The global monetary system could be on the brink of disaster...
Some experts say world governments have borrowed too much money... which will cause a financial crisis and send currencies plummeting in value.
So how can you protect yourself?
By owning "gold in the ground"...
Gold has been used as money for thousands of years. It has maintained its purchasing power because governments can't print it. If paper currencies collapse, gold will still hold value.
Over the last seven months or so, major currencies around the world have fallen hard against the U.S. dollar... including the Canadian dollar, Australian dollar, the Japanese yen, the Russian ruble, and the euro.
As Porter explained in in the Stansberry Digest last month, these countries are devaluing their currencies to pay their debts cheaply. And he says the U.S. dollar will eventually tumble with them...
The No. 1 way governments chose to pay down their debts is simply by printing money to do it.
All of the world's most powerful countries are broke. The European Union has government debts that are roughly equal to its entire gross domestic product (GDP)... likewise, in the U.S. In Japan, government debts are a massive 225% of GDP. These countries have no choice but to debase their currencies.
And so... that's how I know the big falls these currencies have taken around the world are actually warning shots... even though in the short term they make the U.S. dollar seem like it's getting more valuable. Our currency will certainly follow them down. It must.
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We can't know how this scenario will play out. But governments have an excellent record of making a mess of things. And Porter believes that for paper money, "the race to zero has begun."
If a currency crisis occurs, folks will flock to real assets like gold... pushing the price of gold higher. A small position in high-quality junior gold stocks is a great way to protect yourself from such a crisis... and cash in on a sharp spike in gold prices.
These small resource companies have "gold in the ground." If things go haywire in the financial markets, gold will likely return to its 2011 high of $1,900. Some people, like renowned currency expert Jim Rickards, believe gold will soar past $5,000 within the next decade.
With gold at $1,225 per ounce today, that may seem far-fetched... but it isn't.
In 2001, you could buy gold for just $255 per ounce. It ran up to nearly $1,900 an ounce in 2011, just 10 years later. That's a huge 644% jump.
Over that period, many junior miners became household names. As you can see in the table below, these companies generated staggering gains...
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Company
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Mkt Cap 1/2001*
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Mkt Cap 12/2011*
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% increase
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Fortuna Silver Mines (FSM)
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$0.3
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$691
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249,024%
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Yamana Gold (AUY)
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$9.4
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$11,200
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118,928%
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First Majestic Silver (AG)
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$1.8
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$1,805
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101,128%
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Randgold Resources (GOLD)
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$83.9
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$6,035
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7,096%
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Royal Gold (RGLD)
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$53.3
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$3,750
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6,941%
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Coeur Mining (CDE)
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$33.3
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$2,164
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6,389%
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* in millions |
And it can happen again. If gold soars past $5,000, junior mining companies with gold in the ground could soar in value by 10... 20... even 100 times. An investment of $5,000 in junior gold miners could be worth $100,000 or more.
I hope this crisis scenario never happens... But we have to be prepared. If the "dirt hits the fan" as some expect, these stocks could skyrocket in value with the price of gold.
And it won't be gold alone... Many other metals, like copper, uranium, and silver will soar as well. It will be a bull market in real, "hold in your hand" assets.
Junior miners have huge potential for price appreciation today. But remember: small resource stocks are among the riskiest companies in the market. They are much more volatile than blue-chip stocks like Hershey or McDonald's.
That's why I recommend owning a handful of high-quality junior miners and treating them as one position. For example, if you would normally buy $5,000 worth of a stock, place just $1,000 into five of these. You could think of this position as an exchange-traded fund (ETF) of high-quality junior resource stocks.
This will give you plenty of exposure to the huge potential upside here... while diversifying your holdings. And increase the likelihood that one (or more) of your positions will become tomorrow's household name.