I’ve been working hard, very hard. As in, not an hour of the day goes by, 24/7, that I’m not scouring the internet for incremental information; downloading articles; reading and analyzing them; preparing my next article, podcast, or presentation. This, while performing my other duties, as the Marketing Director of one of America’s oldest, most trusted bullion dealers. To that end, I wrote every day during my vacation – and wake each morning before 4:00 AM, nearly never at the prompt of my alarm clock.
The reason being, that not only do I want to succeed at my job – and thus, overcome a lifelong fear of failure; but educate you of the fraud and deception emanating from the “evil Troika” of Washington, Wall Street, and the (fake news) Mainstream Media. Which cumulatively, will do anything – legal or illegal, ethical or unethical; toward the end of maintaining power over a dying status quo, and helping the “1%” separate the “99%” from their money. Or at the least, create such a dramatic wealth disparity; whilst inadvertently hyper-inflating the cost of living; that even those that appear to be “winning,” are in the big picture losing significant chunks of economic ground.
Politically and economically speaking, the list of “negative superlatives” regarding the state of America – and much of the Western world – has never been longer; and unfortunately, due to the toxic combination of unprecedented, parabolically growing debt; rampant overpopulation, coupled with historically ominous demographic trends; and the ongoing implosion of history’s largest, most destructive fiat Ponzi scheme; will only get worse before one day, when the economic disease is inevitably, but painfully purged, all that has been trending down since the turn of the century, turns up.
When I consider my investment career – going back to my first internship at Paine Webber in 1989, selling 8% Certificates of Deposit to a cold-call list of people with no interest in such “low” yields, it’s amazing to consider not only how the world has changed, but the equally dramatic shift in my personal investment preferences. To that end, my first serious “investments” didn’t occur until 1999; when for the first time – in my first year as a sell-side oilfield service analyst at Southcoast Capital in New Orleans, at age 29 – I had enough savings to even attempt investing. At the time, said investments were typically a few hundred shares of the latest dotcom or telecom high-flier; most of which worked out, until the bubble popped shortly thereafter.
My natural risk aversion – i.e, fear of failure – caused me to sell my last dotcom stock in April of 2000. After which, I remained in cash for the next two years, avoiding entirely the bursting of what, to that point, was the worst economic crash since the Depression. For that matter, aside from mining stocks – which I’ll get to in a second – I haven’t owned a stock of any other kind since.
My early years at Salomon Smith Barney, where I worked as a sell-side oilfield service analyst from 1999-2005, were the best earning years of my career. And thus, for the first time, I had enough saved to make investments large enough to matter. Which is why, when I found the Precious Metal sector in May 2002 – exactly 15 years ago, when I purchased a few hundred shares of Newmont Mining – I was prepared to take significant speculative risks. At the time, I was working 80-hour weeks; making good money; and had no “attachments” except my work, given that I didn’t get married until late 2002. The oil business was good; the worst of the post-Dotcom crash was behind us; and, as noted above, I had been wise – and lucky – enough to have avoided the brunt of the financial carnage.
Given my newfound love of mining stocks, my speculative juices were boiling over. Consequently, I quickly invested my entire net worth in the sector, under the overly simplistic, and decidedly un-alarmist premise that the dollar was “overvalued”; and thus, ripe to “decline.” It took mere days for me to realize an omnipresent Cartel was suppressing prices – and by 2003, I was already a regular contributor to the GATA website. However, the Cartel was exponentially less “advanced” than today, as the existential “threat” gold and silver posed to fiat hegemony was not yet sensed by the powers that be. Thus, while I experienced plenty of frustrating Cartel smashes, the Precious Metal markets were dramatically more freely traded than today; and consequently, the vast majority of my personal wealth – to this day – was earned in the mining share markets, principally juniors, of 2002-06. Given what has conspired since – i.e, a decade of Cartel-induced stress and financial losses, despite everything I had worried about being far worse than imagined – it’s a miracle I’ve retained as much as I have. And yet, care of my subsequent decision to invest solely in physical metal, it’s just a third less than the peak net worth I achieved a decade ago.
