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GOLD – The Ultimate Buy and Hold

GOLD – The Ultimate Buy and Hold

milesfranklin.com / by Andrew Hoffman | May 31, 2017

Last night, I was telling my wife of the frustration the past five years has wrought on Precious Metal holders – or, as they call them in the Bitcoin world, “hoddlers.”  It’s been far worse, and longer, in the “paper PM investment” world – as the Cartel has not only annihilated mining shares, but the mining industry as well; as not only have reserves been decimated, whilst mine production has – perhaps, permanently – peaked; but share counts and debt burdens have exploded, limiting shares’ upside potential even under the best case scenario – which fortunately, must inevitably arrive.

To that end, since exiting mining shares six years ago, I have consisently said they were amongst the worst reward/risk investments imaginable – but that if timed extremely well (which in hindsight, has proven to be nearly impossible), they could provide outsized trading gains – as they did from late 2015 through mid-2016, for example.  Moreover, when the Cartel is inevitably broken – assuming it doesn’t occur due to the type of “black swan” event that shuts down stock exchanges – mining shares could easily generate extraordinary short-term gains; until, equally inevitably, governments nationalize mines and/or enact “windfall” profit taxes.  As trust me, when the Cartel is broken, it will result in – or be caused by – plunging confidence in fiat currency.  Which in turn, will cause Precious Metals to be viewed as the money they have always been – and consequently, governments to consider Precious Metal mines “national security assets.”  In my opinion, of course.

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