In Jim Cook's Archive


The Forecaster, an interesting financial newsletter, has written that 90% of all coin dealers fail every decade. From what I’ve seen in the past 40 years, that’s true. Our competitors today are completely different from who they were 20 or 30 years ago. When a bullion or coin dealer fails, a number of its customers are invariably hurt. You wouldn’t think that when business is booming a company could fail. What’s happened in the past is that dealers hedge their inventory in the futures market. In some cases they have sold a lot of product that can’t be delivered for months and they hedge that with futures. They may even take small positions and in effect begin to play the market. A little success can lead to bigger positions. There is no more dangerous place on earth than the futures market. Losses can snowball in an instant. Playing with futures has destroyed many businesses and will do so again.

We could see more hectic market activity in the coming months and that makes it imperative you don’t have a dealer or broker holding your gold or silver. If you have it stored, make sure the storage agreement is between you and the storage facility with no dealer in between. We advocate that you get silver into your physical possession. One of the main benefits is that you will not trade in and out of silver and you will hold it for the long term. It’s harder to sell the silver you can see and hold in your hand. With the kind of inflation that’s ahead, you may want to hold silver for a long, long time.

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