-- Published: Wednesday, 13 August 2014 | Print | Disqus
By Bill Holter
The pork industry for years has had an advertising campaign that asked "what about the other white meat?". If you already own precious metals or are considering making purchase, I would ask you, "what about the other white metals"? The "other" metals are palladium and platinum.
Why would anyone consider these as a hedge or even an investment instead of silver and gold? There are several reasons, I will start with the most obvious. What happens if gold is again "confiscated" as it was in the 1930's? Will you turn your metal in? What if there is a hefty fine and jail time attached to owning or trading in bullion? Yes, you could seek out your local jeweler to fabricate medallions, chains and earrings but this is a lot of work and a lot of risk in my opinion.
What if the same could be said for silver? I highly doubt this would ever happen as the "haul" that government would receive is very small in relation to an already tiny gold market, but what if it did? What if a law was passed that included both silver AND gold? Yes, one answer is "gold in the ground" via gold and silver mining shares. In fact, as you already know I am a believer that the leverage in these vehicles still exists. I believe they are still viable and will ultimately be the biggest winners. Since last June, the mining shares have vastly outperformed both physical metals and the complex is just now turning up.
If there were a confiscation of metal, would platinum and palladium be included? I guess it's possible but I cannot imagine it. Does it make sense to own any? Personally I think that it does, especially if you have no mining shares which guard against the lunacy of confiscation. I believe having 5% or maybe even 10% of your holdings in platinum and or palladium is a good idea and merely diversifies your metal holdings.
There is another reason for the other white metals..."we" in the U.S. don't produce very much to speak of. In fact, Russia and South Africa are THE biggest producers of both platinum and palladium by very large margins. The following link is a breakdown of global production, http://www.indexmundi.com/en/commodities/minerals/platinum-group_metals/platinum-group_metals_t5.html . "Russia and South Africa", do you know "what" they are? Russia is the "R" and South Africa the "S" in BRICS. Do you recall the recent news about how the BRICS just formed their own central clearing bank to compete with, AND bypass the West's "SWIFT" system? Does this sound to you like they might enjoy "isolating" the U.S. from a business standpoint?
Let me go one step further and ask you another couple of questions, do you believe it's possible that Mr. Putin may also know "they" produce the vast majority of these metals? Do you suppose if the current "sanctionfest" gets a little hotter and heavier that platinum and palladium shipments might get mentioned at some point? Or, what if (when?) the Ukraine situation turns hot and live fire begins, will Russia be shipping any platinum or palladium to the U.S., a direct enemy of war at that point? Or how about South Africa? Will they break from the BRICS and ship some of their production to the U.S.? Could they use their production as leverage or even blackmail? I wonder if anyone in Washington has even completed this scenario but I sort of doubt it...
While I am on the subject of "other metals" I might as well mention "rare Earth" metals. These have many uses, the most important being military uses. These are 90%-95% produced out of China. If (when?) a hot war, let's call it WWIII begins, how likely is it that China will be shipping any of the necessary rare Earth metals to anyone other than their closest allies? This is potentially a huge problem for the U.S. which no one has recently even spoken of but I thought I'd mention it.
To wrap up, platinum and palladium are not "silver and gold" from the standpoint they have never been "money" but they are close cousins. They are close enough and rare enough to merit your thinking about owning a small portion as a hedge against confiscation AND the spigot of supply being turned off. They do have jewelry and industrial/technological uses and demand, who knows, given the "right" (wrong) monetary and political circumstances, they could possibly reign supreme in a hyperinflation where gold and silver are legislated as "contraband"? It's just a thought...
Regards, Bill Holterhttp://blog.milesfranklin.com/
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-- Published: Wednesday, 13 August 2014 | E-Mail | Print | Source: GoldSeek.com