Unfortunately, for those of us who have “invested” (in reality the word is “saved”) in precious metals, I don’t think that we will get to enjoy them. Let me explain before you get disheartened and decide to sell all your holdings to go buy a “nail gun.”
Many people (including myself for the first 6 or 7 years) bought gold and silver to “get rich,” retire and ride off into the sunset of some deserted island paradise. This is/was a natural thought process in my opinion because gold and silver were so cheap based on all sorts of yardsticks. Yardsticks such as versus the cost of production, versus GDP, national and total debt outstanding, versus equities, money supply(s), you name it…precious metals were cheap, cheap, and cheap (they still are…and maybe even cheaper)!
So naturally, many believed that “investing” in an asset class that had become so unloved (actually hated) was the road to fabulous wealth. Wealth that could be used to travel the world, eat fine foods …and just enjoy life in general. Of course, passing wealth on to future generations was a thought but the immediate lure was to become “wealthy.” Some of the early birds have done well enough for this to be the case. Some of the really aggressive early birds have accumulated enough that they no longer need to work but unless they kept their day jobs, income is not flowing.
So what is it exactly that I’m trying to get at here? Presently, we still live in a world where if you accumulated $5-10 million dollars you can really enjoy life. You can do this because the world is still (sort of) “normal.” You are able to buy whatever goods that you desire, you can travel wherever you’d like and dine like a king or a queen. But…I don’t believe our current “fairy tale” world will continue much longer.
I foresee the arrival of many things “restrictive” such as capital controls, bail ins, passport restrictions, the shortages of many goods and even foods because of trade disruptions. I also believe that “war,” whether outright, financial or “cyber” is definitely in our future. In short, our “world” is going to change. And yes I know, our world is constantly changing but in my opinion…what comes will not be pleasant.
The reason I am writing this piece is because it is clear to me that “they” will not let “us” enjoy the fruits of our willingness to have been early, been bold and different, and recognized “value.” Gold and silver have been completely locked down since the fall of 2011 and been monkey hammered by paper contracts for the past year. This in my opinion has been a last ditch haymaker to get anyone that was “in”…”out” and to scare anyone thinking of entering to think at least twice. This has to some extent worked yet it has also created massive demand from outside of the U.S.
I got to thinking about this because I had a recent conversation with a past client who said to me, “I would have thought 15 years ago when gold was $300 that $1,300 gold would have meant that we ‘won’?” The way I see this is that we have “won” but that the “table” will be purposely kicked over and unless you have $100’s of millions or even billions of $ (in today’s dollars)…life will not be a bed of roses. Don’t get me wrong, you will have wealth and you will have arrived into whatever new system that is set up with wealth…but…”things” will be different.
I do not believe that gold or silver (or ANY market for that matter) will be allowed to trade freely “until they do.” Sounds almost foolish don’t it? “Until they do.” What I am trying to say is that once the markets do trade “freely” it will mean that “control” will have been lost. “Control” as in the chaos that is being hidden in plain sight becomes plain for all to see. I want you to think about this, what exactly would $4,000 gold mean? Or $10,000-$20,000 gold? Or even MUCH higher? It would mean that the world has spun out of control …which also means that life in general will be a dangerous proposition never mind ordering $200 bottles of champagne with your dinner.
What I am trying to do here is to get you to change your mindset from “making money” to “surviving with wealth.” I’ve written about this concept from many angles but never “in your face” like this before. I do not believe that gold or silver will “go up” until it is determined that there is no more to be delivered from West to East. Once this does happen… all bets are off and the table itself will probably be kicked over. There will also necessarily need to be something to “point at.” Some sort of event, whether “real or false” flag will occur because something must be blamed. Without something to blame it cannot be said that …”our policies would have worked if it weren’t for such and such.”
The bottom line I believe is that those with precious metals will not be allowed to feel like “they won” until “winning” doesn’t matter anymore…survival will. Yes, precious metals will be wealth and this wealth will allow you to do some things that others without any wealth will be able to do (like eat), but you will not be “wealthy” in today’s current sense of the word. You may, probably even will, have more purchasing power than currently but I believe that your “options” to spend your wealth will be far more limited than they are today.
