A Picture is Worth Your Retirement Savings
Wednesday, January 4, 2012 at 3:38PM [Editor's Note: The following is from TDV's Toronto correspondent, Chris Horlacher. Bio at bottom.]
As the year came to a close we saw what appeared to be massive profit-taking by funds and other institutional investment firms. Driving this were firms looking to post a profit for the year and in order to do that, they needed to realize their gains in something. This is done by selling assets that have accrued gains and anyone buying gold these past few years has accrued massive gains. Stocks did quite poorly in 2011, barely breaking even whereas gold finished the year up over $150/oz.
Also keep in mind that during the collapse of MF Global, a number of accounts got raided and the futures contracts on gold that they possessed were apparently stolen. Take, for instance, the case of Gerald Celente who publishes the Trends Journal, a popular investment newsletter. He had an account with MF and was set to take delivery on a December contract at a rate of about $1,450/oz. Given the current spot price, this would have been an incredible bargain for him. During the collapse of the firm though, his future appears to have been replaced by a future contract with a rate of about $1,780/oz. Now obviously Mr. Celente won’t be sending another dime to MF and won’t be buying any gold this month at $1,780/oz but SOMEONE is buying Gerald’s gold at $1,450/oz. Coupled with the fact that they can sell an equal amount of gold at the current spot price of over $1,550/oz and these banking criminals had great time at the expense of MF’s gold-buying client base.
With the collapse of MF Global and subsequent malfeasance with the way the courts have decided to deal with the bankruptcy, Ann Barhardt decided to wind up her commodity futures company and send all client funds back to them. It is her firm belief now that if you can’t stand in front of something and defend it then you don’t own it and may very well lose it in the months and years to come. Her interview with Jim Puplava is especially eye-opening and I highly recommend that you listen to it. These kinds of actions in the financial markets are absolutely unprecedented and signal that we are entering an extremely dangerous period of time for the global economy. The system of law that investors have relied upon for centuries is breaking up before our eyes.
Despite all of this, the main stream sources of news are attempting to paint a pretty picture for 2012. I recently caught a look at the special year-end edition of Fortune magazine, which continues to portray buying stocks as the best decision anyone could make. This ignores the fact that gold has consistently outperformed stocks now for 11 years straight (including 2011). There is, however, a subliminal hint of what we should really be doing with our money on the front cover.
Fundamentally, absolutely nothing has changed in the marketplace. Interest rates are still at record lows, governments all over the world are printing money like mad, real-estate continues to collapse with a few more crashes on their way (particularly in Canada) and governments continue to fall victim to civil-unrest and uprisings. Precious metals investors had their mettle tested in 2011, more tests likely are forthcoming but one thing that I can promise you is that 2012 will continue bringing events the likes of which no one alive today has ever seen.
[Editor's Note: The only stocks we recommend investing in are the precious metals mining stocks that we think will soon enter into a mania phase. Due to brokerage risk, such as what happened at MF Global, we will be releasing a Special Report with details on how to register your shares in order to ensure that even a collapse of your brokerage will not result in any losses.]
Chris HorlacherChris Horlacher, CA is the Founder and Managing Director of Maple Leaf Metals Exchange. He possesses a Chartered Accountant designation and is a former Senior Auditor for Deloitte & Touche LLP where he provided audit and assurance services to Fortune 500 companies, as well as independent businesses. He left Deloitte to aid Euro Pacific Canada Inc., an IIROC dealer-member, during its formative period by serving as Chief Financial Officer before founding Maple Leaf Metals Exchange.
Reader Comments (4)
The subliminal message has been launched:
- Because of our advertisers, we can only tell you to buy stocks and mutal funds.
- But if you can read between the line, gold and silver are a much better investment.
;-)
I read (I don't remember were on the web) a year ago, when I started looking to gold and silver, as a possible investment, that silver prices were being kept artificially low by HSBC and JP Morgan (they were accused of).
Aren't you concerned that they might also do the same with gold? (I'm just asking because well.. I definitely am..)