Rising Debt Means a Weaker Dollar

Published here: http://goldsilverworlds.com/gold-silver-experts/rising-debt-means-a-weaker-dollar/?utm_source=rss&utm_medium=rss&utm_campaign=rising-debt-means-a-weaker-dollar

Americans appear to be growing more concerned about the skyrocketing national debt level – officially $28.1 trillion and counting.

The Peter G. Peterson Foundation’s monthly Fiscal Confidence Index recently shed five points, dropping to a level of 47, in the wake of the Biden Administration’s latest $2 trillion stimulus package.

That $2 trillion bill is simply piled on top of already massive budget deficits.

And it adds furthers to concerns over the country’s currency, the Federal Reserve Note “dollar.”

Federal debt is currently the largest as a percentage of the economy since World War II. Given that no amount of tax hikes will yield enough capital to cover the debt, the nation now finds itself on an unsustainable trajectory towards bankruptcy.

The only viable way for the government to dig itself out of its debt predicament is by leaning on its banker, the Federal Reserve.

The Fed now buys $120 billion in bonds every month, artificially suppresses interest rates, and intentionally targets higher inflation. These maneuvers make issuing and servicing government debt cheaper in real terms.

The national debt went seemingly unnoticed, for years. The consequences of massive overspending are becoming increasingly clear, however. Among them are a weaker dollar and decline in national credibility.

As the U.S. dollar loses value, it could also lose its preeminent spot on the international stage.

Other countries, such as China, continue to move away from the dollar as the global reserve currency of choice by reducing their holdings of U.S. Treasuries, holding larger allocations of other currencies, and establishing bi-lateral trade deals denominated in those other currencies.

The addition of China’s currency, the Yuan, to the IMF’s special drawing rights (SDR) basket also puts increasing pressure on the dollar’s status.

As faith in the greenback erodes, more and more nations will diversify away from it.

As more nations abandon the dollar, more dollars will flow back into the U.S. And as the supply of dollars climbs, the value of the dollar is likely to fall substantially – not just against real goods, but against other depreciating currencies.

A weaker dollar may be good for the government (and other borrowers too), because it makes debt payments more manageable.

But it’s bad for cash savers, consumers, wage earners, and retirees on a fixed income. Currency weakness makes everything more expensive.

As the cost of everyday goods and services goes up, disposable incomes go down.

As disposable incomes decline, so does economic activity. The reluctance to spend by Americans could, in turn, force the U.S. economy back into recession, or even a depression.

Debt-driven dollar weakness could become the ultimate economic driver in the decades ahead. Not only does debt lower the value of the dollar, it can also cause U.S. borrowing rates to rise.

Higher borrowing costs can further dent economic output while also causing a higher likelihood of default. As the cost of loans rises and economic activity declines, the risk of recession or worse also rises in a cycle that fuels ever more Fed “stimulus” (currency debasement).

That makes now a critical time to diversify your portfolio with asset classes that can potentially benefit from a weaker dollar.

Gold and silver have long been considered the ultimate hedges against paper currency weakness. This time around will be no different.

After pulling back from its all-time high at $2,100 last August, gold is basing out and could be gearing up for a fresh, significant leg higher that could see it reach $3,000 or higher within a couple years.

And a rally in gold (and silver) could happen fast once investors catch on to the full ramifications of the debt / devaluation cycle into which our nation is now locked.

 

Stefan Gleason is President of 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 the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

Read More

Don’t Be Fooled by the Stock Market Rally

Published here: http://goldsilverworlds.com/investing/dont-be-fooled-by-the-stock-market-rally/?utm_source=rss&utm_medium=rss&utm_campaign=dont-be-fooled-by-the-stock-market-rally

Markets tend to move in cycles. They typically experience cyclical pullbacks after trending higher for a long period of time. Rarely do markets move straight up or straight down.

The stock market has, however, essentially moved straight up since the March 2020 mini-crash. As the market moves higher, an increasing number of “analysts” are calling for even higher equity prices.

Just last week, in fact, an analyst called for the broad market S&P 500 index to double by 2030.

Calls for an 8000 S&P do not seem quite as farfetched as they did just a year ago. That is the power of greed (and wishful thinking) at work.

It is no secret that the Federal Reserve has fueled the market’s gains. The Fed cut interest rates down to zero over 10 years ago.

The Fed quickly ran into a brick wall, however, when it attempted to tighten monetary policy in the middle of the last decade. Stock investors began to rapidly show their dissatisfaction with the central bank once rates began to tick slightly higher.

The “taper tantrum” of 2013 demonstrated how important the Fed’s actions were to markets.

Spooked by then-Chairman Ben Bernanke’s commentary about the central bank slowly taking its foot off the QE gas pedal, stock market volatility rose significantly while bond yields spiked.

The Fed didn’t get very far on the tightening campaign, halting it in 2018.

And the central bank quickly cut rates to zero at the first sign of trouble in 2020.

Now they’re at their old game again, purchasing billions of assets per month to keep the economy afloat.

Although no one can see the future, it does stand to reason that stimulus-addicted equity markets could see a substantial pullback from current levels if and when the Fed puts on the brakes.

However, the Fed has made it absolutely clear it is comfortable keeping monetary accommodation going and letting inflation run hot for some time.

The central bank may, therefore, keep its pedal to the metal for several months to come (or longer). That could help sustain the ascent in equity prices until investors’ concerns about inflation and rising interest rates trigger a rotation out of stocks.

Gold and silver perform well during stock market turbulence as well as times of inflation, including during rate-hiking campaigns.

A key driver in performance of the monetary metals is negative real interest rates, a condition that exists when the inflation rate is higher than nominal interest rates.

That’s what we have today. And even if the Fed were to start hiking rates again, they will almost certainly remain “behind the curve” such that real rates remain below zero.

The Fed has blown a bubble, arguably the largest bubble ever, and eventually that bubble is going to pop.

When it does, many of the investors that have seen strong performance during the equity rally will see their accounts suffer real losses.

As the old saying goes: “Markets take the stairs up and the elevator down.” This elevator is likely to be fast – and may even catch the most astute investors off-guard.

Given a reckless Fed and the equity market’s astronomical valuations, now is the ideal time to take steps to protect your investment portfolio and financial future.

Against the current backdrop of easy money, there may simply be no better asset class to turn to than precious metals.

 

Stefan Gleason is President of 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 the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

Read More

Magflation: An Unexpected Gold and Silver Driver

Published here: http://goldsilverworlds.com/economy/magflation-an-unexpected-gold-and-silver-driver/?utm_source=rss&utm_medium=rss&utm_campaign=magflation-an-unexpected-gold-and-silver-driver

he 1970’s, the U.S. experienced a decade of below-trend economic growth combined with rising interest rates – and eventually – massively higher gold and silver prices.

