Wisdom from the Mogambo Guru
If you’re not regularly reading the Mogambo Guru, you should be.
Today’s article is chock-full of good stuff, but here’s some highlights for you on-the-go types who wonder if you should still be sinking part of your paychecks into a 401(k) or mutual fund.
“…the number of unemployed persons increased by a whopping 851,000 in February, taking the total to 12.5 million unemployed…”
Remember, folks - over 50% of the jobs in this country are Federal, State or Local government jobs, supported entirely by your taxes. None of those people have lost their jobs. This means that the Gubmint will not only have 12.5M less suckers to bleed this month, but they’ll actually have to support them via unemployment and other similar payouts.
Guess who gets to foot *that* bill?
“Total unemployed … of the civilian labor force … is now a staggering 14.8%”
Again, more than 50% work for the government. Take 14.8 from 49.0 and you’ve got 34.2% of the non-government wage-earners supporting the entire nation.
“…stocks have fallen in price to where they were in 1996, 13 years ago,”
BUT
“…the dollar has lost so much buying power since 1996 that any idiots buying and holding stocks between then and now are getting destroyed.”
You cry, “What do you mean, ‘lost buying power?’ ” The Mogambo puts it another way.
“…in real terms, after inflation using the CPI was factored in, the Dow is back to where it was in 1966!”
43 years of gains - gone!! So much for that horsepucky your financial advisor shovels out about “investing for the long-term.”
“Okay, smartypants,” you say. “What *should* we have invested in?”
Let’s say you’re socking away $50 a month in your retirement fund. Let’s say you’ve been doing so since 1996. If you’re in stocks or mutuals, you’re pretty much broke now. Sorry about that.
Let’s take that 50 and buy as many whole ounces of silver as possible within $5 of the $50 line. (ie, if 2 oz is $45, we buy 2. If 3 oz is $55, we buy 3. ) We never sell - we just continually, patiently increase our holdings. Pricing is closing spot price for the first of each month. (Historical figures from kitco.com. I’m just eyeballing the price from the charts, but it’s close enough for our purpose. Want a copy of my spreadsheet? Email me.)
Starting from Jan 96 and running thru March 09, if you spent ballpark $50 a month, you would now have:
1301 oz of silver
Spot price on 3/1/09 for silver was 13.17, giving your holdings a total value of $17,139.87.
Over that time, your total outlay was $7,968.14. You’ve made a profit of $9171.73.
ROI = (final value - initial outlay) / initial outlay.
That gives you a 115.11% return on investment.
I’ll say it again.
A ONE HUNDRED AND FIFTEEN PERCENT RETURN ON YOUR MONEY FROM BUYING SILVER.
All while every other savings vehicle in the industry took a complete bath.
Go ahead, try to find a 401(k) or mutual fund that provides that kind of ROI over ANY timeframe. Bernie Madoff robbed the nation’s brightest and wealthiest investors of nearly $50B by promising returns of 10 to 13%.
Don’t have a clue about stocks? Tired of seeing your money buy less every month? Hey, look where these financial geniuses got themselves and our economy. They’re crying in Washington right now for more of your money! You’re gonna trust them? Just go to Kitco.com, set yourself up an account, and set your bank to auto-pay $50 a month to your pool.
Added bonus - the more Free Money the government prints up to loan to these losers, the higher in value your hard assets rise! The dollar has lost over half its purchasing power since 1996 - what do you think it’s going to be worth with another $2 Trillion entering the swim? Nada. Bupkis.
Buy silver, ammo and land in the country, and you’ll be just fine.
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