GATA’s Powell: Attacks on Gold & Silver Prices Are Losing Their Impact

Published here: http://goldsilverworlds.com/gold-silver-price-news/gatas-powell-attacks-on-gold-silver-prices-are-losing-their-impact/

Mike Gleason: It is my privilege now to welcome in Chris Powell, Secretary-Treasurer at the Gold Anti-Trust Action Committee, also known as GATA. Chris is a long time journalist and hard money advocate, and through his tireless efforts at GATA, he is working to expose the manipulation of the gold and silver markets. Through GATA’s work over the years, some important revelations have come to light which quite honestly should concern everyone.

It’s great to have him back on with us. Chris, thanks for the time again today, and welcome.

Chris Powell: Oh, thanks as always for your interest, Mike.

Mike Gleason: Well, Chris, we think some people owe you and GATA an apology. You have been making the case for manipulation of gold and silver prices since GATA was formed in 1999, but lots of people dismissed everything you had to say. We now have incontrovertible proof of multiple banks and multiple traders running a decade-long scheme to “spoof” prices.

There are guilty pleas and piles of evidence exposing a scheme which involved thousands of bogus trades. We know senior people were training more junior employees on how to rig prices. The Department of Justice is going to prosecute using RICO laws because attorneys there can see this is organized crime. But somehow, it doesn’t look like the apologies will be coming anytime soon.

The same people who openly mocked the idea of p rice rigging a year or two ago now want us to believe that this sort of cheating is really just par for the course in any market. Bankers will be bankers – we should just expect they will occasionally cheat a little. They want everyone to know these markets are free and fair for the most part. At this point, I think it’s safe to assume that no amount of evidence could persuade them otherwise.

Why do you think people still refuse to acknowledge just how crooked these markets are? Wouldn’t most of these manipulation skeptics be better off if the markets were actually free and fair?

Chris Powell: Well, many people in the markets, Mike, and many people in the mainstream financial news media are dependent on ignoring this stuff. If people begin to realize that the markets are so heavily rigged, they’re not going to participate in them as much, and certainly, they’re not going to pay as much attention to the traditional market analysis that we’re provided with people trying to compare chart patterns and drawing lines and waves and everything like that.

Well, if we’re really just looking at holograms because people behind the scenes are rigging the markets, people, they’re going to lose faith in a lot of businesses and a lot of analysts. And I certainly understand why people are very reluctant to acknowledge this stuff. If they acknowledge it, they’re basically admitting that everything they’ve been telling people for years has been a lie or at least erroneous.

But we’re, of course, enjoying the Justice Department’s description of the JP Morgan Chase metals desk as a criminal organization, and we’re enjoying all the indictments of the traders at these big investment banks. But we’re the first to admit that we’ve been going after bigger game for a long time.

As reprehensible as this market rigging by the investment banks is, we’ve been concentrating on the market rigging by governments and central banks, and I think the indictments we’ve had so far are probably just a distant reflection of the rigging by the governments and central banks. I think that some of this rigging that has resulted in indictments and convictions is possibly front-running of government trades that have been undertaken by the investment banks fronting for central banks and governments.

But it’s not the big stuff we’re after. We’re after exposing the interventions of governments and central banks, particularly in the gold and silver markets. But with all this repo stuff going on, there’s no telling if there’s any end to their rigging.

Mike Gleason: Taking a step back here for people that may be somewhat new to this issue of this idea of manipulation of the gold and silver markets, give us a brief synopsis of why it is that you believe governments would have an incentive to rig gold and silver prices, suppress the prices. Talk about that if you would.

Chris Powell: Well, gold and silver are traditionally currencies. They’re the oldest currencies on the planet, and they compete with government currencies. They also have a powerful impact on the valuation of government currencies; on the price of government bonds; on interest rates; on the price of all other financial assets since financial assets all compete against each other for public investment.

Now, governments for many years have had an interest, and admitted their interest, in controlling the prices of the monetary metals. That’s what the gold standard was about. It was governments setting the gold price. Now, back when the government had a gold standard, gold was far more independent in its pricing because the public could pretty much control the gold price by deciding how much it thought government currencies were worth.

That was really before the surreptitious intervention in the markets came about. We’ve collected a lot of admissions by central bankers and government officials, things in government archives, memoirs written by central bankers, documents that are on the internet sites of governments showing that the gold price suppression is longstanding Western central bank policy. That’s all compiled in our documentation archive at the GATA internet site.

This is policy. This is not a conspiracy theory. We have admissions from various central bankers. Probably the best known one is Alan Greenspan who testified to Congress in 1998 that the purpose of gold leasing by central banks was to keep the gold price down when it was rising. The archives are full of this stuff, and we seldom get challenged on it because it’s just so overwhelming.

Mike Gleason: Alan Greenspan is an interesting case study. I don’t know that you’d call him a whistleblower necessarily, but he’s getting advanced in his years, and he’s starting to reveal some of the secrets of the central banks. There’s a guy who seemed to be somewhat of an advocate for gold before he became the Fed chairman, and then now, after he’s been removed from that role or taken a step back from that role and nearing retirement now, it seems like he’s sort of back to being a somewhat of an advocate for gold. It’s kind of an interesting telltale. Too bad he couldn’t have had any of those convictions while he was actually in power.

Precious metals mining companies that have long been a disappointment to us when it comes to this effort to reform these markets. When prices are rigged artificially lower, it hurts their bottom line, but with one or two exceptions, the miners have had almost nothing to say on the subject.

Now that banks have been caught running this scheme, we wonder if the miners will finally take some action. They have to be among the biggest victims of these crimes. What do you think? Are they going to step up now and demand some serious reforms? Are you seeing any movement there? Because I know we’ve talked with you in the past about this, and you’ve always expressed a lot of disappointment about the lack of an uproar among the mining executive community. Any change there?

Chris Powell: I’ve not seen any substantial reaction from the gold and silver miners to the convictions and indictments of the investment bank people for spoofing the monetary metals markets. And I understand it, Mike. The problem is the mining companies are afraid. They’re afraid of their governments. They’re afraid of their banks.

Mining is very probably the most capital intensive industry in the world. It takes hundreds of millions of dollars, sometimes billions of dollars, to discover and put a mine into production. And in doing that, mining companies are totally at the mercy of governments for first, their mining patents, then their environmental regulations and their royalty requirements to governments.

And since the industry is so capital-intensive, most mining companies are very dependent on the very biggest banks. And the very biggest banks, of course, are very directly government agents in the markets. Most of them are primary dealers and U.S. treasury securities and have very intimate relations with the U.S. government, which certainly does not want the monetary metals prices rising uncontrollably and displacing government currencies in the financial system.

The mining companies are terribly vulnerable to governments. They’re terribly vulnerable to the investment banks, which are central bank agents. And I understand why they do not want to support GATA, and they don’t want to endorse our complaints about the rigging of the markets: because they just figure the governments and their own bankers will come down on them and impair their business. But I would still suggest to them, do you want to die on your feet, or do you want to die on your knees? Because this industry is in a very strange position right now.

