This is a topic I have written of ad nauseum, as has Miles Franklin’s President – Andy Schectman – who opens his presentations with the following slide:
However, I thought I’d rehash it given the recent Cartel ATTACKS, which have pushed PAPER gold and silver prices to the bases of their respective eight month “reverse head and shoulder patterns.”
While Economics 101 teaches us to “buy low” and “sell high,” the majority of investors lose money in financial markets, slaves to emotion in lieu of logic. I am no different, but ONLY invest in sectors where I have 100% conviction – which is why I have been “all in” Precious Metals for the past “TEN YEARS OF HEAVEN AND HELL.” When investing in PHYSICAL gold and silver, this mantra is easy to adhere to, as no matter how far down PAPER prices are pushed, your metals remain safe and sound. This is why Miles Franklin receives essentially ZERO customer buybacks, even during MAJOR attacks such as what we’ve experienced this month.
To the contrary, “PAPER PM Investments” cause vanishing brokerage accounts, and are thus preyed on by Cartel naked shorting, seeking to DESTROY careless, un-informed, and/or greedy “goldbugs.” You see, “Secret #1” to PM investing is realizing you are not “investing” in securities, but “protecting” your net worth with REAL ASSETS that cannot be destroyed or stolen my manipulative – or normal – market forces.
That said, it matters not what your portfolio allocation looks like, so long as you understand “corrections” within an ongoing, generational bull market should be viewed as gifts, the unforeseen ramifications of TPTB’s efforts to prevent “Gold Fever” from commencing, a fear-based phenomenon where the MASSES desperately attempt to divest dying scrip in lieu of REAL MONEY. Therein lies “Secret #2,” gold and silver are MONEY, while dollar, pounds, and Euros are just FIAT CURRENCIES, backed by ZERO intrinsic value.
Over the past ten years of PM ownership, my motto – regarding Cartel suppression – has been “each day worse than the last,” presciently coined circa 2005. However, I never dreamed they could hold “the system” together this long – as bloated, bleeding, and cancerous as it is – and thus, that what I viewed as egregious in 2005 – or 2007 or 2009, for that matter – would pale in comparison to what we see today.
Following gold’s run to an ALL-TIME HIGH of $1,920/oz – and silver to $45/oz – during last summer’s Global Meltdown II, Cartel efforts to push PMs down have been UNPRECEDENTED, consequently pushing prices as far below their “fair market values” as at any time during the 12-year bull market, and perhaps – EVER. I continue to calculate gold’s fair value in TODAY’S DOLLARS – based solely on overt MONEY PRINTING over the past four decades – as $15,000-$20,000/oz, and for silver – based on a return to the historical gold/silver ratio of 15:1 – at least $1,000/oz, again, in TODAY’S DOLLARS.
Given PMs rising “fair market value” – as “TODAY’S DOLLARS” increase each minute – and the most draconian Cartel suppression EVER, one should be wary of the potential SUPPLY SHORTAGES that have plagued the industry each time the Cartel pushes the price too low – or allows it to rise “too high” – over the past five years. We first saw it in late 2008, when the Cartel attacked PMs during the initial stage of Global Meltdown I to prevent them from being viewed as safe havens. At that time – for instance – PAPER silver fell below $9/oz, but PHYSICAL silver never fell below $16/oz, with EVERY GLOBAL MINT SOLD OUT, yielding nearly 100% premiums (to PAPER prices) and 6-10 week delivery times.
It next occurred a year ago, when “ADMIRAL SPROTT” floated his PSLV bullion trust, catalyzing PAPER silver’s run to $50/oz, despite the Cartel’s best efforts post “D-DAY” – November 9, 2010, the first time silver approached $30/oz. In late April 2011 – with PAPER silver trading in the high $40s – the bullion industry again SOLD OUT, with premiums and delivery waits EXPLODING, prompting the Cartel to counterattack with its most “sophisticated” attack to date, the infamous “SUNDAY NIGHT PAPER SILVER MASSACRE,” when it was forced to play its long-held “bin Laden card” to provide cover for one of the most egregious market manipulations EVER.
Then in September 2011 – following the aforementioned PM surges to $1,920/oz and $45/oz, respectively – amidst Global Meltdown II – the Cartel again committed a violent, blatant PAPER PM suppression, commencing with “OPERATION PM ANNIHILATION I” just hours after Labor Day, and minutes before the Swiss National Bank devalued the Franc by 9%. The real world result of this attack – as well as the follow-up “OPERATION PM ANNIHILATION II” in December – were additional PHYISCAL DEMAND EXPLOSIONS, sucking up valuable metal at fire-sale prices. Just two months later – on the eve of the “LEAP DAY VIOLATION,” gold had risen from the high $1,500’s (where we are today) to the high $1,700s, and silver from the $29s (again, where we are today) to $37.50.
Here we are in May 2011 – just two months after the “LEAP DAY VIOLATION” – and gold and silver have been knocked back to those same levels, while the FUNDAMENTALS for why we own PMs exponentially stronger. Greece has partially DEFAULTED and is on the verge of RENEGING on ALL its debt – with Spain, Portugal, and Italy close behind – while France has elected a near-COMMUNIST that threatens to undo the thin fibers of support holding the Euro currency together. WORLDWIDE, economies are IMPLODING and money printing EXPLODING, while the U.S. threatens the world’s third largest oil exporter with annihilation.
Thus, the conditions for a PHYSICAL PM DEMAND EXPLOSION are ripe, and just one day into the sub-$1,600/gold, sub-$30/oz silver environment, Miles Franklin has already seen surging demand. The Cartel’s mantra has been to make you believe a) PMs are NOT a safe haven, b) PAPER PMs are just as good as PHYSICAL, and c) supply will ALWAYS be available if you need it. They are wrong on all counts – as HISTORY proves – and will be wrong again, in spectacular form.
These are the times to think long and hard of what the world may look like in the coming months and years, and how you can best PROTECT your assets from the dangerous times ahead. Per the image above, PM SUPPLY SHORTAGES are real, and at some point will be acute, and finally, permanent.
PROTECT YOURSELF, and do it NOW!