LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
New Car Smells Like Long-Term Investing

By: Richard Daughty, The Mogambo Guru - The Daily Reckoning


-- Posted Monday, 14 July 2008 | Digg This ArticleDigg It! | Source: GoldSeek.com

And if you think that things aren't too bad and that you just have to hold on, hold on, hold tenaciously on until you retire, which is when you can start consuming all that money you have invested in your retirement plans, then Larry Edelson of MoneyandMarkets.com has some information that will make you crazy.

He has compiled some statistics that illustrate the loss of buying power of the dollar since 1980, thanks to the Federal Reserve creating so much money and credit all that time, and thanks to the corrupt Congress (except Ron Paul) who aided and abetted them every dime and every dollar of the stinking way.

His research shows that, for instance, the average price of a house was $62,200 in 1980 and $196,300 in 2007. To compare, monthly rent on an apartment was $300 a month in 1980, and $1,082 in 2007.

The one statistic that I think is most instructive is "Average cost of a new car", which in 1980 was $7,200, and in 2007 was $26,950. The reason that new car prices fascinate me is not because of my raw, seething envy at people who can afford new cars, as I realize that I will never be able to afford a new car and will always have to drive cheap, rusted-out pieces of automotive crap because I am too lazy to work and because my family costs a bundle, but I use new car prices as an illustrative device, because the price of a car is a big expense, which makes the average price of new car a nice, handy proxy of retirement investment needs, which is a big expense if you do it right.

And, because I am lazy, I really, really, really like things that are "handy"!

So, to show you that investing in the stock market over the long-term is a guaranteed loser for the majority of investors, suppose you had invested $7,200 (the price of a new car in 1980) into your precious little retirement account in 1980. Now, in 2008, after 28 years, your face burns with shame and you hear the scornful laughter of The Mogambo ringing in your ears when I tell you that that your original investment of $7,200 would have to have, after paying a 15% capital gains tax on the increase from your original $7,200, risen to $29,912! And you got this sum by having a superb annual 5.2% investment gain! Every year for 28 years! No losses! Marvelous!

Now, to those blithely uninformed as to the horrors of inflation in the money supply and the loss of buying power it creates, this seems like a nice gain: $7,200 grew to $29,912. It almost quadrupled!

If you thought that, then The Mogambo is laughing at you, and you will find out why when you discover that you actually didn't make a damned dime! Hahaha! You broke even!

Your gain on the $7,200 is just enough for you to have, after 28 years, an after-tax price of a new car ($26,950), which means that you just break even! Hahaha! In essence, you invested a new car to get a new car, after waiting 28 years! Hahaha! Nice "investing for the long-term" dudes! Hahaha!

And yet people think they are going to fund a retirement by investing in the stock market? Hahahaha! It ain't a-gonna happen! Welcome to the real world, chumps!

From what Bill Bonner, here at The Daily Reckoning wrote, I see that this kind of crap has been going on a long time, as "Since '67, consumer prices are, officially, up seven times. Wages in America are up exactly the same amount. In other words, during your editor's entire adult lifetime Americans' per hour earnings have not increased a single penny."

Even worse, The Desidooru Saloon column notes that the dollar is falling faster than ever, as "the dollar index has fallen 41% against the euro during the Bush 43 presidency." The dollar has lost almost half of its value in eight years! Astonishing!

This means Really Bad News (RBN) for people who have no job for one reason or another (fired, retired, young, handicapped or in prison); not only do they not have an income, either then or now, but the little bit of money they do have buys half as much as it did only eight years ago!

And how many people are unemployed? Desidooru finds that while "The wizards at the Bureau of Labor Statistics have somehow found unemployment still at 5.5%", the truth is that John Williams at this shadowstats.com estimates that real unemployment, stripped of the government's manipulating, lying, deceitful, and intellectually-corrupt handiwork, is "a Carter-esque 14%." 14% unemployment! Yikes!

And speaking of manipulating, lying, and deceitful, George Ure of UrbanSurvival.com feels like I do about government debt, and he obviously feels like my wife does about shenanigans with the money (Her: "Where's the change from that twenty you still owe me?" Me: "Me no speakee English!"), and in his "It's Only Money Department" he writes, "check this out: 'The Debt to the Penny' just went up by $30 billion on June 30 after basically being flat for two months. It makes one rather suspicious of the validity of the numbers."

George, I am far, far, faaaaAAAAAaaaar beyond suspicious. I'm even beyond paranoid and frightened.

It is only the safety and security of gold that allows me to laugh, "Hahaha!"

P.S. To get The Daily Reckoning sent directly to your inbox, sign up for our free email newsletter, or if you prefer to use RSS, subscribe to the Daily Reckoning RSS feed.

Editor's Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.

The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications. Click here to visit the Mogambo archive page.


-- Posted Monday, 14 July 2008 | Digg This Article | Source: GoldSeek.com


Visit The Daily Reckoning's website.



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.