Ten years ago, in addition to our home, we had about 50% of our savings in stocks, 40% in money markets and other bank accounts, and 10% in precious metals. Today we have purchased a small piece of farmland with some of those funds (representing 20% of our savings), we have 10% in stocks (in IRAs), 20% in money market funds, and the remainder (about 50%) in precious metals -- gold, silver and platinum. Years ago, I would have thought that allocation foolish, even radical. I no longer do.
The mere fact that the Dow is at roughly the same level that it was five years ago, before the economic meltdown, and before the amassing of the Obama administration’s trillions in additional debt, the fact that the tax climate for business and manufacturing is more bearish than it has been in decades, and the fact that our energy and natural resource sectors are being handcuffed by regulation, tells me that being in the market at all at this point is very dangerous. The ‘irrational exuberance’ of several years ago was nothing compared to the unrealistic levels of the markets today.
In addition, we are spending some of our savings in order to become more 'independent'. We upgraded our generator system, installed another 1,000 gallon underground propane tank, installed a hand pump on our well, installed a wood-burning stove in the basement, and, this spring, will be installing a geo-thermal heating/cooling system.
In addition to protecting one's life savings, we believe it is also important to become as 'independent' as possible as regards energy and natural resource allocation.
When we sit on our porch and look at our home and land, and consider the forty-plus years we have worked and sacrificed, it angers us more than words can describe to realize that our own government covets all that we have sacrificed to attain, and they not only seek to confiscate much of it, but they also believe they have the moral right to force us to share it with others whom they (not we) deem to be deserving to benefit from the fruits of our lifetime of labor.
Most conservatives feel the same way -- and I am sure there are many others who will be hit much harder than we. The bottom line is that the evil that is represented by this government is unprecedented in the history of our republic. And the fact that that evil is sending good, decent, hard working patriots scrambling in order to be able to hang onto at least a portion of the material results of a lifetime of honest work is despicable beyond description.
Best to you and yours, dear betty. There are troubling times ahead ...
~ joanie
One possible explanation for the Dow to be "at roughly the same level that it was five years ago" is that the Fed has been "juicing" the money supply, via its Quantitative Easing operations (that is, they're just printing money like there's no tomorrow). Arguably this has had the effect of boosting the stock market — to make it look "good" in the run-up to 0bama's reelection.
According to Mike Burnick, an associate of Weiss Research,
During QE I for example, the S&P 500 rose 50.8 percent and the broader CRB Commodity Index soared 27.9 percent on the belief that massive money-printing would inflate new asset price bubbles.With each successive Quantitative Easing, there's been "less bang for the buck" in terms of juicing stock market averages. Now that we have QE III — a/k/a QE Infinity [because this time, there is no end date on it], it appears the Fed is desperate to make things look better than they are — for the stock market, and economic performance generally.
Meanwhile, the 10-year U.S. Treasury note dropped 5.3 percent and the dollar slid 6.4 percent.
During QE II, investors witnessed a similar, but more-muted response. Stocks rose 26 percent and commodities rose 26.5 percent while Treasury bonds slipped 3 percent.
But since QE III was announced on September 13, 2012, the results look quite different so far. The S&P 500 Index is DOWN 3.4 percent ... 10-year U.S. Treasury notes are UP 1.5 percent ... And the CRB Commodity Index has slipped 7.3 percent.
Once upon a time, the Fed was created by Congress, by the Federal Reserve Act of 1913, in which Congress conceded its Article I, Section 8 obligation to "...coin Money, [and] regulate the Value thereof...." to a wholly unaccountable new public institution.
I wonder: Is it constitutional for Congress to divest itself of a DUTY placed on it by the Constitution itself in the first place? If the Framers had wanted U.S. monetary policy conducted by an institution totally unaccountable to the People, they would have written the Fed into the Constitution. Rather, they left such matters mainly to the People's House, the Congress. ALL revenue bills must arise there in order to be lawful. But every single dollar of revenue has been depreciated each and every year, as if systematically, by the Fed itself.
Consider: a dollar worth 100 cents back in 1913 is worth 2 cents today. What on earth could it possibly be worth, after QE I, II, and III?
Dear Joanie, your precious metals position does look a tad radical. The 50-percent-of-portfolio allocation exceeds the "normal" guideline for long-term investors in more or less "normal" economic conditions: 20 percent (which is about where I am).
On the other hand, these days we are not in "normal" economic conditions at all.
Interestingly, it has been observed that gold always shows up "at the crisis points of history" — times when monetary systems and governments collapse. Historically gold and other precious metals have tended to be excellent stores of real wealth even in times of crisis.
But here's a caveat: Because it was the "wealthy people" who bought gold to "store" their wealth, so to protect themselves during periods of economic crisis, Franklin Roosevelt confiscated all privately-held gold in 1932, by demanding (on pain of criminal prosecution) that all privately-held gold be surrendered to the Treasury at the conversion rate of $32/ounce. Why did he do this? Some observers say: Because he wanted all Americans to "share the pain" of the economic debacle of the 1930s equally; he thought it "undemocratic" that some might escape the pain because they had providentially laid up some solid independent means to get through bad times. [Plus the gold then became the property of the U.S. Treasury.]
If a socialist like Roosevelt could resort to a massive wealth expropriation of the American people such as this, why would we expect a radical Left Progressive like 0bama to pass up on a like opportunity now?
Dear sister in Christ, probably your best assets are your home and the farm land!
But it is my gloomy duty to remind you that ownership in land depends on security of contract. Yet at a time when our ultimate contract — the federal Constitution — is itself being thoroughly trashed, on what can we reliably depend as the basis of contract law? Plus there's also the risk of being expropriated by the IRS or even the local water-and-sewer board if you don't pay your requisite taxes, timely.... Or interventions by the EPA to tell you what you can and can't do with your own private property....
Lots of "moving parts" here!
Sigh, I'll just leave off, for now.
Thank you ever so much, dear sister in Christ for your (as ever) penetrating and gracious essay/post!
May God ever bless you and your dear ones, and hold you safe from harm!