Written by Bill Holter
on May 01 2013
Reputations and Relationships
Read the Monday Afternoon Wrap-Up for 4/29/2013 and the Tuesday Morning Commentary for 4/30/2013
When I made my first PHYSICAL bullion purchase in 2008 – on eBay – I had no idea my life was about to change. Five years later, my lifelong connection with financial markets has been totally – and permanently – severed; and as Marketing Director of one of the nation’s largest bullion dealers, have devoted my life to PROTECTING others from oncoming, inevitable HYPERINFLATION.
Back then, I knew NOTHING of the bullion business – in the slightest. Fortunately, I was not harmed by my ignorance; although several times, my naivety created materially stressful situations. However, I now understand all aspects of how gold and silver coins are manufactured, distributed, and sold; and consequently, aim to educate you as much on how to buy bullion, as why it should be done.
My initial 2008 purchases coincided with the industry’s first, MAJOR bullion shortages; but at the time, I didn’t realize the gravity of the situation. It was then I learned my first valuable lesson in bullion buying; which frankly, should be THE MOST IMPORTANT factor one considers. That is, you must KNOW if the seller has inventory on hand before buying; and equally important, TRUST that if they don’t, they will get you the product as promised. Many PM sellers – particularly online – either lie or are purposefully vague about their inventory status; and if they are not PROVEN to be trustworthy, don’t be surprised if the money you send them remains in limbo for a significant period of time. The chain of promises – from Mint to customer – is not small; and thus, you MUST be confident that the “link” in the chain you deal with is ROCK SOLID.
Once I realized “all sellers are not created equal,” I stopped buying online; and instead, sought those I could TRUST personally. Not that buying online is necessarily “bad”; as Miles Franklin is BY FAR the largest PM bullion seller on eBay, and will unveil an online trading platform in the future. However, when it comes to PROTECTING your life’s savings, NOTHING compares to the PERSONAL SERVICE received from a real person – at a reputable firm. And remember, bullion sales are completely unregulated; thus, if someone “screws you over”; you have little – if any – recourse. Miles Franklin has not lost a package, check, or wire in 23 years of business; or received a single registered complaint. Thus, its A+ Better Business Bureau rating – and industry-wide reputation for trustworthiness.
Since 2008’s Global Meltdown I – when we first experienced significant product shortages; Miles Franklin’s President, Andy Schectman, has been touring the continent telling people of how dire the industry supply situation is…
…as succinctly described last week by Jason Hommel; who, by the way, gave me my first silver round – in 2006…
Silver Shortage of April, 2013 – Jason Hommel
Andy has been DEAD ON in his commentary; as with GLOBAL silver inventory hovering near RECORD LOW levels (nearly all of which is sitting in investor vaults, NEVER to see the light of day)…
…bullion sales at RECORD HIGH levels – for both gold…
…and silver…
…and NARROWING intervals between premium spikes…
…particularly in “the ultimate fear product” (I vociferously reiterate, you “MUST OWN JUNK SILVER”)”; I cannot overemphasize the necessity of considering “REPUTATIONS AND RELATIONSHIPS” as you consider PROTECTING assets with REAL MONEY…
Miles Franklin continues to publish the industry’s leading financial commentary – for FREE; and our brokers – with an average of 18 years experience – treat ALL clients (and potential clients) as if they were family. I’d say it’s as simple as “GIVING US A CHANCE”; however, it’s not. This is about safeguarding you’re life’s savings, which is EXACTLY what “MILES FRANKLIN, PROTECTION PROVIDER” aims to do.
PROTECT YOURSELF, and do it NOW!
Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business.
Gold in Hand
Though you haven’t heard a peep out of the media, the Cyprus parliament will vote today on their own financial execution. They have basically 2 choices, they can vote themselves out of the EU and everyone loses their bank balances… or they can remain in the EU and lose 90%+- of their bank balances. Option A would mean going the route of Iceland which 5+ years after their collapse is one of the few economies in the world that is actually growing again, option B would mean sticking with the “known” evil which includes the iron anvil of the Euro attached to their feet for the future. Option A is obviously in their best interest, option B is what they will choose.
A media blackout on this event is in effect so that the populace doesn’t panic. How smart would it be to play movie trailers in advance letting people know that “coming to a theater near you” is the theft of your bank balances? Think about it, if you have plans to steal “money in the bank,” you want as much “in the bank” as possible right? Why would you promote a bank run where all the cockroaches (that is what the savers are considered) scatter with their funds before you could rob them? Plans have been quietly put into place to take the “Cyprus template” and use it far and wide. Once begun, you will only hear “we have no other options” topped off by “who coulda’ seen it coming?” The coming “global bail ins” are more than obvious to see, all you need to do is use a little common sense and connect a few dots.
