Metals aren�t that mighty
Jumping aboard the gold and silver train today is a high-risk proposition
Dear Mr. French,
   Regarding �The Greater Depression� [July], The time to buy juniors, bullion and coins was back when the majors were all selling forward their production and Bob Bishop folded up shop on his Gold Bug newsletter (along with nearly everyone else who was still pushing the metals in the aftermath of the 1980 top). When was that? I think it was around 1999.
   I read Casey�s 1993 book (in 1993) and was captivated. It still has about the best philosophical treatment of �little l� libertarianism I�ve ever seen. I bought stocks, bought metals, subscribed to his newsletter, etc., etc., etc.
   And I lost money year after year until I capitulated.
   I learned the hard way that in investing as in battle, rarely do adjustments in tactics make up for an initially poor deployment of forces (capital). If you miss the bottom, you�ll have a hard time getting on the train. You will inevitably be faced with questions of �how high is up?� 
   Gold investors are still down about 50 percent in inflation-adjusted terms on gold despite a 50-percent loss in dollar value these past 28 years. The metals have punished their adherents and true believers. They are anything but inflation hedges. The metals are subject to all sorts of fundamental rationalizations on why they have to go up. Such reasons are fantasies. I see them all the time.
   There may be a future when holding gold, silver or other metals will be a low risk, high-reward proposition again. It may occur in a few short years, if prices pull back 40, 80 or even 90 percent. But jumping aboard that train today is a high-risk proposition. The last time gold was cheap was more than seven years ago. Today the metals are just one more thing fiat money (actually credit/leverage, not currency) is sometimes thrown at, along with housing, junk bonds, energy and agricultural commodities. All these markets have more or less risen and fallen in sync for years on tides of central-bank liquidity.
   The tide is going out. I think it�s dangerous to bet that the metals (and miners) won�t be affected by its disappearance.
   Just my $0.02
David Calderwood

LW�s �As Good as Gold� article
remains a legend online
Dear Mr. French,
   H.L. Mencken also predicted that sooner or later, the voters would elect a �true representative,� thus ensconcing a moron in the White House [�Votes of Idiots,� July].
   Your point is well-taken, and unarguably manifest in the current occupant at 1600 Pennsylvania Avenue. The sad truth is not confined to the issue of native intelligence but to the epidemic of arrogant, aggressive stupidity reflected in our culture and in our politics. There�s Cheney famously advising Sen. Leahy (and the rest of the world for that matter) to perform a physically impossible feat, and Bush searching under the coffee table for the �missing� WMDs. The list goes on through the farcical popularity of American Idol.
   The film Idiocracy posits a future wherein even today�s average Joe will be looked upon as the smartest guy in the room. Watching said film is akin to fingernails on the blackboard.
   In the meantime, here in Northern Virginia, roughly half the new class at the most intellectually challenging public high school is Asian-American. So there is hope from families who actually value intellectual discipline and academic excellence. One can only trust that the brains of the masses will not further atrophy and that sufficient wit and wisdom will be present to prevent a complete transition to a Banana Republic where that which is broken remains broken for lack of knowledge.
Stephen W. Davis
Annandale, VA

LW Cartoonist  
keeps us grinning
Dear Mr. Zigler, 
   First, I applaud Liberty Watch and I am a consistent reader. It is a staple on my research list. Second, I appreciate the exposure you give my editorial cartoons, and I�m happy they have a routine platform in your pages.
   Good luck with all your efforts. These are interesting and in many ways alarming times.
Bob Gorrell


CORRECTION: Liberty Watch incorrectly identified Steve Sebelius as a student of Murray Rothbard in August�s �From the Editor� column. Sebelius only covered Rothbard as a journalist for the Las Vegas Sun.