STAFF NEWS & ANALYSIS
Advisors Still Can't – and Won't – Recommend Gold and Silver
By Staff News & Analysis - April 04, 2012

Clients want alts in their IRAs — but advisers' hands are tied … In February, the firm polled 1,000 people nationwide, along with 365 financial advisers with at least $10 million in assets under management. Two out of three advisers polled said that investing in alternative assets can help build wealth for investors, and 80% them said that their clients have expressed interest in using alternative assets. Meanwhile, about three out of four Americans familiar with retirement accounts are interested in adding these investments to their individual retirement accounts. But regulatory scrutiny, as well as tough broker-dealer compliance rules on the use of alts, have largely deterred advisers from adding them to clients' portfolios. Only one in 10 of the polled advisers said they have the capability to add alternatives – Investment News

Dominant Social Theme: Just keep investing in stocks and it will all work out.

Free-Market Analysis: One of the hallmarks of a controlled press is its regular departure from reality. The US press and the Western press generally have been departing from reality for most of the past 100 years and longer.

But in the past ten years the controlled investment press has truly proved how out-of-contact with the real world it actually is. While gold and silver have made huge gains year after year, the US press especially – the loudest and most aggressive financial press in the world – has never covered the story effectively.

The mainstream, controlled media has written millions of words about financial scandals such as the Madoff scheme, but it has studiously avoided reporting on the huge bull market in money metals that has been ongoing for more than a decade now.

This trend continues even though we can see from the article excerpted above that investors – more than the industry itself – are increasingly aware that the nostrums of the past 60 years are woefully inadequate. Here's some more from the article:

"In recent months, the top five adviser networks in the country have begun to scrutinize the assets clients are holding, such as nontraded assets," said Kelly Rodriques, chief executive of Pensco. "The adviser and the client may want these investments, but the institutions' administrative capabilities limit that."

The Securities and Exchange Commission and the North American Securities Administrators Association have issued warnings about the pitfalls of self-directed IRAs, including lack of information surrounding alternative investments. Meanwhile, nontraded real estate investment trusts in IRAs can come with their share of problems.

Tougher regulations have made it clear to large broker-dealers that it won't be easy to administer these alternative assets, Mr. Rodriques said. He added that clients working with his firm largely lean toward private stock, in which they invest in a growing company. At the same time, hedge fund holdings are also becoming more commonplace. Distressed real estate and the use of private notes have also captured investors' interest, he said.

We can see from all of the above that gold and silver STILL don't warrant a mention in articles such as this. And the best that the SEC can do is to "warn" about the pitfalls of self-directed IRAs.

This is part of the larger disconnect that the regulatory authorities have with the general public and it is one the mainstream media shares. Do either group in aggregate believe that the "public" hasn't noticed the price of gold and silver has risen tenfold in the past decade while stocks have stagnated?

The big story of the past decade financially has been the re-emergence of the business cycle and its changing from one valuing paper assets to one focused on money metals. This is perfectly explicable if one understands Austrian economics and free-market thinking generally.

It was Ludwig von Mises that elaborated on the modern business cycle and its central-bank generated booms and busts. As the success of Mises's paradigm has become evermore apparent over the past decade, the attacks on Austrian economics and libertarianism generally have ratcheted up.

The mainstream press, of course, is controlled by the same apparent dynastic families that run the world's central banks and apparently intend to create world government. Wishing to create world government, these families and their enablers and associates have set in motion the boom/bust cycles inherent to manmade currencies.

The elites have over time removed fiat money entirely from underlying gold and silver and far worse than this, they have made fiat a monopoly creation of mercantilist central banks. These banks derive their authority from the public venue even though they are privately run.

In fact, the elites have spent nearly a century divorcing economies from gold and silver because gold and silver essentially fetter economies and do not easily allow for the unlimited printing of paper money that the elites so desire.

Free banking and competitive currencies within a private market environment are preferable to the insanity of current monetary stimulation that takes place today. Any time government has a monopoly anything, but especially money, only ruin can occur.

Government will always do too much, print too much, etc. because the function is divorced from competition. This is only common sense.

Nonetheless, none of these issues get a thorough airing in the mainstream press. Even in this article, there are no mentions of the primary alternative vehicles of gold and silver.

Instead of warning people away from "alternatives," the SEC and the mainstream media should make a concerted effort to explain the business cycle and how money metals work within the modern paradigm.

Chances are that this business cycle shall run several more years and cycle through paper gold and silver and ultimately through junior mining stocks as well. This is how the cycle actually operates and the regulators are doing no one any service by obfuscating what's really going on.

But in fact, this is a good example of why regulation doesn't work. The SEC and other regulators actually seem to be nothing but reinforcers for the elite's paper-money paradigm. The real story of the current faux-economic environments around the world is not being told.

Regulations are barring investors from making proper use of gold and silver within the context of the modern business cycle. Investment publications themselves do not ever explain the reality of this cycle and as a result many investors – trusting the current Western system – have missed out on profit-making purchases.

After Thoughts

Articles like this, along with regulatory intransience, make it clear that these trends are not going to be addressed any time soon. No wonder the alternative media is gaining ground.

Posted in STAFF NEWS & ANALYSIS
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