David Morgan: ‘The Silver Bottom Is In: Time to Hold, Add
and Ride It Out’
When the bulls are running for the doors, that is a sign that we have hit bottom and wise investors should hold on to their portfolios for the ride up, says Silver-Investor.com Editor David Morgan in this interview with The Gold Report. It may take a couple of resource war-addled years for gold and silver prices to move back to profitable levels, but the right companies—and he points to five from the members-only Morgan Report files—could make money all the way up.
The Gold Report: When we interviewed you last, you mentioned the possibility of “resource wars” in 2014 as referenced in Michael Klare’s book of the same title. What will that look like to the average investor?
David Morgan: The resource wars have already started. Look at Mexico. It has a resource that it covets very much, and that’s energy. That is why the government levied a new tax designed primarily at energy but subsequently adds a 7.5% royalty on mining profits. Is it a war? Not per se, but it is detrimental to companies that operate in Mexico today and in the future. I think we will see even more of this kind of thing in 2014.
TGR: Last year was a volatile year for precious metals prices with silver going below $20/ounce ($20/oz) and gold bobbing around $1,200/oz at the end of the year. Are we still three or four years from $100/oz silver as you said in your last interview? What’s going to push it to that level?
DM: What’s going to push it to that level are fundamentals. There is no change fundamentally in why investors would buy gold in 2001 compared to why they would buy gold in 2013 or 2014. The fundamental fact is that there isn’t a nation state on earth that has a handle on the debt problem. Because of that, we’re going to see more people wake up to the need for precious metals, because precious metals are true money outside the framework of the current system.
Read the full article here…
Silver “Bullets” – Not just about Vampires and Werewolves
by David Morgan
The idea that bullets made from silver offered an effective (sometimes only) means of dispatching evil entities from vampires to werewolves, has been around in popular mythology for quite some time. A Brothers Grimm fairy tale called The Two Brothers, features a supposedly conventional bullet-proof witch being given an attitude adjustment via the use of silver bullets. According to Bulgarian legend, Delyo, a 17th century rebel who led forces against the Ottoman Empire, was immune to injury from either swords or guns, so his enemies cast a silver bullet in order to dispatch him from the scene.
Closer to present day, The Lone Ranger TV series, which ran from 1949 – 57, had the protagonist using silver bullets – the .45 (Long) Colt – against Wild West evil-doers. Well before this, beginning in 1930, tales of the masked man were to become a staple of radio, eventually airing almost 3,000 episodes. An announcer began each one with:
“In the early days of the western United States, a masked man and an Indian rode the plains, searching for truth and justice. Return with us now to those thrilling days of yesteryear, when from out of the past, come the thundering hoof beats of the great horse Silver! The Lone Ranger rides again!”
A New York writer, Fran Striker, is credited with creating The Lone Ranger character. He ascribed to his hero a strict moral code, among the elements as listed in Wikipedia, the following:
• That to have a friend, a man must be one.
• That all men are created equal and that everyone has within himself the power to make this a better world.
• Being prepared physically, mentally, and morally to fight when necessary for what is right.
• That a man should make the most of what equipment he has.
• That ‘this government of the people, by the people, and for the people’ shall live always.
• That men should live by the rule of what is best for the greatest number.
• That sooner or later…somewhere…somehow…we must settle with the world and make payment for what we
• That all things change but truth, and that truth alone, lives on forever.
In an interesting twist of terminology serendipity, The Lone Ranger’s sidekick, Tonto, was played by Jay Silverheels, the son of a Canadian Mohawk tribal chief (First Nations) and military officer. Jay’s father was the most decorated Native Canadian soldier in WW I. Silverheels – Harry Smith – adopted this screen name from the nickname he had received for his running prowess as a lacrosse player. In 1997, Silverheels was inducted into the Canadian Lacrosse Hall of Fame, under the name Harry “Tonto” Smith.
A few years ago, Michael Krieger, a former macro analyst, who now runs his own investment fund, brought our silver bullet versus the vampires’ analogy fully up to date. In a post on Zerohedge, he stated,
“…vampires are able to come back from the dead and once they have done so they drain the life out of the living while they sleep. Need I say more? The big banks and the Federal Reserve are modern day vampires and they are feeding off what remains of the living (productive) parts of the economy while the majority of Americans are stuck in a reality TV, Prozac induced coma of endless propaganda and brainwashing. Indeed the vampires are feeding off of an American public that still by and large remains ‘asleep.’ These are ideal hunting grounds for vampires.”
Referring to the too-big-to-fail banks and trading houses building mountains of paper silver derivatives, alongside central banks printing virtually unlimited amounts of fiat paper “money”, Krieger comments: “Until these entities are put out of their misery, restructured and key executives now and from the crisis are prosecuted there will be no sustainable recovery other than repeated phony boosts in aggregate demand created by printing money. More worryingly, the social fabric of the country will continue to deteriorate.”
