Last year at this time, I wrote and asked readers who owned shares in gold and silver producers to send their companies a letter. I ask that you do this once again. Please don't believe I am under any delusions whatsoever because herding cats is a near impossibility. Almost no one dislikes gold and misunderstands their own product more than the current management in the mining industry. However, doing nothing will certainly accomplish nothing, doing something at least has a "chance" albeit slim. Below is a letter I plan to send to each producing mining company and precious metals mutual fund that I own personally. Gold and silver prices have been diluted by paper contracts to the point where no money can be made producing gold, and an industry wide loss producing silver. Years ago, Rob McEwen of Goldcorp decided to withhold the sale of gold production to be held in their treasury until prices were higher. THIS is exactly what needs to be done now as a counterbalance to the unbacked paper contracts being sold to dilute and depress prices. The COMEX and naked shorts need to be starved for metal, the strong physical demand is doing this slowly while the mining industry could do this very quickly.
Please, copy and paste the below and sign with your name to any producing mining companies you have investments in. Also, do the same for any gold mutual funds you may own and ask the money manager to contact their holdings with this same letter. Government has an incentive to keep metals prices down and the lapdog regulators are allowing it to happen. Price manipulation is illegal, if the authorities will not fix it, hopefully the industry itself has sense enough to finally do something! I'm not holding my breath on this one.
Dear Sirs, I am a believer in hard money and as such am an investor in mining shares, your company being one of them. As you well know, hard times have hit the producers of both gold and silver. Gold and silver prices have been forced down, capital, either debt or equity is very scarce for our industry and share prices are back to the levels they traded at when gold was under $400 more than 10 years ago.
Much evidence has been uncovered by GATA (Gold Anti Trust Action committee) over the last 15 years showing how gold and silver prices have been suppressed and continually manipulated yet we’ve heard not a sound from the industry itself. Many mining concerns pay dues each year to the World Gold Council which at the very best seems to be an antagonist to gold and silver, at worst a Trojan horse. I know of no other industry which does not promote their own product nor protect it from outside malicious pricing practices. This needs to change and the most logical catalyst is from within the mining industry itself.
It makes no sense at all to expend labor and capital to lose money, especially when your product is a finite resource and will not ever replenish. If working harder and digging more ore was an answer then I would be cheerleading the machines. The fact is, the more that gets dug up in the current environment the more money is lost and precious ore forever wasted. As a shareholder I ask that any product over and above expenses be withheld from sale until free and fair prices are present.
The facts are well documented, global demand is and has outstripped supply of gold and silver for many years …yet the prices are dropping. Your “product” is being diluted by paper sales of “representative metal” while the board of directors do nothing at all. Actually, the mining industry itself is aiding the suppression scheme by delivering metal. This can only start one company at a time, why not our company? Why do we deplete our ore reserves and not receive fair value for our capital and labor? Whether this proposed action is taken or not remains to be seen. Shortages of metal will occur sooner or later as physical demand and backwardation will eventually take the metals higher in price by multiples. Hopefully our company still has reserves left to be sold at fair profit margins. Many companies will not be in existence within a couple of years unless those with the fiduciary responsibility to protect our companies and shareholders …also protect our product from fraudulent dilution. Best regards, _________.
Regards, Bill Holter for;
Bill Holter writes and is partnered with Jim Sinclair at the newly formed Holter/Sinclair collaboration.
Prior, he wrote for Miles Franklin from 2012-15. Bill worked as a retail stockbroker for 23 years, including 12 as a branch manager at A.G. Edwards. He left Wall Street in late 2006 to avoid potential liabilities related to management of paper assets. In retirement he and his family moved to Costa Rica where he lived until 2011 when he moved back to the United States. Bill was a well-known contributor to the Gold Anti-Trust Action Committee (GATA) commentaries from 2007-present.
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