Book Summary: A Guide to Investing in Gold and Silver – By Michael Maloney

This is a great educational book about real money. Mike examines the sound monetary principles that have persisted throughout human history. One thing is consistent: gold and silver are real money. In today’s world of fiat currencies, gold and silver are tools you can use to preserve and protect your wealth. Mike looks at the differences between currencies, real and fiat money. Fiat currency is basically paper money with no collateral. We will go into some detail as to why this is dangerous and the average investor should at least understand the significance of devalued money and inflated fiat currencies. With the economic collapse of 2008, along with Ireland, Greece and other bankrupt countries, we as small investors need to be educated so that we can protect ourselves.

Why is this important to me?

This is important because the greatest transfer of wealth is happening right now, and that transfer is away from America, not to us. This should be a priority if you want to protect yourself and your family.

There are a few things going on that 90% of the general public don’t understand. This is understandable because the noise between the political heads on CNN and Fox News distracts from the real issues. The real problem is this: The Federal Reserve is a private institution that is not regulated or audited. They control the financial system. These guys are the quintessential king makers who rule the country in the background. Thomas Jefferson, of course, was against a central bank in the United States. For more information on this topic, you can listen to Ron Paul. He’s a congressman from Texas who’s in it all.

The great swings we saw from the internet boom to the housing bust were a direct result of the Fed’s actions. Few people know about it and some will argue that it is wrong. The Fed kept interest rates artificially low, which created an inflated housing market. Debt-to-equity easing and financial instruments of mass destruction known as CDOs and MBSs and other weapons nearly killed the country. Financial education is needed for us little guys to have a chance. Read this book to open your eyes. One thing the mainstream media doesn’t say, and is more powerful than terrorism, is this: if the dollar is lost as the world’s reserve currency, our overall standard of living will drop by at least 25%. It is already difficult for 85% of American families. Another transfer of wealth can put the final nail in the coffin. Get an education.

There is a ton of information in Mike’s book. The history of currency devaluation has been chronicled in every major empire, including the Persian, Greek, Roman, British, and now American. Currency depreciation, inflation and taxation are wealth stealers. If your money is a candle, then taxes and inflation are a flame burning at both ends.

  1. Resourcefulness – I’m not a gloomy person. I believe in the strength and determination of the American people. That still doesn’t stop us all from being educated and the only way to change is from the bottom up. In this light, top-down government cannot benefit the country. It is the ingenuity of the iron horse of the American people to solve our financial problems.

  2. Gold and Silver – Gold has been money for over 5,000 years. His red-haired half-sister, Silver, was also known as money. The ratio between them has historically been 16-1. I have personally seen the spread over the last year go from 80 to 1 to 30 to 1 and rise again to about 40 to 1. That means you can give 40 ounces of silver for 1 ounce of gold. So silver is $35 an ounce and gold is $1,500 an ounce. Now – a reality check. Warren Buffett does not invest in gold. If you’ve been following any of my book summaries, you know I’m a Buffett fan, so let’s take a look at this. Basically, Buffett is saying that if he owned all the gold in the world, he would have a 67-foot cube of gold (height, width, length for those beginning math majors). He could polish it, kiss it and sleep on it. Instead of a gold cube, he could have half the farmland in the US plus 7 Exxon Mobiles plus a trillion dollars in cash. He’d rather take the latter, as would I. Buffett is basically arguing that gold has NO BENEFITS. I agree with him. Silver on the hand is different. Buffett has owned silver in the past and may still own some. Silver is really useful because it is used in mobile phones, computers, smart devices and medical gadgets. This is why I love silver as a means of saving.

  3. Cash Flow vs. Capital Gain – We don’t want to fall into the big fool theory and invest in capital gain. In fact, silver is a capital gain investment. Either way, you need to consider all of your investments using a synergistic approach. This means that we want investments to spend cash flow, but we also want our savings to grow. Robert Kiyosaki claims that investors are losers. Translated, this means that if you hold dollars, you lose due to inflation and currency depreciation. So you can keep your savings in silver.

Now let’s talk about keeping “real money” as a lifeline of wealth. Note: Get educated, I’m not saying go out and invest in silver and gold today. I say get an education. I personally invest in silver and will continue to do so, but it is very volatile so you need to learn. Also, I do not do financial planning or give advice, so please do your own homework. My goal is simply to help you with your homework.

  1. Mountain of Debt – This book was written in 2007 BEFORE the subprime mortgage meltdown. Even then, the US was buried in mountains of debt. Since then, the money supply has been tripled by the Fed. So this mountain just became Everest. This happened over the last 3 years, so the dollar rate in 2011 was at its lowest level.

  2. Unsecured Liabilities – Social Security, Medicare, Medicare……… These unsecured debts, along with the mountain of debt, only compound the problem. When you give something to someone and then try to take it away, all hell breaks loose. Take a look at GM. They had to go bankrupt, get government bailouts and write off all of their unsecured liabilities to survive. They are doing well now, but the kid has lost his pension and medical benefits. Get educated my friends. Don’t let other people manage your money… The same thing will happen with US unsecured obligations. Start planning NOW.

    3. Derivatives – We’ve touched on this before, but in a nutshell, here’s what happened during the subprime meltdown. About 100 people sat in rooms and decided to sell MBS (mortgage backed securities) to investors. The problem is they wrapped the crap up, sprayed it with perfume and sold it as triple A rated tools. The rating agencies and management of these companies should be held accountable. What happened was that a 1-2% change in values ​​could destroy companies because the leverage was so deep. These guys used billions to make tens of millions. There are too many zeros for this to work in the long run. As we now know, this did not happen.

In summary, what does it all mean? This book and others like it will help you take control of your destiny. It is recommended to keep 10% of your assets outside the financial system. This means that there is no risk of confrontation. If you put all your money in a bank and the bank has a run and it fails, the bank is the counterparty. Holding physical gold and silver as real money eliminates counterparty risk.

I hope you found this brief summary helpful. The key to any new idea is to incorporate it into your daily routine until it becomes a habit. Habits are formed in just 21 days.

One thing you can take away from this book is GET AN EDUCATION. Please open your eyes and spend a few minutes a day educating yourself. You’ll be glad you did.

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