Gold Producers (GDX) 20.66 24.78 45.55 Oil 97.65 94.80 86.26 Silver Stocks (SIL) 10.82 12.59 22.11 TSX (Toronto Stock Exchange) 13.280.72 13,380.41 12,151.13 Gold Junior Stocks (GDXJ) 28.89 37.15 83.12 Louis James Senior Metals Investment Strategist Casey Research P.S. New phyles are launching in Sleman, Yogyakarta, Indonesia; Cuenca Canton, Ecuador; and Birmingham, England. The Antwerp, Belgium; Sydney, Australia; Princeton, NJ; Edmonton, ON; and London, ON, Canada phyles are looking for coordinators. Anyone interested in any of these areas or in checking for an existing phyle in his region should send an email to email@example.com. Silver 19.54 21.77 33.04 Copper 3.21 3.24 3.63 One Month Ago Dear Reader, I have written repeatedly about the futility and foolishness of trying to time the market—tops or bottoms—but I know the desire for such a crystal ball is overpowering. So this week, we’ll indulge in a bit of crystal-ball gazing. But first, it is with great pride that I announce the publication of Doug Casey’s new book, Right on the Money. This is our second volume of “Conversations With Casey,” but this one includes several conversations between the two of us that weren’t distributed for free in our former column by that name. In the book, Doug and I delve into the specifics of how to apply his contrarian philosophy to making money. The Book When I mentioned the new book on my Facebook page a few days ago, I received a slew of congratulations. Thank you all. I enjoyed the conversations greatly, as well as the opportunity to draw out Doug’s knowledge and experience to share with all who are intellectually honest enough to consider what he says. But one fellow wrote in to say that Doug and I were quite brazen to publish a book called Right on the Money after being wrong about gold for the last two years. I understand completely that people who’ve invested recently in the gold sector are likely underwater and wondering how long they can hold their breath. I feel the pinch myself, with many of my own stocks in the red at the moment. However, we were not wrong about the current correction. Back in 2011 when gold hit its nominal peak over $1,900, we warned readers in print that a retreat was likely. Granted, given all the Wile E. Coyote economics governments around the world have been engaged in, we didn’t expect the temporary bear to stay so long or grow so large, but we did see it coming, and we did—and still do—see it as a fantastic opportunity for those who didn’t get in at the beginning of the bull cycle back in 2001. In point of fact, we have not been proven wrong about that yet; we’ve just seen a predictable level of panic among those who don’t see or have confidence in the bigger picture and long-term trends we’re betting on. Further, we found ways to make money on gold’s slide since 2011, including three highly successful “gold insurance” plays that more than doubled readers’ investments when gold went down. We’ve also included more dividend-paying companies in BIG GOLD, and even found one company for the International Speculator that profits from processing gold regardless of the gold price (one so far—I’m on my way to see another possible pick as you read this), as well as been able to upgrade our portfolio with high-grade exploration and development companies on sale while the market is down. This is what it means to be a contrarian—as Doug likes to say: “Make volatility your best friend.” And he should know: he’s been profiting from the metals and mining markets for almost 40 years. If one pulls back to view the big picture—in both global breadth and historical depth—as few people can do like Doug, it’s easy to see that the current slump in our market sector should not be cause for fear, but for excitement. It’s the best bargain-hunting opportunity for commodities investors in a decade. And it just may be the best wealth-creation opportunity in a generation. Exactly how one goes about this is what we explore in Right on the Money, and you can preorder a copy now to receive a 13% discount. Just in time for holiday reading—and giving. I hope you take advantage of this deal while it lasts. The Crystal Ball Doug likes to say that it’s a big mistake to make a prediction that includes both an event and a time. But then he often goes ahead and does exactly that—”for entertainment purposes only.” So I’m going to go out on a similar limb: I think it will be clear to most investors that the precious metals correction is over and the second half of this record-smashing gold bull market is under way well before the end of 2014. One of the reasons for this is a very different conversation I recently had, not with Doug, but with Krassimir Petrov. Krassimir is a true international man, like Doug: an Austrian School professor of economics from Bulgaria, currently living in Thailand. More important at the moment is that the previous time I interviewed him, he predicted the timing of the current gold bull cycle more accurately than Doug and I did—a fact that impressed me greatly. That interview is a relatively quick read, dense with important ideas and insights, but it’s too long for this dispatch, so I’m going to give you the bottom line and encourage you to read the whole interview here. Based on cyclical analysis, technical analysis, fundamental analysis, and portfolio analysis, Petrov says the bottom for gold could be in already, but most likely will be behind