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Aiming for Knowledge and Better Decision-Making

The price of yellow metal went up nine bucks last week. And the price of silver three rose cents, which is back to where it was two weeks earlier. We need to rant, and promise to tie it back to the prices of the metals. We have written these past several weeks about the fact that the franc has been rendered useless. Owning a franc does nothing for you, other than to trade to the next person at hopefully a higher price.

When the money of the realm becomes literally useless as money – the charts and data example above shows excerpts of what happened in Germany from WW1 to the hyperinflation blow-out of 1923. In the end, one simply could no longer use the Reichsmark as a medium of exchange. [PT]

This is the state into which gold has been forced, by a series of actions by the US and other governments.

Indeed, so useless has gold become, that we measure its value in terms of the irredeemable fiat dollar. We all love to hate the dollar, we all think the dollar will collapse at some point in the future. Yet so ubiquitous — and useful — is it that we measure even money in terms of dollars!

And “we” does not refer to Keynesians and their close cousins the Monetarists. “We” refers to many Monetary Metals clients and prospective clients. Yes, truly, the folks that are keen to earn interest on their money paid in money — gold — ask constantly our opinion on the price of money in terms of irredeemable Fed credit notes!

…click on the above link to read the rest of the article…

911 was a bank heist

October 18, 2018

911 was a bank heist

Food for thought. 9/11 was a bank heist.

As we explain in Splitting Pennies and Splitting Bits – the world is not as it seems.

If we can source this untold story even from the JYT then you know it must be real:

A team of 30 firefighters and police officers are helping to move the metals, a task that can be measured practically down to the flake but that has been rounded off at 379,036 ounces of gold and 29,942,619 ounces of silver. As layers of debris are peeled away, recovery workers are opening gangways to intact portions of a 16-acre basement that was largely unseen but was a place of spectacular scope in its own right. Just the basement area of the World Trade Center enclosed twice as much space as the entire Empire State Building. Nearly a quarter of a mile below the spectacular vistas from the towers was their upside-down attic dropping 70 feet below the ground, a strange world with enough room for fortunes in gold and silver, for Godiva chocolates, assault weapons, old furniture, bricks of cocaine, phony taxicabs and Central Intelligence Agency files. With so many people still lost, the owners of this stuff have maintained a discreet silence during the recovery operations. But that doesn’t mean they’re not interested.

So let’s repeat this. Cocaine, guns, gold, silver, and secret CIA files – all stored underground in the WTC complex and all went missing? How convenient!

You can’t make this stuff up folks. Growing up in the 90’s you can’t miss Hollywood films like Die Hard with a Vengeance. But who would have even suggested, that only 6 years later, an eerily similar plot would unfold in Lower Manhattan, shaping the world forever?

…click on the above link to read the rest of the article…

Silver v Gold Standard

September 30, 2018

Silver v Gold Standard

QUESTION: Mr. Armstrong; You do not give much credence to the world returning to a gold standard. Didn’t the entire world use the gold standard before?

Thank you for your input

ANSWER: The entire world has NEVER been on the gold standard simultaneously. Asia was on a silver standard while the West was on a gold standard. Above is the first coin struck in Hong Kong in 1866 which was the Hong Kong Dollar. The West struck Trade Dollars during the 19th century to pay for goods from Asia and they were silver – never gold. Here is an example of both the British and American trade dollars used in payments particularly with China.

It is just not practical that we have a monetary system that is based upon a commodity. The true value of money is the productive-capability of its people. China, Germany, Japan, all rose from economic depression WITHOUT gold. They did it with the productive capacity of the people. The produce whatever and sell it to someone else and then get gold or whatever in return. This theory that you have nothing without gold is just stupid. It would mean that no nation could ever rise no matter how good their people are because they lack a natural source of gold.

The collapse of the Turkish lira is a reflection of the collapse in confidence in the government. The same has taken place in Venezuela. China and Japan rose from the ashes, not because of their possession of commodities, but because they could bring their people to bear and produce various items efficiently and cost-effective. It was the people first that produced the economic recovery and then they bought even gold.

…click on the above link to read the rest of the article…

Which Precious Metals Are Likely To Be Better Investments During The Next Market Crash?

September 18, 2018

Which Precious Metals Are Likely To Be Better Investments During The Next Market Crash?

The question on the minds of many investors, is which of the precious metals will be better investments during the next market crash? I should know because I receive this question in my email box quite often. So, I decided to test the price action of several metals and how each traded during a large market correction.