Maybe I am wrong in this thought process but I don’t think so. We are on the cusp of something that happens every 200 years or so, the changing of the guard or more specifically the reserve currency. I can envision maybe even up to 20 years of chaos and uncertainty until a “new world order” truly becomes ironed out. Wealth will obviously be a good thing to have, truly “enjoying it” will be whole ‘nother story in my opinion.
As hard as it is to hear, Bill, I think you’re right. I’ve been thinking along the same lines for a while now, so this sort of confirms my feelings. I’ve even sensed a change in Andy Hoffman’s tone recently. I started buying silver 4 years ago this month, and I had thought that by now my stack would be worth a lot more, not less. I’m 38 years old, and I’ve never have been wealthy. And now I’m convinced that I never will be. I saw precious metals as the only way to preserve what I worked so hard for. I’m certainly keeping my stack as things are worse now than they were 4 years ago. Frankly, I’m astonished that TPTB have kept the system together this long. What a world we live in.
Yes, what a world…
Some sobering thoughts but likely right on the mark.
I still wonder if we will get to some critical supply shortage in the Silver market at some point before TPTB lose control. This would essentially render the paper markets meaningless and we could see real price discovery in the physical market.
Jeff Nielson posted an interesting article today about a supposedly dwindling silver stockpile. Lots of speculation and clearly nobody knows for sure but it seems pretty clear to me that any significant short-term increases in investment or “savings” demand in Silver could pretty quickly deplete whatever silver hoards remain…
http://www.bullionbullscanada.com/silver-commentary/26520-the-secret-silver-stockpile-part-iii
I think it will happen all at once.
I’m still following Larry Edelson. He thinks gold and silver will take off soon. He says gold is going to at least $5,000 and silver to $125 over the next few years. Maybe we’ll get to enjoy our stacks for a short while? LOL.
Trader Dan has some good posts about this on his website. He isn’t a gold basher, but he does feel that it’s dangerous to always be bullish on something, especially when it’s been hit hard the last couple of years.
http://traderdannorcini.blogspot.com/2014/05/the-gold-cult.html#comment-form
Bill, Dave in Denver says he has no doubt where gold is headed, but wonders what world we’ll live in when it gets there. His post the other day questions the CME’s proposal to limit price changes in precious metals. He notes that there was no such proposal when PMs were slammed last year, and wonders if it’s brought up now because they want to limit gains now that supplies are low. His blog was The Golden Truth but now it’s InvestmentResearchDynamics.
I tend to agree, the limits will be put on to retard the upside.
Bill,
I have a friend with a great sense of humor. Whenever he and his wife argue and neither will back off, he says ” Well, I guess there will be no sex tonight.”
Your piece today reminded me of that. I always thought of having a little silver was only a life jacket anyway, so I still think it is only a life jacket and the ones who have some junk silver will t least be better off than the average Joe.
yes
Just read the latest missive by Harry Dent to scare precious metal investors into selling their holdings. He’s been on record for a while that Gold is going to $700, but now he claims that it will retreat as low $250 by 2022 as king dollar will reign supreme in a deflationary crash. He has no concept of geo-political events, production costs or the fact that we would have to default on our debts or print lots more money in a deflationary collapse, either of which is anything but bullish for the dollar.
Sure would love to hear someone like Bill Holter debate this clown and tear his arguments to shreds. Porter Stansberry wasn’t quite up to the task, which I found surprising….
AK, I just finished an entire piece about Harry Dent so look for it Monday. He is a delusional idiot in my opinion and yes, I did challenge him to a debate any time that he would like.
Yes I think Harry Dent is “one of them” serving up disinformation!
please see my piece on Monday.
OK!
Harry Dent told Jim Rickards the public wouldn’t stand for QE3 or QE4, yet here we are. With growth at 0.1% in the first quarter even using BS, understated inflation data. How long before Yellen reverses taper and goes full print? BTW, Harry Dent doesn’t seem to understand that PMs have no counterparty risk as paper implodes in a deflationary collapse.
He fails to understand a lot.
Bill I’ve always enjoyed your posts. Possibly because I share so many of the same viewpoints when it comes to the metals. While I’ve always been a big believer it their various forms of value one has always been outstanding and that is I view them as a hedge against Government and should always be accepted while many other forms of trade will not. Keep up the real deal as they say. While Truth seekers will never be the most popular at the party their information still holds true value… much the same way that your posts do. Keep it up and thanks
thank you Barry.
