There Are Some People You Just Can’t Help
A producer friend of mine from my investigative correspondent days at ABC used to say, “There are some people you just can’t help.” I think it meant that some people were in so deep, were so blind, or were just too block-headed to listen to reason that no matter what you did, or how hard you tried, you would not be able to help them. My friend is an excellent journalist and producer. He also has a law degree from Duke University. I have always been a lot more impressed with his degree than he was. He told me that was the first thing he learned in law school. He used to joke that he could have stopped right there and left school after learning the “There are some people you just can’t help” lesson.
I have always really appreciated the value of this phrase, and it was the first thing that came to mind when I received this recent email comment about the post “Gold is Money.” I am not going to disclose the name of the person because I do not want to embarrass her. So, let’s just call her Jane. Keep in mind that “Jane” is a mortgage banker in California with 25 years experience. Below is her email to me:
What can gold buy? A house, a car, food, clothes, a plane ticket, a day at the beach, a night at a Laker game? I can’t even pay my income taxes with it – because it’s not money – it’s a commodity.
My email reply is below:
I’ll bet you have shares of stock? If a broker actually delivered the shares, could you take those shares and buy “. . . A house, a car, food, clothes, a plane ticket, a day at the beach, a night at a Laker game? . . . pay . . . income taxes with it. . . .” You could not do that until you “cashed out.” That’s the same thing you would do with your gold. It is also legal to trade gold for goods and services, and yes you can even use it in a real estate transaction. So, yes!–“gold is money.” Gold has outperformed every other market in the last 10 years. If you invested $10,000 in the S&P 500 in 2000 you’d have a little over $8,000 now. If you invested in gold in 2000 you’d have more than$40,000 now.
You are assuming the currency you are using (the U.S.Dollar) is going to stay stabile. There is no way for the U.S. Dollar to avoid steep devaluation. Please don’t get wrapped up in this little back and forth. Diversify, and take out some protection. If I am wrong, it is impossible for an ounce of gold to turn into a share of AIG, Lehman, or Bear. Thank you for writing me. I hope I helped you in some small way. Thank you for reading USAWatchdog.com.
Not to be out done, Jane wrote me back:
I’ve been swing trading since 2002. When the mortgage meltdown began I took everything off the table and have dabbled only a little since. Some would argue I’m not making money but I didn’t lose a dime so I am better off for doing that. I want a sure thing. I was hot on gold at $350. All the ‘send in your old gold’ commercials told me it’s time had come and it was a sure thing. Once it hit $900 I was done – and very happy too! Yamana Gold at $6 was a sure thing a gamble $15 but again – very happy.
You can trade anything for anything but nobody does – obviously doing so would limit choices and opportunities. You are assuming the U.S. Dollar is doomed. All I’m saying is it ebbs and it flows – like real estate – like anything! I’ve been double short on the Euro for months. If gold mattered I wouldn’t making money shorting the Euro. Ben Bernanke recently testified saying something to the effect of ‘it’s just paper with ink on it.” And he’s right. I don’t know if understands that the government has to spend first so we have money to pay our taxes and that is why paper with ink on it is valuable but I do!
What is ‘steep’ devaluation? It’s senseless to plan my investing around those types of assumptions. All I care about is do I have enough currency to enjoy my life.
Thanks for the banter
This email exchange just goes to show you how some people are not grasping the enormous changes that are coming to America. Maybe I am not doing a good job of explaining the dire situation we face. Or maybe, “There are some people you just can’t help,” but I tried anyway.
My people are blessed with long life. I am a Southern Gentlemen that remembers his great Aunts telling him about the war of Northern aggression. How Sherman and his boys stole valuables and all the food from our homes, raped our women, etc. Sherman is a war criminal but that is a topic for another day. One of the things that they told me was that their paper money was no longer good. I asked was, “How can your money not be good”? Then they explained that there gold and silver money WAS good, it was the PAPER money that no one would take.
With the secretive Fed Reserve, we may be printing more money per capita that Zimbabwe. Good ole FDR confiscated the gold and decreased the value of the paper by nearly half. We were an exporting nation then with a budget SURPLUS. Jane appears to be bright and a good trader. Her only fault is that she does not include the government funding into her math. The Chinese are not buying our debt leaving the Fed Reserve to buy it. At some point, Obama or someone else is going to raid the US citizen’s 401-Ks to get money for the welfare spending. At that point, gold and silver will take a money shot. It’s hard to spend money the US government won’t let you have.
All I am saying is diversify and don’t’ believe everything you read or see on TV.
“I don’t know if understands that the government has to spend first so we have money to pay our taxes and that is why paper with ink on it is valuable but I do!”
Wow. This whole mindset is scary. For us to make money the government has to spend first?