This article will focus on the top four precious metals, gold, silver, platinum, and palladium. Even though Rhodium and other metals are considered precious, the ones listed above take the lion’s share of the investment market. Furthermore, while platinum and palladium are purchased as investments, they have a much larger industrial component than gold or silver.

As I have mentioned many times, gold and silver disconnected from the broader markets when the Dow Jones Index fell 2,000 points in the first six weeks of 2016.

The two reasons I believe gold and silver jumped considerably as the markets sold off at the beginning of 2016 were:

Gold and Silver were extremely oversold, and the Commercial hedgers’ short positions were at a low, thus very bullish
Investors were extremely worried that the Dow Jones and markets were beginning a massive correction, so they moved into both gold and silver

To explain why investors were spooked in 2016, we need to look at the following chart:

Typically during a major correction, the market makes several attempts at a top. In 2007, there were three tops made before the market finally came down in 2008. Then in 2015, we had three more tops and two large corrections. The reason investors’ worry turned into fear at the beginning of 2016 was that the last top did not reach the previous 18,000 level.

And this can be seen in the next chart:

…click on the above link to read the rest of the article…

Real Gold and Silver Are Hedges Against the “Stupidity of the Elites” – Kiyosaki

September 3, 2018

Real Gold and Silver Are Hedges Against the “Stupidity of the Elites” – Kiyosaki

Real Gold and Silver – 7 Reasons Robert Kiyosaki Owns Them

In Robert Kiyosaki’s just-released book ‘FAKE – Fake Money, Fake Teachers, Fake Assets’, the best selling ‘Rich Dad’ author and respected personal finance expert details the seven reasons he owns “real gold and silver.”

The book is designed to deliver insights and answers to help the millions of people – many of whom have had little in the way of financial education — determine what is ‘real’ and relevant to their financial future.

Kiyosaki is the inspirational author of “Rich Dad, Poor Dad,” the No. 1 selling personal finance book of all time, and therefore always worth listening to.

Kiyosaki believes in the law of attraction and the principle that ‘like attracts like’ and focusing on the purest forms of wealth – gold and silver – attracts like and brings more wealth into gold owners lives.

He believes that holding real gold coins and bars attracts wealth to gold bullion owners through the law of attraction and is the best way to attract wealth and have a steady income.

In the book, CHAPTER 3 of which was released on Saturday (September 1st), Kioyosaki considers the 7 Reasons I Own Real Gold and Silver and we feature an short extract in our market update today:

REASON #1: Real gold and silver are not investments.

I do not own gold and silver to make money. They are insurance, a hedge against the stupidity of the elites… and myself.

I have insurance on my car, just in case someone hits me, or in case I hit someone else. Gold and silver serve a similar purpose.

…click on the above link to read the rest of the article…

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Gold, Silver, Shale Oil Industry & The Economy: My Interview With James Kunstler

August 16, 2018

Gold, Silver, Shale Oil Industry & The Economy: My Interview With James Kunstler

How insane are the markets today? Well, it’s always a pleasure to discuss this and other topics with James Howard Kunstler. Jim and I had a lively conversation about gold, silver, the shale oil industry and the overall economy in his most recent KunstlerCast. James is one of the few that understands the dire energy predicament we face.

I started following James Kunstler after listening to an interview he had with Art Bell on Coast-To-Coast AM, back in 2005. James is way ahead of his time and in his book, “The Long Emergency” and in the video, “End of Suburbia” he describes what the world looks like after peak oil… and it isn’t pretty.

During our interview, James and I chatted about precious metals manipulation, the soon-to-be disintegrating shale oil industry, the insanely overvalued markets, peak oil, and many other topics. One of the more important items I brought up was the incorrect notion that the Central banks can continue to rig the markets indefinitely. They can’t.

And why is that? Because Central banks can’t continue to prop up the market with paper when the problem is one based on a limitation of PHYSICAL OIL. If the Central banks want to really solve our problems, they have to find a lot more oil… but there just really isn’t much left to find.

So, there lies the rub

To listen to my interview with James Howard Kunstler, please click on the link below:

KunstlerCast 306 — Gold, Silver, and Oil with Steve St. Angelo

Also, please check out James Kunstler’s website as he is a prolific writer and has many interesting books on his website.

