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  • Podcast

    Hard Assets Alliance: The Role Of Gold (And Silver)

    An update on the case for holding precious metals
    by Adam Taggart

    Thursday, December 21, 2017, 3:34 AM

Longtime PeakProsperity.com readers know that the Hard Assets Alliance is this website's officially-endorsed gold & silver bullion dealer (the list of reasons why can be read here).

Given the painful slog over recent years for precious metals investors, we thought it was high time to bring them back on the program to offer an update on the fundamental reasons for continuing to own bullion.

This week, Chris sits down with HAA executive Ed D'Agostino to discuss the role of gold (and silver) in an investment portfolio during the age of bitcoin and endless central bank liquidity:

As for what's next for prices, in terms of supply, I think that the sector, in many ways, has a self-correcting aspect to it. If producers can't produce and make any profit — and that's really where they're at now in the silver mining sector — eventually that situation will correct. Mines will shut down, and the price will go up. We're seeing something similar to that in oil right now. 

But then when you introduce the short position on the COMEX, things become more nefarious. In the US, the government has, in my opinion, beaten gold out of the collective consciousness of the American citizenship. So because of that, Americans tend to be very under-invested or under-exposed to gold.

My general sense is I think we'll kind of keep grinding sideways as we've been for a while until a trigger event happens — and then you'll see the real value of holding gold in your portfolio. During a black swan event, gold tends to hold up quite well whereas other more conventional investments — like equities, which have all the headlines these days — will struggle.

Gold, for me, is not a religion. It's not the only asset that you should own; but it's an essential assets that you should have in your portfolio. And if you look at it that way, then a period like this, in my opinion, is a good time to accumulate precious metals. 

I always try to tell people that you want to buy any asset class — gold, silver or anything else that you're interested in — when it's out of favor. The time to buy it is before it gets hot. And the Hard Assets Alliance, because of our volume and our relationships, is in a great position to have access the physical product when things get hot. 

Just take a long view of your metal holdings and keep accumulating over time. Don't let them take over your life or become a religion.

Click the play button below to listen to Chris' interview with Ed D'Agostino (36m:35s).

About the Guest
Ed D’Agostino

Ed D’Agostino is the GM of the Hard Assets Alliance and Publisher of Mauldin Economics. He began his career in finance at a boutique investment house and later joined his largest client as Vice President of Business Development. In this capacity Ed directed strategic growth initiatives while providing investment analysis and advisory services to the company’s principals. Prior to joining Mauldin Economics, Ed was Managing Director at a consultancy focused on business development in the financial sector. He has been instrumental in the start-up and expansion of several businesses. Ed’s clients, including hedge funds, lenders, and investment publishers, relied on him to recruit and mentor analysts, develop controls and systems, and implement growth strategies.

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10 Comments

  • Fri, Dec 22, 2017 - 5:43am

    #1

    Chris Martenson

    Status Platinum Member (Online)

    Joined: Jun 07 2007

    Posts: 4513

    CryptoCrash

    Well, all bubbles eventually find their pin.

    It’s hard to predict exactly how this will play out because for most people the “losses” were in the form of unrealized gains, not actual losses.

    But for all the new entrants over the past two months who sold into this carnage, these are straight up losses.

    At any rate, I’m placing this here in the HAA gold/silver thread because I want to remind people that an important diversification for getting your wealth out of the crosshairs of the central bankers and their goobermint enablers who wish to thieve your purchasing power has to be in the form of having some primary or secondary wealth.

    *some*

    But the time for making that some into *all* is approaching because there are only two outcomes for a credit bubble – voluntary abandonment (*snort*) or the collapse of the currency system involved.

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  • Fri, Dec 22, 2017 - 6:19am

    #2

    SingleSpeak

    Status Bronze Member (Offline)

    Joined: Nov 30 2008

    Posts: 163

    That's Mark Dice

    that does the videos. Andrew Dice is 2/3rds the name of a famous comedian. Easy slip up.

    Mark Dice”s videos on youtube are generally hilarious, until you realize how many people are uninformed, or misinformed or, I’ll just say it, stupid.

    He does most of the filming near where I live in North County San Diego, so I’m hoping to someday be able to turn down the candy bar.

    SS

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  • Fri, Dec 22, 2017 - 6:37am

    Reply to #2

    Chris Martenson

    Status Platinum Member (Online)

    Joined: Jun 07 2007

    Posts: 4513

    Thanks...

    SingleSpeak wrote:

    Andrew Dice is 2/3rds the name of a famous comedian. Easy slip up.

    I knew that was wrong when it came out of my mouth, but couldn’t quite recall the correct first name.  

    Got the Dice right!  🙂

     

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  • Fri, Dec 22, 2017 - 7:30am

    #3

    Chris Martenson

    Status Platinum Member (Online)

    Joined: Jun 07 2007

    Posts: 4513

    A reminder from Ben

    “An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.”

    -Benjamin Graham

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  • Fri, Dec 22, 2017 - 7:39am

    #4
    skipr

    skipr

    Status Bronze Member (Offline)

    Joined: Jan 09 2016

    Posts: 123

    Whew!!!

    Luckily, I was paranoid enough to move half of my bitcoins over to gold at Vaultoro.com when the price dropped down to $16,500.  Unfortunately I couldn’t do the same with my other altcoins since I use shapeshift.com and it takes a while to exchange a large quantity.  At the same time $10k by the end of the year looked unobtainable a month or 2 ago.

