Tag Archives: silver coins

Silver And Gresham’s Law

Gold is unobtainable for most people in the world the way it’s priced right now. If a global crisis hits silver is going to be remonetized by the free market. If it’s not just an industrial metal, like it is today, if governments and central banks start holding it (silver), and this is a copy-cat effect, because obviously you know this, once one of the central banks does something the rest will do it because they don’t want to be different. – Lior Gantz, The Daily Coin, Silver Will Be Re-Monetized By The Market

In 1965 Lyndon Johnson signed the Coinage Act of 1965, which removed the silver content from dimes and quarters and took the silver content in half-dollars down to 40%.   In 1970 silver was removed completely from the half-dollars.   The excuse given was that the country was running out of silver.    But the truth is that the U.S. Government in conjunction with England was dumping its Central Bank stock of silver  (and gold) onto the market in order to prevent the price of these precious metals from rising against the U.S. dollar, which had been effectively the world’s reserve currency for 20 years.

In fact, the silver-based U.S. coins were disappearing from the market because the value of the silver content in these coins had risen above the face value of the coins.  It was real-time proof of Gresham’s Law.   In effect, it was an effort by the U.S. Government to de-monetize silver, which has been civilized history’s oldest monetary metal.  The U.S. could not yet de-monetize gold because, based on the Bretton Woods Agreement, the U.S. was required to back all Treasuries bonds issued to foreign buyers with gold.   But a year after the last remnants of silver were removed from U.S.-minted coins, the Nixon Government disconnected gold from the reserve currency.

Ultimately, silver will become re-monetized.  Silver has been, is and always will be “poor man’s gold.”  In today’s episode of The Daily Coin, we discuss the eventual re-monetization of silver.   As a bonus, we describe the fraudulent nature of Tesla’s latest earnings report.

No State shall…coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts. – U.S. Constitution, Article 1, Section 10, Clause 1

Why Are Central Banks Buying Mining Stocks?

It was reported last week that the Norwegian and Swiss Central Banks had accumulated large positions in several high quality gold and silver mining stocks.  Why would these bankers want to own producers of a barbarous relic?

This is not some scheme to load up on miners and then dump them into the market to help the Fed/ECB/BOE manipulate the precious metals.  That’s an absurd view.  They would just short shares if they wanted to accomplish that.

The dollar’s reserve status is coming to an end. In fact, the current fiat currency system is coming to an end.  Central Bankers know this better than anyone.  Every western CB has been printing  money and buying worthless assets in order to keep the system from collapsing.  Central Banks that want to survive are also finding ways to hedge their fiat currency-based portfolios with negative beta assets.  Mining stocks are the easiest way to gain exposure to coming explosion in the price of gold and silver.   Also note that Norway and Switzerland are not members of the EU.

We discuss this topic in this week’s Shadow of Truth.  We also analyze the Hillary Clinton health situation:

World’s Largest Silver Producer Calls On The LBMA To Explain Last Week’s Fraudulent Silver Fix

The London gold/silver fix was established in 1919 principally by the House of Rothschild to enable the Rothschilds  to control  international money markets through the manipulation of the price of gold.  The daily gold/silver fix was conducted in the offices of N.M. Rothschild and Company.  Fast-forward to 2016 and very little about the London fix has changed, other than some of the names involved with setting the “fix.”

As most of you know by know, the London price fix committee “fixed” the price of silver 84 cents below the market price as represented by silver futures trading.  In the context of the daily interventions in the precious metals market in London and NYC, this act of manipulation was a particularly brazen display of contemptuous disregard for anti-collusion laws.

The parties who were harmed by this are the entities that had posted offerings in physical silver prior to the fix.  They are the ones who need to initiate legal action so we can find out what happened.  Certainly mining companies who posted their silver for sale had their face ripped off by this event.  The more interesting side of the “fix” would be know the identities of the beneficiaries.   My bet is that the bullion banks, some of whom are involved in the price fix process, were the biggest beneficiaries of the fraudulent price fixing.

As it turns out, the world’s largest silver producer, Poland-based KGHM, has called on the LBMA to provide an explanation:

KGHM, one of the largest producers of copper and the single largest producer of silver in the world, called the difference between the prices “very alarming” and called on the London Bullion Market Association (LBMA) to provide an explanation.  LINK

Unfortunately, KGHM’s half-hearted plea will fall on deaf ears.   The criminal manipulation of the London gold and silver market has been going on for over 100 years.  Nothing will change that until the west collapses and the global system of fiat currencies is reset.