It’s Time To Care Again About Gold & Silver

June 30, 2018

DnD-Production.com/Shutterstock

It’s Time To Care Again About Gold & Silver

Fundamentals and TA are signaling extreme undervaluation

It’s been a while since I’ve covered the precious metals in an article. They’ve been range-bound for much of the past year, with few notable sector developments to report.

But I feel compelled to write about them today for two reasons:

The probability of an upwards re-pricing of the precious metals is rising, and
Both gold & silver are quite over-sold right now, technically-speaking.

With technical and fundamental indicators flashing green simultaneously like this, now is an advantageous time to consider increasing your PM exposure (I did so myself yesterday).

The Human Factor

Before I go into further detail on the current conditions of the PM market, here’s a recent personal experience that underscores how few people have any real familiarity with gold & silver as an asset class, let alone own any (beyond, perhaps, a bit of jewelry).

A good friend moved and needed help transporting some bullion from his old town to his new one. Most of it was silver, several thousand ounces worth.

That much silver is pretty friggin’ heavy.

So we huffed and strained, hauling that load out of one bank vault, into his car, and from there into the vault at his new bank. While we did our best to be as discrete as possible, our sweaty, grunting 2-man production was hard for the bank staff to ignore.

Managers at both banks figured out what was going on, as it was pretty obvious. And both separately asked us out of genuine curiosity, “Is that real silver?”.

My friend briefly handed over a 100-oz bar so they could see for themselves, sparking conversations about the merits of owning physical bullion.

…click on the above link to read the rest of the article…

Manipulation of Gold & Silver by Bullion Banks

June 24, 2018

Manipulation of Gold & Silver by Bullion Banks

As a former spot currency trader for a major international bank, I have had first-hand experience of central banks directly intervening in currency markets in massive size, repeatedly. You’ll hear a lot of people say market manipulation is a conspiracy theory, despite the fact that it has been proven in court several times in various assets classes and especially in precious metals. Books have been written about Gold and Silver manipulation for decades. Central Bankers have admitted it publicly. Now it has become so obvious that it’s predictable. I know because I made 500% in less than 24 hours on Friday last on a 1-week SLV 15.50 strike put option I bought on Thursday at 2pm. I bought that put expecting the Bullion Banks to come in and hammer the metals, given the typical signals I was seeing ahead of each time they slam Gold and/or Silver lower. Moreover, I began warning people on Twitter a week ahead of time that this could happen (note the dates posted):

I’ll provide those typical signals later, but let’s take a look at what happened to Gold…

Since May 24^th, Gold has been capped at its 200 day moving average despite being oversold, extreme overbearish per the DSI and Funds positioning being at levels that has consistently led to strong rallies over the past 3 years. Yet, on this occasion the price went down?

So why did the price go down? Below is the daily changes in Gold open interest (“OI”) on the COMEX up to and including Friday last.

Notice how OI rose significantly around May 10, and the price of Gold fell hard. Then OI fell consistently but the price did not rise, instead it remained capped under its 200-day MA. Then, beginning Tuesday, June 12 and for the next two days, open interest rose a total of 18k contracts.

…click on the above link to read the rest of the article…

Ronald Stoeferle: Gold Is Dirt Cheap Right Now

June 13, 2018

Ronald Stoeferle: Gold Is Dirt Cheap Right Now

And a new bull market for the metal is beginning

Fresh from releasing his exhaustive 230-page annual report titled In Gold We Trust, Ronald Stoerferle joins us to summarize his forecast for the yellow metal.

Stoerferle, an author of several books on Austrian economics and head of strategy and portfolio management at Incrementum AG, concludes that gold is extremely cheap right now in dollar terms. And he sees a new bull market beginning for the precious metal — one likely to quickly build momentum as the next (and long overdue) financial market correction arrives.

We’re at the beginning of a new stage of a bull market.

We’ve seen a massive correction with a big drawdown, but we’re now seeing the Commitment of Traders report suggesting that there’s been a washout. We’re seeing that sentiment is really negative. We’re seeing that nobody really cares about gold and mining stocks, and especially about silver. Silver is probably the biggest contrarian investment, though silver mining stocks are probably even more contrarian at the moment.

We all know that the herd behavior in the sector is getting more extreme. I think it has got to do with career risk in the financial industry, so nobody really wants to make a contrarian call. But once we go above this $1,360-$1,380 resistance, which is also the neckline of a large inverse head & shoulder formation, I think gold will hit $1,500, $1,600 pretty quickly.