I think the objective of central banking and governments is to keep the monetary metals prices at pretty much subsistence level. They don’t want the monetary metals miners to go out of business. They need a supply constantly coming into the market, but they don’t want the price to be so attractive that people start investing in monetary metals as international reserve currencies and moving out of government currencies. The governments have got the miners at subsistence levels, and I don’t think they are very eagerly going to let the miners become substantially profitable in an attractive industry for investment, at least not until the government and central bank rigging is exposed.

Mike Gleason: Well-stated there, and certainly, you’ve got to really commend a guy like Keith Neumeyer, First Majestic Silver. I know there’s maybe one or two others who are kind of sticking their neck out there. You just sort of laid out a very good case as to why a lot of these guys don’t do that.

They have a lot to lose. They’re beholden to the banks that that loan them money for their projects and, of course, the government who approves their environmental cases and so forth. It’s kind of an interesting and difficult situation.

Chris Powell: Neumeyer has been very courageous, and he has put himself at risk. Eric Sprott is another. There are not too many like them. There’s a few others, but there’s not too many like them.

Mike Gleason: Agreed. Has GATA ever been called to testify, to provide any evidence in any of these criminal cases that are underway? Do you have a sense of whether prosecutors are on the right track?

Chris Powell: We’ve provided information to some of the lawyers involved in the class action lawsuits against the investment banks for rigging the monetary metals markets. I don’t think we’ve had any contact with prosecutors though.

All the documentation we have amassed and publicized is out in the open on the documentation page of our internet site. That’s accessible to everybody. I don’t know if prosecutors have ever looked at it. I know that the Russian government has been aware of GATA’s work since at least 2004 because a Russian central banker in 2004 gave a speech to the London Bullion Market association meeting in Moscow that summer, and the only words of English he spoke were “Gold Anti-Trust Action Committee,” which was pretty interesting to us because to the best of our knowledge, we’d never had any contact with anybody in Russia.

But it turned out the bank of Russia was watching us very closely. We know from the WikiLeaks cables from the U.S. Embassy in Beijing to the State Department in Washington that the Chinese government is very aware of gold price suppression by Western central banks because it’s often been written about in the government-controlled news organizations in China.

And the U.S. Embassy in Beijing translated a bunch of those reports and cabled them back to the State Department in Washington. And then when WikiLeaks got a hold of them some years ago, it was revealed that China knows all about the Western gold price suppression scheme and has reported it and complained about it in government publications in China.

The Chinese government knows all about gold price suppression by the Western central banks, and the U.S. government knows that China knows all about it because of the WikiLeaks cables of the translations that came from Beijing to the State Department. So, we know that gold price suppression is widely understood on an official basis around the world.

Mike Gleason: Well, as we begin to wrap up here, Chris, summarize the state of the state, if you will, with respect to the likelihood of the metals market manipulation coming to an end one day or at least the progress that’s being made on that front. Where are we here, and what are the prospects of finally achieving these free and fair markets that we all want so badly? And are you feeling any better about the possibility of seeing that one day now compared to, say, where you felt two to three years ago?

Chris Powell: Well, I have to admit being surprised that they’ve been able to pull it off for at least the 20 years that GATA’s been in business. It’s been very obvious to us what’s been going on. I think we’ve had the dispositive documentation in hand for at least 17 or 18 of our 20 years.

I am a little more encouraged over the last five or six months or so because there’s an obvious firmness, I think, to the gold and silver markets now. The interventional smash downs of the monetary metals prices are not having the effect they used to have. The central banks used to be able to knock down the gold price by 20, 30, 40, 50 dollars for months at a time.

And they haven’t been able to do that lately. I think it’s because the central banking cartel has split up on the gold front. We know a whole bunch of central banks have been buying gold lately. The central banks have switched in the last several years from net sellers to net buyers. There’s, I think, a lot of circumstantial evidence that China and Russia particularly are buying gold heavily in London.

So, I’m encouraged. I suspect we may be in a situation similar to the last months of the London Gold Pool back in 1967 and 1968, similar insofar as back then, the central bank gold cartel was dividing. There was division among the participants in the London Gold Pool.

France wasn’t playing along anymore. France started exchanging dollars for gold, and ordinary investment houses began to realize that the gold reserves at the participating banks were being run down and probably could not hold out much longer. I think we’re very likely in a similar situation now because central banks are now net buyers instead of net sellers, and they’re not telling us everything they’re buying.

I’m sure China has bought far more than it’s reporting. I’m hopeful about going on living for a few more years, but I can’t guarantee that anybody of my age is going to see the end of gold price suppression. I suspect we will have a day, perhaps not too distant, when the central banks have an international currency revaluation and revalue gold substantially upwards to re-liquify themselves after the redistribution of gold reserves around the world. And I think they may begin another half century of gold price control at a much more sustainable level, a much higher price.

Mike Gleason: You do have to be encouraged, just focusing on one thing that you said there, about how they are not getting the result that they used to be able to get when it comes to dragging down the price that they once did. So, they may be losing a little bit of control, and obviously, the whole game is sort of held up by confidence.

Maybe you’ve got nations that are going to start to scramble if they do see the end of fiat or the beginning of the end; that maybe there’s a mad dash into physical gold, and at that point, all bets are off. Maybe they won’t worry about colluding anymore and just fend for themselves.

Chris Powell: There’s so much central bank clamor now for devaluation of all the currencies, and there’s so much resentment of the weaponization of the dollar. All this is practically screaming for gold and silver, so I am hopeful, Mike.

Mike Gleason: Well, excellent stuff, Chris. We’ll leave it there. We certainly appreciate the time and your insights as always. Now, before we let you go though, please tell our listeners how they can get more information and learn more and follow GATA, and then also how they can get involved and maybe even donate to GATA so your organization can continue to fight this important fight.

Chris Powell: Well, thanks, Mike. Our internet site is gata.org. We are a tax-exempt educational and civil rights organization recognized as tax-exempt by the U.S. Internal Revenue Service. We’re a 501(c)(3) organization under the U.S. Internal Revenue Code.

Contributions to us are federally tax-exempt in the United States. There’s a mechanism on our internet site for accepting donations. I’m grateful for anything. Anybody who wants to send us a dollar will be sending us more than we’ve ever gotten from Newmont Mining or Barrick Gold or some of those big guys.

Even the hedge fund managers around the world who are outspoken in favor of gold, they don’t want to have anything to do with us because I think they’re afraid that we’ll put them in even more trouble with the government. We also have a mailing list. We try to put out several dispatches a day on subjects of interest to gold investors and people who aspire to free markets.

You can enroll for our dispatches on our mailing list on our homepage at gata.org. There’s no charge for that. We just want to get our word out, and we’re very grateful to anybody who wants to help us.

Mike Gleason: I’m on that list. I get those dispatches regularly, and it’s excellent stuff and a great way to stay up on this issue in particular and others as well related to gold and silver.

Well, we appreciate you coming on and spending time with us, Chris. Look forward to catching up with you again down the road, and I hope you enjoy your weekend. Take care, my friend.

Chris Powell: Thank you, Mike.