I wrote the other day that “the smack down in gold and silver was probably the result of the bottom of the barrel becoming visible.” This chart courtesy of Zero Hedge pretty much says it all:
Source: Zero Hedge
JP Morgan is down to their last 165,000 ounces of gold eligible for delivery at the COMEX. It is quite interesting that this hoard has dropped by over 90% and that the draw down began last September (1 month before the obvious capping action in gold began in October). It is also interesting that the bloodletting of gold would occur as the central banks of both the U.S. and Japan would announce over $2 trillion of further money supply debasement.
In my mind, it is now only a question of “when” do the lights get turned off and deliveries of metals cease. ABN Amro notified customers 2-3 weeks ago that their supposedly ALLOCATED metal would not be delivered. How can this be IF it was truly “allocated?” The only plausible reason that customer “allocated” metal would not be delivered is because it was previously re-allocated to someone else and is no longer in the vault. There can be NO other explanation. I guess we should wait for the lawsuits to commence by customers who paid storage fees (similar to Morgan Stanley’s fraudulent silver storage back in 2009) for nonexistent metal. As has been said many times before and from several viewpoints, you either have the metal or you do not. When all is said and done, there will be at least 99 people out of 100 who believe that they own metal who will find out that they do not. The time to act and not be a part of these 99 is now. Right now. Deliveries will fail and supply for new purchases will dry up overnight, there will be no “options” once the default is triggered. Believe me or don’t, this is pure common sense and the most basic of math.
They Are After Our Money
They are after our money. State and Federal taxes are rising rapidly. Bail-in already established.
Despite the stump rhetoric, the political class is not interested in fostering a vibrant commercial life to help you and me get by in this world. Instead, it is interested in extracting as much revenue as possible from the existing commercial environment. The government elites want their cut, regardless of the consequences.
- Jeffrey Tucker, If it Moves, Tax It, April 29 2013
Not only are TPTB jacking up taxes on “the rich,” they are targeting your savings as well.
News on Cyprus’ large depositor’s confiscation of funds is in an MSM black out for obvious reasons. Money knows what herculean event has occurred to large depositors in Cyprus.
A reporting black out will not make the history-making event go away
Very temporary capital controls have historically gone on for significant periods. Capital controls and bail ins will grow and reach your home. If you do not exit the system, you will not be able to exit the system.
- Jim Sinclair, Large Depositors In Cyprus Flushed, April 29 2013
Out of the dollar and out of the banking system. Out of the country too, if you have a large net-worth and see where this is headed. Most Americans will not exit the dollar or remove their funds from the banks. Those who do will be looked at as rather misguided and crazy. You know, like a Goldbug.
Bail ins are coming everywhere. If you are not out of the system soon, you are not getting out.
– Jim Sinclair, In the News Today, April 29 2013
Larry Edelson is certainly consistent. Today he wrote that those of us who tell people that gold is going up and now is the time to buy it are doing so to feather our own nests. I think that is rather insulting. I purchased $50k worth of gold myself since the fall, and have not sold one ounce. Somehow I can’t fathom that people like Jim Sinclair, Richard Russell, Jim Willie, Gerald Celente, Ted Butler and dozens of other notable newsletter writers I bring to your attention are pitching gold and silver to sell product.
Most of us sincerely believe what we say and act accordingly for our own well-being. I know for a fact that Andy Hoffman and Andy Schectman are buyers at these prices. We think it is the right thing to do and promote it because it is in your best interest. Edelson, on the other hand is selling paid-for subscription to his newsletter, and his angle is to get you to believe you need his advice and technical analysis in order to succeed. His view is that before gold moves up in earnest, it will first drop to $1,030. The recent gains, he says, are nothing more than a dead cat bounce.
Buy Silver on May 1 And Break The Cartel
While gold and silver shortages continue to crop up, May 1st is officially The National Campaign To Buy Silver Day. It is hoped that with massive physical purchases of silver, the paper silver will become irrelevant, once and for all. If this helps raise the price of silver, then so be it. The end of the massive manipulation of precious metals prices will soon become a thing of the past. Andy Hoffman joins Kerry Lutz of the Financial Survival Network to discuss this event and more:
Ranting Andy Hoffman – Buy Silver on May 1 And Break The Cartel
Unending Energy Independence Hype
Read the Friday Afternoon Wrap-Up for 4/26/2013 and the Monday Morning Commentary for 4/29/2013
From 1996-2005, I was a Wall Street buy-side and sell-side Energy analyst; with the last seven years spent as an Institutional Investor-ranked service, equipment, and drilling analyst at Salomon Smith Barney in New York. Believe it or not, that period of my life characterized a passion and commitment to Energy that I now demonstrate in Precious Metals; as described in my November 2011 RANT, “TWICE IN A LIFETIME.”
