December 3, 2017
December 3, 2017


This week, Energold just got flushed down the toilet. Your last post, says you would be nibbling. At current price,
You got to be buying? But decline does not indicate such. Response from Fleck, he says he has NOT sold any.
You also said in your last post, expect a couple of week Quarters. So with Jrs in the toilet and NO numbers, Energold is going to a BUCK. With being down 24%
As of Friday, 4/5. How do do you sleep with your HUGE position??? Myself, now days drinking lots more beer.

Investing is about position sizing. My Energold is huge and I don’t even think about it. It’s not fun to be up a lot and then give it all back, but I believe in the ultimate value of the business. If the position were so large that I was losing sleep, then I’d seriously consider cutting it back.

Hi Kuppy,
Your insight was spot on with BLY.ASX last time around. Has the world really changed that much to warrant its share price collapse in the last few months?

Has the world changed? Yes and No. Demand for drilling in the short term is likely not improving due to very weak prices for junior mining shares and the messaging from the producers is that they don’t intend to do much exploration either. Given all of the debt at BLY, I much prefer EGD which is now down substantially from where it was when I first wrote about BLY. EGD has one of the most pristine balance sheets in the industry–you can buy the business essentially for the working capital.

I have read that on average it costs silver miners $20-$23 to produce an ounce of silver. I am sure this is fully loaded with OH and indirect costs. I have no idea what the incremental amount for producing an ounce is. I read so many differenet things.
You had written about the price of silver getting crushed when a new smelter facility came online in a couple years. IF silver trades down to the low 20s, would you be a buyer or would you wait to see how the new supply hitting the market affects the price? Or do you just buy gold and not worry about it. At that point, I assume it would trade more as a base/industrial metal than a storage of value. I have only bought gold so far but the drop in silver has been nothing short of spectacular. Thank you for the site!

I still think that silver is highly overvalued compared to gold. In the low 20’s, it would certainly be a better bargain. The issue is that a substantial portion of the world’s silver supply comes as a byproduct of other metal mining. When prices were low, these mines didn’t care much about their silver recoveries. Now that silver is up a lot compared to zinc, lead and even gold, these mines are investing in silver recovery circuits. In addition, new smelter capacity is coming online. In the scheme of things, a few billion dollars a year of investment demand will overwhelm the new supply, but I still think of commodities as assets that you buy based on the cost of production. My analysis, seems to say that silver costs around $12-$15 to produce. I don’t want to pay more than a certain percentage above that. Right now, I can buy gold for about 20% more than it costs to produce–that seems like the better bargain.

Before I get another diluge of angry emails accusing me of holding down the price of silver, let me state again that I own silver. I WANT it to go higher because I own a lot of it. I have never sold any of my core position–but I bought my core position back in 2003-2005.

Dear Kuppy,

You recommend that Southern EU and possibly French savers move their deposits out of those banking systems, and you are not the only one saying this. Various bloggers such as Zerohedge, Mish and even UK politician Nigel Farage have said the same thing. Unfortunately, none have suggested where to put one’s cash.

Where should deposits be moved to, which currency (if the Euro breaks up) which banks are safe, which assets?? It’s not practical to put everything into gold or real estate etc. Some real estate markets are still overvalued and i, for one, have no idea how to value gold!
And what is to stop the deposits being clawed back if you do move them?
Offshore accounts have to be notified to the tax dept, so if you move your cash there they know about it and can still dip their sticky fingers in.
What about stock portfolios, could they slice off a chunk of that? Considering that most retail investors use nominee accounts with their bank or broker i imagine it would be technically feasible. What if you hold paper certificates?

Is there anywhere to find safety?

Where do the large/ smart money keep their cash and investments? (Where do you?)
Apologies for the rather rambling and panicked questions but for unsophisticated savers/ investors like myself it’s not easy to figure out in which direction to run.
I don’t think that i would be the only one who would very much appreciate a blog post covering this!
Many thanks

I keep so much of my savings in the form of gold because I have trouble answering your question. As for liquid capital, I think that a diversified approach is warranted. Stick to places like Norway where there aren’t crazy banking imbalances–or Russia that may want a stronger currency. During the next crisis, some of the little countries of the world will glide through just fine. I personally have bank accounts in quite a few countries. I opened them years ago, put whatever the minimal requirement is so that they don’t nickel and dime me to death. These accounts are around in case I want to move money quickly. In the end, the key is to be diversified and be prepared.

Kuppy, are you still following Mongolia? Is there an update?

Am I still following Mongolia? Lol. I’m writing this FROM Mongolia…

An update? I’m not sure what to say. Since I first wrote about the country in 2010, the GDP has continued to grow at a mid-teen annual pace and the GDP is expected to accelerate this year, compared to last year as the giant Oyu Tolgoi mine comes online.

i personaliy can believe that the coming world banks crisis will find governments calling in the citizens gold holding or not let gold out of there countries. desperate times create desperate measures. the u.s. does not have enough money to cover the deposits in the banks now. the u.s. already as a history of calling in the gold and england citizsens are not allowed to own goild. hoping canada is a safer haven for the precious metls.

This isn’t exactly a question, but I doubt that our government confiscates gold. If you’re concerned about this, get your gold out of the country. There are plenty of places to store gold around the world.