Oh silver, how do I love thee? Let me count the ways.
The negative sentiment amongst some is palpable. You can almost smell the fear.
Am I afraid? No. Why not? Keep reading and you'll get some idea. So how much skin in the game do I have? To answer that I'll use this metaphor: if a percentage of skin eqates to a percentage of all my worldly posessions, then if I was surfing and went under a wave all that the water touched would be invested.
So here's a question for the real investors, not traders. (I use the term "investors" reservedly, when "speculators" is more appropriate).
How much "money" have you put into Silver Mines shares and what do you expect to gain?
$2,000? 10,000? 20k? 100k? 1,000,000? 10,000,000?
What do you hope to buy with those gains when they materialise? Something tangible like a boat, a house, or more toys? So your very survival is not dependent on your gains then? Your basic needs, food and shelter, are met? Is your investment about adding to your pleasure, or a way to survive for you, or your children?
The answers to all these questions are what motivates the retail crowd. Financial institutions just care about making more profit. People are expendable, yet paradoxically the few running the parasitic system rely on the host, the 99%. That's us. Don't fret, the 1% will never read any comments here.
When gold is treated as the only real money or formally backs currencies, people save gold. Gold's 5000 year historical status and monetary role has been beaten out of the public conciouness. Gold is considered an investment, or a traded commodity, nothing more, by the current system. Meaning in financial terms gold is not seen as the only real money - which it is - but as just another way to make more fiat "money".
Given its intrinsic cheapness vis-à-vis paper currencies today and worsening economic conditions a few investors have been replacing a portion of their fiat cash and financial asset portfolios with physical gold. Gold ETFs or futures that are never called upon to deliver physical gold (they would default anyway) are just another way to divert investment demand for those who seek gold exposure, mistaking "paper" gold for the real thing. The only way to hold physical bullion in a financial asset portfolio would be to own shares in mining companies, which provide direct ownership of physical bullion inventories held below ground.
Serious Silver Mines' shareholders who don't have unrealistic expectations know that the risk of any default occurring to cause a catastrophic loss of their right to the silver in the ground is calculated to be small. Conversely, those with unreasonable expectations worry about anything and everything. It's invariably the smallest spéculateurs who do the most worrying, because they are looking for quick gains, are irrational, impatient, illogical, and immature. Do major shareholders like HSBC worry? Does Anthony McClure worry? Even ( if ) the shares went to zero in terms of a fiat AUD, ( no chance ) there's the ownership rights to in ground silver. Worry about getting struck by lighting first.
Gold and silver will be valued in terms of the purchasing power of each gram or ounce or part thereof. New currencies issued will be substitutes for a fixed weight of gold or silver, and circulate as cash or in digital form in the financial system as is now the case. The big difference is the value of currencies will be tied to gold and silver, unlike today’s fiat currencies.
Whatever new currency unit the shares are priced in, will mean each share represents a sum decided upon by the market based on the purchasing power of each ounce of silver which will necessarily be a value also decided by the market such as the producers of oil. How many gold grams for a barrel of oil? Or gold grams equivalent in a new currency unit? It doesn't matter what the number of new currency units is set to equal a set weight of gold or silver as long as it is a fixed amount, and unchangeable. But what is unknown is that number. Time will tell. Russia ( leading BRICS in monetary planning ) is working toward this end. It's not to "de-dollarise" as much as insurance against the credit crunch for the USD.
Only by fixing a new currency to a weight of gold or silver will a new world of monetary stability emerge from the inbuilt self-destruction of the current debt-based monetary system, which has distorted values, misallocated capital, destroyed financial 'assets,' created no tangible wealth, transferred real wealth upwards, torn up the social contract, and caused wars for scarce resources and energy.
As most of the relatively larger retail shareholders of Silver Mines probably bought their shares with capital gains from other financial investments rather than by the sweat of their brow, it is reasonable to assume they expect capital gains from selling their shares, again, without breaking a sweat. This is all well and good, but those who are impatient are being sorely tested. Everyone wants instant gratification. If you buy a Lotto ticket, or place all your chips on black in roulette, do you expect to win? What are the odds?
Yet with SVL it's much more like a bet on whether the sun will rise tomorrow. A certainty. Those with diamond fingertips and stoic patience will be rewarded. Those in the "O ye of little faith" camp can choose to believe and have the same faith as defined in the Good Book:"Faith is the confidence that what we hope for will actually happen; it gives us assurance about things we cannot see."
The true believers, the few of us with faith will continue to relax in our hammocks strung beneath the coconut palms, eyes lazily surveying the infinite blue horizon, and with satisfied smiles, savour the sound of the surf on the shore...life is good!
SVL Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
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