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Central Banks Unanimously Prefer Gold Over Paper ~ Jeff Nielson
Issue 92
Today's Gold/Silver Ratio: 39/1 Dn

Issue 117

Gold: $1600.60/ Silver: $40.16

SGS Notes: This week's news has centered around the debt ceiling, the budget 'crisis', and the impending economic crises for Europe, Italy, Greece (again)... all of these things are having an impact on gold and silver prices.

Central Banks Unanimously Prefer Gold Over Paper

Jeff Nielson

After the Western banking cabal engineered the "crash" of the global gold market in 1980, Western central banks spent more than a quarter-century perpetrating the lie that gold was a "barbarous relic" - which was supposedly "inferior" to the worthless, un-backed paper they were cranking out (in record amounts) on their privately-owned printing presses.

Their incentive was obvious. In getting the entire world to believe that lie, they were able to enrich themselves by $10's of trillions of dollars. This was done by creating those $10's of trillions ("out of thin air"), pretending that this paper actually represented real wealth - and then getting people all over the world to give them $trillions more paying interest on worthless paper which never represented any real wealth in the first place.

While it was the largest fraud (and theft) in the history of the world (by a factor of more than 1,000), it was by no means an original act of fraud - being nothing more than the same scam which all bankers always perpetrate, whenever they are (foolishly) granted the privilege of inventing "money" out of thin air, going back a thousand years.

During the first twenty-five years of this institutionalized fraud/theft, the bankers supported their fraud by dumping their vast hoards of gold onto the market (in the largest quantities in history). "Look," they would say, pointing with their evil talons, "Even we bankers, the greediest creatures ever hatched on this planet, have no use for this archaic, yellow metal - so why would any of you want to own it?"

It was a very successful strategy

The price of gold was pushed to an all-time low (in real dollars), so low that more than 90% of the world's gold mines were forced to close since they couldn't manage to break-even at those fraud-induced prices. And individual holdings of gold (especially in the West) fell to their lowest level in history.

Obviously, with that privilege to print money not having been revoked yet (a literal "license to steal"), their incentive to continue this fraud/theft is as strong as ever. However, over the past five years a "funny" thing has occurred. First these central banks rapidly slowed their dumping of gold, then they stopped it altogether, and now they are the single-largest bloc of gold-buyers on the planet.

Recent statistics released by the World Gold Council allow us to go even further. Over the past two years, the world's central banks have demonstrated a 100% unanimous preference for gold over their own banker-paper (i.e. all those un-backed "fiat currencies"). During that span of time, only three nations have been modest "net sellers" of gold - and in all three cases this related to "long term sales agreements" (i.e. old obligations). During the past two years, not one single central bank on the face of the Earth has chosen to be a net-seller of gold over that time.

I drive a Toyota

Let me construct an analogy here. A person goes shopping for a car. He goes to a Ford dealership, and after getting the full "sales pitch" on what wonderful vehicles all Ford products are, the shopper asks the salesman "what kind of car do you drive?" And the salesman answers "I drive a Toyota."

The car-shopper then goes to a GM dealership, a Chrysler dealership, a Volkswagen dealership, and every other auto-dealership he can find. At each dealership, the salesman tells the shopper what "wonderful vehicles" they make, but when the shopper asks each one what car they drive themselves, every one replies "Toyota". The obvious question to ask is that armed with such data, is there a single (rational) auto-buyer who would buy anything other than a Toyota?

The equally obvious answer is that "no", no rational buyer would ever choose any vehicle other than a Toyota - unless he/she simply couldn't afford the purchase price.

The most charitable statement we can make about the world's central bankers is that they are the world's "sellers of money". Indeed, since I have already pointed out that what they are selling is worthless, we could obviously come up with a long list of terms less-neutral than "sellers". Unquestionably, with armies of statisticians and data-gatherers at their disposal, they are the world's foremost experts on "money" (assuming we generously include their fiat currencies with that label).

Much like a hypothetical world where all the sellers of automobiles (who know these cars the best) all buy a single brand of automobile themselves, all of the world's foremost experts on "money" are showing a 100% preference for one kind of money: gold. The message from the world's central bankers is absolutely unequivocal: only chumps would choose to hold paper over gold.

