Hill’s Law of Economics
To continue with Napoleon Hill’s commentary on capitalism, he adds that the Law of Economics provides checks and balances for those who try to “get without giving.”
“There is but one dependable method of accumulating, and legally holding riches, and that is by rendering useful service. No system has ever been created by which men can legally acquire riches through mere force of numbers, or without giving in return an equivalent value of one form or another.”
He claims that the Law of Economics is “a law no man can beat.”
He says, “…it is far more powerful than all the politicians and political machines. It is above and beyond the control of all the labor unions. It cannot be swayed, nor influenced nor bribed by racketeers or self-appointed leaders in any calling. Moreover, it has an all-seeing eye, and a perfect system of bookkeeping, in which it keeps an accurate account fo the transactions of every human being engaged in the business of trying to get without giving. Sooner or later its auditors come around, look over the records of individuals both great and small, and demand an accounting.”
Growing up, my dad said this in a more succinct way, “what goes around comes around.”
Hill goes on to say, “The Law of Economics was passed by Nature! There is no Supreme Court to which violators of this law may appeal. The law hands out penalties for its violation, and appropriate rewards for its observance.”
Now, why talk about Capitalism and the Law of Economics on a coin blog?
Very simply, when times get tough, rare coins, bullion and commodities – including precious metals – increase in value.
Now, some pundits would have us think the nation’s economy has improved dramatically over the last few months. Others claim that gold and the precious metals have topped out and will level off or decrease from their current values.
On the other hand, other pundits claim “we ain’t seen nothin’ yet” for the economic challenges will get worse and the prices will increase.
Both extremes could happen, but the indications and facts lean more toward continued trials and tribulations.
If you’ve never read Think and Grow Rich or its been awhile since you read it, read a copy. (You can even find free versions on the Internet.) The parallels between the difficulties during the time he wrote the book and our challenges now are astonishing. Plus, his lessons for personal and business improvement remain timeless.
In the meantime, listen to the pundits – both the Negative Nellies and the Optimistic Ollies, but perform your own research into the facts before buying or bypassing those rare coins, that bullion or the commodities stocks.
Capitalism…interesting…
“For more than twenty years it has been a somewhat popular and growing pastime for radicals, self-seeking politicians, racketeers, crooked labor leaders, and on occasion religious leaders, to take potshots at Wall Street, The Money Changers, and Big Business.”
Sound familiar? Was it written today? By whom?
No, it was written by Napoleon Hill in Think and Grow Rich initially published in 1937. Interesting isn’t it? It could easily describe today’s world.
However, the paragraphs around the above statement are even more intriguing. First, he sets the stage talking about capitalism as the foundation of our prosperity.
“This is a capitalistic country, it was developed through the use of capital, and we who claim the right to partake of the blessings of freedom and opportunity, we who seek to accumulate riches here, may as well know that neither riches nor opportunity would be available to us if organized capital had not provided these benefits.”
Afterwards, he talks about the people taking the potshots at business – the foundation of what puts food on the table and clothing on the back.
“The practice became so general that we witnessed during the business depression, the unbelievable sight of high government officials lining up with the cheap politicians, and labor leaders, with the openly avowed purpose of throttling the system which has made Industrial America the richest country on earth. The line-up was so general and so well organized that it prolonged the worst depression America has ever known. It cost millions of men their jobs, because those jobs were inseparably a part of the industrial and capitalistic system which form the very backbone of the nation.”
“During this unusual alliance of government officials and self-seeking individuals who were endeavoring to profit by declaring ‘open season’ on the American system of industry, a certain type of labor leader joined forces with the politicians and offered to deliver voters in return for legislation designed to permit men to take riches away from industry by organized force of numbers instead of the better method of giving a fair day’s work for a fair day’s pay.”
He goes on to say, “Millions of men and women throughout the nation are still engaged in this popular pastime of trying to get without giving.”