Mike Gleason: Thanks again to Chris Powell at the Gold Anti-Trust Action Committee. Again, check out gata.org for more information. They publish a lot of great content there at GATA, and we highly recommend everyone check that out. You can also make a tax-deductible donation there on the GATA site as well. Again, gata.org is where you can do all that.

 

Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 50,000 customers. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.

 

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The Fed’s “Not QE” Is Morphing into “QE4ever”

Published here: http://goldsilverworlds.com/money-currency/the-feds-not-qe-is-morphing-into-qe4ever/

Another week, another new and expanded repo market intervention by the Federal Reserve. On Thursday, the Federal Reserve Bank of New York intervened twice with fresh liquidity injections. Fed officials raised their offerings for overnight repos up from $75 billion to a staggering $120 billion.

This comes on top of the $60 billion per month in Treasury bill purchases that will extend well into next year and possibly beyond. Over the past month alone, the Fed’s balance sheet has soared by $200 billion.

You might think numbers like these should be quite alarming to investors and to anyone who holds U.S. dollars. But the strange thing about these Fed interventions is that hardly anyone seems alarmed. There’s no sense of rising risk being priced into the stock market. And the mainstream media is barely even mentioning these massive transfers of paper wealth.

Perhaps after multiple rounds of Quantitative Easing over the past decade, this latest spate of money printing is just part of the new normal. But we remain concerned that something very abnormal could be unfolding.

At the very least, there is a persistent liquidity shortage in overnight lending markets. And Fed officials obviously feared that it could cause the banking system to freeze up and money market funds to fail.

We don’t yet have all the answers as to what’s really going on in the bowels of these institutional markets, but we will continue to question the line the Fed is putting out. When these repo market interventions were first announced, our research team here at Money Metals, as well as our recent guest experts on this podcast, immediately suspected a new Quantitative Easing program was beginning.

Now, despite the Fed chairman Jerome Powell’s repeated denials, it’s pretty apparent we were right.

It is indeed QE, and we can only guess as to how much bigger it will get in the weeks to come. In fact, it’s looking more and more like “QE4ever.” Fed money printing certainly does carry implications for higher rates of price inflation down the road in the real economy.

The inflationary effects of previous QEs were largely absorbed by capital markets and stunted by relative weakness in the economy. This time around the Fed’s balance sheet surge is starting with the stock market at extremely elevated levels and many conventional economic indicators coming in strong.

We wouldn’t be surprised if precious metals markets soon begin to reflect rising inflation risk.

This week gold and silver markets showed signs of moving toward an upside breakout. On Thursday, gold prices rallied above the $1,500 level while silver rallied up to its 50-day moving average.

Looking ahead to next week, metals investors will await the Fed’s decision on interest rates at its policy meeting. Fed policymakers appear likely to roll out another rate cut. It will come on top of all their other recent liquidity injections.

The risk for gold and silver markets is that Wall Street celebrates by pushing the stock market to a record high. If that happens, it could temporarily quell buying interest in the metals. But it won’t necessarily trigger any kind of big sell-off. A rising sea of liquidity does ultimately tend to lift all boats.

Precious metals markets have performed well overall this year on the heels of major multi-year breakouts. The consolidation phase over the past few weeks in no way undermines those breakouts or their longer-term bullish implications.

Looking ahead to next year, we can expect a very polarized and at times very nasty political campaign to begin moving markets once it’s clear who the Democrat nominee will be. Right now the momentum within the radicalized Democrat voter base is behind Elizabeth Warren.

Given Warren’s plans to jack up taxes and break up large American companies, some on Wall Street fear a Warren victory would crash the stock market by 20% or more.

One of Warren’s signature campaign promises is to impose a “wealth tax.” It would introduce a dangerous new concept into the tax code – namely that the government gets to tax not just capital gains on investments, but also the market value of investments and other household assets taken together.

A wealth tax would force you to account for the value of all your assets – from your financial accounts to your home, your car, your personal possessions, and your gold coins.

Under current law, gold and silver coins generate no tax liabilities or reporting requirements until they are sold. Under a wealth tax, gold coins and other tangible assets in your possession could get an annual scalping by the government.

Regardless of whether such a proposal ever gets enshrined into law, and regardless of who wins next year’s election, the government will be looking for new ways to raise revenues as budget deficits expand. One way to hedge against a Warren wealth tax or a Biden capital gains tax hike is by moving assets into a tax-sheltered IRA.

The government can’t tax IRA assets, including IRA-eligible physical precious metals products, until you take distributions. And with a Roth IRA, you may be able to avoid taxes completely – even as tax risks and inflation risks rise.

 

Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 50,000 customers. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.

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Craig Hemke: Ignore the Elliott Wave “Buffoons” Calling for a Gold Crash

Published here: http://goldsilverworlds.com/gold-silver-price-news/craig-hemke-ignore-the-elliott-wave-buffoons-calling-for-a-gold-crash/

Mike Gleason: It is my privilege now to welcome back Craig Hemke of the TF Metals Report. Craig is a well-known name in the metals industry and runs one of the most highly respected websites in our space and provides some of the very best analysis on banking schemes, the flaws of Keynesian economics, and evidence of manipulation in the gold and silver markets that you will find anywhere.

Craig, welcome back, and thanks for joining us again. How are you today?

Craig Hemke: Mike, my friend, it’s always a pleasure. Thanks for the invite.

Mike Gleason: Absolutely. Love to get you back on and thanks for the time. Well, the recent smash in the metals prices was reminiscent to what we saw in the markets in 2016, at least in silver. Prices ran higher up to about $20 an ounce and then got hammered back down where they continued trading in a range between about $14 and $17 until this year’s breakout. Do you think we’ll see the metals once again be put back into their box here or do you think it will be different this time around? I guess that’s the million-dollar question for silver bugs, what do you think?

Craig Hemke: That’s the question everybody has to answer, right? Everybody has to answer that for themselves. Now, I have been, and then you and I have been discussing this all through the year, I’ve been forecasting this year to be like 2010. You recall those conversations, I’m sure Mike. Going back to late last year, all the talk was about rate hikes, right? And all the seven-figure sell side economists and analysts on Wall Street were talking about three to four rate hikes this year and I got in front of that and said, no, no, no. That’s not going to be the case. All the political uncertainty, economic uncertainty, trade wars, all this kind of stuff, it’s going to lead to a loss of confidence that ripples through the economy, not just at the individual level, but at the business level, and you get this slowdown. The central banks cannot afford a slowdown, which is why they’ve worked so hard to keep the plates spinning for 10 years.

So, therefore they were going to reverse policy. You’re going to get rate cuts instead of rate hikes. You’re going to get more QE as well and in the end it looks a lot like 2010 where we entered the year, everybody was talking about great the economy was and there was green shoots and it was a one off that financial crisis, and bliss and joy and rainbow and Skittles for everybody.

As it turned out there was some economic growth in 2010 until about the third quarter and then we began to slow. By the fourth quarter it was negative growth and we entered into a recession beginning in 2011. Of course, the Fed reverse policy, then began QE2. Anyway, anybody that’s been the metals for the last decade knows what happens next point. Well, anyway, we’re on the same path. Like you said, we’ve been trapped in a price range for about six years until we finally broke out back in May. And again, this is following along the path.

