The trees are starting to bud, March Madness is winding down to the Final 4 (GO UCONN!) and if we get another April smack down like 2011 and 2013, silver will be “free.” “Free” as in either zero or a negative price so all you’ll need to do is be able to put enough gas in your truck to pull up to the loading dock and get ya some. If we are lucky, this April will be worse than the other two and you’ll actually get paid a few FRN’s to haul some of the white metal off.
I must confess, I have been wrong…all along. Silly me, I thought that “money” was supposed to be something that was not freely created when in reality it HAS to be freely created. If not, how in the world would we survive? I mean think about it, this is America, and if money wasn’t freely created then how in the world could we all have free lunches? And then logically, how could Walmart even survive? We “deserve” a better standard of living than our parents had, yes they worked hard but we are smarter than they were and figured the game out. Why pay “cash” for anything when your bank will lend you the money…and thanks to a much more informed Federal Reserve we can do this at nearly 0% interest.
Even though this is not New Year’s, I have finally decided to turn over a new leaf since I’ve realized the faults in my logic. I finally realize that yes; low interest rates that look like they are here to stay really will turn the tide. Lower rates allow for more car sales, more home building and more sales in general which in turn will create jobs. These will be good jobs which generate taxes. Once this “expansion” really gets rolling in a self-sustainable manner we can actually outgrow our debt and actually pay some of it down. An offshoot of this growth and increased tax base will be that minimum wage can be increased which will generate even more tax revenues. A “virtuous circle” if you will.
These lower rates also mean that bonds aren’t such a good deal anymore and bank accounts that pay such low rates are not a great choice either so stocks are the way to go. Stocks are known to do quite well during a growing economy in conjunction with low inflation. They also do well during inflationary times which we really don’t expect but if wrong, stocks should still do well. I do want to point out that carefully choosing your equities are normally quite important, will not be as important because as they say…a rising tide lifts all boats.
Speaking of inflation, I have been wrong about that also. Inflation has been recently reported by the BEA to be fewer than 2%. This is a number that we can live with as long as it doesn’t start creeping higher which I don’t think the Fed will allow. I had thought that inflation would have reared its ugly head already…again, I was wrong. Inflation appears stable and in fact I went to the grocery store for the first time in several months and it seems that some items have even dropped in price!
As you know, I have been boisterous that I believed inflation would explode. I think I can pinpoint the error of my logic. Yes the Fed has created a lot of credit and enlarged their balance sheet but the banks (in their wisdom) have taken these new dollars and just sat on them as free reserves. Maybe the banks are doing this because they just want to be on the safe side and in case of a rainy day…they won’t be caught short. I might add that this is probably a good strategy since there is a good chance that the dollar will raise in value versus other currencies and particularly versus many of the goods that seem to be in fat supply.
My last mea culpa is regarding gold and silver. I’ve been wrong. I should have listened to Warren Buffet when he so correctly pointed out that they pay no dividend, aren’t used as money and thus regarding “utility,” they have little except for use as jewelry as they are kind of pretty. I’m not really sure what to make of the rest of the world as they on load such large quantities of precious metal; I thought that they might be on to something but it’s pretty clear that the more they buy…the lower the price goes. They can buy all they want but if the price keeps going down…this adds a whole new meaning to shooting oneself in the foot huh? Suckers!
My biggest mistake and one that I plan to rectify this week by selling all of my mining interests are of course the “shares.” What a dummy I was to believe that there was any future in this area. I mean who wants a business where you sell your product for a loss…which means for the producers the more you sell…the more you lose. As for the exploration companies, this was a really big mistake. How could I have ever imagined that “supposed” reserves in the ground could ever get recovered for a profit? What a dumb thought process on my part but as I said, at least I plan to fix it before I lose all my money.
I am excited. I can now begin moving forward again with a clear head and clearer thinking. I will have less stress because I know that I’ll be doing the right thing and all I’ll need to do is listen to the news to support my decisions. I will also have the peace of mind that should I or anyone in my family get sick or injured we will “be covered” thanks to our president. I did not vote for President Obama and was fairly dismayed when the audited results came out but I guess I was wrong here also. I now think he means well and wants the best for all of us including and especially those who are down on their luck. I will finish with the blasphemous statement that though The Constitution has served our nation well over the years, I think it needs to be at least amended or even repealed because the 3rd time would probably be the charm. I would like one more chance to vote …for Mr. Obama!
By now you have probably guessed huh? “It’s that time of year again” as in yes, it April Fool’s Day! You have no idea how hard it was for me to write this piece or how hard I laughed at some of the ideas that didn’t make it because they would have been too politically incorrect. Think about it, if I cannot make fun of “what the reality is” because it wouldn’t be politically correct means that the joke is really on us. Think about this one for a moment…it’ll set in. Happy April Fool’s Day!