During that decade, I experienced EVERYTHING imaginable in the oil and gas sector; and traveled the world learning about it. When I left Salomon in February 2005, the consensus “long-term” oil price estimate was roughly $25/bbl – of Wall Street analysts and global oil companies alike; which in hindsight, fell “just a bit short” of REALITY…
At the time, it was tar sands – particularly in Canada – that were hailed as the “next great thing” that would permanently reduce global energy costs. As it turns out, tar sands have been a major BUST; given a host of issues including energy intensity, environmental damage, logistics, and costs…
…amongst a LONG line of failed “next great things”; from “Austin Chalk” oil drilling (pioneered by Chesapeake Energy)…
…to Ethanol…
The Disastrous Failure of Corn-Based Ethanol
…to hybrid-electric cars; a subject (not so) near and dear to my heart, after having spent three years as head of Investor Relations of Geovic Mining – which unsuccessfully attempted to develop a cobalt mine in Cameroon, Africa (cobalt is utilized in the lithium-ion batteries that power hybrid cars)…
Hybrid cars: an economic failure
Today, the “next great thing” is shale gas extracting – utilizing environmentally dangerous fracking methods. Believe me, I know fracking well, as I covered the world’s largest fracking companies for years – such as Halliburton, BJ Services, and Carbo Ceramics. This is not a new technology, but its application in certain geologic formations has created a sharp production increase in recent years…
Unfortunately, it hasn’t prevented WORLDWIDE crude oil prices from reaching – and hovering around – ALL-TIME HIGHS for years. And now that a substantial sample of such work is available, the “shale gas bubble” is starting to burst…
The Fracked-up USA Shale Gas Bubble
Some of the nation’s most optimistically promoted projects are falling flat on their faces…
Ohio’s $500 Billion Oil Dream Fades as Utica Turns Gassy
…as what do you know – shale gas drilling is also ENERGY INTENSIVE…
N. Dakota Bakken Oil Boom Will End in a Bust, Just like ’49 Gold Rush
…and MASSIVELY DEPLETING…
…resulting in plummeting reserve estimates…
U.S. shale gas reserve estimates plummet
…and plunging shale driller stock prices; such as Devon Energy…
…and – how about that – good old Chesapeake Energy…
I am no oilfield engineer. However, I know enough about BUBBLES to have an idea when they’re right under my nose; as when I discussed the Bitcoin Bubble just three days before it crashed (time stamp 8:30 to 11:00)…
Precious Metal Investing Update w/ Ranting Andy Hoffman of Miles Franklin Apr 6 2013
Perhaps “shale gas” will in fact yield the “Energy Independence” America has so desperately sought for decades…
However, I’ll take the “under” on that bet…
The last eight U.S. Presidents promised energy independence, nobody did it!
PROTECT YOURSELF, and do it NOW!
Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business.
No Conflict of Interest Here
Chief Advisor To US Treasury Becomes JPMorgan’s Second Most Important Man
Matt Zames has taken over the 2nd in command position at JP Morgan and replaced Ina Drew. He has worked over the last year or so to unwind the failed trades put on by the famous “London whale.” Should Jamie Dimon ever step down, odds are that Mr. Zames will take the reins. But he also has another job; a “government job” so to speak. He is the head of “TBAC” (Treasury Borrowing Advisory Committee). This committee basically decides how much, how long or short and when the Treasury steps up to borrow (never pay down) new debt. A pretty big job for sure but someone has to do it right?
Any conflict of interest here? Nah, I’m sure that whenever he gets done “advising” the Treasury he would never, NEVER let his knowledge influence the investment decisions at JP Morgan. He is now the “CIO” at JP Morgan and in case you haven’t figured it out yet, the “I” in CIO stands for “investment.” So… we are to believe that this man (who by the way was employed by LTCM which almost blew up the entire financial world in 1998 with Russian bonds of all things) wears one hat, then switches to another and does not use his knowledge under either to benefit the other? Or maybe this is why he has both jobs? So that nothing gets lost in the translation unless he has a brain wire or two crossed?
