Gather three hundred average American investors in a room, ask how many own physical gold and how many own physical silver - and you might see one or two hands raised.
Clearly... we’re not dealing with average investors here in Carlsbad. Because when those two questions were put to this audience by Eric Sprott, CEO of Sprott Asset Management, which manages over US$3 billion in assets, every hand in the room shot up. Eric chuckled, “I see I’m preaching to the choir here.”
What, then, brings us out to Casey summits?
One thing is the opportunity to exchange ideas with investment legends like Eric Sprott - and other folks not available to us in our daily lives.
But another is to find out what they’re investing in. Gold we know. But what are the ways to play the gold bull market other than buying coins and bars? What are the junior mining companies whose stocks are headed moonward as gold itself rockets ahead?
Here Sprott did not disappoint, as he named three of his favorites, walked everyone through their fundamentals, and told why they’re buys at present prices. Pens scrolled frantically and you could almost see the disappointment that it’s Saturday and the markets are closed.
Eric didn’t get to be one of the wealthiest men in Canada through consistent misreadings of the economic situation, so when he says we’re in a depression, not a recession, it might be a good idea to pay attention. Nor are we anywhere near the end of the downturn. “Banks,” he said, “are so broke it’s beyond belief.” Want to bet on a recovery in the financial sector?
Eric’s presentation was fascinating in itself, and reason enough to be here. But it’s a good thing Sprott was on his game, because he had to follow Casey Research’s own resident economic genius Bud Conrad, the nonpareil whirling dervish of data points.
Bud never fails to energize a crowd, and today was no exception, as he unveiled a mind-boggling sequence of charts and graphs covering virtually every aspect of the economy.
Though it was hard to keep up with the numbers, he succinctly spelled out the overall message for us: we are in the eye of the storm. That little bit of blue sky Washington is pumping up is no different from the patch of blue at the eye of a hurricane. The next arm of the storm is on the way.
Not that the blowhards of DC are the only problem, either. All fiat currencies are toilet paper, Bud said. They’re engaged in a race to the bottom, and the only question is who will get there the quickest. Don’t believe governments actually know this? Take a look at the list of countries that have intervened on behalf of their currencies in recent months. Bud showed it. It’s long. Very long.
How important is it that we take remedial action, right now? Bud showed us. If the running up of deficits keeps on at current rates, the interest on the national debt will hit $1 trillion. By mid-century? Uh uh... in just four years. Which means that, at that point, every cent collected in personal income taxes in this country will be spent on interest payments alone. Think about that.
After talks by Bud Conrad and Eric Sprott, it was almost comic relief to hear Doug Casey speak on “Stupidity, Evil and the Decline of the U.S.”
Doug began by making a distinction between America, which came into being as a wonderful, liberating idea, and the United States, which is just another country - formerly known as the land of the free. But now there are regulations on everything. So much so that, as Doug puts it, “everything not obligatory is prohibited.”
To help make the point visually, and to the enormous delight of the attendees, Doug calmly extracted a cigarette from his pocket and lit up. In public! You can guess whether anyone dared tell him to put it out.
He boiled the serious side to his presentation down to this: Planet America is being circled by the twin moons of evil and stupidity and neither is conducive to healthy politics or economics.
The reasons for such a state of affairs are threefold, in Doug’s opinion:
We’ve lost our philosophical anchor. We no longer exhibit courage and initiative, nor are capable of producing more than we consume.
Concurrently, we’ve developed a reflexive belief in the power of government to solve all our problems.
Fear is the driving emotion among our middle class, which is shrinking, desperate to hang onto what it still has, and prey for any demagogue who comes along and speaks in the right kind of code.
There is no quick fix for this.
But the market cares nothing for fixes, quick or otherwise. It imposes consequences on the actions people take. Party for decades like there’s no tomorrow and there will be a hangover when tomorrow finally comes, as it must.
Just ask another investment legend, Richard Russell, who also spoke today. Richard began publishing his top-ranked newsletter in 1958. Since then, he’s seen it all. And he described our collective tomorrow with a single word: austerity.
“Get used to it,” Richard advised. ”And if you want to survive it, get some gold.”
Order our complete audio collection - click now to learn more.
But don’t take long, on Monday the price goes up $100.
Talking of profits over in our options trading den they have closed their latest trade which generated a profit of 50% in 30 days on "target=_blank">GLD Call Options, so they have updated their progress chart, yet again, to show all the closed trades as of today, so you can see exactly how it is going, please click this link.
Stay on your toes and have a good one.
Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.
On Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton.
The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:
On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09. On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days, with more positions opened yesterday. Drop by and take a look.
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