wearmanyhats

For the first time in a long time, oil and gold are taking a hit.  Two years ago or so this happened, and Wall Street typicals naysayed the run up in the two commodities as a fluke, calling goldbugs and commodity lovers a bunch of fools.  After two solid years of growth, financial advisors who were late getting on board are now crying out about buying both black and shiny gold.  Does that mean the rise is gone?  After all, everyone knows the old addage that whenever the common man is looking to buy gold, it’s time to get out.

Baloney.

Wall Street hawkers often think the common man is dumb, a sheep.  Anyone who follows money at all recognized when gold was selling for under $300 an ounce that it was cheap.  One character I knew pulled all of his money out of the stock market and bought only gold.  I’m sure he is smiling all the way to the bank. Another bookkeeper I knew did nothing but throw a coin a week in his bank box.  He had planned to retire with that money, taking one coin a week out to suppliment his income.  He’d be retired by now.  Finally, one other family did nothing but throw silver and gold into bank boxes for their children.  The married couple never quite agreed about the husband’s obsession with the study of money, and the wife thought it foolish to have bought so much metals.  She never lived long enough to see the eventual delight on her childrens’ faces when they were given that bank box filled with metals.  But her husband was vindicated as one child needed that to hedge against inflation to stave off foreclosure on some real estate investments.  Hedging against inflation is the very reason to own metals in the first place!

So don’t look to the common man to determine if the price of oil and metal is going to drop and stay down.  Now is the time to evaluate other factors.  First, demand.  Well, China and India will need more.  Second, our dollar.  If McCain becomes President, he’s tightfisted.  We might get back on economic track.  Third, government interference. There’s been some talk about the SEC keeping future’s speculators from going crazy on oil as they did on Freddie Mac and Fannie Mae.  We’ll see what they do.  Fourth:  National mindset.  You can’t hardly go a day that people aren’t talking about out of control, double digit inflation. Well, it’s upon us.  So there’s no sense speculating whether we are going to have it or not.  We already have it.

So what is a body to invest in?  First:  buy foreclosed real estate if it cash flowing. Second:  Value based stocks, many of which I am featuring here.  Third:  gold and silver  Fourth: Food.  Stock up if you can.

Oh, and one last thing:  Get rid of any consumer debt you can.  Soon credit card interest rates will go crazy. You may not even be able to pay off your minimum balance.  Kill it.  Get it gone.  Now.

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