are not a good idea in these times unless they are made with money you can afford to lose.
2. Pick a sound bank. Maintain accounts at several institutions. Do not keep over $100,000 in any one bank. Remember that not all types of accounts are covered by FDIC. Some institutions now offer private insurance. Make sure you know to what extent you are at risk.1
3. Diversify your investments among blue ribbon, over-the-counter, growth, income, large, small, mutuals, bonds, real estate, bullion coins, mining stock, and tangibles. Industries that do well in hard times are gambling, alcohol, and escapist entertainment. Study the fields and companies in which you invest. Personal knowledge is indispensable.
4. Avoid the most recent 'best' performers. Their great track records are historical. They have no bearing on future
performance. To the contrary, they may now be overpriced and 1. T h a t is n o t an easy assignment. It helps to h a v e professional assistance f r o m an i n d e p e n d e n t source w h i c h is able to analyze asset q u a l i t y , l o a n ratios, e q u i t y ratios, loan-loss reserves, a n d the like. O n e of the best sources of this k i n d of i n f o r m a t i o n is Veribanc. For a n o m i n a l fee, this b a n k - r a t i n g service w i l l p r o v i d e y o u w i t h detailed reports o n a n y b a n k o r s a v i n g & l o a n i n A m e r i c a . I f y o u w a n t their b r o c h u r e , w r i t e t o t h e m a t P.O. Box 461, W a k e f i e l d , M A 01880.
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poised for a fall. See how an investment fared over the long run—at least fifteen years—and particularly how it performed during periods of economic downturn.
5. When investing in coins, avoid those with high numismatic value—unless you are prepared to become an expert. As with other types of investments, seek advice but don't depend on it.
The same is true for diamonds, art pieces, and other collectibles.
Stay with what you know. Otherwise, you will be vulnerable in shark-infested waters where even the most experienced traders can lose money.
6. Maintain a stash of cash, including some old silver coins. The currency should be enough to provide your family with
necessities for about two months. The coins are for more severe and prolonged conditions. There is no 'correct' quantity. It is a matter of personal judgment and financial ability.
PROFITING FROM DISASTER
All of this is aimed at surviving the storm and preparing ourselves to offer leadership in troubled times ahead. That is a rather negative view. There is a more positive outlook for those who are looking for good news, as Adlai Stevenson said. It is the exciting prospect that we can turn this calamity to our advantage.
We can actually profit from the coming collapse. That thought has spawned hundreds of books and newsletters offering advice on how to get rich while others are being destroyed. There is even one that gives advice on how to cash in on the environmental-industry boom. The pitch is how to make a fortune on the downfall of America.
There is no doubt that opportunities exist to profit from investment decisions based on a realistic appraisal of current trends. Most of those opportunities, however, depend on making market-timing decisions. One must know precisely when to buy, when to sell, and at what price. To know all that, the investor must become expert on the nature of the industries involved and must monitor the daily shifts in market forces. He must attempt to complete his analysis and reach his conclusions in advance of the crowd. And, of course, he must be right. Most investors are not prepared to do that, so they must depend on the services of professionals, usually the same experts who are encouraging them to invest in these kinds of enterprises. If the investment is profitA REALISTIC SCENARIO
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able, the analyst receives an income. If the investment turns sour, the analyst
That relationship is not unique to the 'profit-from-crash'
group, however. It is to be found at every level of the investment business as well as within the legal and medical professions. The customer pays for the advice regardless of its quality. What is disturbing about this investment concept is that it actually may help to make matters worse. By focusing on finding clever ways to avoid the effects of inflation or of making a profit from it, we are doing nothing to stop it and, thereby, encouraging its continuation.
Those who are gaining from inflation are not likely to offer serious resistance to it. As they watch their profits pile up, they may become its most ardent supporters—even though they know deep in their hearts that it will destroy them in the end.
There is nothing wrong with trying to preserve one's capital on the way down, but the only real solution is to
There is no way to protect your assets, your home, your job, your family, your freedom. As Henry Hazlitt phrased it, 'There is no safe hedge against inflation except to stop it.'
AN EDUCATIONAL CRUSADE
The best investment one can make at this time is to finance an educational crusade. Americans have allowed their nation to be stolen from right under their noses because they did not understand what was happening. There is no hope for the future as long as that condition remains. The starting point for any realistic plan for survival
What does that entail? These are the tasks:
1. Become self-informed. That's not as easy as it sounds. It involves a major commitment of time and money for books, recordings, and seminars. Do it.