Some sectors boomed while others lagged, and then as now, the majority of the population struggled with rising home and commodity prices, bookmarked by lofty interest rates.

This stilted and challenging environment, which came to be called stagflation, eventually drove the more perceptive people into gold and silver.

The result?

Gold, having been freed from its long-term tether of $35, first rose to $200, then dropped to $100 before rocketing to an all-time nominal high of $850.

As per usual on a percentage basis, silver rose even more, topping out at $50 the ounce.

For years now, (officially-stated) inflation has been annualizing at one or two percent per year. Most people, including the current generation of market participants, have little or no memory of the relatively high inflation, interest rates and metal’s prices of the late ’70’s.

They may be about to get a shock…

Plata o Plomo?

Mexican bandits, when attempting to relieve victims of their money, might ask them “Plata o Plomo?” – Silver or lead (bullets)?

.22 rounds for sale at a local gun range.

Given that demand and the rising cost of components have now priced ammunition several times higher in all calibers than last year, perhaps those who stack both silver and ammo should change this phrase to “Plata y Plomo”… Silver and Lead.

The picture nearby from a local gun range shows something well beyond the Fed’s sub-2% inflation target.

But then they also said it would be acceptable to let inflation “run hot.” Last year a box of .22 rounds could be had for less than $25. Is the Fed getting what they asked for?

Inflation? Deflation? Both?

This debate has gone on for several years as governments continue to ramp up spending. Oversimplified, if they let our debts default, the result is deflation.

If the printing press and spending spigot remain unchecked, then inflation is more likely. Excessive demand, loss of confidence, and increased money velocity (turnover) leads reliably to the inflationary door.

A few asset classes like the stock market and most real estate sectors initially keep up but later on lag severely, as purchasing power declines precipitously.

But gold and silver catch a wave, and wealth preservation for the lucky relative few, historically topping out at 2.5 – 3% of the population’s assets, is largely assured, enabling a small minority to seriously blunt the inflationary impacts on their material wealth.

Since August 2020, it hasn’t been a bed of roses for metals/mining shareholders.

However, as Lobo Tiggre states, “No price goes up forever without taking a break. That’s why they call it a correction…In short, I see any near-term correction as a buying opportunity for commodities – even more so for gold and silver, which are monetary metals as well – notice that silver falls into both categories.”

Prices UP? More buying of gold and silver. Prices Down? Same Story.

What’s becoming increasingly apparent is that when gold and silver prices rise, public buying increases. And when prices drop… public buying increases! The mints I’ve spoken to all report sustained sales of everything gold and silver.

Take Australia’s Perth Mint.

Perth Mint minted product sales for both gold and silver soared during February, with more than 124,000 troy ounces of gold, and more than 1.8 million troy ounces of silver sold during the month. Relative to February 2020, sales increased by more than 400% for gold and 200% for silver, as investors took advantage of lower precious metal prices.

The Federal Reserve has only three ways to “deal with” debt: make significant cuts in deficit spending; substantially raise taxes; or let inflation drive economic policy, with the end result that government debts are paid off in increasingly worth-less paper.

Agriculture Prices Have Broken a 10-Year Downtrend

Given the way politicians and the currency creators have historically dealt with this, I’d cast a strong vote for the inflationary “solution.”

What indications do we have right now that not only is inflation higher in disparate sectors of the economy considerably than the government’s highly- manipulated statistics tell us, but even more important, that the rate of increase is moving at a worrisome (to us) speed.

• In Indonesia, tofu costs 30% more than it did in December.
• In Brazil, the staple, turtle beans, have risen 50% in the past month.
• In Russia, consumers are paying 60% more for sugar over the last year.
• Cereal inflation is now running at a 20% annualized rate.
• Locust swarms are devouring food supplies in East Africa and Saudi Arabia.
• Michael Snyder writes that The Head of the UN Food Program has stated there will be “famines of biblical proportions in 2021.”
• And demonstrating that, thanks in no small part to the recent Wall Street Bets – Reddit successful (if initially short-lived) foray into buying silver miners and physical metal, the case that we’re moving into the public recognition phase for our thesis has been greatly strengthened.

Note a new subreddit, Wall Street Silver, already has over 30,000 subscribers.

Few people are aware that, even as the Feds tout the validity of the CPI in tracking inflation – both current and expected – they openly admit food prices are the most accurate predictor of inflation!

Start keeping track of your grocery tab!

No less an establishment thinker than former U.S. Treasury Secretary, Lawrence Summers, opines, “I think there’s a real possibility that within the year, we’re going to be dealing with the most serious incipient inflation problem we have faced in the last forty years.”

Consider that – starting right now – elevated inflation, concomitant with uneven economic growth and massive deficit spending via guaranteed income and the likely build out of MMT – is going to duplicate the deleterious stagflationary effects of the ’70’s… on steroids!

Got silver? Got lead?

 

David Smith is Senior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com. For the past 15 years, he has investigated precious metals’ mines and exploration sites in Argentina, Chile, Mexico, Bolivia, China, Canada, and the U.S. He shares his resource sector findings with readers, the media, and North American investment conference attendees.

Read More

Signs of a Bottom in Gold and Silver Prices

Published here: http://goldsilverworlds.com/gold-silver-price-news/signs-of-a-bottom-in-gold-and-silver-prices/?utm_source=rss&utm_medium=rss&utm_campaign=signs-of-a-bottom-in-gold-and-silver-prices

The U.S. dollar’s value is set to get diluted by another $1.9 trillion.

On Saturday, Senate Democrats narrowly passed their massive COVID relief bill on a party line vote. It includes $1,400 in additional free-money handouts for most Americans, $350 billion in aid to state and local governments, and hundreds of billions more for various other pet programs.

Upon approval by the House of Representatives and President Joe Biden’s signature, expected later this week, another wave of government-induced inflation will cycle through the economy.

The impact on commodity and precious metals markets won’t necessarily be felt immediately. But investors who can see what’s coming will want to position themselves ahead of the trend.

Last week saw some smart money rotation into mining stocks ahead of a potential bottom in precious metals spot prices. The HUI gold miners index (NYSE:HUI) finished out the week with a 4.7% gain, despite continued weakness in metals markets.

This positive divergence is a bullish sign. It may indicate that a significant bottom is in, or in the process of forming, in gold and silver markets.

After becoming deeply oversold, the HUI could now rapidly push toward to its uptrending 50-week moving average line on a rally.

That would likely coincide with gold prices recovering off their similarly oversold condition.

Since peaking 7 months ago at over $2,000/oz, gold has trekked lower in a large corrective pattern. That correction is now getting long in the tooth, assuming as we do that it’s occurring within the context of a larger, structural bull market.