Strange that your comment today reflects exactly the opinion I have held for over a year. My email of earlier today (before today’s blog was published) seeking your comment on the future of gold could have been sent after reading your “Unfortunately” blog.
I never did buy PM to “get rich” only to maintain the status quo. To borrow your title – unfortunately – I bought just in time to loose one third of the wealth we planned to live on for the rest of our retirement. I never cared if gold went to $3 -10 or 30k – I just wanted to stay even. Didn’t happen – Looks like it won’t.
B.
“looks like it won’t”….??? Really?
Bob,
I can completely sympathize with what you are saying because I converted a significant amount of my savings at higher prices as well.
When I ultimately made the decision to convert my IRAs and most of my liquid net worth into precious metals, it really had nothing to do with price of the precious metals.
Instead, it had everything to do with me no longer willing to be a participant of a corrupt, over-leveraged financial system that is designed to enrich the elite at the benefit of everybody else.
To me, the risks no longer justify playing in a corrupt casino. I chose to voice my dissent by pulling out of the system except for one bank account to pay for bills. I continue to convert excess cash into other assets including precious metals that are not part of the system.
To me, it is not about price, it is about taking ownership of my limited wealth and hence be insulated from the criminality that is so prevalent in our financial markets and the eventual bail-ins that will affect every investor who chose to remain a pawn in our manipulated markets.
Many precious metal “investors” tend to overlook what I deem to be the most important attribute of holding precious metals outside of the financial system: “NO COUNTER-PARTY RISK”.
In my humble opinion that simple fact will prove to be price-less for holders of precious metals, regardless of the paper price on the fraudulent Comex.
yes.
Hey Mr. Bill…oh no!
Big fan and hope to hear you back on TF Metals for another interview with Mr. Ferguson. Have listened to Jim Rickarts for years on the FED knowing they need to devalue the USD and soon they will but the more time goes by the more I tend to see it the way you laid it out. The yen and the yang of the USD strength and devaluation to me just doesn’t seem like it will come by choice. More of a leaping and screaming tantrum as we see daily in the travesty called the Crimex. Other than that reads like a testimonial of my thoughts you are a gem or a golden nugget your call. Carry on please dear sir
Thanks KC, ask Turd to have me back, I look forward to it. Rickards still believes that Ft. Knox is full… he is dreaming in my opinion.
when the ‘world’ changes…you will need lead to survive and retain your possessions…all else will be secondary….imho
yes
I am afraid the crooks will implement an “obscene” profits tax to punish those of us who saved properly in precious metals.
They will not want us to benefit from any significant increase in precious metal prices because they are truly sick, psychopathic people.
you could be right.
Mr Holter has an interesting perspective on gold, the ‘future’, and ‘winning vs survival.’
If you hold gold and silver (which candidly I do), you sort of have to adopt this sort of hunker down mentality (indirectly inferred from the above commentary) in order to not be kicking yourself had you placed whatever dollars you had into the stock market vs gold over the past 5 years.
This my friends, is what psychologists call rationalization. It’s a way for the mind to deal with present reality, and also a way to FEEL like one is in control of one’s destiny, and that reality is that holding gold or silver, physical and not paper, is simply nothing more than a rationalized gamble. Stocks are pretty much the same way.
Obviously no one can predict the future. Though many pretend they are going to be more accurate and have the answers based upon their many life biases or even observations of what they consider “technical analysis” using charts. The goofy thing about this so called “technical analysis” is that it is neither technical nor actual analysis that can be consistently used to ‘predict’ the future. If it were truly TECHNICAL, and ANALYSIS, it would not be using historical data (since history means jack squat in terms of the future, though we all try to rationalize otherwise – that’s what humans have to do for mental survival and relative sanity), AND most importantly, it would be consistently repeatable if it were true analytics or analysis. Traders and posters on many so called trading boards, have both themselves fooled, and people who follow them, fooled as well.