Clearly, the massive paper-fraud of these banksters is in its final stages of decay: a Ponzi-scheme of unimaginable proportions, where people willingly funneled $trillions of their own wealth into the clutches of Western bankers - only to ultimately end up with zero (or near-zero, or less-than-zero). We know this, because the scammers themselves are now publicly fleeing from their own scam.

Ironically, the same, semi-comatose mainstream media which still alerts us when "insiders" in our equity markets are "dumping" their shares, has been 100% oblivious to the "insiders" in our monetary markets dumping their banker-paper (in favor of gold). The parallel cannot be missed: when corporate insiders are unanimously dumping their shares, only the "Mother of All Fools" would be a buyer in equity markets. When all of the world's monetary "insiders" are dumping their banker-paper in favor of gold, only an equivalent "fool" would attempt to swim against that tide.

To avoid getting "lynched" by all of the silver-bulls who follow my work, let me take a moment to include silver in this analysis. To begin with, if anything the bankers have even more fear/hatred of silver than gold. However, their hatred/aversion to silver is so extreme that rather than merely lie about silver (so people would not want to hold it), and then hoarding as much as possible themselves, they decided on the "nuclear option": destroying the world's stockpiles of silver. The only reason why the world's central banks have shown no interest in silver is because inventories have been decimated to such an extreme (more than 90% lower than 15 years ago) that (relative to gold) there is no silver for the central banks to start hoarding.

At the household level, the world's silver shortage is not yet that extreme. We can still buy what we want/need as individuals - and at "sale" prices, thanks to the recent ambush of the silver market by the CME Group. Of particular relevance, for those small investors who are finding the price of gold moving out of their "reach", silver remains accessible - and a fantastic bargain.

Short of B.S. Bernanke starting to walk around with a neon sign hanging around his neck saying "buy gold", it is impossible for ordinary investors to get any clearer warning that "cash is trash" and bullion is "golden". Ignore such a warning at your own peril.

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Silver May Rebound To Test $100

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Gold & Silver Accelerate to Upside

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Retirement Accounts & The Coming Tax Code Revolution

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Silver Price Manipulation, Delivery Default & Supply Shortage Risks

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Dark Days Ahead for COMEX as China Enters Silver Market

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Silver is a Powder Keg
Waiting To Explode
Andy Schectman, CEO
Miles Franklin

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Gold Is Our Defense Against The Fiat Currency Graveyard ~ James Turk
Issue 92
Today's Gold/Silver Ratio: 40/1 Dn

Issue 116

Gold: $1595.50/ Silver: $39.34

SGS Notes: Well, we've seen gold (and silver) dramatically rising in the wake of discussion on more Qualitative Easing and the European Crisis and the US Budget crisis... Silver rising faster than gold (on a % growth basis) in keeping with its historical performance. The Dodd-Frank Legislation also has been a big item in the news this week... Check out the ratio this week... down to 40:1

 

Gold Is Our Defense Against The Fiat Currency Graveyard

James Turk

 

“The rule of law has basically been thrown out the window. Money printing is the order of the day. And when politicians take control of central banks, which they have done in the United States and they are also doing in Europe, that basically destroys the currency. It puts the currency on the road to what I call the Fiat Currency Graveyard, so I expect there are going to be massive currency problems as we go forward. The financial crisis that we have been dealing with for the last several years has not been solved.”

So cautions James Turk, widely-respected precious metals expert and founder/chairman of GoldMoney. In this detailed interview (recorded in June), Chris and James explore the probable outcome of the current US debt-ceiling operatics, the likelihood of future Fed money printing, and strategies for preserving wealth. In short, James believes we are witnessing the decline of the world's major fiat currencies, and expects gold to be remonetized in the aftermath.

James explains why he expects:

The US Government to raise the debt ceiling in August, which will require the Federal Reserve to print more money in order to soak up the new debt, sending gold and silver prices much higher this summer.

Holders of fiat currencies to experience increasing losses in the purchasing power of their wealth; contrary to those who hold precious metals, who will see the reverse.
This pattern of currency devaluation to be similar to the many other examples seen throughout monetary history. In short, the “unthinkable” event of a dollar collapse is a much more probable event than most consider.

