Your Questions Answered: Gold, Silver, Oil, Groceries and More!

First from Robert:

… 40 to 50 years ago, some top analyst said we would run out of oil. Today we will not run out of oil for another 100 years — so what gives with gold? Someone will discover it in North Greenland after the ice melts or wherever. So why the scare tactics that gold availability will end?”

Thanks for your questions, Robert. Let me expound upon my comment about a limited supply of gold.

You are right — folks have been yelling about Peak Oil for 40 years, and the oil industry has always proven them wrong. Unlike oil, however, a limited supply of gold is a good thing.

Gold is not consumable like oil. Once we mine it, we have it forever. It can be melted and reused as many times as we want or need to melt it and reuse it.

The reason I mentioned its limited supply was not to scare anyone. (There’s nothing to scare anyone about.) That was simply to point out why it is a good measuring stick … it can’t be created ad infinitum by central banks or governments.

Hope this clears things up, because I certainly wasn’t trying to scare anyone!

Dallas requests:

Please do a parallel analysis article on the silver metal. Thank you.”

Dallas — thanks for writing. It’s on the way. It might be a few weeks, though, so keep watching for it!

L.J.E. comments:

“I started collecting gold and silver more than five years ago. Not because I wanted to die rich, but because of being in my 80s, I wanted to leave my family something of value.”

L.J.E., I can hardly think of a better reason! They should be thankful you’re working so hard for them.

Richard says:

“I agree that gold is a better measure of all other commodities than fiat currency. But, a good series of charts pitting gold against the Dow, housing, groceries, energy, etc. is hard to find all in one place. I would like to know where to find these charts, with trendlines. Thanks.”

Richard, you can find much of what you are asking for from our friends at

W.R. writes:

I am 89 years of age and this is the first time that the neutron star story of creating gold has ever crossed my path. Thanks!”

Thank you for writing in. W.R. If you’re 89, that would put you at about age 17 or 18 on Dec. 8, 1941. We at Uncommon Wisdom would like to thank you and your generation for our freedoms.

We want you to know that we are fighting to maintain those freedoms, in our own way, each and every day. Thank you — it’s an honor to have you as a reader!

If you like this format, I can do more in the future. Just make sure you send your comments and questions to Without you we wouldn’t be here, so we want to ensure we are doing everything we can to help you manage your investments as profitably as possible.

Here are some other stories you should have on your radar to help you do just that:


In Other Market News:

  • Big banks are pushing back against tighter regulation. They have hired “longtime, influential Washington hands to deflectregulatory and political pressure,” per the Wall Street Journal. This push in lobbying is a new direction for the industry, which adopted a low-profile stance about regulation in the wake of the economic crisis. Many larger banks are also shedding profitable assets to avoid higher cash reserve requirements to offset risk.
  • Teen-friendly jewelry boutique chain Claire’s Stores is returning for an IPO, more battered and bruised than when Apollo Global Management bought it in a 2007 leveraged buyout. Apollo has filed to take Claire’s public after the retailer exhausted its ability to issue secured debt.
  • Apollo made a similar play with Realogy Holdings Corp. (RLGY) in October, which was carrying a lot of debt. RLGY has gained nearly 90% since, thanks to the real estate rebound.
  • What does Wall Street have to say about the IPO? “Claire’s is one of the most-leveraged names in the retail sector,” said Monica Aggarwal, a credit analyst with Fitch Ratings. William Susman, managing director of Threadstone Advisors, commented, “The more equity you raise, the more debt you pay down, the more that equity is worth.”
  • Higher revenue in the first quarter helped Groupon (GRPN) shares to rise 11.5% since it reported after the bell yesterday. “The business is stable and healthy,” said chairman and co-chief Eric Lefkofsky, adding that “it has been a misunderstood company.” Ted Leonsis, Groupon’s other co-chief, said on its earnings conference call that the board is looking for a permanent CEO and had formed a committee, but it was unlikely to be a “simple search.”
  • Sony (SNE) returns to profits under new CEO Kazuo Hirai. But this expected profit, the first in five years, is more of an accounting trick than an operational victory. Hirai and about 40 other execs agreed to forego bonuses as a result of the continued losses and a sharp forecasted drop in sales in their electronics division for the fiscal year that just ended. Such bonuses account for 30%-50% of the executives’ annual pay.Source:

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