Sunday, June 12, 2011

The Doc Convinces an Average Jane to Invest in Silver

Last night I made a personal convert to gold and silver. A longtime friend (let's call her Jane) who is a college graduate, and has taught Jr. High math for 5 years was in town visiting.  Over dinner, she asked me what type of investment I recommended she make with her life savings, which was currently sitting in a savings account. She informed me that her life savings was roughly $7,000 (which was what remained from the $8,000 federal stimulus refund she received when she purchased a new home in 2009).
When I responded that I would recommend she invest in gold and silver, her response

"What is that?"

Not "gold is a barbarous relic", or "what about storage fees and issues", or even "gold doesn't pay interest or dividends".  No, her reply was "What is that? "
As you can imagine, I was nearly speechless.  Even my wife had to struggle to suppress a laugh.
This is a middle American, college educated, financially stable, teacher of America's youth who DOES NOT EVEN KNOW WHAT GOLD AND SILVER ARE, much less ever even CONSIDERED investing in either!
Now to her credit, literally around 90 seconds into my sound money/impending dollar collapse thesis, (and after I pulled out a roll of silver Eagles for her to hold) Jane said "ok, can I just buy it now?"
10 minutes later Jane had a gold Canadian Maple and 100 US Silver Eagles being shipped to her house from an online dealer.
I don't tell this story to embarrass or belittle my friend, who is actually very intelligent, much more so than the average sheeple we meet every day.
I tell this story to make several important points.
1. The average American has absolutely no personal savings.
2. The average American does not even know what gold and silver are!  To most of our readers the concept of gold and silver as the ultimate insurance and preserver of wealth is basically second nature. It takes a conversation with a normal American to fully grasp what little understanding the common man/woman on the street has about gold and silver!
3. Trust is an incredibly powerful tool at influencing the investing decisions of the masses.  Jane put her entire life savings into physical gold and silver because she trusted my advice.  She did not make the decision based on any information/evidence I presented.  Jane did not make her decision based on silver's supply/demand fundamentals, because she learned JP Morgue/ HSBS have sold over 100 million ounces of silver short and are manipulating the silver market, or because gold and silver are sound money and would protect her wealth and savings from inflation or a collapse of the US dollar.  No, Jane purchased 100 silver Eagles and 1 gold Canadian Maple because she trusted my opinion.  Pure, blind faith. 
Honestly, is Jane any different than the average American who walks into Edward Jones and meets with his investment adviser?  Average Joe hands over his money and basically tells his investment adviser "I'm too uneducated to wisely invest my money, can I pay you to do it for me? You say California MUNI's are giving great rates, T-bonds are the safest thing ever, and AAPL is the best stock since Microsoft? Whatever you say Mr. Jones!"
4. Don't listen to anyone who attempts to scare you out of gold and silver by telling you that they are in a bubble.  When the common Jane does not have a clue what gold and silver even ARE, it is clear that we are not even close to the INITIAL STAGES of the 3rd leg of the massive precious metals bull market, when the general public becomes involved, rushes all-in, and takes out 2nd mortgages to invest in gold, silver, and their related stocks.
5. We need to start doing more to help educate others outside our community.  This is why our upcoming Silver Viral project is so critical.  We will be initiating discussions about silver in forums, blogs, and social sites where silver is not the focus or common knowledge. 
It's time to graduate from student into teacher.
It's time to take the message of the freedom that gold and silver provide to the masses.
It's time to take Silver Viral.

-The Doc