In Jim Cook's Archive


My wife mentioned that a friend in her exercise class said that her husband was up all night worrying about a decline in his stocks. My advice to that fellow would to be to put 20% of his portfolio into silver. We’ve tried to make the case that our nation is on a slippery slope that can lead to an economic crisis. You absolutely need a tangible asset that can preserve a percentage of your net worth in a financial collapse. We could see runaway inflation and then deflation. All over the world, the monetary authorities are committed to money and credit creation that knows no bounds.

The destruction of the dollar through runaway inflation does not mean the end of America. It just means that if you hold only paper and intangible assets you could be ruined. The most liquid, divisible, portable and important assets you can own in a severe inflation are silver and gold. Their demand rises during inflationary periods. Thus, they offset the ravages of a depreciating currency. Silver analyst Theodore Butler believes that silver will increase the wealth of those who hold it. He believes huge profits are coming in silver and at the very least you will make a lot of money holding silver.

Every year, hundreds of ounces of silver are used up by industry and are gone forever. When you superimpose investment buying of silver on top of this heavy industrial demand, you have an additional wild card that can aggravate the shortage that Ted Butler predicts.  When the fireworks from a shortage start, you have the biggest silver short position in history that must be bought back and covered. You have pool accounts and worldwide bank storage where no real silver exists that will have to be purchased. You will have everybody and his brother buying silver on a price rise, on top of an industrial users’ buying panic, on top of a short-covering panic. If you own the real thing, the screaming you hear for physical silver will be music to your ears. Theodore Butler has warned that all of this can happen in a hurry. It’s imperative to own the silver beforehand.

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