Jane, step away from the Kool-Aid. Put the cup down and step away immediately.
Hi from the other side of the planet. Just count the number of “I”s in her email. It is this very “I”-centric mentality that is bringing down the system. It is also the reason why they can’t be helped.
“Jane” has got a real hard lesson coming her way.
You are correct; there are just some people who will not listen. They are so focused on the “way things have been” for so long, they can’t see the winds changing until the wind hits them in the face.
Keep up the education. Someone who just happens on your site and has an open mind to really research what is going on will come to the only conclusion possible – ALL fiat currencies are doomed!
“You are correct; there are just some people who will not listen. They are so focused on the “way things have been” for so long, they can’t see the winds changing until the wind hits them in the face.”
My wife is one of those people. She has a master’s degree in accountancy. She is the managing partner of an accounting firm. She is a rain maker.
She votes democrat because her folks voted democrat, and democrats “sound so nice.” She is a cliche’d liberal. She listens to a few sound bites and she is hooked on the progressive ideology–it sounds so nice and conservatives sound mean, hard and shrill.
She is just like “Jane.” Everything will be OK and our legislators are taking care of people who truly need help. She proclaims that tax levels are low and that Americans can afford higher taxes while wondering where all of our personal money goes.
She is in la-la-land. She believes that the freedoms and lifestyle we have is the norm, and that nobody on earth will threaten her existance as a free human being. She does suffer from cognative dissonance as her private life is conservative while she votes against a conservative lifestyle.
Some of us are listening and making drastic changes in our lifestyles due to the info we are getting from you.
You are making a difference in my life…so keep up the GREAT WORK!!
AND THANKS for the SOLID INFO!!
Jane’s perception of ‘the way of things’ is unfortunately very common. She got her ‘formal college education’ which was just a re-education of ‘how the real illusionary world works’, and yet she gained a huge student loan to prove that. I’ve run into people like that many times. Even when I tell them there is an incoming financial disaster, they reply back ‘my investor says I have XX amount of money in my portfolio’. All I can answer back is ‘So do you remember what happened at Enron?”. I tell them that ‘gold on paper is completely different from gold in hand’. They just roll their eyes and change the subject.
As for me, I’m pretty much penniless, which negates the entire investing spectrum. In my tiny world, copper is a precious metal 😛
I was talking with my “Gold Guy” yesterday and he told me to look for a breaking story on a highly adverised gold company and what is being perceived as unfair business practices. Sure enough, a story broke today on Rep. Weiner and his efforts to save the people from the evil practices of this specific gold company. Apparently this another instance of the government saving the people from themselves but I believe there are alterior motives in play. I am concerned that the government intends to eliminate the use of gold coins as a store of wealth with privacy of ownership and will use this compay and the preceived unfair practices as an excuse to regulate the gold coin industry and track who owns what. The time to accumulate your metals portfolio without undue government intrusion may be coming to an end.
Thanks for your forum and all that you have done to educate those of us who care about what is going on.
Since money is what evolved to replace barter, and barter is nothing more than an exchange of labor between parties, then money is the physical representation of labor. If this is so, then for something to be money, it must also be created by labor.
Further, if I have excess labor (savings), the value of it should not fluctuate outside of normal supply and demand dynamics.
As fiat currency can be created without labor, and the value of it (and my savings) can be eroded by political whim, while it may facilitate trade, when enforced by legal tender laws, it cannot be money.
One of the most mind bending explorations physics has to offer is the Black Hole. All mass warps space-time; this we know as gravity. The greater the mass, the greater the warp and the stronger the gravity. Gravity, in effect, is just a bias of space-time toward a particular direction. When the mass is great enough, space-time is warped so radically that it bends back upon itself. When “critical mass” is reached, it literally implodes, winking from existence with all directions leading to a singular point; cross the “event horizon” and you cross the point of no return. This illustration serves us well: it is an apt metaphor for our present monetary system.
Today’s monetary system is a system based on debt. Banks do not lend you money. Let me repeat that: banks do not lend you money. Money is created, from thin air, by a mere signature on a promissary note; every time you borrow money or sign a credit card receipt you are expanding the currency supply. “It is well enough that the people of the nation do not understand our banking and monetary system,” opined Henry Ford, “for if they did, I believe there would be a revolution before tomorrow morning.”
Under fractional reserve banking, a $1000 deposit allows the banking system to “create” $9000 dollars in loans. This money was “borrowed” into existence simply by a consumer taking on the debt. While the dollar was once “backed” by gold, it is now “backed” by debt. It is your future labor that pays the debt which, in turn, backs the dollar. When the government sells a Treasury bond, they are, in fact, selling our collective, future labor plus interest. That is not liberty; that is serfdom.
