The sad history of paper money is that it is printed until it is worthless. This is to say that whenever paper currencies are de-linked from gold or silver (made no longer redeemable in gold or silver), politicians print those currencies until they are worthless.

In no case did any politician come forth and say, “Our currency is now no longer redeemable in gold or silver, so let’s print it until it is worthless.” In all instances, the politicians thought they had good reasons to print.

The most infamous destruction of a paper currency occurred in post World War I Germany. The Germans had lost the war, and the French demanded reparations. Coupled with the costs of reconstruction, Germany turned to the printing presses.

The French, ironically, had their own sad encounter with paper money during the French Revolution (1789 – 1799), which was eloquently documented by Andrew Dickson White, cofounder of Cornel University, is his Fiat Money Inflation in France.

The French currency of the time was the assignat. White’s account tells how members of the French Assembly rose and called for the printing of more assignats with every slow down in the economy. In the end, just as would be the case in Germany 1923-1924, hyperinflation destroyed the currency.

Politicians always have what they consider good reasons for the printing of more paper money, regardless of the inevitable consequences. Of course, I’m sure, they rationalize that “Just this one time, it is necessary.” Later comes another time.

Going from memory, I can think of a few of those times. There was the Russian crisis in late 1980s, followed by the Mexican crisis in the early 1990s, followed by the Asian crisis. Then there was the slow down in the economy, which prompted Alan Greenspan to lower the Fed’s discount rate to 1%.

Greenspan’s hammering of interest rates helped bring on the housing boom, which turned into the housing bust, which gave us the Fannie Mae/Freddy Mac debacle. Now, Congress has instructed the Fed and the Treasury to work together for the creation of still more fiat paper money.

Ron Paul, who needs no introduction to gold/silver investors, gives an excellent analysis of the Fanny Mae/Freddy Mac bailout legislation that will allow the Fed and the Treasury to commence printing. Paul prepared his comments in video form. The video, which can be found on goldseek.com, is only 7-1/2 minutes. Note below the video the printed summary of the bill.

For some investors, and apparently for the media and for Congress, judging their coverage and comments, the looming failures of Fanny Mae and Freddy Mac were surprises. To other investors, however, the lid was simply pulled off a barrel of rotten apples.

For years, the head of Fanny Mae has bragged about lending money to low-income homeowners. Sounds great, right? Struggling Americans want to own homes just like everyone else, and along comes a White Knight with plenty of money to lend. And, you don’t have be all that qualified. Able to sign your name, fog a mirror? Viola! You have a home mortgage.

And, you couldn’t lose. The housing market was hot, up 17% to 20% annually in some areas, at higher rates in a few regions of the country. Why not buy? “If you can afford to rent, you can afford to buy,” said the posters in banks, which decided to get in on a good thing and also entered the mortgage business in a big way.

Fanny Mae and Freddy Mac, however, had the upper hand over banks. Fanny Mae and Freddy Mac are government sponsored enterprises (GSEs) and enjoy the implied backing the federal government. The implied government backing enabled them to borrow in the money markets at lower rates than other lending entities. That position resulted in Fanny Mae and Freddy Mac garnering 50% of the mortgage market in the US.

Under the laws that set up Fanny Mae and Freddy Mac, the federal government did not agree to back debt issued by the two lenders. Past Secretaries of the Treasury have said so. But, in the world of political expediency, Congress and the Fed stepped up to the plate.

So far, the U.S. government has not agreed to guarantee Fanny Mae and Freddy Mac debt. At this time, the Fed has announced that it will only buy Fanny Mae and Freddy Mac debt on the open market. That is a long way from guaranteeing the debt, but had the Fed not agreed to do make the purchases, Fanny Mae and Freddy Mac debt holders would have suffered huge losses.

As investors became aware that Fanny Mae and Freddy Mac did not have the capital to cover all the bad loans that they had written, Fanny Mae and Freddy Mac stock prices collapsed, losing about 85% in twelve months. Meanwhile, a large California mortgage lender, IndyMac Bank, was taken over by the FDIC, further spreading concerns about the banking industry.

Under such circumstances, gold and silver become of interest to an even larger number of people, and for good reason. Gold and silver are the ultimate monies. They cannot default; they need no government guarantee to maintain their values. Investing in gold and silver at this time makes sense.

A final note: Why was it that some investors knew to avoid Fanny Mae and Freddy Mac debt while huge financial institutions, such as insurance companies and mutual funds, got stuck? Primarily because those investors were attune to what was going on. Fact is, you cannot be attuned to what is “going on” by watching Establishment financial programs and by reading Establishment publications. You can learn what has happened by following Establishment sources, but it’s rare that you learn via Establishment media what is happening while it is happening.