Precious metals to be an excellent vehicle for preserving purchasing power through this next transition, and whatever future currency emerges, their historic role as money to be restored.

The end of the bull market in precious metals is years away. We’ll know its ending when holders of PMs begin trading them for other assets (e.g. property, securities) that have become overly undervalued.

Click Here to listen to Audio Interview with Chris Martenson & James Turk

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Could Silver One Day be Worth More Than Gold?

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Return of the Gold Standard as World Order Unravels

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Silver and Industrial Demand - Part I by Jeff Lewis
Issue 92
Today's Gold/Silver Ratio: 42/1 Dn

Issue 115

Gold: $1545.70/ Silver: $36.67

SGS Notes: This week's article was too long for one newsletter, so we've split it up into 2 parts. This week will deal with historical and established silver demand; Part 2 will deal with Future Trends and silver's role in them. Meanwhile, if you haven't been watching silver and gold prices lately, you'll note that in the past week, we've seen a rise again in silver from the $34 range to the $36 range, and gold from the $1490s to the mid $1500 range and a drop of the gold:silver ratio of 2 points...

 

Silver and Industrial Demand - Part I

Jeff Lewis

I. Introduction

As you know, silver is much more than just a form of money. Although not often discussed in great detail, silver is actually an incredibly important and strategic industrial commodity. In fact, demand for silver by industry has increased dramatically in recent years and shows no signs of slowing despite price fluctuations.

Silver's incredible versatility - as a conductor, a catalyst, an antibacterial agent and much more - and unrealistically low prices have made it ideal for use in a huge number of products spanning countless manufacturing sectors. And the continued (relative) affordability of this super-metal points to dramatically increased demand in coming years.

As silver investors and educators, we feel that understanding silver's tremendous role(s) in industry (along side its importance as a store of wealth) is critical to understanding its past, present and future value. In fact, we are confident that you will find the insight and knowledge gained to be crucial for maintaining perspective as we head through the upcoming currency storm.

Ironically, if not miraculously, we find ourselves at the cutting edge of technology, while simultaneously, re-aligning with what also happens to be an excellent, proven, and historic form of wealth preservation - and money. Not to mention it is becoming increasingly scarce!

To broaden your understanding of silver's industrial applications, we're examining past and current industrial demand and looking forward toward what is expected to be a very bright future for this powerful and increasingly rare metal.

Growing Industrial Demand

As recently as 1990, total annual demand for silver by industry was about 273 million ounces (Moz). This represented about 39 percent of the total amount of silver fabricated each year. By 2000, industrial demand represented over 40 percent of total fabrication. And as of 2007, it had climbed to an all-time high of 465 Moz annually - or 55 percent of total fabrication - where, despite a downturn related to the global economic crisis that began in 2008, it is approximately today.

This upward trend is expected to continue, with annual industrial silver consumption growing from about 487 Moz in 2010 to approximately 666 Moz in 2015. This increase in demand will come from growth in both long-established industrial uses of silver and some intriguing new applications.

Established Industrial Applications

Silver's superiority as an electrical conductor makes it ideally suited for use in batteries and electrical contacts. Silver is used widely in automobiles (the list of core automotive applications is growing) and, in the form of a highly conductive paste, in photovoltaic cells. Photovoltaic cells - which convert solar energy into electricity - are already in great demand as concerns about dwindling fossil-fuel supplies grow. Photovoltaics also promises to play a key role in the drive toward clean energy sources in coming years. In fact, silver demand for use in photovoltaic cells is expected to double by 2015.

Emerging Industrial Applications

Thanks to silver's unmatched conductivity and relative affordability, it has become a critical element in the manufacture of a great variety of electronic devices - many of which have become important (and largely taken for granted) parts of our daily lives. Because silver-containing batteries manage energy output in very small packages, they are widely used in smart phones, laptops, and tablets, demand for which seems to be virtually limitless.

Other new applications capitalize on silver's powerful antibacterial properties. Silver-bearing products ranging from socks to cosmetics are appearing on the market with increasing frequency.

Because, in many of its industrial applications, silver performs much better than its possible replacements (if they exist), industry shows little interest in moving away from it toward less expensive or more abundant materials. So long as silver continues to be relatively inexpensive, and consumers don't lose their appetites for silver-containing products - which doesn't seem likely - industrial demand for silver will continue to grow.

