If Big Bank in Crisis, Then Precious Metal for Safety

This is an interview of one great mind talking with another. They are James Turk, interviewer, and Eric Sprott, interviewed. This interview took place at GATA's Gold Rush 2011 conference in London on, or near, August 5, 2011. This is a segment of a thirty-three minute interview that is worth listening to for the range of topics and candid observations from two marketers of precious metals investments. They focus on metals they represent, silver and gold, and point to the possibility of copper maybe having a role in this movement. Even though they are "talking their book", they earned my respect by providing investment vehicles that represent direct ownership of the metals, something Sprott states in the interview about his fund.

Do You Own Gold?

The ownership of precious metals is an important, not-correlated to the stock market, alternate investment category. I say it is an alternate category because we do not see the category included in modern portfolio theory (MPT) allocations. We usually see it as a highly volatile and corrupt business sector and I have historically avoided exposure to it. During 2008 and 2009 I used SPDR Gold Bullion Trust (GLD) until I grew concerned about owners rights and other issues that I could not disprove. I miss it. In the current crisis conditions, gold and silver are taking on importance as a currency hedge and as a store of value. Some might use it as a hedge for inflation. Owning the metals is very desirable in a deflation economy, as a hedge against currency devaluation. Metals do not provide business risk and do not have common stockholders who demand certain behavior from management.