Having said that, not only does the LBMA price set the price for clearing physical gold and silver trades twice a day, it also is used to benchmark OTC derivatives.  My best educated guess is that a couple of the most influential bullion banks involved in the fix – JP Morgan and HSBC, each of whom respectively operates the SLV and GLD trusts – used the fraudulent silver price on Friday in order to address an immediate need – either a large physical silver deficiency or a derivatives problem.

A friend of Bill “Midas” Muphy’s sent a note into Midas relating what happened with CDS in “The Big Short” with the silver market:

I can’t get the comparison to silver out of my mind as it truly is the mirror image of Credit Default Swaps. That is the CDS were never allowed to rise in value as the underlying mortgage bonds defaulted yet Goldman was constantly trying to buy them back from the holders at very low prices…..it wasn’t until Goldman had been able to purchase enough CDS back that the price skyrocketed.

I think what we saw on the LBMA last week with the silver fix is exactly that.

Unfortunately we’ll never know the truth about what happened.  But the act itself reflects the desperation that is creeping into the bullion banking establishment.  Desperation that is being fueled by what I believe is the early stages of an extremely powerful resumption of the bull market in gold/silver.

SoT – Gerald Celente: Get Prepped For Global Systemic Collapse

More ridiculous predictable market action today. The worse things become in the real world the more frantic the stupidity becomes. The American authorities are clearly terrified that their world role as hegemon is being threatened and it is not beyond the realm of possibility that your fears of war will turn out to be a reality. – John Embry

It was reported yesterday that a Government panel is recommending that all adults over the age of 18 should be screened for “depression” – LINK. Nothwithstanding the fact that the term “depression” is a subjective concept, it exemplifies the move in the Government to control the population. It’s a frightening movement toward Totalitarianism that has been in motion since the formation of the Federal Reserve and the ratification of the16th Amendment, giving the Federal Government authority to enact an income tax. Both events occurred in 1913.

Make no mistake about it, the Government panel’s recommendation, if it finds its way somehow through Congress, is an underhanded way for the Government to implement gun control. We can’t have depressed people running around with guns in their possession. In addition, there’s no doubt that one of the big drug or hospital corporations has devised some sort of “depression screening” protocol which generates very high margin profits. Even better if the testing is covered by Medicare and Medicaid so the taxpayers can fill yet another big trough from which corporate America feeds.

The irony in the Totalitarian creep of the Federal Government is that humans don’t like the idea that they can’t control their immediate lives and living environment. Thus, they want to believe with surprising adamance that their vote matters – that they can control the outcome of an election with their “participation” in the process. Of course, nothing could be farther from the truth. The fact of the matter is that the modern Presidential process has become little more than the political version of “The Jerry Springer Show.” It’s like watching a slow motion train wreck repetitively with the now-frequent “debates” and “town hall” meetings.

Sorry. Maybe if you could vote for each of the well-funded 25 lobbyists per elected House Rep and Senator your participation in the process might matter. The only part of an election campaign that matters is the amount of money that gets apportioned by Wall Street financial firms, big pharmaceutical companies and the defense industry. Democrats who think Big Labor matters better think again – just look at the scale of the de-industrialization of America which has converted the majority of the U.S. manufacturing workforce into Walmart greeters and bartenders.

Perhaps the only safe refuge from this insanity and from the systemic destruction headed our way is to move as much of your wealth out of the fiat currency based financial system and into the safe haven of precious metals. Of course, Wall Street and the Government-controlled propaganda disseminators – otherwise known as mainstream financial media – are doing their best to discourage investors from even learning how to spell “gold.” It’s the barbarous relic of cavemen which you can’t eat and doesn’t earn interest. It’s about as useful as a Pet Rock.

What they won’t show you is this graph – click on image to enlarge (source: Zerohedge):

CelenteGOLDThis graph shows the performance of gold (red line) vs. the British pound, euro, yen, Swiss franc and commodity index since Jan 2000.  The elitists running our system don’t want you see that graph because that graph embodies the truth about the deteriorating economic, political and geopolitical condition of both the U.S. and the world.  Better to have you focused on Trump vs. Cruz or Trump vs. Clinton. And Obama clearly doesn’t care because he now spends most of his time golfing in Hawaii and staying at his future $10 million enclave – paid for by the Pritzker Family and Company.

The Shadow of Truth hosted Gerald Celente for what we believe may be his best podcast interview in quite some time.  It borders on cerebral and we presented Mr. Celente with several thought-provoking questions – we think you will enjoy this side of the world’s foremost trends forecaster:

When people lose everything and they have noting to lose, they “lose it.”  – Gerald Celente on the Shadow of Truth.