 

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Peter Schiff on
numismatic vs. bullion

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The Screaming Fundamentals For Owning Gold And Silver by Chris Martenson
July 4 , 2011
Issue 92
Today's Gold/Silver Ratio: 44/1 Up

Issue 114

Gold: $1497.50/ Silver: $34.22

SGS Notes: We hope youare enjoying your extended Independence Day holiday. While we aren't seeing dramatic volatility in silver prices during the last few weeks, the general consensus is that the price will head sharply upward again soon... The Greece Bailout, Increasing Devaluation of the Dollar, the new RV of the Iraqi Dinar, movements towards implementation of a gold standard... all these are having an effect on this market.

 

The Screaming Fundamentals For Owning Gold And Silver

Chris Martenson

This report lays out an investment thesis for gold and one for silver. Various factors lead me to conclude that gold is one investment that you can park for the next ten or twenty years, confident that it will perform well. My timing and logic for both entering and finally exiting gold (and silver) as investments are laid out in the full report.

The punch line is this: Gold and silver are not (yet) in bubble territory, and large gains remain, especially if monetary, fiscal, and fundamental supply-and-demand trends remain in play.

Introduction

In 2001, as the painful end of the long stock bull market finally seeped into my consciousness, I began to grow quite concerned about my traditional stock and bond holdings. Other than a house with 27 years left on a 30 year mortgage, these holdings represented 100% of my investing portfolio. So I dug into the economic data to see what I could discover. What I found shocked me. It's all in the Crash Course in both video and book form, so I won't go into that data here.By 2002, I had investigated enough about our monetary, economic, and political systems that I decided that holding gold and silver would be a very good idea, poured 50% of my liquid net worth into precious metals, and sat back and watched.Since then, my appreciation for and understanding of the role of gold as a monetary asset and silver as an indispensable industrial metal have deepened considerably.

Investing in gold and silver is still a good idea. Here's why.

Why own gold and silver?

The reasons to hold gold and silver, and I mean physical gold and silver, are pretty straightforward. So let's begin with the primary reasons to own gold.

To protect against monetary recklessness
As insulation against fiscal foolishness
As insurance against the possibility of a major calamity in the banking/financial system
For the embedded 'option value' that will pay out if and when gold is remonetized

By 'monetary recklessness,' I mean the creation of money out of thin air and the application of more liquidity than the productive economy actually needs. The central banks of the world have been doing this for decades, not just since the onset of the great financial crisis. In gold terms, the supply of above-ground gold is growing at roughly 3% per year, while money supply has been growing at nearly three times that yearly rate since 1980.

Now this is admittedly an unfair view, because the economy has been growing, too, but money and credit growth have handily outpaced even the upwardly distorted GDP measurements by a wide margin. As the economy stagnates under this too-large debt load while the credit system continues to operate as if perpetual expansion were possible, look for all the resulting extra dollars to show up in prices of goods and services.

Real interest rates are deeply negative (meaning that the rate of inflation is higher than Treasury bond yields). This is a forced, manipulated outcome courtesy of central banks that are buying bonds with thin-air money. Historically, periods of negative real interest rates are nearly always associated with outsized returns for commodities, especially precious metals. If and when real interest rates turn positive, I will reconsider my holdings in gold and silver, but not until then. That is as close to an absolute requirement as I have in this business.

Monetary policies across the developed world remain as accommodating as they've ever been. Even Greenspan's 1% blow-out special in 2003 was not as steeply negative in real terms as what Bernanke has recently engineered. But it is the highly aggressive and 'alternative' use of the Federal Reserve balance sheet to prop up insolvent banks and to sop up extra Treasury debt that really has me worried. There seems to be no way to end these ever-expanding programs, and they seem to have become a permanent feature of the economic and financial landscape. In Europe, the equivalent would be the sovereign debt now found on the European Central Bank (ECB) balance sheet.

Federal deficits are seemingly out of control and are now stuck in the -$1.5 trillion range. Massive deficit spending has always been inflationary, and inflation is usually gold/silver friendly. Although not always, mind you, as the correlation is not strong, especially during mild inflation (less than 5%). Note, for example, that gold fell from its high in 1980 all the way to its low in 1998, an 18 year period with plenty of mild inflation along the way. Sooner or later I expect extraordinary budget deficits to translate into extraordinary inflation.

