KitcoKitco
 

A Loverly Day in the Neighbourhood

 

By David Bond

Apr 23 2009 10:42AM
www.silverminers.com

   

Wallace, Idaho – It's a grand time to be alive in the silver fields of northern Idaho. The glaciers in both our front- and back-yards are receding, courtesy of the annual Global Warming, though not as rapidly in winters past. The crocus bulbs have released flowers resplendent in shades of champagne and merlot; the fore and aft hatches on the mansion are open and a breeze off the Bitterroots blows through the cobwebs and nicotine haze, and over the cat-box, exhausting winter's pent-up pollution to the great outdoors (which belongs to the EPA so who cares?); silver and gold are absurdly cheap, relative to what they're about to be, but the mines and the miners here haven't noticed they're right now in a price slump.

There is talk everywhere of a big recession, or a Great Depression. It reverberates from the newsrooms of the San Francisco Chronicle, the Seattle P-I, the Rocky Mountain News, the Boston Globe, a couple of rags in Minneapolis and Chicago, viewed through the prisms of those who either have lost their reporting jobs or are about to. Ronald Reagan, quoting someone, said that a recession is when your neighbour loses his job; a Depression is when you lose yours. So it is quite natural that the mainstream media, lined up to borrow apple-carts and untrained in even the basics of mercantilism, think we're Depressed.

They should take up silver-mining. (Or gold-mining, for that matter.) Forces larger than the U.S. Fed, the Goldman-Sachs cabal, or even the IMF (“Dirty M.F.,” Canadian folkster Bruce Cockburn calls this latter) combined are powerless against the historic, congenital need for property security that is silver and gold. Those who mine for the stuff reside at the real seat of international power; the banksters know this and are desperately trying every Keynesian measure to hide inflation by repressing the gold price (and with it, silver) and the longer they do, and the tighter they turn down the screws, the more explosive the response will be and the nastier their losses, already underway will become.

Anyone with other than a degree in journalism understands that inflation has been breathing hot and heavy down our necks since the millennium's dawn. Gas prices may be “down” from $4 to $2, but they're still double what they were when the ball dropped in Times Square on 31 December, 1999. Bread, orange juice, milk, eggs, tomatoes, canned chili – you name it – all have doubled in a decade. Applying the “rule of 78” that works out to about 8 per cent inflation per year for ordinary household necessities for the past decade. When the inflation rate hit 13 percent in 1979, gold shot to $850 an ounce – more than $1,500 in today's FedNotes – and silver flirted with $50: nearly $90 in 2009 Fednotes. Within the next 18 months, we will look back at $1,500 gold and $50 silver and kick ourselves for not having bought more when we had the chance at $880 and $12 – silver, especially, given its current 73:1 ratio to gold.

The U.S. money supply and the U.S. deficit have gone from linear to parabolic. And here is the bankster's double-bind: An even slight bump upwards in the Libor, to which most adjustable-rate “liar's loan” mortgages are tied, will trigger a new avalanche of home mortgage defaults, something the banksters and their teleprompter president cannot countenance because it will happen on their watch, not the previous thugs' watch. So the banksters have to suppress the interest rate, which is why they're not doing any lending despite the Vaseline job American citizens have been forced to perform for them. Yet around them inflation swirls. As we said, a double-bind. “Contempt for money is something the rich invented to keep the poor from having any,” some sage if long-dead financialist (Damn! Our spell-checker informs us we have just invented a word: Financialist) is supposed to have said. Ditto for gold. The banks sow contempt among the plebes for silver and gold, but they're the first to run for metals when the shit hits the fan. And the squeeze between low interest rates and a gold scarcity is already on, as The Telegraph's Ambrose Evans-Pritchard reports.

“Pure metal – whether Krugerrands, Maple Leaf coins, or the 'five tael biscuit' favoured by the Chinese – entail no counterparty risk,” notes Evans-Pritchard. Indeed, neither do silver-mining stocks, if one studies up on the properties and the players. Blue-chip silver shares like Hecla, Pan-American, Silver Wheaton and Silver Standard, are ridiculously under-priced despite their 100-200 percent recoveries since last fall's market 90 percent downwash. If you bought a penny stock like Silver Buckle (SBUM) you'd still be holding 30 cents on the buck from a year ago; say that about GM, Bear Sterns, or McClatchy newspaper shares, if you can. (If you'd bought McClatchy a year ago for $10, you'd be holding 58 cents of their paper today – worth less even than mainstream media newsprint; your last year's investment in General Motors of $10 would be worth about 90 cents now. And they say penny mining stocks are risky?)

So we bask in Wallace, Idaho in the ephemeral warmth of April's false summer atop a couple of billion ounces of silver, which is not ephemeral, and which is the stuff the banksters will run to when they cannot find any cheap gold, just as they did in 1979. And silver is the stuff with which the working man, who does not choose to soil his soul with the filth of Wall Street or the stench of the U.S. Congress or the U.S. Fed, will happily accept in exchange for his labours, and with which he will pay his bills.

As sure as our daffodils and tulips will follow our spray of crocus, as sure as Solstice warmth will follow the May and June rains ahead, even as sure as the sun sets on Western hegemony and Empire, even as it rises on an Asia that understands that metals win all wars and that silver and gold keep score,  and the companies who mine and look for silver have their sunshine day a-coming. Plant and propagate your bulbs accordingly, and watch them multiply, before the soil hardens and the brown-shirts rip them out.

David Bond

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Editor of The Silver Valley Mining Journal