So while everything Mr. Holter writes SOUNDS plausible, and frankly is un-arguable, because again, no one can successfully and consistently predict the future, I suggest everyone keep in mind that they are no ‘safer’ holding gold or silver than holding any other fiat de-nominated ‘asset.’
In the meantime, somebody’s cycle work suggests than gold will have a meaningful ‘bottom’ sometime in June/July.
FWIW, My definition of ‘wealth’ is far different than most – if today, I was able to eat, feed my family, have them healthy, and living relatively a normal existence under a protective roof and safe home, and as well get to conduct work that is compensating me in a reasonable fashion, to allow for today’s lifestyle, I consider myself both grateful and wealthy. Along with that, if I can also help others, and am able to make time to do so, that is a plus. And the less I pre-occupy myself with worrying about the future, the more I find that I am content that I am making the right decisions.
Trying to actively and consistently prepare one-self for some unknowable future,is a fools errand and one that is increasingly unhealthy, and increasingly a waste of precious time. Why do I say that ? Because in an instant, my life could be taken by any number of events that are simply out of my control.
The vast majority of human’s have an EXTREMELY difficult time wrapping their minds around that simple little fact, and have extreme difficulty figuring out how to accept that quite simply, most of what surrounds them either locally, globally, or universally, is totally out of their control. Taken without any context, that is an immensely unsettling proposition for the human mind to accept.
When you come to grips with that premise, you will then understand the true meaning and importance and appreciation for an Italian phrase that I have engraved on a plague and in my home displayed during the winter season, and outside my home on my deck, that over-looks my outdoor swimming pool. “Il Dolce Far Niete.”
You will then learn how to actually live in the moment, not FOR the moment, and will become wealthy far beyond what you currently can imagine or define as ‘wealth.’
WEG? Really? We had better come up with a new energy source soon or tomorrow will never come! No matter…as long as we are in control of today? I say, “all you can do is the best that you can do…to prepare”. If you ignore everything (reality) and do not prepare then it is your own fault.
A Prudent man forseeth danger and hides himself. There are many who lived in the moment when the hurricane was coming. Some are living no more and others have lost everything. Many prepared, got damages and were still able to salvage from what was torn down. Tomorrow is not guaranteed, however, we do live today with preparation for tomorrow, if tomorrow comes. No one lives as if tomorrow will not exist. Even if it never comes for you, what about the ones whom you love or care about?
True wealth is health first, for without your health nothing will be achieved. It is not only what you have for yourself or gained for yourself. It is also what you will and can share with others in your life and when you are gone. I live for today but also prepare for tomorrow whether I am in it or not. Preparation eases the burden and fills the void of many things, especially if someone is missing for whatever reason.
WEG, you sound like my friends whom I warn about the impending doom. They make no attempt to learn about how the system works, and instead have faith in it. One friend agrees that things will collapse at some point in the future, but not the time frame I am suggesting. But the attitude that really gets me is: “Sure, things may collapse, but you just have to live your life and deal with things as they happen”. I find this so wrong on so many levels, and it’s the classic North American response to taking responsibility as a citizen, a perfectly choreographed attitude that the bankers have conditioned into us all to just accept our situation and not question or complain about it. It is because of this laissez-faire, “why should I bother to make an effort” attitude that the bankers have been able to gain control of our society and destroy it.
Sure, people can just “live their lives” and not take an interest in the politics that control them like they did a hundred years ago, but I respond that they then deserve to “live their lives” in a dictatorship, which is where we are going and arguably already are. If you aren’t willing to do your part to stick up for democracy then you don’t deserve to live in a democracy, which is why we no longer have a democracy. I have a feeling that my friends’ positions will change radically once their Fed-induced delusions are shattered…
And I agree mostly with what Bill writes, except his position that we have lots of natural resources left. While many aspects of our future are out of our control and not predictable, to use that as an excuse to not participate in society at a political level is not acceptable to me. Furthermore, as an “Energy Guru”, you should be intimately familiar with the laws of thermodynamics which are 100% predictable. They are predicting a very dark future for us since the net energy return of our remaining fossil fuels (to which we are fully addicted) is dropping precariously close to 1, after which we will have no more energy (despite the “trillions of barrels” of oil shale) and we’ll be forced into what Malthus predicted centuries ago but were able to delay by finding massive quantities of dead things underground to burn.
