As this is written, gold is trading at about $924 and silver $16.60, posting decades-high prices. Meanwhile, the dollar is suffering on the FOREX markets. Much of the blame for the dollar’s woes, and the reason for the metals’ climbs, is laid at the feet of the subprime lenders, the subprime mess having been spread worldwide and affecting financial institutions across the globe. The Fed slashing its discount rate three quarters of a point Tuesday showed just how bad the world’s financial and economic “experts” think things are. Still, the subprime mess is not the sole cause of the dollar’s woes; lewrockwell.com has posted a commentary as to why.

How to Sink America combines Tom Engelhard’s and Chalmers Johnson’s analyses as to the stress put on America by the U.S. military. Now, I’m well aware that any suggestion that military spending be cut is a sensitive subject with many people. However, all the military spending is not desired by the Pentagon.

For example, Engelhard notes that the Pentagon wanted to cancel an order for Boeing’s C-17 cargo plane. But, canceling a project is not that simple because contracts and subcontracts for weapons systems are passed out to as many states as possible, which means jobs. So, Congress balked at the Pentagon’s plans to cancel its order for C-17s. The result of such politics is that the Pentagon ends up with material it does not want.

Chalmers Johnson’s part of the analysis is titled Going Bankrupt: Why the Debt Crisis Is Now the Greatest Threat to the American Republic. The title alone should cause one to want to read it, especially anyone interested in investing in silver and gold. Here are a few excerpts from Johnson’s analysis:

It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense’s planned expenditures for fiscal year 2008 are larger than all other nations’ military budgets combined. The supplementary budget to pay for the current wars in Iraq and Afghanistan, not part of the official defense budget, is itself larger than the combined military budgets of Russia and China. Defense-related spending for fiscal 2008 will exceed $1 trillion for the first time in history.

Leaving out of account President Bush’s two on-going wars, defense spending has doubled since the mid-1990s. The defense budget for fiscal 2008 is the largest since World War II.

And:

In an attempt to disguise the true size of the American military empire, the government has long hidden major military-related expenditures in departments other than Defense. For example, $23.4 billion for the Department of Energy goes toward developing and maintaining nuclear warheads; and $25.3 billion in the Department of State budget is spent on foreign military assistance (primarily for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic, Egypt, and Pakistan). Another $1.03 billion outside the official Department of Defense budget is now needed for recruitment and reenlistment incentives for the overstretched U.S. military itself, up from a mere $174 million in 2003, the year the war in Iraq began. The Department of Veterans Affairs currently gets at least $75.7 billion, 50% of which goes for the long-term care of the grievously injured among the at least 28,870 soldiers so far wounded in Iraq and another 1,708 in Afghanistan. The amount is universally derided as inadequate. Another $46.4 billion goes to the Department of Homeland Security.

In short, there simply is not enough money to sustain the U.S. military and the rest of the federal government’s spending. Raising taxes is not a solution because it usually results in politicians being voted out of office. Besides, presently Congress and the White House are compromising on a plan to send “tax rebates” in an effort to stimulate the economy. Deficit spending is on the horizon for as far as the eye can see. These are the times to invest in gold and silver.

In my December 12, 2007 article Only Ron Paul, I asserted that of the presidential candidates only Ron Paul had the economic understanding to deal with the subprime mess. Now, I present more evidence that Ron Paul is the man to deal with the impending recession. The medicine, however, would be bitter, but the results would be long-lasting. Ron Paul would call for a return to the gold standard.

In 1985, Ron Paul presented a paper to the Mises’ Institute conference on the gold standard: The Political and Economic Agenda for a Real Gold Standard. Nearly 23 years ago, Ron Paul exhibited his grasp of the Austrian Theory of Money and the need for a return to the gold standard. Since 1985, we have seen the devastating results of not being on the gold standard: inflation and the destruction of the dollar as the world’s sole reserve currency.

Because returning to the gold standard seems anachronistic to most Americans (because they do not understand the gold standard and the concept of money), implementing the ideas of Ludwig von Mises, which Paul discusses in his 1985 paper, would be next to impossible. However, Ron Paul discusses another tactic to return to the gold standard, a tactic which should be of interest to gold and silver investors.

Paul asserts that the popularity of gold coins “have shown us that it is possible to adopt another tactic, that of getting gold coins into circulation prior to setting a new par value for the dollar.” (Par value for the dollar meaning the dollar’s conversion rate into gold [and maybe silver.])

In other words, the people would lead the “leaders” in returning to the gold standard. As more and more people turn to gold as protection against inflation and its inevitable result, a declining dollar, they adopt gold as their standard investment. Eventually, our “leaders” will see the handwriting on the wall and return to gold. Returning to the gold standard would be much less painful for the nation if Ron Paul were president. The other candidates, steeped in statist economic theories, would fight returning to the gold standard.

Paul’s piece is an educating read. If you do not grasp all of it, don’t worry. Just by reading Paul’s paper you will inherently know that now is the time to invest in gold and silver.

We will be closed Monday, November 12, in celebration of Veterans’ Day. The COMEX will be closed also, but the Globex Internet-based exchange will trade, and action can be watched on our Spot Prices page. Note: follow the price action on the graphs, not in the table.

Despite the Globex being open Veterans’ Day, we will not be open. Additionally, the Post Office will be closed, as will banks. Besides, if there’s a holiday we should observe, it’s Veterans’ Day.

By now probably everyone reading this has seen the news about the mid-air news helicopters’ collision that occurred in Phoenix today about 12:50 pm MST. The copters collided about a half-mile north of our offices, which are only stories below the height at which the collision occurred. We’re on the 14th floor. Several of our staff had a “bird’s eye” view of the horrific accident.

Mike had called Kelly, our office manager, into his office, asking why are those helicopters up there. Kelly watched the copters, and Mike’s attention was drawn to the street where many police cars, their sirens sounding, were involved in a car chase, which in recent years have become the rage with the TV media.

Kelly said one copter did a hard bank north and hit the other one solidly, maybe head-on, maybe in the side. There were at least four copters following the chase, circling for position to film.

I heard the collision, and immediately looked to the street, thinking it was a major auto accident. Then my eyes were drawn upward as the copters fell straight down behind a parking garage. A huge black smoke stack rose immediately.

Mike was talking on his cell phone as he watched the chase. His view of the collision was peripheral, but Kelly, whose husband is a pilot, watched the copters. There was no crash landing. The helicopters fell like rocks. Fred in shipping also witnessed the collision.

Our offices gave those watching a prefect view of the chase. The police had shot out the tires on the chased vehicle, which turned out to be a construction truck, which the driver ditched in a vacant lot only yards from an FBI building. The driver jumped in another construction truck, which, by happen stance, must have had keys in the ignition.

The second truck had a small cement mixer on the back; the chase headed east on a street one block north of our office building. That was when the collision happened, and no one in the office continued to watch the chase.

As this is written, the smoke has dissipated, the police guard the ditched truck, and the news is nationwide, probably worldwide. We can see that the truck’s tires on the passenger side are flat. The way the truck is sitting, the driver side tires may be flat also.

Obviously, no news copter continued with the chase, which ended miles west of the crash site. Mike tells me that the guy being chased can be criminally charged with the deaths of the newspersons in the copters. Not a good way to start a weekend.