Tuesday, August 6, 2013

complacency

The most recent book I've read is $10,000 Gold: Why Gold's Inevitable Rise is the Investor's Safe Haven, by Nick Barisheff.  As you might surmise from the title, the premise of the book is that the price of an ounce of gold is going to rise to $10,000, and sooner than you or I may think.

I thought the author put forth a compelling argument.  Now, will gold really hit that price or not, who knows. At its current price it has a long way to go but then there was a time when people may have thought the Dow at 10,000 was preposterous.

The arguments supporting the book's contention made a great deal of sense to me. I highly recommend reading it but for purposes of this blog post, I will make a very short summary: The U.S. economy has been artificially lifted up for way too many years, in large part due to its printing lots and lots of paper money out of thin air with nothing to back it up, and soon the game will be over because we cannot sustain this financial charade. The demand will be for something representing true wealth, like gold, rather than worthless paper. That will drive the price up, to the $10,000 level claimed by the author.

Now, some, maybe most, maybe all of you reading that preceding paragraph may feel there is some merit to it but you're probably also thinking I'm overreacting. After all, just look at how robust our economy is. The stock market is heading up and up, the numbers coming from the government paint a rosy picture ahead, and money is money, right?  So what if it is gold or paper, it's still money.

So it makes me sound and feel like the guy on the street corner holding a sign, screaming at cars.

It takes a lot more than just the above paragraph to truly explain the situation, a situation that I feel Mr. Barisheff has indeed explained very well in his book. If anything, get the book and make sure to read chapter 10, Gold Never Sleeps, which puts the solemn picture together.  When I try to do so with people, most of them get a glazed look in their eye.  Or else, as I just said, they think I am overreacting.

On top of that, people don't want to deal with negative stuff; they want to feel good. When things are going okay, then they get complacent. It's like the ending of One Flew Over the Cuckoo's Nest. The inmates all had the opportunity to escape but before they did so, they decided to celebrate and throw a party. They got  so drunk they passed out. And then none of them escaped because they were still sleeping off the liquor when the staff arrived the next morning.

So what's the purpose of this post?  One, that I highly recommend the book because even if you have no plans to buy gold, it presents an excellent and realistic argument for why we are headed for troubled times in this country.  Two, I just wanted to put forth my observations about how people don't see what's in front of their face and they get complacent. Or maybe they just don't want to see; they'd rather just let the good times roll.

So I'm still the guy on the street corner holding a sign, screaming at cars.


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