Now, here’s the thing. Is this 2010, or as you said, is it 2016 because ’16 saw many of the same underlying fundamentals, if you will. You had the Brexit thing, which is amazingly still talked about three years later, but 2016 was all about a slowing economy, interest rates just collapsing around the globe. We got over $10 trillion in negative yields for the first time and the 10-year note got down to about 1.9, 1.7% even got close to 1.5.

Everybody thought, “Okay, here we go. This is bad.” And gold was rallying, but then the economy recovered and then there was this theme put out there when Trump was elected that, “Oh, now things are going to be great and the dollar is going to soar and all this infrastructure spending and blah, blah, blah. The bond market’s going to burst all.” All that stuff which didn’t come to pass but it reversed everything in 2016. So, ultimately to answer your question, is this like 2016 or is it like 2010?

The bond market selloff last month got everybody worried that this was just like 2016. Interest rates started back up. Gold rolled over. But now here we are reality setting back in in October. We’ve had the PMIs this week which have shown both in the manufacturing and the service sectors, sharp, sharp slowdowns. We’re going to get an employment report on Friday which is likely to come in poor but you never know the way they fabricate the numbers. At any rate, the Fed is going to cut again later on this month. Probably going to have to cut again in December, so we’re not, in my opinion, headed back like we were in 2016. Instead we are headed forward like we were in 2010.

Mike Gleason: We wanted to talk about manipulation in the futures markets. You have been a leading voice on the topic for many years. For a long time people seemed to ignore the evidence or dismissed the whole thing as a few “boys just being boys.” Isolated traders trying here and there to rig a price in their favor. They mocked anyone sounding the alarm as conspiracy theorists. What’s amazing is that still hasn’t changed.

There have been several traders arrested or indicted. Banks have pleaded guilty. Evidence has come out of a scheme that involved multiple people on the trading desks of pretty much all of the major bullion banks. It went on for the better part of a decade and it involved thousands of traders. We know rookie traders underwent training from their superiors on how to cheat. The fact is this fraud was long running, wide ranging and pervasive. Now the Department of Justice may use RICO laws to prosecute these bankers because it was organized crime. What do you make of the people who are still claiming the futures markets are basically fair and honest?

Craig Hemke: Well, there’s a lot in your question that we probably need to talk about. I’ll get to the Baghdad Bob newsletter writers in a second. The RICO statutes are important because RICO statutes were written so that you could get the Don of the mafia family, not just the assassin. The Don might order Jimmy No Knees to go take out Frankie the Tongue and then he does. And then maybe Jimmy No Knees is the guy that gets prosecuted. Well, the RICO laws allow you to go after the Don and that’s what we’re seeing now. We had under guys, just simple vice presidents get convicted. And you’ve got this guy, Edmonds who’s now been convicted, but he hasn’t been sentenced yet. He’s obviously singing like a songbird and implicating his superiors. So, now the guys that have been indicted include this guy, Nowak, who was the head of precious metals trading for JPMorgan.

Eventually, this is probably going to lead up to Blythe Masters who was Nowak’s boss during the period in question that the Department of Justice has been looking at… and then even beyond there perhaps, but look at it, whatever, that’s fine… but where these Baghdad Bob types get lost, these traders, these Elliot wave counters, whatever, what they don’t understand is they just think gold is this thing, this dot that moves on the screen. And everybody cheats and everybody tries to spoof and help their trading desk and all that kind of stuff.

But man, gold and silver are different because these banks, the term you use is correct, they are bullion banks. What does that mean? They are the banks that are on the hook for maintaining the physical market in London. Everybody knows there’s no physical delivery in New York. This physical market, to what extent it’s actually physical, it’s not just unallocated gold getting shifted back and forth across the line in the vault, but they’re the ones that are responsible. They’re the one that are on the hook. They’re the ones that have the leases that they have to match up almost on a daily basis. And so where the conspiracy lies that just that none of these losers who just simply are generalists, that you know, they don’t understand these markets but they think they’re know-it-all because they have to convince their dupe subscribers that they’re know-it-alls.

What these guys miss out on is that the trading desks that JPMorgan in this example, trading desk worked hand in glove with the physical desk in London. That’s where the conspiracy is. So, say the physical desk in London has an order that they took a few weeks back and they’ve got to fill, they’ve got to get a ton, 50,000 ounces, whatever. And they’ve got to fill that order and they don’t have it, right? So they’ve got to go buy it. Well, first they got to get that metal shook free, so, they’ve got to convince somebody to sell, but at the same time they might want to save a few bucks when buying that metal and so they get the desk in New York to rig the price lower.

The guy in London calls up Michael Nowak and says, “Mike, hey, I really could use price down $10 from here. Could you take care of that for me?” Mike gets Edmonds on the phone. They start spoofing away, boom. And you get these waterfall declines where we all sit back and scratch your head going, wait a second. Who in their right mind sells 10,000 contracts in 30 seconds.

So anyway, to your newsletter writers, like you said, and you got, you know who these buffoons are. Look, they’ve got so much invested, they got their flag planted in the ground going back years saying, “Well, there’s no manipulation,” because if they admit there’s manipulation in any market, their subscribers are going to go, “Well what’s the point of your little wave counting service if there’s manipulation? Geez, what good is that?” So then they become like Baghdad Bob. I may be revealing my age here, but folks that were around 15 years ago and they remember the second Iraq war remember Baghdad Bob was that Iraqi defense ministry guy, right?

Mike Gleason: Sure. There’s nothing to see here, right? “Nothing to see.”

Craig Hemke: Right, exactly. There were all these, the American tanks are coming at him from every direction. Every morning he’d get up and say, “Oh no, everything’s fine. Don’t worry about it. We’re good. No, the great leader’s got everything under control.” Well, he was so vested in saying that it didn’t even matter how patently false that was. He was going to keep saying it because he couldn’t turn around at that point and that’s what these cats are doing.

Who cares? I mean, seriously, I can’t believe I’ve just wasted time talking about it. Who gives a darn what some of these guys have to say? It doesn’t matter. It doesn’t matter what some newsletter writer, Elliot wave counter says. It doesn’t. What matters going forward is that one, this news is getting out. The Department of Justice is on the case. The authorities in London are on the case.

Eventually, this is going to get to the point where it’s just no longer worth the trouble for the bullion banks to stay in this business. So we’re headed in that direction. Outside of that, what really matters is that the global economy’s in the tank. The U.S. economy continues to slow. The central bankers are reversing course, and this demand for gold in all its forms is only going to continue to grow in the months ahead.

Mike Gleason: Some of the recent news here over the last month has been the Fed’s work in the repo markets injecting billions and billions of dollars into that overnight lending market and it doesn’t seem like it’s had that much of an effect on the price in the various assets whether it’s the stock market, although it has taken it on the chin here this week, maybe it’s a lag effect there, but certainly metals have not rallied like you would have expected. What do you have to say about all that?

