Ron Paul & Silver

San Francisco (Nov 16)  As a fairly novice investor, I’m quick to acknowledge that I lack sophisticated knowledge about many of the terms, concepts and topics that seem to influence more experienced or “professional” traders. For example, I know nothing about “technical analysis” or “Fibonacci waves.” I’m also pretty clueless about the workings of futures markets – “naked shorts,” “concentrated positions” and the like.

Truth be told the main reason I started investing in precious metals is Ron Paul. And, truth be told, the main reason I’m not interested in selling any of my silver or gold (or mining stocks) is also Ron Paul.

For people like myself (who will probably never take the time to become experts in the intricacies of the precious metals trading worlds), a substitute investing strategy requires the identification of a “guru” we believe in and trust more than any other figure, and then simply follow his advice.

That is, we trust our “instincts” about individuals who we believe have, time and again, demonstrated they know more than others. We look for people who have consistently displayed keen instincts, people who we have come to believe have deeply studied a topic(s) and have reached unwavering conclusions based on their in-depth studies.

For me, this person is Ron Paul. This is the man, more than any, I put my faith in.

Of course, as gurus go, Ron Paul is a faith-tester. He is the definition of a “contrarian” and probably the Father of Political Incorrectness.

Even now I can hear some readers pecking away at their keyboards in rebuttal: “So how has that Ron Paul ‘advice’ worked out for you lately?”

Well, in the last nine or so months (when the USD prices of gold and silver have plummeted), not very well at all.

But then again – thanks in part to the teachings and pronouncements of Paul – I haven’t been in the market to sell my precious metals. In fact – a contrarian like my mentor – I’ve been buying the stuff. For me, acquiring silver is a long-term play (and Paul, a great student of economic history, is definitely a long-term thinker).

However, if I had “discovered” Ron Paul when he first entered national politics in the late ‘70s – and followed his advice to acquire gold and silver – I’d be rich by now and composing these columns at my beach home.

So why do I put my trust in Ron Paul? Why do I think that his analysis about the macro economy is spot on, and that his predictions for the future will become reality at some point in time?

Simply put, because just about everything he’s talked about and warned us about in the past has come to fruition (or is clearly coming to fruition even as I write).

What follows are “talking points” emphasized by Paul over the course of decades. As you will see, many of these positions and statements provoked boos (literally) from his audience, and certainly derision or ridicule from the mainstream media and mainstream political class.

But Paul has nonetheless stuck to his convictions (one of many reasons I’ve come to admire him).

Here’s a sample of Paul political and economic positions with comments about how how his once controversial pronouncements are perceived years later:

• Going to war with Iraq and Afghanistan was a major mistake, and unconstitutional to boot.

This is/was the position that most conspicuously separates Paul from fellow Republicans. He talked about the folly of such an endeavor almost immediately following 9-11. He spoke about it at every campaign appearance he made in both the 2008 and 2012 presidential primary cycles. At debates, his views routinely got him booed (albeit “not off the stage” – as he held his ground).

Today of course, the vast majority of Americans have come to believe that America’s decade-long involvement in both wars was a terrible blunder, both from a strategic perspective and a financial or budgetary perspective. Most Americans, that is, now believe that Paul was right.

• American empire – or American involvement in countries around the world. Paul famously (or infamously) has long been for “bringing the troops home” not just from Afghanistan and Iraq but all the 100-plus nations where American military personnel are stationed.

Paul argues that such a presence not only further breaks an already broke treasury, it violates George Washington’s warning about the dangers of unnecessary foreign entanglements. America’s meddling also invites “blow back” down the road and leads to all kinds of unanticipated and unintended consequences. Invariably, dictators we support become enemies.

Events in the Mid-East, Libya, Iraq, Egypt, etc. have made more and more Americans move toward Paul’s way of thinking.

• Audit the Fed (and/or an emphasis on the damaging influence of the nontransparent and unelected Federal Reserve).

No other politician in America (or the world for that matter) has made a greater effort to steer the focus of economic discussions to the policies of the Fed (and other central banks and central planners).

Despite these lonely efforts, most people still see the Fed’s actions as being “solutions” to our economic woes, not as the source of the mess we are in. But more people are now critical of the Fed, or at least open to the possibility that the Fed is creating “boom and bust cycles,” devaluing the dollar and making it harder for members of the middle class to remain in the middle class. This evolution in thinking is largely due to the preaching of Dr. Paul.

• Discussions of gold, a gold standard or at least a standard of money that uses “competing currencies.”

Paul is probably the most famous “gold bug” in the world. It was Paul who first questioned whether America actually possessed (free and clear) all the gold the government says it possesses.

His skepticism on this matter was duly noted, and duly ridiculed and dismissed. Today, however, more and more pundits are raising the exact same questions, especially after the U.S. government denied the German government’s request to return just 20 percent of the gold it stores in America.

