Sunday, December 4, 2016
Joined Apr 19, 2009
721 Blog Posts

The Stand





Happy New Year, we’ve got a lot of work to do.  It’s 2013, and individual liberty is in peril like it hasn’t been since the early 1930’s, and it’s up to thoughtful people to stand up for it, or see it perish from this land.

Ironically enough, the provenance of our problem is one of base economics.  Economics are simply the study or limited resources, which are what defines our world as much as much as the laws of physics.  Prior to the development of market capitalism, the laws of economics translated into a near zero-sum, Hobbesian nightmare where resources were either stolen or distributed by force, and what laws existed held constant only for the very elite protected classes.    The advances of the Mercantilism and the Enlightenment combined trade and innovation with the concept of a “rule of law,” which eventually gave rise to our modern manufacturing and service based economy.   The resulting system — characterized by the pursuit of profit through mutually agreeable exchange, protected by an agreed upon set of rules that define contracts and protect private property, has created the highest standards of living, in human history.  It is referred to today as the modern capitalist economy.

All of that has come into peril however, due to an obnoxious side effect of the modern economy… the welfare state.   In practical terms, the advent of the “progressive state” — more commonly termed “statism” — grew out of 19th century German social philosophy that married social engineering and bureaucracy, mostly in pursuit of a particularly Germanic “order” which was a concept quite foreign to the more libertarian precepts of the Anglosphere (especially in it’s North American precincts).   These philosophies found a friendly ear in the U.S. in both academic (which sought to improve) and governmental (which sought to control) circles.   As capitalism flowered, these philosophies (Marxism being only one of the more well known) found purchase, ironically, in the leisure classes endowed with a surfeit of time thanks to the capitalist system.

Such helpful souls are with us even today, and marked mainly by their interest in saving ourselves from ourselves, using their approved prescriptions.  You call them busybodies in a limited neighborhood setting, but given enough money and power, those over-interested folk can easily shift to full time totalitarians.  Congress is replete with them.  Their prescriptions, all engendered with the best intentions, tend not consider your individual rights, whether property or civil, being far more interested in the rights of the collective body.   In fact, these well intended chaps regard the Constitution that enshrines your individual rights as a hoary anachronism, no longer relevant for this brave new innovative world of progress.  After all, Thomas Jefferson never had the internet, now, did he?

  But it has been ever thus, wherein governments enjoined in greatest intention, dedicated to the greater glory of civilization, usually fall to ruin as a result of centralization, corruption, bureaucratic bloat, and in the end, lack of accountability.  We thought we had that tendency towards “the Fall” covered, when we put our country together in September of 1787.  We had checks and balances with regard to the “three legs of government,” and of course the mighty Bill of Rights, whose first two amendments guaranteed a check on the sovereign from the very roots of the citizenry.

But institutions are corrupted, and rights are overlooked, or worse, discarded.   When did the first Amendment only guarantee free speech rights to the established (corporate) press for instance?   And when did the second amendment become obsolete?  When did the Fifth Amendment become so corrupted that it justified government takings that would be distributed to “more suitable” private interests, rather than for specific public purposes? What has happened to the Ninth and Tenth amendments, and the fealty they paid to the States? Moreover, what has happened to our ability to preserve our monetary base — our very sovereignty?

I could go on all night, and I’ve been struggling, struggling for answers.  Right now I face a depressive realization, and yes,  it entails a cliff.  It’s not, however,  the silly “fiscal cliff” the warring homunculi of Congress currently battle for in their kabuki theater show.  It’s the cliff of the Constitution itself.  Have we sailed, finally, into a post-Constitutional America?   Where the same authoritarian statist bodies have used populism and demagoguery to establish totalitarian control in our once free land?

I know we will see for sure in 2013.  We will see if our hollowed out press has finally given up the ghost, and allowed themselves to become nothing more than organs of the State, banging the gong for whatever grasping, illegal policies the Administration feels it can get away with.  I expect Executive Orders by the handfuls.  This Executive is not one to wait on consensus for his plans to come to fruition.   We will see the true mettle of this country in the response these moves provoke.  But wherever you stand — even if it is with the current forces in power — I beg you to remain vigilant, and to plan well for your families.   Unintended consequences will abound, as they did in the 1930’s.   All we can do is prepare for continuing ill times.  God bless.


If you’ve read this far, you are probably deserving of my take on the precious metal markets.  I am still enthusiastically bullish, especially at these prices. I will only remain so if we drop 10% from here.  Many of you (trader types), will frown at that last, but I cannot be of more service than to give you what I am doing personally.  The Fed has opened the window to an eventual runaway inflation.  And they may believe that the sophisticated tools they are using to expand the money supply while retiring toxic debts will not rebound upon them because of their ability to shrink as quickly as expand.  What they do not take into account, however, is the amount of dollar-based credit outside their control, and outside their boundaries.  I am especially thinking of the dollars housed in sovereign banks as assets anchoring other poor balance sheets in countries in even worse shape than our own.

Fiat money can only be abused for so long until it begins losing its elastic properties.  Eventually, the confidence will be lost in the U.S. Wonder Machine… especially with four more years of sub 2% growth accompanied by trillion-plus deficits.   If you do not deign to go the riskier path of the miners (EXK, AG, GDX, SIL), then at least get yourself some physical coinage or bullion.  Hard assets are your only surcease here, your only stop gap.

