Monday, November 22, 2010

Quote of the Decade?

The question most often asked of gold bulls is, “At what price will you take your profits?” It is a question that betrays a lack of understanding about why anyone should own gold. Nevertheless, the simple answer must be, “When paper money stops losing its value”. This response should alert anyone who asks this question to the idea that owning fiat cash is the speculative position, not ownership of precious metals.

That one gets my vote. The author is Alasdair Macleod, and his must-read commentary can be found
HERE. I highly recommend bookmarking his website. I recently discovered this Scotsman's commentary and have found it to be among the most value-added material in cyberspace.

On another note, as I have previously suggested and per the observations of several other long-time precious metals market participants, the "character" of this market seems to have significicantly transformed since August.  By this I mean that it would appear, at least for now, that the usual suspects who have been suppressing the price of gold/silver for over 30 years seem to have lost, to a high degree, their ability to keep the metals from moving higher. This, despite an avalanche of bearish articles and commentary which have deluged the mainstream media.

With tomorrow's Comex options expiry looming, the open interest in gold/silver calls/puts is set up to keep silver below $27 and gold below $1350.  At this point it looks likely, barring some kind market torpedo tomorrow, that they will fail.  I have to believe GATA is getting the hospital stretchers and body bags ready for delivery to the Comex trading floor tomorrow...


  1. Dave I am interested in purchasing a couple hundred oz's of physical silver. My question is should I buy the closest to spot bars possible or should i buy for example some 1 kilo Australian koalas. These sell for around $2.50 per/oz over spot. Will these keep their premium when I sell? I have no problem spending more as long as I can get the premium back when its time to sell.


  2. I don't know anything about the bar market other than 1000 Comex deliverable bars. My gut tells me to buy the closest to spot that's made by either Johnson-Mathey or Englehard. Stick with those and not the smaller private label stuff.

    I think your better bet is to buy as many 1 oz. silver eagles as you can afford. If you can afford 500, buy a sealed mint box from

  3. When should I take profits?

    That's a good question actually.
    And it's easy to answer.

    What makes you happy in life? Travel, gardening,
    reading, more free time with family, charity?
    You get the idea!

    You start taking profits when you can trade it for more of the things that make you happy!

    What I see happening is we are now entering the personal gold/silver competition phase.

    At what price did you get in @?
    How much did you sell for?
    How many oz's do you have?
    blah, blah, blah.

    Just, convert profits into intrinsic happiness.
    And keep a core position.

    Or, is it shiny bragging rights that make you happy?

    P.S. I had buddies in Vancouver that were up 10,000%,20,000% and more in jr plays in the 2002-2006 run up and they gave it all back in 2008/2009.

    They never converted their profits into happiness.

    One buddy had Aurilean Resources at 0.60 and it went to $40. You guess the ending.

  4. I use Northwest Territorial Mint out of Auburn, Washington. Their prices are competitive for 1 oz. silver rounds. Good people to deal with. It's taking 6-8 weeks for due to high demand. Check them out:

  5. Dera Dave,

    Your following comments looks complex for me to understand :- "With tomorrow's Comex options expiry looming, the open interest in gold/silver calls/puts is set up to keep silver below $27 and gold below $1350. At this point it looks likely,"

    Please let me make my understanding clear, if OI is so high and at this point silver/gold is at 27.60/1361.7 spot. Is it likely that calls/puts are going to hammer prices bellow this price looks so certain? OR you words were filled with lot of sarcasm?

    I am getting ahead with my delivery schedule from MCX. there is new revelation now, exchange told only 30Kg contract can be forced for delivery and 5 Kg contracts are only options, means they would be settled with cash and no penalty would be charged to seller. I was also told in the history of exchange no one has asked for 5Kg contract delivery.

    The exchange touts as No 1/2 trading exchange in the World for Silver/Gold respectively, this looks quite ridiculous that 5Kg no delivery from the existence of the exchange.

  6. maybe a different answer might ask the questioner into which currency should you be taking/converting your profits?


  7. USD Baby!

    A flight to paper safety.

  8. nice post. I agree. the character has certainly changed. We havent been getting the clubbings that were characteristic of COMEX options expiry.

  9. Hey Dave, great job with the blog, keep it up! If you have the time, I'd be really interested in your take on Nadler's analysis on silver and particularly, what events you could foresee causing a major correction.

    Here's the link:


  10. Thanks for the feedback. I don't pay attention to Nadler. He's a pre-programmed shill for the anti-gold cartel. Yes he works for Kitco, but Kitco operates "fractional" bullion accounts in which they take in a lot more investment cash than they have gold to back the invested wealth if all of those investors decide to ask for their gold. Similar to the Comex gold/silver short interest. In other words Kitco makes a lot money selling paper interest in gold they don't have.

    Nadler is completely monomaniacal in his thought process and commentary. It is a complete waste of time reading him. All you will do is poison your thinking.

    I actually exchanged several emails with him a couple years ago and he became very pissy and girl-like in the emotional severity of his responses.

    That says it all.

  11. I used to read a lot of Nadler-- he originally struck me as a voice of reason in a world of panic in '08 (I'm a geologist and I got to researching as to what the real reasons were that led to my being out of work in fall '08- spring '09). Without knowing the Kitco situation I still came to the same conclusion as you-- he's a yes-man to people/ organizations I disagree with.
    I'm just a worker-- swore I would never invest in stocks, etc, despite my obvious greater-than-average ability to interpret juniors' real situation. That said, I'm investing in silver these days. I've checked out your stock recommendations Dave, and I agree with them big time. Reading your blog is always a pleasure and anyone who wants more understanding should certainly be reading your blog.
    Justin from Canada