Historic Reports
 

Larry Myles Reports 

All the effusions of the contemporary welfare school are, like those of the socialist authors, based on the implicit assumption that there is an abundant supply of capital goods. Then, of course, it seems easy to find a remedy for all ills, to give to everybody according to his needs and to make everyone perfectly happy.

The Business of Gold Explained

Reality-based investing….guaranteeing your current and future financial security through the personal ownership of physical gold and silver


If we are prepared to look and to listen, we can always count on history to give us guidance. All we have to bring to the table is a willingness to learn from those who have preceded us.  And when it comes to recognizing a genuine storehouse of value, even the vile revisionists would have a tough time glossing over this absolute: Throughout history, every single government that has created its own brand of state sponsored, faith-backed fiat currency has watched that brand of paper money devalue and disappear.

Every great society; every major country system that has succumbed to a faith-backed, fiat currency program travels down the same well trod road - to fiscal destruction. Through a combination of arrogance and ignorance, every new attempt at creating a paper currency that is not backed by gold or silver refuses to learn from history. For over 2,000 years, from ancient Rome right to modern times, our leaders declare ‘this time it will be different’; promising the citizenry that this time they will not dilute the value of their currency through over-printing. This time they will work hard to ensure the value of those little pieces of paper in your wallet. In the end, their brand of fiat devalues and disappears. The citizens of the affected countries experience crippling financial dislocation through devastating inflation. Read again: Over the last 2,000 years, each and every brand of faith-backed fiat currency has collapsed, losing all value as a store of wealth. No exceptions!  (Brief history of doomed fiat currencies).

The value of gold as a store of wealth has persevered for thousands of years. When all of the sundry brands of fiat currency bubble large before burstaing, gold as the true currency retains value. The value of gold has proven to be the most durable, and reigns supreme as a time-tested repository of measured wealth; investors turn to gold as a hedge against any economic, political, social or currency-based crisis. Crisis labels include: investment market declines, social unrest, war and...pay attention America: burgeoning national debt, inflation, irresponsible government and the inevitability of currency failue. And for the record, I am not suggesting that owning gold and silver is merely a good idea - it is a necesary investment.

It is important to remember that a nation’s monetary policy always serves the needs of the ruling country-government. Advancing the prosperity of the citizenry never really enters into the behind-closed-doors narrative; albeit if the masses benefit, what a pleasant surprise! So much the better.

What Meaning, Gold?
....with evidence far from meager


Owning gold can guarantee your financial security; once you own and possess your gold (and silver) bullion, your asset is free of any lien or encumbrance. I am sure we can all agree that our governments will continue to feed their addiction and print more of their soon-to-be worthless fiat currencies. And if they are not busy printing more fiat, they will be beggaring their citizens by continued borrowing. The good news: They cannot print more gold. Physical gold is more than a simple commodity; it is a currency metal. In other words, gold and silver are money. And all of this recent talk about gold being ‘just another bubble’ is nonsense; a desperation move to keep you shackled to the collapsing ‘dollar standard’. By comparing the rising price of gold to other bubbles provides a disservice to both gold and the people holding gold.


Why don’t we save most of the ‘thousand words’ and rely on the ‘worth of a picture’; or in this case a pair of charts to cement the debate. I would like you to consider what has happened to the price of an ounce of gold since 1913: 





It should be noted that over the last decade, gold ‘bottomed’ in 2001 to $255 per ounce but has since increased in value by over 300%. While overall the worth of an ounce of gold has clearly gained in value over the last four decades, look at what has happened to the purchasing power of those shabby little pieces of paper (US Dollar) in your wallet: 





As of late I hear the argument that the US dollar is the only currency worth owning. I could not disagree more. From my perspective, holding any currency is a sap’s game; as eventually every currency will fall to gold (and silver). I have mentioned on many occasions that the beginning of the end for the US dollar began in 1971 when Richard Nixon signed America off the gold standard. Individuals and mega-companies exited the US; taking jobs and capital with them. By the mid-1970’s inflation had devastated the American family as paper money that was no longer backed by gold, lost value. Thank you government, Wall Street and the banking community for ending sound and prudent monetary policy; and ushering in corporate socialism! Actually, no thanks! I refuse to participate and will trust my future to gold and silver. 


The Guarantee That Gold is Destined to Rise
….while the US dollar will ultimately lose all value

All one needs is a grasp of some basic common sense and a modicum of arithmetic to comprehend the errors of those currently holding power in Washington. The current administration is projecting deficits of over $1.7 trillion a year for the next decade. Meaning to you: within the next half decade, $500 billion of your tax dollars will go just toward the interest on the debt! Meaning to you: very little money left for anything but the debt; and with a spend-and-tax government in place for the next three years, there will be even more borrowing, which in turn will deepen the deficit.

