My ongoing premise is the US is now in or near depression mode. It’s a fairly lonely stance to take because almost everyone believes the official economic numbers cast our way. That is a very costly mistake.

Any sustained recession with falling employment and production can start to look like a depression. We fit that description if you look at real statistics. Some pundits think that you have to have the same scenario as the “Great Depression” to qualify as one. That’s pretty shallow. Quite obviously the one in the 1930’s forward was “greater” than other depressions. Hello.

You don’t have to see execs jumping from tall buildings or hoboes gathering in camps to have a depression. Look the word up… preferably in an older dictionary.

The central planners in charge of our economy are still in denial that we’re even in recession. You and I, living in the real world, do not have that luxury. Our present environment clearly qualifies as depression. Only the degree of it is yet to be determined. Maybe it’s a mild depression? Some might call it merely a severe recession. Whatever you want to call it… it’s anything but pretty.

Semantics aside; all want to know how to financially survive this morass. IDE reader “Mike” recently asked… “I’ve been reading up on your previous articles in the archives, yet I fully do not understand what constitutes as tangible assets. Is it possible for you to do a series of articles on tangible assets?”

Good question, Mike. I’ll be brief here. We’re looking at items that are “substantially real” or “capable of being touched”. Gold or silver, in hand, are the most obvious examples. A piece of paper that represents a claim to gold or silver in someone else’s hands does not qualify.

You can hold a $100 bill in your hand but it has zero intrinsic value. It is an I.O.U. In fact it is an I.O.U. nothing. There’s nothing behind it but misplaced confidence and government mandates. We work for them, spend them and sometimes even save them mostly out of convention.

A few ‘tangible assets’ are:

1. Bullion- gold, silver, platinum or palladium coins or bars
2. Numismatic or rare coins
3. Valuable art
4. Collectables
5. Land or Real Estate (with little to no debt)
6. Miscellaneous

This is by no means a complete list. The general idea is to own items that have historically protected citizens in times of monetary excesses. None of these items can be manufactured by a simple stroke of the keyboard. Owning barrels of oil or truck loads of zinc isn’t practical though these are also tangible items.

The Fed is futilely attempting to inflate their way out of their current predicament. The expression is “inflate or die”. A coming article will expound on this premise.

Every elitist bailout is inflation by definition. A lot of banking cronies are deep under water right now. Those that don’t understand or recognize the inflationary process put themselves in financial peril. I tried to make a joke in a recent editorial about not having “unprotected finances” (like unprotected sex). Hopefully, a couple of our thousands of readers got the joke.

I was referring to protection via owning tangible assets. I was also referring to understanding the inflationary process and the jeopardy of holding only ‘paper’ assets.

Commodities, in general, tend to benefit in times of inflation. The non-Federal non-Reserve is pulling out all stops to bring it forth.

Here are a couple of charts for those that don’t believe commodities can appreciate during times of recession or even “prolonged recession”:

From John Williams’ Shadow Government Statistics website

The blue line shows a recessionary environment (negative growth) almost exclusively throughout the 2000’s. Does that look “sustained” to you? Now let’s look at commodity prices as represented by the CRB:

Obviously, commodities can appreciate during times of economic stress. They’ve done so for the better part of the last seven years. It just wasn’t an officially recognized recession. Chuckle.

As we saw last week, both gold and silver are real money. They thrive in times of monetary crisis. Whatever you want to call the present mess, recession or depression, it is clearly an historic monetary mess.

About that ‘protection’…

Invest Resourcefully,

Rusty

P.S. To let me know what you thought of today’s article, send an e-mail to: feedback@investorsdailyedge.com.