Craig Hemke: Well, there’s a little bit of that I guess on the safe haven, if you want to call it that bit in the bond market. And again, I can’t stress enough how important lower rates are and rising bond prices are to sustaining this rally in gold. Again, it was when the bond market kind of rolled over with a very sharp correction in early and mid-September, that gold rolled over too. And so getting the bond market chugging back in a bullish direction is important to getting gold chugging back as well. And there are some key technical levels that gold’s going to cross sometime before the end of the year that’s going to really generate its own bit of excitement. But at the end of the day it’s all about the bond market and so you’ve got these liquidity concerns and people worried about what this might mean until you get to kind of a safe-haven bid.

And we’re seeing the two-year note as an example, rally harder than the 10-year note. Now the 10 year’s all the way back down to 1.55. It was 1.90 at the last Fed meeting not even three weeks ago. The two-year note has fallen even further. It was 1.80 and now today is like 1.37. So, think about that… the Fed cuts, the Fed funds rate tries to say that they’re now neutral because at the time they cut the Fed funds to 1.90 and that’s what the 10-year was. The two year was 1.80. Basically you had a flat yield curve from overnight after 10 years. Well, in the two or three weeks since, you’ve got 1.90 Fed funds and now you’ve got 1.40 two-year and 1.50 for a 10 year.

That assures you, provided things don’t completely turn in the next couple of weeks, that assures you the Fed’s going to cut again at the next FOMC which is around about Halloween four weeks from now. In fact, the odds of that are now 92% but it also means you’re probably going to get another Fed cut in December. Well, you go back two weeks ago we were told the Fed’s now neutral and that was reason why gold was going to keep going lower and all this kind of stuff. Well it’s not.

Getting back to your original question, Mike, this liquidity thing is a real concern. The Fed with their policies over the last couple of years, has sparked a really kind of a dollar shortage crisis, if you will, and it’s revealing itself in all these different ways. One of them is this need now for almost a permanent repo facility. They are going to act to create more dollars to try to fend in this off because what else can they do? And again, you put all those pieces together and you realize, “Oh, you know what? I think I need to buy the dips because prices are going higher, not lower for gold.”

Mike Gleason: Speaking of that, what are some of those key technical levels that you’re looking for to maybe be taken out later in this, later in the year? What are you expecting for metals over the last quarter?

Craig Hemke: Well, on the daily chart, let’s start there, because we’ve had now a series of two lower highs and lower lows. There’s a trend line there that anybody can see. In fact, there’s a pennant on the daily chart that we bounced off the lower band back on Monday. First, we got to get above on a closing basis, probably $1,530 to 35. How soon that happens, anybody’s guess, but it’s going to happen. More important is that kind of the long-term look of these charts, explain that why in just a second. And the long-term it’s extremely positive. When you get a weekly close in the front month contract, which is now December, you get a weekly close above $1,550. Now we tried twice at the end of August and in early September and we traded above there intra week but we can never close above there.

The significance of closing above there is that level held as a floor for 19 months at the end of that previous bull market. And so a move back above $1,550 on a weekly closing basis would really open a lot of eyes. So, now to the point, why does that even matter? “Manipulation, that doesn’t matter. Make TA worthless,” and all that stuff. Yeah, look, you may think that, whatever, but I can assure you again we get back to these people that don’t think there’s any manipulation at all.

You think this is a regular hedge fund manager, institutional money manager, pension fund manager, whatever. They look at this stuff. They look at charts. They look at price trends. They look at the data they get on their screen at the end of every quarter, at the end of the year that says, “Here’s the best performing sector,” and then all of a sudden you look at chart and you go, “Wow, look at this. This gold, not only are the miners, is the best performing sector in the precious metals and hard assets doing great. Now look at the breakout on this chart back above $1,550… oh my gosh, I better start putting some money there.”

And it’s when that money starts to flow into the sector, all these trillions of dollars that have been created by the central banks in the last 10 years, we get just a little piece of that and we’re going to see things that are going to blow your doors off. And what I mean by that is, again, I’m sorry for these long-winded answers, Mike, but had too much coffee today. Here’s the thing. I got this little nugget from Rick Rule when I did a little panel with him, I don’t know, a couple months ago.

Everybody knows, you know, everybody hates the sector. You’ve seen the Grant Williams thing about how nobody cares, and everybody hates the sector and that’s absolutely true. Over the last 40 years, the amount of global asset allocation to the precious metals in all their forms, whether it’s the metals, the futures contracts, there weren’t ETFs 40 years ago, that kind of thing… but there were mining shares. It ranged from high of 8% back in 1980 to as low as one half of 1% really each of the last couple of years. Now you got to figure that’s about as low as going to go. The median is 2 1/2%.

No, I don’t know if we’ll get back, who knows, but let’s just say we do, just for fun. We go back to 2 1/2% global asset allocation, the precious metals, which doesn’t seem to be very much. We’re at one half of 1%. That would mean five times the investible assets, dollars, euro, yen, whatever looking for a home. Looking for an investment in the sector so they can get some exposure, whether that’s futures contracts, ETFs, unallocated metal, some mint or the mining share… you get five times the amount of cash chasing really a finite number of investment opportunities, prices are going to go up.

It doesn’t matter what your little wave counts says or some cycle or whatever, knock yourself out. You just get a wad of cash chasing a finite number of assets, prices go up. I mean that’s just how it works. And so there’s some importance to breaking these technical milestones. There’s importance in keeping this trend going because it begins to feed on itself. And that’s really what I expect to happen. Maybe not right away later this year, there’s only three months left, but certainly next.

Mike Gleason: Yeah. Obviously the self-fulfilling prophecy of the technical side of things, it matters because people think it matters as you say.

Craig Hemke: Yeah, no, that’s true. And see that’s the funny thing. Look, I do, you can call it technical analysis, really it’s more of a manipulation analysis because we know the banks use the technicals against the traders to try to flush them out by breaking a moving average or paint the chart with a head and shoulder top or whatever. But what’s so odd, and here I am talking about these wave counters again, but look, when I broke into the business in 1990 there was some validity to a technical analysis, maybe on a small scale because everybody was looking at the same charts and like you said, it becomes kind of a self-fulfilling thing. If everybody’s looking at the price in a pennant, in a wedge, in a moving average and all that kind of stuff in a small, little market and it breaks out and everybody moves at once then it kind of becomes self-fulfilling.

But, these guys still treat this technical analysis as if it all operates in a vacuum. I see on Twitter everyday people try to say, “Well, wave three of sub wave Z microwave X means that we’re going to go down to $1,330 (in gold).” I’m like, “Not if the bond market keeps rallying.” I mean these things don’t happen in a vacuum. They don’t happen independently. You can’t look at gold on the chart and go, “Well I’ve got this wave count and that’s it.” No, no.

If the employment report shows a contraction in jobs on Friday and the bond market rallies 10 basis points, it doesn’t matter what your silly little wave count said was going to happen. In 2020, man, with everything connected by computer and everything done by pre-programmed algo and all of this cash sloshing around the planet, and the central bank intervention and all this kind of stuff, you simply cannot use your little tools from 30 years ago to try to make predictions about where things are headed. It just doesn’t … I’m sorry. Here I am just ranting. I apologize, Mike.

