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Nikki Haley will deliver her first State of the State Address, and the State paper has published the entirety of her prepared text. Haley has recently made news by speaking up against Obamacare and asking President Obama for permission to opt out of the legislation. It is sad and shocking that the leader of a sovereign state would ask for permission rather than assert her position. That makes her 0 for 1 in our book when it comes to being the Governor of South Carolina (as opposed to being a provincial officer of some collection of serfs) but I digress, let’s see what she has to say.
Haley opens her speech with this:
Let me start tonight with a tradition established by my predecessor, who recognized the certain truth that nothing said in this chamber tonight or done in this chamber tomorrow would be possible without the sacrifices and commitment of the men and women in uniform who bravely serve our nation. And so now let us pay tribute to those South Carolinians, those true heroes, who in the past year made the ultimate sacrifice in the service of our state and of our country:
… and she goes on to name the soldiers from South Carolina who lost their life in 2010. Only, contrary to her statement, they didn’t lose their lives defending South Carolina, they lost their lives in an illegal (unconstitutional) war on the other side of the planet where no rational person could make the argument that they were participating in an action of self defense.
Now don’t get me wrong: I admire the men and women who decide to enlist in the military. I think they are brave and patriotic people. I realize that they have not reached the same political conclusions that I have, and so I believe their patriotism to be misguided, and their bravery to be misused. Unfortunately Mrs. Haley has opened her State of the State Address by reminding us all that we are subjects to a worldwide empire (the USA) and our brave men and women are used as pawns instead of as defenders of South Carolina.
Let’s move on:
For eighteen months I traveled our state and I told our citizens what I tell you now: government was intended to secure the rights and freedoms of the people; it was never intended to be all things to all people. We have drifted far from that principle, that idea so critical to the future of our state and of our people.
So as we move forward tonight in discussion of the challenges and opportunities that lie in front of us, let’s not forget the words of our 40th president, Ronald Reagan, who said: “There’s a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty contracts.”
It is time that we restore to the people of South Carolina a government that both knows and performs its intended role.
This is the type of rhetoric that got Nikki Haley elected, and it is encouraging to see our governor promoting these ideals. It’s true, it is past time that we restore a government that sticks to its intended role. Most importantly: it’s time we stand up to the federal government and put them back in their place, and make sure they perform their role (Article 1, Section 8 of the Constitution), by nullifying each and every law that goes outside of said role!
However, it doesn’t appear that Haley sees the role of government the same way that we do here at Third Palmetto Republic:
I believe in the will of the people. I believe that it is our duty to follow that will and to engage the people of South Carolina in the governance of our state. And I believe that if we do that, if we move forward together with one vision, we can climb any mountain and prosper through every challenge, no matter how high, no matter how hard. (Ain’t no mountain high enough)
The responsibility to get there is a shared one, one that is in large part mine but is not mine alone. The legislature, the people, the governor – we must be committed, together, to moving South Carolina forward.
Abraham Lincoln once said, “The people will save their government, if the government itself will let them.”
Words escape me at reading that last sentence. Here we are talking about putting government back in its box, about restoring it to its proper role, and she decides to quote Abraham Lincoln (the worst Tyrant in American history)? Not only that, but she is essentially saying here that she believes in mobocracy, in the unlimited rule of the majority, in the “will of the people.” Well, Mrs. Haley, the role of government is NOT to execute the will of the people. The role of government is to protect the individual rights of each and every person, regardless of the will of other people. I had high hopes for Nikki Haley but it is hard to keep the faith after reading a paragraph like that one.
Haley moves on to talk about the budget crisis and how she plans to go through and cut waste from every single office and agency. She fails to mention; however, the fact that about 3/4ths of the budget is federally mandated spending, and about 3/4ths of the revenue is federally provided. How can she say, with a straight face, that we have any control over our budget when so much of it is forced upon us?