Making adjustments for our country’s move away from an industrial focus, Mr. Hill’s description could easily represent today’s political, economic and employment environments.
Both business and Wall Street investment firms cause their share of problems in our society. However, wouldn’t it make more sense to work on those specific problems rather than break the system?
Without businesses, you would have to grow, harvest, prepare and preserve food for your table. Plus, you would need to grow, harvest and construct the materials for your clothing. Of course, you would need a water source to sustain life and a shelter to protect you from the elements.
Forget all the “toys” we enjoy today, the basic fundamentals to live – food, water, shelter, clothing – would be very difficult for the majority of people to acquire cost effectively without “business.”
The next time you agree with a pundit’s rant against business or capitalism, take a minute to think about how business supplies you with what you need to live.
Platinum – a conundrum
Did you know that platinum is an element on the periodic table with chemical symbol Pt and atomic number 78? The name platinum comes from the Spanish phrase platina del Pinto which translates to “little silver of the Pinto River.”
Of course, you can find platinum in numismatics in both coins and bullion metals. Platinum can also be found in jewelry. Interestingly, people allergic to other jewelry metals are often not allergic to platinum. Perhaps more important to the market, platinum can be used in a variety of existing and new technological industries.
Let’s look at how platinum has performed in the market over the last year.
As with any market, there are peaks and valleys even as the price moves upward. However, platinum doesn’t appear to have quite the same volatility as gold to the vagaries of the economic climate.
Now, let’s look at the five year chart.
Wait, that’s a big dip in 2008 that gold didn’t experience. But, most of the market collapse can be explained by the car manufacturers dumping a large part of their hoarded reserves of platinum. What would have happened to the market’s upward climb if they hadn’t sold such a large amount?
Look what happens to gold, now and historically, any time the dollar weakens or the economy becomes stressed. People turn to gold as their investment of choice and as a hedge against losing their investments. Perhaps people continue to think of gold as having monetary value even though our monetary system is no longer tied to gold.
However, what about platinum? Could it be that platinum has more consistent and longer term value?
Take a look at this article: The Rise and Rise of Platinum in 2010. Now, the author only mentions platinum being used for catalytic converters for cars but that shortchanges the many uses of platinum around the world today.
Yes, platinum is used for catalytic converters in diesel vehicles, whereas they now use palladium for catalytic converters for gasoline engines. Perhaps more importantly, platinum has many other uses in industry and in new technologies.
Platinum does not corrode, it acts as a catalyst, it melts at over 3000 degrees Fahrenheit, and it conducts extremely well. Those characteristics make it widely desired in manufacturing equipment and processes, as a catalyst in many chemical reactions, in a variety of electronics, for helping with petroleum refinement and in chemical and electrical situations where high temperatures are needed. That list, too, shortchanges the many and varied uses of platinum.
But, platinum can be difficult to find. Depending on the information source, gold can be found in three to six ppb (parts per billion) in the earth’s crust. On the other hand, platinum is found in .003 ppb. This means platinum requires much more ore (and mining of that ore) to yield the same amount of pure material as does gold. This speaks to the difficulty and the rarity of finding platinum
What happens when demand outpaces the supply? What happens when the supply becomes more and more difficult to extract? Very simply, prices go up.
Perhaps platinum coins and bullion could be an interesting investment.
As one article stated, “platinum has three important things going for it – it’s rare, valuable and in demand.”
Interesting reading:
Is it better to invest in gold or platinum?
Another study in contrasts…
Watching the gold charts can be entertaining, however reading the news and investment commentary about gold, precious metals and stocks trumps the charts’ amusement factor. It’s interesting to read the opposing views of the marketplace. Some are Negative Nellies and others are Optimistic Ollies.
For example, take a look at this Negative Nellie article: Gold and copper slump on China worries where the author talks about China’s activities to help their economic situation and how that helps our dollar and hurts the metals markets. Could it be the author is right or were his comments self-serving?
