SHOULD HARD AS­SETS BE A PART OF YOUR FI­NAN­CIAL PLAN?

The Covington News - - BUSINESS - Mike Las­siter is a Char­tered Life Un­der­writer and Char­tered Fi­nan­cial Con­sul­tant. He is a Li­censed In­sur­ance Coun­selor and a Reg­is­tered In­vest­ment Ad­vi­sor. He can be reached lo­cally at 770- 786- 2781. MIKE LAS­SITER COLUM­NIST

Mike Las­siter is a Char­tered Life Un­der­writer and Char­tered Fi­nan­cial Con­sul­tant. He is a Li­censed In­sur­ance Coun­selor and a Reg­is­tered In­vest­ment Ad­vi­sor. He can be reached lo­cally at 770- 786- 2781.

FYI….. In­for­ma­tion that may be ben­e­fi­cial to you in your plan­ning…

Should Hard As­sets be a Part of Your Fi­nan­cial Plan?

In my opin­ion, ab­so­lutely. Let me draw on my Uni­ver­sity of Ge­or­gia his­tory de­gree and add some ed­i­to­rial com­ment to make my point.

The Fed­eral Re­serve Bank was cre­ated in 1913 at Jekyll Is­land. Since that time, the dollar has lost over 90 per­cent of its pur­chas­ing power and our na­tional debt has risen over 500,000 per­cent. When you in­clude un­funded li­a­bil­i­ties, our na­tion’s ac­tual debt has risen to over 100 tril­lion dol­lars. That’s not pretty.

Two other events have dam­aged our econ­omy badly dur­ing the past 50 years. Lyn­don John­son’s re­mov­ing sil­ver from our coinage to fi­nance his Great So­ci­ety Pro­gram and also the Viet­nam War has gen­er­ated sig­nif­i­cant long term debt.

The other sig­nif­i­cant event was re­moval of the gold stan­dard via an ex­ec­u­tive or­der from Richard Nixon. The Fed­eral Re­serve printed a lot of money af­ter World War II to re­duce un­em­ploy­ment. By 1970, for­eign banks held more dol­lars than the US had gold in re­serve. The Eco­nomic Sta­bi­liza­tion Act of 1970 pro­vided that US would no longer re­deem their pa­per dol­lars in gold.

Cur­rently, our coun­try is deal­ing with in­ter­est rates that clearly are ar­ti­fi­cially sup­pressed by the Fed­eral Re­serve. Fifty years ago, in­ter­est rates were less than 2 per­cent, then ris­ing to 16 per­cent by 1980. To­day, it’s very hard to find cur­rent in­ter­est rates over 1 per­cent for short term money. His­tory tends to re­peat it­self and I feel strongly that the in­ter­est cy­cle will too.

To wrap up to­day’s lec­ture, if you feel as I do, that you should own some sil­ver and or gold, what should you con­sider buy­ing? For gold own­er­ship, the Amer­i­can Gold Ea­gle, South African Krug­gerand and Canadian Maple Leaf are at­trac­tive. They all con­tain one troy ounce of gold.

Sil­ver is in con­stant de­mand for industrial us­age in­clud­ing photography, mil­i­tary, so­lar en­ergy, ap­pli­ances and the list goes on. The Amer­i­can Sil­ver Ea­gle is ex­cel­lent as are cir­cu­lated sil­ver coins, also re­ferred to as “junk sil­ver”. Th­ese in­clude pre- 1965 dimes, quar­ters and halves along with pre1935 sil­ver dol­lars. Th­ese coins are 90 per­cent sil­ver in con­tent.

If you wish to buy coins strictly for the bul­lion value, you should avoid coins that add a pre­mium for the coin col­lec­tor. That’s a fun hobby, but shouldn’t be used as an in­fla­tion hedge. Other items that are not good buys for bul­lion would in­clude older proof sets, com­plete sets of later date coins and ba­si­cally any­thing from the Franklin Mint.

It has been many years since I had any in­volve­ment in the buy­ing and sell­ing of th­ese items. If you have any in­ter­est in this type of in­vest­ment, please let me know and I will be happy to put you in touch with my long time rec­om­mended dealer. I ac­cept no com­mis­sion or fee for a re­fer­ral.

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