Silver, meanwhile, is seeing a huge positive divergence via the physical versus the paper markets. Robust physical bullion buying by investors continues to defy lackluster paper price moves.

Bullion dealers have been absolutely slammed with demand for coins, bars, and rounds this year – draining available inventories in the process. While Money Metals is still well stocked, many other dealers are nearly wiped out or are quoting month-long delays on many items.

Availability has actually improved some since the height of February’s buying frenzy. However, scarcity-driven premiums on popular products such as Silver Eagles remain elevated.

It is unusual for extremely stressed conditions in the bullion market to persist while spot prices merely bounce around within a capped range.

Although frustrating for bulls, the people who should be nervous in this environment are the bears – in particular, the naked short sellers. They face unlimited risk in the event of a price spike driven by physical shortages.

A demand strain on minted bullion products doesn’t necessarily imply a shortage of silver itself.

At least not immediately.

Industrial users of silver normally command a much larger share of the total physical market than investors. But the pace of investment buying over the past year (nearly 600 million ounces) has shifted the scales to the point where it actually exceeds total industrial demand.

Of course, industrial demand for silver suffered last year due to economic lockdowns that are gradually being lifted. As manufacturers ramp back up, so will their need for silver.

But industrial demand can’t return to normal at the same time as investment demand remains elevated without generating a massive supply deficit. These powerful dynamics of physical supply and demand will ultimately exert pressure on prices – perhaps putting a real “squeeze” on paper silver short sellers.

 

Stefan Gleason is President of 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 the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

 

Read More

Bond Yields Roil Markets, Gold/Silver Drop

Published here: http://goldsilverworlds.com/gold-silver-price-news/bond-yields-roil-markets-gold-silver-drop/?utm_source=rss&utm_medium=rss&utm_campaign=bond-yields-roil-markets-gold-silver-drop

As financial markets sold off this week, precious metals got dragged down in the selling. The culprit, once again, was rising bond yields.

On Thursday, the 10-year Treasury climbed above 1.5%. While still low on a historical range, the upside momentum has investors concerned. Over the past seven months, the 10-year yield has tripled from a low of just 52 basis points.

The 10-year note serves as a benchmark for mortgage rates as well as risk premiums in the equity markets. Elevated price-to-earnings ratios in the S&P 500 are more difficult to justify in a higher interest rate environment.

As we’ve noted, real interest rates are also a headwind to precious metals markets. The key word there is “real” – as in, after adjusting for inflation. And if inflationary pressures continue to grow, that could be all that is needed to drive real interest rates down deeply into negative territory.

The Federal Reserve may also be on the verge of restarting Operation Twist. Under that program, the central bank sells some of its short-dated Treasuries and buys longer-term bonds. The aim is to drive down long-term yields.

But when Fed chairman Jerome Powell spoke on Thursday, he gave no definitive commitment to launching Operation Twist or any other intervention to tame the bond market.

At some point, Wall Street may force Powell’s hand. Despite trillions of dollars in COVID stimulus and more to come, the economic recovery is shaky with inflation risk rising.

Trends forecaster and a many time guest here on our podcast Gerald Celente released a video yesterday warning of what he calls “dragflation”:

Gerald Celente:
And Powell failed to reassure investors that central banksters would keep surging bond yields and inflation expectations in check. What did we say about inflation? Only about six months ago in the Trends Journal, coined the term dragflation. Economy dragging down and inflation going up.

Despite inflation showing up in oil prices and elsewhere in the economy, gold and silver trading markets aren’t really reflecting that reality at this time and have had a really tough week.

On the plus side for gold and silver bulls, the selloff in precious metals mining stocks didn’t gain any new downside momentum this week. In fact, the GDX gold miners index showed a slight gain through Thursday’s close.

If gold and silver equities continue to display relative strength versus the broad market averages, that would bode well for precious metals themselves.

It’s been several months since a fear trade gripped Wall Street. But with stocks showing vulnerability and bonds failing to serve as a good counterweight, precious metals may begin to look more attractive to more investors as an alternative asset class for portfolio diversification.

Bullion dealers including Money Metals Exchange have seen buying activity surge in recent weeks, especially for silver products. However, sentiment among those who trade futures and exchange-traded products is an entirely different story.

The paper gold markets have yet to pick up. According to the World Gold Council, holdings ETFs that track gold declined last month by 2%. Global gold assets under management now sit at their lowest level since last June.

Last month’s sudden spike in silver buying did carry over into ETFs and other derivatives for a while. But after the silver squeeze failed to sustain any big upside in price, many of the fast-money momentum chasers from “Wall Street Bets” sold out of their positions.

The online chatter and unusual volumes in silver trading caused the Commodity Futures Trading Commission to hurriedly issue a statement announcing it was closely monitoring the market for “fraud and manipulation.”

Regulators jumped into action after a decentralized campaign by individual investors to buy silver pushed prices up for a couple trading days.

For years, though, the CFTC has failed to root out the fraud and manipulation being perpetrated in the silver market by large institutional short sellers. In 2013, it ended a 5-year investigation into allegations that JPMorgan and other banks manipulate the COMEX silver futures market. The CFTC claimed it found no evidence of wrongdoing.

The head of the CFTC at that time was Gary Gensler. He is currently President Joe Biden’s pick to run the Securities and Exchange Commission. That means for the big investment banks on Wall Street, it will be business as usual.

It doesn’t necessarily mean they will keep silver prices depressed, however. Rising industrial demand coupled with powerfully strong retail bullion buying will test the ability of supply to keep pace.

The bullish case for silver doesn’t rest on engineering a dramatic “short squeeze” event on the futures market. Instead, it is based on the fact that silver is scarce in the face of rising physical demand. It is based on the certainty that inflation will diminish the value of the U.S. dollar and the history that shows precious metals function as sound money.

 

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.

 

Read More

The Great Reset Is Coming for the Currency

Published here: http://goldsilverworlds.com/money-currency/the-great-reset-is-coming-for-the-currency/?utm_source=rss&utm_medium=rss&utm_campaign=the-great-reset-is-coming-for-the-currency

As the Great Reset proceeds from globalist think tanks and technology billionaires to allied media elites, governments, schools, and Woke corporations, what will be “reset” next?

Supporters of the World Economic Forum’s all-encompassing Great Reset agenda are eyeing BIG changes for the global monetary system.

Plans that might once have been dismissed as pure speculation or conspiracy theories are now being openly pushed by people who occupy the highest levels of power.

President Joe Biden’s economic policies were grafted directly from the “build back better” language of the Great Reset’s authors.

