BONUS CHAPTER: RELENTLESS WEALTH PROTECTION AND APPRECIATION
I’ve saved something important for last. Because if you follow all my rules, you may very well become wealthy, famous and successful. That’s great news, right? You may even become a legend in your field. But it’s all for nothing, if you don’t figure out how to protect “what’s yours.” All the income and assets you acquire are for nothing if you can’t protect them, if you can’t save them and your family from economic crisis. Getting rich is one thing. Staying rich is even harder! Here is how you stay rich.
In all my years in school and college, no one ever taught me this lesson. I wish I could go back in time and learn, at the start of my career, about the two most relentless investments in the world. These two unique investments relentlessly protect “what’s yours” against all forms of economic crisis. And they relentlessly appreciate in good times and bad like no other investment or asset. These two amazing relentless investments are Precious Metals (gold and silver) and Rare Fancy Color Diamonds.
I’ll tell you more in a moment. But first let’s take a detailed look at the current economy and why I believe every reader of this book needs to quickly move to protect their income, assets, and fortune just as relentlessly as they earned it.
This country (and most of the world) is in serious economic trouble. Debt is exploding and getting worse every day. Governments are desperate to spend more money, print more money, as well as add to the debt, in order to try to keep the economy afloat. Yes, stock markets are dramatically higher, but that too is based on debt (printing fake money), which you and your children owe back.
The same exact debt that “saves” our economy short term, will destroy it long term. No nation in world history has ever recovered from a debt-to-GDP ratio of 100 percent or higher. America is now over that 100 percent threshold (much higher, according to some economists).1
But this is not a uniquely American problem. Global debt is almost three times larger than the entire world economy.2
We are heading for a cataclysmic event—debt crisis, dollar crisis, currency war, world war, stock market implosion, or widespread economic collapse.
Before I get to the personal solution for each of us, allow me to paint a picture of how bad the debt situation really is.
SOBERING FACTS ABOUT THE DEBT
Obama is on track to add $12 trillion to the national debt—a staggering three times more than Bush added in his eight years as president:3 the “marketable debt” of the U.S. government has increased by 106 percent under Obama, increasing from $5.749 trillion at the end of January 2009 to $11.825 trillion at the end of January 2014, according to the U.S. Treasury.4
If the U.S. debt was stacked in dollar bills, it would stretch 1.1 million miles into space, five times the distance from the moon to the earth.5 The national debt now exceeds the entire output of the U.S. economy.6 The dangerous debt-to-GDP ratio is now over 100 percent.7 The national debt jumped $328 billion in one day under Obama, more than the entire budget deficit for the year 2007 under President George W. Bush.8
Total public and private debt in advanced economies across the globe is 30 percent higher now than before the Lehman Brothers financial crisis in 2008.9 Student loans are on track in two to three years to be DOUBLE that of credit card debt.10
Because of all of this debt, the U.S. credit rating has been downgraded for the first time in history. Expect many more downgrades to come.11
The worst news of all—interest rates are being kept artificially low. They are the lowest in history. Any increase in interest rates in the future would result in just interest on the debt exploding to levels that would eat up the entire budget and send the U.S. economy into a death spiral.
• In January 2001, when President George W. Bush took office, the Treasury was paying an average interest rate of 6.620 percent on its marketable debt.
• In January 2009, when Obama took office, the Treasury was paying an average interest rate of 3.116 percent on its marketable debt.
• In January 2014, according to the Treasury, the U.S. paid an average interest rate of only 1.998 percent on its marketable debt.12
Do a little basic math. That means that the average interest rate on the U.S. government’s marketable debt is now less than a third of the interest rate we were paying in 2001, when our marketable debt was only about 25 percent of what we owe now. If interest rates were to rise up from the historically low rates they are at now, our economy would be destroyed; the assets that you’ve worked for your entire life would become worthless; and our children’s future would be doomed.
PART I: PRECIOUS METALS
It’s time to introduce you to the antidote to debt: the relentless protection and appreciation of your money. We start with Precious Metals (gold and silver). Precious Metals are the perfect financial instrument for a book called The Power of RELENTLESS. Because gold and silver are quite simply the most relentless forms of currency in world history.
