May 30, 2003
—Zurich, SwitzerlandDFO8467 October 1979
—(Notes by Oshea, now with International Investments.—Edited by Dad, 27/10/79)
OPENING REMARKS—Nicholas Deak‚ President, Deak—Perera Group, N.Y.: The strengthening of the dollar doesn't look as if it can come through. It's mostly window–dressing & noise, a short-lived & temporary package. It won't work because inflation is rooted in the deficit spending of the U.S. & other governments.
THE SWISS ECONOMY—Director of the Swiss Tourist Office: Inflation in the U.S. is now running at 14% (officially) versus 4% in Switzerland. (But the Swiss inflation is directly tied to U.S. version. My boss leaned over to tell me that by international convention, Switzerland has to maintain a certain relationship with other European currencies, which must in turn maintain a certain relationship with the dollar. So the Swiss Franc is indirectly tied to the dollar. Witness the Swiss national bank purchase of $1 billion in the currency markets last week to prop up the $.—Oshea.)
THE SWISS BANKING SYSTEM—Hans Weber, President of Foreign Conference Bank, Zurich: The Swiss currency in circulation is backed by 50% gold. The Zurich gold market is probably the biggest in the world. Both South Africa & Russia market practically all their gold here.
ASPECTS OF INVESTING—Jack Williams‚ Economic Research Counsellors, Vancouver, Canada: Silver has appreciated 1,129% in the last 12 years. Gold has appreciated 852% in the last 8 years. Platinum has been appreciating at 110% annually. Diamonds have been appreciating at 10% annually. I see no forces currently operating to drive gold & silver prices down. Everytime the U.S. government mounts a rescue package to save the dollar, it's a perfect time to buy gold & silver, since the price goes down temporarily. There's just not enough gold & silver to go round. Gold & silver are real money—paper money is just artificial money.
INVESTMENT GUIDELINES FOR THE 1980s—Gordon McLendon, "Investment Guidelines": (He ended up his speech by witnessing to the entire conference saying:) Above all, don't forget to smell the flowers & look up at the limitless heavens above, & remember that, whatever you call Him, there is a higher power, & that without acknowledging Him you cannot enjoy the ultimate wealth—happiness! (By the way, I got Proverbs 3:13-15 for this conference. They fit perfectly! PTL!—Oshea.)
NICHOLAS DEAK‚ Bankhaus Deak in Vienna & Deak National Bank in New York: Offer actual gold checking accounts! You keep your funds in gold, & when you cash a check on your account in whatever currency it's in, they sell a small amount of gold corresponding to this amount. Deposits credited in gold. (Can be done through bank or by mail to Vienna.)
INFLATION OR DEFLATION, WHICH WAY?—Murray Rothbard, Author, Economist & Historian:—You'll never have another depression, because they'll be called recessions.—You can call government printers counterfeiters—they perform the same function. Muggers & rapers get 1-2 years in prison, but counterfeiters get 20! Government doesn't care about me & you, but when their revenues are touched, then they care! Counterfeiters are in direct competition with them.—The way the government inflates, there are definite benefits to certain people: The government is the first to benefit—they spend the money they print before its inflationary effect pushes the prices up.—Fear of the future is going to be translated into the policy of: "Buy now—it's just going to go up later."—As long as we have lack of faith in the dollar, the dollar cannot appreciate internationally‚ & as long as there is inflation there cannot be faith in the dollar‚ & the trend will continue downward at present. No person, entity or government can go on spending more than they take in. (Like U.S.!—Dad.)—There is no such thing as the floating dollar—there is only the sinking dollar.
EQUITY PROFITS IN THE EIGHTIES—Jerome Smith, Editor-in-Chief, World Market Perspective:—I decided my purpose in life would be to search for a way to put an end to the enormous, systematic plundering of little people by paper currency that enslaves the world! This is what I have fought to overcome in my life. Economics in its true human sense is voluntary human action. In the sense it is used today, it is coerced human action. A prediction—We're soon going to reach a point where there will be no more silver in the commodity exchange warehouses—it will all be in private hands. This may not happen with gold—there are huge stockpiles in storage. 90% of all gold ever produced is still around. The opposite is true of silver. From the time they reached double-digit inflation in Germany (10%-99%) to the time economy collapsed was 10 months, in a period of limited communications. What took place in 10 months in Germany could take only 10 days in the U.S.‚ once we reach a certain point.
IMPACT OF INFLATION UPON INSURANCE—Lawrence Scott‚ Chartered Life Underwriter: There is nothing called the dollar at this present time, except your belief in it!
ALEXANDER PARIS—Author, Economist: The brunt of the recession is going to fall in 1980. How bad is it going to be?—Very severe! Over the next 18 months there will be a record number of bankruptcies & bank failures—the big bust. We have inflation & deflation at the same time—rising prices & falling productivity. The coming recession will be severe, but because of government power to control the economy, things will keep going. I have great faith in the power of crafty politicians to hold things together! (Ha!—Dad.)
HARRY BROWNE, Author, Financial Advisor, Zurich: The investor's most important asset is humility. Runaway inflation always reaches such a point that people are trying to get a rid of their money as fast as possible. (Harry Browne gave his scenario for the future from one of his books about to be published, which includes a big depression in the early '80s, banks closing & never reopening, strikes & crises in America‚ & finally America goes to war & a large segment of the population is killed!) (He was one of the most honest lecturers, & one of the simplest as well.—Oshea.)
PANEL DISCUSSION—All major speakers: Someone asked the question: "Assuming that a great depression hits the world, will there be any economic havens?" Deak—"It will affect the entire world.-Cemeteries will be the only safe place." (He later added that Switzerland will be safer than most.) Rothbard—"No." Smith—"We must pay the piper. Overprinting money with nothing to back it always leads to a deep depression, no matter what happens. The consequence would be a complete collapse of money & a possible bloodbath. There will be no havens!" Browne—"Switzerland will not be hurt so badly." (He lives in Zurich.) Paris—"Go to the country with the most political freedom left." (But where?—Dad.)—The Bible says in Isaiah 2:
ENTER INTO THE ROCK, & HIDE thee in the dust, for fear of the Lord‚ & for the glory of His majesty. And the idols He shall utterly abolish. And they shall go into the holes of the rocks, & into the caves of the Earth‚ for fear of the Lord, & for the glory of his majesty, when He ariseth to shake terribly the Earth! In that day a man shall cast his idols of silver, & his idols of gold, which they made each one for himself to worship, to the moles & to the bats; to go into the clefts of the rocks, & into the tops of the ragged rocks, for fear of the Lord, & for the glory of His majesty‚ when He ariseth to shake terribly the Earth!"—Verses 10 & 18-21.
—The only safe refuges the Bible advises are the Rock, Christ Jesus, and the dust!—The grave?—Or the soil—a farm with food?!—You can't eat gold or silver!—Are you ready?