This one from Marc, is DEFINITELY WORTHY OF HOME PAGE COVERAGE!
“On April 24, 2012 at 11:32 am,
Marc says: (Edit)
Big Al, and everyone (that will listen)
Hey, I wanted to relay this VERY IMPORTANT article that I found on http://www.prudentbear.com. An article written called: “Precious in all but Recent Perception” by Darren Pollock. Good article. If you scroll down to the last paragraph you will find something VERY, VERY interesting! I have not heard this one before but I believe, if correct, it is one of the most important facts of past history which signifies FUTURE events!
Here it goes:
In 1937 JOHN MAYNARD KEYNES, after fiscal stimulus was halted and the US economy slumped; Keynes persuaded FDR to dramatically increase deficit spending. He KNEW that this would debase the currency! Besides being a influential economist, he was a very successful investor. From 1933 to 1947, he was the manager of the King’s college endowment fund. He beat the general stock market by a margin of 908% to 168% during that period of time! How did he do it – you ask? GET THIS: BY 1936, 66% OF THE PORTFOLIO HE MANAGED WAS FULLY INVESTED IN GOLD STOCKS – A “TITANIC” BET AS THE ARTICLE STATES .THAT IS RIGHT, GOLD STOCKS! He knew his persuasive policies would debase the currency and he invested exactly according to this plan!
Now, if this author got his facts correct – isn’t that the “smoking gun” of where we should be investing in the “mother’ of all Keynesian policies being played out right before are very eyes! Comments?
All the best,
Marc”
Pretty pertinent today, don’t you think?
Big Al
No. The main reason being is that this has nothing to do with current gold prices, in that it will not cause it to “rocket” higher, or even effect the “average” investor towards mining stocks. It just shows you what we here already know, that gold mining stocks are going to be a good place to be in the near future. But this article will do NOTHING to convince the “average Joe” to get involved. Reason? They are much too scared by the volatility, the waiting, the cycles, the lack of dividends, the geopolitical pressures that are mounting against many mining companies, the ever-growing army of government sponsored environmentalist, the lack of recognition by the MSM, the anti-gold propaganda spouting from the “idiot box”, and the lack of knowledge about how to purchase gold stocks.
The ONLY THING, and I mean the ONLY THING that will get the average “Joe” investor into the mining sector is when it will become too late to be in, that is, when the dollar has dropped significantly, their savings have been inflated to oblivion, their pensions have been replaced by government mandated investment treasuries, and all other investments have depleted to only 30% of their value because of the stock market bear that will end with the Great Depression. Then, well…maybe, they might start buying.
I agree Mark A, but that was not my point.
My point was that information like this is certainly relevant to our on-going discussions.
Big Al
Ahhhhh. Comprendo Big Al. Yes, you are correct.
I have a slightly different take. Remember that every sale is simultaneously also a purchase. Dumb money sells in increasing size as prices fall. Therefore, smart money buys in increasing size as prices fall. Higher prices will be the result of the sellers exhausting themselves. Buyers in this kind of environment are definitely “strong hands.” A lower dollar won’t be necessary for prices to begin rising again. With stronger and stronger hands controlling more and more shares, once the market turns, it will be “marked up” significantly. The strong hands will not sell a meaningful amount until they get what THEY know these shares are worth. Buying this kind of bottom is like selling a spike -it’s better to be a day early than a day late.
Oh no question about that Matthew. But I was talking about the general public. The strong hands are going to be selling to “Joe Six Pack” at outrageous prices. That is why I feel only the smart money (we investors) will buy the miners as they are now, and not so much when they are at parabolic status. My point was, that at this moment in time, no “average investor” reading the article Marc provided would be influenced to purchase the miners at this time….sad though it be.
Agreed. Many here probably wouldn’t be influenced to buy either!
Great point, Matthew!
Big Al
Mark A., My friend, you are light years ahead of A LOT of people, including me…this was for all of us – investors that are still trying to catch Up 🙂
All the best,
Marc
See my apology below Matthews comments. And “no” I am not light years ahead. I am still very far behind.
stay frosty and I apologize for the tone in which my words came across.
A reply to your above comment, Mark A.,
That could be true…sad…. RIDICULOUSLY sad!