Taking a different viewpoint, another article, Gold: Weaker dollar to help raise gold prices, suggests gold could continue upward. “On expectations of lower interest rate in the US, the dollar is expected to weaken further. Weakness in the dollar will help gold prices as a weaker dollar will make the yellow metal look attractive for holders of other currencies. In 2009, the rise in gold prices was mainly backed by the weakness in the dollar. Gold prices could continue to witness an uptrend in prices and the bullish phase in the yellow metal could continue.”
Likewise in the commentaries, some people are bearish and some continue to be optimistic about the metals markets.
In Stocks are at THE Critical Line, this gentleman takes issue with the market bulls on several fronts. He thinks neither stocks nor metals should be considered bullish. For an interesting spin, he looks at the markets in “Gold Dollars” and shows how they performed in relation to each other. He concludes his analysis with “Given that Gold is in a corrective mode, I expect we’ll see Gold fall and stocks hold on or possibly grind a littler higher. However, even stocks are beginning to show major signs of duress.”
Now, again, let’s look at the other side. This commentary, Financial Elite’s Behaviour Has Opened Floodgates for Gold, takes issue with the economic climate and the political actions of our elected and appointed officials. However, he draws the semi-optimistic conclusion, ” We may not like what has happened, and still is happening, with the behavior of our politicians and the country’s financial elite but we can, and should, prepare now for the financial rewards their actions (and inaction) will bring our way. Just prepare for the inevitable, be patient as it unfolds and then enjoy your new found prosperity.”
So, who’s right? The Negative Nellies or the Optimistic Ollies?
Which are you?
Reminder-Coin Show Tomorrow, 1/17/2010
Join us tomorrow, January 17, 2010, for the monthly Greater Atlanta Coin Show at the Holiday Inn Select on Chamblee Dunwoody Rd. (Directions)
The coin show hours start at 9am and end at 5pm with free admission.
Also, for those of you who like sports cards and memorabilia, the North Atlanta Sports Collectibles Show coincides with the coin show this month. Their hours are from 10am to 5pm with free admission.
Some fun dollar facts…
Since numismatics also includes the study and collection of paper money, let’s have some fun with the lowly, but rather important, dollar bill.
Did you know?
- There are red and blue silk fibers woven into the linen and cotton blend – look closely in the white spaces on the bill.
- The black seal to the left of George’s portrait with the big letter in the middle identifies the Federal Reserve Bank that printed the bill (A = Boston, B = New York City, C = Philadelphia, D = Cleveland, E = Richmond, Va., F = Atlanta, G = Chicago, H = St. Louis, I = Minneapolis, J = Kansas City, K = Dallas).
- The small number just to the left of the black seal also denotes the Federal Reserve Bank. This number can be found four times on the front of the bill. For an Atlanta bill, 6 represents F, the sixth letter of the alphabet, and F represents the Federal Reserve Bank in Atlanta.
- Some people think there an owl or spider perches on the front of the dollar bill. Get a loupe or a magnifying glass for this one. First, look at the large “1″ in the upper right corner. Just to the upper left of the “1,” the owl sits on the concave curve of the surrounding shield.
- On the back of the bill, the circles with the pyramid on the left and the eagle on the right come from the Great Seal of the United States.
- The founding fathers approved the Great Seal of the United States in 1782. Thomas Jefferson, John Adams and Ben Franklin provide input into the design of the Great Seal of the United States.
- The Latin “ANNUIT COEPTIS” above the pyramid means “God has favored our undertakings.”
- The second Latin phrase under the pyramid, “NOVUS ORDO SECLORUM,” translates to “new order of the ages.” Working on the Great Seal, the statesman, Charles Thomson, proposed the phrase to represent the beginning of the new American era that started with the signing of the Declaration of Independence in 1776.
- On the largest step of the pyramid, the Great Seal includes the Roman Numeral, “MDCCLXXVI.” This equates to 1776, the year of the “NOVUS ORDO SECLORUM.”
