High Interest Savings

It has been my observation that global economic conditions have divided investors into two general categories; reactive and proactive. Reactive investors are the ones that I have genuine sympathy for, as they choose to buy into all of the rhetoric and double talk from Wall Street and Washington, and are willing to wait for the great global economic machine to fix itself. Some reactive investors have conjured the courage to divest in stocks and bonds, but have shifted their investment dollars into savings or checking accounts or CDs in the hopes that other avenues for high interest savings will miraculously present themselves, and cure their financial woes. I wish them well.

Conversely, proactive investors have taken the initiative of converting their stocks and bonds investments into precious metals. In times like these, when the dollar is devalued due to massive overprinting by our Treasury Department, gold has historically increased in value. Such was the case in the 1970s, when the dollar lost over 60% of its’ spending power, while stock returns fell far behind the rate of inflation. Bondholders fared no better, as interest rates were hiked over 100 times during the same time frame. Those who were invested in gold early in the 1970s made over 1000% on their investment, which more than compensated for any so-called high interest savings that they may have invested in. Today, the world’s top economists and financial analysts have already professed that the economic machine is broken, and will take years to repair. There really aren’t any places to put dollars where so-called high interest savings could yield returns that could keep up with the inflation that has already begun. That is why so many proactive investors are taking control of their own financial destiny by investing in precious metals. If projections for gold prices are even remotely accurate, the mere thought of so-called high interest savings will make for some pretty hardy giggles from proactive investors.

Joseph Morton

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