Marc
Not even the physicals?…if that is the case, too………brutal!
And that is the REALLY SAD part too, Marc! I can count on ONE HAND the number of people I know personally that have TRUE PHYSICAL gold and silver bullion. Most think that their jewelry is the same thing as holding gold bullion! No Joke! But if you ask them why they won’t buy gold; “Ohhh! It’s too high!” And when you ask them the same about silver; “Well, I mean, What am I going to do with it?” UNBELIEVABLE!!
Yep, same here. My “brother in laws” just stare blankly at me!
Guys,
People don’t stare blankly at me, they think that I am crazy!
Oh well,
Big Al
I have this strong feeling that you don’t have a lot of catching up to do, Marc!
Big Al
This is why I am in gold stocks. The big difference between then and now, I suspect, is the degree of interference in the markets. Hopefully fundamentals will yet play out as they should.
I completely agree with you Peter.
Big Al
I might be wrong, Peter but I think that fundamentals will win out in the end!
Big Al
This isn’t old news for newcomers; and a young bull market matures on the rapidly growing interest of newcomers. Here’s a good article on the subject of gold stocks in that era.
http://www.gold-eagle.com/editorials/great_crash.html
Very true, Matthew.
I apologize if my words were sarcastic. I was expressing my knowledge in a very informal way. I became aware of this subject regarding Keynes back in 2002, and the information came from a coin dealer from Oregon called Crown Rare Coins operated by a man named Hank Passafera (Spelling? ). Anyway, it definitely adds fuel to the fire for ANYONE who is considering the mining sector and precious metals. But it is not going to effect the “establishment’s” ideology towards gold until it becomes too late.
Again, sorry if I seemed condescending. And that goes to Sir Marc as well.
Stay FROSTY
Mark A., absolutely, no problem…I dish out A LOT of compliments…because first and foremost it is TRUE! And secondly, I LOVE to spread positive vibes!
All the best,
“Stayin frosty” Marc
Great point, Marc about spreading positive vibes!
That is my lesson for the day. Thank you!
Big Al
Mark, I don’t think an apology was in order. I like bluntness, it cuts down on space. Besides, technically, you’re right. This news is about 80 years old!
Staying Frosty!
You stole my line! just kidding.
Hey do you know anything about the common advertisements that are used in LURING ignorant investors into gold stocks? You may have heard about how LION MINES “exploded to over 52,000%” or another company (can’t remember) that “exploded to over “36,00%”? If you have, well it is not quite true. If you haven’t I have a really great article that was researched into this subject and it sheds a lot of REALISTIC light onto the subject.
Matthew, Mark A., et al
Any comments on Brazilian Resources. BRIZF…Rick Rule, and the Encompass fund is pretty heavily invested…the guy that got Uranium Resources to production runs it. Any thoughts? Long term play…they now have 300,000 acres, great mgmt, enough cash (?). I looked at them about four months ago. Futuremoneytrends is pushing them. Buyer beware? Probably at multi-year payoff down the road 3 to 5 years.
Marc
Marc
Buyer Beware. Look at the drill results. Also look at who has the most controlling stake in the company. Also, look at who is promoting it. Can it make you money? Sure. But this company smells, walks, sounds, and acts like five other companies that had THE SAME people involved. BIG NAMES sell – period! And when the promos take effect pushing the stock to a 50% + higher price, watch the warrants get exercised and insider shares get dumped. I haven’t done a lot of research on the company but from the looks of it….IT IS ALL ABOUT PROMO AND SELLING A “HOT” NEW ITEM. Your choice..not investment advice.
Yes, thank you. The share structure is real tight. No warrants
Oh yes there are, Marc. But they are only about 300K+, which is quite low. But the share structure is what bothers me. Too easy for the insiders to make a REAL FAST million bucks.
Matthew,
Love it, great, great article…thanks so much!
Gentlemen,
I believe that Marshall (Encompass Fund) is pretty hot on this company.
I personally do not have an opinion.
Big Al
Actually,
Big Al, that is WHY I asked about it – yeah, the Fund is a big investor
HI Marc,
I will ask Marshall about it.
