By Robert Ringer

(The content of this series of articles has been taken from my 1982 book “Civilization.” So far, you’ve seen the case I made for getting out of paper money – and the reason most of your alternatives for trying to safeguard your capital are like black holes that simply suck it in and make it disappear. In the next section of the book, I examined several alternatives that at least give you a chance – an outside chance – of coming out ahead.)

Stocks

The biggest reasons the Capital Black Hole alternatives are automatic losers are that they are locked into a fixed rate of return and they pay off in paper. Thus, corporate stocks deserve the status of Capital Crapshoots, because they are not automatic losers like Capital Black Holes; they are only wild speculations.

With stocks, you at least have an outside chance ─ a very outside chance ─ of coming out ahead. Even though any dividends paid will not be sufficient to offset taxes and price inflation, what sets stocks apart from Capital Black Holes is the possibility for long term capital gains. Read the rest of this entry »

By Robert Ringer

(The content of this series of articles has been taken from my 1982 book “Civilization.” Part II covered what I said in my book about banks and savings and loans. Now, let’s take a look at what I said about some other Capital Black Holes-insurance companies, government and corporate bonds, mortgages, Treasury bills, and money market funds.)

Insurance Companies

Insurance companies are not much better off than banks. First, they have a majority of their assets tied up in bonds and mortgages, which is like the blind leading the blind. Second, as times get tougher, more and more people will want to borrow on the cash value of their life insurance policies.

This money is lent at rates far below the going interest rates in the financial markets, which, of course, is a disaster for the insurance companies. If too many people decide to borrow the amounts they are legally entitled to, insurance companies, like banks, are forced to dump securities and mortgages at depressed market prices, which can lead to insolvency. Read the rest of this entry »