- Thomson offered the pyramid shape as “sturdy and enduring,” but he did not explain the unfinished state. Many think it represented the unfinished state of the country.
- The thirteen steps included on the pyramid represent the original thirteen colonies.
- Above the pyramid, the “Eye of Providence” visually signifies “ANNUIT COEPTIS” or the eye of God.
- The eye symbol has origins in ancient Egypt.
- On the right, in the seal above the eagle, “E PLURIBUS UNUM,” translates to “Out of many, one” and represents the thirteen colonies coming together into one entity.
- In the eagle’s talons, he holds arrows on the right and an olive branch on the left signifying war and peace.
- The Great Seal includes several representations of the number 13 for the original thirteen colonies. Thirteen steps on the pyramid, thirteen arrows in the eagle’s talons, thirteen leaves and thirteen olives in the olive branch held by the eagle, thirteen stripes in the shield on the eagle’s chest and thirteen stars above the eagle. Some people even count the letters in ANNUIT COEPTIS and E PLURIBUS UNUM as thirteen to represent the colonies.
- In addition, in the green Department of Treasury seal on the front of the bill, thirteen stars march across the shield in the chevron or upside down “V.”
- Alson, there are groups of leaves and fruits on either side of George’s portrait consisting of eight leaves and five fruits.
For even more fun, you can track your dollar bills on the web site, Where’s George.
Have fun!
A Study in Contrasts
Do you ever take a look at the Kitco commentaries and news stories? They include articles and news from a variety of sources and a variety of backgrounds.
This story from the Irish Independent, The curious rise of gold…, provides comments on gold investing in the Ireland markets. They provide quotes from two separate investment houses. Mr. Connelley from Citadel says, “For now, I would say tread cautiously, and if investing in it, do it in very small size.”
Likewise, Eamon Porter, principal at Aspire Wealth Management, believes gold will fall and claims the following, “Leaving aside consumer-led demand for jewellry and specialist electronic components, many investors look at gold as a hedge against the dollar. If the dollar strengthens, then the gold price will start to fall back.”
Interesting, the Chinese have a very different view from the Irish on investing in gold. In this story, Gold price to be hit by declining mine deposits, “The global supply of gold could become of increasing importance in light of recent suggestions that the Chinese are buying up the precious metal at record rates.”
They quote Xiam Zang, a bullion dealer in Beijing as saying, “Chinese people are buying more gold these days. In fact, many people are now convinced that gold is the best investment asset.”
As for the Americans, in his Nerves of Clay commentary, Lawrance Roulston states “History suggests that the gold market should correct after a spectacular rise such as we enjoyed over the past three months. However, the world is very different now than at any time in the past. Many investors are still nervous, or even full-on terrified. Gold provides comfort to those who have lost faith in currencies and other paper assets.”
Similarly, Eric and David Coffin comment in 2010 – The Tricky Bit, “The gold price will fluctuate against the Dollar, but it is increasing held as a hedge against all currency defamation. Even if we think some of the romanticism about gold is overdone, its supply can’t be conjured out of thin air like fiat currencies. This simple fact has attracted quite a few converts to holding some bullion as a portfolio anchor. We expect continued strength and perhaps new highs in 2010 because of this. Importantly, at current prices gold mining can finally function well.”
In his somewhat acerbic commentary on his Journey into Economics, Howard Katz talks of people who refuse to see economic events realistically. Though, he ends with, “Fortunately, we live in a world which is inherently based on justice. Those who see reality as it is are rewarded. Those who deliberately close their eyes to reality are punished. So it was in the ‘70s. So it will be today. History does repeat. It is repeating as we speak. Fantastic moves occur in the financial markets. If you are on the right side of them, you prosper. If wrong, you lose.”
In the global market, who is right? The cautious Irish, the impetuous Chinese or the analytical Americans?
Of all the quotes above, a favorite says, “However, the world is very different now than at any time in the past.”
