Jan 11 2010 9:53AM

Things We've Forgotten

One of the most dangerous political philosophies afflicting America today is the belief that we can’t allow anyone to suffer the natural consequences of their own stupidity.

For example, after the government first sucked people into buying and taking on mortgages they couldn’t afford to pay, when they got in trouble, the government produced welfare programs to see they had enough money. They also would force the banks to lower the mortgage terms so the consequences of stupidity would not be felt.

If cars aren’t selling, create the open-ended Cash for Clunkers program. If the big banks are about to fail, pour money into them and take control for the greater good of all of us.

Actually, the real solution to all of these problems is usually bankruptcy and failure. That’s the only way we will shake the excesses out of our economy – allow people to suffer the consequences of their own stupidity or ignorance.

After the consequences have been felt and the economy has then prepared to return to sanity, which may take several years.

One thing we should have learned from the Depression of the ‘30s is that whenever government tries to fix a problem, it usually creates two or more problems of equal or greater dimensions. We simply have to allow people to suffer the consequences. This may be politically incorrect, but it is the only solution.

The money we throw at the problems will create a monstrous inflation. If you think it is bad now, wait until inflation really takes control, and watch things disappear from the store shelves.

Fundamentals

Let’s look at the fundamentals. What are the things you should do first with your money?

1. Get out of debt so you have discretion over what you do with the money you have or can earn in these difficult times.

2. Develop a commodity storage program. Not just food; I’m talking about any commodity that you use on an ordinary basis, like diapers, soap, and motor oil. When you see a two-for-one sale, buy extra and store it.

Here is a forecast for you: You will find that when inflation really begins to pick up, and it will, store shelves will start emptying. People will empty the stores faster. The difficulty will be with distribution, and in the inflationary environment, merchants will not be able to keep up with demand.

Prices will rise. Buy at today’s low prices and consume at tomorrow’s higher prices.

If you know you have sufficient to take care of your family so they won’t go hungry and be without important commodities, you will have great peace of mind. This is insomnia insurance.

3. Invest your resources in things that aren’t someone’s promise to pay. Promises to pay will not be worth the paper they are printed on. You need to have commodities that are indestructible.

That’s the real reason I recommend gold and silver, not as an investment so you can brag about how much money you made, but to insure the preservation of your assets that can’t become valueless because people are not keeping their promises to pay.

Gold and silver are ideal for this purpose, with the emphasis on silver.

Why Silver?

Gold is now over $1,100 an ounce. Silver is still only $17 an ounce. The average person can’t afford to buy any real quantity of gold, and it would be like stocking up $1,000 bills which would not be very useful in a difficult environment where you might to use gold and silver as money.

The number of people who would be able to buy some silver will vastly out-number the people who will be able to buy gold. That is one of the most important reasons I favor silver over gold.

4. Recognize that life will change dramatically. Don’t expect that today’s problems are temporary and might change in the next election. Democrats are the enemy, but the Republicans are just as bad. Even though I expect Republicans to take control of the House and Senate in the next election, I don’t expect them to perform any better than the Democrats are performing now, ignoring the public desires and strictly trying to preserve their power.

I am neither Republican nor Democrat right now. In fact, I’m anti-incumbent. If someone is an incumbent, it’s time to get rid of even some of my good friends in the House or Senate. They are either helping to cause the problems or are inept in exposing those who are causing the problems.

We simply need to redo the whole political landscape. I don’t care whether they are Republicans or Democrats; they just need to be new people with old-fashioned ideas of responsibility and integrity – things that are in very short supply in Washington, D.C. right now.

As a young Mormon missionary, people asked me, “Where did the church send you?â€