The most important thing is: in comparison to all the monetary printing that we’ve seen in the last couple of years, gold got significantly cheaper. Gold, in monetary terms, is dirt cheap at the moment. We’re basically at the same levels like in 1971 when it comes to the gold backing of the US dollar. So gold is a bargain at this level.

…click on the above link to read the rest of the article…

My Views on US-Canada Trade, Steel’s Impact on National Security, NAFTA, and the Dollar

June 11, 2018

My Views on US-Canada Trade, Steel’s Impact on National Security, NAFTA, and the Dollar

Wolf Richter with Jim Goddard on This Week in Money:

Trade agreements are designed to benefit companies, not people – which is part of the problem. We also get into whether gold and silver will remain stuck in the current trading range, and whether there will be a recession under Trump.

Total U.S. Public Debt & Interest Expense Hit A New Record High

June 5, 2018

Total U.S. Public Debt & Interest Expense Hit A New Record High

The total U.S. public debt hit a new record high of $21.145 trillion on the last day in May. As the U.S. debt increased, so did the interest expense which jumped by more than $26 billion in the first seven months of the fiscal year. That’s correct; the United States government forked out an additional $26 billion to service its debt (Oct.-Apr) versus the same period last year.

While the U.S. debt reached a new high on May 31st, it took nearly two months to do it. Let me explain. During tax season, the total U.S. public debt actually declined from a peak of $21.135 trillion on April 10th to a low of $21.033 trillion on May 3rd. Since then, the U.S. debt has been steadily moving higher (including some daily fluctuations):

If you spend some time on the TreasuryDirect.gov site, you will see that the total public debt doesn’t go up in a straight line. There are days or weeks where the total debt declines. However, the overall trend is higher.

Now, a rising debt level impacts the interest the U.S. Treasury must pay on this debt… especially when the average interest rate also increases. According to the TreasuryDirect.gov, the interest expense rose from $257.3 billion (Oct-Apr) 2017 to $283.6 billion (Oct-Apr) this year:

As I mentioned, the U.S. government paid an additional $26 billion to service the debt than it did last year. Now, $26 billion may not seem like a lot of money these days, but it could buy the total global Registered Silver inventory:

Thus, the extra $26 billion paid by the U.S. Treasury to service its debt would have purchased the 1+ billion ounces of silver held in the COMEX (270 million oz) and all the Global Silver ETFs. And, this would include the 138 million oz of silver supposedly stored at the JP Morgan vaults.

…click on the above link to read the rest of the article…

Wealth Preservation: Understanding Silver and Gold Content for Collapse Investing

May 11, 2018

Wealth Preservation: Understanding Silver and Gold Content for Collapse Investing

Investing in precious metals is a great way to diversify and preserve your wealth. You can even find it on eBay! While this article is by no means an exhaustive treatise on gold and silver buying, it is more of a “primer” to give you some basic information you need to get started (if you plan on going into this area) or to provide knowledge to arm you in your dealings with people. Some of this may be useful for you in purchases of precious metals, but the scope of this is mainly to cover things that you may find when out hunting in the flea markets, thrift stores, yard sales, or other areas of the “secondary shops.”

First, we’ll cover gold measured in terms of purity that is expressed in karats, symbolized by the letter “K” and “kt” with jewelers.

24 Karat 100%, or pure gold

22 Karat 91.7% gold

18 Karat 75.0% gold

14 Karat 58.3% gold

10 Karat 41.7% gold

Now let’s cover silver, a metal marked with a purity mark. Here are the marks and their percentage of silver contents that correspond:

999 99.9% silver

958 95.8% silver

925 92.5% silver (known as Sterling silver)

800 80.0% silver

We are referring mostly to jewelry or decorative pieces and keepsakes here (such as silverware, candlestick holders, or other things that may bear a stamp to show their precious metal content). Coins are a little bit more involved and beyond the scope of this article, as there are too many to list here.

One of the problems that people run into with jewelry and their great-grandmother’s candlestick holders is that most businesses that buy them will usually pay according to their melt value. This is especially true with silver. Most of these dealers will estimate the silver content of your item by weight, and then will pay you roughly 15-25% under value to cover their handling and melting charges.

Learn how to test your junk gold and silver

…click on the above link to read the rest of the article…

The Two Most Important Reasons To Invest In Gold & Silver

May 8, 2018

The Two Most Important Reasons To Invest In Gold & Silver

As the markets and financial system continue to be propped up by an ever-increasing amount of debt and leverage, precious metals investors need to understand the two most important reasons to invest in gold and silver. While one of the reasons to own precious metals is understood by many in the alternative media community, the more important critical factor is not.

