I don’t always write from my expertise on this blog, but usually, I write from the heart, sharing experiences, questioning my own beliefs, and proposing solutions that I apply to my own life. This is one of those days, mostly. I conduct this public introspection because I know that many of you are grappling with similar issues. Many others have already found their way through and have much to share. We desperately need those perspectives here in our community.
Last Friday I was immersed in a busy day of university meetings and essay grading. I did not know we dropped down through key levels until I looked at the blog after the close. But the entire day I had a feeling that something was wrong. I attributed it to the Scots (my people) voting to stay in the commonwealth and especially the story about the British move away from US T-bills.
The dollar is being ushered off the international stage, kicking and screaming, threatening retaliation, war, and disaster for all. Now we read that Kenneth Austin, a Treasury Department economist [thank you Dan] called for the end of dollar reserve status, and China is parking a destroyer in an Iranian port, a stone’s throw from American protected ports across the gulf. As they build a petro-yuan system we see the world is changing! Perhaps the US is cooperating behind the curtain?
But my negative feelings went deeper than the usual news stories. After some thought, it slapped me in the face: I still value dollars over metal. I see metals as an “investment.” Thus, when my “investments” do well, I am in a good mood and have increased self-confidence. When my investments fall, I second guess all my decisions and my self-confidence takes a kick in the
guts ass testicular region.
“Where you treasure is, there will your heart be also.”
My mind knows better; it’s my heart that is confused. I read, process, and come to logical conclusions. Thus I trade dollars for metal, knowing that a day will come when that metal will save my family.
When I first learned there was a thing called money, I soon realized I could exchange it for candy and toys. My allowance was in dollars. Everything I desired was denominated in dollars. My paper route customers paid me in dollars. Later, my paycheck was denominated in dollars, my expenses were in dollars, so were the value of my possessions—both assets and debts. My small business, my equity in the house, my mortgage, my car loan, dinner at the Mexican restaurant, groceries, vacations—they are all denominated in dollars. How can I ever escape?
This “dollar paradigm” is where I was successful and respected by peers, where I had found success and respect with my employer and profession. My credit rating, yes my precious credit rating, was strong and bankers always said “yes” when I wanted to borrow more dollars. I live within a dollar paradigm that permeates my heart to the point that metal that I have acquired gets denominated in dollars, just like everything else, though many here have continuously reminded us not to do that.
How do I break that heart-dollar connection and value my possessions in metal? Once I am able to see silver for what it is, able to see the intrinsic value of my pantry, self defense equipment, property, land, then my heart can take satisfaction in those things and NOT have to convert their value to dollars.
Damn! These American banking propagandists have done an effective job!
The problem leaks out of my heart and has firmly shaped my vocabulary--and I think people following Bernay's tactics had a hand in it.
Here is where we find the key to change: I must change the way I talk about metals. Descartes left this critical step out of his famous equation. One cannot reason without words.* If these brains of ours did not have language, we would quickly invent it. Words shape our thought, our perceptions and guide our evaluations of experience.
Bernanke knew this. He publicly called gold a "barbarous relic." He was a step ahead of most, taking an active role in shaping public perceptions.
One trader-blogger is not fooled by Bernanke, yet he still asserts that gold is an “asset class.” Though he and his followers may hold gold, this vocabulary reveals that he denominates his world in dollars and his fortunes will rise or fall with this current financial system. I say "good luck" to traders who think they can click their mouse before a flash crash sets in, or that their trading platform will execute their stops before that price runs their account down by 40%.
We use metaphors that powerfully shape our views of the world: if I say "gold or silver is a hedge,” this metaphor will keep metals firmly denominated in dollars in my mind. Even the “insurance policy” metaphor keeps metal denominated in dollars as it “writes a check” to cover “losses” after the collapse.
Metaphors that cut the dollar-silver connection would a “lifeboat,” a “fortress,” or a “vehicle” to carry you into the new economy. I’d love to hear some other metaphors that will reprogram my heart.
If we go a level deeper, we get at grammar. We divide our world into grammatical agents, objects, actions, and effects (in the English language). In my brain, I am an agent (buyer), silver is an object, the action is “investment” and a rise or fall in dollars is the effect. As long as I talk about silver with that grammatical structure, it will, in turn, structure my emotional responses. Good effects mean feeling good, and vice versa. I have a couple of choices for changing my grammar. I am the agent, silver is the object, holding it is my action, and the effect is security. Or… silver is the agent, I am the object it acts upon, silver saves me, and the effect is security and stability.
So am sitting here this Sunday evening, watching the silver chart fall, again, realizing that as long as I watch these charts with dollar denominations on the Y axis, I am stuck in the dollar paradigm. My heart is just doing what I have trained it to do. Somehow, Pavlov comes to mind.
But now I am holding a $100 Benjamin in my left hand and five silver maples in my right. What am I to make of these? That chart on my computer, the price at provident.com, suggests they are of equal value. But they are not!
One is a piece of paper, printed ad naseum by an organization of bankers who do not have the best interests of our citizens in mind. It is backed by the “full faith and trust” of the US government. In past decades, when the economy was strong and a majority of American worked hard, that abstract promise had value. Today, the “full faith and trust” line comes from mostly corrupt politicians who accept bribes from corporations so they can buy enough media coverage to manage their public image and stay in power. That Benjamin on my desk now represents a den of thieves and liars. It is their “snake oil” being hawked to cure my ills.
In my other hand, my silver is hard, tangible, represents energy, labor, and expertise to get it out of the ground. It is beautiful. I can even drop a coin into my milk to allow it to keep longer. Clever people have found ways to use it for medicine, energy production, electronics—a lengthy list of practical uses. And it has a multi-thousand year history as a medium of exchange due to intrinsic principles. Politicians do not have to lie to me to persuade me to use it as money. This silver will carry my family back into prosperity in case of economic collapse.
A few days ago, a good friend and I discussed where to invest a large sum he is receiving from his retirement fund. He senses that the economy is in trouble and cannot see any security or profit in his usual investment vehicles. We talked about “investing” and what to “buy.” This grammar and vocabulary keeps the both of us living in a dollar denominated world. I need to go talk to him again and change my words. He can “acquire” metals and “hold” them so that they carry his family through whatever turmoil may come.
For me, and you, the key to shifting my affections to metals is to talk about them in a different way. They are not an investment, a hedge, an asset class, or speculative play. They are wealth, they are security, they are stability; they are a vehicle, a lifeboat, true money. Our action is to “hold” them and let them do what they do best. They will carry us into a new world.
I think I’ll go fondle my coins a while. They speak volumes to my heart.
* Many poets and culture critics discuss “thought as the reality” and “words as its representation,” but the philosophers, linguists, and scholars from my own field have published loads of academic crap arguing that language precedes thinking. If you doubt the likelihood of this assertion, here is a link to get started down this rabbit hole. Another link