Precious Metals Investing

The past three trading days have been devastating to the precious metals and the mining shares leaving markets rattled and investors scrambling for the exits.

Why is this happening?

It all started last week with the latest desperate scheme of the Federal Reserve: Operation Twist. It was the biggest investing story of the week and its consequences thus far have been detrimental to markets worldwide.

Under this ridiculously stupid plan, the Federal Reserve will buy $400 billion of long-dated Treasuries, financed by selling bonds with three years to go or less. The idea is to try to drive long-term rates lower, which the Fed thinks will help the mortgage market.

The Fed unveiled this latest Keynesian economic insanity (QE3, aka Operation Twist) on Wednesday, and the market quickly tallied its opinion to the downside.

This proves my point that I have been making for the past year that these Federal Reserve pukes have no idea what to do about the current economic situation other than apply more failed Keynesian economic doctrine.

It is their failed policies that have caused the problems to begin with — yet investors still look to these idiots for solutions.

Unbelievable!

Let’s look at the Fed’s recent track record of providing a fix for what ails the economy. Those attempts were called QE1 and QE2, and we were told as recently as June — three months ago — that there would be no need for any other QE events.

This contradiction itself should tell investors these people have no idea what to do about the current mess.

During the first two rounds of QE, the Fed purchased $2.3 trillion worth of debt and kept interest rates at near zero for almost three years.

What has this accomplished?

The answer is nothing. It has actually made things worse, and yet they want to apply more of this failed thinking that has kept Japan in the dark for over 30 years.

Japan already went down this road and has proven this philosophy will not work.

In reality, QE3 is just another attempt at protecting the banks under the guise of supporting the housing market. In reality, these elitist banking bastards couldn’t care less about the housing market, since the banks end up with all the property and get either the Fed or the U.S. "Goobermint" to pay for it.

In the meantime, banking executives get huge bonuses for the whole insidious scam while the U.S. taxpayer ultimately gets to foot the bill. What a plan.

In my book, this is called the hijacking of America by the elitist banks for the elitist banks so they can get even more power and control.

But don’t worry; Americans will keep voting for Republicans or Democrats who are bought and paid for by these elitist banksters thinking that something will change.

It makes one want to just scream in utter frustration.

In reality, nothing is going to change the course we are on. Citizens worldwide are going to pay the full price for all this economic and political stupidity. It is not going to be a pretty picture.

For the intelligent few (my subscribers) who do understand what is going on, what do we do?

Given the current prices of our juniors, we want to avoid panic at this point as demonstrated by a graphic (left, click to enlarge) sent to me by a colleague.

This spells it out better than I can describe with words.

For now, we must just hold on.

And whatever you do, don’t panic and sell at this point!

I wrote in recent weeks that investors who needed money should think about cashing up some in case things go south...

Well, things have gone south. Now we must just gut it out. It will get better.

Take another look at that graphic as your guide as to when to buy some low-priced stock. When you feel like capitulating and have utter despondency, then you know the time is right to buy. If you are able to do so, these will probably be some of your best buys ever, as I believe our market will recover in a big way.

I have been adamant in my belief that our markets would see extreme volatility in both directions. Well, we have just been hit by the downside volatility, which sets us up for a big upside volatility.

Remember that nothing fundamentally has changed. Governments and their central banks are more out of control now than they were last week, last month, or last year. Investors who don’t know what they are doing are being whipsawed around by these Keynesian jackals as they flee to what is perceived as the next best currency or the next best thing.

In the end, the only thing left standing will be the precious metals and their corresponding mining shares as one fiat currency after another implodes worldwide.

We are witnessing the final stages of what happens when fiat currencies go the way of the world...

For a good four-minute video on the subject of what a fiat currency is, please watch the following:

(Thanks to Scott R., a subscriber, for making me aware of this video. It is very well done and can be very useful in explaining to loved ones and others why you are investing in precious metals.)

I’ve never said that investing in precious metals and their mining would be easy, but I am on record that it will be worth it.

What lies between now and that moment is plenty of market volatility and all kinds of societal chaos.

You simply have to choose as an investor whether you want to be part of the slaughter, or be on top of the financial heap as the consequences for decades of economic and political stupidity come to full maturation.

I leave you with that choice and a quote below from Richard Russell. His words have guided me along the way when things have seemingly been at their worst for precious metals these past 11 years:

Remember, just as the bear wants to go down while taking the greatest number of stockholders with it, the bull wants to advance while taking the fewest investors with it. Therefore, this gold bull will try to shake as many gold investors off its back as possible as it rises.

The best way to do that is to violate so-called support levels. Advice, take a gold position that you can sleep with and forget about trading gold. 

How many times during this secular precious metals bull market have we heard of gold’s demise only to have gold hit yet another new high?

This time is no different — only the volatility is getting greater as we get close to the implosion of fiat currencies worldwide.

I choose gold, silver, and the precious metals mining shares for my financial salvation.

Greg McCoach
Analyst, Wealth Daily
Investment Director, Mining Speculator

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