Eventually the new Governor does allude to this situation when she starts talking about federal funding, without actually detailing just how large the problem is:
Tonight I am also announcing that my cabinet will stop the practice of working the system to get increases in federal funding simply for the sake of expanding our budgets.
South Carolina cannot continue to chase federal dollars without studying the larger impact of how accepting those dollars affects our spending and financial stability. We know all too well that with federal money comes strings, and with those strings come limitations, unaccounted for costs, and in many cases, unsustainable spending.
The days are over when Washington tells South Carolina, “If you want the money? Jump.” And South Carolina responds, “How high?”
We cannot jump without first considering where we are going to land. And South Carolina cannot afford to follow the federal government, which has thrown itself into a pit of growing deficits, irresponsible budgeting, and uncontrollable spending.
This is starting to sound good…
Starting tonight, South Carolina is a state that is focused on establishing our financial independence, controlling our own destiny, and empowering our people with the knowledge that their state government doesn’t jump for anyone.
Wow! That sounds like something we have written! It’s tempting to think that Haley, in the short course of giving one speech, has gone from an empire supporting, US Provincial officer to a bona-fide Governor! If she actually intended to follow through on the concepts behind that statement, then our work here would be done, and we could just close down this site and stop all of our activities.
Unfortunately, back in the real world Haley goes on to illustrate how she doesn’t really understand what it means to be independent, and has no intention of cutting the budgetary ties that chain us to the federal tit.
We can’t talk about the federal government or our budget without acknowledging the financial challenges that face us with the new health-care bill.
I had the pleasure of meeting with the president last month and asked him if he would consider repealing this law, as South Carolina citizens can’t afford it. He quickly told me “no.”
Our founding fathers always intended that we empower families first, then communities, then states, and last federal. Constitutionally, our states do and should have the ability to decide what is best for our citizens. And so I will continue to support the attorney general’s legal action against this intrusion.
But as I told the president, my job is to look for every avenue I can to deal with a situation that South Carolina can’t afford. I asked him, respectfully, if he would allow South Carolina an exemption from this bill. I appreciate his willingness to have an open dialogue, and his statement to me that if South Carolina met certain criteria, he would be open to allowing us to opt out.
I am working with members of my cabinet to find a solution that is economically sensible, conservative, and beneficial for the people of our state. The reality is that the federal health-care bill will cost this state $2.7 billion more by the year 2020.
We can’t afford or sustain those numbers. We must find an alternative.
The alternative is freedom through independence, but clearly Governor Haley doesn’t understand this. She set up the opportunity in this speech to talk about all of the federal mandates and programs that make us serfs instead of sovereign citizens, to detail all of the ways in which our state and our people are controlled by Washington DC… yet the only thing she talked about was the Affordable Health Care Law (Obamacare.)
Not one mention of the Federal Reserve and how we could establish a system of competing currencies in South Carolina to allow our citizens to free themselves from debt slavery and infinite inflation. Not one mention of Federal entitlement programs such as Medicare, Medicaid, Social Security, Welfare, Public Housing, etc. that the people of South Carolina never voted for yet have been forced to pay for. Not one mention of the mountains of Federal regulations and bureaucracy through the many unconstitutional federal departments such as DHHS, FDA, USDA, DoE, ATF, DEA, etc. that bury small businesses without the consent of the people of South Carolina. Not one mention of the hundreds of bases worldwide and unconstitutional wars that see our brave military personnel sacrificed on the altar of Empire instead of defending their homeland. Not one mention of the confiscation of wealth known as federal taxes that takes away the property that the people of South Carolina have earned. Not one mention of any of the substantive abuses weathered daily by the people of our state.
Instead, she only talked about the flavor of the day, the item in the news that couldn’t be less controversial here in South Carolina, as the clear and large majority disagree with the law. What’s worse, even in this one pathetic example of standing up to the Feds, she details how she “asked” the President (or King, as it were) to please “allow” us to opt out of the law. Nowhere does she make even the slightest mention of the word Nullification, or the concept of state sovereignty, and given her earlier reference to Lincoln, you can be sure she would never utter the “S” word.
