Dance with Gold, Silver, or the Mining Stocks

It's not even a close question. Gold will rule the final day, just as Silver looks like the champion, long after passing the mining stocks as they careen to earth from a variety of ills including the oft realized threat of nationalization.

Gold steps up the plate when economic activity contracts because people are scrounging for food, let alone being productive. Silver runs hard when the inflation keeps the wheels of industry blurring, just before the contraction sets in because prices outrace the quantity of money being produced, setting up a slowdown despite the rampant inflation or money printing. Sounds impossible, but soon no amount of money will flow, even if enourmous sums are flowing because the price increases absorb the paper or worthless digits. Think wheelbarrows full of currency for the loaf of bread that is no longer available because of wheat crop failures and politically expedient yet scientifically laughable ethanol plans, and such.

Our play book, for those following my experienced template, is to run with Silver, and the mining stocks early, holding only a small portion of Gold. Then dump the stocks after catching a few good runs, keeping only the profitabl producers which will eventually pay handsome dividends. Later, much later, sell the stocks and the silver and convert completely to gold. At this point you might even have to leave the country and gold will be easy to tote, while Silver is anything but light.

Silver, Stocks, Gold to Silver, Producers Stocks, and Gold to Silver and Gold, then finally only Gold. Gold will hand the wisest ones a 10 to 15 X return, Silver probably a 20 to 23X return, the stocks will probably give a 4-10X return. None of those returns are shabby, but they will all go back down to earth if you do not trade your position correctly at the tale end of this tail of currency crashes.

Keep coming back here for the watch words on when to move from class to class.
We are still early yet, though the stock momentum is off the majors and with the mid-tiers, eventually dropping back to a few juniors that have real prospects at production. Gold and silver are awaiting launch for their biggest moves yet in absolute terms, if not percentage returns.

If it were not for the totalitarism that these currency moves portend, this would be a great time to be alive. As it is, this is a time for bravery in the face of fascism and gold and silver are the best teammates you could ask for.