True Conspiracy

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Monday, March 26, 2007

Don Stott On Making Money

Home business
ideas for making money

Everyone wants to 'make money,' as far as I can see. It's a universal pastime and goal. The question I have, is how does one make money? Can you make money by starting a business? Some can, but most new restaurants fail within the first year, unless they are a franchise. Franchises seem to do well, because the issuer of the franchise won't sell one unless they have done traffic counts, approve the location, median income of the area, competition, etc. Starting your own, has no franchise fees, and no percentage of the gross to pay to the franchisor, but then, you have no proven name or instructions on how to operate, menu prices and content, equipment and ingredients furnished by the franchisor which makes it work efficiently. I have had two restaurants, non-franchised, and they worked very well, but oh the work! In one, the Swedish chef decked my son, who was dutifully washing dishes on a busy night…because he was eating some ice cream. He went quickly! No more restaurants for me. I have clients who have restaurants, Dairy Queens, and the like, and they make out well. Make money in a food dispensing business? Yeah, but make plans to do a lot of work and put in long hours.

I am mentioning things I have done, which made me a lot of money, just to show how it can be done. Way back in 1963, I decided to build an ice cream parlour in Filthydelphia, (it wasn't filthy then), because I love ice cream, and had an idea for hand dipping, which hadn't caught on then. I made it work beautifully! I ended up with ten parlours, owned the buildings in which they were located, and paid cash for the buildings after the third one. I soon discovered that employees are the main problem in any business, and in the first one, I was being stolen blind. My second one, and then all ten, made a lot of money, because I franchised them. The operators bought their ice cream through me, and I bought it for thirty cents a quart and sold it to them for sixty cents a quart, and charged them no rent, no utilities, no repairs, or even light bulb replacements. They had a fully equipped store, and no franchise fees. They had to charge my prices, which gave them a 40% markup before any employees they hired. I was making good money, and my operators did well too. In the year 1970, my ten stores sold over 100,000 gallons of ice cream. They had to be careful. If they over-scooped, it cost them their profit, and if they under-scooped, they would destroy their goodwill. They had to worry about their help stealing, not me. I had my supplier take orders, collect money, and send me a rebate check every week. I'd just drive around in my Mercedes and "check stores" to see that they were using my ice cream, were clean, well stocked, etc.

I sold them when I went to Colorado to save an old hotel which was going to be torn down. (God lives in Colorado, I really believe!) The fellow I sold to, destroyed them within six months, due to inattention, and sheer stupidity. A business is only as good as its operator, concept, location, prices, profit making ability, and a host of other things. Not everyone is cut out to be a businessman. I've done a lot of things, and had a lot of fun, but the point of this is to make money, and how to do it.

Most people think that by saving their dollars and drawing interest on them, they are 'making money' at the rate of 10% per year, if they're lucky. Various investments and investment advisors consider themselves successful and lucky if they get 10% a year. I think this is an absolute sham. "What, are you crazy? What's wrong with a 10% return a year?" I am sure this is the logical and common response, but once again, I disagree. Why? Because first of all, two things aren't taken into consideration.

(1) Currency devaluation: How much value is the buck losing every year? Josef Gцbbels, the Nazi honcho said, in 1930, "Any lie, frequently repeated, will gradually gain acceptance." I am no fan of the Nazis, but his statement is totally true. Hitler and his goons repeated their lies so fervently, frequently, and with such gusto, that almost the entire German nation accepted their nonsense, and went along with their brutal actions. Hitler was a grand public speaker, which helped out his cause a lot. German currency had gone to absolute zero, years before Hitler came into power. The Reichsmark's going to zero, as a matter of fact, is what caused Hitler to come into power. The chaos created when a currency goes to zero sudde4nly, as opposed to the buck's less rapid slide, is horrendous.

After WW 1, the victorious Allies forced Germany to pay for the damage they caused, a first in history. Naturally, the Germans were broke, so to make a complex story simple, they printed their way out of debt. The more they printed, the less their currency was worth. The more they printed, the more they needed, just to stay afloat. The presses couldn't keep up, so they took the old bills and printed over them with much higher 'valuations,' which of course were total lies. Printing press money cannot create value, nor increase the value or purchasing power of a currency. Government lies to the contrary don't make it true.

The more that is printed, the less they are worth, and prices go up to meet the decreased value. This is known as inflation. Germany is an extreme case, but the truth of the matter cannot be denied. If a currency is endlessly increased in numbers by means of the printing press, its value will go down and prices go up in proportion. Lies, repeated often, will eventually gain acceptance. It is in government's interest to lie about inflation, otherwise known as printing one's way out of debt, or printing press money. In its interest, because millions of Social Security recipients' checks are directly related to the government stated cost of living increase rate. If the truth were told, we'd be getting a lot more dollars every month. Also, since the U.S. is more in debt than any nation in history, they depend on OPM, or "Other people's money." OPM is money 'loaned' to the U.S. government in exchange for paper instruments in the form of bonds and treasury notes. Our taxes, it is said, don't even pay the interest, so we must constantly borrow. If the truth about inflation were published, foreign nations might not want to loan their money. It therefore is logical that governments will always be truthful, only so long as it makes them appear righteous and solvent.

Ask yourself the question, "Have prices gone up only a percent or two per year, as the official government statistics say they have?" The answer has to be, "NO, A LOT HIGHER.". How much higher? We can only guess, but I'd put it at eight percent. It has been made more difficult because the M3 figure is no longer published…to government's advantage, of course. (Hitler stopped allowing government financial information to be printed in the newspapers in 1934). The question then is, if one is getting a 10% return on invested dollars each year, you must figure how much less the dollar is worth each year. If 8% devaluation is correct, the return is 2%, not 10%. If your advisor or manager of your funds takes a percent for his trouble, does this make the 'return' 1%?

(2) When you invested your dollars for a 10% return, did you have to give your Social Security number? Then you have to figure your taxes, not on one or two percent actual return, but the full ten percent, you supposedly received.

Since gold went up 28%, and silver went up 69% last year, you figure it out. Start a restaurant, chain of ice cream parlours, buy a hotel, or get a franchise for something, and you might make some taxable money, spend lots of hours, worry a lot, fight the bureaucrats, and get a few headaches. Maybe you could perfect alchemy, making gold out of lead. Sir Isaac Newton worked real hard at this, but never succeeded. Or you maybe could buy some real gold or silver, and make 69% or 28% this year? The chances are pretty good, I think. Protect yourself.

March 22, 2007

Don Stott has been a precious metals dealer since 1977, has written five books, hundreds of columns, and his web site is www.coloradogold.com

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