Best,
Big Al
Thanks Matthew,
I just printed out the article which is a great reminder and should be a great read for “newbies”!
Big Al
Many thanks for the link, Matthew!
Big Al
Still wondering why the “TITANIC” privy mark on the 2012 Silver Maple Leaf looks more like a wooden trawler, and today reading those ALL-CAPS in the context of Keynes, I had a perceptual ambiguity moment. While Pollock’s original spelling is “titanic,” choosing this word to characterize the size and route of today’s global Keynesian experiment would require using a capital “T” from the ship’s name.
Great observation, Impeachemall!
Big Al
I have the original Titanic Privy marked coins. They look better. Some RCM coins are realy cool and others make you wonder who makes the decisions to mint a coin.
I vow to buy at least $100 in silver coins before the end of the month! The 2012 Moose coin is a cool coin.
Dan
Dan, I’m happy to agree totally about the original mark, the moose coin, and a purchase near the end of this month. Not that I like her, but if only the RCM could get Elizabeth’s profile to appear at least half as recognizable as the moose or the leaf!
Hello impeachemall,
The 2011 Wolf is a nice coin but a buddy of mine says that the moon over his head looks like a chunk of cheese but the polar bear is good all around. The 2012 Cougar looks like he has T-Rex toes and weighs 300 lbs. I ignore the Queen in general. I liked the older (and prettier) profile of her without the crown.
Dan
I am pretty much with you Dan,
Big Al
Hey Al,
How about a 2012 silver dinosaur quarter with a 25,000 mintage that glows in the dark at $70.! Oh brother! At least the dinosaur was found in Alberta.
Dan
Most of you probably know that on 6/28, China will begin paying Iran for oil in gold. Many of those much smarter than I say this is the beginning of gold as an official currency and the tightening of the noose around the dollar. What are your thoughts on this Al and others?
wyn
wyn
Kicking Iran out of SWIFT will turn out to have been a (huge) mistake. There is a great irony here. THEY are squeezing Iran, not because of nukes, but because Iran has challenged the USD monopoly. In response, they were kicked out, possibly as a prelude to a military attack. This attack will, if at all, come after the election. The US has NEVER started a war during an election year. Israel won’t “go it alone” because the don’t have the capability.
The unintended consequence is the unintended publicity for gold as a legitimate medium of exchange in international trade. An alternative system to SWIFT is already being constructed. THEY may just have shot themselves in the foot with this one. THEY have overplayed their hand. All this will only increase the stature of gold and erode the USD as the global reserve currency.
Of course, all this takes time to play out. In the mean time we should expect more strikes against gold from the fangs of this dying serpent. How many will succumb to the poison before the serpent falters?
I think you are spot on, Peter.
Marc
I agree with Marc, Peter.
Big Al
So we’re all agreed.
YEP 🙂
Wyn
To be quite honest and frank, the demise of the dollar started a LONG time ago. It has only been a matter of time for events to build leading the way to dollar depreciation. You can see this on any USD index chart going back thirty years. We have thousands of years of history on our side regarding the role of gold as REAL money. Sadly we also KNOW the end results. I truly believe that most Americans are in the “normalcy bias” state of mind. Most have never experienced a currency crisis, much less a true MAJOR shift in their standard of living. That is about to change.
Yes, it could very be, guys. It could very well be!
Big Al
I have been talking about this general subject, Wyn, for quite some time now.
Look for a Daily Editorial on it tomorrow.
Best,
Big Al
Many here will find this 27 year old Australian 60 minutes story intriguing.
A while back I bought a company called Colossus Minerals which was mentioned by James Dines in a KWN segmnet.
When performing recent due diligence on the company I remembered a story about the Brazilian Gold Rush years ago.
I thought it was a 60 minutes piece so I searched “60 Minutes Serra Palada” and I found this gem.
If you watch the piece you might find it interesting that the wildcat miners were being treated even worse than the story illustrates.
Apparently when taking their ore to smelt the controlling company paid the miners for gold credits only.
Unknown to the wildcat miners at the time was what they thought was worthless slag actually contained even more valuable platinum, palladium and rhodium. Because of this in remediation a group of the miners now own a 25% interest in the project
I found this when considering adding to the position because as with many miners it is at a 52 week low.
