out the way they did.  I must say, in all honesty, I owe it all to my wonderfully supportive wife Susan (a true Saint if there ever was one, and damn good looking too boot) and to the precious metals industry and to my good friend, Jim Cook at Investment Rarities, who had faith in me and gave me my start in the gold and silver business.  And last, but certainly not least, to my son Andy whose vision and energy have taken Miles Franklin to a level it never would have reached without him.  Andy has risen to the top of our industry and was recently sited as “one of the top young rising stars in the gold and silver industry,” by our friends at Casey Research.  Without all of them, I could well have ended up, like so many millions of good people, in a very bad place.  I have been blessed.

I try and do my part; to give something back in return, and that is what this daily blog is all about.  I can’t change the way things are, but I can write about the issues and better yet, offer you solutions.  I do know that I have helped thousands of good folks, like you, acquire gold and silver along the way – and many would never have taken the step without my encouragement, and soon, I believe, it will be a Godsend.  I know I really have made a difference for many people.  And I will continue to keep pounding away.  For all of the “Cactus Jacks” out there, I say once again – “Prepare for the worst and hope for the best!”  And one of the best ways to do that is to get out of your stocks and bonds and dollar-based investments now, while you still have time and while your dollars still have value.  Gold and silver is your best form of financial insurance and you will need it.


David Schectman

Miles Franklin