Concern about the naked shorts counterfeiting stock certificates is something I am sure many of you have. There have been numerous Q calls adressing this question, but still the issue remains a very difficult one to analyze. If there is a naked short position, then obviously there are conterfeit shares floating around out there. How am I to know that the shares I am buying are not the counterfeit shares The answer is: you do not. This was initially concerning for me? Why? Because the computer I am typing on was stolen. Here’s the story: A good friend of mine, an E.R. Pysician in San Diego had this computer stolen out of his car in San Franciso about a year ago. It has some sort of un-erasable program embeded in it that functions as soon as the thief goes online and will start taking pictures and recording addresses. So basically, 6 months later, the police showed up at some unsuspecting couples’ house and took the computer back. The sad thing is that these people bought it for $2500 from someone online. Well, as they say in Russia, Toughskie Poopskie. It was stolen, so my buddy got it back. He had already bought a new one, so he gave me this one and I gave mine to one of my top researchers, Hawkeye. Still the sad part of the story is that the people who bought the stolen computer were left holding the bag and my friend, I and the thief got off without much damage. Actually only I and the thief escaped unscathed financially, but so it goes.

So that’s the concern, what if I’m holding shares of stock that are essentially stolen or counterfeit, that shouldn’t be there. Am I going to get screwed. Well, anything is possible, just ask O.J. Simpson, but we, Kimber shareholders, are not likely to get screwed on this deal, and this is why? First of all, there is a paper trail. These counterfeit shares are distinguishible from real shares by virtue of the fact that all shares issued by the company are accounted for numerically. Also, there is a paper trail of where all traded shares came from. Nobody is printing up Kimber shares in their garage and moving out of town. When the jig is finally up, everything will be sorted out and everyone will know what everybody did and where everything came from. In other words, the deal with the computer would have been a lot different if the people would have taken delivery from a certain person who lived at a certain address. They could have then just gone to that person and demanded a refund before he got carted off to jail. Of course, there’s a problem then if the gentleman in question had already spent the funds. Then he goes off to jail, but not before he had had a great time in Las Vegas with the money those people spent on the stolen computer. Then they really are out of the cash. So why couldn’t this happen with the Royal Bank of Canada and other organizations that are shorting Kimber? Well, for one, we know where they live. We know what they are doing, and eventually they will have to come clean. Here’s the kicker. Kimber is a big deal for us, but it is relatively small potatoes for them. In other words, their entire bank is not going to collapse because of Kimber. They are going to pay up or suffer legal consequences. RBC for example, has $633 billion in assets right now. OK, worst case scenario. They are shorting everything and the whole gold market and juniors take off to the moon and because of other crappy investment decisions and lack of vision the whole bank goes under. Are we screwed? I still don’t think so. The Canadian taxpayers will be screwed because, in case you haven’t noticed, in this period of history, it is not fashionable to let banks fail. All the money will be printed to pay us off. That in turn will create more inflation which will make our gold holdings worth even more. If this doesn’t happen and RBC goes under, believe me, a lot of other institutions will be going under and this is why I have $200,000 in gold and silver in a safe deposit box, because if this end-of-the -world financial scenario should ever happen, just about the only things that will have value will be gold, silver, food producing land, guns and ammunition and my wits, which might be pretty strained at that time.

And it could happen. If you are thinking it can’t, then you are on the wrong planet. Do I think it will? I just don’t know. That’s what makes life an adventure. But here’s why I don’t think the governments will let banks fail like they did in the 30’s. Here’s something that I bet none of you know. Napoleon Hill, to the best of my knowledge never wrote about this, but in a rare recorded speech before he died he made mention of it once and only once. FDR, called him in in the 30’s for assitance to organize a group of political and business leaders to stop the stampede of fear that was then occurring in the United States. Unless you study the depression in depth, you really don’t understand how close our leaders thought we were to actually losing many of our democratic institutions. Communism had taken over countries with much more history and much larger governments than ours. The Communist threat was real. And if WWII had not saved us, things could be very different today. The point is that what nearly destroyed our nation was the collapse of the banks. That destroyed people psychologically. The banks represented money. And money was gone. This utterly destroyed people. The collapse of the stock market didn’t do it. Everyone always figured that could happen, but to have one’s savings wiped out in the blink of an eye, that was bad, really bad. People lost interest in living, working. They were mad and ready to do some really bad things. I am convinced, that as stupid as the people in our governement are today, at least some of them understand this. They will not let the banks collapse, even if they have to print dollars until a cup of coffee costs $1000. If this type of thing happens, it will end badly too for just about everyone except those who own gold and silver. Also, I don’t think they are going to let people lose their homes. Somehow these subprime borrowers are going to be bailed out even if it means their kids will be living with them until they're in their 40’s becasue they can’t afford a loan for a house with an 18% interest rate. You need to understand, our governement is no longer of the people, it had become what all governements become over time, like a breast cancer in the body, no longer a part of the body that shares in the sustenance of the body and provides a valuable function. Now it is a tumor and struggles only to survive, growing out of control and distorting the normal function of the body. Notice that it is a breast cancer, because governments, are mostly peopled by boobs. This government is trying to save itself now and the way it is going to do that is by keeping the people at bay as long as it can, and it will do that by not taking their houses and trying to keep the country’s financial institutions afloat as long as possible. This will be very good for gold and silver. Eventually there will be a depression, but those in power are going to do everything they can to stop it. They won’t be able to, but we should all be pretty well off financially by the time everything really gets bad. The trick is not to save the system, but to see the impending destruction before everyone else does take advantage of your knowledge that you've worked for and use it to gain wealth and get the heck out on time. It's like Peter Falk said in the In-Laws. "What's good about working for the CIA? Great benefits. The trick is not to get killed. That's the key to the benefits program." Bull