SID: Hello, Sid Roth your investigative reporter here with Dr. Larry Bates and we’re painting a picture that we really don’t even have to paint the picture. You read your own newspapers and you see what’s going on in the world, you see fear all over, you see the real estate just keeps going up, up, up, and there’s an old adage what goes up must come down. People have some money; they don’t even know what to do with it right now. Larry, why is it that certain people are trying to corner the silver market?
LARRY: Well, some of these certain people, we might as well call them by name, Warren Buffet, of the Bircher/Hathaway Group, it’s been estimated that he has cornered about 40 percent of the world silver market. He makes the Hunt Brothers look like pikers compared to what he has. Uh, it’s interesting, Warren Buffet is a very savvy investor, he understands how the system works, how the market works. He was the same guy the Wall Street crowd made fun of back in the dot.com boom because he wasn’t getting in the high-risk speculative bubble. They were ridiculing his eleven percent return and of course I liken the current housing bubble to the dot.com bubble, and you had IPO, initial public offerings, you had companies that were creating their own currency, just like the mortgage industry is creating its own currency. It’s like the guy comes home one day and says to his wife, “Hey I sold the dog for a hundred thousand dollars.” And she said, “You sold that dog for a hundred thousand dollars?” He said, “Well sort of, I got two fifty thousand cats for it.” Now, that’s fine as long as people use dogs and cats as money. Or if they use stocks and IPO’s as money, or if they use real estate mortgages bundled as money. But when people determine that this is not really currency, it’s not really liquid, then a lot of the stuff hits the market and you have a downward spiral in these markets, and that’s the fear that I have for this economy. But if you’re prepared for it you won’t be scathed by it.
SID: Okay, give me briefly recommendations for us to be prepared for this. What Godly wisdom or counsel do you give us?
LARRY: First of all, reduce debt. Try to get out of debt. If you’re not out of debt, you still have a debt, have a good reserve.
SID: You know the pull of the world, the pull of television is keep up with the Jones, must be in debt. Have a nice, beautiful house because all of your children’s friends have nice, beautiful houses. Even if you can’t afford it, it doesn’t matter, don’t worry, we’re in America.
LARRY: Well, that’s part of the American arrogance, it can’t happen to us. But wisdom dictates that we understand the times that we’re living in and it cannot keep going on forever.
SID: Now, let’s take you. Do you own a house?
LARRY: Yes.
SID: All right, Is the house worth a great deal more than what you paid for it?
LARRY: Quite a bit. I’m getting ready to sell it.
SID: So what are you going to do, buy another house?
LARRY: No, I’m going to build out on the farm.
SID: Okay, because you want to live in it?
LARRY: I want to live in it – but – I’m picking the time to sell it when all of the frenzy of the real estate market is going up.
SID: Well, speculate, and that’s all you can do, but your godly speculation is when will the bubble burst?
LARRY: Here is the key things, beginning to the middle of 2006, we have a lot of these mortgages that are interest rate only mortgages, a lot of them are adjustable rate mortgages and the adjustment period begins in that time frame. From the beginning to the end of 2006, and at the latest 2007, you are going to have a lot of people that their payments will ratchet up if they cannot make the payments, if they are so stretched, which I believe they are, then you’ll have a lot of people that default, go in bankruptcy. We’re already seeing a rise in bankruptcies. Its pockets of weakness already – Jefferson County, Colorado, right outside of Denver, 39 percent increase in bankruptcies and foreclosures.
SID: Okay. Someone has, they are relatively debt-free, they do have a mortgage, they have $20,000 they want to invest, they don’t want to, I mean we’re in a period where most people feel interest rates will keep increasing, inflation is going to run rampant, we don’t want to just put it in a small interest rate in the bank. What would you advise?
LARRY: Remember this: cash at the crash will be king. And that’s cash in your money markets, CD’s and cash in your precious medals. I believe people ought to have at least 30 percent of their total assets in gold and silver coins.
SID: Why?
LARRY: It’s the only monetary asset that is not someone else’s liability. Gold and silver is money, anything else is credit. It’s the money of the Bible. You go back to Amos, chapter eight it talks about they made the shekel or dollar larger, and the epal or bushel smaller, where it bought less grain and cheated with dishonest scales.
SID: By the way, why coins versus bonds?
LARRY: Well they are more liquid, they are easy to identify, they are minted by respected government, and certified as to weight in purity and so it’s a lot less questions about what do you really have when you have coins.
SID: But we’re living in a time of the Bible that you were alluding to of unequal weights and measure.
LARRY: Yes.
SID: So what does an honest person do?
LARRY: Well, you deal in honest money. Gold and silver, it’s money of the Bible. Why is it the money of the Bible? It’s scarce.
SID: Now what’s going on with the whole health insurance thing in the United States? My rates go up every year. I mean not just inflationary, gigantic.
LARRY: Two things.
SID: The average person isn’t even going to be able to have health insurance.
LARRY: My oldest son’s father-in-law is the former president, retired president of the Methodist Hospital Systems in Tennessee. 1964 his per patient cost per day was $9.49 a day. In 1966 two years later, it went to $69.96 a day. Now what happened in those two years? We passed Medicare. It was the government funds with the pertinent regulations, all of the government regulations that caused the rise in the cost of health care. Didn’t improve the quality, that’s why we’re going to have another thing, a lot of the churches are going to have to get into health care.
SID: Guess what? If you really want to analyze things you can get yourself sick. But I have some good news for you, the Bible does talk there’s going to be a wealth transfer, the Bible does say, God says, “I’ve never seen the righteous begging for food.” I believe that there is only one surefire investment and it’s something no one can ever take away from you and that is intimacy with God. Do not mishear what I’m saying, I am not saying religion, I am not saying tradition, I am saying that if you do not have intimacy with God you have nothing. And if you’ve got gold stars for synagogue and mosque and church attendance that counts for – that won’t even get you a cup of coffee. Listen to me, you can know God, but the only way you can know a holy God is if someone who is perfect dies in your place. That someone is the one Moses said would be greater than him, that would be a Jew, that would have all of the word of God inside of him, we must follow him. How shall we escape if we neglect so great a salvation? Pray to God, repent to God. Say “God I’m a sinner.” Yes you are. “I believe Jesus died for my sins and by His wounds I am healed. And now that I am clean I want to know you God. Jesus, I want you to live inside of me, I want you to become real to me, I want to hear your voice, I want to be able to walk in shalom, in peace. I make you my Lord Jesus. Amen.” That’s how to be free.