Nothing has ever stopped the relentless appreciation of gold—not presidents, or entire countries, or central banks, or the world’s most powerful banking families, or the experts on CNBC (who slander gold at every opportunity), or even deceptive billionaires with an agenda like Warren Buffett (who also slanders gold at every opportunity). In the end, gold always wins. That’s The Power of RELENTLESS squared.
There are many reasons to lose sleep at night. Our country is headed in the wrong direction. The things that have destroyed every country in world history are big government, big spending, big taxes, big entitlements, and big debt. That last one (debt) is the poison of all poisons. I’ve already laid out the debt tsunami that America is facing.
Over the past 100+ years (since 1913 when the Fed was founded), if you kept your money in dollars, $1,000,000 in cash is now worth $20,000 (in today’s buying power, as of the writing of this book). The dollar has declined in value by about 98 percent during that period.
But if you had kept your assets in gold, $1,000,000 today would be worth about $60,000,000.
I don’t know about you, but my math says $60 million beats $20,000 every time!
Think of the difference in what you’d leave your family on the day you die. $20,000 is basically worthless—it doesn’t even provide a down payment for a cheap condo. But leave your family $60 million and they’re set for generations to come. Your grandchildren’s grandchildren will still be thanking you one hundred years from now.
If you’d prefer a more short-term outlook, let’s look at the year 2000. If you kept your money in dollars since the year 2000, $1,000,000 cash is worth about $660,000 (in today’s buying power, as of the writing of this book) versus over $4,000,000 if you had converted paper dollars into physical gold (as of the writing of this book).
Gold is the best long-term asset to hold in the twenty-first century:
• “Gold is up 3500% since 1970!”—London Telegraph13
• “Gold has DOUBLED versus stocks since 1967!”—Seeking Alpha14
• “Gold has outperformed stocks for 40 years!”—Zero Hedge15
Why the forty-year demarcation line? Because up until 1967 gold was pegged to world currencies. Once France dropped ended that in 1967, gold has outperformed stocks over almost every period in the past forty-seven years, except for the tech bubble (from 1997 to 2000). Overall since 1967, stocks were up 18.45 percent versus gold’s rise of 37.43 percent.16
From January 1, 2000, to Dec 31, 2013 (fourteen years), gold outperformed every other asset class by a mile. Gold beat stocks, bonds, real estate, and even inflation. By how much? The NASDAQ was up over those fourteen years by 16.40 percent. The S&P 500 was up by 56.50 percent. Gold bullion was up by 446 percent.17
Now since 2013 gold has been down. But as my investing hero Benjamin Graham said, “Buy low, sell high.” Buying gold or silver each time they dip is my definition of a bargain.
What accounts for this over-the-top success for such a long period of time? It’s actually pretty simple. Gold is more than an investment, or a form of currency. It’s “wealth insurance.”
You don’t expect to die today, yet you pay for life insurance. You don’t expect to be sick today, yet you pay for health insurance. You don’t expect to wreck your car, yet you wouldn’t even think of getting into your car without auto insurance. Insurance protects you from disaster (an unexpected event that could wipe you out).
Well, buying gold is “wealth insurance”—it protects you from overall economic disaster. There are many forms of economic disaster. There are the obvious kinds (war, tragedy, terrorism). But far worse over time is a more subtle form of economic disaster—reckless, irresponsible, spendthrift, and corrupt politicians and governments. The more they spend, the more debt they create. That debt destroys economies and creates economic crises that erode the value of paper money (the dollar) and eventually leads to the collapse of dominant empires (think of the Greek and Roman Empires).
Gold is your hedge. While paper money issued by reckless governments declines in value, gold holds its value. That’s what has happened since 1913, since 1967 and since 2000. But that’s all short-term thinking. Gold has served as wealth insurance for thousands of years. It has successfully held its value during major wars, economic collapses, debt crises, hyper-inflation and unrest in the streets.
While the typical investor has slowed their purchase of gold since 2013 (the first down year since 2000), the smartest, most sophisticated investors in the world have increased their gold buying—central banks.
