From 2002 to 2016, I was the world’s most vocal Precious Metal advocate – as well known in the Precious Metals community as essentially anyone. In 2011, I abandoned mining stocks entirely (which I had owned since 2002, and marketed since 2006) for the relative safety of bullion - holding a little in third-party storage programs (Brink’s), but most in basement safes.
In other words, when viewed from the eyes of today’s emerging digital world; where third parties are less trustworthy than ever, and governments increasingly draconian; as stupid and dangerous an investment strategy as one can imagine.
In early 2017, the first signs of my wavering on this front occurred. I had been actively acquiring Bitcoin since January 2016, and writing EVERY DAY of how Bitcoin was part of a monetary future featuring it, gold, and silver. However, with each passing day, my outlook for Precious Metals wavered a bit more – which was first seen in my writings in early 2017, when I recommended holders swap junk silver for silver bullion.
Man, was the backlash incredible! Quite literally, I was nearly fired from Miles Franklin for having the gall to recommend a swap into bullion coins. That said, nothing in my article discussed the real reason for this recommendation – which was, that in a world where Bitcoin exists, the archaic view that junk silver could act as “money” during times of crisis had become laughable.
In other words, the first instance of the myths (which I for years had believed) that Precious Metals were more fungible, divisible, portable, liquid, and “outside the system” than fiat currency. Finally, in a world where Bitcoin exists, these long ignored mistruths became starkly obvious.
By mid-2017, with Bitcoin surpassing my Precious Metal holdings, I was losing faith fast in PMs’ future. I started divesting my silver in July 2017, and dumped it all when Bitcoin SegWit locked in (thus, ensuring BTC would NOT be defeated by hard forks). I still held my gold (which is why CGC, launched in September 2017, was called CryptoGoldCentral), but was entirely divested of silver, by August 2017…when I was fired from Miles Franklin for speaking too much about Bitcoin, during a time when bullion sales continued to decline, as they had for years. And FYI, I equally publicly sold my gold in January 2018, when I once and for all realized Bitcoin was destined to usurp it’s use case.
Putting silver’s uselessness into perspective, consider that I once had seven safes full in my basement, weighing thousands of pounds. It could obviously never be transported; and given the wide variety of products I held – from the junk I sold in early 2017 (the heaviest of all, as a 715 pound bag weighs 50 pounds); to thousands of “generics” with no real market; and a bunch of specialty coins that only a handful of experts could properly price; there was no real way to determine its market value.
Not to mention, the fact that all silver (and gold) must be authenticated – so the only way to actually sell it is to transport it, at enormous cost and inconvenience, to one of the handful of bullion dealers with authentication equipment and pricing experts.
Of course, to do so, you actually have to get the coins to them – which requires either driving them there, if you are lucky enough to live near one of the handful that exist, at great peril of robbery or confiscation; or send through the mail. The problem being, it is essentially illegal to send through the mail, and against the policy of UPS and FedEx.
Suffice to say, the process of selling took many months, and was extremely painful – including a lawsuit with UPS that I lost. I was lucky to have sold my junk silver and generics around spot – but that was three years ago, and I suspect that ability may no longer exist. All in the name of a supposed store of value, that was supposedly universally desired.
Fast forward 2½ years, and amidst the greatest financial crisis since 2008 – which in my view, will be VASTLY worse, and IRREVERSIBLE due to the cumulative damage caused by government and Central banks’ policy response to the 2008 crisis; and silver is not only in freefall against dollars, but gold.
To wit, the gold/silver ratio, which had been holding around its all-time high of 90 for years, has exploded to 125 – and unlike 2008, it is NOT due to paper market manipulation (though it certainly hasn’t helped). No, silver’s monetary demand is dead…as is platinum’s, whose ratio to gold has plunged to an all-time low, too. Heck, even its ratio to sister element palladium, a 100% industrial commodity, has fallen through the floor.
In my view, the bullion industry is in SEVERE danger. This has been the case for years due to plunging sales (check the U.S Mint website - https://www.usmint.gov/bullion-sales), but has dramatically worsened due to the current crisis.
Yes, gold has hung in there – though clearly, the Cartel’s paper attacks are worse than ever; and equally clearly, it is yet again, decidedly not acting like a safe haven asset. That said, it is indisputable that silver and platinum are dead, which likely represent the largest share of bullion dealer margins.
Throw in the fears of logistical breakdowns; not to mention, the potential for fear of bank and third-party storage facility solvency and security; and you can see why the market for physical bullion could see dramatically less liquidity very soon…particularly, silver.
So, if you were still harboring a belief that silver will one day moon – and save you from the political, economic, and financial carnage we are starting to witness now – I’m guessing that belief is rapidly withering away. Which is why you MUST sell your silver any way you can; as fast as you can; before potentially, it becomes impossible to do so.
As for gold, it will likely maintain some manner of monetary value for a decade or two, as Central banks still own it (theoretically, as they don’t allow audits of their holdings). However, in an increasingly digital world, it won’t be long before they realize Bitcoin is far superior in ever way. Plus, the stream of sales from Millennials and Gen Z’s inheriting gold and silver from “goldbugs” will continue unabated for decades, heavily pressuring prices.
Conversely, we have Bitcoin, the most perfect asset ever created – which will only strengthen, as it becomes more widely understood…not to mention, as it halvens, and halvens again. The current financial crisis has caused panic selling of everything – which is why the opportunity to escape from archaic, increasingly illiquid Precious Metals whilst you still can; for the money of the future, Bitcoin; could not be more powerful.
And if you need advice in how to sell Precious Metals, I’m your man!