Reason #3, insurance against a major calamity in the banking system, is an important part of my rationale for holding gold. I'm not referring to “paper gold" either, which includes the various tradable vehicles (like the "GLD" ETF) that you can buy like stocks through your broker. I'm talking about physical gold and silver because of their unusual ability to sit outside of the banking/monetary system and act as monetary assets.

Literally everything else financial, including your paper US money, is simultaneously somebody else's liability, but gold and silver are not. They are simply, boringly, just assets. This is a highly desirable characteristic that is not easily replicated.

Should the banking system suffer a systemic breakdown, to which I ascribe a reasonably high probability of greater than 1-in-4 over the next 5 years, I expect banks to close for some period of time. Whether it's two weeks or six months is unimportant; no matter the length of time, I'd prefer to be holding gold than bank deposits.

During a banking holiday, your money will be frozen and left just sitting there, even as everything priced in money (especially imported items) rocket up in price. By the time your money is again available to you, you may find that a large portion of it has been looted by the effects of a collapsing currency. How do you avoid this? Easy; keep some 'money' out of the system to spend during an emergency. I always advocate three months of living expenses in cash, but you owe it to yourself to have gold and silver in your possession as well.

The final reason for holding gold, because it may be remonetized, is actually a very big draw for me. While the probability of this coming to pass may be low, the rewards would be very high.

Here are some numbers: The total amount of 'official gold,' or that held by central banks around the world, is 30,684 tonnes, or 987 million troy ounces (MOz). In 2008 the total amount of money stock in the world was roughly $60 trillion.

If the world wanted 100% gold backing of all existing money, then the implied price for an ounce of gold is ($60T/987MOz) = $60,790 per troy ounce.

Clearly that's a silly number (or is it?), but even a 10% partial backing of money yields $6,000 per ounce. The point here is not to bandy about outlandish numbers, but merely to point out that unless a great deal of the world's money stock is destroyed somehow, or a lot more official gold is bought from the market and placed into official hands, backing even a fraction of the world's money supply by gold will result in a far higher number than today's $1,500/Oz.

Click here to read remainder of the article

Quote of the Week                               

In honor of Independence Day, 2011, I'd like to share this article. It was written some fifty years ago by the father of radio host Rush Limbaugh.
Regardless of your opinion of Rush the Third, please take a few moments to read and reflect upon the words and wisdom of Rush the Second.


Lives, Fortunes, and Honor, Americans Who Risked Everything


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SILVER GURUS: Paper to Physical Ratio of 25, 100, 500 to 1? Sprott, Martenson & Bix Weir

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Bullion Blows Up Banksters ~ Jeff Nielsen
June 26 , 2011
Issue 92
Today's Gold/Silver Ratio: 43/1 Up

Issue 113

Gold: $1503.30/ Silver: $34.43

Bullion Blows Up Banksters

Jeff Nielsen

When precious metals commentators (including myself) talk about the pathological fear/hatred which bankers exhibit toward gold and silver, we typically focus on their aversion to higher bullion prices – as being the “canary in the coal mine” which warns us that banker money-printing has spun out of control.

There is, however, an even more fundamental antagonism which the paper-pushing “elites” feel toward precious metals: the simple act of holding bullion is effectively an involuntary “de-leveraging” of the endless $trillions in bankster Ponzi-schemes which have totally contaminated nearly all Western economies.

Readers should not confuse my title with the popular “take down JP Morgan” campaign spearheaded by a few so-called “silver vigilantes”. When I talk about bankers being “blown up” by bullion, this is an entirely passive process. First of all, our purchasing of bullion (as has been often explained) is a defensive move to “insure” our dwindling wealth against the currency-dilution inflicted upon us by the excessive money-printing of the bankers. Secondly, the “harm” caused to the bankers by bullion is indirect, and entirely a function of their own excessive behavior.

Let me quickly cover the first premise by once again reviewing the monetary abomination known as “fractional reserve banking”. In the typical, modern “fractional reserve system”, each time we deposit a (paper) dollar with a bank (or invest it), our eternally greedy bankers are allowed to effectively print-up ten more dollars, loan them out into the economy (or “invest” them) – and thus that $1 dollar suddenly becomes $11, with the other $10 dollars being a windfall created (literally) out of thin air, which has neither been “earned”, nor does it have anything at all “backing” its value.

