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Today I went to my bank and paid off a $70,000 loan that I took out one year ago. The officer went to the vault and retrieved 120 ounces of gold that I gave them to hold as collateral for the loan.

When I took out the loan, gold was $1185 an ounce. They required $140,000 worth of gold to collateralize a $70,000 loan. To a banker, gold or gold stocks are worth fifty cents on the dollar. Bankers and gold are like oil and water.

I couldn’t help myself, and I pointed out to my banker that by using THEIR money, and paying them $4,550 in interest over the past 12 months, the gold they were holding as collateral increased by $52,560.

One year ago, instead of taking out a loan, I could have raised the $70,000 by selling 59 ounces of gold, but in the past year it would have cost me $21,292 in profit, after paying the interest on the gold. Think about it! $70,000 in gold increased by $21,292 in just one year. That is not unusual – gold has increased from $252 to $1620 in a decade. And still, my bankers and most people just don’t get it. They still think you should be in CDs and bonds. “None are so blind as those who refuse to see!”

I don’t advocate that you borrow money to buy gold or silver, but if you already own the metals, you will be better served by NOT selling it now.   Use your bank instead.

There is a lesson to be learned here – we are still early into the bull market and if at all possible, do not sell your gold and silver now. It will cost you dearly.

Last fall I changed accountants. In character, I spent half an hour telling him why HE should invest in gold and silver. Of course, nothing happened. Then in March we got together again and we had the same conversation. He said, “I should have listened to you last fall.” This time he did listen and he invested $100,000 in silver stocks. I strongly suggested that he buy physical silver first, and not shares, but against my advice, he bought the mining stocks.

Yesterday we talked about tax issues related to my move from Minnesota to Florida and he brought up the mining shares. He said, “Immediately after I bought the stocks my $100,000 investment was worth $116,000 and you were my favorite client. Then the bottom fell out and my investment fell to $84,000. It is currently back over $100,000 but why is silver rising and my stocks are basically standing still?”

I told him he should have listened to me and bought the physicals first. The stocks are under-performing because the Cartel uses “naked shorting” to hold back the price of the mining shares. The regulators (CFTC) do nothing to stop this illegal practice. That is why Andy Hoffman and I both believe physical metals are a better bet than the large major mining companies. (

Check out Andy’s article in today’s daily.) I sent a copy of Andy’s article to my accountant. I agree with Andy. Soon it will be difficult to source physical coins and bars and ifyou can find product, the “premium” will be sky-high. It really is important to buy your gold and silver now, while you can still get it and while the premiums are still low. But as the saying goes – pay me now or pay me (much more) later!