Silver – an agent of truth and social justice
What to make of all this? Silver – both as metaphor and in its physical form – can be seen not only as an agent of truth and social justice via establishing individual self-sufficiency, but also as setting a standard for purity, equality, clarity, right-behavior, and ultimately the triumph of good over evil.
Think about the travails the citizens of so many nations face today due to government mismanagement, the distortions in the marketplace caused by “crony capitalism”, the two-way flow of business positions between the regulators and the regulated, and, arguably, the current establishment of a ruling, rather than a governing class. There seems to be a singular lack of leadership in the mold of even one of history’s greats – be it a Roman Cincinnatus, George Washington, Andrew Jackson, Sun Yat-sen, Mahatma Gandhi, Nelson Mandela, Martin Luther King, Dwight David Eisenhower – or even (on his better days) a Lycurgus of Sparta.
One can only hope that the day arrives when enlightened leadership places us on a more sustainable path of both individual and collective growth. Until that time, one would be well-advised to consider the basic tenets embodied in the Lone Ranger’s creed.
In a recent video interview, available at http://www.youtube.com/user/silverguru along with many others I have done, I stated the following:
“We’re going to see more and more people wake up to the reality, that regardless of what the spin-doctors in the mainstream financial press say, things are not really better – there really isn’t a recovery going on – so what’s the solution?
“The solution starts with a change that you can make on a personal basis. For most people, this means acquiring hard assets that are totally outside the banking system.”
Krieger concludes with a message aligning almost perfectly with my own, writing,
“The people do not want things to stay the way they are and in fact the means of ending it are very simple. Much more simple than voting at the polls for politicians that know nothing and can be bought off within a week. Vote with your money. Buy silver.”
David Morgan (Silver-Investor.com) is a widely recognized analyst in the precious metals industry; he consults for hedge funds, high net-worth investors, mining companies, depositories and bullion dealers. He is the publisher of The Morgan Report on precious metals, the author of Get the Skinny on Silver Investing, and a featured speaker at investment conferences in North America, Europe and Asia. You can receive a free 30 day trial subscription here http://www.silver-investor.com/joinfreelist.html
Richard (Rick) Mills
Ahead of the Herd
As a general rule, the most successful man in life is the man who has the best information
The nature of the recently released report by the Intergovernmental Panel on Climate Change (IPCC) is extremely alarmist. The report warns, with a 95% certainty, that global warming is man-made and that the resulting climate change will lead to:
• Rising temperatures, drought and increasing desertification
• Warming of the oceans and rising sea levels
• Shortages of food
• Loss of ice sheets & shrinking of glaciers
• Increasing intensity and size of storms
There’s no doubt our climate is changing, but are the charges the IPCC is making correct? Are the global climate changes we’re experiencing man-made or part of earth’s natural climate cycle?
Let’s take a look under the ‘hood’ of ‘man-made’ global warming.
You can read the rest of the article here…
David Banister- www.markettrendforecast.com Jan 15 2014
The SP 500 has been in Major wave Elliott Wave 3 up of Primary wave 3 from 1267 by our best projected counts. Our technical analysis of stock trends predicted back in early September a large rally up in the SP 500 to 1822-1829, which we managed to see hit just 3 months later from the mid 1600’s.
Recently, the market had a bit of an extension higher than our original 1822-29 pivot projections, but we see possible trouble ahead. Our Elliott Wave Theory interpretation is based on Fibonacci sequencing, Investment Advisor sentiment surveys, traditional technical analysis patterns and more.
The stock market is climbing here now likely in a final 5th wave of Major 3 and we believe it may truncate or be shorter than normally expected. We also have a rising bearish wedge from the Intermediate wave 4 lows of 1560 for Major wave 3 structure, which is a classic topping pattern for the markets in general.
Our view is that the SP 500 Index or the market should top out around 1868 and then begin a Major Elliott Wave 4 correction in February, and at the same time GOLD and SILVER are forming bottoms now and will begin strong moves up in February.
Much like our Kitco.com piece in early September called for a Top in GOLD and a Bottom in the SP 500 at the time, we see the opposite nearing now.
Below is our updated best projection on the SP 500 market trend analysis and near term action, with potential of course for a blow off reversal top over the 1868 area. For now we would watch 1868 and we would be buyers of GOLD as we have been saying for several weeks during this final window into early February.
Joins us at www.markettrendforecast.com for regular updates on the SP 500 and Precious Metals.
Since the beginning of recorded history, the lure of gold has drawn men and women to it like a moth to flame. A Greek traitor told the Persian King Xerxes about a secret goat trail that would enable his personal bodyguard, The Ten Thousand Immortals, to outflank and defeat King Leonidas and the 300 Spartans in the mountain pass at Thermopylae. The asking price was his weight in gold, which the Persians granted to him and then buried him with it.