SoT – Peter Schiff: The U.S. Is One Gigantic Bubble Economy

The admission that the economy is so weak that it needs more QE is going to destroy the narrative that the U.S. economy is in great shape and it’s no longer going to be the safe haven for capital around the world…it’s going to prick the bubble in the dollar…and people are going to realize that we’ve never recovered from anything, the economy is sicker than ever, the Fed’s going to make it even sicker with more of its toxic monetary policy, the dollar’s going to tank and the price of gold is going to skyrocket – and people need to prepare for that now.  – Peter Schiff on the Shadow of Truth

When Mt. Vesuvius blew, no one knew when it would happen or how big the eruption would be.  Everyone knew a volcanic event was going to occur and yet, the magnitude of the event caught a lot of people by surprise. The eruption destroyed two Roman cities and several surrounding settlements.  It killed an estimated 16,000 people.  The question is, how come more people didn’t leave the area surrounding Vesuvius when they knew that something was going happen at some point?

The United States financial system – including the viability of the U.S. dollar – is analogous to the eruption of Mt. Vesuvius.  A lot of people know something is wrong – evidenced by the growing support for the Trump candidacy – and yet 99.5% of the population is ignoring the warning signs of a systemic eruption of unknown magnitude.  It’s an event that draws closer with each passing day.

The warning signals of the coming financial markets collapse are in full view.  The warning signal from the junk bond market, triggered by but not limited to the collapsing energy sector, is beginning to spread into and infect the rest of the financial markets like an uncontrollable virus. If you are an investor or a professional money manager, what more of a warning do you need that this:

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That chart resembles a giant tsunami that has coiled offshore and is getting ready to slam into the the nearby beach. Only in this case millions of people remain on the “beach” to watch the horror show unfold without leaving for safer ground. It’s as if everyone knows a catastrophe is about to occur and yet most remain embalmed with the hope that it can’t really happen.

The willingness of people to park their paper in financial assets like bonds is simply a function of their lack of understanding of the problems that exist and their false confidence in Central Banks.  – Peter Schiff

The systemic causes of the financial crisis that hit in 2008 – and which was really a de facto financial system collapse – were never properly treated. Rather, they were medicated by heavy doses of money printing and free money, the latter which is otherwise known as ZIRP. The moral hazards of this monetary policy have fomented in impending systemic eruption which will be the financial market’s equivalent of the historic Mt. Vesuvius volcanic blast. The timing of this is just as unpredictable as the consequences.

The Shadow of Truth hosted a conversation with Peter Schiff to discuss to discuss the impending financial market eruption and the inevitable dollar crisis, which will ultimately rip apart the U.S. financial and economic system:

SoT #63 James Turk: Gold/Silver – “This Thing Could Blow”

What we’ve got now with Central Banks and their financial repression with zero interest rates and destruction of fiat currencies, they’re destroying the inherent nature of capitalism itself:  the inherent nature of the accumulation of capital by the productive middle class – this is all being destroyed...one way or another, the world is going to go back to gold and silver [as the primary form of currency] – it’s just a matter of time.  –  James Turk on the Shadow of Truth

Gold and silver appear to have found their final bottom in the nasty 4-plus year price correction that began in May 2011.   Too be sure, this “correction” was largely a product of Central Bank intervention which was implemented to prevent gold and silver from signalling to the world that Governments globally, especially the U.S. Government, are in the process of destroying middle class wealth through the incessant debasement of paper currencies.

Since late July/early August, gold has moved up over 9% from its bottom ($1085, futures basis) and silver is up 14.5% from its bottom ($14.07, futures basis).  Of course, it remains to be seen if this is going to be more than a dead-cat bounce before the metals head back to re-test their bottom or set new lows, but specific market signals are suggesting that there’s a strong probability that the precious metals have embarked on the the long-awaited resumption of their secular bull market.

One of the primary signals is the persistent price “backwardation” observed in the London gold market since 2013.  As Turk explains in the podcast:

Backwardation shouldn’t happen in the gold market. The arbitrage opportunity should take it away. But we saw it 1999 for a couple of days when gold was its low and we saw in 2008 for a couple of days when gold reached its low then. We’ve seen backwardation more often than not since January 2013 when the Fed’s QE3 program started.

While backwardation occurs when there’s a shortage of physical gold available for immediate delivery on a “wholesale” basis – i.e. very large quantities – it also reflects that fact that investors prefer to hold onto the gold they have in possession rather than lend it to the market in exchange for the market’s promise to re-deliver that gold in the future at a lower cost to the investor.

