"GOLDBUG!" - Book Review - A Lifetime of Investing Knowledge from James Dines
Much of this book concerns history, a small portion "ancient" history" as necessary background because few people really understand money. But most of the "history" in this book consists of what, with apologies to Rbt. Heinlein, I would call a "future history" in the sense that it carries extensive quotes from Mr. Dines' decades of financial predictions. Today it is history but originally they were predictions.
Unless you understand what he is teaching (based on simple facts but highly complex analysis) then this may seem self-serving, but it is necessary.
Unlike Nobel Laureate economists (and Federal Reserve Chairmen) who make predictions based on often contradictory theories, Mr. Dines demonstrates time after time just how accurate his predictions have been.
If that were all this book did then it would be of marginal interest at best except to historians but for most of his business life Mr. Dines has striven not just to explain what is happening behind the veil of government obfuscation, but to teach others how to do exactly what he has done - that is, make a fortune by spotting major investment trends as much as a decade before they become widely known.
It can be easy to ridicule Mr. Dines as a "goldbug" until you realize that his predictions have almost always proven correct - right down to the timing.
He advised buying gold when it was $32/oz. and was banned from Wall Street. He pushed Uranium stocks when it was the most hated energy source (the metal itself went from about $8 to nearly $150/lb. and is once again going up from a floor of about $45.)
He tried to get corporations interested in China in the 70's only to find CEO's who asked where Chinese would get the money to buy anything. (Now they have the money to buy everything!)
He also advised selling Internet stocks just days before their high in 2000.
Most important to most of us, he started talking about the housing "bubble" years before house prices plunged.
But the important point to get from a careful reading of his books is that he made his predictions based on a clear understanding of how governments ALWAYS finance bread and circuses, AND wars.
He also teaches stock and financial instrument charting and has a deep understanding of the psychology of investing and spotting bubbles.
This book looks at the possible collapse of fiat (paper) currencies which are only backed by empty promises which governments have always broken when they found it convenient.
Even when paper was backed by gold governments always found a way to justify printing more paper than there was gold to support. Unfortunately the results have also always been the same in the end; it is just a question of how close the "end" of the currency bubble is.
His analysis of the boom and bust of the 20's and 30's are wildly different from those of Fed Heads and other government pundits who don't even appear to know the definition of "inflation." (Which is NOT rising prices.)
He also shows not only why they hide the truth but just when critical decisions were made, economic and financial manipulation colluded to by top bankers and governments.
You may think you know the story of the great depression and understand today's situation because you have heard of Bretton Woods but if you never heard of Jekyll Island (where, in 1910 the Federal Reserve was created) or the Genoa Conference in 1922 where WWI was paid for by moving to a "Gold Bullion Standard" which, unlike the previous "Gold Standard" didn't let people trade in paper money for actual gold coins.
In fact, Mr. Dines' predictions are so wild they would be easy to dismiss if he hadn't proven over decades to be correct in the vast majority of his economic and even stock purchase recommendations.
Above all, Mr. Dines strives to make economics and particularly investing into an actual science where he proves his theories the scientific way, by making correct predictions.
Although gold has been accepted as money almost any place in the world in the past 3500 years, when any government wants to spend more money that it can raise through taxes alone, it decides that gold is just another metal then proceed to turn good honest paper into worthless trash by simply printing numbers on it.
Some of you may remember Economics 101 where you were taught about Gresham's Law - bad money displaces good - essentially it means when people have a choice between two currencies they tend to spend the one which doesn't retain its value and hoard the one which is "good as gold."
That's not a new idea; the government Gresham advised was that of Queen Elizabeth I when England was beginning its climb to world dominance.
Perhaps Mr. Dines' most basic and telling statement about gold money vs. paper currency is that he will believe paper is as good as gold when women get as excited about receiving a paper ring as they do when they get a solid gold ring.
This is a history, a textbook on economics and investing, and a book which you may need to reread a dozen times.
You won't find specific stock investment advice here, for that you may want to subscribe to his newsletter which is extremely specific.
Many people will find this book very upsetting. If they are also angry they may want to look at the call among a few Congressmen for an audit of the Federal Reserve.
GOLDBUG! may seem a bit pricey but consider that his out-of-print 1974 book on technical analysis is going for $465 and up on Amazon.com - used.
"GOLDBUG!," by James Dines, ISBN: 0964968932, 2009 James Dines & Company, Inc. Available through dinesletter.com.
John McCormick is a reporter, /science/medical columnist and finance and social commentator, with 17,000+ bylined stories. Contact John through NewsBlaze.