Twenty seven years ago, a class of six new brokers sat down for their first day of training at one of the largest precious metals firms in the US. I was one of the six. So was Michael Spector, who is now a Senior Broker at Miles Franklin, and Kathy Downs. Kathy Downs is now married as goes by the name Kathie Bortnem. If you are a client of my son Andy’s, you will eventually work with Kathie, because two weeks ago she was hired to work with Andy as his assistant.
In 1986, after three successful years as a broker, Kathy left the industry, but I have kept in touch with her ever since and when it became clear that Andy desperately needed help, I called her to see if she would be interested in coming to work at Miles Franklin. The timing was right and she joined our firm.
Here we are today, three of that class of six who started work on the same day, 27 years ago. Bob Sichel joined me at Miles Franklin in 1992. In the late ’80s, I shared an office with Bob who was one year ahead of our “class of six.”
Andy joined me at Miles Franklin in 1991, one year after I started the firm. There is a lot of industry “experience” at my firm. Shane Spector is Michael’s son and works closely with Michael. Joel Kravetz is Andy’s oldest friend and worked in an off-shoot of our industry for years while he lived in Florida. Joel heads up our Internet Division and has a decade’s worth of experience in that area. Ross Kiefer has been a friend of mine since our high school days at Minneapolis North, in the late ’50s. Derek Winebarger joined Miles Franklin three years ago and knew Andy before he came to work for us.
We are like a family at Miles Franklin. We take pride in our company. I have been fortunate to put together a pretty special group of brokers. Along those lines, Kathy pulled me aside yesterday and told me “David, I have talked with dozens and dozens of Andy’s clients and as an impartial third party, I wanted to tell you that you have an amazing company. Every single person that I have talked to loves Miles Franklin. They love your newsletter, they love your son and they love the way they are treated. I wasn’t prepared for this and I wanted to share this with you.” I was not surprised to hear this, but it is nice to be reminded that Miles Franklin really is a special company. I don’t think there is another firm in our industry that offers the same high level of customer relations, low pricing, and expertise as we do. I am proud of the staff that works for me and they all share my philosophy of working hard to offer you more than any other firm in the industry. If you ever have a problem that your broker can’t solve, or a question that they can’t answer, please contact me directly and I promise you, I will personally take care of it. They best way to reach me is by email – email@example.com.
Last night my wife and I went to my daughter’s house for dinner. It was my oldest granddaughter Molly’s 18th birthday and she will be going away to college at the University of Missouri in the fall. Molly does data entry for me after school and during the summer. Miles Franklin really is a “family” business. I had a conversation with Molly’s other grandfather. We were talking about the opportunities for kids like Molly after they graduate college. He said “the economy should be much better when she graduates, in four or five years. That piece of paper (the diploma) will get her a good job.” I took issue with his outlook. Sure, there will be good jobs out there, but a college degree will not be enough. It is not enough even now. When I graduated college, in 1964, a college degree was enough to land a good job. The people of my generation had ample opportunity to succeed. Molly’s class will face a much more difficult challenge. I was part of a large and growing “middle class.” The middle class is disappearing now, like an ice cube in the sun. Our society is changing. The middle class used to be the largest class, with a small percentage above and below. Now, there is still a small class of the well-to-do but the bulk of the middle class has been forced into the lower class and we are moving rapidly toward a two class society instead of a three class society. Some will do very well and most will not.
The manufacturing sector has basically been outsourced to third world countries. Those were the high paying jobs that allowed people to move into the suburbs and buy two cars and a boat. We are becoming a “service-based” society and the pay scale has fallen dramatically, as a result. When you couple that with a steadily rising inflation – well beyond wage increases – the result is a much lower standard of living for the majority of Americans.
It will be more difficult for the millions of people who have been forced out of their high paying jobs to adjust to a lower standard of living than it will be for the younger generation coming into the work force, who aren’t used to a life of consumption and materialism. The world is changing rapidly and most of the people that I talk to haven’t come to grips with the magnitude of the changes. Most people, like Molly’s other grandfather, still cling to HOPE and look at today’s problems as being only temporary. Like I told him last night – Sam, it is beyond fixing. A hundred and thirty trillion dollar debt is overhanging our economy and the interest on that debt alone, which is compounding, will steal from the standard of living of our children and grandchildren.
There is a growing awareness that borrowing and spending is a bad thing and a lot of our politicians will find themselves out of work this fall, as a result. I hope it’s not too late, but all of the debt we have built up in my lifetime will have to be paid by someone – either the lender or the borrower (by default and bankruptcy). The political answer is, and always has been to inflate the problem away. Sam’s tuition at the University of Minnesota in the late ’40s was $22 a quarter and he could earn enough working part time to pay his own way. By the time I started at the U in 1959, tuition had risen to $60 a quarter. I paid my own was too, by working part time selling lady’s shoes two nights a week and on Saturdays. This year, I think the number is approaching $3,500 a quarter. Try working part time to pay for your tuition now days. That’s how you “inflate away” a problem. My father in law used to slip me a $10 bill every time he saw me, when I was newly married. I give my kids a $100 bill from time to time. It has the same buying power as the $10 I used to get from Susan’s father.
If you open your eyes, and look back at your own life experiences, you can clearly see that it is impossible to retain your wealth in Dollars. The cost of living is rising much faster than the phony government statistics on inflation. Sadly, it will only get worse, much worse.
For those of you who still think that we can borrow our way out of this mess – I have news for you. We can’t. It is our yearly deficits that have put us in this awful mess in the first place and going further into debt to help the needy is not the answer. But that is the path of our current Administration. What’s another trillion or two if we borrow it for a good cause? It used to be a million or even a billion and now it’s a trillion. I’ve got news for you – a trillion is a lot of money. A lot! It’s a million with six zeros added to the end of it. If you need proof of how rapidly we are destroying our currency, just follow the rising price of gold. Gold is, after all, the canary in the mine shaft. In a mere 10 years, it now takes four times as many dollars (or Euro or Swiss francs or British Pounds) to buy an ounce of gold. Did gold really go up that much in ten years? No! Paper currencies lost that much buying power in ten years. If you aren’t moving your wealth out of fiat currencies and into gold now, you are oblivious to what is happening to your wealth. Look around – remember what things used to cost 10 or 20 years ago. Remember what you used to think a good wage was, when you first started working after college. Once the reality sets in, then tell yourself that the problem is getting worse, not better, and the dollar’s purchasing power will fall even faster in the future. A year from now, when gold is $2,000 an ounce, remind yourself that gold didn’t increase by $750 an ounce – the buying power of your dollar lost nearly 40% to the STANDARD, to gold.
Your choices are simple. Listen to your stock broker and you financial advisor and stay in dollars and in stocks and take your changes, or listen to me and preserve your wealth. You will understand this in a year, if you don’t already. Awareness of gold’s importance is on the rise. Large six and seven figure orders are common place at Miles Franklin now. The “rich” are finally figuring it out and moving funds into the safety of gold. This is a global awakening – from China and Russia to the Middle East to Europe and it is just starting here in the US. Listen to my son Andy – Got gold?