Real Wealth, Gold, and Why Government May Want You on Food Stamps

by Bill Sardi

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Gold topped at $1697/oz today, Labor day 2012 (see chart below).

Look at the 20-year gold chart below.  

As gold has risen from ~$250 in the 1990s to $1697 today, you don’t see readily see that the value of the US dollar has plummeted over this same time.  I’ve added a chart at the bottom for you to compare.  When the gold price rises, this means there is less purchasing power and confidence in paper money.  Most Americans don’t have enough money to buy gold.  They spend every dollar they make. 

With the collapse of the real estate market, American family wealth has plummeted by ~40%.  And if the banksters revealed their shadow inventory of 4 million non-performing home loans that have not been ushered into foreclosure, even greater wealth in the form of real estate assets would have been washed away.  Cut another 20-30% off of current home values to figure your real asset wealth.

The problem is, most Americans value credit (debt).  Many Americans consider their debt to be their wealth.  Their home, which may be valued at $400,000, but if the bank has the majority of the equity – let’s say you still owe $250,000 – then your imagined wealth is just that.

You drive a Lexus, have a membership at the golf club, buy clothes at Nordstrom’s – all on credit.  You are among the wealthy-appearing debtor class.  Will real wealth ever come your way? 

If it does, you had better figure out how to grow it at the rate of 10% per year or your wealth will erode due to inflation.  Since 2006 the government has published inflation rates in the 2-4%-range, while the real inflation rate has been in the 8-10% range during that time.  If you aren’t asking and getting a 10% pay raise every year, you are losing your wealth and purchasing power. 

Money in the bank now gains less than 1% interest.  CALPERS, the California employee pension fund could only produce a 1% yield on its investments in the past year, and CALPERS is more savvy about investing than you or I. 

If Americans don’t boot out the Federal Reserve, the very agency that was commissioned to stabilize the value of the dollar, the vast majority of Americans will be receiving Food Stamps. 

The bread lines of yesterday are the Food Stamps of today.  In the 1950s Russian people stood in bread lines for hours.  It was the best way to control the people and keep them from overthrowing the government.  Hungry and tired from standing in bread lines, they would never pose much of a threat to the government. 

Now you might begin to guess why Americans are being impoverished in a seemingly intentional manner.  Wealth is being transferred to the elites and in 5 years the trillions of dollars in savings accounts will erode in value by ~50%.  Government knows there will be unrest.  Government has squandered the American dream for its citizens by its paper money printing policies.  This has allowed politicians to promise what they cannot possibly deliver.  If you are beholden to the federal government for Food Stamps, just how much of a protest do you think you will be able to launch against the government? 

Charts are courtesy of and

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