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  • Tue, Dec 26, 2017 - 2:33pm

    #5
    Bryan Kaufman

    Bryan Kaufman

    Status Member (Offline)

    Joined: Nov 30 2011

    Posts: 1

    Cryptography

     

     

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  • Tue, Dec 26, 2017 - 8:34pm

    Reply to #5

    davefairtex

    Status Diamond Member (Offline)

    Joined: Sep 03 2008

    Posts: 3112

    cryptos

    I’m going to second the comment about the word “crypto” in cryptocurrency.

    The thing that secures the blockchain – and other things, like PIN card transaction messages – is a cryptographic checksum.  A cryptographic checksum functions as a (theoretically) tamper-proof seal that is applied to a message (or a block) at creation time that ensures that if someone tries to change the block’s contents in flight, everyone will detect it – and reject the altered block.

    Your humble PIN pad at the supermarket uses the same approach to make sure that the pin-based debit card transaction message, created by the PIN pad, can’t be altered on its way to the debit card processor.  If a debit transaction message didn’t have a MAC, you could authenticate a $10 transaction by entering your PIN, and then the merchant could receive the message from the PIN pad, change the amount from $10 to $10000, and then send it on to the processor.  Because the MAC is calculated by the PIN pad at message creation time using its secret key, any changes to the amount will be detected by the processor.  The merchant can’t change the message and (re)calculate the MAC, because it doesn’t have the pin pad’s secret key.

    Encryption is used when you want to hide the contents of a message.

    MACs are used when you want everyone to see the message contents, but you want to be able to detect (and presumably reject) any messages that have been altered in flight.

    Both MAC and encryption use cryptography to get their job done.

    The difference between PIN pads and blockchain is the type of crypto being employed.  PIN pads use symmetric keys (a secret that is shared between the PIN pad and the processor), and blockchain uses public-private keypairs, where the MAC can only be generated using the private key, but everyone in the world can verify the MAC using the public key.

    Note the implication of this difference: with a PIN pad, only the processor can verify the MAC is accurate, because only the processor has the PIN pad’s secret key.  With blockchain, everyone can verify the MAC is accurate – all they need is the creator’s public key.

    Ultimately, blockchain tech is centered around the following promise: “cryptography guarantees that this record hasn’t been changed since it was created.”  And unlike the PIN pad, anyone can verify – not just the owner of that secret key.  That’s why blockchain is decentralized.

    As long as SHA2 remains unbroken, all is well.  🙂

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  • Thu, Mar 22, 2018 - 6:35pm

    #6
    finanindecia

    finanindecia

    Status Member (Offline)

    Joined: Oct 22 2012

    Posts: 14

    holding gold

    I’m working on my preparedness via the suggestions of peakprosperity.com.

    If one wants primary wealth, such as precious metals, doesn’t one want to have direct access to it? In other words, doesn’t one want to be able to put his/her hands on primary wealth at anytime?

    Thanks.

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  • Thu, Mar 22, 2018 - 6:44pm

    #7
    finanindecia

    finanindecia

    Status Member (Offline)

    Joined: Oct 22 2012

    Posts: 14

    Dave Ramsey

    Dave Ramsey is not interested in gold as an investment. https://www.daveramsey.com/askdave/investing/8465

    Any thoughts on reconciling the peakprosperity.com ideas on precious metals with Dave Ramsey’s?

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  • Thu, Mar 22, 2018 - 7:01pm

    Reply to #6

    Adam Taggart

    Status Platinum Member (Offline)

    Joined: May 25 2009

    Posts: 2528

    finanindecia wrote: I'm

    finanindecia wrote:

    I’m working on my preparedness via the suggestions of peakprosperity.com.

    If one wants primary wealth, such as precious metals, doesn’t one want to have direct access to it? In other words, doesn’t one want to be able to put his/her hands on primary wealth at anytime?

    Thanks.

    Yes, that’s what we recommend for your the initial ounces you hold.

    Those first coins/bars are your ‘Armageddon’ insurance. They’re for unforeseen catastrophes: an overnight devaluation of your home currency, or banking crisis, or EMP, an urgent need to flee out of the country, or war, or…who knows? If the world suddenly changes for the worse, your physical bullion stash may very well preserve for you the means to procure the things you and your family need.

    But.. beyond a certain amount, too many physical ounces under your personal control can quickly become a theft/personal safety/loss risk. You can hold $100,000 worth of gold with one hand. A burglar can easily walk off with that (and more). And many thieves would be more than willing to beat/kill you to get at it if they learned you were storing PMs at home.

    Similarly, if you kept that amount in a bank safe deposit box, on the (albeit low) probability the box gets robbed or its contents confiscated by authorities; your PMs are gone for good.

    So our advice is to have some amount you feel comfortable with on near/your person (home safe, backyard hole, local bank safe deposit, etc). Only you will be able to determine the right amount that lets you sleep at night; but for most people we wouldn’t recommend holding more than a few $thousand or $tens of thousand locally. 

    Then, hold the rest of your physical bullion via an allocated storage solution like the Hard Assets Alliance. World-class security, you can even diversify your holding outside of the US if you like, and if you want, they will deliver your physical bullion to you upon demand (this would only make sense in a few cases, most of them involving a major collapse of the world’s fiat currencies).

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