In addition to backwardation, Mr. Turk discusses some other indicators which are signalling the likelihood of much higher gold/silver prices going forward plus his views on the “re-monetization” of gold – i.e. the market’s push to insert gold into the global financial system as a currency (it’s always been used as an asset).  Or, as Mr. Turk prefers to say, “the re-currencyzation” of gold:

There’s always a higher risk in fiat currency than there is in gold because gold can not be created out of thin air like paper currency can be created out of thin air. – James Turk, Shadow of Truth

SoT – Jeff Brown From Beijing: The Rise Of China And The Collapse Of The West

“The Americans are very good at using future money – the Chinese are good at saving.”  – Alibaba founder, Jack Ma at a UN meeting led by Chinese President, Xi Jinping

In China gold is money.  Every bank in China sells gold and silver right at the teller window. The savings rate of the Chinese population is 50% and the favored store of wealth is gold held in bank safety deposit boxes.  In fact, Jeff Brown quickly discovered after his first gold purchase that every safety deposit in Beijing was taken.

When you go into a bank here they hand out brochures that explain the Shanghai Gold Exchange to the people.  If you buy your gold through the Shanghai Gold Exchange you are exempt from the value-added tax.  –  Jeff Brown in Beijing, Shadow of Truth

The western media propaganda machine has inundated the airwaves with countless misleading and false reports about the Chinese economy.

It’s so surreal to hear about Armageddon and implosion [in China] because of the stock market.  That affects maybe 6% of the population that is invested in the stock market here…outside of the stock market correction things are just thriving over here…the manufacturing economy is down but the service economy booming here  – Jeff Brown, Shadow of Truth

Although the manufacturing sector of the economy in China has slowed down considerably, it’s still producing economy growth.  However, the service economy is exploding in ways that is not reported at all by the western media.  Furthermore, the manufacturing output slowdown has been caused by a dramatic decline in exports, which reflects the extent of the economic contraction occurring in Europe and the United States, China’s two largest export markets.

With regard to China unloading $200 billion recently in U.S. Treasuries, the western media has once again promoted highly misleading reports that China was dumping to raise liquidity in order to support the yuan.  But conveniently overlooked by everyone in the west is the fact that China committed and recently funded $150 billion for the Asian Infrastructure Investment bank ($50 billion) and $100 billion for the new BRICS bank.

And lets put this in perspective.   China is sitting on approximately $3.4 trillion in foreign exchange reserves, $1 trillion of which is Treasuries.  It was only a matter of time before China decided to diversify away from the U.S. dollar component of its FX reserves. Furthermore, contrast this the paltry $30 billion in foreign exchange reserves of the United States.

They were very upset when the United States snuffed China from putting the RMB into the IMF Special Drawing Rights you could just “feel” the anger over here among the leadership.  That’s when they announced that bogus amount of PBoC gold holdings and then a week later they came out and devalued the Renminbi.  – Jeff Brown, Shadow of Truth

Jeff Brown in Beijing provided us with an absolutely fascinating, must-hear perspective of the incredible proliferation of the middle class in China and the booming local economies all throughout the country.

“There’s so much going on that is not reported in the west that it’s unreal” – Jeff Brown, Shadow of Truth

Please visit Jeff’s website 44days.net and find his articles on the link to his blog: LINK

John Embry: A Serious Upside Explosion In Silver Is Coming

I really like these interviews you and Rory do and for some reason they are a notch above most of the other work out there.  – comment from “Joe”

Yes, I know, we’ve been hearing experts including your’s truly talk about a coming upside explosion in silver for a couple years now.  But the action in the market is suggestive of an underlying dynamic that has changed.   Every attempt by the bullion banks to smash silver below $16 now lasts less than 24 trading hours.   Just look at last week:  silver was smashed below $16 a couple times only bounce back quickly with big-volume spikes.

This occurred, ironically, about halfway thru our podcast recording with John Embry.   Silver was smashed at the Comex open on no news and taken well below $16.  Toward the end of our recording session with John, silver had traded back over $16.   It moved even higher a bit later.   Silver is definitely behaving a  lot differently than it has been over the last 4 years and I will be doing a blog post specifically on this topic later this week, with charts to show the action.

In addition, James Turk mentioned in another interview last week that silver has now joined gold in backwardation from spot to the front-month contract on the LBMA in London.  This means that there is a shortage of silver and buyers prefer delivery upfront rather than paying less through a forward contract in 30 days.   This means buyers prefer holding metal over cash.

You guys are just great! I love the laughs and the lighthearted spirit that you bring to your interviews. Dave Kranzler is a real pleasure to listen to given his obvious expertise and insight. His words resonate with me completely. John Embry, moreover, is a great guest; I’ve been reading his columns for years and find him very credible and articulate. Thank you guys!!
 
i really like listening to these guys; Dave Kranzler is such a natural & i learned lots from John Embry & Rory is a super interviewer & knows the real scoop on what’s really going on.  thank you for the great conversation.   plz ask John Embry back soon.

