Jim’s Daily Rant. Fast Growth Can Kill You.

Just ask Baby Huey who outgrew his diaper before it could be changed. It strangled him in shit.

This is especially true of businesses. An entrepreneur can start the business from his garage. In a few months he has a storefront and has learned how to run it. He can hire, train, has suppliers, has a line of credit at the bank, has an accounting system and was even visited by the tax collector.

He is now comfortable going in on Monday mornings knowing how the week will go. Things are calm at home now too. Then suddenly his business is tripled for some reason.

Now he has a sudden growth problem that can kill his business. He has to hire and train immediately. May have to locate more suppliers that deliver on terms as he is short on cash.

He has to pledge his wife, kids and marriage as collateral at the bank because they are scared of sudden growth companys. Just after he gets his line of credit raised by the bank, he suddenly needs another $1.5 Million line of credit. His bank refuses. He goes to a Too Big To Fail Bank and they agree to finance, but on condition he moves all of his bank accounts to their bank. They now have their hands on his money at all times. This has the feel of a Boa Constrictor, doesn’t it?

His original bank sees his accounts going to near zero and know the tale. Now the entrepreneur's commercial loan is called in for early payoff. If he did not see this coming; it can be the kiss of death.

It was a game of Chicken and now the original bank wants out of the way. They call the loan and then go after the pledged collateral while the clear shot opportunity is there.

Such is the game of banking; a legal license to steal.

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This is what is happening now to retail precious metal dealers in your hometown. They see the vast profits shining in the sunlight and reach for it. They have run their business successfully for years, they can handle it. But they do not know the risk of suddenly needing $Millions in either capital or credit. They don’t know the difference. Nor do they know the difference from a garden hose on the lawn and a Boa Constrictor.

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There was no time as they did not see the business rush coming. If they had, they would have calculated their risks and exit plan. They would know what direction to go in so they aren't trapped. They might have had an investor lined up.

They might have moved to a safer location not tempting burglars now that they are inventorying $Millions, overloading their insurance policy. They might have considered they may need security guards or at least bullet proof vests that they are too old to wear all the time.

This is what we are witnessing today for the retailers with a crew and storefront. They are slipping into the deep water.

They might have had an exit plan to just close the business and move all the inventory to a safe hiding place and just sit back and enjoy the rocket ride in peace.

See: Dealers Are BEGGING To Buy Back Your Silver ($125 Offer!)