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You Can't Print More Gold


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Deflationary forces need to intensify further likely bringing the Euro down, financial systems to their knees and the US dollar and treasuries up, before central planners decide more money is the only way out. As such, there is no question precious metals could drop substantially (as any asset can) here until the hand of the ECB is forced which it will be.


I don't think its wise to try and trade that though - that's  a tough business.

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I have a core bullion position that has been acquired over my adult lifetime, and was inherited from my father. Think of that as an insurance policy. I don't and have not bought any bullion over $1,200 an ounce...


Since about 2005 we have been investing in gold through the shares of miners and developers. Think of gold as a moving marker for intrinsic value, which you can use to analyze miners and developers.


By investing in miners and developers you can buy exposure to gold for a fraction of it's bullion price.


Here is a small example of one we own:


Simba Gold (SGD-V) has about $.10 a share in cash and is selling for less than cash. They have a non-43-101 historic resource of about 400,000 ounces of gold and will be conducting more drilling shortly

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"You Can't Print More Gold"


Maybe not, but you can print free money with just a few simple steps:


1.  Incorporate a business and thinly capitalize it.


2.  Buy a mining or mineral right for a nominal amount of money.  Whether the 'right' has any chance of being real or worth anything doesn't matter.  After all, you won't ever dig for anything anyway.  Also, buying this right is best done with shares.  This way you don't give up real cash and you can value the mining rights at whatever value you wish.


3.  Pay an 'expert' to say your 'mining right' is worth a lot more than you paid for it.  And I mean, a lot.  This is not the time to be modest.  Shoot for the stars!


4.  Tell unsuspecting rubes that you've got some crazy amount of gold, etc. in the ground and you just need to raise a little capital to cover the cost of mining.  For example, you might say you have rights to 400,000 ounces of gold (worth $663 million today), even though your company is capitalized with just a couple million bucks (most of which is paper capitalization from issuing worthless shares).


5.  Sell these same rubes shares in your worthless, I mean valuable, company.


6.  After selling stock to these rubes, make a few consecutive quarterly excuses about why you haven't been able to start digging yet (unforeseen regulatory issues is a good reason).


7.  Laugh all the way to the bank.


8.  Repeat with a different thinly capitalized, non-operational shell company a few years later.

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