I wanted to repost our podcast interview with John Embry because I believe it’s one of Embry’s best interviews in a long time.  He does not hold back or filter his comments.  Rory and I both knew after we finished our recording session that this was a home run interview:

Rory and Dave – you both are awesome!! A thought – i think the central banks of the world are “giving” the impression that they are holding the financial system together [eg, the reverse repo data from the fed]. I think their [central banks] mission is to “take down” the current financial system using the OPTICS that they were desperately trying to keep it together.

The tipping point is NOW. They need to tip this current system over starting now – if they have any hope of the 2018 goal of the progression to a single world currency, {ie, 1988 Economist article of the rise of the Phoenix world currency] – “R Damm” – comment on Shadow of Truth

SoT Ep 16 – JamesTurk: The Gold In London Is Pretty Much Gone

I think London has been pretty much emptied out – I don’t think there’s a lot gold left in London that’s available for shipment elsewhere.  – James Turk, Shadow of Truth podcast – LINK

The rate of the flow of gold from western bank and investment vaults into Asia accelerated in the first quarter of 2015.   India just announced that it imported 125 tonnes of gold in March, more than double the amount imported in March 2014.  And 625 tonnes of gold was withdrawn from the Shanghai Gold Exchange during Q1, up 10.8% from Q1 2014.   In that all gold purchased in China – other than the gold purchased by the PBOC – must pass through the SGE, withdrawals from the SGE represent the China’s gold demand (not including the PBOC).   China only produces 400 tonnes per year, or 100 tonnes per quarter.  This means recycled gold plus imports must account for balance of demand.

Just from combined demand from India and China, there is a supply deficit of gold.  In fact, the global gold market has been functioning with a supply deficit since at least the mid-1990’s.  Frank Veneroso was the first analyst/consultant to figure this out based on conversations in his meetings as a consultant with the world’s Central Banks.   Veneroso predicted that eventually the price of gold would have to explode higher once the demand completely overwhelmed the supply.

GATA picked up on Veneroso’s work and began a campaign to educate the world about the western Central Bank schemes being used to keep the price of gold suppressed in order to prop up the legitimacy of paper fiat currencies.

James Turk has been a long time consultant to GATA and, in my opinion, knows as much about the global gold market as anyone.   Turk was the first analyst to look at the original GLD prospectus in 2004 and conclude that it was little more than paper gold:

The GLD prospectus is quite clear that the shares are not backed by gold.  It says the structure was designed to track the price of gold.

Rory Hall (The Daily Coin) and I hosted James Turk on our Shadow of Truth project.  We cover the latest developments in the Greece/EU saga, the condition of “backwardation” in the London gold market and the catastrophic level of debt globally.  We also discuss in-depth why GLD likely has very little physical gold sitting in its vault that is legally owned by the Trust and the reasons why the supply/demand deficit will lead, eventually, to much higher prices for gold.

I try to read/listen anytime Turk is willing to share his knowledge with the public.  This is an incredible interview with someone who I consider to be as knowledgeable about the gold market as anyone in the world (other than maybe BIS insiders).  We think you’ll find it time well-spent to listen to the entire podcast:

The Global Power Structure Is Shifting East Along With All Of The Gold

All of these western – if you will – European and American Central Banks – have completely gone all-in on the fiat currency structure and we’re all going to suffer as a result.  – Craig Hemke – aka “Turd Furguson,” Daily Coin podcast

What is the significance behind China’s historical physical gold accumulation?   No one really knows how much gold China’s Central Bank has accumulated over the past 20 years. Similarly no one knows how much gold is really sitting in the Fed’s vaults.  We do know that the Fed has spent a small fortune – including hiring Linda Robinson, who was the head of Enron’s Washington lobby office – to fight Congress’ effort to pass legislation requiring a full audit of the Fed’s gold.

One thing we know for sure, in light of the fact that China and India alone are importing more gold than is mined by all gold mines globally – the western Central Banks have unloaded most if not all of their sovereign-owned gold.

Rory Hall of The Daily Coin hosted Craig Hemke of the  TF Metals Report – for a discussion about the new London gold price “fix,” among other timely issues connected with the ongoing massive transfer of physical gold from the western Central Bank system to  Asia:

It’s well worth the 25 minutes spent listening to this conversation.  I have a bad feeling that sometime within the next 12-24 months, citizens of the west are going to understand the significance of the meaning behind “the Golden Rule”:  “He who controls the gold makes the rules.”