Best to you all.


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  1. EvanBFI

    Did you get a chance to read Fly’s comments about you/PMs?

  2. MX2101

    Thank you Jake. Your post is the best thing I’ve had with my morning coffee in a long time. Have a good day, sir.

  3. 88888s Account

    Agreed Jake

    The narrative the week on soft PMs was the specter of QE being withdrawn after the recent FED notes

    How the fuck do they cease QE infinity when the Bernank is still buying the majority of Barry’s bond issuance?

    Balance the budget – oh yeah

    The ADD crowd can’t handle some short term selling. So what…

    At least there is some fundamental reasoning behind PM buying.

    The only argument for equities at the moment is technicals.

    Equities look cheap compared to a bubble in bonds and commercial property – shit, we need a bubble in equities too

  4. MX2101

    It looks to me that instead of a class war between high and low income people, it will be class warfare between those who feel entitled to welfare and support from the government versus those who take responsibility for themselves financially and in other ways.

    When the 47 percent becomes the 65 percent, and eventually has a clear voting majority, I expect the country will accelerate to wherever it is going.

  5. Bravo

    I have to agree. Brilliant writing. Thanks JG.

  6. youknowitsme

    Glad you’re back. However, I think gold & silver will do well for the intermediate term because it acts as insurance against retarded governments, of which, there are plenty. I don’t see inflation as too much of an issue here as there remains a fairly healthy market for US bonds.

    • Jakegint

      Have you been keeping an eye on TBT?

      As I’ve said, the US gov’t is no more or less retarded than most of them… which is a shame, given our original framework.


      • youknowitsme

        Even with all this $$ printing I think deflation is a bigger worry than inflation. At present, there is still demand for US Treasuries. When there is no more demand for US Treasuries, then we will have inflation. US debt is better than European debt…….

  7. Mr. Cain Thaler

    Yep, I was just commenting the other day how MANY people are getting into Hobbes.

    It’s crazy, Hobbes was off his rocker. He picked a series of fights with mathematicians of his time, waging a 20 year war against some of Gauss’s contemporaries. He practically destroyed their reputations, pushing concepts that human intution could be as accurate if not more so than logic. These concepts were later easily disproven.

    He then published a series of articles trying to square the circle (classical Greek problem involving a compass and a straight edge). It’s not possible, later proofs demonstrate why.

    After some more crazy stuff, he suggested the world would be a better place if we all surrenderred to “super dictators”.

    Let us leave that as the legacy of Hobbes.

  8. drummerboy

    the road to hell was paved with good intentions.glad your back also. long live senator cement head.:)

  9. chuck bennett

    Hello dare good sir.


    Chuck Bennett

  10. Mad Willie Thompson
    Mad Willie Thompson

    Thanks Jake. Erudite and timely as always.

    If this were a conversation over a bourbon you’d get a hug (an extraordinarily manly one of course).

  11. Gold

    Wellcome back Jake. I’d been waiting your insight. Thank you.

  12. mindthegap99

    Thanks for taking the time to post, Jake. Much appreciated.

  13. Heaterman

    Excellent summation of our current status in the USA. The nail was hit squarely on the head.
    Unfortunately, I would hazard a guess that less than 30% of our population would understand what you are talking about let alone agree with it.

    I am waiting for someone or some group, organization or even a current government official to sound the clarion call to resist the flow of what seems to be the incoming tide of “change”………..dare I use the word. I have long felt that 0bama would bring new meaning to that word and it appears he may have found the lever to do it here with the klaxons in the press blaring for the trampling of the only amendment that truly keeps government in check.

  14. Honolulu Trader

    This last drop on EXK I went balls to wall to the tune of bout 65% of my bank.Dumb, I know, but, I never claimed to smart.

    I”m amazed that fly would sell
    at those! Whats up with with sir fly these days? “swhc”??

  15. Blind Read Ant

    Giant ascending triangles in PM.

    Im about to position LONG.

    This site is degenerate sans the Jake Gents reason.

    Where’s V.King too?

  16. Honolulu Trader

    Bought $USLV 3X 25.60’s

    Silver with some Nitro behind it.
    Seat belts needed!

  17. Sir Robert Hooke

    Happy days! The Senator is back.

  18. JimH

    You’re on drugs…..

  19. chris

    Nibbling each time RGLD goes below $80. Grabbing a few shares of SLW and AG on down days. Stashing some metal. I frankly don’t know what else to do given the proclivities of government interventions in the markets. Nothing makes sense.

  20. Honolulu Trader

    Silver is looking strong! Bust through 31.50..raise the roof!

    $USLV has been performing very well.

  21. kohai

    hi Jake!

    I hope all is well and your return perhaps not too far off..

    In the meantime, any thoughts on ANV? Sneaky little bastard, you would think on some days they mine toxic kryptonite.

    Thank you for all sir.

  22. Honolulu Trader

    Ive seemed to have lost my ass.
    It was last seen in the vicinity
    of NUGT. I hope to find it soon.
    My yoga lessons are now on hold.