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I know it seems monotonous, but my point about mining share investment could not be more important – which is:

The chances of losing EVERYTHING are far greater than making an ‘extraordinary’ return.

Let that very simple statement sink in; particularly as the primary reason people invest in Precious Metals is to hedge the possibility of catastrophic political, economic, and/or social deterioration.  You could lose EVERYTHING in what are ironically touted as “safe” investments; or, in some circles, “insurance.”  But insurance they are not, as mining shares are just another PAPER investment; to boot, fraught with more risks than nearly ANY other.

Again, this is not to say you cannot “make money” in mining shares; as some have over the years.  However, the overwhelming majority have not; done in by fear-induced selling – care of relentless Cartel PAPER raids; naked shorting; and a host of operational, jurisdictional, environmental, labor and other issues.  And, oh yeah; miserable profits and margins – largely due to Cartel suppression of end product prices.

Moreover, as the ENTIRE WORLD transitions to socialism to compensate for the “economic cancer” inflicted by the GLOBAL FIAT CURRENCY REGIME, capital gains rates will rise dramatically; such as what is scheduled to occur in the U.S. at year-end.  In other words, investors will encounter higher tax rates simultaneously with the increased nationalization risks that inevitably accompany surging PM prices and inflation…

HUGH HENDRY: Buying Gold Mining Stocks Is ‘Insane’

The past five-plus years have been an outright CATASTROPHE for mining share investors; as large-caps barely budged while small-cap “juniors” are down – on average – by 50% – 75%.  Margins – for the handful of actual producers – have declined; the aforementioned operational risks have ALL come to fruition; capital availability and investment have plunged; and Cartel naked shorting has reached epic proportions.

Worse yet, not a single mining executive has made a peep about the industry’s most important issue – Cartel suppression of PM prices on the New York PAPER exchange.  Consequently, mining shares have been a DISASTER, production levels have stagnated, and PHYSICAL gold and silver prices have risen each year…

Global gold mine output is expected to rise just 0.7% in 2013, the slowest pace since 2008.

– Barclays Research

At some point, EVERYONE reaches their “loss limit.” Care of relentless mining share losses, I started divesting mining shares in late 2008; eventually reaching my limit in mid-2011, when I moved 100% of my liquid net worth into PHYSICAL PMs.  Hopefully, this year’s mining share DEBACLE will convince others as well; leaving the “trading” to government algorithms programmed to DESTROY anyone that enters their PAPER realm.  If this is the case, the growing ARMY of anti-miner, pro-PM advocates can make a significant dent in the Cartel’s armor; or, perhaps, DESTROY it!

It’s that simple.  Less mining investment – in a sector already desperate for capital – will only cause more production declines; less investment capital; and ultimately, the bankruptcy of hundreds of exploration companies.  The “majors” rarely explore anymore, so they would be forced to acquire exploration companies – for pennies on the dollar – and re-establish exploration programs; just as occurred in the oil industry 10-15 years ago.  Such a process – involving HUGE retrenchments along the way – takes years to develop; which I know too well, working as an oil industry analyst from 1996-2005.  And by the way, have you seen what oil prices have done since?

Mining giants speed up spending cuts, asset sales

The same will occur in PMs, but exponentially more so; as not only will production continue to stagnate, but demand will explode as the GLOBAL fiat currency regime collapses.  Not to mention, the destruction of the price-suppressing Cartel, as it runs out of “tools” to manage PAPER prices lower.

Again, there is no “guarantee” what any specific stock will do – nor of the mining share sector in general.  However, the RISKS of “investing” in PAPER shares are astronomic, while “saving” PHYSICAL gold and silver is essentially riskless.  Plus, by selling mining shares, you are simply exaggerating what the Cartel has inadvertently been doing over the past decade; that is, depriving the sector of the ability to dilute itself with increased production.

Plus – equally importantly – you will SLEEP LIKE A BABY!


Call Miles Franklin at 800-822-8080, and talk to one of our brokers.  Through industry-leading customer service and competitive pricing, we aim to EARN your business.