Legend speaks of Midas, whose fascination with gold was so intense that he wished for – and received – the ability to turn everything he touched into this shiny metal. Seeing his own daughter turn into a gold statue did not faze him. He was only brought to his senses, when the very food he tried to eat choked him as it too became gold.
During WW II in 1943, a Japanese I-Boat, known as Japan’s “Golden Submarine” was sunk by the Allies as it headed for Nazi-occupied territory to exchange its load of bullion for uranium oxide, in an attempt to make a “dirty” bomb.
During that same war, Allied airmen were given in their survival kit, in addition to fire starting and signaling supplies – for barter, gold rings, gold French Francs and British Sovereigns.
After the Nazis came to power in Germany and began persecution of the Jews which would eventually lead to the Holocaust, a Jewish family escaped to America by taking their store of gold, hammering it into the shape of wooden chest hinges, and painting those hinges black to disguise its valuable status when they booked passage out of the country.
In early 1980, as the last gold bull market was topping, a college in a small West Coast community was looking at being forced to close because of a lack of funding – which neither state nor local sources had been able to provide. At the last minute, a member of the community showed up to a Board meeting and donated a wooden box full of gold coins. The people tasked with “monetizing” the golden windfall were unsure about whether or not they should wait for higher prices before selling, but chose to act soon thereafter, selling at around $800/ounce – very near the top in terms of price and time – a level that would not again be reached for another 27 years.
A writer known to most investors in the resource sector community, while in Central America some years ago had his wallet stolen, just before he was to return to the U.S. Standing on a table at the airport, he waved a gold chain he was carrying, seeking exchange (which he got) for an airline ticket back to the States.
So there are still a lot of reasons for owning gold, but as with the pursuit of anything else, it’s helpful, over the course of one’s life, to keep things in perspective.
Off to the Klondike!
The Klondike Gold Rush got underway in 1897, when ships docking in Seattle and San Francisco off loaded miners returning from the Yukon carrying bags of gold. This event morphed into one of the great gold rushes of all time. Perhaps the most vivid and enduring description ever written of it was Pierre Berton’s Klondike: The Last Great Gold Rush, 1896 – 99. As other historians have noted, many who braved the hardships of getting into the North Country to search for gold, didn’t even try to find it when they got there. Apparently just the act of making the trip was a “golden experience” in and of itself.
About this historical period, Poet and Writer Robert Service – known as “the Bard of the Yukon” wrote the following poem, entitled “The Spell of the Yukon”
I wanted the gold and I sought it; / I scrabbled and mucked like a slave. / Was it Famine or Scurvy – I fought it; / I hurled my youth into a grave. / I wanted the gold and I got it – / Came out with a fortune last fall.- / Yet somehow life’s not what I thought it. / And somehow the gold isn’t all.
A few days before the end of December, 2013, a wealthy New Yorker worth an estimated $800 million, after having given away his fortune to a variety of charities, committed suicide. The UK Independent reported it this way:
“Hedge fund multi-millionaire Robert W. Wilson, 87, leapt from the 16th floor of his luxury San Remo apartment building, a prestigious address in New York’s Upper East Side which has been the residence of Steven Spielberg, Demi Moore, Glenn Close, Dustin Hoffman, Bono, Steve Martin, Bruce Willis and Steve Jobs in the past.”
By just about any monetary measure, Mr. Wilson had achieved great success in his life. The donation of his fortune to charities is to be commended. By such a yardstick, his material success exceeded what most people could dream about attaining. We don’t know about the other elements of his life and how they all came together for this final act. And it certainly is not our place to second-guess his behavior. But it does seem to say something about the path that all mortals must walk, the importance of thinking carefully about what we truly value, how we want to travel on this plane, and what kind of legacy we hope to leave behind. I would suggest, in the greater scheme of things, that the message Robert Service wrote about in his description of the Klondike Gold Rush well over a century ago, is just as true today – and will remain so a century from now – as it was then.
A life well lived, is much more than “Just about the gold”.
Transcribed on a building wall in Dawson City, Yukon
The “balanced” life seems to be about a number of things – nurturing strong relationships, giving as well as receiving, expressing gratitude, being resilient, holding a belief in something larger than oneself, having a bit of luck from time to time, and yes making some money too. But given that we are imperfect beings – often tossed to and fro by the events of the day, it definitely helps to “stay in touch” with our core values, and realign ourselves to them from time to time. Going on autopilot for many years and assuming the details will take care of themselves, is not always the best course of action.
In recognition of the effort that all of us must make, which I believe calls for a certain amount of regular introspection, I close each issue of The Morgan Report with the following – a message I sincerely extend to each and every one reading these words:
Until next month, wishing you health above wealth, and wisdom beyond knowledge,