Central banks around the world bought more than $3 trillion of physical gold in 2013.18 All that buying by central banks in 2013 followed a record buying spree in 2012 that saw central banks buy more gold that year than in all the years since 1964 combined.19 In 2014 central banks did it again—they went on a gold-buying spree. They bought 477 tonnes of gold, 17 percent more than in 2013 and the second most gold bought in a year in the past half century (topped only by 2012).20
So why isn’t any of this in the news? Why isn’t it a headline at CNBC? Why does no one teach you about gold in high school . . . or college . . . or even business school?
Why does no one mention that the antidote to a debt crisis is gold?
Here’s the most important question of all: If gold rose over 400 percent from 2000 to 2013 because of the massive debt being accumulated by the U.S. government (with its out-of-control spending), why wouldn’t gold be an even better investment now that debt is dramatically higher both in America and around the world?
If you understand math . . . and you’ve read history . . . you have to understand that this won’t end well. History repeats, and we are on a collision course with tragic history.
All the “Principles of Relentless” are worthless if the economy implodes; your assets are destroyed or devalued to almost nothing; and you and your family are left helpless. All your relentless work, relentless energy, relentless optimism, relentless risk, relentless branding, and relentless YESes will have been for nothing.
But I come bearing gifts! I have the solution. This is the powerful one-two punch that protects “what’s yours” from crisis and disaster, while relentlessly appreciating in good times and bad.
The first half of my arsenal is precious metals (gold and silver). I call it “wealth insurance.” I could not sleep at night without owning gold and silver as my insurance policy.
Here are just a few crises that would keep me up late at night if I didn’t own “wealth insurance.” I own gold and silver just in case . . .
In case the over-priced stock market suffers a 1929-like crash, or a long steady decline . . .
In case of a debt crisis, or economic collapse . . .
In case of massive hyper-inflation combined with a dollar crisis . . .
In case World War III breaks out with ISIS in the Middle East . . .
In case World War III breaks out between the U.S. and Russia over Ukraine . . .
In case World War III breaks out between the U.S. and China over Taiwan . . .
In case World War III breaks out over an Iranian nuclear attack on Israel . . .
In case of unrest in the streets of America . . . or bank runs . . . or capital controls . . .
In case of a massive terrorist attack on U.S. soil . . .
In case of an EMP (Electro-Magnetic Pulse) attack on America’s power grid that would shut down the internet, banks, businesses, credit cards, electricity, pumps at gas stations, etc. . . .
In case of a massive overdue earthquake in California that will make the costs of repairing New Orleans after Hurricane Katrina look “dirt cheap” in comparison . . .
In case of a health crisis in this country like Ebola, or a deadly flu pandemic that shuts down commerce, tourism, travel, and strains the healthcare system to the breaking point.
In case any of these “Black Swan” events happens, then owning even as little as 5 to 10 percent of your assets in gold and silver could save your entire life savings (by replacing the value of your falling stocks, bonds, and real estate assets).
Knowing how many bad things could happen, the ownership of precious metals should be a crucial part of any portfolio. Keep in mind that U.S. tax law now allows you to own precious metals inside your IRA accounts.
Gold and silver are about safety and security. Gold and silver give me “staying power” in case of disaster or tragedy. Gold and silver protect my family, income, and assets. Gold and silver help me sleep at night. Gold and silver often appreciate while other forms of investment are in decline or collapse. And that’s the very definition of The Power of RELENTLESS.
For more information on how to purchase precious metals (gold and silver), contact THE authority that I trust:
Swiss America
Website: www.RelentlessGOLD.com
PH: 800 519-6270
Dean Heskin is the President of Swiss America
Dean’s personal e-mail: Heskin@SwissAmerica.com
RELENTLESS PROTECTION AND APPRECIATION, PART II: RARE FANCY COLOR DIAMONDS
But I’m not done yet. There’s a Part Deux to wealth protection and appreciation. Precious metals have a “kissing cousin.” I’m talking about diamonds. Not just any diamonds. We all know that traditional diamonds—like a wedding ring—generally go down in value after you walk out of the showroom (kind of like a car).
But Rare Fancy Color Diamonds are a unique asset class all their own—some have called them “indestructible wealth.” Because of their rarity, much like rare collectible coins or rare works of art they have proven to hold their value or dramatically appreciate during times of great economic crisis, instability, and uncertainty.
