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The mass market realization of Silver and Gold fundamentals


It is fascinating to realize just how far the industry has come in my 17 years of being involved in physical gold and silver ownership. From the early days of next to no analysts, when I used to write a review called "The Precious Metals Advisor," long before the likes of Schiff, Morgan, Maloney, Arcadia Economics, and others were a "thing."


Back in 2004, I looked up to guys like John Embry, the "Godfather" of mining stocks in Canada and Ira Epstein and Ted Butler. It was a time when buying and selling silver and gold still meant that brands like Johnson and Matthey and Engelhard and others like the now-bankrupt Republic Metals were still big mainstays in the industry.


Back then, I always dealt with almost an equal combination of new and old products. By old, I mean ten or more years old, especially in the case of Engelhard, who had not made a new bar since the 1980s. But all that has changed. Now, almost all the circulating product is brand new about 90% of the time. I have not personally had an Engelhard or Johnson Matthey bar outside of 1000 Oz Silver bars for a long, long time. There is now perhaps one seller for every 100 buyers plus, and more recently, that ratio is even more significant.


It speaks to the changing of the mainstream mentality around silver and gold ownership. It speaks to the growing number of investors worldwide who are awakening to something that cannot entirely be deciphered just yet. A change, if you will follow me down the rabbit hole, in how we view the level of trust we give to our traditional markets.


There is a coming of age that has very little to do with things like GameStop or #wallstreetbets or silver shorts or any of the more recent "soup du jour" topics, and much more to do with the mass-market realization of the underlying long-term fundamentals of the gold and silver market. A set of easy-to-understand building blocks, which I identified way back in 2005, that repeat themselves repeatedly in some form. Yes, indeed, hindsight is always 50/50, but these building blocks have become my pillars of foundation and the reasons why I continue to accumulate gold and silver long-term.


1. USD/Currency Depreciation

Currency depreciation is happening and will continue to degrade the big fiats like the EU's euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. These are the basket of currencies used to measure against the value of the USD. These countries will continue to be threatened to maintain a "cap" on the value of their currencies while they print themselves to death and attempting to depreciate their fiat. This printing will continue to underpin the next building bloc/fundamental.


2. Inflation


Keep it simple: If I was an American, I started the 2000s with roughly $700 to $800 Billion in circulation. Meaningless without context, right? Since Presidencies in the US have changed from Bush Jr to Obama, moved to Trump and now to Biden, what took 150+ years to create prior to Obama and the 2008 financial crisis was blown apart in less than 13 years. There is now more than $5.2 trillion in circulation. But it still lacks context, right?


Well, here you go for context: You had roughly 700-800 people fighting for 1 bushel of apples that costs $20 bucks, and now you have approximately 5200 people fighting for that same bushel of apples. What happens to that bushel of apples? Yup, it has to be priced much higher to balance the supply and demand equilibrium. This has not happened in the world yet because of artificial everything. You name it. Every trick in the book has been thrown at this very serious threat of inflation from artificially low-interest rates, deceitful reporting data, crimes in accounting, negative real returns, shrinkflation, the lower margin on retail and much more.


In fact, if you measure by the proper pre-Bush Jr. inflation equation standards, such as our friend John Williams does at www.shadowstats.com, you will quickly conclude that the street level of inflation for the everyday person is much higher than what gets reported. It is silently killing our net worth and standard of living as it robs us of our purchasing power and shrinks the middle class.

What happens when all 4500 people want that bushel of apples at the same time? You guessed it; the bushel becomes priced to oblivion. The same thing will happen worldwide. It is no longer a phenomenon of one or two countries. The entire developed global village is experiencing this simultaneously, and they are keeping their currencies competitive by depreciating them and giving us the “illusion”, that inflation is non-existent.


3. Geo-politics


This is a vast area of worry. The last time we witnessed a bull market in the 1970s in gold and silver geopolitical threats were not so domestic. They occurred outside of westernized nations, especially North America.


These threats come in many forms (War, terrorism, civil unrest, economic sanctioning, sovereign debts, human rights violations etc.) and have resulted in central banks around the world (outside of Canada for some unknown Godly reason) accumulating gold holdings to protect their foreign and domestic assets while providing economic stability. It should come as no surprise to you as an investor that the West is the only part of the world not actively accumulating because they have spent the last 30 years getting us addicted to their “paper” alternatives. Paper that can generate billions of returns for them, is subject to constant manipulation and represents nothing at the end of the day when you own no diversified hard assets to balance.


4. Supply and Demand


Like inflation and the threat of losing purchasing power, silver and gold have faced the real danger of living in a world full of paper lies and deceit. It is estimated that as much as 100 ounces of paper gold are owned for every single ounce of actual physical gold. The problem is that all 100 ounces of paper gold are owned by individuals who believe they own physical assets. Add to this no real expansion of mining for silver and very little meaningful expansion of mining for gold and you have a perfect storm developing.


Therefore, we have analysts all over the world basically suggesting that there is a real significant chance of gold rising much higher in our lifetime, perhaps even in the next few years. https://www.munknee.com/3k-to-20k-gold-coming-these-pundits-think-so/


The silver market is starting to witness the same trend as gold. In 17 years, this is the tightest I have ever seen in the physical marketplace. It does not matter how much more demand comes online (although it is slowly starting to snowball out of control) if the producers (The mints and other types of fabricators etc.) cannot accommodate more production. They do not possess the infrastructure to fabricate even 30-50% more products, let alone 100%+ more products, based on recent trends.


Our mint here at home in Canada is at pretty much full capacity. This strengthening demand is arriving when there is a healthy appetite to uncover the truth about the paper to the physical reality of silver and gold. As this occurs what has to happen in order to quell the demand for physical? Yes, you guessed it, the price must go much higher.


I believe investors stand an excellent chance right now to make millions of dollars from being positioned accordingly as the supply of both gold and silver becomes bankrupted the world over.


Here is a sign it is happening right now. Check out the COMEX. (Commodities exchange in New York, where futures contracts get settled and basic spot pricing is derived) Silver 20 day running total of monthly deliveries. It is almost 5-6 times the monthly average:

This total is the highest since I have been in precious metals, and now you, the individual, know this. Would you have bought Apple stock in hindsight when the 1st iPod was released? How about Tesla stock when their first car announcement went public?


Silver and gold are more important stories in my opinion. Both are underpinned by dozens and dozens of these types of factual anecdotes that will hit the mainstream like a kick in the head, causing millions of potential investors FOMO nightmares.


What lies before you is something experienced by less than 2% of global investors who have exposure to gold and silver, of which only a fraction is in physical form. Imagine when 4% or even 10% get involved, where prices are going to go! You are ahead of the curve.


What are you going to do about it?



Yours to the penny,


Darren V. Long

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