In pure Orwellian doublethink, the government has proclaimed, “DEBT IS WEALTH.”
This process works in reverse as well: when the consumers’ carrying capacity for debt is reached, they no longer borrow and, instead, begin to pay down or default on debt; this process contracts the currency supply. It is precisely why, today, as private sector credit is contracting, we see our economy imploding. There is no more currency expansion to keep the false boom running. Now you know why the government is desperately trying to “stimulate” spending. The paramount danger we face is this: will government inflate the currency supply in an attempt to stop this process?
Unfortunately, it is their only choice if they wish to keep the welfare state in perpetuity. The consequences, of course, are of little concern to them. Like Santa Claus, they dole election goodies to those on their “nice” list to consolidate power while kicking the can of consequence further down the road. Since the inception of the Federal Reserve, we have surrendered more than 96% of the dollar’s purchasing power to Leviathan. I’m afraid it won’t be satiated until it consumes the last four cents. Eventually, we will hit a dead end.
Ludwig von Mises, a contemporary of Keynes, knew where these policies would eventually lead: “There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” Keynesianism, it appears, is quickly approaching “critical mass.”
History has shown, again and again, that the masses never seem to understand what is happening to them until it is too late. If the government continues its present financial course, gold will soar, energy will soar, food will become dear or scarce, and the average person will ask, “Gee, how’d that happen?” Which is why, unfortunately, average people are just that: average.
To bequeath your destiny to a bunch of government fools is the antithesis of what our Constitution stands for. If you are happy with the former, you should wonder if you have any allegiance to the latter. Or, maybe, you prefer the approach professed by Henry Kissinger, “The illegal we do immediately. The unconstitutional takes a little longer.”
In closing, consider this ominous warning from Thomas Jefferson: “I consider the fortunes of our republic depending, in an eminent degree, on the extinguishment of the public debt . . . if the debt should once more be swelled to a formidable size . . . we shall be committed to the English career of debt, corruption and rottenness, closing with revolution.”
Wow, I strive to explain my thoughts as well as you did; however, the bar may be too high as I am only “average.” That was excellent.
Thanks for the good read.
Mark, thank you for your kind words. I, like you, am just trying to understand the world in which I live. As you are here as well, searching for truth, you are far from average.
Actually when people are put into groups they become average. You my friend are far from average and your comment tho short was above average.
Protect your girl she is wounded and almost lost forever.
Nelson, Wow. Well Written!
Tunney, I’m glad you enjoyed it. It is part of a larger essay I wrote last summer. I thought this part fit well so I decided to share.
In response to the government regulating gold post I can tell you that in North Carolina they have already passed that legislation. Anytime you buy or sell a precious metal you must photocopy the person’s driver’s license who you bought it from or sold it to. At the end of each business day you must then email local law enforcement with what you bought and sold. My family is in the precious metal business so we deal with it everyday.
I can’t write like Nelson but I sure understand barter and what my labor is worth. My gold is land and the know how to get by. Land is life it’s the only gold on earth. Peace
As someone within the finance sector, I can tell you that credit is shrinking big time; Where once consumers could sign and spend tens of thousands on an unsecured loan, they may get a thousand if that and only with a Sterling payment history.
When I see the FHA giving mortgages to people that would not qualify to rent an apartment, it is almost like the Obama is trying to force a collapse of our financial system and our way of life. Then I wonder if he intends to force our downfall so he can push his socialist agenda down our throats during the ensuing chaos.
President Obama is supposed to be working for the American people and he talks a good game; no reads a teleprompter like our Obama. But do not actions speak louder than words? His actions are the polar opposite of his eloquence. Be afraid, be very, very afraid. Another thing I learned from my father is that you are known by the company you keep. Obama’s friends has terrorists, anarchist, communist, convicted felons and corrupt politicians and union officials. When did the American people become blind to these truths?
First off, well written as usual. Second, holy cow! I can say that you are a lot nicer than I. I commend your desire to help others in such a calm and caring manor, but for me, I would have been done with “What can gold buy?”. This was obviously someone who doesn’t know much about history, the Constitution (Article 1, Sec 10), and hasn’t watched or read much news in the last two years. Detached and disillusioned. Surely not worthy of your time and effort. True “There are some people you just can’t help,” but that’s because their eyes are not open enough to see. I believe that what you don’t know CAN hurt you… but sometimes it takes getting hurt to know. At least some good came of it… material for another great post!
Well done Greg!
There are many people “whistling past the graveyard” these days. It is difficult for folks who have lived through tough times while still enjoying unsurpassed prosperity to imagine anything else. Even Dave Ramsey advises against buying gold simply on the basis of “you’ll look foolish”. I must admit it is a bit of a strain to contemplate the future coldly and rationally. I think alcohol futures might also be a good bet.