is there an easy solution to financial panic?

a reply to:

Recently, many people have been increasing their concern for their relationships to financial markets and economy. As people have been repeatedly surprised- often unpleasantly- they have experienced fear and confusion, and even a reactive urgency to find perhaps just one single moderate adjustment that, as soon as they make this one adjustment, then suddenly that returns them to their prior perception of comfort and ease. Ah… relax, like a warm bubble bath!

For instance, perhaps one can just concentrate one’s assets in precious metals. If, at the peak of the enthusiasm for precious metals a little over a year ago, I re-distributed most of my assets into a diversified set of precious metals- like silver, gold, and platinum- what results would I have?

Of course, the key words there were “at the peak of enthusiasm,” and the losses since then would have been staggering: silver down by up to 60% (currently down by about 40%) and so on. What about all the alarmist “paper money may be worthless” warnings? Well, so far, US Dollars have actually been increasing in purchasing power, haven’t they?

Sure, paper debts like mortgages are increasingly being discounted (or even classified as “junk”) and certainly paper ownership of US companies (stock shares) have tended towards collapse, but how about those US Dollars? Reversing multi-year trends, US Dollars sure can buy a lot more today than a year or so ago: more stock ownership, more real estate, more silver, more oil, or more of most any foreign currency.

But what if I just do not like the US government? What if it is my least favorite government in the history of the world? Shouldn’t I feel guilty for owning US Dollars? Further, if I do not feel guilty for owning US Dollars, shouldn’t I feel guilty for not feeling more guilty?

Isn’t it a betrayal of the US Constitution not to invest in gold and silver? Also, aren’t poor people more likely to get to heaven? Oh, right- actually I do want to be rich, just ideally while looking patriotic (or spiritual or whatever).

English: Cover of the book Take Control of You...

Image via Wikipedia

So, even a champion of personal responsiblity like Dr. Mercola says that gold is “sure to soar.” He made no clarification of how to tell his “phase two” from “phase three,” but he sure seems confident, right? Plus, if “phase three” were already over, wouldn’t that have been indicated by something really obvious… like the sudden 60% decline of silver prices in 2008?

Again, he sure appears confident- like maybe even “phase three” confident? Then again, maybe he is trying to sell off his store of precious metals, huh? Someone has to buy for him to sell.

After all, he even promises inflation, and that is in spite the fact that he and people like him have been promising inflation for a while now though, in fact, the opposite, deflation is what is obviously happening- with the deflating of the credit bubble of paper debt. Even as the Fed tries to re-inflate, the market forces of deflation have been overwhelming.

Okay, Dr. Mercola says there has been a collapse in paper wealth, which is true- except for US Dollars, which are soaring in value- while gold stopped soaring to new highs over a year ago. Hmmm- he asks “how much is enough?”

How much inaccuracy is enough? How much speculative presumption is enough? How much reactive and desperately hopeful desperation is enough “terrified into grasping for a silver bullet” despair? Consider that what is relevant now is not more hopeful despair, but a curious courage?

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