The Silver Lining Shining Behind the Financial Storm
Why Financial Freedom is Shining Brighter than ever Behind the Doom and Gloom
August 8th, 2011 will be a day of mixed memories for investors, some feeling like they’ve seen a very bad horror movie and some moving purposefully forward without surprise or ulcers. After all, we’ve seen this coming like a long high home run sailing over the fence: going, going, gone!
After a late Friday afternoon foul ball with S&P downgrading US debt after close of business for the day, the Dow Jones industrials closed down Monday 634 points. It was the first time the Dow fell below 11,000 since November and its biggest one-day point drop since December 2008.
A horror show to some, another drop in the bucket to others; while analysts kick back and look at the damage being inflicted on consumer credit and investments, there are quite a few people out here who just won’t be bothered by this one tiny bit. The unemployed, the underemployed, the credit-revoked masses, the boomers like me who’ve already had their IRAs pillaged in 2008, the foreclosed upon, bankrupt, broke with nothing-left-to-lose huddled poor— for these folks, its another day and where’s the daily bread?
However, I am seeing a whole different class of investors, ranging from gen-Ys to Baby Boomers, who will walk through this unscathed and, yes, even laughing. They’re the ones who bet on the homerun grand slam that is changing the face of investing for good. They are the entrepreneurs and visionaries who are taking back the reins of their financial freedom and investing in their personal assets instead of creating debt, who are investing in their small businesses instead of working for a fractional hourly wage.
Investors in precious metals were sitting pretty today. Gold, although at record highs was up $67.70. Silver, though up $.65, is hugely undervalued in my opinion. Silver is a highly undervalued limited commodity used in everything from cell phones, medical treatment, and manufacturing. Many analysts believe silver should be trading at 10% the price of gold or $170. Its current average of $40 is a steal.
But before you run out and stockpile gold and silver bullion, here is an intriguing piece of history that you should digest carefully. In times of financial disruption and emergency, the US Fed has the right to make it illegal for individuals to stockpile or hoard gold and silver bullion! That’s right, your personal Fort Knox can actually be confiscated and melted down if the government wants/needs it. This was in fact the case for 41 years from 1933 until 1974 (Nixon took the US dollar off the gold standard in 1971 and Gerald Ford repealed the ban on gold and silver ownership in 1974). A high profile trial recently involved 10 gold eagles worth $80,000,000 which the Fed wanted to confiscate and melt during the Great Depression.
Another historical event was the introduction of numismatic Government-issue graded proof coins when President Reagan passed the Liberty Coin Act in 1986. It was his intent to introduce an investment grade asset similar to the Krugerrand, first marketed in 1967 by South Africa to market its gold supply. With these issues, the government recognized investment grade proof-perfect museum quality coins as having an intrinsic value beyond its precious metal content. These coins far exceed the value of bullion and are immune from confiscation. Doesn’t that make a much stronger asset for the personal investor? Since their initial release in 1986, the US Silver Eagles have become one of the most popular coins in history. To compare the value of a perfect MS70 1986 coin to the same weight in silver bullion, the MS70 is currently selling for $700 on up, if you can find one.
One of the most intriguing business models that I’ve seen introduced into the home based arena recently has introduced numismatic coins as its product. The leverage of investment grade proof coins with the tax advantages of a home business are a grand slam to the small business entrepreneur. http://www.lotusliberty.com
We look forward to working with this company for the long term, with a product that has no expiration date and a very shiny silver lining in the worst economy. Black Monday? What is that? To quote the old Nixon-era band Huey Lewis & the News: “The future’s so bright, I’ve gotta wear shades!”
Happiness, Health and Wealth!
CEO, Lotus Wellbeing, Inc./Lotus Liberty
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