A return to the gold standard probably won’t happen any time soon, but it is now at least being discussed (forming a commission to study the issue was inserted into the Republican platform). Some smart people are even predicting that China might be working as fast as possible to have the yuan ultimately become the world’s new reserve currency, using gold to back said currency.

Again, something Paul broached first is being considered and talked about in much wider circles.

• Unsustainable debt. No politician in America in the last 40 years has spent more time warning about the growth of the Federal government and the “catastrophe” that hyperbolic debt and deficits will unleash on this country and the world.

Today, many more Americans are now coming to appreciate the immense scale of the problem. Their concerns echo those Paul was sounding thirty years ago.

• Threats to civil liberties and dangers of the encroachment of a Police/Surveillance State.

Paul, almost alone, stood against the creation of the massive Homeland Defense Department, the federalized Grandma-groping TSA, the Big Brother elements of the “Patriot Act,”etc.

Indeed, the growth of the “Security State” and the erosion of civil liberties has been another standard of almost every political speech Paul has given for decades. Again, many dismissed his “unpatriotic” critiques. Today, with revelations of Edward Snowden and others, Paul is considered as being either prescient, or at least as the best-known figure who sounded a warning alarm about Nanny State also becoming Big Brother state.

Other examples of Paul’s unpopular positions that seem to be not as unpopular as they once were:

• The folly of the ‘war on drugs’ and Paul’s warnings about the “Police/Prison/Prosecutor/ Industrial Complex.”

A libertarian at heart, Paul is for legalization of drugs, a position he’s never backed away from even though it couldn’t have helped him in the polls.

Still, have you noticed that two U.S. states have now legalized marijuana? Other states are seriously considering doing the same thing. In conversations with friends and acquaintances, I’ve noticed that many more are now open to legalization, or at least acknowledge the validity of the arguments.

Whatever you think about the subject, this is clearly another example of Paul being far ahead of the curve on a potential policy change, and also being a central figure in influencing how this topic is debated.

• Immigration debate – During the last presidential debating season, Paul floored me when he made a comment I’ve never heard before, or thought about.

When it comes to building an immigration wall/fence along our southern border, we should stop and think about something, Paul said. Not only will such a wall make it harder for others to enter our country, it will also make it harder for Americans to leave (if they so desire … and if our government doesn’t want us to leave).

Huh? Could this actually happen? Well, money (and people) will flee to where it is more welcome, right? People move from State A to State B all the time to protect their wealth. Could a time come where Americans want to flee to other countries for the same reason? Isn’t the government already doing everything it can to keep Americans from “sheltering” funds outside the country?

Already broke – and soon to be broker – will the government not care if money it can confiscate from tax payers forever escapes its reach?

It’s a question worth asking, or at least thinking about – and Paul is apparently the only political thinker who has thought about such a scenario.

This is just one of many examples of Paul saying something that, at first blush, sounds outlandish (and beyond the realm of possibility) but, upon further consideration – and further passage of time – seems quite possible indeed.

Other readers can no doubt come up with examples of Paul predictions or warnings that have either come to pass, or are now much closer to coming to pass than most would have ever thought.

I cite the above to hopefully illustrate my point that Paul seems to know what he is talking about – even though what he says and believes is often far from “conventional wisdom” at the time he says it.

For his part, Paul – quite a humble man – would no doubt chafe at the notion that he is some kind of seer.

Especially when it comes to the economy, Paul would say that he’s not spoken one original thought. Everything he believes and shares with others comes from his study of Austrian economic thinkers.

On other matters dealing with the structure of government, just about everything he says flows from the pronouncements of our nation’s Founding Fathers and his study of the U.S. Constitution.

When Paul argues forcefully for a return to small government or a return to “sound money” – he is echoing the teachings of great men he has studied in great depth.

Maybe one day I’ll get around to taking a home course on Austrian economics or become an authority on the thinking that went into the creation of our Constitution.

But when it comes to how economic events might play out, and how I should invest given these likely possibilities, I can probably save some time and effort by simply listening to Ron Paul.

I guess I could listen to Ben Bernanke or Paul Krugman, but my instincts say that Ron Paul is probably the man tomorrow’s historians will say “saw it all coming.”

Paul has admitted that he’s no good at predicting when things will happen. But he’s very confident that, given the realities and trends of the world today, certain events will happen, developments that will cause a “catastrophe” in the global economy.

Owning physical silver and/or gold is about all a lowly newspaper man like myself can do to protect his family’s wealth and economic future when such events materialize.

There’s many reasons I’ve reached this conclusion and am not likely to change my opinion about our collective economic fate. I have, in fact, done some of my own study and reached my own conclusions. But I haven’t studied these topics to the extent Ron Paul has. Nor have I seen anyone else in public life whose warnings and predictions about the future have been more consistently clairvoyant.

That is, I feel very comfortable about the long-term wisdom of my silver investments because I’m confident that the mentor I’ve selected is much smarter than I am.

I don’t need to study Fibonacci waves when I can simply listen to Ron Paul.