President’s Day is one of those strange holidays when some, but not all businesses are closed. Miles Franklin is open but the U.S. stock market is not. Thus, barring a sudden, dramatic crisis, global markets will likely be relatively calm. I’m writing this Sunday morning – under the assumption tomorrow will be just that; and if not, perhaps I’ll edit my comments. As it is, I have two topics I’d like to discuss; the first, in this article, discussing why Precious Metals’ value is timeless; and the second, in a separate article, regarding a real-time event highlighting the gaping difference between the value of “paper” – or in this case “digital” assets (hint: Bitcoin), and real money.
The first topic – “post-fiat future” – relates to a book written by a loyal Miles Franklin Blog reader, Damian Bouch, titled No Delight in Fools. Damian has already written one book – the Onus of Man – about the abstract, immoral concept of debt in a civilized society, which I haven’t yet read. However, he asked me to read a draft of his yet unpublished No Delight in Fools – which I happily obliged, given its subject matter. The book describes what society might resemble ten years after a fiat currency crash; in this case, in the Appalachian region of the Northeast United States.
When writing of reasons to own Precious Metals, we rarely speak of the potentially “worst-case scenario;”i.e., a total societal collapse, borne of the instantaneous disappearance of fiat currency denominated wealth. Sure, we vehemently advise the ownership of at least a modicum of “junk silver,” in case of a temporary barter society caused by pandemic bank failures. However, an actual societal collapse – resulting in thousands of deaths related more to looting and gang violence than actual war, is somewhere we just don’t go. I mean, under such conditions, many would argue life just isn’t worth living. In reviewing this book, we are not judging whether this is the case or not. However, we are simply acknowledging it is possible; and if one intends to survive such a scenario, they had better prepare beforehand.
Without going into great detail – and thus, spoiling the story – No Delight in Fools describes a micro-society ten years after the “Cataclysm” – a total financial crash of stocks, bonds and currencies; and the “Peril” – i.e., the lawless conditions that immediately ensued. The fictional, modestly-sized city of Nearfield – fortuitously, far enough from major population centers to have survived relatively intact – struggles to recover in the absence of electricity, technology and law. Its impromptu “Elder Council,” comprised of solely of freedom-seeking citizens, attempts to rebuild public confidence in a broad variety of institutions; whilst “industry” returns slowly but surely, for the most part in subsistence businesses. Debt and taxes are not even considerations – as the former have been entirely erased, and the latter impossible to collect in a stateless society. Moreover, the only “money” of the land is silver rounds and copper ingots. Said money is manufactured by a private mint, operated by a rich, forward-seeing banker from the “pre-Cataclysm” era.
As Nearfield starts to regain cohesion after a decade of chaos, the story delves into various aspects of the human condition; from the acceptance of demagogues, survival instinct and willingness to sacrifice freedom in the name of “security.” I will not go deeper into such topics here; but suffice to say, one can learn a lot about humanity in this book – or, at the least, it will force one to consider such topics. After all, today’s society may have not yet collapsed; but signs of such “cataclysms” – politically, economically and socially, are already being seen the world round. Ask people in Turkey, Greece, Thailand, Argentina, Venezuela, Brazil, Kazakhstan and the Ukraine – and trust me, you’ll understand.
Anyhow, No Delight in Fools has not yet been published; and when it is, I’ll certainly let you know. I’m thankful for having read it, and given what I do for a living, thought it couldn’t be more apropos. We do not know if the “worst-case scenario” will in fact unfold; and of course, pray it doesn’t. However, even if something far less draconian than the “worst-case” scenario occurs, it’s quite clear that holding one’s wealth in the form of real items of value will be the only way to survive – and potentially thrive. And thus, our conviction in the long-term value proposition of PHYSICAL gold and silver has never been stronger.
Remember, whether the “end game” turns out to be a series of bank failures, currency revaluations, and other “wealth-transferring” events; or alternatively, an all-out, uncontrolled societal collapse, gold and silver will undoubtedly will retain their purchasing power better than all other asset classes – just as they have throughout recorded history. And given the fragile state of the global financial system, don’t be surprised if such “end games” commence a lot sooner than most could imagine.