Haley goes on to detail some of the minutia of state organization and department reorganization. I’ll spare you any discussion on this section and move right on to the conclusion of the address:
As many of you will come to know in the weeks and months ahead, the door to my office has a sign for all to see every time they walk through my doorway.
The sign says, “Can’t Is Not An Option.”
For too long, we have approached the problems facing South Carolina with the question, “Can we get this done?” It’s the wrong question, and predictably, almost always leads us to the wrong answer.
If we approach our challenges with the mindset that can’t is not an option, and begin to instead ask ourselves the question “How do we get to where we need to go?,” we will give the people of South Carolina a state that every other state in the country looks at and says, “That’s how you do it.”
That’s my South Carolina.
I know that together, we can make it happen.
Thank you, may God bless, and may He continue to smile on South Carolina.
The answer to the question “How do we get where we want to go?” is very simple: restore political independence to South Carolina. Nullify every single law that is outside of the charter of the Constitution. Get the FED out of South Carolina, get the Federal Bureaucrats out of South Carolina, bring our troops back home, restore our Sovereignty, and if that doesn’t work, Secede!
“But we can’t nullify federal laws,” you say, “and surely we can’t secede!”
Well my friends, Can’t Is Not An Option.
The very first target of any nullification effort should be the federal reserve: a private corporation that is granted the exclusive power by the United States government to issue legal tender, and acts as the base to an inverted pyramid of currency creation known as fractional reserve banking. In short, we are forced to use Federal Reserve Notes in all transactions, while the private banks that make up the Federal Reserve enjoy the luxury of creating new money out of thin air, continually robbing us of the value of each dollar. The fact of the matter is that we do not and cannot have any independence so long as such a system exists.
To start with: why does it matter at all? Who cares about the federal reserve, or how they control the currency? Why does it matter what we use for money in the first place? These are complex questions and for a more in-depth explanation please see “What has the government done to our money?” by Murray Rothbard.
Basically, currency matters because it represents money, or the store of value used in exchange. This means that when you invest your time into something and you are paid money for that investment, you are paid in currency, and you can then go and use that currency to purchase the things that you desire, such as food, shelter, electricity, movies, etc, or you can be wise and prudent and use that currency for savings. You could then go and use those savings to buy larger items like a car or a house, or you could use those savings to start a company or invest in an existing company.
However, since the creation of the Federal Reserve in 1913, along with the income tax, it has become increasingly difficult to generate savings. First, the federal government confiscates a large percentage of our profits (earnings after expenses) through the income tax, and second, the federal government has made it illegal to use anything other than federal reserve notes as currency, which means that they have handed over the control of your savings to the federal reserve.
Judge Napolitano talks about these issues all of the time on his show Freedom Watch, and here is one such clip:
This deadly combination of the income tax, the federal reserve system, and legal tender laws robs the people of South Carolina of the value of their savings, the value of their work, and impacts the poor and the elderly the most severely. In our state we don’t have a very high average income, so while the FED manipulates the value of our dollars our citizens find it harder and harder to pay the bills and put food on the table, and nearly impossible to start a new business and create new wealth. We find ourselves begging large multi-national corporations to build factories and offices here, and begging the federal government for much needed improvements, instead of standing on our own two feet and generating our own prosperity.
However, there is a solution to all of this. The FED’s achilles heel, so to speak, is the legal tender law (and other various laws dealing with currency) which compel us to use their reserve notes (dollars) and forbid us from using other forms of payment, such as gold, silver, platinum, copper, etc. Without said laws, the people of our state would be free to use dollars if they so choose, but they would not be forced to, as they are now. People could use precious metals, foreign coins and currency, commodities, etc as payment and businesses could refuse dollars if they decided to, and they probably would given the 95% depreciation of the dollar since the inception of the federal reserve.
The legal tender law reads as such:
Section 5103 of title 31, United States Code
§ 5103. Legal tender
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.
