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From David’s Desk

Richard Maybury (of the “Early Warning Report”) says there are only two trends that he is certain of: (1) currency devaluations, and (2) war.

Russell Comment — Wars and currency devaluations go together. The single most expensive thing that any nation can do is to go to war or prepare for war. The US is doing both.

Last week, legendary trader Jim Rodgers was interviewed by Maria Bartiromo on CNBC.  Rogers is very worried about the US economy and states that the US dollar will lose its status of the world’s reserve currency.  We are headed for very dark times, according to Rodgers.  He suggests that investors move out of dollars and into commodities and strong foreign currencies.  He likes gold and silver a lot.  Here is the link to the interview:


Sunday afternoon, Susan and I attended the high school graduation party of our neighbor’s daughter.  I ended up engaged in a half hour conversation with a plastic surgeon (the brother of the host of the party) about gold and silver.  He reminded me that we had a similar conversation a few years ago, when gold was around $500 an ounce.  He said, “I should have listened to you several years ago when you told me to buy gold.  It’s too late now.”  This is a very common viewpoint – it’s too late, I missed the boat!  Actually, it’s not!  Granted, you would have been better off buying gold at $500 than at $1530, but it’s still not too late.  I believe that the best-case scenario would still find gold at $3,000 and if the Fed engages in some form of QE3, you can pick your price for gold anywhere between $5,000 – $12,000 an ounce.  (Read Jim Willie’s section, below, and see why he says the Fed has NO CHOICE but to continue with QE3.)

Then, the conversation switched to silver.  I told him that I expected silver to outperform gold.  He said, “Silver hasn’t done as well as gold.”  This is a common perception by people who haven’t closely followed the market, over the past few years.  I told him that during the period that gold went from $275 to $1575 silver went from $4.50 to $50.  I gave him every important reason why he should start accumulating silver (and gold) now.  I emphasized that what was occurring was not so much a rise in the price of gold and silver, but rather a collapse in the buying power of his dollar – and dollar-based portfolio.

There is no question that he totally understood what I was saying, but I would be surprised if he did anything about it.  I assured him that when we discuss this again, in a couple of years, gold will have doubled and silver will have done even better.  His reply was, “I believe you; you were right the last time we talked. Obviously, you know what you are talking about.”  Why then, did he not ask me how he could get started in accumulating silver and gold?

When it comes to buying gold or silver, most Americans are like deer, frozen in the headlights of an oncoming car.  They find it so hard to react to what is happening that they do nothing at all.  This conversation was just so very typical.  People listen to what I have to say, they acknowledge that I have been right, but they don’t do anything.  They listen but they don’t hear.  My message is not politically correct.  It is too harsh.  Yes, it’s harsh, but it is also the TRUTH.

In today’s daily, I present information from Bob Chapman and NIA.  I have received emails from readers who feel I harm my credibility by presenting information from these two sources.  Nonsense!  If you are turned off by either or both of these sources, skip their articles.  Enjoy Sinclair, Casey, Willie and Butler.  Regarding Bob Chapman, he does present some extreme views, but overall his information is absolutely spot-on.  Ignore his “conspiratorial views,” if you must, but his data and the conclusions he draws are important enough to be presented in this blog.  As for NIA, I made my point very clear – unless you are a sophisticated investor and understand the nature of exploration mining stocks and how they are often part of a “pump and dump” promotion, you should avoid this category of stocks.  NIA may or may not be a “pump and dump” operation, but one thing I can tell you for a fact, they present outstanding information on inflation, the economy and on gold and silver.  That is what I present in this blog, NOT their stock recommendations.


David Schectman

Miles Franklin