Saturday, November 6, 2010

Atlas Shrugs - Again

This commentary by John Browne from Peter Shiff's firm is an excellent summary of what happened last with the Fed.  I love this comment: " Chairman Ben Bernanke's unusual (and clumsy) Washington Post op-ed follow up ," because it's a lot more diplomatic than my reaction to Bernanke's WashPo op-ed on Thurs - which I called "retarded."

The reason I am bringing this piece to your attention is because it not only efficiently describes the failure already embedded in the Fed's actions, but it also subtly describes the state of existence as portrayed in "Atlas Shrugged."  The fate of our country is unfolding on a startling parallel path as decribed in Rand's epic treatise:
What the Fed is doing, essentially, is forcing consumers to spend their cash hoardings. Until the economic and financial policies of the government change dramatically, those who are tempted to invest their savings within the United States risk increasing regime uncertainty. So, much of our domestic capital is flowing into hard assets and overseas markets...This will do nothing to help the festering wounds underlying the US economy.
I recommend reading Browne's commentary, linked HERE.  And then go out and buy as much gold and silver as you can in order to get your paper wealth away from the criminals who are running our country.


  1. People are panicking over SDRG and yet I see this as an excellent buying oppurtunity. Got in at .25 and also at .185. Dave, I'm the farthest thingfrom an expert and while it's best to remain conservative on estimates, I don't see this as just a ten banger, I see this as a 50 banger and then some especially at this price Is this another SVM in the makings?

  2. "get your paper wealth away from the criminals who are running our country"


  3. anonymous, i agree. but if i put 50-bagger down very few will believe me.

    They already have 40mm 43-101 ozs. in China and 14mm in Mexico. That's 54mm ozs. Back in May 2006, juniors were being capped on avg at $2/oz in the ground with silver at $12/oz. That would imply a $108mm value or a little over $1/sh for SDRG.

    Now, they are going to be preparing and releasing updated 43-101's for Dadi and Laopandao sometime in the next month or so. I'm hearing that they believe the update reports will have 100mm ozs combined. That would imply $200mm mkt cap or $2/sh.

    Both properties will still be less than 50% drilled. More than one expert has said that Mexico likely has 100mm ozs.

    Silver is near $27/oz. At some point I expect to see good juniors capped at well in excess of $2/oz in the ground.

    The upside potential here in terms of market cap and total eventual ozs is enormous.

    If silver goes to $50 and the cost to get silver for SDRG out of the ground is $10/oz or even $15/oz (these are very high estimates) what kind of upside potential is there? ENORMOUS.

  4. Good stuff.

    Great picture of Aspen's Maroon Bells, looks super amazing.

  5. This is a bit off topic but I would like to mention it to you if I may.

    From time to time the know nothings chime in that gold is a useless metal. There is a web site that is keeping tabs on the different uses for gold in the realm of electronics, medicine and nanotechnology.
    It is called

    While I doubt the site offers anything in the realm of investing in new or proven gold technologies, it is always interesting to see what uses the yellow metal has and what are being discovered. It is also nice to have facts of gold’s usefulenss to silence the gold bashers once and for all.


  7. Took me time to read all the comments, but I really enjoyed the article.audemars piguet watches

  8. Hi Dave - thank you for your great blog and commentary. You have some great insights. I've been watching these economic trends take place these past few years. Can you recommend any mining companies for gold and silver? Which ones do you think are going to do well as the precious metals continue to rise?

    I follow a few economic gurus, such as yourself, but I haven't been able to determine which specific mining companies will do well, because most of the commentary is talking about mining companies in general.


    - Dan in Utah

  9. Hi Dan. Thanks for your feedback. I appreciate it. Although I can't lay claim to being an economic "guru" lol.

    As for minings stocks, it really depends on how much risk you want to take.

    If you have enough money to throw together a small portfolio, like at least 100 share of 3 or 4 large cap names, I like AEM, AU, GG and EGO. In lieu of GG, you can buy Osisko - OSK.V or OSKFF. GG will eventually acquire OSK and it will outperform GG.

    As for riskier names, I like SDRG, ECU, EMX.V and VIT.V.

    I would urge you to spend some time reviewing the information on the websites of the smaller companies so you see what you are getting into.

    The ride in these stocks will be volatile but ultimately rewarding.

