The Newest Casualty in the Bankers’ War on Gold and Silver
from The Wealth Watchman
Another One Bites the Dust
Have you ever had pesky, unwanted cash, ya know… just lying around? Sure, we all have! All that dirty, old currency just sitting there, desperately needing to be disposed of. Cuz’ spending cash, after all, is always the thing that everyone just has way too much of, right?
Wait though! Lemme ask you another question: have you ever looked at all that unwanted currency, needing to lose it all in a pinch, but just didn’t quite know how to go about it?
If you said yes, don’t feel bad, you’re not alone! Be assured though, there are endless, creative ways to go about it disposing of that “clumsy cash”. Allow me to give you a few ideas! You could:
Cram it all down the garbage disposal:
That always works nicely!
You could flush it down the toilet…
Always an amusing choice!
Hmm, let’s see….oh! You could jettison it out of a plane window to random onlookers below!
That one is always popular with the onlookers, by the way!
While there are many actions in our world, which you could take to help you needlessly burn through large piles of cash in a hurry, though…
Few of them can hold a candle to the more keenly-effective, and gut-wrenching practice…
Of buying some gold and silver mining shares!
In all seriousness though, the recent news coming from that industry are anything but funny. In fact, it just gets more harrowing by the day.
One of the things I’ve been nearly alone on in the precious metals world, is the fact that I’m always cheering for lower prices, not higher ones. I take this approach, because I know that the con of price suppression can only exist as long as adequate flows of new gold and silver can be sourced.
Since that’s true, perennially lower precious metals prices are a stackers’ best friend! This is true, because at some point in the not-too-distant future, those who produce it will hit the brick wall of reality. They will mathematically reach the marker, where their production will be insufficient to either: 1) satisfy stackers’ demand, or 2)stay in business themselves…..or both!
I’ve hoped that our common banking enemy(in wanting and needing lower prices) would continue to pull out all the stops in the market rigging, thereby ending this generational con as quickly as possible.
Since we know that in the Comex and LBMA, nothing can stop the bullion banks from dominating the paper trade of metals, it stands to reason that the only thing that can and will stop the market rigging, is their taking this price-smashing thing too far.
Way. Too. Far.
Remarkably, the enemy hasn’t disappointed in that category, either! That’s precisely what they’ve spent nearly the last 4 years doing now in the silver market.
In times past in this bull market, the banks always chose to cap silver and gold for a year or two, and then allow a follow-on price rally, to release built-up pressures in the sector. Not this time, however! This time they’ve held the metals underwater so long, that real casualties are now cropping up, especially in the leveraged sectors responsible for producing these metals in the first place, like the mining industry.
The Latest Casualty of Price Suppression
Speaking of which, let me introduce you to the newest casualty of the price-rigging scheme, this time in the mining sector.
In an article that I wrote in early November 2014, I said this, concerning Allied Nevada Gold:
“Allied Nevada Gold Corp.(symbol ANV):
Current share price: $1.39.
Top closing share price in 2011: $43.71
Total loss from the top: 96.8%
That last figure is about the closest thing to zero from a top that you can probably find, without just calling it quits!”
Uncanny, brothers! Because….on March 9th, Allied Nevada did call it quits! That’s right, Allied Nevada has filed for bankruptcy…and honestly, can anyone blame them?
Why on earth would you go on hustling to labor even one more day, while drowning in senior debt payments, just to mine a product at a loss(a product which only keeps endlessly cratering)?
I mean, when the price chart of your shares looks like this:
Why not just pack it in?
That’s the reality that this company had to face. It’s frustrating and sad. Frustrating, because these miners’ execs all know their product’s price is rigged, but won’t do the slightest thing to fight these banks publicly. Sad, because the shareholders are all likely to be left with nothing, while the culprits responsible for their financial troubles, will make off with the lions’ share of the loot.
Think about it….who funds these mines in the first place?
That’s right, the big banks. They’re the ones who are owed senior bond payments(if the mine survives), and who end up owning the entirety of the company’s assets, if they finally succumb to the market rigging.
Either way, the banks win, and you(the shareholder) lose. Just take a look at the statement from Allied Nevada on their Bankruptcy Reorganization Summary, explaining why they filed for Chapter 11:
This was done to allow us to implement an agreement that was reached with…its secured bank lenders to effect a reduction in the Company’s funded debt obligations and provide the Company with additional liquidity.
Allied Nevada will continue to operate its business as a “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Under the proposed financial restructuring, which requires Bankruptcy Court approval, Allied Nevada’s trade creditors and vendors are expected to be paid in full.
Whew! What a relief! The trade creditors & vendors will be paid in full!
The banks and other creditors, who will extend a new line of credit(getting recouped for much of the invested capital in the deal) now own the mine itself, lock, stock, and barrel….while the shareholders are left with nothing!