So let us take a real chance and just this once, take Tim Geithner at his word – and we will also cross our fingers and try to somehow believe the US dollar will not give up its status position of being the world’s reserve currency; okay, therefore default on the debt is not an option. That can only mean one thing: an anaemic dollar and the 100% guarantee of inflation. Jimmy Carter inflation or Zimbabwe hyper-inflation?  Only time will tell. A certainty: hyper-taxation...as well as the money in your wallet being worth far less in five years than it is right now – and over time, even assuming the fiat currency in your wallet will still considered legal tender! Another certainty: the price of gold and silver will appreciate.

Remaining Participlant in The Business of Gold
….discover how you can accumulate gold at zero cost

Many people around the world are already in the game – investing in physical gold as the ultimate shelter from the many financial storms building on the near-term horizon. There are those who claim that gold stocks can provide almost as much stability as gold coins. I could not disagree more intensely. Because of the current financial climate gold stocks may enjoy more investor focus and scrutiny; offering far more value than in other sectors – but that does not take away from the fact that the stock market is fraught with uncertainty. It is owning and possessing gold and silver bullion that is absolute key to the business of gold stratagem working - as it is the possession of the physical that is your insurance policy guaranteeing your ticket to future prosperity and financial security.



Also the sector of the market I want you to consider is even riskier than the big board. I want you to focus on where we have traditionally been able to received the big bang for the buck – the penny gold market!


What I do not want you to do is consider gold stocks as a hedge against coming inflation and the falling dollar. That would (imo) be courting disaster. Instead, I want you become participant in the business of gold by realizing a profit from investing in junior gold’s and taking a large portion of that profit and add to your insurance by adding to your stake in gold and silver coins.  

As I keep reminding my subscribers, your entry into the business of gold begins with physical gold and silver.

Reality-based investing: the irrepressible and insistent principle that allows the investor to create a realistic investment environment resulting in rational decisions based on reason, hard fact and solid market data. The alternative of course is a belief in faith-and-hope-based investing. Dare I use the U.S. sub-prime mortgage debacle as an obvious and negative example?

Seek out junior gold companies that already have an established deposit : of gold. Sound advice, but chances are that the rest of the market already has this same information and the share price has already move up accordingly. My suggestion is to look for a company that has released news in the form of an official public news release of outstanding early results – surface work such as trenching, channel sampling, etc. Chances are excellent that the share price of this company are reflective of the level of work completed – but are now poised to move much higher on upcoming drill results. (An official company release leaves the company liable for the content of the news).

The vast majority of my readers are folks who have at one time or another, invested in the penny markets. And during the 2008 meltdown, many of my readers who were also penny market investors fled the stock market. Badly dented they stumbled and lurched to the sidelines to lick their wounds. At the same time, many others listened to my November pitch to man up and get busy  - working the due diligence process on a number of quality gold juniors that were trading at rock bottom prices. The result? Many of us prospered during the dark days of late 2008 and early 2009. Some of the other investors who fled to the sidelines...waited, then jumped back into market a little too late to take advantage of the big fat early wins - but their continued participation has nevertheless paid off for them. There is an irony at play here; as I continue to forward my investment standard to take advantage of the penny markets that in turn will allow you to translate your profits into what amounts to zero-cost gold and silver coins. The irony is this - American leadership feels that without stock market participation the economy will not recover as quickly and also shows a lack of trust and support for America's current economic system. This worries our leadership as they feel that investing in stocks is key to a full-throated recovery; and Americans investing in stocks is an investment in America itself.  I could not agree more; I would love it if all of my readers became participant in the business of gold - but instead of reinvesting their profits back into the market (ergo the system), I would like them to swap out the paper money profits and translate those profits into hard metal currencies - gold and silver coins.  But that being said, this is one of the rare times that the government's aims and goals shadow my own.

Once you have identified a company with great early results, get to work!

As investors of publicly traded junior gold companies it is important that we all accommodate the following criteria when researching a target company: recognizing and appreciating a strong and experienced management team, a prudent amount of cash in the bank, a stellar property that has already identified gold in the ground, a work program that will not only expand the library of information on that property, but identify an economic resource and last but not least, a company with a reasonable number of shares in circulation. When it comes to risk-reward, begin with my investment standard and compromise accordingly, if at all. The above five points constitute my tried-and-true standard; when all five points score well, I feel my investment in a company is as solid as a slab of bedrock. Such has been the case for years; profitable results have proven out. As with any system…beware of complacency!

I look at junior gold companies like lottery tickets – but with much better odds. And the odds get better the more due diligence you put into a company. In other words, once you are committed to being involved in the business of gold and deepen that commitment by investing in junior gold companies, remember: Do not put all of your eggs in one basket. My comfort zone is to be positioned in four or five gold plays. Reason: I am not a passive participant. I do not wait for one of my target companies to dutifully email me a copy of the official news release. I check the target company sites a few times a week. I rely on feeds to keep me informed on current events in the target company’s host country.  I also rely on news crossing the wire, and pull that information from sites such as Stockwatch and always make time to at least scan the company filings and financials that I can download from SEDAR. Of course I am talking about junior gold companies that are listed on the Toronto Stock Exchange and not the smarmy OTC or the dreaded Pink Sheets. Transparency is very important to me, and when it comes to investing in junior gold plays, reading over the company’s technical document; NI4-101 is a vital component of the process.



