All the news about a potential silver ETF, has everyone all excited, and I can understand why. Because in order for this thing to get going, take your Social Security Number, and supposedly have enough silver for all shares, it will be necessary for them to purchase silver. Some say 130 million ounces and some say a million and a half. Some say none. Who cares? Not me. I wouldn’t get involved in that for all the tea in China. “Fools rush in, where angels fear to tread,” goes the old song. Want to own some silver? Great. Buy it and hold it. Stash it away where no one would dream of looking, but for goodness sake, you keep it, and hold it in your hot little hands.
Foolish banks “leased” their gold. Remember? They leased it for 1%. Why not? Gold, they figured, doesn’t pay interest, so they got 1% for their gold and it was ’leased,’ not sold. Correct? Ha! Not on the skin of your chinny chin chin. That ’leased gold’ was immediately sold, and is now on ear rings in India probably. The banks who ’leased’ that gold, figured they hadn’t lost a thing. They took the money and probably bought U.S. debt. I’ll bet they’ll never see the gold again. All that ’leasing’ was done with gold about $300 or maybe less, and now it’s close to $600. Know about ’leasing?’
Ever hear of someone taking care of a ’leased car?’ Do rental or leased apartments receive the care and upkeep by their occupants as they would care for their own residence? Rent something to someone, or ’lease it,’ and watch it disappear. That ’leased gold’ is long gone. Notice you never hear of it of late? Those bracelets, necklaces and earrings, made from ’leased’ gold won’t be returned, and you can bet on it. ’Leased’ things, which can be moved, often are never seen again.
Things which are supposed to be ’stored’ offshore or in some foreign land, may be there, and all may be well, but how does one know? The purveyors of certificates which say that so many silver bars are ’stored’ in your name in some vault overseas, may be as honest as the day is long. But is there any silver there? If it is there, how can you get it if you want it? How much do you have to pay them to ’store’ it for you? How much would you have to pay to get it shipped to you here in America? Will the proposed ETF actually have a single ounce of silver, or is this just a large game of silver Monopoly?
Just a clue, but I have heard of plenty of people having a difficult time getting their bars delivered to them from right here in America. COMEX bars, stored in New York, and in your name with serial numbers even, have taken many weeks to get delivered. Why trust anyone to ’store’ something for you which you are depending on as a hedge against devaluing dollars? If you buy canned goods to guard against food shortages, would you store them in a distant state or in Europe? If you bought food for hard times, and stored it in Europe or the Caribbean, against hard times, even if you had the serial numbers and a paper promise that they were there, would you do it? Of course not, because YOU MAY GET HUNGRY!
Of what value is a piece of paper stating that one has umteen number of silver bars stored in some far away place, even if you have the serial numbers? Of what value are they, if you DON’T HAVE POSESSION OF THEM, when you need or want them? How can one use something if one doesn’t have physical possession of it? You say, “Well I can trade with paper silver, can’t I?” Yes, of course you can, but why do that? If you want to gamble, go to Las Vegas or Atlantic City. If you want to protect yourself, how in the name of common sense, can you do it with paper silver?
Millions of stock-holders own GM at $35 or $40 per share, and now it’s worth $19, and headed down to bankruptcy, probably. Remember Enron? Hundreds of millions were lost due to their lies. Paper ownership of silver? Can’t they lie like Enron or Global Crossing? Why would you trust something as valuable as silver, to some outfit you have never seen, know nothing about, and which is in some foreign land? Silver ETF? Your profits will be taxed at 28%. Enjoy. Can’t get into an ETF without your serial number, but you can buy antiques, old cars, ancient books and stamps, and gold and silver without giving away your personal ID.
Why are people so infatuated with pieces of paper with ink on them, which say you own something? Why not own it and hold it yourself? What’s the point? Stock markets are rife with fraud, and outfits that ’store your metals,’ have gone belly up many times, and taken the metals with it. I saw it happen three times myself. Once was with an outfit I began doing this. North American Coin and Currency took millions of physical gold and silver, ’stored’ with them, when they went the way of all flesh. There is (was?) An outfit in Van Nuys California, which went down the tubes, I hear, because of a huge bad check. Another outfit in Phoenix, which I used, went that way too, and I had to pay the piper. So I forked over, and my customers never lost a dime. I am honest, in other words. Is the world full of honest people, businessmen, and corporations? You know the answer to that one.
If a U.S. ETF does get going, and is not required to own what it is dealing in, as in the COMEX, where is the security? The COMEX is a classic case of dealing in probably 350 million ounces of silver, and actually owning a third of that much. Suppose all silver contract owners decided to take delivery? Same with an ETF. Where is it coming from? Would you rather have dollars or silver? Under flimsy paper deals, you may have no choice. Do your paper deals, and when it doesn’t work, or there’s no silver there, remember the words of Omar Khayyam:
“The Moving Finger writes: and, having writ,
Moves on, nor all thy Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all thy Tears wash out a Word of it.”
Hind sight is always 20/20. It’s always nice to look back at all the deals and things one could have done or bought. I still almost weep at the 1927 Springfield Rolls Royce I almost bought for $250 back in the 1950’s or the Packard V-12 Phaeton (4 door convertible) for the same price. I bought a 1947 Kaiser instead, because you see it got better gas mileage. Stupid? Of course! Hind sight is always there to mock you, isn’t it? Stay clear of all the paper promises, and stick with physical, tangible things. They’re not dependent on any government or corporate promise or action. Physical things give one great pleasure. Would you rather caress a blow-up woman or a real one? Would you have great pleasure in holding a hundred ounce bar of glorious silver, or have a piece of paper or an ETF certificate? I’d rather own a $19,000 GM car than a thousand shares of GM stock. The car will get you around and even give pleasure, whereas a thousand shares of stock you’ll never even see. They’re just an entry in some broker’s computer. From page 51 of a marvelous book titled “Little Engines and Big Men,” (1954, very collectible) when the writer’s father was in Chama, New Mexico in 1881:
“Money was money and there were no paper certificates. All legal tender was in coin, the smallest acceptable unit a quarter. The narrow gauge ran a monthly pay car and paid all employees in gold. I’ve seen gold pieces stacked two feet high on the counter. Gold and silver money, but representing real value. We had no use for paper. Paper money could be printed too easily to represent much value, we thought. Gold and silver were tangible, palpable, ponderable. They had to be dug from flint hard stone, at the expense of sweat and blood.”
Protect yourself.