Category Archives: gold bugs

Dividend Investors: Beware of Payments in Gold

Posted on August 15, 2012 by | Leave a comment

As long-term investors in precious metals, we have featured several articles that warned about the pitfalls of gold and silver investing rather than highlighting the redeeming attributes in the sector.  One reason for this is the one-sided analysis that permeates throughout the gold and silver investment community.

Too often there are voices clamoring for attention about reasons to invest in gold and silver and very few of those same voices willing to say “dump the junk.”  Some analysts in the gold sector will defy logic by recommending gold stocks in an obvious declining trend rendering their analysis moot since anyone can use the rationale “we’re in a bull market” to justify their claims.

One sure sign that we’re in a gold bull market is when gold and silver mining companies start paying ever increasing dividends.  In a 2009 article titled “Why Silver Beats Gold As a Precious Metals Play,” we said, “be mindful of the coming competitive dividend war between precious metal companies.”  Apparently, precious metal stocks have not disappointed in sharing the wealth in the current gold bull market. According to Morningstar.com, in the last five years the top ten dividend increasing companies in the precious metal sector has averaged +29.61%.  We don’t expect this trend to reverse in the near term.

Symbol Company 5-year dividend growth rate
AEM Agnico-Eagle 84.42%
AUY Yamana Gold 50.61%
IAG IamGold 29.87%
DRD DRDGold 26.08%
NEM Newmont Mining 20.11%
GG Goldcorp 19.26%
ABX Barrick Gold 18.31%
BVN Buenaventura 17.97%
RGLD Royal Gold 17.50%
GFI Gold Fields 11.98%
Average dividend growth rate 29.61%
Source: Morningstar.com accessed August 15, 2012

Also, in the same 2009 article and later reiterated in our 2011 article titled “The Coming Precious Metals Dividend War,” we said the following, “one gold or silver company is going to ‘jump the shark’ and make the dividend payments in the actual metal. When that time comes, it will be fair warning to protect your positions, though this may be indistinguishable to ebullient gold bugs at the time.”  When we published our October 13, 2011 article titled “Gold Resource: Gold Dividend Means Sell” we felt that precious metal investors had been given fair warning that “…it may be an indication of a cyclical or short-term top in the gold market.”

The announcement by Gold Resource (GORO) that the option for an “in-kind” dividend in the form of gold was on August 17, 2011 (PDF found here).  Three trading days later, the price of the SPDR Gold Shares (GLD), according to Yahoo!Finance, peaked at $184.59.  Twelve trading days after GORO’s announcement, according to Kitco.com, the London PM fix for gold closed at the peak price of $1,895.  At the same time, the long established Philadelphia Gold and Silver Stock Index (XAU) declined as much as –33% by May, 15, 2012 and has settled at a loss of -26.80%.

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As the precious metals dividend war heats up, the timing, nature of the dividend, and the quality of the company will provide for some perspective as to whether we are at a short/long-term peak in the precious metal market.

However, as we’ve said in the past, companies that pay dividends in gold have historically had difficulty in retaining such a policy.  Those companies that currently have a policy of offering dividend payments in gold should be expected to discontinue such distributions at some point down the road.  When that change in policy arrives, the news could push the respective gold and silver stock prices well below known “undervalued” levels.

If you must invest in precious metal stocks, we’d opt for those that are part of the XAU Index or the HUI Gold Bug Index and pay their dividends only in the form of cash.

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Posted in dividends, gold, gold bugs

Precious Metal Myths: A Metal “Standard” Promotes Economic Stability

Posted on June 6, 2012 by | Leave a comment

As precious metals investors since 1996 (long only) and speculators since 2008 (long and short), we readily admit that when the right price appears we’re going to sell a large portion of our physical inventory.  We have written numerous articles on gold and silver highlighting both the good and the bad associated with investing in precious metals.  We feel that a balanced view of both the risks and rewards of precious metals investment and speculation is critical to the longer term goal of wealth accumulation.

Unfortunately, there is a contingent of precious metal marketers that would rather stretch the truth or even promote myths to inspire undue hope, fear, and reckless optimism.  A common myth by these marketers is that if we have a gold “standard” instead of a U.S. dollar based financial system, our debt laden society would become stable.  Unfortunately, promoters of this claim have not carefully examined a period when there was a gold “standard.”

Below is a chart of gold and silver in the period from 1846 to 1895, this to set the stage for the level of stability that was experienced by most Americans.

