How to Navigate Multiple Depressions with Your Sanity Intact
I’m a Depression kid. My parents were born during the Great Depression and I was born in 1968, a year which sowed the seeds for the depression of the 1970s. Although I am 46 years old now, I still, at heart, have a Depression-era mindset when it comes to the future.
No one likes to call the 1970s a depression, but that was the case. It was different from the Great One because it was an inflationary depression rather than a deflationary one. It was the first depression managed by the global cadre of central banks after delinking the monetary system from gold.
So, I grew up during a time of massive food and energy inflation. We were the quintessential middle-class family. Second-generation Italian immigrants, my parents — a nurse and an NYPD sergeant — worked hard, valued stability and thrift, and most importantly, saw their standard of living crash for an entire decade.
Those experiences stuck with me during 20 years of the bull market in the U.S. dollar, leaving me with a healthy (some would say unhealthy) distrust of power and politics. I distrusted them so much, I ignored them completely.
I left home at 18, studied chemistry and literature at the University of Florida, where I met my wife, and began my love/hate relationship with markets and money during the dot.com bubble. I took two introductory courses in economics. I don’t remember them being overtly political like those same classes are now.
Like many people, I lost my mind — and, thankfully, only a few thousand dollars — in the dot-com crash.
But it was that loss that prompted me to search for real answers. Nothing I heard in the financial press made any sense. What made sense was the contrarian — at that time — view of the Austrian School. We know of them now thanks to Ron Paul’s presidential run.
I quickly realized that this was a proper, logically consistent, if politically untenable, worldview. It was hated, but correct. Contrarian, but sound. And it led me to rethink everything I thought I knew about the world.
I became very conservative in my approach to money, falling back on those difficult years growing up. It was the human cost of credit-induced boom/bust cycles that galvanized my view. Gold and silver were the investments of choice because the monetary system is unsustainable.
I began buying silver at $4.25 an ounce in 2001. Gold soon followed, when more funds allowed, at $345 an ounce. In 2003, my wife and I got in front of the Florida property bust by buying 15 acres of land and offsetting the high cost of it by building our home ourselves.
I put the equity from my 50-year-old house into building the new one. I financed the build with zero-percent credit cards and rolled it into a low-interest, short-term fixed-rate mortgage. I advised my mother to sell her apartment in South Florida at the top of the market in 2005 and have a house built cheaply.
Since then, I have added to my skills through investments in both human and physical capital. My property today is a small goat dairy which provides us with high-quality, low-cost food, maintains our health both physically and emotionally, and teaches my daughter valuable lessons in resource management, lessons I wish I’d gotten as a child.
The compounded return on investment from a dairy goat I have is not equal in the financial markets. This is especially true as we navigate this current depression, which persists despite the trillions of dollars goosing the statistics back to baselines.
Resolute Wealth Letter is not your run-of-the-mill, gloom-and-doom, gold-bug advisory. I see this period in history as a singular opportunity for individuals to change the course of their lives through prudent asset management and timing. Making sense of central bank policy built on faulty models, while politicians scramble to lay off the blame, is a crazy game we all try to play.
Resolute Wealth Letter takes the position of “better to be a few months early, than a day late.”
The next leg of the gold bull market will be a reflection of the greater opportunity in under-invested commodities and natural resources which are growing scarce. As capital formation shifts from west to east, so too will global money flows. But at the heart of that will be an unprecedented need for the basics of human civilization.
Investing in things that are scarce and in high demand is at the core of Resolute Wealth Letter’s approach. So, I’ll look around at the whole of these markets seeking that right combination of solid income growth sprinkled with opportunities for explosive growth in the junior resource sector.
But the first thing we’re going to do is not lose money by being rigid. But how we travel that road together is just as important.
I live by the principles espoused within Resolute Wealth Letter, believing that the best way to convince people you are correct is to “‘walk that walk.” I’m overjoyed that you have considered joining me in that quest.