So in this respect, I do not envision a new world order emerging at some point after the chaos stops, as Bill predicts. People will be hoping for order to resume, but it never will, because our economies will be contracting, and the financial system cannot operate in a contracting economy. Unemployment will skyrocket and remain permanently elevated. Either wealth gets redistributed on a widespread scale, or half the population starves, or the starving half comes after the remaining half with pitchforks. Unfortunately, no conventional economist has a clue how to solve that problem.
Instead, the financial collapse will mark the turning point in the history of humanity, the dividing line between the pre-Peak Oil ascent, and the post-Peak Oil decline, which seems likely to be much more steep than the ascent was. We are overpopulated, just as the enviro freaks were warning us decades ago. 40 years of Fed market manipulation hasn’t changed that reality, it’s only made it worse because it conditioned complacency into people which sabotaged efforts to overhaul the energy sector when we still could, and also instilled in people the belief that the previous 40 years of economic growth were the “norm” which we should be striving to maintain and resume, when in fact economic growth is totally abnormal in the history of the world and not at all sustainable. Growth is the problem, not the solution, but will you ever hear that uttered in any mainstream economic commentary?
some very good comments.
lots of places to live besides the US. never thought I would consider it but now I’m really looking into it. at over 60yrs I’m just not up for the fight and I’m not going to be totally controlled so leaving is what’s left. like Doug Casey says just because you were born on a particular patch of dirt doesn’t mean somebody “owns” you.
yes correct… but there are other places where “gringo’s” won’t be so safe.
I started buying PMs in 2003, bought my first silver rounds July 4th weekend for $5. Each. I received a small inheritance the next year and bought more silver at about $7 spaced over several months. The inheritance represented a small share of my grandparents’ 20 acre property outside a small Texas city where my father and his siblings grew up.
Years ago I interviewed my uncle about what life was like growing up there during the depression. He said, “I didn’t realize at the time we were poor, because we had everything we needed, chickens, milk cows, horses, a garden and fruit trees. Dad worked at the packing house off and on, and he would butcher neighbors’ cows and be paid with a share of beef, which he barbequed in our homemade smoke oven. To me, poor people were the ones my parents let camp down the bluff beside the river. They lived mostly on rice and beans and what fish they could catch. As a kid, I thought we had a fine life.”¬¬¬
Personally, I hated to see the property sold because growing up I adored my grandparents and spent the happiest days of my life running over the place with my cousins and rowing boats on the river, etc. The reason I bought silver with that money was to have something tangible that would not disappear in my life, something I could pass on to my kids, even possibly something that might save our lives if times get desperate like the depression again.
So I “get” your article. Many thanks.
Thank you Western woman, great great story and I think your reasoning is wise.
The movie “Looper” shows the kind of world that we may be living in post dollar collapse. Chinese Yuan as the currency and silver and gold as the payment. Problem is, the view of that world is not one I would like to live in. It is crazy!
Great piece as always. This column really resonated with me because I’ve been having the same thoughts for some time.
As far as “becoming wealthy”, I’ve been accumulating mining stocks to compliment my physical holdings. I realize the risks such as nationalization of mines and how that could collapse a portfolio, but see that route as a possible way to increase net worth and quickly convert that into a sustainable set up for my family. I think the only way that it will work is to not become greedy and wait too long to sell.
That said, I see considerable risk in the approach, which is why my main focus remains the accumulation of physical gold and silver which will hopefully provide the long term security for my family.
thanks Scott, sounds like a plan.
Keep your FUD. All these thoughts have been thought in the past.
WTF should we do? Sit in our living rooms and cry? Don’t buy gold, don’t buy silver, don’t renew your passport, you’re in danger if you leave the country….
Bill, you’ve done no one a service with this post.
If I ran Miles Franklin blog, it would be your last post.
The world has been in similar situations before and here we are.
The government’s job is to spread fear, not yours.
sorry you did not like my post “finnthecelt”. I write what I think and you are in no way obligated to read my thoughts…..it’s still a free country “for now”. Oh, and since you don’t run Miles Franklin, it won’t be my last post “unfortunately” in your opinion. Umm, and no, the world has NEVER EVER been in the situation it is now.