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Sometimes FATE works in my favor, not that I’m “happy” about this topic.  Last week, I noted that the Cartel destroyed Tuesday’s HUI gain on Wednesday – even though gold prices were down just a measly buck – and this past weekend, I wrote the following:

Amazingly, the HUI only fell eight points Friday – or half its Thursday gains – as I was positive they would attempt to reverse all of Thursday’s gains, as they did on Wednesday with Tuesday’s gains.

And this in Monday morning’s commentary:

I should have known something was up when – yet again – the HUI opened lower with gold, silver, and the Dow higher, particularly when Silver Wheaton (SLW) – the world’s largest silver company – was down 3% in premarket trading for no apparent reason.

As I write at 12:45 PM EST Monday, the Dow is up 70, gold is down $6, and silver is unchanged.  However, the HUI is down 7.5 points , or 1.8%; in other words, it has now lost nearly all of Thursday’s 17 point gain, taking just the extra day to do so.   Moreover, Silver Wheaton is down a whopping 5.5%, again based on no discernible news.  Not that much “news” occurs with SLW, which generates royalties from more than 20 mines on four continents, and just weeks ago reported record annual earnings, 92% higher than in 2010.

The reason I am focused on Silver Wheaton is because I view it as the world’s best PM company, with one of the worst stocks.  For years it was my largest holding, either directly or via a junior mining stock called Silverstone that SLW acquired in early 2009.  However, I sold it – and ALL my PM miners – last August after the Cartel naked shorted it into oblivion, and as you can see below, SLW now trades at the same level as on “D-DAY” – November 9th, 2010 – when GOVERNMENT COMPUTERS took over the HUI for good.  Gold was $250/oz lower back then – and the Dow 2,700 points- yet Silver Wheaton – record earnings and all – has seen its P/E multiple contract to record low levels.

As have the handful of PM miners that actually make PROFITS after a 12-year bull market, which by my estimation is no more than 2% of all such companies on Earth.

And don’t even go into the junior miners, down more than 40% in the past year – on average – with the majority closer to 60%-70%, at or near the all-time lows of late 2008 and – before that – the Bre-X scandal of the late-1990s, when the HUI dropped to 40.  Below is a chart of the TSX-Venture (Vancouver) Index, which peaked five years ago this month, down 55% since with not a spark of life to be seen.

It may seem like I “harp” on mining shares a lot, but then again, 90% of my writing is spent harping on the same handful of topics.  The overarching theme is to PROTECT YOURSELF, and in my view “PAPER PM INVESTMENTS” represent the antithesis of protection.  In essence, they are pure speculations with instruments possessing myriad, exponentially expanding risks within a “market” where a malignant, omnipresent Cartel creates limitless supply that will NEVER, EVER stop.

That is, not until the Cartel is permanently BROKEN, which could occur tomorrow, but may take six months…or a year…or even two in what I would view an extreme scenario.  Until then, your capital is at extreme risk, with such perils only increasing afterwards.  AFTER the inevitable Cartel collapse, I don’t expect the window of opportunity for mining stocks to be EXREMELY short in duration, as it won’t take long before windfall profits tax and nationalization rumors proliferate, most likely started by the Cartel itself in a desperate effort to prevent slow the PM mania.

And then, the nationalizations will commence, and again I thank FATE for choosing today’s topic, per the MAJOR headline that crossed the tape this morning

The Nationalizations Begin: Argentina Takes Over Oil And Gas Producer YPF

YPF, the largest oil producer in Argentina – which I know well from my oil analyst days of 1996-2005 – is being NATIONALIZED by the Argentinian government.  No warnings, no hints, NOTHING.  And this is just an oil company during middling economic times, a “non-event” compared to the political MANIA likely to envelope PM mining companies in the aftermath of currency COLLAPSE and HYPERINFLATION.

Adding insult to injury, YPF is actually a joint venture with Repsol, Spain’s THIRD LARGEST COMPANY and likely one of the dying nation’s most profitable.  Amidst today’s global economic recession, few companies outside Oil & Gas are making significant profits, just as in tomorrow’s FINANCIAL ARMAGEDDON, PM miners will likely be the world’s most profitable, making them far more attractive nationalization/expropriation candidates.  Of course, at that time gold and silver will finally be understood to be the REAL MONEY they have always been, so such “profits” will become secondary to RESOURCES.

The Largest Companies in Spain for 2011

The beauty of my recommendation to SELL ALL MINING STOCKS and buy PHYSICAL gold and silver is that it CANNOT lose.  PHYSICAL PMs avoid ALL the risks noted above, let alone operations, taxation, brokerage, and systemic equity market risks, and are GUARANTEED to PROTECT you from the HYPERINFLATION certain to envelope the global financial system as the PONZI SCHEME that is fiat currency meets its inevitable demise.

Moreover, the less interest in mining stocks, the less capital that will be available for mine development, which will further boost PHYSICAL gold and silver prices.  The Cartel has starved mining companies of capital for five years, and in that time NONE have fought back for their shareholders, so why should you?  Instead, let the miners figure out how to capitalize on the most lucrative bull market of our lifetimes, while you sleep well and watch your PHYSICAL gold and silver rise more than 99% of investments in the HISTORY.

Financing a challenge for junior miners – Panel