History shows that fancy color diamonds have been one of the best-performing assets during periods of inflation and currency devaluation. Since formal records began in the 1970s, prices for the highest grades of color diamonds have increased in value by an average of between 10 and 15 percent per year (with rarer colors and higher grades enjoying the greatest appreciation).21
Perhaps more importantly, the appreciation of fancy color diamonds has no direct correlation to stock market or bond prices—thereby giving investors true diversification.
“Rare” is the key. Regular coins that your child keeps in his piggy bank—pennies, nickels, dimes, quarters—never go up in value. A nickel is worth exactly five cents. Nickels don’t go up in value. But rare collectible coins are a very different breed. Just one rare coin from the late 1787 sold at auction in 2014 for $4.58 million. The coin contained 26.66 grams of gold, worth about $400. That’s the importance and value of “rarity.”22
In 2013, a 1794 silver dollar sold for $10 million at auction. An ordinary dollar (the kind you keep in your wallet) may not go very far anymore, but a rare collectible dollar has ten million times the value!23 Don’t you wish in all your years of schooling, someone, anyone had taught you about the value of rare collectible assets?
Well, it’s not too late. That kind of rare value and appreciation is offered by Rare Fancy Color Diamonds here and now. In fact eight of the eleven most expensive diamonds ever sold at auction (at famous auction houses like Sotheby’s and Christie’s) are fancy natural rare color diamonds.24
In late 2014 the “Fancy Color Diamond Index” showed a 167 percent appreciation of Rare Fancy Color Diamonds since January of 2005. This compared to a 58 percent increase in the Dow Jones Industrial Average, 63 percent in the S&P 500, and an 82.1 percent increase in London real estate prices. Pink diamonds showed the greatest appreciation—up 360 percent over the past nine years—clearly a hard asset that you can appreciate, while it is appreciating!25
Since 2007, over fifteen price records have been broken—such as “highest price per carat ever paid at auction” and “highest price paid for any diamond and any jewel sold at auction”—all by Fancy Color Diamonds.26
Rare Color Diamonds are on fire, with record prices being achieved. For example twenty years ago a fancy intense pink color diamond sold for approximately $70,000 per carat. Today that same diamond is worth $500,000 per carat. The highest price ever paid for a color diamond was achieved at Sotheby’s in 2013 when a pink color diamond sold for $83.2 million.27
Bloomberg, FOX Business News, CNBC, and media across the globe are all talking about the growing trend of investing in Rare Fancy Color Diamonds.28
The head auctioneer of Christie’s, Rahul Kadakia, says, “Anyone who bought diamonds in 2004, by 2014 noticed 200 percent appreciation.”29
Leviev Executive V.P. Lisa Klein reported on Fox Business, “Rare Color Diamonds have averaged 15% per year for the last decade.”30
Naval Bhandari of Sotheby’s Diamonds stated that Rare Color Diamonds have averaged about 10 to 15 percent appreciation per year since record keeping began in the mid-1970s.31
When anyone acquires Rare Fancy Color Diamonds they should come graded and certified with GIA grading papers and accompanied by a GIA graduate gemologist appraisal.32
If you are looking for a non-correlated inflation hedge product that offers Privacy, Performance, Portability, Stored Wealth, Legacy Transfer and Long-Term Growth, then this is the place to be.
One tiny Fancy Color Diamond, about the size of a button, fits in your shirt pocket. It has a weight that is virtually undetectable. You can fit literally millions of dollars of fancy rare color diamonds in an envelope that weighs about two ounces.
Rare Fancy Color Diamonds are a one-of-a-kind portable “wealth insurance” policy. Combined with precious metals (gold and silver), it’s the most relentless one-two knockout punch in the investing world.
For more information on how to purchase rare fancy color diamonds now, contact THE only authority that I trust:
The Diamond Market
PH: 1-877-432-6291
Website: www.thediamondmarket.com/vault
Adam J. Lowe is the President of The Diamond Market and Adam’s direct e-mail is: CEO@TheDiamondMarket.com
Author’s Note: I am so sold on the importance of Precious Metals and Rare Fancy Color Diamonds, and more specifically the quality and credibility of Swiss America and The Diamond Market, that I became a paid spokesman for both companies. I cannot recommend them highly enough.
Be Relentless, and you will see all your dreams come true.
God Bless & Best Wishes,
WAR
Wayne Allyn Root