Biden’s agenda for the economy is now being spearheaded by Treasury Secretary Janet Yellen. The former Federal Reserve chair has taken a particular interest in stamping out cryptocurrencies and expanding the reach of the International Monetary Fund (IMF) – which could ultimately be the issuer of a new global digital currency.

Bitcoin’s recent surge to $1 trillion in market value (it has since pulled back some) irked central bankers and government officials.

While they have long complained that cryptocurrencies are, supposedly, a major vehicle for fraud and other illegal transactions, officials are now focusing their ire on crypto-mining’s energy usage.

Since the Great Reset prescribes a transition to a “sustainable” economy, anything tied to resource consumption is now subject to being attacked.

Yellen derided Bitcoin as “an extremely inefficient way to conduct transactions” because “the amount of energy consumed in processing those transactions is staggering.”

A report just released on Monday by Citi (“Bitcoin: At the Tipping Point”) makes the case that Bitcoin could become the currency of choice for international trade within seven years. That assumes governments won’t act in conjunction to ban or co-opt the technology to ensure they maintain “legal tender” monopolies.

In principle, Yellen and her global central planning cohorts support the digitization of money. In fact, they are enthusiastic about the prospects for replacing circulating paper cash with digital tokens.

They just want to make sure those digits are issued and controlled by governments and central banks.

‘New Blueprint for Worldwide Inflation’

Last Thursday, Yellen told the G20 the United States would back a new issuance of the IMF’s international reserve asset, known as a Special Drawing Right (SDR).

The move, which reverses the opposition of the Trump administration, will direct liquidity to poor countries struggling to recover from the coronavirus downturn on their own.

SDRs were last issued in 2009, in part to address liquidity concerns, in part to build a precedent for something bigger down the road.

In 2011, the IMF issued its first blueprint for replacing the U.S. dollar as the world’s reserve currency with a global SDR regime.

And in 2016, the IMF added the Chinese yuan to the SDR basket, elevating China’s Communist government to prominence on the world monetary stage.

Economist James G. Rickards predicts, “Over the next several years, we will see the issuance of SDRs to transnational organizations, such as the U.N. and World Bank, to be spent on climate change infrastructure and other elite pet projects outside the supervision of any democratically elected bodies. I call this the New Blueprint for Worldwide Inflation.”

Rickards views the Great Reset of the monetary system as being ultimately bullish for precious metals. The push to digitize and globalize the U.S. dollar will only accelerate the demise of its value and increase the need for investors to hold tangible safe havens.

Yellen, Powell Openly Push for Digital Dollar

If the Federal Reserve, perhaps in coordination with the IMF, attains the ability to inject stimulus directly into digital wallets, then Quantitative Easing could take a whole new meaning. Central bankers could bypass Congress and distribute their own aid as they see fit.

Treasury Secretary Yellen recently told the New York Times, “Too many Americans really don’t have access to easy payment systems and to banking accounts, and I think this is something that a digital dollar — a central bank digital currency — could help with. I think it could result in faster, safer and cheaper payments.”

A central bank digital currency might also result in the imposition of negative interest rates or the automatic deduction of taxes with no way for holders to escape… except by exiting the dollar-denominated financial system entirely.

Federal Reserve Chairman Jerome Powell told Congress last week that the Fed is indeed “looking carefully” at issuing a digital dollar, calling it “a high priority project for us.”

Anyone who is concerned about the prospect of being herded into a new digital currency regime should make it a high priority to own tangible money that exists outside the financial system.

No technology or government mandate can change the fact that gold and silver have universally recognized, inflation-resistant value.

 

Stefan Gleason is President of 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 the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

 

Read More

Bullion Banks Sell Even More Silver: Do They Have It?

Published here: http://goldsilverworlds.com/physical-market/bullion-banks-sell-even-more-silver-do-they-have-it/?utm_source=rss&utm_medium=rss&utm_campaign=bullion-banks-sell-even-more-silver-do-they-have-it

Anyone with a naked short in the silver futures market risks getting squeezed by physical buying. Demand for delivery of COMEX silver bars is rising, even as the paper price of the metal fell more than 4.5% last week.

Silver shorts sold contracts representing a whole lot more silver than they have available to deliver again last week.

The disconnect between paper prices and physical demand is getting more ridiculous by the day.

It is also getting more dangerous for COMEX market participants – long and short. The COMEX functions on confidence, which can vanish suddenly.

It will happen when long contract holders discover, en masse, the paper they bought cannot be redeemed for the actual metal as expected. Instead, they get cash settled or, in the event of an outright default, they get nothing at all from insolvent counterparties.

Garrett Goggin has been keeping an eye on COMEX silver deliveries. He notes a huge difference between this year and last.

Delivery demand is roughly 20 times what it was for this period last year.

It is approximately 4 times the previous record for the period set in 2010.

The 41 million ounces delivered over the past three weeks is very significant relative to the total “Registered” stockpile of silver in the COMEX vaults. Bars in the “Registered” category are the ones actually available for delivery to a new owner.

COMEX vaults also contain a larger stockpile of “Eligible” silver. Bars in this category can be converted to Registered when owners decide they are willing to let them go. Until then, they are not available to be claimed by contract holders.

It looks like 80 to 100 million ounces of physical silver will be delivered in March – likely a new all-time record.

The latest report from the CME group shows just 135 million ounces of Registered silver sill available – down from 16 million from the 151 million ounces reported two weeks ago.

Watching the Registered inventory is a good way to judge whether the effort to squeeze silver prices is working.

How much of the silver currently being delivered will remain as Registered in the vaults? How much will be converted to Eligible and made unavailable? And how much will be moved to segregated storage or removed from COMEX vaults altogether?

It could get worse for the banks. Shorts may be nervous.

Demand for physical metal keeps accelerating and the COMEX bar inventory continues to fall.

Bullion dealer inventories are low and demand for retail bullion products has never been higher.

Even thousand-ounce bar premiums are elevated, which is an extremely rare occurrence. Rising lease rates in London imply an inventory shortage across the pond.

It is an extraordinarily dangerous time for bullion banks to continue selling silver they don’t have. Their play is to destroy sentiment and shake investors out of the market. Thus far, at least on the physical front, this effort appears to be backfiring.

 

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.

Read More

Fed Grilled about Its Unsound Currency, Digital Currency Schemes

Published here: http://goldsilverworlds.com/money-currency/fed-grilled-about-its-unsound-currency-digital-currency-schemes/?utm_source=rss&utm_medium=rss&utm_campaign=fed-grilled-about-its-unsound-currency-digital-currency-schemes

As financial markets gyrated this week, Federal Reserve chairman Jerome Powell touted the U.S. dollar as a form of “sound money.” More on that incredible take in a moment.

But first, let’s review this week’s market action.

