Where are “we” today? “We” being honest money advocates (disparagingly called Gold bugs) and “today” being fully 10++ years into a bull market for Gold and Silver. I ask the question “where are we” because I cannot remember a time over the last decade where even THE most ardent hard money advocates were as “down” as they are now. When I say down, I really mean down… and it sounds like almost out! But why is this? Is it really that bad or do investors have unrealistic expectations or are they just impatient? Impatient because their common sense tells them each and every day that the metals are trading (on the paper bourses) at fractions of what they are really worth… or what we think they should be worth.
Over the last 10 days or so I have received fearful e-mails, I have read many “cautious” articles from Gold advocates, I know that (Mr. Gold) Jim Sinclair was buried with panicky e-mails last week and today on Bill Murphy’s site he published what sounded to me like “suicide notes.” A fellow named Jack wrote in and basically asked, “Why don’t we just give up and do what TPTB want us to? At least we’d have the winds at our backs. Maybe we should just put our money in high yield emerging debt?” Great idea… if you are a good little sheeple!
This note to Murph was followed by a guy named Norm whom I know very well. Kathy and I met Norm and his lovely wife Marianne last year at the GATA conference in London, a truly great couple and we have kept in touch since. Norm is a really bright guy. He has done the logic and knows the nuts and bolts of the metals markets about as well as anyone I know. I could not have ever imagined him getting “weak in the knees” as far as Gold, Silver or anything economic or financial for that matter… but… he nearly seconded Jack’s fearful motion of hitting the eject button.
I am writing this piece (as I have done for nearly 6 years now) to try to put “where we are” in perspective and help those with “suicidal thoughts.” I use the word “suicidal” because that is exactly what it is. So you decide “I just can’t take it anymore” …and then I ask WHAT in the world do you do with the capital? I mean really, WHERE can you put it other than the precious metals that will survive what is mathematically assured to come? In “AAA” bonds issued by governments that are more broke than their constituents who receive food stamps? In reality, there is NO PLACE on Earth today where you can invest in a “paper” account that is truly AAA rated. NOWHERE, period, end of story because everything is now a “promise to pay” and unless you receive a real and tangible item for trade, you did not receive true settlement. Argue this all you’d like, it is true and we will very soon find out just how true.
So, “where are we?” Gold is “up” from the beginning of the last decade over 600%, Silver costs 800% more Dollars to purchase and yes, even those oh so scary and crappy mining stocks as measured by the HUI are a 12 bagger! The world is ending for the Gold bugs! We are LOSING all of our money! We should get out now while we still have enough money to buy a good cup of imported coffee! Do it now, do it yesterday… we’re doomed!
OK, so a little dramatic I know but I’m trying to make a point here. My point? “We” have already won and cannot lose unless you let the “perception makers” win. Don’t get me wrong, these “perception makers” ARE GOOD, very very good as evidenced by how many smart, logical and well grounded investors are ready to do exactly what TPTB want them to, BAIL OUT and sell their insurance. But like I just wrote, where on God’s green Earth do you put the capital for safety?
To put it in perspective, where could you have put your money and done better than the precious metals over the last decade? There was nowhere and 90% of your choices can’t even purchase the same amount of goods that they could back in 2000. That’s right, versus real goods, probably 90% + of your paper investment alternatives back then have not even kept up with inflation (so much for Warren Buffett’s “productive assets” theory). Stocks, bonds, CD’s money markets or what have you did not even keep up with inflation and many are even down in nominal terms. The majority of investors now have less “money” today than they did in 2007. Many (maybe not the majority) have less “money” today than they did back in 1999…
…Yet, the Gold community is shivering in their socks, fearful of waking up tomorrow morning because Gold might “go down?” Think, think very hard about “how” you got to the financial position you are in now. Think about what exactly you would want to own next Monday morning were the global markets to not open. Think about where you would put your capital if you made the decision to sell the only insurance that will actually perform and “pay out” in the coming financial trainwreck.
Yes, THINK, think logically before you give yourself a heart attack, stroke or a mental breakdown. Use pure math. Use pure logic and ignore your stomach. I personally don’t understand the “why” of investors stomachs turning but they are. Please remember, THE biggest rallies in all markets come and begin when sentiment is at its worst, sentiment for whatever reason is as bad as I can ever remember it. We have seen blatant manipulation for years upon years so today is no different other than it is more obvious and the logic as to why you must own precious metals is more clear. We have had bigger corrections, more violent corrections and surely scarier corrections before, what we haven;t had was a correction that has lasted this long without going to a new high. The current “bad attitude” is nothing more than a function of “time” or should I say length of time it is taking to reach new highs in worthless fiat terms.
DON’T be scared, don’t do anything stupid, don’t do anything irrational. RELAX, sit back and know that what you currently sit on means that you have already won the game. Don’t lose by panicking and committing your own financial suicide. This is exactly what you’d be doing if you crumble to the perception makers and sell the only insurance that’s going to save your butt when “they” lose control of the entire global financial system! Mathematically the end of the current fiat system is coming… know this and you know everything necessary to make correct financial decisions! Regards and relax while holding your insurance.