When I left Salomon in 2005 – after the fourth round of post-Dotcom layoffs finally, mercifully ensnared me – I sought to parlay my 16 years of (largely successful) Wall Street experience into the sector that now dominated not only my intellectual interest, but my net worth as well; i.e., Precious Metals mining. Starting in 2006, when I received my first (inevitably worthless) warrants to consult with a junior miner, I spent five years working as either an Investor Relations officer or consultant to literally dozens of mining companies. One of them was a full-time gig, from early 2008 (when the stock, and my options’ value, peaked) until it burned through the $100 million of equity capital it raised at the time of my hiring, a mere three years later. Good people, but a highly-flawed business plan, exposing why mining is one of the difficult businesses on the planet; particularly, when a Cartel is working 24/7 to destroy the value of your end-product.
During that time, the 2008 financial crisis occurred – and despite having been dead-on right in predicting it; and being fully invested in Precious Metal mining shares, which I expected to benefit greatly from it; I lost two-thirds of my net worth to the Cartel’s post-crisis paper PM raids – which consequently, hit mining shares far harder. Too bad I hadn’t yet discovered physical metal; as despite the initial, Cartel-induced plunges in paper prices, physical prices never materially declined. As once the paper prices started falling, physical demand grew so strong, the global bullion industry sold out within weeks – yielding massive delivery delays, and physical premiums (versus the fraudulent paper prices) of up to 30% for gold, and 100% for silver. I.e., the exact amounts the paper markets had been taken down.
As the crisis progressed through 2008, I started selling my miners in lieu of physical metal – which initially, I purchased in small amounts from eBay. Fortunately, I held on to the majority of my mining stock investment for dear life – which for the most part, I “high-graded” into what I thought to be, at the time, the best mining stock imaginable. Yes, I “bet the house” on one stock, a Canadian silver royalty company called Silverstone Resources – which, from a high of roughly $4.00/share, had fallen to about $0.50/share. Given that this “poor man’s Silver Wheaton” was cash-flowing even at the bottom, I thought it was worth the risk. Which it turned out to be, as Silver Wheaton eventually bought it in early 2009 for stock – making Silver Wheaton, valued near its post crisis low of $8/share, the vast majority of my net worth.
Fortunately, it rose to more than $40/share two years later – peaking just before the “Sunday night paper silver massacre” raid of May 2011. However, it could never make up for all I had lost in the 2008 crash. And thus, when incredibly, the miners dramatically underperformed silver when it was racing toward $50/oz; let alone, in the traumatic aftermath of the aforementioned, horrific raid (which occurred at the San Diego airport, returning to Denver from a party celebrating the great outlook for my junior mining stock investor relations firm); I finally said “no mas”; and subsequently, in June 2011, sold my last mining share, and went entirely into physical metal. By then, I had already whittled my share/metal ratio down to 50/50 – principally, when I cashed out my mining share owning IRA in late 2009; but finally, after four long years of misery since the TSX-Venture (i.e., Vancouver) stock exchange peaked in the spring of 2007, I was 100% metal – where I planned to remain for, essentially, forever.
The six years since have been equally painful mentally, as the Precious Metal “threat” to the fiat regime been fully recognized; and acted upon, by a vicious Cartel that has not only suppressed prices to historically undervalued levels, but taken the world to the brink of financial ruin. Moreover, given my role as Marketing Director of Miles Franklin, I have been exposed to their attacks in every imaginable way. That said, the beauty of owning physical metal, versus speculative “paper PM investments,” is that my net worth really hasn’t changed much over this time – as, plain and simple, gold and silver are so close to their costs of production, the actual downside losses (which I responded to, by buying on the dips) have been muted; and with nearly 100% certainty, will remain that way ad infinitum, now that production is plunging; inventories paper-thin; and oh yeah, global demand is inexorably rising, as fiat currencies serially crash.
