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Wallace, Idaho
– The recent skirmish between the
publishers of “Don't Tread on Me”
(Max Kaiser) and 321 Gold's Bob Moriarty highlights again the latter's
utter ignorance of the dynamics of the silver market and its
potential.
Thankfully, the former has published this email
exchange with Moriarty, whose arrogant, vicious,
crude, personal and uninformed comments resemble more a psychotic episode than
a mere temper tantrum. You can read the Zipperhead's
toned-down version of it here,
sans the expletives.
It's disheartening such level of discourse could
emit from the owner of a Cayman Islands website whose sheeple
follow this guy for advice even as he shorts into their 18-hour
post-recommendation buying spree and shakes down his latest fair-haired
company for free stock and advertising revenue. Moriarty's disclaimer at the end
of each of his blow-jobs, to wit: “We own shares, they advertise with
us, and we are prejudiced” hardly dismisses his duty to perform
objective analysis. Admitting you're crooked doesn't absolve you of being a
crook.
It's also reminiscent of the putrid, personal and
vicious attacks Moriarty has launched
against movers and shakers in the Coeur d'Alene Mining District of northern
Idaho, where he has spent, to our knowledge, the sum of about
6 hours but claims expertise far beyond those who live, work and invest here
– or, one suspects, any other mining district he elects to bash or
pump.
So, how does a guy whose every major
“call” in the silver sector has been wrong since he discovered it
six years ago get on? Good question. He'll sure never speak at the Silver
Summit; we'd take Thom Calandra pumping Ivanhoe
first, and that ain't going to happen, either.
The young Turks in this game, like Moriarty, who in the
1970s didn't know silver from galena or gold from porphyry copper, and never
studied Aristotle or Descartes, can be forgiven their grotesque
misapprehension of the dynamics forming up in silver. But until the markets
have slammed them up against the wall a few times they ought to proceed with
curiosity and humility, not bombast and threats. A newby's
innocence can be forgiven. A newby's aggressive,
belligerent ignorance is another matter.
There are silver zealots, to be sure, bristling with
Biblical exhortations and end-of-the-world humdiddlin',
and there even people who like Coeur d'Alene Mines, but we don't see any
zealotry in what Kaiser wrote about the white metal.
To which we'll add some immutable truths:
- The death
of the silver price in the early 1980s was, in fact, a political act,
not a market correction. Bunker Hunt spoke out of class to National
Geographic in 1980, saying the Hunts ought to issue Silver Certificates
since the U$ Dollar was no good anymore. Carter's Fed and Treasury had
to protect the U$D, and broke dollar-fears over the back of silver;
- Event No.
(1) cannot happen again, because the
billion-plus ounce “surplus” silver in the U.S.
Strategic stockpile used to crash the price has all been sold. There is no
physical metal with which the Fed can ever again crush silver;
- Back in
the late 1970s and early 1980s, whenever silver showed a pulse, we had
an office pool at the newspaper as to how quickly Eastman-Kodak would issue
a press release saying it was near to discovering a substitute for
silver in silver-halide photo film. Kodak hated $5 silver. That
ephemeral “discovery” momentarily depressed the price, but
guess what? They never found one. It took digital imagery to get silver
out of the
photo
business, but guess what again? That turned out to be a zero-sum
game: for all those ounces of silver not going into the manufacture of
photo film, there were an equal number of ounces of silver not being
recovered in the film-developing process to be returned to the market as
“scrap”;
- Silver
disappears. Its use in cell phones, computers, autos, medicine, as a
flux or a reflector, while ubiquitous, is no threat to the supply chain.
Silver would have to cost as much as gold (i.e. 40-x or so) to render it
economic to recover;
- Primary
silver mining is a small part of the supply equation. Most newly-mined
silver is a byproduct of copper, lead, zinc and even gold mining. So
yes, at $35, you'll see some ratcheting-up of new silver from primary
mines. But 70 percent of silver production on the planet is not driven
by the silver price. So there's no chance that $35 silver (or $50 or
$100 or even $200) silver will significantly boost new production
– at least not in the next few decades;
- There are
substitutes for silver in some critical industrial applications. They
are gold, currently $1,425 an ounce, and palladium, currently $746 an
ounce. Until there is a price parity with
either of those other two metals, silver remains the economic choice.
No religion here, just cold, hard facts. And we
didn't even get into the area that is most important: that silver as money
predates gold. It's a means of commerce and exchange, a store of value, and a
hedge
against the
hegemony of dishonest magistrates. Moriarty may periodically proclaim silver
to be in bubble-shape, but he neglects millennia of monetary history to the
contrary.
We're defensive of our little primary-silver mining
district here in the mountains of northern Idaho, especially when it is under
attack by ignorant slatterns. So we were a tad amused when, in the aftermath
of Moriarty's latest attack upon us two years ago, we offered our defence up to a senior manager at Sprott
Asset Management and we were confronted with a dumb stare.
David
Bond
Editor : The
Silver Valley Mining Journal
www.silverminers.com
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