How To Prepare For Economic Uncertainty

What’s interesting is the degree to which is there a battle inside Washington, with sides being taken against the Deep State and really can you separate what we call government into a whole variety of different factions, certainly gets into a bit more of the speculative zone. Although I’ve seen enough to feel that I don’t think that what we see through all these things is actually what’s really happening. I need to hear there’s a school of thought that perhaps Trump is actually working in concert with Russia and China to bring down the Deep State and the banks, which is fascinating to think about. I can’t sit here and say whether I know that to be true. But to the degree that it seems bizarre the way things are lining up that you would keep antagonizing your largest creditor, it’s certainly a fascinating possibility that I’ve heard some intelligent people basically voice in a manner of speaking.

On the surface of it, yes, there’s a trade war, which from an Austrian economic standpoint, to me is not the way I would do it. Although I do wonder more and more as you see these things develop if things are a bit different underneath the surface than we’ve been told. Again, we can only hope you find out more about that in time. But certainly, it’s fascinating hearing some of the opinions out there, and watching to see how it unfolds.

Maurice Jackson: As a speculator, these are truly exciting times for us all. For a listener, they’re saying to themselves, “Okay, that’s the macro perspective. But from a micro perspective, what can I as an individual investor do to benefit and or protect myself?”

Chris Marcus: Fortunately, the good news is that there are options for those who have been following gold and silver, especially if you bought in 2011 anywhere near the highs that hasn’t gone so well. Similarly, I know you cover a lot of the miners, and it’s been a tough seven years in particular for the miners as well.

The good news, and before we started you and I talked a little about the difference between insurance and speculation and what is savings, what is money. I think what’s nice with gold and silver is that, to me, when you look at the amount of money that’s been printed, especially since the last collapse, and you see the way all the other, the stock market, the real estate market, they’re all hitting new all-time highs. I got an alert that the NASDAQ, I think yesterday, hit a new all-time high. I looked, it’s basically gone up a multiple of 5 since March 2009. So again, just looking at the amount of money that the Fed says it printed, if any, of course we haven’t got an answer on how much money is out there with that $21 trillion missing, because so far, the government’s only response to my knowledge as voiced by Dr. Mark Skidmore has been to take down the documents from its website.

The point being, I think there’s a ton of money out there I don’t think anybody even really knows. And yet gold and silver are up a little bit since their 2008 lows, but seems far behind to me. And you also have the advantage that they’re basically trading at what it costs to get them out of the ground. So, you can sell as much paper as you want if you drive silver down to 10 bucks. There’s not going to be many people’s spending 15 to get a $10 ounce of silver. Again, you know the mechanics of the miners better than I do. But from listening to folks like you and Rick Rule and others that really dig into the balance sheet, I’ve always felt like the mining stocks that actually know that they have gold and silver seem incredibly cheap to me.

Now because I’m a former options trader, I’ve had good days and bad days trading options on these, which I don’t recommend to most people. Although to the degree that, and this would certainly be by all means speculative again, I wouldn’t recommend to most people. But when you think about to the degree if you do capture that timing, especially on the miners if you dabbled in options, again, that’s getting away from if you have physical gold and silver, which can represent to me a form of savings. I remember when I was five or six years old, sometimes I would get a savings bond as a birthday present. You were getting something that you could leave there, you didn’t have to touch it, and you knew that it would appreciate over time. Certainly, gold and silver are trying to trade short term. I say as someone who was trading short-term equity options for a career, I don’t bother trying to do that because it’s tricky when the markets are this manipulated.

But as I write about all the time for Miles Franklin and Arcadia, to me, the fact that you have this floor in the form of the cost of production and saying that it’s kind of hard for it to go much lower, and you have all this printed paper out there. We’re not talking about conspiracy theory, Deutsche Bank got caught, they paid a fine. I’m sure you’ve seen some of these traders’ transcripts were there giggling, not just one bank, but you hear Deutsche Bank trader A telling UBS trader B, “We’re gonna smash it, hahaha.” Stuff that is kind of surprising to me, because from being on a trading floor, I remember our compliance guy would often say, “Two out of every three things you type are going to be read by somebody. So, be careful about what you type.” This is public record. We have another court case ongoing now where more of these transcripts have been released, which I’m trying to get access to.

I know the mainstream likes to ignore the topic of gold and silver in general. But people sitting out there saying, “What can I do if I see something coming and I want to have my money safe?” I think gold and silver in particular fit that bill. Again, if you get more to the speculative side with the miners, because you can have a company that silver could go up a lot. But if they just have a bag of dirt, it’s not going to do much good. But I think there’s a place for balance in both of those. Again, by all means, I’m a trader, not a financial licensed analyst. Although my general rule of thumb is that if it’s affecting your emotions throughout the day, or you’re worried about how you’re going to pay for food or your rent, that’s probably a sign that maybe the position size is too big. Again, factor that in. If you have a great professional you work with, explain that.

I think there’s certainly a great reason for it to be part of your portfolio. But just remember you want to balance that all together. If your goal is really just to protect what you have, that you’re doing that versus if you want to speculate, you have the right to do that too, just to the goal of matching what you believe, what you’re aiming for, so that your money’s actually doing that for you.

Maurice Jackson: I’m actually quite surprised that the equity markets with the way that Bitcoin has been doing lately, that precious metals actually have sustained their price. So, that’s actually interesting to see, because I would have thought that there would have been a flight from the metals to Bitcoin, because a lot of us are speculators in the metals as well. Based on today’s discussion, give us your thoughts on gold, silver, platinum, palladium and rhodium.

Chris Marcus: I’m a bullion silver bug over here. I remember when I started seeing the problems with the dollar focused. Own an ounce of platinum and maybe an ounce of palladium. And from what I’ve heard, again, I’m far from an expert on those two, but I’ve heard Rick Rule talk about both of them. I would get the feeling that certainly if somebody had a good investment case for palladium or platinum, and wanted to say, which would you rather hold, these or the dollar? That’s an easy call. I get the feeling those will do quite well.

More specifically, in terms of gold and silver. One of the things that I always liked about silver that drew me more heavily there is that you do have the industrial use as well. So, whereas most of the gold that we’ve mined is still out there, most of the silver is gone. Now, I think it’s interesting. I know there’s a lot of skepticism about the public gold and silver numbers, and rightly so. Because we’re also analyzing another market here where there’s a lot of variance on how much gold and silver is actually out there, where it is. I believe there’s a consensus that at this point there is more aboveground gold than silver at this point. Does that match?

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