Sesquiculus

Gold Should More than Double in Next 6 Months

There is also the fact that gold is worth whatever it is worth. During the crash, about the only two things that did not get throughly- hammered were "cash and gold bars".

All That Glitters Isn't Gold--Watch Out for the Fake Stuff

While lead is significantly lighter than gold, its density is similar to both silver and palladium. Allegedly, back when silver had its last run-up, scammers would drill out 100 oz bars and refil the holes with lead. Then they would cap the hole with silver and polish the area.

My bullion dealer tells me that most of these were easy to detect if you looked closely. The scam ended when gold went below $10 per ounce.

The Market Appears to Be Valuing Gold Stocks on Cash Flow, Not Assets

Some PM miners are "pure" unexpiring options on the PM Price, These are bare-bones mining companies sitting on top of cash and defined, but non-producing resources.

Since Mr. market currently totally disregards resources, these companies are extraordinarily cheap relative to active miners.

The two examples that come to mind are vista gold (vgz) and North American Palladium (PAL).

VGZ set itself up deliberately this way by buying up large, but uneconomic mines back in the day, figuring on spining off actual mining companies if and when mining them became economic. E.g.,, a couple years ago, they successfully spun off Allied Nevada (ANV).

VGZ is sill sitting on large reserves, awaiting another runup in the POG.

PAL recently shut down its mines and cut its costs, with $26 million stashed away to see them thru until conditions improve. I particularly like this company because either inflation or economic revival should run up the palladium price.

JPMorgan Chase: Poisoned by Bear's 5,000 Counterparties

One data point relative to the solvency of JPM-Chase: I'm the executor of my parents will. Using the usual court-supplied documentation, I have had no problem cashing out their various accounts at other institutions.

But, I have run into a stone wall of impedimenta trying to cash out their brokerage account at JPM. Real Kafkaesque stuff like demands to reopen the entire estate, go back to court, etc.. Accompanied by a certain obtuseness about the documentation I present. Seemingly anything to slow the process. Either that, or they are dumber than nails, which creates a whole other series of problems.

Not a very big account, either. But one JPM has had pretty much free use of for the last decade or so.

Such accounts do mount up--- Artifically slowing payout of estate settlements is an effective way to keep the money as long as possible. If you tried this with primary account holders, you would soon have a bank run. But heirs might not realize what is goin on.

No Silver Lining for Precious Metal Bugs

Other issues aside-- otherwise viable financial institutions are now dying because of counterparty failures far down the chain. So, the short counterparty chain with unhedged miners is a major source of comfort. You mostly just have to worry about the viability of the miner itself and not that multiple linked counterparties, the failure of any of which may bring down the edifice. Not to mention the fact that bullion in hand has no counterparty risk at all.

Surprising Call for Return to the Gold Standard

Into the 20th century, US import duties could only be paid in gold coin or equivalent. A partial step toward a gold standard would to be to again accept cerfified bullion at spot for tax payments. The treasury could then "manipulate" the dollar/gold ratio by selling its intake (or not).

This would not require the treasury to cover every dollar, which is clearly impossible. But it would tie the dollar indirectly to gold, providing some check on dollar creation. Among other things, inflation (with its run-up in the gold price) would increase gold flow to the treasury. Ron Paul has repeatedly submitted bills to this effect.