Inflation fears helped drive another spike in long-term bond yields, and by Thursday that began to spook Wall Street. The Treasury market is now off to one of its roughest starts to a year on record. As a result, calls are mounting for the Fed to up its bond purchases.

A steepening yield curve is helping to depress precious metals prices. Rising real interest rates tend to be negative for the gold market.

But with short-term rates remaining locked near zero and inflation pressures rising, the case for rising real rates as a major trend remains tenuous at best. If central bankers begin deploying yield curve control measures to bring down long-term bond yields, that could serve as a catalyst for the next up-leg in gold and silver.

In the meantime, gold and silver have fallen back sharply here at the end of the week – with gold trading down to $1,730 and silver at $26.50.

In other alternative asset markets, Bitcoin prices plunged more than 25%. The cryptocurrency had been gaining increasingly widespread adoption by some large corporations and financial institutions. At the same time, Bitcoin has come under increasing scrutiny by regulators and central bankers.

Treasury Secretary Janet Yellen recently derided cryptocurrencies for supposedly facilitating illegal activity. Yellen along with some members of Congress are threatening to crack down on crypto markets.

Meanwhile, Fed chairman Powell along with other central bankers and the International Monetary Fund are vowing to roll out official digital currencies in the near future. As the globalist Great Reset agenda proceeds, a more globally coordinated, centralized currency regime may be coming – one that seeks free-market digital currencies as well as paper cash.

Powell told Congress on Tuesday that developing a digital currency is a “high priority project” for the Fed. But he admitted that there are still significant technical and legal issues that need to be worked out.

For now, he continues to cheerlead for higher inflation while at the same time insisting the U.S. dollar’s value is stable and everyone should have confidence in holding it. In an exchange with Republican Congressman Warren Davidson, Powell laughably claimed that depreciating Federal Reserve notes are “sound money”:

Warren Davidson:
What would you say constitutes sound money?

Jerome Powell:
Well, the public has confidence in the currency, which they do, which the world does. That’s really what it comes down to that people believe that the United States currency is perfectly reliable and stable in value.

Warren Davidson:
Is it diluted as a store of value when M2 goes up by more than 25% in one year. Does the printing of more U.S. dollars somehow diminish the value of the dollars that others hold?

Jerome Powell:
There was a time when monetary aggregates were important determinants of inflation and that has not been the case for a long time. So, you’ll see, if you look back, the correlation between movements in different aggregates, you mentioned M2 and inflation is just very, very low. And you see that now where inflation is at 1.4% for this year.

Surging food, energy, housing, and healthcare costs this year would suggest that real-world inflation is running at a much higher rate than 1.4%. But even that rate of currency depreciation means that long-term savers of dollars are guaranteed to lose significant purchasing power as that rate of depreciation compounds.

That is a far cry from sound money. A truly sound currency would be backed by more than mere expressions of confidence. It would be backed by something solid, timeless, and universally recognized. It would retain value over years, decades, and centuries – not depreciate at an arbitrarily prescribed pace.

Physical precious metals are the basis of sound money. Although in theory a currency could attain soundness through other mechanisms, only gold and silver have a consistent historical track record worldwide of serving as the ultimate money.

The era of unbacked fiat money may be heading toward a ruinous end. The M2 money supply has been exploding over the past several months. Even as Powell expresses nonchalance at the prospect of an inflation problem, the risks of spiraling adverse consequences to all his money printing are growing.

It’s true that the rate of money supply growth doesn’t necessarily cause corresponding price increases in the economy immediately. Cash can sit on the sidelines or be cycled through financial markets without generating any noticeable uptick in conventional inflation gauges.

And as long as inflation expectations remain well “anchored” as Fed head Powell often puts it, money velocity tends to be slow. But when business owners and consumers begin to worry about higher costs ahead, they tend to accelerate their spending. That in turn causes price levels to rise more rapidly and inflation expectations to no longer be anchored at the Fed’s desired rate.

An inflationary spiral that develops slowly at first does not mean that inflation is therefore contained. As long as the currency supply isn’t contained, then neither is inflation risk.

There is at all times a limited supply of physical precious metals. Although supply and demand dynamics will cause price fluctuations, what makes gold and silver sound investments is that they retain intrinsic value regardless of inflation rates or other threats particular to paper and digital assets.

 

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.

 

Read More

Is the Reckoning Nigh for Silver Shorts?

Published here: http://goldsilverworlds.com/gold-silver-price-news/is-the-reckoning-nigh-for-silver-shorts/?utm_source=rss&utm_medium=rss&utm_campaign=is-the-reckoning-nigh-for-silver-shorts

Investors are buying silver in vast quantities – in whatever form they can get it.

Smaller silver bugs are buying it a few ounces at a time from scarce retail inventories. Whales are accumulating millions of ounces via the silver ETFs or by standing for delivery of COMEX futures contracts.

Unless the bullion banks and other shorts can finally engineer a price smash, they may have to stop selling paper and start buying a lot of physical.

If the short sellers are naked, i.e., not hedged with long positions elsewhere, a genuine short squeeze driving prices higher could commence.

Over the past several trading days, the silver market has simply been resilient. Prices haven’t risen. More importantly, they haven’t fallen much either.

Long investors continue to buy as the paper sellers dump massive amounts of unbacked silver contracts on the market.

We’ll know by the end of this week, when the March futures contract goes off the board, how many of those contracts are held for delivery of actual bars.

It is expected to be a record number – perhaps 2-3 times the average. See below.

If the number of contracts held is 30,000, the demand would, in theory, completely wipe out the entire stockpile of registered bars in the COMEX vault system.

That almost certainly won’t be allowed to happen. The contracts provide the option of cash settlement in the event physical silver is not available in adequate quantities.

Widespread cash settlement would at least put the lie to the notion that a futures contract is a proxy for the actual metal. In a sense, that would be good thing.

The COMEX has been a tool for manipulating prices, creating price volatility, and discouraging ownership of the physical metal since gold and silver futures trading started at the exchange during the 1970s.

The number of “Registered” bars has been in decline in recent months and that trend is accelerating. The stockpile dropped by 5.5 million ounces last week.

COMEX bar inventories are being accessed by nervous speculators who want the actual bars and by mints and refiners who are scooping up metal to convert into retail-sized coins, bars, and rounds.

The situation doesn’t appear to be any better in the larger London physical markets.

Ronan Manly of BullionStar recently estimated there are only about 150 million ounces of silver not locked up by ETFs in London vaults. Much of that remainder may be owned by investors who will not be willing to sell unless prices go higher.

David Jensen, who watches the London markets carefully, noted that silver lease rates are spiking.

The spike in lease rates last week is much larger than the jump seen nearly a year ago when a shortage drove thousand-ounce bar premiums higher.

