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Orlando Musings

By: David Bond

-- Posted 19 February, 2007 | |

The Wallace Street Journal


By David Bond, Editor

The Silver Valley Mining Journal


Wallace, Idaho – As readers of this rant know, we recently participated in a Money Show event in Orlando, Florida, at the Gaylord Palms, wherein we represented Silver investment opportunities to those who still might give a rusty one about the future of their paper money. The demographics of this Money Show crowd, some 11,000-strong, were a tad different than one encounters at an IIC conference in New Yawk or San Francisco, albeit their goals to preserve their personal wealth in the face of a runaway Fed and a lunatic President were much the same as you'd find at a resource gathering.


But in Orlando, the humble Silver Valley Mining Association, with its humble representations of humble silver properties ranging from the humble Bunker Hill and humble Sunshine mines to the humble Galena-Coeur-Caladay and humble Lucky Friday mines, together with their humble prospects to the north and south, no doubt paled in the extravagant light of offerings for permanent $1.5-million staterooms aboard wrung-out Caribbean cruise ships and their $25,000/year condo fees. “Guaranteed (sort of) income,” these rust-buckets are offering. And they are not humble; they are grandiose.


Not grandiose is the opportunity to pick up and own a humble little bar of silver, available in 100-oz denominations for a little over a thousand bucks, or 100 or even 1,000 shares of near- or actually-producing silver mines. And how curious it was that, while we were there, the United Snakes Government trotted out its new “silver dollars” bearing the likeness of George Washington, his portrait to perform where Sacajawea and Susan B. Anthony could not, permitting a pot-metal slug, artfully contrived as a “real” dollar. Which is funny, considering that the United States Mint actually does strike a one-dollar coin, comprising 1-oz of triple-fine silver, and has been doing so since the early 1980s: the Liberty.


(And so here we have two simultaneous issues of the U.S. Mint. The one garnering all the balley-hoo, insulting this time the likeness of George Washington and in the future all U.S. presidents, regardless of merit; the other, struck of pure silver in the amount prescribed by the U.S. Congress 200 years ago as the Republic's money, bearing the likeness of the St. Gaudens' double-eagle Walking Liberty on its obverse, with the official seal of the nation on its reverse. Is there a more glaring example of the two-facedness of the United Snakes government than this? A dollar that is worth an ounce of silver, and thus about $14, or a dollar that is worth a shaving of pot metal, worth about 17 cents?)


But we digress. And this is where the dozen thousand Money Show participants weigh in: they had and they have their choice between flipping houses and burgers under the New World Order, or gathering to themselves real money with which they and their progeny might survive and even prosper, and be respected, as honest traders in the assuredly Dark Times ahead. What will Bush XLIII do next? Will he nuke Iran? Will he extend the Desert Storm tours another 24 or 240 months to further his Crusades? What disaffected citizens is he producing? Will he abolish elections? In light of the lies he and his pals spun to seduce us into the murder of Iraqi and U.S. citizens on foreign soil four years ago, there are no unfair answers to demand of this madman – or to ask of ourselves.


A seminal moment during our brief soirée into Orlando came when a curmudgeonly sort sauntered up to our booth and demanded why, when he sought to retrieve the silver bars he had laid into receipted warehouse storage at this nation's most premiere repository in New Orleans, they could not produce them but, per contract, would happily replace with new bars. They were not deadbeats, this New Orleans outfit. They would honour the contract. He would get bars of equal value. “Why cannot I get my own silver back from your storage?” he asked.


“We leased your silver,” they told him. His bars were gone. That was his story to us.  And then along comes, just Sunday, a missive from Bill Murphy of GATA and LeMetropole Cafe, alerting us to an article by Tom Lauricella, dipping out of the Wall Street Journal (not to be confused with the Wallace Street Journal) to the effect that Barclays ETFs, which make owning silver so painless and easy, may have a more nefarious agenda: turns out the reason that their ETF schemes are so inexpensive and transparent is that there's a back-door to the money. Says Lauricella, “Another aspect of its business that is less well-known to ETF investors: Barclays actively engages in securities lending -- loaning out the stocks and bonds in its iShares ETF portfolios. The loans are highly lucrative, bringing in millions of dollars a year for Barclays in addition to the fees it gets for managing the funds.”


In other words, there's just a niggling chance that the silver Barclays claims to be holding on your behalf may already be leased to somebody else. May already have ceased to exist. But because you are so confident in your investment in iShares, you'll not demand delivery of the physical because you are so far just enjoying the ride. After all, why would a bank lie to you? And this is the nut of a Ponzi scheme: as long as only a few make physical demand, the game continueth. Ponzi schemes unravel not because of their size, but because they run out of trusting players.


If the cruise-ship you've invested in has sunk or is yet to be built, you do not own a stateroom, except on paper.  If your silver has been lent, you no longer own it – except on paper. If your government issues two forms of coin, one worth 17 cents and one worth $14, and claims these two to be the same, and you do not catch the difference, then you have no business thinking about your retirement or your future. Because you already have squandered both.

-- Posted 19 February, 2007 | |

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