Zimtu 2011 Road Trip – Day 3 in Munich
By November 9, 2011– Published in on
[caption id="attachment_534" align="alignright" width="150" caption="100 Grams of Silver"][/caption]
There is no doubt that this is, by far, the best investment conference in Europe for Canadian mineral exploration companies. Not only does it attract a lot of local people it brings together many investment professionals from Zurich, Geneva, Hamburg and other cities who both raise money for the Canadian juniors and invest in them.
But, while there are people visiting the chatting with the Canadians – language is no barrier – the buzz is most definitely with the many companies selling gold and silver products. They are all busy.
Walking around the floor I met Alex Macdougal, a long time advisor to many Canadian juniors and a lifelong student of many currency fluctuations. Alex reminded me of a talk he gave at a Cambridge conference in Phoenix where he used this example to show what happens to a country’s currency in a runaway inflation situation.
- Prior to WW1 it took 87 German Marks to buy 30 dozen eggs.
- After WW1 it took 100 Marks to buy 5 dozen eggs.
- Then, inflation took over and really took over.
- In 1925, just seven years after WW1, it took 726 BILLION Marks to buy SIX DOZEN eggs.
Over the past several years we have laughed about the similar situation happening in Zimbabwe. The Germans don’t laugh. There are many alive today who were born then and the rest of them are only one, two or three generations away from the time when their country went bankrupt.
Today Germany is the leading economic key in the European Economic Union. Daily, the news media are running stories about the possible collapse of the Euro. Daily, the news media report on the problems in the US and the possibility of hyperinflation bringing that great nation to its knees.
The best way to protect yourself is to make sure you have some bullion. Today I bought a small plastic case with 100, one-gram units of silver, held together so you could break them off one piece at a time to use them to purchase things.
The mix of having bullion companies and mineral exploration companies selling shares is a great way to handle your investments. Buy bullion to hedge against inflation. Speculate by investing in a carefully selected basket of junior mineral exploration companies that often run ahead of other investments. And, with the way bullion is selling around the world, we need these companies to find new mineable ore deposits. It is an exciting time for Canadian juniors.