J. Paul Getty, Physical Silver and Staying Power

Money isn’t everything but it sure keeps you in touch with your children
J. Paul Getty

I was recently reminded of the story of J. Paul Getty and a trick he did on the floor of the New York Stock Exchange.  It seems J. Paul decided to stand prominently out on the floor of the exchange where everyone could be sure and see him.  Then he very openly, not secretly, sold a large amount of stock in one of his oil companies – we’ll just say Getty Oil for the purposes of this story.  And let’s say he sold them for $10 a share.

Now all of the other traders got really nervous.  After all, if J. Paul was selling his own shares he must know something bad, so they all started selling some of their shares – maybe for $8 a share.

Then J. Paul sold some more of his shares for $7 a share.  And the traders around him started to panic.  They couldn’t get rid of Getty Oil shares fast enough.  Selling was so desperate the price went down to $2 a share.

Can you guess what happened next?

J. Paul very coolly bought all of their shares, and all of the shares he had sold – for $2 a share.

And walked off of the trading floor.

Now the details of this story may not be totally accurate, but I’ve read of this happening in the past.  And recently, as I was reading about a possible manipulation of the silver price, the story came back to mind.

There are reports, and a lawsuit, that indicate some of the top financial institutions in this country are doing the same thing to the price of silver.  They start short selling silver to the tune of a 100 million or so, which drives the price severely down.  Because us retail investors see the price drop, and sell our shares to get out of the trade alive, which drops the price even more.

And then, can you guess what happens?

The big financial institutions swoop in and buy it all back at a lower price.

There are even articles out their suggesting some of this is done in collusion with the government.  Now I don’t know if that’s true or not, but I am quite convinced the government hates gold and silver.

Why?  Because it makes it much more difficult to devalue the dollar when people are fleeing to real assets like silver and gold to protect their net worth.  And the government wants to devalue the dollar.  Because that’s how they intend to pay off part of the national debt.

So how do these two stories affect you?  Well, they make yet another case for investing in physical silver.  Now I’m not ruling out all securities that involve silver.  I have some of those too.  But investors have been whipsawed in and out of them over the past year due to the wild swings in the price of silver.  Which may or may not have been manipulated.

But I maintain you have more staying power when you actually own physical silver – like one ounce silver rounds.  Because you actually have the silver in hand.  They can’t take that away from you.

And here’s the thing.  When they drive the price down it’s a virtual silver lollapalooza for you.  Because you can buy a few more rounds at the cheaper price.

And then price is most likely going to go back up – perhaps go up a great deal.

So two can play this game, right?  That’s another reason why it’s a good idea to invest at least a small portion of your portfolio in physical silver.  Because it gives you staying power.  And keeps you in the game, even when the J. Paul Getty’s and big financial intuitions are around.

To your health and prosperity – John

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