-- Posted Wednesday, 14 April 2010 | | Source: GoldSeek.com
By: Bix Weir
*Excerpt from the weekly “Friday Road Trip” posted on 4/9/2010 at www.roadtoroota.com
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Why I Think Gold/Silver Mining Shares Are A Bad Investment
Mining shares are a hot topic these days and I'd like to clarify my position on this issue but let me tell you first that I don't have any answers. Only a feeling and some common sense.
The question is... "Will mining shares payoff more than physical metal when the manipulation ends?" My answer is maybe...but ONLY if the fiat monetary system stays in tact. If the crash is as serious as I think it will be, I can't see mining shares paying off. They will all be nationalized.
Here is my reasoning:
1) When the manipulation ends gold/silver will skyrocket many, many multiples of where they are valued today. So much so that everyone will want answers to the question "Why?". The manipulation story will come out and the people will demand that the wealth of their nation be shared.
2) Globalization will end with the monetary crash and everyone will close their borders to trade for a while. Non-citizen claims of gold/silver mine ownership will be laughed at.
3) There will be anger towards the "rich people" that caused the crash such that private ownership of a country's supplies of new money in the ground (gold/silver) will not be allowed. The good guys want NO WINNERS in this transition.
4) There is a massive amount of phantom shares floating around in every brokerage house and at the DTCC (some say 1,000x+ for most mining shares). When everyone who supposedly holds shares tries to cash in there will be no way to allocate them because there will be so many legitimate claims of share ownership.
5) All of the brokerage houses will fail with the crash and there is only $263M in net assets left in the SIPC insurance fund to insure TRILLIONS UPON TRILLIONS of SIPC Member accounts.
There is more but you get the idea.
Don't get me wrong though...I think the mining companies hold MASSIVE wealth in the ground.
The problem is not that the shares aren't valuable...IT'S THAT THEY'RE TOO VALUABLE!
Take the Gold Manipulation Quiz and learn why!
http://www.roadtoroota.com/public/197.cfm
Preparing the People...The Great Banking Con Explained on National TV!
Over the last year the good guys have been working on the masses to get them knowledgeable and prepared to take it out on the banking cabal. Here's the latest mainstream education session...
http://www.msnbc.msn.com/id/21134540/vp/36233217#36233217
Citigroup on the Hot Seat
One of the main problems with holding this house of cards together is what to do with Citigroup. Citi was the heart of the banking cabal and my sources say it has TRILLIONS of undeclared losses. Citi will be in the front row when the people want to know WHY everything has fallen apart.
The hearings continue as we speak.
http://finance.yahoo.com/news/Fmr-Citi-exec-warned-Rubin-apf-712700185.html?x=0&sec=topStories&pos=1&asset=&ccode=
Citi is the elephant in the room at the moment.
When will they break... tonight?
Alan Greenspan's Big Lies on Capitol Hill
I am knee deep in comments, challenges and disbelief regarding my article yesterday on Alan Greenspan. Many emails are coming from people who read it on Goldseek.com and 24hgold.com but haven't been "subjected" to the Road to Roota Theory.
I have directed them to the Road to Roota Archives to see how I came to such an unlikely conclusion and hopefully they will begin to understand what is REALLY going on behind the scenes.
Although Greenspan's testimony yesterday was 100% scripted and rehearsed it should surprise no one that he continues to lie to the world about his involvement in the destruction of the world's monetary system.
There should be no doubt about his fault in the matter… here is Greenspan's 1998 Testimony about regulating OTC Derivatives...
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
July 24, 1998 Testimony of Chairman Alan Greenspan
The regulation of OTC derivatives
Before the Committee on Banking and Financial Services, U.S. House of
Representatives
Conclusion
"In conclusion, the Board continues to believe that, aside from safety and soundness regulation of derivatives dealers under the banking or securities laws, regulation of derivatives transactions that are privately negotiated by professionals is unnecessary. Moreover, the Board questions whether the CEA as currently implemented is an appropriate framework for professional trading of financial futures on exchanges. The key elements of the CEA were put in place in the 1920s and 1930s to regulate the trading of agricultural futures by the general public."
"The vast majority of financial futures traded simply are not as susceptible to manipulation as agricultural and other commodity futures where supplies are more limited. And participants in financial futures markets are predominantly professionals that simply do not require the customer protections that may be needed by the general public. Regulation that serves no useful purpose hinders the efficiency of markets to enlarge standards of living."
"In choosing a particular regulatory regime it is important to remember that no system will fully eliminate inappropriate or illegal activities. Banking examiners, for example, find it difficult to unearth fraud and embezzlement in their early stages. Securities regulators have difficulty ferreting out malfeasance. Even trading on exchanges does not in itself eliminate all endeavors at manipulation, as the Hunt brothers' 1979-80 fiasco in silver demonstrated. The primary source of regulatory effectiveness has always been private traders being knowledgeable of their counterparties. Government regulation can only act as a backup. It should be careful to create net benefits to markets."
END
Did I really read that correctly? Let me take some of the extra Green-speak words out of the Conclusion to find out what he really said.
"Aside from safety and soundness...regulation of derivatives transactions...is unnecessary."
"The vast majority of financial futures traded simply are not as susceptible to manipulation"
"Participants...are professionals that do not require the customer protections."
"Regulation...hinders the efficiency of markets to enlarge standards of living."
"No system will fully eliminate inappropriate or illegal activities."
"The primary source of regulatory effectiveness has always been private traders being knowledgeable of their counterparties."
Can it be any clearer that these statements and the subsequent lack of regulation is the cause and reason behind the financial meltdown?
To me, the only question left is "Did he do it all on purpose?"
As far as the housing situation is concerned, it's hard for Greenspan to say that he didn't know what was going to happen since the Federal Reserve published this EXACT SCENARIO in their 1987 and 2007 editions on page 33 of "Banking Basics":
http://www.bos.frb.org/education/pubs/bankingbasics.htm
Or take the case of Bedrock Bank . . .
Bedrock Bank Gets Too Big Too Fast
Bedrock Bank's new president was determined to turn his bank into the region's biggest lender. Bedrock's loan officers got the message and started making as many loans as they could for condominium developments, shopping centers, office buildings, and high-priced suburban housing developments. Loan applications were not always checked as closely as they had been in the past, and some of the loans were approved more quickly than they had been in the old days. But nobody seemed concerned because the local economy was strong and real estate values were rising rapidly.
Everything seemed fine; everyone was making money. But then the economy slowed down, and things took a turn for the worse. The weak economy forced many businesses to close, leaving lots of vacant office space. Real estate values plummeted, and many developers fell behind on their loan payments.
In the end, Bedrock Bank was losing so much money on bad real estate loans that government regulators were forced to step in and close it. The regulators tried to find a buyer for Bedrock, but no other bank wanted to get stuck with all the loans that had gone bad. Eventually, another bank agreed to buy Bedrock if the federal government would agree to keep many of the problem loans.
END
Look through the pages of the 2007 version for all the pictures of people cashing in their gold at the bank!
Of course Greenspan knew what was going to happen.
It was all part of the plan.
Plot to Over Throw America
More on our mysterious past...
http://www.fourwinds10.com/siterun_data/history/american/news.php?q=1270669273
My friends. We are about enter a very, very scary time but keep your head up and your eyes open for our freedom is just around this dark corner.
May the Road you choose be the Right Road
Bix Weir
www.RoadtoRoota.com
-- Posted Wednesday, 14 April 2010 | Digg This Article
| Source: GoldSeek.com
