Hey, you've been doing some reading. Demand is growing and not just with that guy who drank a lot of it and turned blue! :eek:

there is a LOT to the money story. here's a coupla good starts for more
of the inside story.......

Secrets of the Temple - How the Federal Reserve runs the Country
by William Greider.

another.....

Negotiable Instruments and the Payments Mechanism

by James V. Vergarl, Esquire formerly Senior Vice President and General Counsel Federal Reserve Bank of Philadelphia

published by the American Institute of Banking

one thing for sure: a "note" is not an asset, always remember that fact
and it will keep you in the clear. debt is being used to discharge other debts, nothing is ever "Paid" for. think "discharge of debt" and you will
get the picture. welcome to the unfunny money system of negotiable debt instruments.

Very good, Husky Man.
Also, there is the books, The Creature from Jekyl Island
And the Laws of Banking. Both are very good.
Money is only created by debt...

Personally, I wouldn't mess around in the commodities market until/unless I really knew what was going on. People tend to jump into gold/silver when they get nervious and drive up the markets temporarily. It really depends if you are looking for a long term investment or are trying to time the market. I'm surprised you're not looking for some long term real estate investments instead.

one thing for sure: your local banker isn't looking out for your
interests. they are looking out for the bank's interests. no
wonder our grand parents didn't trust banks. for good reason.

I am looking at long term RE, will probably buy some this year.

But I'd like to buy some silver just because.

Understand, I just think RE is much safer if you don't buy into a bubble and are willing to hold it long enough.

My holding period would be 30+ years so I should make out OK.

It would be hard to lose in RE over 30 years.

This I don't understand. Suzy Q pays back $157.50. But if all the money involved is part of the current pool of money, how was any created?

1) More money has to be printed in order to account for the natural growth in population. But if you print too much, then interest rates have to rise, and I'm going to suggest you take a college course in economics to find out why, since I'm just not that interested in typing it all out for you.

2) Very few, if any. Some countries don't have any gold at all, perhaps they could use a "goat standard" I suppose, but most countries use the current system of valuing currency much in the way stock is valued, the net asset value of the country is what determines the value of it's currency. The current net asset value of the United States is determined in a shorthand kid of way by simply looking at the Dow Jones numbers for the day. Using that as a way to look at the situation, the Dow stands about the same place it did in 1999, which means the net asset value of the United States decreased in the last ten years in relation to population growth and inflation. This in turn is reflected in the value of our currency, which has decreased a proportional amount in that time, to reflect the realties of America most of those on the American Right refuse to see. Paul is one of them. If we went on the gold standard, we would simply just start trading gold for cheap Chinese junk and gas, nothing would really change, we would simply be setting ourselves up for the next Great Depression when the price of gold either rose out of sight or dropped like a rock as we pushed all we had on the world market to purchase our last barrel of cheap oil. The secret to solving Dr. Paul's problem is not gold, it is increasing the net asset value of the United States. That is done by having an economy that produces things the rest of the world wants to buy, something we seem unable to do.

3) In the old days, banks printed their own money, redeemable in gold at their banks. The problem is, gold simply becomes a new variable in the equation. Scarcity of gold or a sudden increase in supply cause inflationary and deflationary pressures on gold prices, causing them to increase or decrease dramatically. Since the bank is the one left holding the bag, they can fail quite easily no matter what they do, one of the reasons we got off the gold standard. Prior to 1932, the US routinely suffered severe economic dislocations called "Panics", most due to disruption in gold and silver prices that caused bank failures. When a bank fails, lots of people get hurt, especially back then when there was no deposit insurance.

And to your last question, in the modern world, Dr. Paul's ideas are insane.

A note to HAT and others....

The long term RE thing really works if you stick with it. It is like building up a business slow since it takes some time to aquire assets, but if you have good renters then they will pay for your investment.

When you reach retirement you will be confortable but not wildly rich since all of your wealth will be tied up in RE. But this can be a good thing. A friend of mine is, by net weatth standards, worth millions. However, if he had it all in cash even he admits he would be broke after a few weeks of wild living.

As it is he is scraping by on just $200,000 a year. If his house and ranch were not paid for he would really be broke.

But it took him 30 years of buying, selling and repairing old houses and office buildings to reach this point. A divorce also set him back about $1.5 million, but into every life a little rain must fall.

Anyway, keep thinking long term and take a nice vacation now and then. It sure worked for that guy.

The Fed dictates that. They basically say, "Here is $500 go on and loan that out." From there that is how money is created. They give it to the banks with restrictions saying that they can use this money to loan out to customers. The "free" money can only be used in Bank's loan offerings and not for financing day to day stuff.

Stuff like this is only done at the Fed districts banks. Think of it as the banker's bank. From there it is sent downward to the private financial firms.

Thanks

What makes RE a good investment is once again, population growth. Sooner or later, supply will decrease and demand will increase.