I first fell down the rabbit hole in 2002, guided by the writing of several people - Steve Saville (noted in previous post) included - who seemed to make sense above other financial commentators. Not coincidentally they tended to write a lot about gold and the history and nature of money. Once down the rabbit hole I met one character (remaining nameless) who above all others shaped my early view; who in almost militaristic fashion snapped me to attention and laid out the rules as in "Gary, off the debt... ALL OF IT!", "Gary, make preparations... do it NOW!" While I had a wood stove at the time I now have two more and each Autumn look forward to getting out to my wood pile. I got a generator too. And - this has caused some strange reactions in some who thought they knew me pre-rabbit hole - I got a large capacity license and own a 9mm semi-automatic which I am sure will never be used for anything other than target practice. But I am not the sort to take any chances. Be prepared.
Since 2002 I have watched this society come apart at the seams - in much the way Biiwii guest writer James Howard Kunstler does (listen to this week's FSN interview posted here). As I go about my preparations ('Be prepared' was a big lesson from Boy Scouts after all) I have actually had people who work for me laugh right in my face. It's okay though, I laugh at myself too... all the while remaining focused. This is about not forgetting once you've had your consciousness raised - and about being reinforced by seeing actual current events unfold just as envisioned years ago. Check my early writing dudes.
Anyway, I was doing a little background work on the gold miner IAMGold (IAG - I do not own it) based on a Motley Fool piece I stumbled upon, whereby IAG is attempting to control costs by buying back royalties on their own mines. As part of it I checked the company's sales, PE, cash to debt ratios, etc. and I also took a look at the Yahoo message forum and saw some IAG investors bemoaning one of the slicksters from Fast Money - Guy Adami (pictured employing the 1000 mile stare all battle tested warriors have :-)) - dissing gold. Nothing new there. I decided to check his bio and found he was head gold trader at Goldman Sachs. Hmmm... Then I noted that he began his career at Drexel in 1986 - around the same time that my militaristic 'guru' began his AT THE SAME SHOP.
The irony hit me over the head like a mallet; One Drexel kid becomes an underground guru trying to sort out the truth (trust me when I tell you that some highly successful and in some cases notable people used to hang on his words) while the other goes on to a long career in the financial establishment. The irony reminded me of the scene in Platoon where the kid is talking about 'being born of two fathers', the pure and good Sgt. Elias and the killing machine known as Sgt. Barns "If the machine breaks down... WE break down and I'm not gonna allow that to happen". Sgt. Barns was part of the machine - as is CNBC and Mr. Adami. IF THE MACHINE BREAKS DOWN, WE BREAK DOWN and CNBC is not gonna allow that to happen - if it can help it. Which it can't.
But to those of us putting our money up in an effort to keep pace or outperform this mess, you'd better know who has sincerity in their hearts and who has ratings in theirs. Because the machine does not care about you. It cares about next quarter's net income or limiting its losses. It cares about keeping up appearances even as the rats scurry out of the smoking casino through a crack under the back door. That is in fact how we got into this unraveling mess in the first place, isn't it? Keeping up appearances for too long while moral hazards built? Major financial media are now getting on board and helping fan the fear - which actually makes me look ahead to a bullish time out on the horizon. But where were they when I was writing about this mess unraveling in 2004 and others well before that? They were right there enabling more and more conventional investors to take on more and more moral hazard, that's where they were. It's just the way the game goes. The way the machine works.
Okay, pulling back out of the hole, dusting off and getting back to the real world, here is the chart of IAG and a link to the Motley piece The Lean, Mean, Cost-Cutting Machine. I am not by any means abandoning the A-B-C correction scenario for precious metals but I am always on the lookout for quality miners to buy when the time is right.
Edit (4:06) Otto sez after reading this post:
|Buzz! Sorry!!! thanks for playing anyway!!!!!|
IAG is a dog with fleas. It's going to add more uncharted assets soon when it buys *** (proprietary info omitted ;-)
I will tend to take this guy's word for it. He knows his stuff.