Whether you have limited means
directed at specific collapse-proof assets, or you’re an investor with
capital in personal savings or stock portfolios, there exist a number of
strategies that can help you to not only mitigate a worst-case scenario
crisis, but to come out ahead should it come to pass.
Rick Rule is the Chairman and
Founder of Sprott Global Resource Investments Ltd., and one of the world’s
foremost experts on non-traditional investments during times of uncertainty.
The company manages some $10 billion in investments for clients. Sprott is
one of the few firms that has been highly recommended by contrarian
investors, as they not only talk the talk, but walk the walk, having created
a massive store of physical gold and silver to back some of their leading
investment funds. With currencies being devalued to the tune of billions of
dollars monthly and government debt skyrocketing at an unprecedented pace,
getting into the mind of someone who’s seen and prospered from cataclysmic
market events over the last 40 years can help us to identify opportunities
where none seem to exist.
From how to trade stocks
in erratic markets to investment strategies that target long-term
global trends like dwindling resources and economies on the brink of
disaster, the following interview with Rick Rule from Future Money Trends covers numerous
topics that include how he thrived during geo-political calamity, his past
stock investment mistakes, the outlook for precious metals, how cold hard
cash will play a role when markets collapse, and preparing for a world where
even our most precious global asset – fresh water – becomes almost impossible
to acquire.
When looking for the best way
to allocate your hard earned money, start with one of the key rules Rick
follows:
”You want to own
things the enemy can’t print.”
Watch the full interview
from Future Money Trends:
Rick Rule on precious metals:
I like all forms of
bullion…
I believe, if pushed, that the
best form of bullion in terms of price appreciation for the next one or two
years, is platinum and palladium.
I don’t believe it’s because
of the monetary aspects of it. I believe it because the industry does not
earn its cost of capital at this price point.
I believe it because on the
supply side there’s no above ground inventory. All the platinum and palladium
that’s ever been mined has gone out a tail pipe, it’s gone up a smokestack or
it’s gotten turned into jewelry.
On why you should have some
dollars in your reserves:
I think you have to
own some dollars.
I think you have
to acquaint yourself with the fact that liquidity is a tool in
turbulent markets. You have to have some dollars knowing you’re going to lose
2% or 3% compounded. Because, as turbulence increases, cash will give you the
means and the courage to take advantage of the mistakes that other people
will make in a 2008 style market.
The first thing is you have to
choke down the fact that you’re losing money in the real sense and have some
cash.
Ugly lesson, but we have to do
it.
The second thing is that some
of that cash ought to be bullion. Some of that cash ought to be a store of
value that’s a medium of exchange.
I can’t tell the individual
speculator if they should be long gold or silver or platinum.
If somebody asked me that
question I would say “yes,” as opposed to making a choice.
On dwindling Western water
resources:
We haven’t had a situation
where we’ve had to ration it by price before.
Water is allocated in the west
politically, it’s not allocated by the market…
…We do things as a consequence
of that like growing rice in the desert.
We do
some phenomenally stupid things with our water, but it’s protected
by law.
And the law is
protected by guns.
In a real market you wouldn’t
have any problem like this. We have these adjudicated rights to
water.
As a consequence we’ve
subsidized people’s water consumption to the point where it isn’t enough to
say that we’re vulnerable to a drought.
You have to say that
if there is a drought there’s going to be massive dislocation.
Part of me would like
to see nature and the market triumph…
You may be an average American
struggling to make ends meet, a retiree with
a sizable savings account, or an investor with capital at the
ready. Whatever your means, Rick Rule’s ideas can apply to your situation.
Consider a scenario where
financial markets and the economy collapse similar to 2008, but more severe.
As counter-intuitive as holding US dollars may sound, if prices in
commodities like food or precious metals collapse during the initial panic
selling, or farmland drops to 20 cents on the dollar like it did during the
Great Depression, you’ll want to have cash on hand to quickly accumulate
whatever you can.
At the same time, perhaps the
US dollar melts down in an overnight ‘waterfall’ event, leaving much of your
cash worthless — if you don’t have some medium of exchange like gold, silver
or platinum, then you’ll have no way of engaging in trade.
Likewise, while Rick Rule
focuses on water in this interview, there is a broader trend surrounding the
allocation of resources through political means, and it affects not just
water, but energy and food as well. Should we have a crisis in one of these
sectors, it could cause significant dislocation in the others.
Diversification and assuming
that multiple events of varying degrees and effects can play out is critical
to any complete SHTF plan.
If you’re caught
unprepared with none of these ‘hard assets’ in your personal inventory, how
will you manage?
If you focus on the things the
enemy can’t print or manipulate, primarily hard assets that will always be
necessary for day-to-day human functioning and survival, you’ll come out much
better off than most when the system descends into crisis.
Hat tip Future Money Trends