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The chart above is drawn from an article titled “The Relative Stability of Gold and Silver” by Edward Sherwood Meade in the Annals of the American Academy of Political Social Science, 1899.  In the period from 1851 to 1873, there was a bimetallic “standard,” where both gold and silver were used as a monetary base in some countries.  At the same time, either gold or silver was used in other countries as a form of a monetary “standard.”  After the period of 1873, the silver “standard” was abandoned due to “…legislative and industrial” reasons according to Meade.

Unfortunately, both gold and silver “standards” are constructs of legislative actions (fiat) and subject to industrial supply and demand constraints, just as the U.S. dollar is subject to fiscal and monetary policies (etc.).  It should be noted that although gold and silver were the “standards” for a given monetary system, there was still a decline of nearly –33% in the value of gold and silver from 1851 to 1873.  The subsequent dramatic rise of both gold and silver from 1873 and beyond only demonstrates just how little stability there actually was in having gold and silver as the anchor for the monetary system.

Adding insult to injury, it took 33 years for gold to achieve parity after the decline from 1851.  This is eerily similar to the 31 years it has taken gold to achieve the inflation-adjusted equivalent of 1980 when gold peaked at $1,900 an ounce in 2011.

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While gold and silver was vacillating wildly as a “standard” in the 1800’s, the stock market, represented by the chart below, was demonstrating its characteristic fluctuations.

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The stock market increased nearly +300% and declined over -50% on two separate occasions in the period from 1860-1895.  Having a gold and silver “standard” promoted greater volatility in the market since it would take a government edict (fiat) to mitigate massive gains or losses in the price of gold and silver.  Additionally, cornering of the market was much easier then than it is today.

At the same time that the stock market was experiencing wide gyrations, the U.S. economy experienced widespread panics and depressions in the period from 1857 to 1895.  Below are the National Bureau of Economic Research (NBER) dates for economic recessions from 1857 to 1895:

Peak Trough Contraction                                                (peak to trough in months)
June 1857(II) December 1858 (IV) 18
October 1860(III) June 1861 (III) 8
April 1865(I) December 1867 (I) 32
June 1869(II) December 1870 (IV) 18
October 1873(III) March 1879 (I) 65
March 1882(I) May 1885 (II) 38
March 1887(II) April 1888 (I) 13
July 1890(III) May 1891 (II) 10
January 1893(I) June 1894 (II) 17

Amazingly, 47% of the time from 1857 to 1895 was spent in periods of recession with a large dose of panics and crashes mixed in.   The most notable of the U.S. economic contractions started with the panic of 1873 which, spawned by years of railway speculation in the U.S. but sparked by the collapse of banking giant Jay Cooke & Co.,  led to a global economic depression that lasted well beyond 1878 in many other countries.  The panic of 1873 was the longest lasting recession/depression based on NBER data.

Currently, the monopoly role (corner of the market) that government has on monetary and fiscal policy allows investors and speculators a better chance to align their interests within the context of the known.  What we know is that the purchasing power of the dollar will never increase under the current regime.  If governments are allowed to set artificial “standards” then investors and speculators would not know when the policy will be changed/ended.

Again, anyone who feels that the current system is out of whack should carefully consider the prospects of the “legislative and industrial” whims that a gold and silver “standard” could bring.  We believe that whether dollar, gold, yen, silver, yuan, or pesos, the only constant is change itself.

Planning accordingly for the prospects of change is what makes for successful investment and speculation in the precious metals market.  Those marketers who rely on fear and the propagation of myths only serve to ensure the maximum number of unsuccessful speculators.

Note: In terms of gold and silver, the word “standard” following each metal is really a pseudonym for price control, price fixing and propping the market for whatever the “standard” may be.  This means that the market value for whatever the “standard” is will not be realized in the open market in the period that a “standard” is used. 

There is nothing more oxymoronic than the word “standard” being applied to either gold, silver, or the U.S. dollar since the origins of the word “standard” is rooted in the meaning to “stand fast or firm.”  This is something that could never occur in a world that is always seeking a price, unless mandated by government that price seeking is illegal.

