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“Simon Black” of Sovereign Man is one of the best writers of “protection-related” articles in the blogosphere.  I have quoted him numerous times, and an article he published last week struck a chord in my psyche.  Not so much that its theme is novel – as I have been writing of the need to own PHYSICAL assets for some time – but as it pertains to a REAL LIFE SITUATION…

Guest Post: Why You Always Want Physical Everything

Granted, touring San Marino is not an experience shared by most.  However, taking one’s car to the gas station most certainly is.  As Simon describes, he literally could not use a credit card in numerous Italian establishments, as mistrust in the financial system is rapidly expanding.    With the Italian economy contracting

BBC News – Italian economy contracts 0.7% in second quarter

…debt exploding

No time for Mr Monti: Italy will have to restructure its debt

…banks failing


…and poverty proliferating

28,000 “Cash For Gold” Outlets in Italy as Serfs are Forced to Sell

…shop owners are AFRAID of financial institutions, and desperate for “cash”; in other words, hard currency free of counterparty risk.  Moreover, Black astutely notes,

Why you always want physical EVERYTHING…

Simon Black on August 23, 2012

It’s the same thing with gold and silver when you think about it. In the early days of the post-Lehman financial crisis, precious metals prices were tanking. At least, on paper. 

Gold and silver contract prices may have been plummeting in futures exchanges around the world, but simultaneously, premiums for physical gold and silver coins were skyrocketing. The US mint was unable to keep up with demand for physical coins, and premiums hit double digits by December 2008. 

It was an obvious example of the huge disparity between paper and physical prices.  In tough times, the paper price is irrelevant – physical is all that matters.

Continue reading on Sovereign Man

I have exhaustively written of the EXPLOSION of PHYSICAL PM premiums during late 2008 – when fear of market meltdown, and currency collapse, peaked.  Black is 100% in his assertion, other than avoiding the PINK ELEPHANT IN THE ROOM – that PM prices were “plummeting on futures exchanges” due to Cartel naked shorting, to prevent PMs from being rightfully recognized as safe havens.  Irrespective, it was fear that caused dislocation of the PAPER and PHYSICAL markets, yielding premiums of nearly 100% in silver, and lesser levels in gold.  Conversely, GREED came into play in April 2011, when premiums also soared due to PHYSICAL silver shortages, this time in otherwise calm financial markets.

Black’s Italian experience represents a small microcosm of the current European situation, but I ASSURE you the microcosm will shortly turn “macro.”  Initially, Europeans – and Americans, Britons, Japanese, etc. –  will fear the financial institutions processing fiat payments.  However, they will eventually shun the fiat payments themselves.  When that occurs – potentially much sooner than you might imagine – if you haven’t traded your fiat currency for REAL MONEY, it will be too late.


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