Bullion banks, and other shorts, lost hundreds of millions of dollars trying to get hold of bars with which to meet delivery requests.

Silver leases are a mechanism shorts can use to essentially borrow bars today for the purpose of making good on delivery requests. Usually this is possible without much cost.

In fact, bar owners typically defray some of the cost by paying a small fee to lessees. This is because the lessee takes on the cost of storage and insurance. That is one reason why the chart above shows lease rates as negative most of the time.

Leasing silver may be an option for bankers and other shorts, but it carries substantial risk in times like these. They are required to return the bars at the end of the lease term.

Unhedged shorts will get crushed when/if they have to buy the needed silver at much higher prices.

Silver prices have not done much since the surge past $30/oz was reversed on February 1st. Those just looking at the price might assume the effort to squeeze short sellers has failed. However, based on developments behind the scenes, it appears the squeeze may be just getting started.

 

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.

Read More

Owning Real Assets Amid Surreal Markets

Published here: http://goldsilverworlds.com/gold-silver-insights/owning-real-assets-amid-surreal-markets/?utm_source=rss&utm_medium=rss&utm_campaign=owning-real-assets-amid-surreal-markets

In the current market environment, little else matters other than momentum. What’s moving up gets chased higher still by investors. And what can be moved up by any means is pursued by speculators who hope to jump-start a momentum trade.

It’s all being fueled by cheap money and government “stimulus.”

The consequences?

The U.S. stock market trades at an historically high premium to GDP (the so-called “Buffett indicator”).

Speculative trading frenzies in stocks such as GameStop defy any kind of fundamental analysis.

Manic up moves in unbacked cryptocurrencies such as Bitcoin (which hit a record high today and is nearing a total market value of $1 trillion) seem to suggest that digital assets have unlimited value.

Record inflows into exchange-traded products that purport to hold precious metals have also been seen in recent weeks.

But whether these proxy instruments have acquired, or can feasibly acquire, the amount of physical gold and silver necessary to back their shares is another question – one that few momentum chasers are asking at the moment.

More should be.

Where’s the beef? Originating in a series of Wendy’s television commercials that aired in the mid 1980s, the slogan takes on new meaning in today’s investing landscape where real value is rare.

Where’s the earnings growth behind relentless stock price rises? Where’s the actual wealth being created by the notoriously slow and electricity hogging digital blockchain? Where’s the physical bullion that is supposed to be backing silver ETFs?

Some silver exchange-traded products may well have the receipts to prove they hold all the promised quantity of metal in vaults. But the biggest of them all, the iShares Silver Trust (SLV), practically admits that it does not.

After being deluged with $1.5 billion in record inflows during the first week of February, SLV then suffered large outflows the following week as much of the day-trading herd flocked elsewhere.

The large volumes of buying and selling caused discrepancies between the market price of SLV and the value of its underlying assets.

SLV’s prospectus was hastily updated to warn investors that the fund “may suspend or restrict the issuance” of shares if it is unable to obtain enough metal.

As an open-ended fund, SLV doesn’t hold a fixed quantity of silver. A close inspection of its prospectus reveals that it relies on layers of financial intermediaries (“authorized participants”) to create shares and manage its inflows and outflows.

That creates a tremendous amount of counterparty risk, including the risk that some of the silver claimed in vaults by SLV may be rehypothecated, or simultaneously owned by another party.

SLV is controlled by BlackRock Inc., the world’s largest asset manager. Financial disclosures show that in the fourth quarter of 2020, BlackRock’s subsidiaries unloaded 36.5% of their gold ETF holdings but increased their SLV holdings by 4,848% ($26.9 million).

It’s not an enormous sum relative to the total assets owned by the giant firm, but it may be an indication that its analysts see significant upside ahead in silver.

If the silver thesis is confirmed, other institutional investors will undoubtedly follow the money – much like many have recently into Bitcoin.

It’s easier for billionaires and institutional investors such as hedge funds to move millions of dollars into gold or silver via an ETF rather than through the purchase of bullion coins. Some of the “smart money” is moving into silver in particular via this route.

Owning silver indirectly through financial instruments obviously isn’t the safest or most effective strategy for obtaining true diversification out of financial assets.

But Wall Street types who follow financial markets tend to perceive financial instruments as the only game in town.

That so much demand is being diverted into Wall Street products instead of bullion products has certainly suppressed physical buying to some extent.

That diversion of demand into paper proxies, in turn, may be working to keep a lid on spot prices as well – especially as exchange-traded vehicles announce work-arounds to obtaining real, physical holdings.

ETFs like iShares Silver depend almost entirely on the London Bullion Market Association (LBMA) for their physical silver holdings, such as they are. Inventories of LBMA silver bars have grown increasingly scarce amid the recent demand surge.

Whether that develops into a true shortage remains to be seen.

The opportunity is that tens of billions of dollars parked in gold and silver derivatives meant to represent precious metals may create something of a force majeure on one or more of the bullion banks – or the futures market itself.

Paper/IOU gold and silver may be “convenient,” but they are inherently untrustworthy as compared to the real thing. When fear grips markets, convenience considerations go out the window. Wealth preservation becomes paramount.

We’ve seen that speculative momentum trades can impact the silver market – with record buying in exchange-traded instruments also carrying over to the bullion market, which saw a huge spike in buying volumes recently.

But long-term silver investors are right to be skeptical of “paper”-led rallies, which can be fleeting.

So where’s the beef? Where’s the real demand growth behind the silver story?

According to the Silver Institute, global demand for silver will rise to 1.025 billion ounces this year. Industrial demand, which is seeing huge growth from electric vehicles and solar energy buildouts, is projected to see a 9% increase from 2020.

Investment demand is difficult to forecast, but it could be the wild card that drives potential shortages in physical exchanges – and much higher prices ahead.

 

Stefan Gleason is President of 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 the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

Read More

Could Silver “Do a Palladium”?

Published here: http://goldsilverworlds.com/gold-silver-price-news/could-silver-do-a-palladium/?utm_source=rss&utm_medium=rss&utm_campaign=could-silver-do-a-palladium

Palladium was manipulated for years. It had the largest short position relative to its size, while physical demand rose inversely to decreasing supply.

In 2018, demand became so large that it overwhelmed the shorts.

Physical palladium could not meet the market’s needs and prices exploded. Shorts eventually decreased their positions until they got to a more sustainable level.

For many years, the platinum/palladium ratio, shown on proprietary charts, averaged 2.4 to 1 in favor of platinum, stretched as high as 5:1 in 2009, but then collapsed for a decade into 2020, to where 1 ounce of palladium would buy 5 ounces of platinum!

Today, much like what was the case with palladium, the concentrated short position in silver is unsustainable.