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Posted in 1846, 1899, gold, gold bugs, Meade, Silver

Homestake Mining: The Exception that Proves the Rule

Posted on October 31, 2010 by | Leave a comment
In order to better understand the relationship of precious metals and precious metal stocks it is critical that investors get familiar with the periods of peaks and troughs of the gold and silver markets. Without this knowledge hardened gold and silver investors will succumb to forces that will result in major losses of capital.
In a prior article on gold we gave an example of how gold stocks in general suffered their biggest percentage loss from 1924 to 1932. However, in that same period, one gold stock, Homestake Mining [HM], managed to not only defy the declining trend but increased in value beyond all expectation. In the period from 1891 to 1987, Homestake Mining increased in value from $9 over $5000 per share. Because it is our assertion that gold and gold stocks rise and fall with the general market (either leading or slightly lagging), we will demonstrate that Homestake Mining is the exception that proves the rule.
Homestake Stock Splits:
  • 8 for 1 1937
  • 2 for 1 1968
  • 2 for 1 1974
  • 3 for 2 1980
  • 2 for 1 1983
  • 2 for 1 1987
This article will address several specific reasons why Homestake Mining [HM] was able to increase in value from $71 to $528 in the period from 1920 to 1940. It is important to note that of the reasons that we provide, no one factor could answer for the rise of Homestake Mining. However, the extent of the combined characteristics far outweighed the concerns gold investors had about the alternative gold stocks during the same period, especially from 1924 to 1933.
There are two kinds of factors that affected the price of Homestake Mining [HM]. One set are those that Homestake Mining cannot control while the second set are those that can be controlled. Those matters not in the control of the management of Homestake Mining [HM] helped to provide a support for the price of the stock. At the same time, those actions taken by the management of Homestake helped to significantly boost the price of Homestake Mining. The combination of the two elements allowed Homestake to emerge as the best performing gold stock in the worst possible markets.
We’ll first address the issues that were not in the control of Homestake Mining [HM]. The most important matter not in the control of Homestake management was the fixing of the gold price. With the price of gold being fixed, the share price and earnings of gold stocks were considered to be stable. This was especially true when the price of other commodities were falling. Few gold bugs will take on the seemingly tabooed topic of the price of gold being fixed as the reason gold and gold stocks were a refuge to investors. However, this alone, being fixed, is the basis by which all myths of gold being a safe haven are built upon.
In more recent times, without a guaranteed price for gold, the commodity has fallen precipitously while gold stocks have been decimated. Some eternal gold bulls would say that during the market decline of 2007 to 2009 with the price of gold “only” falling 25%, in contrast to the Dow Industrials falling 40%, then it was an appropriate hedge. However, using the Philadelphia Gold and Silver Stock index (XAU), (a comparison of equity index to equity index) the decline was nearly 70% in a span of less than 1 year from March 2008 to November 2008. Gold was far from a source of stability during market panics of centuries past.
The next issue not in Homestake’s control was the limiting of the ability of the public to actually own (hoard) gold through the use of Executive Order 6102 issued by Franklin D. Roosevelt on April 5, 1933. This forced investors and savers in the U.S. to seek out the only alternative that existed which was gold equities. When markets seem to be falling apart, investors will seek out whatever happens to be the most stable option. Since owning gold wasn’t available the next best alternative was publicly traded gold stocks.
Also in 1933, President Franklin D. Roosevelt, through Executive Order 6260, authorized the U.S. Treasury to purchase gold at the highest traded world price allowing gold mining companies to increase their earnings by almost 50%. The purpose of this was to incentivize domestic producers to increase their output to shore up the U.S. government’s large outflow of gold that took place from 1929 to 1933.
Factors that were in the control of the management of Homestake Mining [HM] were many and especially effective in getting the stock price to increase in value. The cornerstone of Homestake’s success was their dividend policy. 53 years of continuous dividend payments helped Homestake grow to become the default choice for gold stock investments. The only year that Homestake didn’t pay a dividend was in 1920 which was a reflection of the state of the market for that year.
During times of crisis or when it was felt that the monetary situation was weakening, the management of Homestake Mining would increase the dividend or they would pay an extra dividend. This kind of proactive behavior boosted demand for the stock from institutions and the public even when the dividend exceeded the actual earnings. As an example, after Great Britain abandoned the gold standard, Homestake increased the dividend from $6 to $7.80 in 1931.
On other occasions, Homestake would routinely declare an extra dividend of $1. This dividend would typically come each September, which was in addition to the previously declared payments. While not guaranteed, the $1 extra dividend was paid almost every year and sometimes two or three times within a single year.
Inevitably the payments of dividends would only go so far. Without a profitable business, Homestake would be broke. To resolve this issue, Homestake Mining management was aggressive at increasing efficiencies. In the span of a five-year period, Homestake management was able to nearly double the gold recovery from $3.77 in 1925 to $6.17 in 1930.
The final piece that was essential to the incredible increase of Homestake Mining was the fact that the stock was thinly traded. This critical element, along with the others mentioned before, ensured that a gold mine in the Dakota territory, initially started by George Hearst (father of William Randolph Hearst), Lloyd Tevis and J.B. Haggin, would increase from $9 in 1891 to well over $5000 (unadjusted) by 1987.
The lessons of Homestake Mining may simply be a matter of circumstance, unfair labor practices, below market wages and the acquisition of land in the most unscrupulous fashion. However, some lessons about how Homestake management operated are likely to prove useful to the understanding the reasons why Homestake’s stock price continued to go up in value when others didn’t but should have.