On the face of it, this law is clearly unconstitutional. The constitution says in Article 1 Section 10:
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
So here the federal government has a law that forces states to accept federal reserve notes as tender in payment of debts even though the constitution clearly forbids said practice. Nullification of this law (and similar laws) is therefore easily justified, and demanded for the prosperity of our people.
The good news is that nullification of these laws has already been attempted in South Carolina, to some extent. State Representative Mike Pitts introduced H4501 last year, and plans to reintroduce this year, which states (in part):
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 18 TO CHAPTER 1, TITLE 1 SO AS TO PROVIDE THAT SILVER AND GOLD COIN SHALL BE LEGAL TENDER IN PAYMENT OF CERTAIN DEBTS.
This bill got a small amount of press but not much support and ultimately was tabled before it ever received a vote. We need to stand up and support this measure as it would be a step in the right direction, but additionally we need to push for stronger legislation that would allow the citizens of South Carolina to use gold and silver for payment of all debts, and to refuse payment in dollars if they so choose. Such legislation would need to ban the taxation of gold and silver (sales tax, capital gains tax, etc) and would need to specify that the value of the coins is determined by the weight value of the metal, not by the dollar value stamped into the coin (if any.)
Such a nullification effort would create a system of competing currencies where eventually the best currency, the best store of value, the best protector of purchasing power, would win out. Such a nullification would end the FED, at least for the people of our state.
One of the consequences of South Carolina’s lack of meaningful representation in the US Government is that whenever a crisis comes along and states and businesses start lining up for free federal bailout cash, South Carolina’s interests are completely ignored. While some may make the argument that we don’t get nearly enough bailout money from the feds, I am personally opposed to any such federally imposed bailouts, and I would argue that any time the US Government gives money to individuals or businesses or even entire states, it is bad for the people of South Carolina.
In order to illustrate this point, we need to look at the basics of money, the Federal Reserve system, and inflation. For more background on how the Federal Reserve works, please reference Money, Banking, and the Federal Reserve (Google Video.) Also check out our podcast on the subject, “Money, Central Banking, & the Federal Reserve.”
Basically, banks in the U.S.A. are privy to a government backed cartel that allows them to invent new money, which is known as counterfeiting if you or I were to try it. Certain banks are first in line for this new money creation as they get assets directly from the Federal Reserve board. Member Banks of the Federal Reserve have primary access to this money creation scheme, and so they get the most value out of this new money.
To put this into layman’s terms, imagine if you lived in a neighborhood that had a fixed amount of money, let’s say $100. The prices of goods would reflect the supply of money, so for example a book might cost $1. Now imagine that you got your hands on the printing press, and you decided to print yourself $100. When you spent that $100, you would be purchasing things at their original price. You could get the book for $1. However, after that new money had circulated through the system, prices would have to rise to compensate for the oversupply of money. Since you doubled the money supply, prices would also double, because money is just a medium of exchange that reflects the value of products. If the value of the money goes down, then the price will go up.
Look at what has happened. Because you were close to the origination of the money, you were first in line to access the new money, and so you got the most value out of the new money. The people that were 3rd, 4th, 5th, etc, in line to get the new money got progressively less value out of it. They end up paying $2 for a book that you paid $1.
Now if their salaries or incomes directly reflected the rise in prices, then things wouldn’t be so bad. I mean this would still be a tragic crime because anyone who had saved money to be used as capital would have had half of the value robbed from them, but let’s not focus on that for now. Let’s just focus on the people that are working hard for their money. Let’s say they are still only making $1 a day even though prices have doubled. They have to work for 2 days just to buy the same book that they could have bought before your counterfeiting operation with just 1 day’s work. You have effectively robbed that person of a day’s worth of their time. Then extrapolate that to all of their purchases, and you have robbed that person of a large segment of their life.