Mike Gleason: No problem. It’s well put. It’s a different market now than it was a decade or two ago and people do need to recognize that. Well, we’ll leave it there for today, Craig. Thanks very much for your time. Before we go though, let’s hear more about the TF Metals Report and have you tell people what it is that they’ll find if they visit your site.

Craig Hemke: Well, thank you Mike. It’s really a community like none other in that we’ve got people from all around the world, of all different political stripes, and net worth categories and all that kind of stuff. But we all interact. The first rule of the site is treat others how you want to be treated, so it’s not like your standard website where people blast away and the trolls show up and just try light threads on fire and that kind of stuff.

And so the real value is the interaction amongst the members there. I do my analysis, my podcast every day, post every morning, and then to be a part of that it’s 12 bucks a month, so it’s 40 cents a day. So, it’s not like some exorbitant thing like these newsletter writers charge. And I want to stress, what’s really important here is that people need to understand how these things all relate here in 2019 and now heading into an election year and all that stuff and the efforts that the central banks have made since 2009 to make it appear that they’ve got control. To make it appear, “Oh, no, everything’s fine, man. The banks are all re-liquefied. Everything’s great.”

No, it’s not. No, it’s not. And it was all due to eventually come to an end and you can’t keep the plate spinning forever and that’s where we’re headed now. The economies are slowing globally and the central banks are going to react with the only tools that they know. That’s why gold is rallying. That’s why silver is eventually going to move to catch up. And it’s just vital that people understand this so that you don’t go, you don’t see $20 silver and think, “Yippee, I can finally sell all the silver I bought six years ago,” and what, get dollars for it? And then what are you going to do with those dollars, man? Every smart holder of dollar reserves in the world is selling dollars and buying hard assets. I’m talking like the Russian Central Bank and the Chinese and the Indians and the like. These are the kinds of things we talk about at TF Metals Report. And I think, like I said, if we can keep you focused on the big picture, then I think it’s worth the 40 cents a day.

Mike Gleason: Yeah, absolutely. Highly recommend it. We look at it very closely in our office here. It’s fantastic information. You have a great way of connecting those dots and showing people how things are so inter-related and connected and parsing through all that and I think people just heard that here in this discussion and I hope they’ll check it out.

Well, thanks again, Craig. Appreciate all the time. Have a great weekend. Keep up the great work there at TF Metals Report, and we’ll talk to you again down the road. Take care.

Craig Hemke: Mike, it’s my pleasure. I look forward to seeing where prices are the next time we talk.

Mike Gleason: Well, that will do it for this week, thanks again to Craig Hemke. The site is TFMetalsReport.com, definitely a fantastic source for all things precious metals and a whole lot more. We urge you to check that out so you can get some of the very best commentary on the metals markets that you will find anywhere.

 

Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 50,000 customers. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.

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Yes, Gold “Just Sits There” and That’s Quite a Feat

Published here: http://goldsilverworlds.com/gold-silver-price-news/yes-gold-just-sits-there-and-thats-quite-a-feat/

The Wall Street Journal’s Jason Zweig famously referred to gold as a “Pet Rock” in 2015. He was blasted by people who understand that gold is no passing fad, and it serves some very important roles in an investment portfolio.

The valuable roles played by gold have been well covered here. It’s a hedge against both inflation and deflation, it represents true diversification for portfolios stuffed with conventional securities, and it is a way of protecting wealth during tumultuous times.

But Jason Zweig, Warren Buffett and other notable gold critics who complain about the metal “just sitting there” fail to understand the flaw in their basic assertion.

What they believe to be a potent argument against gold is, itself, one of its great attributes. An asset which can “just sit there” forever, largely impervious to outside political and economic forces, is extraordinary.

A gold coin or bar never degrades, is always valuable and is uniquely insulated from risk. What other asset can deliver such assurances over the next 100 years?

Not Stocks…

Warren Buffet and Jason Zweig are big proponents of stocks. However, they will have a lot of trouble choosing a company today that will still have value 100 years from now.

Most of the top publicly traded companies from a century ago are gone and forgotten.

In order to grow an equity portfolio, investors have to take on significant risk. They must actively manage which shares are held or buy an index fund. While an index seems like the safer bet, there is no certainty that that an index purchased today will still be functioning well into the next century.

Over that time scale it isn’t even clear whether the current financial system, laws, and property rights will persist uninterrupted. Meanwhile, a privately held gold coin can sit there hidden away, independent of all these risks.

Not Real Estate…

Land is tangible and its supply is limited, two important characteristics which it shares with gold. However, it is not private, portable, or liquid. Taxing authorities can, and probably will, continue taking full advantage of the fact that property owners can neither hide nor escape their purview.

Landowners who intend to hold for the next hundred years must also accept geopolitical risk. There is no telling when, or if, the nation might succumb to the forces of socialism and property rights disappear.

Investment real estate might be a winner during normal times, but, over the next ten decades, that is by no means a given.

Not Bitcoin…

Cryptocurrency offers some promise, and there are many reasons to hope it succeeds. There is nothing the world needs more than honest money, and crypto has that potential.

However, Bitcoin and other tokens should be viewed as technology start-ups. The amount of risk in picking a “coin” and holding it over the long haul is exceptionally high.

 

There are major hurdles for the technology to leap in terms of scaling. And there are lots of tokens competing for adoption. Some may well succeed. Many, if not most, are likely to fail in just the next few years.

Picking long-term winners and losers will be very hard to do, particularly given the entire technology landscape continues to evolve.

Many proponents insist that Bitcoin is already a great store of value. That is a gross mischaracterization. There is far too much risk for that to be true. It may never be true.

Not Dollars, Not Bonds…

Gold, which “just sits there” retaining value over time, looks even more compelling if the alternative is holding cash which is guaranteed to depreciate. It looks downright irresistible compared to something like government bonds redeemable in the fiat currency of some insolvent government.

Nations such as Austria, Argentina, and Mexico have begun issuing “ultra-long” 100-year bonds. Officials at the U.S. Treasury Department are thinking about it. We doubt investors buying these instruments have any intention of sitting on them for the next hundred years.

They would have to be crazy. The only asset worth wagering on over that time scale is gold.

 

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

 

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Bill Holter: Credit Seizure Could Eventually Shut Down Supply Chains

Published here: http://goldsilverworlds.com/gold-silver-insights/bill-holter-credit-seizure-could-eventually-shut-down-supply-chains/

Futures Market Failure to Someday Trigger Run on Gold/Silver

Listen to the Podcast Audio: Click Here

 Mike Gleason: It is my privilege now to welcome in Bill Holter of JSMineset and the Holter-Sinclair Collaboration. Since leaving Wall Street more than a decade ago, Bill has made a name for himself as an astute and highly respected market commentator, writer and has teamed up with Jim Sinclair to help others discover the inherent dangers of our debt based economy and how to protect yourself against it.

Bill, it’s great to have you back and I very much appreciate the time today. Welcome.

