Selling The Family Silver

September 26, 2014

Purchasing and securing precious metals is easy. It's like stepping out of the river where you can see the mainstream headed for the big waterfall.

Figuring out when to jump back in the river and bring it back into the system is a whole other challenge. Some of the basic rules of investing to live by (that go along with cheap options with low downside and infinite upside), include:

  • Return of Investment matters more than Return on Investment.
  • Never forget or ignore the laws of unintended consequences. No one plans for fender benders on a daily commute to work.
  • Financial planners, advisors and all people looking to borrow or invest your cash or leverage your assets never talk about these rules.
  • Never get into anything you don't know how to get out of - at acceptable exit consequences.

These last questions are on the minds of many.

When do you sell? How do you exit, when and if the time comes?

What is a sell versus a trade?

It depends on you. Your beliefs, your world view. And the difference between selling and trading.

Selling is complicated because, suddenly, characteristics unique to the individual come full circle. They become personal decisions, in the spirit of self-reliance.

Generally speaking, I use the end of the world scenario as an anchor point. It is better to think and act in preparation for the worst, when the best always takes care of itself - and quite often in retrospect.

From a safe island by which to set sail, one can then more easily assess the options as they relate to your comfort level. If you have lots of time, you may journey far from the island and expect to make it back in time - if needed.

If you have the wherewithal and resources to trade or leverage a position, then you can use it as leverage within some other asset class. If you are set on leaving the island at some point and you have a hard price target, then you would wait until you hit that point.

However, storm clouds have been forming in the distance; close enough for anyone to see. Yet they've been there for so long that they seem to be a benign part of the normal landscape. 

As my friend Mark Jeftovic recently summarized:

"This pattern of intervening to avoid recessions and economic downturns goes all the way back to Nixon’s existential crisis of 1971, perhaps even further ñ to 1913, when the Fed was created to ensure economic stability for all time.”

Today the distortions are now so far advanced that all market signalling is, for the most part, totally broken. The stock market reaches new highs on diminishing volume, it costs you money to save your money and there is no official inflation despite the fact that everything either costs more or it comes in a smaller package for the same price (shrink-flation).

The global financial system is flashing bright red warning lights and yet complacency rules the day. The official policy and media pundit line is that the recovery (now in its 5th year) actually exists.

One of these days all of the market signalling mechanisms are going to snap back into functionality and most likely overshoot the mean in a non-linear, disorderly way.

When that happens, the best possible course of action is to not be in the path of one of the gigantic elastic forces snapping back into place at extremely high velocity. Stay out of debt, avoid counter-party risk, be diversified, and have a bug-out plan.

Personally, I prefer to view, analyze, and frame precious metals in the following context:

A savings vehicle and cheap life option, with not much downside.

They will always be worth something; if not for me to trade or leverage - for my children. But there is a massive potential upside - whether from an investment perspective, leverage vehicle, or as an emergency survival hedge.

Each of us finds our place on one or another part of the great river.

Eyes open - open to possibilities and able to assess your position as objectively as you can.

Both the beauty and difficulty of holding assets out of the system, and in your possession, is the personal responsibility of being right, often sitting tight - and being alone.


For more articles like this, including thoughtful precious metals analysis beyond the mainstream propaganda and basically everything you need to know about silver, short of outlandish fiat price predictions, check out

Most silver is produced as a byproduct of copper, gold, lead and zinc refining.

Silver Phoenix Twitter                 Silver Phoenix on Facebook