Your best course of action regarding the economy and investing is to observe, research, learn, ask questions and don’t believe everything you see and hear without further investigation and consensus of several sources.
Numismatics
Did you ever wonder why coin collecting is called numismatics?
Let’s look at the definition (from www.dictionary.com):
–noun (used with a singular verb)
the study or collecting of coins, medals, paper money, etc.
Looking back in time, “numismatics” as the “study of coins” came into being in 1829. The noun was derived from the adjective “numismatic” which meant “of coins.”
In 1792, “numismatic” came from the French “numismatique.” The French term originated in 1579 from the Latin “numisma” (gen. numismatis) meaning “coin, currency.”
The Latin term began from the Greek “nomisma” meaning “current coin” and literally “what has been sanctioned by custom or usage.”
The Greek “nomisma” derived from “nomizein” which means to “have in use, adopt a custom.”
“Nomizein” came from “nomos” meaning “custom, law, usage.”
“Nomos” which sounds nothing like the “numismatics” had even earlier word ancestry.
And, being somewhat of a skeptic, how do we know this is true?
But back to the current definition, people mentally associate numismatics with only coins. From the definition, the term includes paper money, medals, gems and other monetary representations.
However, one internet source did say that even though one type of people used horses as their money, horses are not included in numismatics. However, those same people used lambskins as change, and the lambskins could be included in numismatics.
Maybe it’s simply that horses die. Their decomposing bodies would be difficult to collect and study. On the other hand, lambskins, provided they are properly protected, can last through time.
But, what if someone studies the fact that those people used horses and lambskins as their currency? Wouldn’t that be the study of money and be included under the definition of numismatics?
That’s a quandary….could be semantics…
Either way, hope to see you at the “numismatics” show on Sunday, January 17, 2010.
Non-Coin Related Kudos…
Are you familiar with Larry Winget, The Pitbull of Personal Development? In his book, “Shut Up, Stop Whining & Get a Life,” he describes basic business lessons in one of his chapters.
In particular, he claims the most important lesson of all for work and business is “Do what you say you are going to do, when you said you were going to do it, in the way you said you were going to do it. No excuses. No pointing the finger of blame elsewhere. No nothing! Just keep your word. Period. Be the person your co-workers and your customers can put their trust, faith, and confidence in – without exception.”
Now, wouldn’t day to day life be much easier if everyone lived by that rule? Many people don’t, especially contractors, but we found someone who does.
Fred Dague of Premier Electrical Contractor and Consultant Inc. lives by that rule. At least every time we have used his services, he has always – I mean, ALWAYS – done what he said he would do when and how he said he would do it.
We’ve utilized Fred’s services several times now for small scale and large scale jobs. His services are not the most expensive for a licensed electrical contractor, but neither is he the least expensive.
His stellar work ethic, though, means Fred always comes to mind when an electrical need arises.
If you are in the metro Atlanta area and need electrical assistance, give Fred a call (770-428-1351). He’s experienced, he’s pleasant, and he always does what he says he’s going to do.
Coin Show – Reminder!
The next Greater Atlanta Coin Show will be this Sunday, January 17, at the Holiday Inn Select on Chamblee Dunwoody Road. For directions, click here: Coin Show – Location & Directions. The show starts at 9am and continues until 5pm, however several dealers begin their trek home earlier. (In other words, come early for a full bourse.) For more information about the coin show, contact Bob O’Brien via email at atlcoin@hotmail.com or via his office telephone at 770-772-4359.
For those of you who are also interested in sports collectibles, the North Atlanta Sports Collectibles Show will coincide with the Greater Atlanta Coin Show on Sunday, January 17 at the Holiday Inn Select. The Sports Collectibles show begins at 10am and ends at 5pm. For more information, contact the Sports Collectibles Promoter Frank Moiger by telephone: 678-644-6057 or by email: utvol69@aol.com
You can experience both free admission shows with one trip.