us within one to seven months. That’s early to mid-2014, now rapidly approaching. (Note that in the interview, he says three to nine months, but I recorded our conversation two months ago.) That said, I should also mention that Krassimir is convinced that the actual Mania Phase in gold – when the investing herd throws itself head-first into the gold market and you’ll get gold stock tips from your friendly cab driver – is still at least six to eight years away. While that may be somewhat disappointing to us gold investors waiting for our big rewards, it isn’t bad at all, because we’ll make plenty of money on the ramp up before the Mania Phase, just as we did in the first half of this epic bull market. I still believe it’s impossible to predict the exact bottom of a market correction, but given that cashed-up, high-grade exploration plays—and even profitable producers—are already on the deep-discount rack, it seems clear as day to me that the thing to do is to build a position while the market is down. You do not want to miss this boat. And best of all, tax-loss selling this month is likely to provide spectacular buying opportunities in the best of the best stock picks in the sector. I strongly encourage any and all with the contrarian courage to buy what others are selling (the hardest part of implementing the “buy low, sell high” formula) to act. Right on the Money shows you how, and the International Speculator offers you specific and detailed guidance. (If you try the International Speculator risk-free for 3 months today, BIG GOLD is included in your subscription, at no extra charge.) I know I’m tooting my own horn here and repeating some things readers have heard before, but I believe 100% in what I’ve said, and I’ve put more of my own money where my mouth is than ever before. Heart and mind, I wish you a happy and very prosperous 2014. Sincerely, Rock & Stock Stats Last Gold and Silver HEADLINES GFMS: India’s Silver Imports Likely to Touch New Record Highs in 2013 (Scrap Monster) According to Thomson Reuters GFMS, silver shipments into India reached 338 tonnes (10.8 million ounces, or Moz) in October, surging 40% over the 241 tonnes (7.7 Moz) imported in September. Through October, the country imported 4,652 tonnes (149.5 Moz), and analysts project that total silver imports could reach 5,200 to 5,400 tonnes (167-174 Moz) this year, exceeding the previous record of 5,048 tonnes (162.2 Moz) achieved in 2008. Silver demand in India has two key drivers. The first is low prices, which have plunged by nearly 37% year to date. The second reason is that increasing numbers of Indians have opted for silver jewelry and coins as gifts at festivals and weddings instead of gold, due to government restrictions that have led to a supply shortfall. Given the strength of the gold tradition in India, it will be interesting to see what happens when this dam finally bursts—as eventually it must. Silver Eagle Coin Sales Lag in November, But Still a Record 2013 (Mineweb) November American Silver Eagle bullion coin sales declined by 787,000 ounces from October levels, as the US Mint reports 2.3 million Silver Eagles were sold in November, down from 3,087,000 coins in October and 3,159,500 coins in November 2012. However, according to the Gold and Silver Blog, “the lower sales figures for November do not reflect a drop in demand for silver bullion coins, but rather the opposite due to the fact that the US Mint has run out of coins due to unprecedented demand.” Last year, the Mint unexpectedly sold out of 2012 Silver Eagles on December 17; the Mint is thus limiting coin orders for the remainder of this year to conserve blanks for the 2014 program. The Mint plans to issue its last weekly allocation of 2013 Silver Eagles on December 9. The 2014 silver Eagle bullion coins will not be available to order until January13, 2014. Meanwhile, year-to-date sales of American Eagle gold bullion coins at the end of November totaled 800,500 ounces, surpassing last year’s total sales of 753,000. This is already a new all-time record. Korea Exchange Targets Gold Trade as Park Hunts Taxes (Bloomberg) In an attempt to improve trading transparency and generate new tax revenue and financial opportunities, the Korean Exchange will begin physical gold trading on March 24, 2014. Asia’s fourth-largest economy, which already offers gold futures trading on the Korean Exchange, has been entertaining the possibility of a physical bullion market since 2010. Illegal trading to avoid taxes accounts for as much as 3.3 trillion won, depriving the government of an estimated $300 billion in tax revenue. The surge in gold-related services and institutions continues, especially in the East. We recommend investing with this trend in mind. This Week in International Speculator and BIG GOLD—Key Updates for Subscribers International Speculator One of our advanced, high-grade explorers just received a critical permit for underground work—a major step forward for this project, which has been significantly de-risked. Gold 1,230.70 1,317.80 1,701.80 One Year Ago TSX Venture 916.65 941.31 1,186.70 This Canadian explorer released outstanding met-test results, showing that its flagship project should have relatively low costs. The market ignored this value-adding news, making this company a Best Buy. BIG GOLD We updated all our stock recommendations in the latest issue of BIG GOLD, which are also posted on the portfolio page.