This, as opposed to “paper PM investments” – which the Cartel has all but destroyed, each and every day of the six years since I abandoned them. Certainly, my recent Bitcoin gains have cushioned the blow, but the majority of my current financial stability, amidst the most heinous Cartel shenanigans to date, is attributed to my decision, in early 2011, to hold the majority of my savings in physical metal. Not to mention, the sheer luck of having moved to Colorado in early 2007; when, to fund the purchase of my home, I sold a good chunk of mining shares. And now that I’m no longer a young pup; not to mention, that starting in mid-2013, I’ve been a father; the sense of financial calm physical gold and silver give me – and with it, the ability to sleep at night, no matter what the Cartel is doing – is priceless.
Well, I certainly didn’t intend to write about my past when I awoke this morning – or even, when writing the first three paragraphs. But hey, something inside me compelled me to do so, and I hope you enjoy it, and learn from my experiences. To the contrary, per today’s title – “PiMBEEB-a-looza, Pt. II – my intention was to focus on the relentless; and frankly, unparalleled; amount of risk factors today’s “historically unsustainable” financial market valuations are up against; i.e., “dotcom valuations, in a Great Depression Era.” And conversely, the “anti-bubble” valuations of Precious Metals, as history’s largest, most destructive fiat Ponzi scheme collapses.
Given that I’ve already penned three pages; with a “PiMBEEB” – or Precious Metal bullish, everything-else-bearish” – list of topics so long, it would take ten more to properly address them, I figured I’d simply list such articles from yesterday. Which, when you read them, and realize that silver has become extremely oversold, following the liquidation of some of the COMEX spec longs’ historically long (with good reason) position; let alone, that despite said heinous Cartel raids, gold is still $20/oz above its 200-week moving average; should empower you with confidence, and embolden you to understand you have invested wisely. To wit…
- The next trade war – Trump threatens to terminate horrible trade deal with South Korea
- Trade War Round Two – Boeing accuses Bombardier of dumping jets, Canada retaliates
- Democrats threaten to shut down government if GOP passes Obamacare repeal
- Trump calls Schumer’s bluff – If there’s a government shutdown, it will be Democrats’ fault
- Trump tweets, Democrats want to shut government over Obamacare failure and Puerto Rico
- United Nations – Obamacare repeal would violate international law
- Hundreds of cops gather, as battle of Berkeley 3.0 begins
- Trump – There’s a chance of a major, major conflict with North Korea
- North Korea releases stunning video, simulating war with U.S. (and blowing up the Capitol building)
- Stocks slump after Putin warns Korea situation deteriorating
- Japan warns citizens to prepare for North Korean missile attack
- More than one million student loan borrowers were in default last year
- Credit card defaults surge to four-year highs, and it’s getting worse
- Trump’s tax plan could cost $3-$7 trillion over the next decade
- Spectacular seven-year Treasury bond auction – record direct bids, soaring bid to cover
- Bitcoin spikes to record high
- Deutsche Bank tumbles most in five weeks, after earnings disappoint across the board
- I’m in Awe of How Fast Brick-and-Mortar Retail is Melting Down
- Crashing Canadian mortgage lender bailed out by 321,000 retired Ontario healthcare workers
- Kansas City Fed survey crashes most in six years, hope fades
- 17 EMEA nations still have negative two-year sovereign yields
- Pending home sales drop in March, stagnant for two years
- Q1 GDP takes another hit, as wholesale inventories slide in March
- Atlanta Fed throws in towel, cuts Q1 GDP forecast to just 0.2%
- JP Morgan cuts 1Q GDP forecast to just 0.3%
- Initial jobless claims jump most in five months, to highest level since election
- Core durable goods orders tumble most since June 2016
- WTI crude plunges, as market runs out of patience with OPEC
- ECB keeps rates steady, says ready to expand QE if outlook worsens
- Trump’s second Obamacare repeal attempt at edge of collapse
And two more this morning, just 24 hours from a potential government shutdown this weekend, and who knows what in North Korea…
- Republicans fail, in second attempt to repeal Obamacare
- S. GDP growth tumbles to just 0.7% – lowest in three years, worst personal spending since 2009
In other words, particularly after the latest; most heinous; and potentially, physical market dislocating Cartel attacks, the reasons to own Precious Metals have never been more powerful, nor their valuations more compelling.