Ted Butler has been writing about it for two decades, and we can be forgiven for thinking it will never change. But at some point soon, it appears the shorts WILL be overwhelmed.

Indeed, the rats are already leaving the sinking ship.

Witness Scotia Mocatta’s exit, and if Ted is correct, J.P. Morgan’s has reversed its long-standing position of being massively short silver, to going long.

Gold Silver Ratio over 50 Years
Through the 2020 Spike High

The “normal” Gold/Silver Ratio is set to fundamentally change.

Silver’s price ratio to gold briefly hit 15:1 in 1980 and set a new record in March 2020 with a spike to about 125:1. But its “normal” range oscillates between 40 and 80.

Like a stone tossed into a quiet pool, the rings of effect will spread out in ever-widening circles, when (not if) this comes to pass.

As Willem Middelkoop, Author of The Big Reset says, “If silver breaks, then the gold manipulation might break as well, and then you will have a real crisis within the monetary system, because then the dollar system is at risk… This is what can happen, and I believe will happen to silver…

There are structural changes for silver in the supply/demand metric, projected growth of new use cases, degradation of a decades-long pattern of unrestrained “paper silver” futures and mining share selling – not to mention changing investment demand ratios compared to industrial use.

Therefore, it’s probable that – just like the gold-to-platinum, and platinum-to-palladium ratios – silver is set to massively outperform gold.

The First Stage: Just moving the ratio into the lower range of 40:1 gives us all-time nominal highs and vast outperformance for silver.

The Second Stage: Turning the gold/silver ratio on its head. Another underappreciated factor is that Bitcoin’s meteoric rise, if sustained, could blunt global gold demand.

Let’s say that silver, as factored above, goes through the roof and briefly hits $500 the ounce while gold hits $10,000. Doing the math gives us a 20:1 ratio.

Then if silver recedes to $250 you would have a “normal” 40:1 ratio. Under this scenario, primary silver producers would be “digging up money” in exchange for fiat!

Meanwhile, it’s not a good idea to “challenge” the COMEX.

In The Art of War, Sun Tzu cautioned against attacking an opponent head on. He also said you should set the field of battle so that you had already won before the conflict began.

This is exactly what the denizens at the “CRIMEX” do, and why they continually defeat all comers.

They can:

• Change the rules (-see The Hunt Bros. 1980)
• Alter margin limits and sell unlimited paper silver.
• Enforce a trading rule of “offset positions only.”
• “Settle” silver obligations with fiat.

A (much) better way to “un-game” the silver system.

Uber-trader “Plunger” writing on Rambus1 com, comments: So why the strength in silver? I think it’s because the bullion bank silver cartel is in the process of unraveling and its ability to maintain its concentrated short position is entering into its last days…despite the army of silver detractors out there, the charts signal to me that silver is on the verge of a breakout…”

The WallStreetBets-Robinhood-GameStop fiasco poked a hole in the vaunted Masters of the Universe’s game plan.

The losers are learning the old winner’s tactics and bringing new tools to bear.

Don’t try to win by holding “faux silver” positions like the ETF SLV.

Don’t buy silver from trading houses that charge you for an empty vault while they write derivatives and lease out what they do have.

Instead…

• Attack their flanks and underbelly by purchasing .999 fine physical silver.
• Add what you can on a regular basis – what happened a few weekends ago was just a preview.

This will keep the pressure on the paper pushers as the ongoing effect of declining silver production through lower grade and a dearth of big discoveries takes silver stores into their fifth consecutive year of decline… just like what happened to palladium.

News broke this week that BlackRock, the world’s largest asset manager, sold a third of its GLD shares in late 2020 and put a big chunk of the proceeds into the silver ETF, SLV.

It sure looks like the dominoes holding up the old way of doing things are starting to fall. If even BlackRock is now “going for the silver” shouldn’t you?

 

David Smith is Senior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com. For the past 15 years, he has investigated precious metals’ mines and exploration sites in Argentina, Chile, Mexico, Bolivia, China, Canada, and the U.S. He shares his resource sector findings with readers, the media, and North American investment conference attendees.

 

Read More

Major Optimism for Platinum, Silver, and Copper

Published here: http://goldsilverworlds.com/physical-market/major-optimism-for-platinum-silver-and-copper/?utm_source=rss&utm_medium=rss&utm_campaign=major-optimism-for-platinum-silver-and-copper

Attention in the metals markets shifted this week from silver to copper and platinum. While big moves in silver and gold prices may be coming down the road, the monetary metals are currently taking a back seat to electrical and automotive metals.

A massive push by the Biden administration to replace gasoline vehicles with electric vehicles is helping to crank up demand for copper. Anything involving electricity involves copper – and lots of it.

Electric vehicles and their massive batteries contain an average of 180 pounds of the metal.  That’s six times the copper that’s used in gasoline cars. Even larger quantities of copper are required for EV charging stations and necessary upgrades to electrical grid infrastructure.

Electric vehicles sales are expected to grow from 4% of the market to 10% by 2022. And if the “Zero Emission” lobby gets its way, EVs will be 100% of the car market by 2030 with a federal prohibition on gasoline vehicles.

Regardless of concerns about personal freedoms being trampled in the process, it may simply not be feasible to power tens of millions of new electric cars without enormous upgrades to electricity generating capacity.

That will require enormous quantities of industrial materials, including copper. And the red metal isn’t likely to come any cheaper in the years ahead.

In particular, platinum is on the move. Concerns over a mining supply deficit and the prospect of renewed demand from automakers and jewelers are helping to send platinum prices more than 13% higher this week.

As long as platinum continues to trade at a discount to gold, it will look relatively attractive to investors and jewelry buyers.

And as long as platinum continues to be available at a much cheaper price than palladium and rhodium, it will be sought by automakers who are looking to lower their catalytic converter costs through substitution.

Gasoline cars are still the vast majority sold, with growth in the developing world projected to remain strong. But if electric vehicles do become market dominant over the next decade, that could deal a blow to the demand profile for platinum and palladium absent an increase in their use in battery or fuel cell technologies.

Silver, however, is expected to see major increases in demand from electric vehicle production and solar power generation. Silver is essential in a variety of electronic applications, including cell phones, due to its superior conductive properties.

Silver along with its more prestigious cousin gold may increasingly come to be seen as essential for wealth protection amid rising inflation risk.

With $1.9 trillion in new federal spending coming down the pike, more stimulus checks, and a possible minimum wage hike, price levels in the economy seem bound to rise. If all that isn’t enough, then Federal Reserve officials will keep pumping fresh liquidity into the financial system until consumer price inflation takes off to their satisfaction.