This is what the United States government does to us on a daily basis, and especially during bailouts and pork barrel spending. The constant inflation of the money supply by the federal reserve and by government spending and entitlement programs leads to the constant price inflation that robs the people of the value of their work and their time. This is very bad for everyone, and it’s very bad for people living in high income areas, but think about how much of a tragedy this is for people living in medium to low income areas! If you’re making $100k a year and the price of gas goes up a dollar and the price of a week’s worth of groceries goes up $100, you might not be hit that hard. You might be able to just absorb it and move on. If that same price inflation hits a person making $25,000 then they are going to face some serious challenges to just pay the bills, keep a roof over their head, and put food on the table.
Please have a look at the following map: (click for full version)
This map illustrates the median household income across the United States. Do you notice anything in particular about the darkest states? (the ones with the highest incomes)
With the exception of Alaska, they are all states that are directly affected by the proximity of the Federal Reserve. NYC is the home of the largest bank of the Federal Reserve, Washington is the seat of government, and Boston and Philadelphia are also sites where there are Federal Reserve Banks.
Those who are closest to the new money are privy to the benefits of the ability to create money, and the median incomes reflect that fact being in the $60k + range. Meanwhile, here in South Carolina we are down in the $35k to $43k range. This means that the inflation caused by the government and the Federal Reserve hits us twice as hard as it hits those privileged states. This means that while we keep working and working and paying our taxes and paying our bills, we’re getting nowhere because the government is robbing us of the value of our work. This means that secession is the only way we are ever going to bring true prosperity to the people of South Carolina. As long as we are ruled by the federal government, they will keep us on this treadmill to nowhere.
Stealing from the poor to give to the rich is about as backward as you can get, but that’s what we have today in the corporatist United States government. To add insult to injury, they also steal from the rich to give to the poor, only they are only stealing from the top producers, or the best income earners, while the real rich, the wealthy who have their money in assets and investments, escape the punitive income tax. In a free South Carolina we would have to be vigilant in our adherence to laissez faire governance, we would have to stick to a separation of economy and state for the same reasons and in the same way as the separation of church and state. Contrary to popular belief, it is not a lack of government that causes the powerful elite to form an oligarchy, it is the government controls of the money supply and the government regulations on the free market that give so much power to so few people. With true freedom we would all have more prosperity and our potential would be limitless. We must work to make this happen, we must work to make South Carolina free.
Tom, the Chairman of the Third Palmetto Republic, Harold, a leader in the secessionist movement in North Carolina, and Michael, webmaster of SLMNews, here discuss real money, the Federal Reserve and the future medium of exchange in a free South Carolina or other secessionist State outside of the United States.
Sunday night we are hosting the fifth podcast / live internet radio show on TalkShoe!
Here are all of the details:
- Third Palmetto Republic Podcast on TalkShoe – Show homepage
- Episodes are recorded live every Sunday at 8PM Eastern time
- You can use the link above to listen online, or you can dial in:
- (724)444-7444 – Call ID: 83081 (long distance rates apply)
Topics for this week are:
1) The Federal Reserve System
2) How Inflation Affects You
3) Sound Money
4) Listener questions
Please call in or log on and ask us your questions, see you then!
As world attention focuses on the plummet of the euro and plight of Greece, the dollar has become a place of refuge – or so it would seem. Barron’s compares the euro to the dollar:
The euro, already at a four-year low against the dollar, is likely to go lower. The bold, €750 billion rescue package and broad international collaboration should stabilize European markets and hush the talk of a breakup. Yet that won’t stop the currency from careening this year toward the $1.18 level, where it made its 1999 debut.
Bloomberg notes the relative rise of the dollar:
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, gained as much as 0.8 percent, heading for a fourth weekly climb in a row. The euro fell below $1.25 on concern that Europe’s debt crisis will limit economic growth and earnings.
