I believe that free markets are the most efficient and ethical way to organize human effort for the individual and common good.
Please bear with me, because this has important practical implications not everyone has thought through.
Accepting the free-enterprise system implies that markets—meaning the people, not the government—should determine what is used for money. They should also set interest rates and prices for all other goods and services.
After the collapse of the Soviet Union and the failure of so many other socialist economies around the world, this belief became less controversial. Few accepted it thoroughly, but the general idea was in ascendancy.
Unfortunately, today this trend has gone into reverse. There’s increasing noise about the rich getting richer while the poor get poorer. This is not a new complaint. Margaret Thatcher answered it brilliantly.
And yet, the politics of envy seems to have more and more sway over the minds of younger people.
What was once unimaginable—that the US could end up more socialistic than either Russia or China—is taking its first steps from nightmare to reality.
We can see this in the lineup of Democratic candidates for the 2020 elections.
Fortunately, many cogent thinkers have examined, explained, and illustrated the free-market thesis. Adam Smith, Ayn Rand, Murray Rothbard, F.A. Hayek, Ludwig Von Mises, Henry Hazlitt, Robert Heinlein, and many others have done so in the past. People like Doug Casey, Johan Norberg, Ken Schoolland, and many others are doing so today, so I won’t repeat all that work here.
I’m hopeful that reality, if not reason, will eventually prevail.
But I will stress that it’s important for people of goodwill to stand up and speak their minds.
Error must be opposed with truth.
Now, assuming you generally agree with this point of view, here’s the vital point I want to focus on:
Precious-metals companies and their shareholders provide the world with the most reliable and enduring form of money ever found.
This means that, far from being “evil speculators,” those of us who speculate in gold and silver stocks are part of Adam Smith’s invisible hand. We’re making the world a better place, delivering something essential to economic interaction in pursuit of our own profit.
That’s the theory.
Having visited hundreds of mine sites and mineral exploration properties around the world, I can tell you that the reality on the ground backs this up.
Well-run companies with ethical management have an enormous positive impact on local communities. And it’s not through demeaning handouts. It’s through honest work and opportunities for entrepreneurs to build other businesses that multiply the uplift the miners provide.
And while gold may not be in circulation as currency, it has never stopped being the most effective form of wealth preservation throughout the entire world. Even with fiat currency laws forcing people everywhere to treat worthless pieces of paper as though they had real, intrinsic value, gold remains a lighthouse on solid rock in the midst of all the storms in the world. This is a historical and present-day fact.
And when—not if—the market for money frees up again, gold will go back into circulation.
I say this is vital to keep in mind, because we’re surrounded by people who dismiss gold and revile speculators.
We must not buy into erroneous views about markets, money, gold, and speculation. If we let their negative thinking infect our own, we run the risk of developing a negative attitude regarding our own activities.
Allowing this incorrect view of speculation as ugly money-grubbing to seep into our minds can sabotage our own efforts, making us our own worst enemies.
Conversely, understanding that it is an error frees us to dedicate ourselves wholeheartedly to our success. Our minds limber up, get more creative, and stay more focused.
This is no mere abstraction.
Failing to expunge this error undermines the discipline I so often write about as being essential for successful speculation.
That’s why it’s so vital to understand that we’re the good guys here.
We can, as Franklin said, “do well while doing good.”
I stress this point because I know there’s a temptation to see philosophical fundamentals as irrelevant idealism. Writing about them is a waste of time. I should stick to more practical things like kicking rocks and looking for more great gold and silver picks.
But I don’t think I’m just being idealistic here.
I think it’s very impractical to imagine that coercing everyone into participating in a system where critical values are set by politicians can work out well for everyone.
Central planning didn’t work for the Soviets. It didn’t work for the Chinese either. China is not yet fully free, but the “Chinese miracle” is due to the government unleashing market forces. This is a historical fact with enormous practical consequences.
And I think it’s very unrealistic for investors and speculators to ignore their own psychology and to expect to have good results.
It may be unreasonable to ask people who just want to make money to think through the philosophical underpinnings of what they’re doing—but that doesn’t make it wrong.
George Bernard Shaw wrote:
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”
If it’s unreasonable for me to ask investors to check their fundamental premises, so be it.
My profit-motivated participation in the gold sector is no mere gold-bug idealism; it’s me getting paid for being part of the solution the modern world is groping toward.
And the same can be true for you.
Tuesday, July 9, 12:51pm, EDT, 2019