Fed Chairman Jerome Powell gave remarks to the New York Economic Club on Wednesday. He acknowledged U.S. government finances weren’t on “a fiscally sustainable path.” But he insisted federal budgetary issues play no role in the central bank’s policy decisions.

And despite his frequent claims of not wanting to take sides in political debates over fiscal policy, Powell suggested Congress shouldn’t even try to rein in the deficit at this time given high rates of unemployment.

In this environment where deficits don’t matter and monetary policy is ultra-loose, investment demand for precious metals is likely to remain strong. Although the pace of public bullion buying isn’t as furious as it was several days ago, market conditions remain tight.

Although Money Metals is still fairly well supplied, other U.S. dealers are mostly sold out of privately minted silver bars and rounds – the favorites of value-focused silver investors.

The supply situation in silver coins is similar, with some availability but higher premiums on certain items, particularly Silver Eagles which have become scarce as a result of the U.S. Mint failing miserably to keep up with the retail demand.

Gold, platinum, palladium, and copper products have faced less intense buying pressure. Availability and premiums there are generally not as stressed at this time, although they are still up a bit from their pre-Covid levels.

Conditions can change without warning or notice. So can spot prices. Those who are waiting for the “perfect” time to buy would be well-advised to take at least a partial position beforehand – in case the perfect time never arrives.

 

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.

 

Read More

How to Survive a Silver-Gold Sucker Punch

Published here: http://goldsilverworlds.com/gold-silver-price-news/how-to-survive-a-silver-gold-sucker-punch/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-survive-a-silver-gold-sucker-punch

Anyone who owns precious metals, mining shares or metals’ ETFs knows the drill.

First, gold and silver begin to establish an uptrend on the charts. Analysts (like us) start writing about how prices are getting ready to make an upside run.

Then “out of nowhere” thousands of highly margined futures contracts hit the market on the short side, “re-painting” the charts, sending terror into the hearts of stackers and those who believe in “honest money.”

The reality is that honest money is being manipulated for personal gain by dishonest traders, enabled by “regulators” who, to put it charitably, look the other way.

It can be disheartening. It can make you feel helpless.

And worse, it can knock you off what David Morgan, Doug Casey, and others believe is destined to become the biggest precious metals and mining stock bull run of our lifetimes.

But you can get back up again and persevere on the path to the Winners’ Table.

Years ago, when I was moving through the Dan ranks in martial arts’ study with my revered Sensei (who unexpectedly passed away last December, ending – at least on this plane – our 33-year relationship), I was given an assignment.

“Choose two or three self-defense situations you’ve been in when you felt unable to respond, and design effective, multiple-response counter attacks,” he said.

The late Professor Bradley J. Steiner with David H. Smith.

Remembering how in third grade I had been sucker punched by a supposed friend when I reached out to shake hands, and how terrible that felt, I went to work on a solution.

I trained full-out for five minutes, then stopped, breathed out fully – and held my breath to see what kind of offensive response(s) I could execute.

Surprisingly, even though my lungs were oxygen-deprived, I was able to perform several powerful empty hand and kicking techniques.

In the event, these would have provided an effective self-defense solution, even before breathing in to refill my lungs. (This capability also holds true for run, stop, draw-and-fire sidearm practice.)

Not long ago, when silver was dropping $2.50 an ounce, with gold down $75, a metals dealer had this to say:

“The Big money always moves way ahead of the crowd. And if you look at what sophisticated money on the planet is doing; they’re using price as a cover; manipulated price as a tool of misdirection, to accumulate.

Today, silver and gold are getting crushed like I’ve never seen (yet) our phones have been ringing off the hook for the past couple of days, as the price has dropped…and no one is selling anything… This is nothing more than a function of a paper price hit-and-run; a paper price drive-by shooting. As soon as the Commercials get to where they can cover, the price will turn around.

The whole concept of the art of war is misdirection.

They (the “Floor traders”) realize that people are so inundated with life that they don’t have time to look under the hood.

So how do you control price or sentiment? You beat the heck out of the price and espouse negative rhetoric across the gamut of big-business-controlled media…

This allows big money to accumulate gold and silver in copius amounts without being crowded out of their trade.

• Why did central banks reclassify gold as a Tier 1 (good as cash) asset?
• Why have central banks been massively accumulating? (Bloomberg reports, that in the last two years, central banks have acquired more than 1,300 tonnes of gold, which they’ve termed “the biggest gold-buying spree in half a century.”)
• Why are the most wealthy and influential people on the COMEX – the “Others” – pulling record amounts (physical gold and silver) off the COMEX?

In a daily column titled, “This is No Time to Give Up on Gold,” Rick Ackerman, of Rick’s Picks, commented about the metal’s swoon:

With gold’s gratuitous, 4% plunge on Friday, bullion has once again affirmed its reputation as one of the nastiest, most frustrating assets an investor can own. Its chief enemy is a global network of shamans, thimble-riggers and feather merchants who make their living borrowing bullion from the central banks for practically nothing, then lending it to everyone else for slightly more.

They are always looking for excuses to pound quotes so that they can replace what they’ve borrowed at a lower price. Helpful to this goal is a story that, however ridiculous, spooks gold bugs into dumping their holdings.

The massive selling of metals is an illusion. And yes, it’s been going on for quite a while.

During a 2010 CFTC hearing, CPM Group’s Jeff Christian testified that: “Precious metals trade in a multiple of a hundred times the amount of the underlying metal.” In other words, prices are manipulated and suppressed with bets placed on tons of imaginary or non-existent metals.

In his book “Rigged: Exposing the Largest Financial Fraud in History, Stuart Englert concludes that “More imaginary gold and silver is traded in a few days than is mined in an entire year.

Such large-scale trading is at the heart of the price suppression scheme. This supply illusion causes the paper metals’ price to be manipulated lower, even if demand is rising!”

So… how can YOU respond to these periodic “shakedowns”?

Ideally, as Master Miyagi in The Karate Kid movie would say, “Don’t be there.” You can sidestep a lot of the action by not trading on margin, buying your physical in tranches rather than all at once, and saving some capital to deploy during one of these take downs.

Of course, if you have a position, you’ll need to suffer through some short-term pain while prices get back to recognizing true supply/demand reality. But now that you know what’s going on, it should help you dial down the emotions – and certainly not give up!

One of the core principles that David Morgan at The Morgan Report teaches is that “The market is ultimately bigger than any attempts to subvert it.” Keeping this in mind can enable you to “stay long and strong” while the inevitable sorting out takes place, and metals prices bounce back quickly thereafter.

 

David Smith is Senior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com. For the past 15 years, he has investigated precious metals’ mines and exploration sites in Argentina, Chile, Mexico, Bolivia, China, Canada, and the U.S. He shares his resource sector findings with readers, the media, and North American investment conference attendees.

Read More