So, now that it is clear that JP Morgan and the Fed are directly linked in body, soul and mind (and maybe even their vaults are physically linked by a tunnel since they are directly across the street from one another), are you able to make the leap? The “leap?” Yes, into the “silver and gold pool!” We have seen both metals get trashed at most every important “technical junction” and we also know that JP Morgan has been THE biggest short in the silver market with at times over 70% of the total short position outstanding. Knowing these 3 points, can you connect the dots and now know without a shadow of a doubt what is going on and HAS been going on… ALL THIS TIME?
The Fed + JP Morgan = official policy. “Official policy” is that the dollar is to be used globally and we get to “enjoy” the hegemony afforded. But, as is always the pesky case there is a fly in the ointment. GOLD! Gold is THE competing “money” to the dollar and how would it look if the teeny tiny silver market was allowed to explode and trade as high or even much higher than gold? You can argue with me but my opinion is that left completely to a Mother Nature free market, silver would right now be trading higher than gold’s price of $1,470. Yes I know this is mere opinion and argue all you’d like because we don’t have a free market and we’ll never know.
In any case, this is really brazen and blatant in your face stuff. It is “insider trading” by simple and totally pure definition. The largest bank in the US and the government don’t even care about appearances anymore. They recently sold over half the years global production of gold and silver (in paper) over a 48 hour period to crash the price (which they have a zero percent possibility to ever deliver)… and then they publicly announce the “crowning” of who is going to run the incestuous circus! The next thing you know, the new Pope will get elected to the boards of both the Fed AND JP Morgan (proving Goldman Sachs prolific in claiming that Wall St. does God’s work)… and some actual physical gold will start to hit the market since the church may be the only entity left without an empty vault. Nah, couldn’t happen because of the “separation of church and state” written in The Constitution which is the law of the land… Oh wait!
The Dollar is a Worse Choice Today to Store Wealth, Than it Was When Gold Was $1,900
I find Jim Sinclair’s quote to be extremely interesting. It will be easy to see if he is correct. If the price continues to rapidly rise, he gains credibility here.
Take into consideration that the recent and violent drop in the gold price, especially if followed by an equally violent recovery, was primarily for the transfer of physical gold from financial and other entities to the families that are running the Western governments and financial world.
In my opinion that’s exactly what has just happened. A very strong and immediate recovery, that is sustained, makes the message clear that gold is an ingredient for these wealthy families to maintain their wealth and power, not simply over a generation, but over multiple generations.
– Jim Sinclair on King World News, April 28 2013
Before reading what Sinclair mentioned, above, I was of the opinion that most gold bugs, including our beloved clients, are still unsure of gold’s near-term future. Thanks to Larry Edelson, and those who think like him, people are sitting on the edge of their chair waiting for gold to reverse course and head even lower toward $1,000. Markets, all markets, move in a zigzag fashion, and even though gold has risen some $100/oz, from the depths below $1,350, with every “zag” people still hold their breath waiting for the bottom to fall out. I expect it will continue to be that way until gold moves back up to at least $1,700 or higher. When it does, I bet Edelson will still not have issued an “it’s time to buy” order.” His “safe entry” number is still above $1,800 unless he recently changed it and I somehow missed it.
(By the way, Sean Brodrick, who, like Larry Edelson works for Uncommon Wisdom, is bullish on gold. Two different views – the same firm. I cast my lot with Sean.)
If Sinclair is correct (this is real fodder for the conspiracy crowd), then Edelson is not only wrong, but doesn’t have a clue HOW the market really works and WHAT fuels the moves. Sorry, I just don’t believe gold and silver move up and down, freely and without purposeful manipulation, based solely on moving averages and Elliott Wave inflection points. Sure, human nature plays a part in investing, and we are seeing it now with gold and silver. Great damage has been courtesy of our dear friend JPMorgan (see article below that documents that JPM sold 99.3% of the physical gold sales at the COMEX in the last three months).
Human nature can be, and IS manipulated. The last thing the Fed, and their powerful central bank friends need, is for people to start to lose faith in fiat currencies. Gold is the barometer that indicates the health of the dollar. Smashing gold down from $1,900 to $1,350 is NOT an indication that the dollar has gotten stronger. It’s a worse choice today to store wealth, than it was when gold was $1,900. But you’d never know it if you watched gold plunge. The question is WHY did gold plunge? WHO benefited from the plunge? I think one needs to look no further than JPMorgan and the Fed. Like I said when I started this rant, Jim Sinclair’s interpretation is pretty interesting and we can easily determine its validity by watching how fast gold recovers. Hopefully, you won’t be on the sidelines while it recovers because you will never again see these low prices to accumulate gold and silver. The rising “premiums” (physicals vs. paper gold and silver) and long delays and shortages clearly demonstrate that there are a lot of buyers out there who are not sitting idly by and watching and waiting for Edelson’s bottom to take hold.