 

Source Citations:

  • “Abreast of the Market.” Wall Street Journal. December 16, 1931. page 8.
  • “Abreast of the Market.” Wall Street Journal. May 6, 1932. page 8.
  • Rice, Claude T. “Premium Paid for Homestake.” Wall Street Journal. May 4, 1933. page 10.
  • “Gold Ruling Adds to Miners’ Income.” Wall Street Journal. August 30, 1933. page 1.
  • Poor’s High and Low Prices 1920-1930. Poor’s Publishing Company. 1931.
  • Poor’s High and Low Prices 1924-1933. Poor’s Publishing Company. 1934.
  • Poor’s High and Low Prices 1932-1940. Poor’s Publishing Company. 1941.

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Posted in gold, gold bugs, HM, Homestake Mining

On the Brink of a Secular Bull Market in Precious Metals

Posted on September 27, 2010 by | 2 comments
In our “Commentary on Gold” dated November 11, 2008, we made some outlandish claims about the lack of performance by three undisputed experts on gold. One claim that we made was that “…when the price of stocks fall so too does the price of gold, and to a greater degree, gold & silver stocks.” This was said after the precious metals and the XAU and HUI indexes had already hit their final lows on October 24, 2008 and October 27, 2008 respectively. We demonstrated our claim through research performed by David Marantette which showed that from 1975 to 2001, declines of 10% or more in the Dow Jones Industrial Average resulted in larger declines in the gold stock indexes and the price of gold.  We completed the research by providing the data from 2001 to 2007.
The point of our December 9, 2008 article was best summed up in our closing paragraph:
“The long term trend in gold and silver stocks as demonstrated by the Philadelphia Gold Stock Index (XAU), which was initiated in November 2000, will eventually head permanently higher. The continuation of that trend will be among the key indicators that the bear market in stocks is at or near an end.”
Our overall assertion was, and is, if precious metals and their stocks continue heading higher so will the general stock market.  If the stock market starts to collapse then so too will the price of gold and silver and to a greater degree gold and silver stocks.
When we wrote our earlier pieces on precious metals, gold enthusiasts argued that the physical metal and the gold stock indexes are completely unrelated and therefore it doesn’t make sense to compare the two, not realizing that we weren’t comparing them at all. Other gold enthusiasts countered that with the price of gold falling only -29% from the March 2008 high investment in that area was justified considering that the Dow and S&P 500 had fallen over -35% in 2008, not realizing that losing less money isn’t the reason why people invest. Not liking the outcome of the data, because it only covered the period from 1975 to 2007, some said that it didn’t go back far enough.To respond to the critics about our data, we gathered prices of gold and silver stocks from 1924 to 1933. That data demonstrated that gold and silver stocks got hammered during that period. Below we have included a previously unpublished Gold Stock Average of the 13 precious metal stocks (out of 21) with complete price history from 1924 to 1933.

Gold Stock index 1924-1933

As you can plainly see, when you exclude the performance of Homestake Mining, the value of the gold stocks fell 76.47% from their peak in 1925 to the bottom in 1932.  This performance is in line with the decline of the Amex Gold Bug Index (HUI) from March 14, 2008 to October 27, 2008; which has 16 precious metal stocks in it.  In the chart below, you can see that the HUI index and the Philadelphia Gold and Silver Index (XAU) fell 70.56% and 68.15% respectively,  within the 8-month period.

Few people will readily agree that all the deflating of the financial system has been expunged from the markets. However, when compared to the deflation that took place from 1924 to 1932, first reflected in the gold stocks and later the entire stock market,  it becomes very clear that the general stock market decline of over 50% and the eight month decline of the gold stock index on such a large scale signaled the end of the deflationary period. For investors, one area we think that holds the most promise is in silver.