What is the real difference between the euro and dollar? Fundamentally, both are coloured pieces of paper with numbers on them. Neither is backed by any commodity. You can’t take your paper dollars to a government bank and get gold or silver for them. This allows the US Federal Reserve to increase the world’s supply of dollars indefinitely to pay for wars, spending projects and bail out government-connected businesses or even foreign countries like Greece. As we know from basic supply and demand, as the supply of something increases, its demand (and the price people are willing to pay for it) tends to decline. We know that the Feds greatly expanded the monetary supply as their answer to the financial crisis. This has had the effect, in part, of keeping prices much higher than they would have been otherwise. Even if prices stayed exactly the same (which they have not), in the absence of the expanded dollar supply they would have fallen – increasing the purchasing power of dollars people held and allowing the malinvestments that brought on the economic crisis to be corrected. However, as we know, this was not allowed. The Feds increased the monetary supply and have done all they possibly can to prevent the correction of malinvestments in the housing market and with huge companies such as General Motors and Goldman Sachs.
All of this leads Jim Rogers, the Sage of Singapore, to be bullish on gold and other commodities rather than paper money:
The latest euro zone crisis has helped to pressure the price of some dollar-denominated commodities as they become more expensive to European buyers. But gold, often seen as a safe-haven asset has soared, hitting fresh record highs.
Rogers believes natural resource assets are a good investment because of their finite supply, leading to the theory commodities are in an extended or “supercycle” market rally.
South Carolinians face a real option now. If we do nothing we will follow the dollar and its inevtiable demise as the world’s reserve currency into worthlessness. As I have pointed out, there is fundamentally nothing different about the dollar and the euro. There’s nothing preventing the dollar from diving the way the euro is right now. If this happens people in the Palmetto State will have their savings wiped out. Exchange will be much more difficult and the economy will suffer greatly because of this. Loans will be impossible to get. Debts will be repaid in dollars worth only the paper they are printed on. A crisis much worse than the present one will set in. None of us want to face such times.
The alternative is to ditch the US dollar and issue our own SC dollar backed by gold (which the State could pay for with money raised by selling off State land and other assets that would be better off in the private market anyhow) . This could be done by the General Assembly as an emergency measure to save our economy. The US Constitution gives Congress the power “To coin Money, regulate the Value thereof, and of foreign Coin…” This is a responsibility the Congress has passed off to the Federal Reserve – a semi-public agency that prints paper rather than coining real money (gold and silver) as required by law. The Federal Government has failed to live up to the letter of the contract (the Constitution) with the people and their States in this area as it has in so many others. With the Feds ignoring the Constitution and putting us all in economic jeopardy, it falls to the people of South Carolina and our General Assembly to take matters in our own hands. To sit by and wait for the coming currency crisis would be foolish.
Three years ago when I began studying the gold market, the fair market value of gold was $680/oz and seemed to change dramatically each day. I watched gold jump up 20 points, then drop 10; jump 40, then drop 15. I picked up a book called Gold: The Once and Future Money and scanned the internet looking for ideas, trends, and insider information. (By the way, the best site I have ever found for daily market research is at usagold.com, and no I don’t get paid anything to say that.) I became fascinated in what drove the market and studied how news affected its value.
More than a year after I started I met with a private investor seeking a solid investment to park a few thousand dollars; she had heard about the prospect of gold over bonds, CDs, or other such paper assets, so I shared what I knew over lunch. At the time, something just wasn’t right. There was mass speculation all over the internet about the banking failures, international exchange rates, inflation, and the price of oil. Something big was about to happen in the gold market, and those of us who keep up with it every day knew it.
I shared this with her and she decided to go ahead and make the move. By now the clock read nearly 3 p.m. and it seemed too late in the day to go through the trouble of locking in on the day’s market price. “First thing tomorrow morning,” we decided; we would make it happen then. Well, the next morning some news had beat me to the punch: Fannie Mae and Freddie Mac were bankrupted! The market started the day at $780/oz and within an hour gold was pushing $800. I watched the price go out of control as the next bombshell hit the news: FDIC was almost out of money; they were nearly bankrupt also! It wasn’t until gold hit $840/oz that I locked her in at the day’s price, and it closed the day at $860/oz. Since then, of course, gold has continued to climb (it’s now at $1,230/oz not a bad gain since our buy-in), but missing the day’s 10% market gain would have been icing on the cake.