Bill Holter: Thanks for having me, Mike.

Mike Gleason: Well Bill, let’s talk for a minute about what the Fed has been up to. They announced some intervention in the repo markets late last month. The program was initially sold as something very short term, there was absolutely nothing to worry about. Now that program has been extended through at least January and the Fed is seeing daily demand for short-term loans of $50 to $80 billion. Again, that’s per day. We know lying is part of the job description at the Fed. It sure seems like something serious is going on when banks start charging one another huge interest rates, or stopped doing this short term, fully collateralized lending altogether. Something is definitely rotten, but the markets aren’t really reacting. There isn’t that much talk about it in the financial press. What is your best guess about why the Fed has had to step in there with hundreds of billions of dollars? Are they bailing out Deutsche bank, another bank? What’s happening here?

Bill Holter: Well, we don’t know for sure what bank it is. Basically something has broken in the plumbing system or the background, whatever you want to call it. And the result is banks don’t trust each other. There’s demand from a bank or a group of banks that need capital overnight. The reason banks need capital overnight is because they carry positions, if you want to call it the carry trade. They carry positions overnight. They have to finance it. And what’s happened is from bank to bank, there’s a lack of confidence and banks are balking at lending to each other and there you have the rate going higher.

Mike Gleason: On top of the hundreds of billions being pumped into the repo markets, the Fed just announced another 60 billion per month in treasury notes. They haven’t come up with a clever name for this quote new program yet, but we definitely aren’t supposed to call it QE.

Bill Holter: Right, it’s not QE.

Mike Gleason: We’re told this is also just a routine preventative measure, nothing to see here. Well they can say what they want, but one thing should be clear our markets are hopelessly addicted to Fed stimulus. We’ve definitely learned that over the last several years. Quantitative tightening has failed, and the Fed isn’t going to be able to normalize interest rates. The question is how goofy things will get now. They printed a few trillion dollars last time and didn’t get all that much economic growth. What will it be this time, do you think? $10 trillion in bond purchases? Will they finally resort to dropping money from helicopters as Ben Bernanke once suggested? What do you think?

Bill Holter: I have no idea what the number is going to be, but what this basically means is the real economy is not generating enough cashflow to support the financial economy and the Fed by doing QE, by shoving liquidity into the system is trying to make up for the gap that is not being created by the real economy. It shows you; I think the best way to look at it is the financial system is a patient on life support and the central banks, the Fed, the ECB, Bank of Japan, they’re all acting as life support for the financial markets, which without the central banks, the financial markets would basically just, the tents would fold up.

Mike Gleason: Has it surprised you how little response there’s been in the markets in terms of investors showing signs of worry? It’s really quite amazing to us that we haven’t seen this become a bigger story. Did you see it the same way?

Bill Holter: Yeah, I agree wholeheartedly. It’s amazing. I mean the very first day I heard that they had to do overnight repos. It raised eyebrows and then it was day after day and now it’s we’re weeks into it. It tells me something is broken and it’s shocking that nobody cares.

Mike Gleason: Thus far metals markets haven’t responded to the Feds new measures either and the prospects for even more rate cuts. We’re well below the highest put in over the summer. In fact, most of the markets that seem to have met the news of extraordinary measures with a collective shrug, as we just talked about. Stocks have moved a bit higher; 10 year bond yields are actually moving higher as well. The dollar hasn’t done much. What do you make of the market’s response? Talk about metals specifically, you would think that they would maybe be getting a little bit more of a safe haven bid. You almost have to wonder at this point what it will take to rattle investors. Are these markets so tightly controlled now that fundamentals have stopped mattering all together?

Bill Holter: I think that’s right. I think fundamentals they matter less today than at any point in the past. Yes, we should have seen a movement higher in the metals, but rallies have been met with paper. If you look at the big up days, the open interest explodes on up days and that’s not so much from the buy side. That’s the short side meeting the demand with paper as opposed to meeting it with metal.

Mike Gleason: Obviously, the metals investors have been frustrated for a long time. You see this, so you think you’re going to get some kind of a market reaction. You certainly think gold and silver should be getting more of a pop. What does that say to you in terms of the fundamentals? Obviously fundamentals may not have the impact that they once had. Eventually, will they? I mean how does the story end and how does somebody who sees all of these black swans and has so much concern about what’s going on in the financial system and their angling and positioning themselves for all of that risk, how do they benefit in the long run or do they?

Bill Holter: Well, you asked how it ends it. I’m convinced that it ends in a failure to deliver, whether it be out of COMAX or LBMA or wherever. There’s going to be a failure to deliver because there’s more demand than there is global production and the demand for years and years has been met from already mined and hoarded gold that’s leaked into the market as a salve if you will for the price. It seems to me… we’re here in North America, the little guy is burned out. The little guy for really the last year or so in North America has been a seller. There’s not been big demand and that tells me that the average retail person has just thrown up their hands and is surrendering and liquidating… everyone else is making money in the market, so I might as well put my money in the market, which is a huge mistake.

Because once the unwind really begins, it’ll be like a light switch. At some point in time I’m convinced that you’re not going to be able to source gold or silver for fiat. Now you’ll be able to trade gold for silver or silver for gold or gold and silver for something real, but I think metal is going to go into hiding and you’re not going to be able to buy it anywhere near current levels and there will be a point in time I think that you won’t be able to buy metals or source metals at all for fiat until the smoke clears.

Mike Gleason: Yeah. That’s one thing we’ve always said in the metals markets. I mean when you really look at the overall participation among the buying public throughout the world, it is such a small percentage and if we just go from say 1% ownership, whatever it is, it’s a very small fraction.

Bill Holter: I think that’s high to begin with. I think 1% is high, I think it’s under 1%.

Mike Gleason: Yeah. If we just see like a doubling of that or a tripling even in a black swan type of scenario, there’s just not that much metal out there, Bill.

Bill Holter: Right. It’s a supply and demand equation and you know, often people say, “Oh, well you can’t go to a gold standard because there’s not enough gold.” Well, that’s true at current prices, but you markup gold to $10,000, $25,000, pick a number at some number there’s enough gold and that’s where we’re headed is to wherever that clearing number is.

Mike Gleason: Certainly presidential politics are going to be a big story in the year ahead. We’ve got quite the slate of socialists running for the Democratic nomination. In normal times, you would think that the nomination of someone like Elizabeth Warren would mean limit down in the stock markets the next day, but these are hardly normal times. The only thing we can be pretty sure about is that the battle to defeat Trump is going to shift into even higher gear, if that’s even possible. Talk about some of the implications you see for the markets based on the political theater over the next 12 months?

Bill Holter: Well, obviously the next 12 months is going to be a circus. From the left, it’s nothing but impeachment and I actually watched about 10 minutes of the debate last night. It was the first one I watched, and I just turned it off. I mean, you’re talking about blatant socialism, communism, whatever you want to call it, which is an abject failure. If one of the 12 that… well, let’s leave Tulsi Gabbard out of it… but if one of the remaining 11 does become president, it’s pretty much over because you’re looking at income redistribution as opposed to capital formation. We’ll go through a phase of total capital destruction as opposed to what capitalism is which is capital formation.