On September 9, 2009 we wrote an article titled “Silver Should be the Focus.”  We indicated that if there were a need to participate in the run in precious metals, silver would be the best investment/speculative choice.  At the time, silver closed at $16.36 an ounce.  On Friday September 24, 2010, silver closed at $21.46 with an increase of 31.17%.  During the same period of time, the price of gold increased 30.61%.  So far, the precious metals appear to be in lock step with each other since our last article on the topic.  However, since the bottom in the market on October 24, 2008, the price of gold is up 82% with the price of silver is up 142%.  Although these are considerably large increases in value in a very short period of time, compared to past price increases the current moves are in their infancy.

The most pressing matter for the precious metals market right now is confirmation.  So far, the price of gold and silver has exceeded their respective 2008 highs.  However, the corresponding stock indexes, the XAU and the HUI, have not yet confirmed the trend.  If the trend is confirmed then we will have received the indication of the beginning of a secular bull market in gold and silver.  In our Richard Russell Review posted on July 4, 2010, we outlined Russell’s significant detail on the importance of confirmations.  Although our analysis shows how Russell got the interpretation incorrect, it is well worth re-examining this article since it outlines exactly how to utilize both indicators (price of gold and gold stock index) for confirmation of the trend.
Below is the HUI index with what appears to be the third attempt at the 514.89 level.
 
Although not likely, failure to breach the 2008 peaks for the XAU and the HUI index could mean very hard economic times ahead.  Alternatively, going above the previous peak, which seems much more likelier, may mean that we’re entering the early stages of higher interest rates and inflation.  It is necessary to keep in mind that higher inflation and higher interest rates won’t initially wreck havoc on the economy.
Most investors have the tendency to remember only the periods at the extremes, the real estate bust, the real estate bubble, the dot com bust, the dot com bubble, the gold bubble and the gold bust, skyrocketing interest rate, the current zero interest rate environment.  In every instance, the recollection of such periods is rooted in the final stage. However, what is more important is the slow transition that takes place from trough to the next peak. 
In the case of inflation, the slow transition was the innocuous period, saved for a world war, from 1932 to 1966.  Unfortunately, most investor over concentrate on the period from 1973 to 1980 due to the exaggerated moves upward.  The transitional period brought many cyclical and one secular bull market in the Dow Jones Industrial Average. It is possible that as our inflation rate climbs the Dow Jones Industrial Average could experience a bull market similar to the period form 1949 to 1966.
According to the chart below, periods of inflation coincided or preceded extremely large moves in the stock market.  The period from 1940 to 1947 had a 74% increase in the CPI while at the same time the stock market doubled in value.  Naturally the argument is that the stock market only managed to beat inflation by a small amount over that period.  The reality is that the response by the Dow Industrials was to go from the 100 level in 1941 to the 1000 level in 1966.

Looking at the chart above, it is hard to believe that the CPI increase of 200% in the 1970's would follow the pattern of previous high inflation periods with stocks increasing 10 times in each instance.
While we watch and wait for the confirmation of the new high in the price of gold and silver with the XAU and HUI indexes by breaking above their 2008 highs, our overall assertion still is that if precious metals and their stocks continue heading higher so will the general stock market.

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Posted in gold, gold bugs, Homestak Mining, HUI, Richard Russell, Silver, XAU

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Silver Should be the Focus

Posted on September 4, 2009 by | Comments Off on Silver Should be the Focus
I watch with glee as Yahoo!Finance includes a price quote for gold in the Market Summary section on their home page. After all the financial turmoil that we've been through since the introduction of the internet, when did Yahoo!Finance realize that a gold quote was necessary? The obvious answer is, "When the public demands it."

Well, when the public finally demands the price quote of gold on their finance homepage, it is probably too late to participate in gold on a level that could be considered meaningful. After all, at nearly $1000 an ounce, there isn't going to be a stock split in the price of gold. Or is there? (I've been pondering this possibility lately) In any event, gold is fast becoming an expensive asset in a world full of correspondingly deflating alternative "assets." What to do? What to do? Get out there and do your research on silver!!! That's what you do!!!

