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Physical = Life, Paper = Death

IMG Auteur
Published : December 19th, 2012
777 words - Reading time : 1 - 3 minutes
( 3 votes, 3.7/5 ) , 1 commentary
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Last week, Bill Holter wrote a great article about the “hand wringing” currently going on amongst Precious Metals investors. But “investors” is the key word; as holding “PAPER PM Investments” is entirely different from owning PHYSICAL gold and silver; i.e., REAL MONEY…


Why all the hand wringing? – Bill Holter, Miles Franklin


I, and a handful of others like Bix Weir, have been among the loudest critics of “PAPER PM Investments” like ETFs and mining stocks; which, care of the Cartel, are marked for death. Remember, “THEY WANT YOU DEAD” – and the easiest way to accomplish this is to DESTROY your PAPER PM Investments. “They” can naked short miners into oblivion; essentially, making supply UNLIMITED – as opposed to the incredibly scarce supply of PHYSICAL gold and silver; which, by the way, is getting more scarce EACH DAY…


DECLINING GOLD & SILVER ORE GRADES FOR DUMMIES


TRUST ME, I know what I’m talking about! From 2002 through 2008, I held 100% of my net worth in mining stocks – many of them juniors – and 70% until mid-2011, when I sold my last mining stock and went 100% PHYSICAL. Not to mention, I spent five years working as an investor relations officer or consultant to dozens of public juniors; of which, roughly 95% have seen 50%-90% stock price declines – and a good portion have gone BANKRUPT.


In other words, I’d BET MY LIFE the “hand wringing” Bill describes emanates ENTIRELY from those holding “PAPER PM Investments” – particularly mining stocks. I have 100% of my liquid assets in bullion; and thus, sleep the “SLEEP OF THE JUST.” Consequently, I haven’t “wrung my hands” one second this year – although I’ll certainly admit frustration.


My coins aren’t going ANYWHERE, particularly as most are sitting in Miles Franklin’s Brinks vault in Montreal. Moreover, my brokerage account didn’t drop one penny during Thursday’s “POST QE4 ABOMINATION,” February’s “LEAP DAY VIOLATION,” or any Cartel attack of the past 18 months. In fact, my bullion – as I write Friday morning – is up 11% this year, care of my allocation of 60% gold/40% silver; outperforming the “DOW JONES PROPAGANDA AVERAGE” handily during easily the most maniacal year of Cartel suppression in my “TEN YEARS OF HEAVEN AND HELL”…




I agree with everything in Bill’s article except the part about the HUI being a 12-bagger. Sure, if you bought it in 2000; and held on through the dozens of Cartel attacks – particularly at the 2008 BOTTOM, when millions of worldwide investors liquidated ALL their stocks, for fear of going BANKRUPT – you would have had a 12-bagger.


However, even I didn’t get into mining stocks until 2002 – when the HUI had already moved up significantly; and the sector, objectively, peaked in April 2007 when the TSX-Venture – i.e, Vancouver – Stock Exchange peaked at 3,300, compared to barely 1,100 today. Worse yet, this is the ugliest looking long-term, MASSIVE “head and shoulders” top imaginable; and given the sector is essentially out of capital, “investing” here could be a VERY dangerous “prospect” indeed…




In fact, I’d bet that just 1/8 of ¼ of ½ of a percent of current mining share holders have been around since 2000; and even they had to own the RIGHT stocks to make the aforementioned 12-bagger.


Many of the senior miners are at the same prices as in 2005-2007, while gold and silver prices have soared; and as for what miners will do in 2013 and beyond – who knows? Irrespective, I have LONG warned that any such window of opportunity will likely be VERY short; as surging miners – suggesting a collapsing Cartel – would likely coincide with a breakdown in fiat currencies, social unrest, and draconian government actions; such as what has been discussed in Congress this month


Cash-Hungry Congress Eyes Levy on Gold Mining


…not to mention, what is about to occur in two weeks


Effects of Ending Bush Tax Cuts


Of course, I could be completely wrong – and mining shares could be the market’s biggest winners. However, I find the odds of such an event to be small; and irrespective, the RISKS involved –discussed in countless RANTS, such as “MINING SHARES REDUX,” “LEAVING THE SANDBOX,” “OUTING GLD AND SLV, AND ‘INNING’ ALTERNATIVE FORMS OF GOLD AND SILVER INVESTMENT,” and – most recently – “SELL MINERS, DESTROY THE CARTEL!” – are simply too high, in my view. PHYSICAL gold and silver will rise more than 99% of ALL bull markets in HISTORY – and will do so at essentially ZERO risk; so why on Earth would you risk losing EVERYTHING, when you could do just as well by risking NOTHING?



 

 

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Andrew Hoffman was a buy-side and sell-side analyst in the United States (including six years as an II-ranked oilfield service analyst at Salomon Smith Barney), but since 2002 his focus has been entirely in the metals markets, principally gold and silver. He recently worked as a consultant to junior mining companies, head of Corporate Development, and VP of Investor Relations for different mining ventures, and is now the Director of Marketing for Miles Franklin, a U.S.-based bullion dealer.
Latest comment posted for this article
Director of Marketing for Miles Franklin, a U.S.-based bullion dealer. I too would rant on about Gold and Silver bullion as you don't need anyone stepping on your turf. As for the underlyong shares they will have their run as the blow off stage reaches i  Read more
neville - 12/20/2012 at 6:06 AM GMT
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Director of Marketing for Miles Franklin, a U.S.-based bullion dealer. I too would rant on about Gold and Silver bullion as you don't need anyone stepping on your turf.
As for the underlyong shares they will have their run as the blow off stage reaches its crescendo.But good luck with your gold holdings and let the holders of the shares worry about their lot.