Mike Gleason: Do you see any real possibility that that could happen? Obviously these are fringe candidates for the most part. Usually when you get to the general election, they’ll come back to center and try to get those moderate voters to swing their way. But is it really just going to come down to the economy? People will vote with their wallets. If the economy is going to remain in a kind of similar spot that it’s in now, 12 months from now, then Trump’s probably fine, but if we go off the proverbial cliff, then he’s in trouble. Is that kind of how you’re viewing it?

Bill Holter: When President Trump back in 2017 started taking ownership of the stock market, I wrote and had done interviews saying that that was very, very dangerous. He should not take ownership of the stock market simply because within the four years I didn’t see even a possibility that it could be held together. So here we are, not quite three years, we’ve got another year to go. Yeah, I do see that as a danger. I’m also on record as saying that none of the current candidates from the left will be the eventual nominee. I think someone else is going to come in. If I had to guess, it might be Michelle Obama. That’s just a wild dart right there, but I don’t think that any of the current candidates will be the nominee.

Mike Gleason: Yeah, interesting theory. I’ve seen that elsewhere. Michael Bloomberg I know is as a name that some people have thrown around too. But yeah, it’ll be a very interesting theater for sure.

Well, Bill, before we go, I want to ask you to comment on any of the other stories you think investors need to be watching here and then also comment if you would, on whether any of the recent market reaction to everything we’ve just been talking about here today, perhaps has made you rethink your belief about the importance of owning precious metals or has it given you more conviction about that? Give us your thoughts about any or all of that as we wrap up today, if you would.

Bill Holter: Market action, well, you’re always rethinking. I mean you come to a conclusion and then you try to break your conclusion. You come at it from a hundred different angles and I’ve done that over years and years and mathematically, pure logic says that if they’re printing paper for free, it doesn’t have any value. And if they’re digging gold and silver up out of the ground and it takes capital, labor and equipment to do that, it has value. My premise for years now has been this is a credit problem. It’s a credit bubble that has been created over, well literally over my lifetime since 1960 say. The world runs on credit and I actually started writing a short article, What if Everyone’s Credit is Ruined. And that’s what I think is going to happen.

I think you’re going to see a credit event where credit basically ceases because you have distrust from counterparty to counterparty and you get a disruption in credit and then our everyday life is disrupted. I’ve said this probably, gosh, I don’t know, 50 or a hundred times in interviews and articles that if there’s an interruption in credit, you’re going to go to Walmart and find that if it is open, there’s nothing on the shelves because there’s not little elves in the back room that make loaves of bread or shoes or whatever. For a loaf of bread, there’s like seven or eight uses of credit from the wheat field to the shelf. And if any of those instances of credit get shut off, the loaf of bread doesn’t make it to the store. So, I think that’s the most significant thing that people just don’t think about it because your everyday life, “Oh, well I need this, or I need that. I’ll go down to my store or go online and order it, whatever.” But shipping, trucking, distribution, all of that, will stop with a credit implosion and that’s where mathematically we’re headed.

Mike Gleason: Yeah. And at the end of the day, if you look at precious metals, it is like a form of insurance more so than it is an investment per se.

Bill Holter: Well, they’re not credit, gold and silver are no one’s liability. They’re not a promise. Everything else is a promise. Gold and silver are merely proof that capital, labor and equipment have already been expended, so they’re pure assets. They’re pure money.

Mike Gleason: Yeah, that’s a great way of summarizing that, very, very well stated. Well Bill thanks so much for your time, enjoyed visiting with you and I certainly hope we can do it again before much longer, great insights as usual from you and we appreciate the time. Thanks for coming on and all the best to you.

Bill Holter: Appreciate it. Thanks Mike.

Mike Gleason: Well, that will do it for this week. Thanks again to Bill Holter. The site is JSmineset.com, be sure to check out all the great commentary that Bill and Jim put out there on a regular basis. Again, JSmineset.com.

Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 50,000 customers. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.

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Federal Reserve’s New QE Transfers Wealth to Its Owner Banks

Published here: http://goldsilverworlds.com/money-currency/federal-reserves-new-qe-transfers-wealth-to-its-owner-banks/

Metals investors are positioning themselves for rapidly developing political and geopolitical events, as well as a rapidly expanding Federal Reserve balance sheet.

What started out as a limited intervention to provide temporary liquidity to overnight lending markets has morphed into a massive $60-billion-per-month Treasury-buying campaign. By some measures, it’s even bigger than the last Quantitative Easing program.

The Fed has yet to fully explain why this is all necessary given the lack of an immediate crisis in the real economy. Last week, Fed chair Jerome Powell took great pains to insist that their expanded repo market operations are “not QE” – only to announce a massive new Treasury bill buying program on Friday.

Is there some emergency going on behind the scenes that Fed officials don’t want us to know about? It could well be that they are engineering another bailout of “too big to fail” banks on a scale they aren’t admitting.

Naturally, they don’t want to spook the markets or trigger a public backlash against an unpopular bailout program. But Powell’s QE denials are only adding to growing suspicions that the Fed is trying to fix something much bigger than a plumbing issue in the repo market.

More than a decade after the Fed initiated secret bailouts of U.S. and foreign financial institutions, we still don’t know where all that money went. Or on whose authority winners and losers were determined.

All we do know is that since 2008, trillions of dollars have been pumped directly into the banking system. And the Fed is showing no signs of stopping.

If the Federal Reserve ever became fully transparent, the public would likely be shocked at the cronyism, corruption, and outright parasitism involved in the banks’ relationship to the Fed. It would be a far bigger scandal than the corrupt crony capitalism practiced by Hunter Biden, that’s for sure.

Unfortunately, the Fed has its own lobbying arm in Congress that always finds a way to shoot down the “Audit the Fed” bill in the Senate even though it has previously passed with broad bipartisan support in the House.

President Donald Trump has called for greater transparency at the Fed and repeatedly jabbed Chairman Powell. This week, the President clashed with the foreign policy establishment over his controversial decision to withdraw military forces in northern Syria. Trump called out the “military-industrial complex” for pushing never-ending wars and occupations overseas.

Trump’s words echoed those of Dwight Eisenhower. In his farewell address, President Eisenhower, himself a military man, warned Americans of the dangers of a self-serving military-industrial complex.

President Eisenhower:

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination in danger our liberties or democratic processes.

 

A similar warning could have been issued about the dangers of a self-serving and wholly unaccountable central banking cartel.

The Fed has strayed far beyond its dual mission of pursuing stable prices and full employment. It has effectuated a massive wealth transfer into the hands of those who are first in line to receive its monetary emissions. It has artificially extended and amplified bull markets on Wall Street while diminishing the purchasing power of cash savings.

There will one day likely be another great wealth transfer – from artificially overvalued financial assets to undervalued hard assets such as gold and silver.

If the Fed continues to damage its own credibility by saying one thing and doing another – growing its balance sheet QE style while insisting it’s not QE – investors may begin preferring the unassailable credibility of physical precious metals.

Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 50,000 customers. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.

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