At the risk of repeating myself, I need to stress an important point to everyone who decides to participate in the business of gold; avoid using gold stocks as a hedge against the economy. Reason: Gold stocks will not always reflect the price of hard (physical) gold. Over the years I have watched the price of gold juniors plummet en masse, while the gold spot prices rise.  The plan…the business of gold is to invest in gold as protection/insurance against what all governments in every country will always do in the end – devalue the fiat currency you carry around in your wallet.  Instead, we will use fiat money to buy gold stocks and once the share price appreciates, we will take our profits in fiat currency and (quickly) exchange that fiat for physical gold and silver; thus the cost of acquiring physical gold will be zero.

I would be entirely remiss in my duty if I did not warn you about the pitfalls of penny market investing. Although that being said, I do feel that our focus of only investing in the companies that are in the business of gold, coupled with our long term goal of owning zero-cost gold and silver will dampen the usual range of emotions we may experience when playing the pennies.

This is a rather callous and heavily biased set of parameters and comes across as assuming that everyone involved in the penny market gme is out to get you. Obviously that is not the case - but all it takes is a few bad apples and your money is gone and our financial survival plan is in tatters! All sharp price movements - whether up or down – can be the result of penny market professionals massaging (manipulating) the share price.   When the company promoter wants to dump personal shares or shares on behalf of other insiders, watch out for the “everything is peaches and cream good news” promotional campaign. This is not to be confused with a genuine  “news stream”  - a series of informative news releases that may start off with the company announcing positive early results from their property, an oversubscribed financing, the commencement of an aggressive drill program, etc.  As to the sleazy promoter...how do we know he has completed his sell-off program? The peachy news suddenly dries up and might even be followed with a bad news campaign so you dump your shares and once the price is low enough, the promoter will buy them back – so he can do it all over again!   How do we know when the dumping of shares by insiders is occurring? Huge volume of trades at higher prices is a leading indicator that someone is making a lot of money by dumping cheap shares at a huge profit.  You want confirmation that this is happening? Expect a flurry of urgent emails and/or a personal phone call from someone working for the company – who no matter how artfully they try to camouflage it, are trying to get you to buy shares at the current high price points. Another clear indicator is that just prior to the rapid upward movement of the share price, your little gold company has suddenly been ‘discovered’ by one or more newsletter writers.  So, beware: Shares that trade huge volumes at higher prices can be a clear signal the dumping stage is happening in full force.   Not to wound your ego, but let’s be real – if you are like me, and are only a minor shareholder (under 200,000 shares)….we will be the last people the company calls for the express purpose of whispering urgent information into our ears. Conversely if the share price is only beginning to move up the charts and you receive a phone call – beware again: someone may want your ‘cheap’ stock so they can scoop it up and then sell it at much higher levels. And it follows that if there is bad news coming, your erstwhile promoter or eager company phone person will not burn the midnight oil to make sure you get a phone call notifying you that something is amiss. Trust me, you may be the last person to know if, as or when bad news is coming. At the end of the day, investing in junior golds takes a strong stomach, determination and keeping your emotions under control; along with a healthy dose of common sense.

When I state: Become participant in the business of gold…
….discover how you can accumulate gold at zero cost – it is not a cute play on words. It is an actual common sense guide; a call to action that will allow you to increase the amount of true currency in your possession – gold and silver coins. It is only common sense to tune out the dollar pushers and accumulate currency metals; as the polyester suit crowd wrings their hands in earnst hoping against hope the dollar magically discovers worth and subatance.

There are approximately 26,000 books written on mining history, over 20 books published on gold bullion and the junior speculative mining market but, to date, no book has been written specifically on the Trading, Speculating and Investment of gold and precious metals stocks.

Gold stocks are stocks first and commodity instruments second, bearing this in mind we need to adopt appropriate stock trading and investment strategies in order to trade and invest in them successfully.

In North America, gold and precious metals stocks are permanently overpriced, which causes even the smallest and marginal gold mining company's properties to be funded without dilution and tends to make junior and independent gold mining companies into great trading and speculative vehicles.”

Larry Myles
604-408-7600
1-877-405-7600


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"So you think that money is the root of all evil.  Have you ever asked what is the root of all money?" 
 

Larry Myles is neither a geologist nor a financial analyst. I do not purport to offer personal investment advice nor recommendations. While all statements of fact are derived from reliable sources, an d are believed to be accurate, I make no warrant that they are so. You must do your own research and check statements of fact for yourself. My opinions are precisely that, my opinions. I do not accept any responsibility for any gains or losses you may experience resulting from actions taken based on my opinions. If not otherwise qualified, you should consult with your own personal financial advisor before engaging in any investment activities. Larry Myles Reports does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Larry Myles may actively trade in the investments discussed in this publication. Larry Myles may have a substantial position in the securities recommended and may increase or decrease such positions without notice. I do not know your personal financial circumstances. I am not your personal financial advisor. You must do your own due diligence. By entering this web site, or reading LMR reports, you acknowledge and accept the foregoing.