One non-Establishment source is Weiss Research, founded by Martin Weiss, PhD, in 1971. Weiss’ understanding of banking and its inherent flaws, i.e., fractional reserve banking, gives him great insight into today’s financial markets. Visit his website at http://www.moneyandmarkets.com/. And, get more information about investing in gold and keeping up with silver prices on our website.

My advice on owning and storing gold: buy the physical gold and store it yourself. The form of the gold, be it Krugerrands, American Gold Eagles or gold bars, is not as important as taking physical possession.

CMIGS does not hold or store gold for its clients—we ship it to them—and we strongly warn against trusting a third party to look after one’s gold. Gold is too important to trust to someone else’s care.

However, Americans who put gold or silver in their IRAs have to use precious metals warehouses. For those investors who buy gold (and silver) outside IRAs, we recommend that they secure the metal themselves.

As to whether the gold or silver should be stored in a bank safe deposit box or secured away from a bank is a decision that each gold owner must make. Investors who own their homes have many more storage options than investors who live in apartments. Frankly, we caution against keeping gold in apartments; we think that bank safe deposit boxes are the preferred storage places for apartment dwellers.

A final note on storing gold or silver at home, whether a house or an apartment: never, ever store gold or silver in a bedroom. That’s the first place that a common burglar goes, looking for cash, guns and jewelry.

What about owning “other forms of gold,” such as ETFs, futures contracts and gold mining shares? With ETFs (Exchange Traded Funds) you do not own gold. You own shares in a company that owns gold. You get the price action dollar for dollar with prices of gold, but you do not own gold.

With futures contracts, by going “long” them, you have the “right” to take delivery of the gold represented by the contract when it matures. With futures contracts, you get dollar for dollar price action plus you gain the advantage of leverage, meaning that you have to put up far less money than if you were buying gold for physical delivery, such as from CMI Gold & Silver Inc.

As with ETFs, when you buy futures contracts you do not “own” gold. You have the right to take delivery of the gold represented by the contract when it matures and you pay the full value of the contract. As for the leverage that comes with futures contracts, it also works against you if gold goes down before it goes up. Futures contracts are not suitable for gold investors and should be left to commodity speculators.

Mining shares also provide greater leverage than the outright ownership of gold because stock shares trade “times earnings.” Further, if you select a mining company that makes moves that increases earnings, you usually see the price of the stock rise. But, with stocks, you in no way “own” gold, you own “proxy gold,” which should increase in value if you select a gold mining company that makes good business decisions.

In reiterate, it my position that persons wanting to hedge against inflation and protect against financial uncertainties should buy gold, be it gold bullion coins or gold bars, take delivery of it and secure it themselves. Leaving someone else to look after your gold is risky.

Still, I recognize that some persons’ circumstances are such that buying and storing offshore, i.e., out of the United States, makes sense. In the past, I’ve had no good recommendations for investors wanting to buy offshore other than to seek out a Swiss bank. Now, though, I do.

BullionVault is a highly-professional precious metals firm owned by Galmarley Limited, a UK-registered company located in West London. BullionVault offers its clients choices of storage in London, Zurich and New York. Obviously, if you choose New York, you are not going offshore, but with BullionVault you have the option of storing precious metals either in London or Zurich.

Ordinarily, the summer is a slow period for the gold and silver markets.

Additionally, the summer is normally a period of low prices for gold and silver, and that is the case this summer. Both metals’ prices are significantly below what they were in March when gold topped $1,000 and silver $21. But, this is not a slow summer for gold and silver. Presently, there is more than normal interest in both metals.

One reason, undoubtedly, is the widespread fear that Bush administration has plans for military action against Iran. If so, that military action would most probably be bombings of Iran’s suspected nuclear facilities, which Iran asserts are for peaceful purposes but the Bush administration says hold the capabilities for advancing Iran’s uranium enrichment program, which is necessary for the building nuclear bombs.

However, there is speculation that covert operations inside Iran have already begun. Seymour Hersh, a regular contributor to The New Yorker on military and security matters, wrote for the weekly magazine a piece titled Preparing the Battlefield.

Additionally, Hersh was interviewed on CNN where he reasserted his position that covert operations inside Iran have begun. Hersh further asserts that the Bush administration is determined to see to it that before it leaves office, Iran has no nuclear capabilities.

