We have been hollering to anyone who will listen about black swans, bail-ins, liquidity crises that will freeze the banks, bank runs, market collapse, paper wealth to zero, hyperinflation and new currencies. I have withdrawn my funds twice after hearing about bank closings in America. So far, we have been wrong, and we look like idiots.
What makes our reputation look even worse are the charlatans out there calling for $600 silver—the pump & dump hawkers. This leads to bloggers saying we are part of a cult. They have just enough evidence with one or two arguments to make a “superficial case” while preaching to the choir of disillusioned metals investors.
I hang around this blog, I have committed time writing up these posts, because I am convinced, convinced by several strong arguments and a mountain of evidence, that this paper system will collapse … soon. I do not want to be ruined financially, so I continue to invest 95% of my meager increase in a diverse portfolio of commodities, rather than ETFs and other paper instruments. I keep a modest pantry filled, just in case; I stock up on other items that may be needed, just in case; and I am working on building a more remote farm/cabin to live in, just in case. I am also attempting to re-habilitate my reputation with friends and relatives with conservative advice that points the right direction to the degree that they can accept it.
Retreat and regroup
So, how do we repair our reputation? First, we admit we have been wrong and over-reacted. Now, buying $30 silver in early 2011 and encouraging our friends to do the same was not an overreaction. We were wrong on the timing. Mistakes were made in not hedging positions with out-of-the-money option contracts as the spike occurred. I bet many good traders here did not make that mistake and profited nicely in the big silver smackdown.
So admit we were wrong (even though we dodged a bullet, economically), eat your hat, let your friends and relatives gloat a bit. You have to repair your reputation here. It may also involve saying “I’m sorry” if you panicked a friend into selling their paper and buying silver. (For the record, the several friends I persuaded to buy back then are still holding for the same reasons I am). My sense in talking with these friends and relatives today is that they are more concerned for the future than they were in 2008, even though the economy has not derailed. They sense the problems and see the gulf between what is happening in their local economies and with what Washington says is the state of the union.