    MOST imortant, my best advice would be to take 30-40% of your investable money and buy 1 oz. gold eagles and silver eagles. It is REALLY important to get as much of your wealth as you can out of the U.S. system, especially banks and retirement vehicles. The latter is doomed to be confiscated eventually.

  10. Thank you for the stock picks! It will be great to go over these.

    I agree with the gold and silver eagles. I usually buy at - is there another site you prefer to buy the gold and silver? All the extra money I make I'm just buying silver for now.

    I can't believe with all the amount of fraud and manipulation going on in the financial systems and govt. that gold and silver are still where they are. I agree with you on getting all the wealth out of the U.S. systems, and I'm telling as many as will listen about it, but many are still locked into the status quo.

    I guess'guru' is a relative term, but from my perspective, you're definitely there :)

    Thanks for the insights!

  11. Would you recommend anything different to a Canadian? Moreso on the big picture, than specific stocks.

    I think our currency will do much better than the US. But if the US goes down, as so much of our trade is with the U S, our goods will become so expensive, it will hurt our economy as well.

  12. ABK Ambac Files for Bankruptcy under Chapter 11 of the United States Bankruptcy Code (0.52 +0.02)

    Co announced that it has filed for a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code ("Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York ("Bankruptcy Court"). The Company will continue to operate in the ordinary course of business as "debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court.

  13. re: Canadian question. Would not recommend anything differently. The loonie is probably in better shape than the dollar, but everyone everywhere in the world should be moving heavily into the universally acknowledged currency of gold/silver for roughly 90% of the 5000 years of organized civilization.

    Re: apmex. Apmex is fine unless you can buy a minimum of 500 ozs of silver or 20 ozs of gold. Then I would use

    re: abk: thanks for the heads up. finally pulled the plug on that fraudulent pig.

  14. Harvey Organ is getting a bit excited.

    "2,845,000 oz (already served upon) + 205,000 oz (to be served) = 3,050,000 oz (this number is rising)

    Our banking cartel are getting quite nervous when they see over 3 million oz standing in a non delivery month. Can you imagine what is going to happen in December? This will be the most exciting and most dramatic event that I will ever report on."

  15. 9:45a


    Grains surge after USDA cuts soybean crop estimate

    Lot of folks are going to see food price shock on a grand scale.

  16. Tuesday, November 09, 2010 10:08:03 AM

    (CH) Chinese rating agency Dagong Global Credit downgrades US credit rating due to QE program (update) - Chinese press

    - Cut long term US sovereign rating one notch to A+ from AA, with a negative outlook.
    - "The serious defects in the U.S. economy will lead to long-term recession and fundamentally lower the national solvency. The credit crisis is far from over in the United States and the U.S. economy will be in a long-term recession." Weaker dollar will hurt US ability to attract dollar capital reflow. "In essence, the U.S. government's move to devalue the dollar indicates its solvency is on the brink of collapse"

  17. "CME confirmed silver margins raised from $5000 to $6500 (30%) effective 11/10 settl - no other metals effected"

  18. It's early in the day for the CME group to be hauling out the big guns. The price was only $28 after all. Shows how worried they are. I hope now someone hits them with an international RICO suit for constructive collusion in price rigging worlwide. The volume in the silver ETF shows it was coordinated and an international RICO suit would start to drive the players away from the CME and it's subsidiaries in all markets. Time to raise the CME's ante.

    At the end of the day this will play out in London not Chicago as the physical market is there. Every physical bar taken out of London causes a 100 bars of degearing by the cartel and this will be an actual physical squeeze not a Bunker Hunt paper squeeze. The physical market will be hit with offset against the Chinese refiners and at some point this supply chain will fold with a force majeure in London. People in London won't get their money from either SLV or the LBMA but JPM, HSBC, LBMA and the CME will get a truckload of law suits.

    At the end of the day silver shares and physical silver holders will be the only winners. It's about time the SLV investors got a dose of reality.

  19. 2 of the best short ideas in the world are GLD and SLV

  20. I don't why the CME haven't been hit with a RICO suit already for promulgating and promoting a Ponzi scheme by insisting on the right to settle in SLV. I think anyone faced with the COMEX trying to foist SLV off on them should immediately go RICO on them.

    Better still a long date spread bet on GLD vs Pys or CEF.