IMPORTANT VIDEO: PLEASE WATCH THIS SHORT VIDEO AND THEN TAKE APPROPRIATE ACTION!
The Truth Rises – Coordinated Strikes Work Both Ways – May 1st 2013
After watching the video, factor in Ted Butler’s comments on the tightness of the silver market:
More than ever, the behavior of JPMorgan on the next silver price rally (which, hopefully, has begun) will have the greatest influence on price. Simply put, if JPMorgan adds new silver shorts aggressively, the price will be constrained by some amount. Without those additional short sales by JPMorgan, the price of silver will fly. It’s really that black and white, at least it is to me. Whereas I wouldn’t trust this crooked bank with money for coffee, if the retail silver shortage develops into a wholesale shortage, the trustworthiness of JPM becomes moot; a wholesale silver physical shortage will roll over them and anyone else who stands in the way. As time runs by, there are other things that suggest an upside resolution in silver is closer than ever.
-Ted Butler, ButlerResearch.com
GOLD CARTEL Has FAILED! PHYSICAL vs PAPER DISCONNECT is HERE!
Andy Hoffman joined Elijah Johnson of Unconventional Finance to talk about the disconnect between the physical and paper market in gold and silver.
GOLD CARTEL Has FAILED! PHYSICAL vs PAPER DISCONNECT is HERE! – “Ranting” Andy Hoffman
It’s Going to Happen
It’s going to happen… because it already is happening and mathematically it had to and has to. “It” being a complete breakdown of the financial system. Look around the Western world and you will see sovereign nation after sovereign nation with debt to GDP ratios bloated and above 100% of GDPs. This is unsustainable and can only last as long as interest rates remain low. Do you really believe that interest rates will never ever rise again? Please keep in mind that perversely, interest rates have been held down by central banks printing money (currency) out of thin air and using this money to purchase the bonds that the sovereign nation MUST sell in order to keep their doors open.
The fly in the ointment is Europe, or I should say Europe’s “structure.” The fact that Spain, Italy, Portugal and the rest cannot “print” their way to pay debt service and issue new debt is the detonation device. It is only a matter of time before another “Cyprus” emerges… only bigger, much bigger. Investors and savers have been given a preview of what is to come and the politicians have tipped their hands by saying that Cyprus is the template going forward. What I am getting at is that once any smoke at all starts coming out of a banking system or a sovereign debt market, investors will be very quick to react. In reality what the Cyprus incident did was put investors and depositors on notice that “he who flees and panics first, panics best.” The conditions for a global bank run have never been higher than they are right now!
I think we were seeing previews of this action in the (physical) precious metals markets during and after the Cyprus event which is what led the cartel to do what they did 2 weeks ago. They were trying to tape a sign over the “exit” signs which led to the safe havens of silver and gold. They tried to portray a situation that said “scary scary, do not go here.” It has not worked and in fact has led to even more demand. As I have said several times before, human nature is a funny duck and whenever one is told “you can’t have that” or “there is none available” people want it even more. In effect they have compounded the problem of potential bank runs with the reality of a global run on the vaults.
You can easily see this, as both allocated and unallocated holders of gold are requesting the goods. ABN Amro denying delivery to their customers is only the beginning and the huge movements (drawdowns) in COMEX (JPM) gold inventories are a huge flashing neon sign that something big is in the works. You can smell it in the air; demand has exploded worldwide with no one saying that their demand has not at least doubled at a minimum since the Friday/Monday smack down. Using common sense alone, the “smack down” happened for a reason. I firmly believe that “the bottom of barrel” was in sight. What has now been unleashed will merely speed up the end game’s arrival.
Even if I am wrong and this was not done to avert an imminent delivery default situation, what is now happening will surely lead to this. Demand has outstripped supply for nearly 20 years now; the last 15 have seen at least a 1,500 ton per year supply/demand shortfall. This means that over 20,000 tons had to “come from somewhere” …but where? The answer has always been obvious to anyone thinking objectively. The only caches of this size were held by central banks who still claim to hold 32,000 tons, laughable at best. Rather than bite the bullet and allow a fiat collapse in terms of gold years ago, they have unloaded their national jewels to buy time. The “time” is expiring now and we will soon see who has what and who doesn’t. The one thing we do know is that gold has flowed East all this time… and with it ultimately financial power. Call what is about to be exposed a “run on the bank” or a “run on the vaults,” when all is said and done they are the same system wide. We will soon find out who has what and who has squat!
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