I say do your research on silver because if I told you that, regardless of the Hunt Brothers cornering the silver market in the 70's, the price of silver always outpaces gold on a percentage basis by a ridiculous margin, you'd probably laugh in my face. But as you should know, silver is the "poor man's gold" and coincidentally, there are more "poor" men than rich men can afford to buy.

When I first bought gold and silver back in 1996 (in bulk and never purchased again), I knew that I was getting a bargain. When I exchanged 75% of my gold for silver in 2008, I knew I was committing highway robbery. I've always noted that "gold bugs" were blinded by the historical significance of the yellow metal, while at the same time claiming that they were investors who used gold as a form of insurance against government mismanagement of paper currency.

The real deal is in the price of silver. While gold has run up 259% since I purchased it, silver has gone up only 266% in the same period. This means that silver hasn't appreciated as much as it historically should relative to the price of gold. Which begs the question, what should we expect silver to do relative to gold? I have my own calculations for the future price of gold and silver. But more importantly, let's look at what history has to offer us.

I like chopping everything into halves. This means that if the Hunt Brothers' cornering of the silver market brought the price of silver to $50 then the real price probably should have been $25. From this vantage we now have to choose a starting point. Where did the price of silver start out?

For illustrative purposes, let's start with the bottom of 1932 and compare silver with gold. At the low in 1932, silver was priced as low as $0.24 an ounce. Gold, on the other hand, was fixed at $20.67 per ounce. At the peak of the market in 1980, gold was selling at $800 an ounce while silver was selling at $50 an ounce. During the period from 1932 to 1980, gold went up 3,770% while silver went up 20,730%.

Gold bugs, ever clinging to their religion, would argue that silver was cornered so the $50 figure was a fraud. Gold bugs would also claim that if gold was allowed to freely float during the crisis of 1929-1932 then gold would have been much higher than the price of silver in 1932. These arguments demonstrate a lack of knowledge on how commodity markets work, basic economics and history in one fell swoop.

For the aforementioned reasons, I will calculate the change of silver from $0.24 to $25. Despite halving the figure, silver still achieves an astounding 10,316% increase from the low of 1932. Any way you slice it, the ratios are completely disfigured and in favor of silver. I could have started my pricing point in the 1950's, 1960's or the 1970's and the distortion would be the same but that would be an exercise in futility when talking to a gold bug. Their retort is always the same, "what about this?" or "You're being selective" or "You're biased" or etc. etc. etc. ad infinitum...

Back to me and my silver holdings, when the price of silver has moved in step with the price of gold, on a percentage basis, then I know that silver is underpriced as a precious metal. With this in mind, I converted a majority of my gold holdings into silver. I'm an investor, therefore I don't want to get myself caught up in the religions debates about gold.

So, if (note the size of the if) you're considering taking the dive into gold then move on to the alternative with every bit the attribute. I suggest that you avoid the numismatic varieties of silver. Instead, aim for junk silver of the half dollar denominations. Again, only buy precious metals as part of a balanced diet of physical real estate, stocks, bonds and cash.

In my opinion, gold and silver stocks are perpetual options on the price of gold and silver. Therefore, precious metal stocks are great for speculation but poor investment choices. Be mindful of the coming competitive dividend war between precious metal companies. I remember one, now defunct, gold company that paid out their dividend in actual gold. These are all gimmicks to lure investors in at a time when the rule of the day should be "head to the exits."

If you've read my blog at any length then you already know of the Dividend Achievers that have beat gold and silver stocks without the added risk. However, if you're a hardened equity speculator, you could nab select gold and silver convertible preferreds. Gold and silver equities aren't my first choice but now you know some of the options available to you.

A Note of Caution for All Precious Metal Investors
As the price of the precious metals get higher, the less likely you'll get the widely quoted price when trying to cash in. Precious metal dealers, being business folk, will not be willing or able to take the risk of buying back your gold and silver at the highest quoted price. Therefore, even though gold was at $800 and silver was at $50 back in 1980, investors who tried to cash in at those prices were being turned away by dealers. This will be one of the signs that we're at a top in the market for precious metals.

When you read the following articles on gold and silver, you need to understand that I have a vested interest in the topic. Therefore, I theoretically should say things that only support the investment positions that I retain. Unfortunately, I don't see (revealing my limitations) the value of the philosophy of "whose food I eat, whose song I sing." Additionally, it would be no contradiction that I would explore and write about the breadth of both sides of the topic of precious metals investing. Touc.

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Posted in gold, gold bugs, precious metals, Silver, Silver Standard