The Appeal to Authority

From the moment we are born to the moment we die, we are programmed to believe that the only way to learn a skill or obtain knowledge is through a higher authority.  It starts while we are in school, our teachers dull our imaginations and ambitions, they deduct points from our essays when we do not quote the work of some ivory tower academic in the proper MLA format, and train us to become robots in search of an authority figure to mindlessly obey.

This authority bias continues even as we get older and begin working.  We make money and are so afraid of trusting ourselves with investing it that we seek a professional, a fancy euphemism for authority figure, to manage our money.  Unfortunately, these financial professionals are nothing more than salesmen who generate meager inflation adjusted returns for the average Joe, charge 1% - 2% in annual fees, and have college interns create the financial analysis that the advisor actually presents, as if he created it of course.  The only thought they give in regards to the product they pitch during the meeting is to make sure they give some wholesaler from some mutual fund family enough new assets to justify the expensive lunch he just covered.  All I had to do to outperform their overly complex portfolio of sixty plus asset classes and two plus million Monte Carlo outcomes was buy silver for $8.00 an ounce in 2008.

If you truly care about your financial well being, don’t leave your money in the hands of another person and think twice about relying on any government safety nets.  The appeals to authority we are fed throughout our lives are all part of the big lie, the lie that you must defer your health, your wealth, your freedom, your body, and your mind to a higher power, a lie our government would kill for you to believe. 

Who am I to talk though, I’m just an entry level analyst who works during the day and goes to school at night.  I don’t have the decorations of authority, years of experience, wisdom or a fancy degree.  I’m just a young kid who happened to read a book about Austrian economics, another on libertarian thought, and realized the neo-conservative warmongering views I had were a result of careful and deliberate programming. 

The Flight to Safety Rerouted

Traditionally, during times of uncertainty, investors pull their capital from the equity markets and use the proceeds to purchase treasuries.  With the turmoil going on in European debt markets and the havoc the Federal Reserve is creating via its disastrous monetary policies, tomorrow’s flight to safety may be permanently rerouted from government debt to shiny pieces of metal.

Today’s market action suggests that investors are pulling money out of the equity and bond markets in the search of real safety (otherwise known as real money) sending gold to an all time historical high, nominally speaking of course and silver back above $40.  Safe, in the traditional sense, is no longer safe thanks to negative real rates of return and the continual erosion of fiat purchasing power.  It seems fiat airlines flight 666 is running out of fuel.

The Stafford Carry Trade

For the past three years I have been buying gold, silver and various mining stocks knowing what the Federal Reserve and our government is doing to debase our currency and steal our wealth.  Working during the day and going to school at night leaves me with little funds to sock away at the end of the month.  Then it dawned on me, I just thought of the greatest trade ever.

I coined it, the “Stafford carry trade”.  My tuition is around $3,000 every semester, why pay for it out of pocket when I can borrow twice the amount that I need with federally subsidized Stafford loans.  I have two years of school left and Uncle Sam is kind enough to let me borrow $6,000 per semester interest free until I graduate. 

Thanks to my gracious uncle, I can use a portion of the loan to pay my tuition and the balance to purchase silver while he picks up the interest.  For the first time in my life, being a lover of liberty, I am actually grateful to my uncle.  A few more years from now, when the Bernank is up to QE 666, the $3,000 I’m plowing into silver, courtesy of my uncle’s printing press, will be worth a heck of a lot more than the total amount that I borrowed.  Enough even to pay off the entire balance of my Stafford loans and have a nice chunk of change left over, maybe even a small fortune. 

I might as well get something out of my college “education” other than liberal brainwashing and government indoctrination.  Thanks Bernank and Uncle Sam, for letting me borrow your printing press, albeit for a fraction of a second twice a year, without you the Stafford carry trade would be impossible.