Happy Guy Fawkes Day
A tribute to the last man to enter parliament with honest intentions
Remember, remember, the 5th of November,
Gunpowder, treason and plot.
I see no reason
Why gunpowder treason
Should ever be forgot.
Guy Fawkes, Guy Fawkes, ‘twas his intent
To blow up the King and the Parliament
Three score barrels of powder below
Poor old England to overthrow
By God’s providence he was catch’d
With a dark lantern and burning match
Holler boys, holler boys, let the bells ring
Holler boys, holler boys
God save the King!-Traditional English nursury rhyme
Today, November 5, is Guy Fawkes Day, the day that the English remember one of their most notorious villains or one of their most celebrated heroes, depending on their mood or ideological leaning.
On this day in 1605 Fawkes, a disgruntled religious minority tired of official abuse, attempted to take down the entire English government—king, ministers, parliament and all—by blowing up the House of Lords with a large cache of gunpowder during the State Opening of Parliament.
Fawkes was discovered and promptly executed, but he is remembered—in typically dry English humor—as the last man to enter parliament with honest intentions.
I ponder this today…
We have a government that has run up a $38 trillion debt… set to hit $40 trillion by this time next year. Social Security is projected to be insolvent in about eight years. Inflation is still running hot at over 3%. Outside of the AI economy, we are in recession. And as I write this, the federal government just broke its record for the longest shutdown in history at 36 days and counting.
Neither political party offers anything resembling a solution to any of these problems. Democrats elected a socialist who equates free enterprise with theft as mayor of New York, and President Trump seems more interested in building gilded ballrooms and running shady cryptocurrencies than in actually governing the country.
Alas, we can’t just blow them all up. That didn’t work for Fawkes, and I can’t imagine it working for you or me either.
So what can we do?
Yes, you can vote. But that’s not really a solution. It was a group effort with equal participation between Democrats and Republicans that got us to this point, and neither party has come up with a credible plan to reduce deficit spending, fix Social Security or tamp down inflation.
All you can really do is protect yourself from the fallout.
As my finance professor back in undergrad used to joke, the only perfect hedge is in an English garden. There is no perfect way to protect yourself from the very real possibility of instability in the dollar and in the bond market.
Gold is the closest we have.
I don’t recommend you go nuts and dump your entire life savings into gold. I would never recommend you do that with any asset.
But you should at least keep 5% to 10% of your allocation in the yellow metal. That’s just prudent diversification. And it keeps at least a portion of your wealth outside the dollar-based system.
Gold went parabolic starting in August, blasting above $4,400 per ounce. That was a little too far a little too fast. The price has corrected by about 10% as traders take profits and some of the hot money rotates out.
So, does this recent setback represent a buying opportunity?
Yes.
I will be 100% clear with you. I don’t know what the price of gold will be tomorrow, a week from now, or 10 years from now. No one does. It may very well have further to correct before finding a proper bottom.
But I do know that the fundamental justification for owning gold has never been stronger. Our political leaders have created a mess in which the only realistic way out is to depreciate the currency. It’s irresponsible to not take that risk seriously. And the easiest and most straightforward hedge is owning a little gold.