Nevertheless, the following quotes I found in a Business Week’s Website article, and I want you to notice any psychologically-driven propaganda here [brackets added for my comments]:
But even if gold keeps rising [it will]—a prospect very difficult to predict, given the metal’s volatile track record [like Wall Street's??]—there are several features of gold that make it treacherous for individual investors, financial advisers say [wow, treacherous huh?].
Gold might have a reputation as a “safe haven,” but nothing could be further from the truth [I beg to differ], says Susan C. Elser, of Elser Financial Planning in Indianapolis [oh wait...she gets paid on commissions of selling paper assets, not hard assets]. Unlike other commodities, gold has few industrial uses [exactly! That's why we use gold (as opposed to other medals) for money]. Unlike businesses owned through the stock market, gold earns no profits and doesn’t pay out dividends [it doesn't LOSE value either; fundamentally, gold ALWAYS holds its buying power value]. Unlike bonds, no one pays interest to holders of gold [this is NEVER a reason to buy gold anyway]. And, unlike insured bank deposits, there is no guarantee of your principal investment [umm...but there is security in Wall Street and the FDIC that almost went bankrupt a year and a half ago?].
“There is no downside protection on investing in gold,” Elser says. [THANK GOD!!! AT LEAST WE HAVE SOMETHING!!!!]
…
Gold used to be the backing for currencies, but no longer [don't worry, it will be again]. Now “it really is only a store of value because people say it’s a store of value, [...exactly, do go on.]” says Ken Eaton, principal at Stepp & Rothwell, a financial planning firm in Overland Park, Kan. [Oh wait, he gets paid from selling paper assets too...] That can lead to extreme volatility, which financial planners cite as one of gold’s biggest downsides. [*scratches head* Wait ... stocks, bonds, and mutual funds have not been EXTREMELY volatile???]
Gold is just one part of a diverse portfolio, she says, with a portfolio allocation often kept to 5 percent, though “you could argue for a higher percentage.” [STOP THE PRESSES! Portfolios should have minimum 10% and up to 30% diversification in precious metals depending upon how confident you feel in the dollar.] A small gold holding is typically recommended even by financial planners, like Eaton, who are skeptical of buying gold now [remember, he doesn't get paid when people buy gold]. Gold is one sliver of commodity holdings that make up 2.5 percent to 5 percent of his clients’ portfolios, Eaton says. [Our Founding Fathers would disapprove.]
Consider this:
The Federal Government’s budget for next year and every year thereafter pushes the $4 Trillion mark – they have no intention of cutting back – and they can barely pay the 1/2% interest on the debt they have now.
The Chinese Yuan (pronounced yoo-ahn) is expected to unpeg from the dollar sometime in the next month so the exchange rate can be properly adjusted by the natural market correction. Since early last year they locked the exchange rate on the IMF at 6.82:$1, and since then we have seen the dollar spiral out of control while the Chinese economy has grown steadily; some experts predict a gain against the dollar of up to 6% during this time. While that doesn’t seem like much, consider how many things are imported from China. As the exchange rates tighten, the cost of goods will increase as well.
Many businesses who are barely making payroll now may be forced to close shop if they do not raise their prices, and may have no other choice anyway. Currency investors across the world will likely convert a substantial portion of their dollar holdings into Yuan to earn on the initial adjustment. This makes every other currency less attractive and shifts money directly into foreign markets to fuel their economies.
Not for nothing, I still think gold is a good buy and will be the only saving grace of America’s economy when the Federal Government collapses. I don’t believe in the dollar, because I don’t believe in the government and few people are buying gold these days for the growth. Gold is not a short term investment, it is something you buy and plan on holding for years to come: People are buying gold so they will have REAL money when it all falls down.
For now, heed the wisdom of, “Buy the book before you buy the investment.” Before investing in anything, educate yourself accordingly.