The motivation to write this article is due to the increasing amount of negative sentiment and comments in regards to precious metals analysis and investing. There’s a very interesting notion put forth by many commenters that the precious metals analysts and dealers are the frauds and charlatans, not Wall Street or the Central Banks. I imagine they believe this because gold and silver prices haven’t performed as forecasted or compared to the insanely inflated stock, real estate, and crypto markets.

Before I discuss the two important reasons to own precious metals, I would like to provide some information about the fraud and corruption taking place in the financial industry.

Now, it is true that a few precious metals dealers have defrauded investors, but this is true with all sectors and markets in the financial industry. However, investors frustrated with the precious metals tend to forget the massive amount of fraud and losses that took place as a result of the 2008 Housing and Investment Banking collapse.

For example, according to the article, Financial Crisis Bank Fines Hit Record 10 Years After The Market Collapse:

$150 billion (127.6 billion euros) – that’s how much US authorities have collected in fines from financial institutions for shady dealings with subprime mortgages since the beginning of the credit crisis in 2007, according to research by the British business daily Financial Times (FT).

…click on the above link to read the rest of the article…

Paper Gold Market Normalizing, Silver Getting Even More Extreme

May 7, 2018

Paper Gold Market Normalizing, Silver Getting Even More Extreme

The past few months have seen some unusual, maybe even unique, developments in the gold and silver futures markets, with gold becoming extremely bearish and silver almost ridiculously bullish.

Neither imbalance has amounted to much in terms of price action, so it’s not clear whether the most recent changes matter. Still, the action in both gold and silver futures remains unusual enough to bear watching.

Beginning with gold, large speculators have lately been hyper-bullish and commercials extremely bearish. Since the former tend to be wrong at the extremes and the latter right, that was disturbing for anyone who didn’t like the idea of gold tanking in the short term.

Gold did fall a bit lately, to the low $1,300s, and that seems to have been enough to cause futures players to start unwinding their extreme positions. Speculators cut their net long bets by about 30,000 contracts and commercials cut their net shorts by a similar amount, which in the scheme of things is a big change. Another few weeks like this and both speculators and commercials will be close to neutral, which is positive for gold’s price going forward.

But silver has been and remains the really interesting case. Speculators – who are almost never net-short – spent a few weeks in that state before briefly reverting to slightly net long. But last week they jumped back to net-short in a big way (the bottom row shows the change in each position).

Here’s the action presented in graphical form, with the gray bars representing large speculators. Note how in the previous couple of cycles (early and late 2017) the speculators’ net positions got close to zero but then bounced back quickly to the more normal net-long. But in the current cycle they’ve been net-short for most of the past two months.

…click on the above link to read the rest of the article…

TOM CLOUD UPDATE: Rising Interest Rates To Impact The Metals & Large Investors Make Up 70% Of Gold & Silver Buying

May 3, 2018

TOM CLOUD UPDATE: Rising Interest Rates To Impact The Metals & Large Investors Make Up 70% Of Gold & Silver Buying

Today, Tom Cloud provided another interesting precious metals update. He discusses how rising interest rates will impact the precious metals and why the Federal Reserve is forced to continue increasing rates. Tom also explains what is going on with official gold reserves in China and Russia.

Tom also mentions how his precious metals sales volume has changed since 2007. I spoke with Tom on the phone this week to get an update as he hears a lot of what is going on in the industry. I asked him if he could look at his precious metals sales figures and see how the small and larger investor buying volume has changed:

If you look at the chart below, the smaller precious metals investor had, the larger pie in gold and silver volume during the 2007-2009 period. According to Tom’s sales figures, the small investor, $50,000 or less, accounted for 62% of total volume while the large investor was 38%. This trend changed in the next period, 2013-2017 as the large investor made up 58% of total volume while the small investor fell to 42%.

Tom said that so far this year, the large investor accounted for 70% (or more) of total precious metals sales as smaller investor buying fell further to only 30%. So, the little guy is not participating in the precious metals market as they were in 2007-2009 when the stock and economy was disintegrating.

However, the larger gold and silver buyer is usually the wiser investor. The small investor is more fickle and has to wait until panic comes back into the market before they start buying once again. Furthermore, the small investor is also the one that loses faith much easier and is known to flip-flop by getting out frustrations by writing negative comments about gold and silver.

…click on the above link to read the rest of the article…

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