Regardless of your opinion of the company if you like precious metals you will find this story compelling.
Enjoy!
http://video.au.msn.com/watch/video/the-treasure-of-serra-pelada/xx3k2px
More on topic:
A quote from JOHN MAYNARD KEYNES:
“Lenin is said to have declared that the best way to destroy the Capitalistic System was to debauch the currency. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose.”
from The Economic Consequence of the Peace, 1920
Wow,
Dennis; another nail in the “paper currency” coffin!
The quote from Lenin is very appropriate.
Big Al
Marc,
You are one of the one man in a million that has diagnosed the debauchery.
Right back at ya!
As a 46 year old man Keynes was nearly wiped out in the 1929 crash.
Think about that. He the great economist was unable to see the fevered frenzy of mal investment. Meanwhile Von Mises was offered a prestigious job at
the Kredit-Anstalt, Austria’s most important bank, in the summer of 1929, because, as he put it to his fiancée “a great crash is coming, and I don’t want my name in any way connected with it.” We have spent economic cycles listening to the guy who got it wrong and ignoring the guy who called it spot on.
An excerpt from http://www.tititudorancea.org/z/john_maynard_keynes.htm
“Keynes would receive considerable support from his father; including expert coaching to help him pass his scholarship exams and financial help both as a young man and when he was nearly wiped out at the onset of Great Depression in 1929.”
The cherry on top for JMK was his devotion to Eugenics. From his wikipedia page I found this beautiful blurb:
Keynes was a proponent of eugenics. He served as Director of the British Eugenics Society from 1937 to 1944. As late as 1946, shortly before his death, Keynes declared eugenics to be “the most important, significant and, I would add, genuine branch of sociology which exists.” This went hand in hand with his Nazi sympathizing.
How nice. How quaint. There is a culture of death. The reality is if we keep following Keynes economics advice Eugenics will be a rendered a redundancy.
Great comments, Dennis. Thank you!
Big Al
Mises had to have controlled opposition like Keynes in order to obfuscate the fact that a private entity owns the cash supply and controls the economy. If every person with a dollar in checking, savings and physical bil/coin found someone with a promise to pay the bank a dollar and gave them the dollar to extinguish the debt, there would be no money, and all the bills and coins would be sitting in a vault worthless unless the banker could convince someone to borrow them and pay usury. They’re really big on teaching that at Mises. Is there any chance there could be email notification added for replies on this blog?
The only way we can arrive at the point you describe is to start with a backing to the currency in question. You have to have a friendly game of poker interrupted.
Suppose you are seated at poker table in the middle of a hand with friends.
Suddenly an armed robber breaks into the parlor and steals the cash box.
All seated at the poker table realize they are now in competition for worthless chips. Certainly those who value their time would not continue in a meaningless farce. You would have never have bought chips and sat down to anti up if the chips were not backed by something. Our economy has experienced a stealth armed robber who gradually debased our chips and ran off with the cash box. Culminating certainly not beginning in 1971. However, for some odd reason we continue to play the hand as if it means something. At some point the players will realize they were robbed. I cannot believe it has taken this long. At that point the EXIT doors will be very crowded.
BTW in relation to how this thread started….
Keynes never said that Gold was a barbaric relic….he said “the Gold Standard is a barbaric relic.” significant difference.
His full quote made in 1924 was more of an indictment of the desire to abandon The Gold Standard than it was an indictment of Gold itself…it was as if to say in order to do what we want and what we are required to prevent revolt we have to counterfeit.
Full quote:
“In truth, the gold standard is already a barbarous relic. All of us, from the Governor of the Bank of England downwards, are now primarily interested in preserving the stability of business, prices and employment, and are not likely, when the choice is forced on us, deliberately to sacrifice these to outworn dogma, which had its value once, of 3 pounds, 17 shillings, 10 1/2 pence per ounce. Advocates of the ancient standard do not observe how remote it now is from the spirit and the requirements of the age.” A Tract on Monetary Reform, 1924
Dennis,
Excellent, excellent analogy – thanks for all your well-thought out input!
Marc
Agreed. Dennis, that is good stuff.
Old news. …..yawn