What would be Iran’s most likely response if Bush bombs Iran? According to many military strategists, that would be the closing of the Strait of Hormuz, through which 17 million barrels of oil flow daily. If you think that the price of gasoline is high now, try calculating the price if approximately 20% of the world’s daily consumption of oil no longer can make it to the market.

If the Bush administration takes military action against Iran, gold and silver prices will remain active this summer, very active. Actually, just the talk of the Bush administration attacking Iran will keep people interested in gold and silver this summer. Seasonally, the summer has been a favorable time to do some silver and gold investing. This summer looks better than past summers.

The breadth and scope of a bull market depends on the number of people following the market and able to participate. The more people following the market and able to participate, the greater the potential of the market to reach unbelievable heights, as did the great gold-silver bull market of the 1970s, which climaxed January 20, 1980, with gold hitting $850 and silver $50.

Today, with gold already having traded above $1,000 this year, $850 gold may not appear high, but for the 1970s $850 was astronomical. In 1973, when CMIGS was formed specifically to retail silver bullion to Americans, gold was trading below $100. (Silver was the product in 1973 because then it was illegal for Americans to own gold bullion. Americans effectively regained the “right” to own gold bullion January 1, 1975.)

Before gold made its 1970s’ move, a common question was, “How high do you think gold will go?” The standard answer was $300. Frankly, no one had any idea that gold would hit $850. For some unknown reason, $300 became the standard answer. But, as it turned out, $300 was far short of the top.

(Not all prognosticators failed to predict extremely high numbers for gold in the 1970s. The Aden sisters predicted $3,000 gold, but considering how far that prediction was off the mark, let’s say that few forecasters foresaw how high gold would eventually go.)

As for silver, there were not a lot of rash predictions. At the time, an abundance of silver lay in precious metals warehouses around the world. The U.S. Strategic Stockpile, for example, still held 139,000,000 ounces. The fear of sales from the Strategic Stockpile hampered predictions of high silver prices. In May 1973, Merrill Lynch published a “Situation Report” that predicted $2.75 - $3.00 silver “within the next 12months.” In that report, ML hedged its prediction by warning of “pending sales from the U.S. Stockpile assuming that they take place.”

In the 1970s’ gold-silver bull market, the sources of information about gold and silver were limited. If you wanted information about gold or silver, you’d head for the local library where you could spend hours trying to find relevant data. Further, you usually had to depend on Establishment publications.

Rarely does the Establishment present accurate, reliable facts, especially when it comes to investments. During my life, I’ve seen Establishment reports on subjects about which I knew something that were so far off that mark they were laughable. Often, Establishment reports are suspected “plants.” In my April 30 blog post, I questioned a Reuters’ article about silver.

With the advent of the Internet, however, things changed – and in a big way.

Today, the first resource for information on just about anything is the Internet. Plug gold into Google, and you get 886,000,000 pages to view, which are too many and too general. Change the search to gold coins, and your choices are reduced to 3,700,000, and you get more specific information. Still too many? Search for gold investments and get 400,000 hits. But, say you’ve heard that the Krugerrand is the best-known gold coin in the world and also carries the lowest premium of the modern gold bullion coins, then google Krugerrand and get 298,000 choices of pages to review. (By the way, if you search the Internet, there’s a 69% change you’re using Google, 17% chance it’s Yahoo!, with MSN, Ask and AOL fighting over the scraps.

According to Internet World Stats, some 1.4 billion persons are connected to the Internet and, therefore, have instant information about investing in silver or gold. Further, because of the Internet, potential investors wanting gold investment information are not limited to the publications that libraries choose to house, which are almost exclusively Establishment publications.

For example, the World Gold Council’s website, www.gold.org, contains a plethora of data about gold, everything from its history, to production and usage, to who owns it. Want to know how much gold the world’s central banks claim to hold? That data is found there.

Like to know more about silver? Visit www.silverinstitute.org, the website of The Silver Institute, a nonprofit association that “serves as the industry’s voice in increasing public understanding of the many uses and values of silver.”

Want to learn what a 34-year veteran of the gold-silver bullion industry has to say about buying gold and silver? Visit www.cmi-gold-silver.com. Our website has been declared by some visitors to be best on the Internet for basic information about what form of gold or silver to buy.

Although I’ve chosen only three resource sites, there are literally thousands of sources of information on the Internet about gold and silver, which means that 1.4 billion potential investors have easy access to information about gold and silver. Because of the Internet, this gold-silver bull market has the potential to dwarf the bull market of the 1970s.