Gold and Silver Juniors, Mid-tiers and Producers Message Board

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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: Chuckles_Bee who wrote (17756)	8/7/2006 8:04:41 PM
From: que seria	of 78416

screen name alias: Re: physical metals v stocks... I opt for stocks and cash now. I think a well-stocked physical refuge would make more sense for your worst case scenario than would physical metals. Like you, I don't see the local stores taking your precious metals. To say they will is either to foresee disintegration of government (I don't), or that the gov't will back off its legal tender law at the very moment it most needs to keep paper currency forced on the populace (even less likely). Sure, there may sprout a black market economy of consensual participants, but I doubt it swallows the legal tender market. Gov't can be very aggressive about protecting its legal tender monopoly. Compare what our national gov't was willing to do about gold in the 1930s with what today's Leviathan is likely to be willing to do to maintain its paper dollar's dominance. Betting against confiscation is more a hope than a plan. Governments don't get softer in bad times. Lately I've only done a mix of PM stocks and shorts and cash. I don't bet on very low probability, unpredictable events such as WW3. PM stocks matter to me (a U.S. investor) for expected superior appreciation against dollars (i.e., cash). After they perform, they go back to cash. Dollars are the medium of exchange for the foreseeable future. It makes sense to minimize transaction costs while maximizing risk/reward. People can steal physical metals; it is a lot harder to steal stocks represented by electronic accounting entries at my broker. I have leverage with stocks but, by definition, not with physical metals. If I'm investing with the idea PMs are going up, why wouldn't I want leverage? (I refer here to production profit or in-situ deposit value---not to buying on margin).

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