This ten-to-one dilution of our currency – which is nothing less than (legal) systemic fraud – is precisely how the Federal Reserve has been able to reduce the value of the U.S. dollar by roughly 98% (over its 98-year existence). But even stealing at this rapacious rate was not enough to sate the greed of the 21st century Wall Street bankster.

They directed their spineless servants in Washington to change a vast number of rules (and eliminate even more “safeguards”) allowing these banksters to increase that (already obscene) 10:1 leverage to an utterly insane level of greater than 30:1 – which turned the entire U.S. financial system (and most of its debt and equity markets) into a collection of hopelessly unstable Ponzi-schemes. This leverage-insanity has culminated in the creation of the banksters’ private casino: the $1.5 quadrillion derivatives market – by itself more than twenty times bigger than the entire global economy.

Thus when a small minority of individuals engage in the “defensive” strategy of buying bullion, we are protecting ourselves in two ways. First of all, we are isolating our waning wealth in a form which the banksters cannot dilute/debauch with their money-printing. Secondly, we are accumulating this insurance against the inevitable financial collapse when the bankster Ponzi-schemes finally implode. There is, however, an indirect “virtuous circle” which is set in motion by the simple act of buying bullion, which (to the best of my knowledge) is not being discussed by other commentators – either in the mainstream media, or within this sector itself.

Let us back-up to the basic premise upon which fractional-reserve banking exists: we invest or deposit a dollar with a banker, and then they are legally allowed to dilute that dollar by anywhere from a factor of 10:1 or 30:1. However, each and every time that we take one of our dollars and invest it into precious metals, we are breaking that cycle of dilution (and currency-destruction).

As this purchasing of bullion increases, we thus began to weaken the cycle of serial currency-dilution, and effectively de-leverage our own financial systems. Note that this “involuntary de-leveraging” of Wall Street (in particular) has been made 100% necessary due to the complete failure of servile politicians and corrupt regulators to rein-in the 30:1 insanity of Wall Street. Indeed, after only a brief drop-off (when there were no “chumps” available to take their bets), all reports indicate that the Wall Street vampires are just as leveraged today as they were before they almost destroyed the global financial system the first time – except that this insane leverage is now concentrated in even fewer hands.

This means that as individuals accumulate bullion to personally insure and insulate their wealth from the fractional-reserve piracy of modern banking, that collectively our actions are insuring and insulating our entire economies against the inevitable economic carnage as the paper-bubbles collapse – including all of the worthless, fiat currencies themselves.

In fact, I only began to consciously explore this line of reasoning myself when I was admiring the brilliance of Hugo Salinas Price’s movement to re-institute silver money as a “parallel currency” in Mexico. Critics of this scheme have argued that most of the silver money being created would quickly disappear: people would spend their paper money, and hang onto their (higher quality) silver money.

My rebuttal to that has been that this is the beauty of Salinas Price’s proposal. Effectively, instead of Mexicans having paper “savings accounts”, where they give their pesos to bankers – and then suffer the economic rape of currency-dilution – Mexicans would have “silver savings accounts”, 100% immune to the monetary depravity of bankers. I then added to that by pointing out the cumulative effect of this: permanently reducing the percentage of our wealth which is under the control of bankers, and (simultaneously) permanently reducing our vulnerability (i.e. leverage) when these paper-pirates (yet again) destroy themselves (and our system) with their insatiable greed and reckless gambling.

The mainstream media have been programmed with their own rebuttal. They call such behavior “hoarding”. This is nothing less than a perversion of semantics. In fact, for more than 4,000 years most of humanity has held their “savings” in the form of gold or silver, and billions of people do so today, primarily in Asian economies.

What has been “savings” for 4,000 years does not become “hoarding” simply because the mainstream media chooses to be an accomplice of the banksters in helping them steal our money through their fractional-reserve Ponzi-schemes.

This supplies ordinary citizens with yet one more motivation to insure a large percentage of their wealth by converting it to (“physical”) gold or silver. Not only are we protecting ourselves individually, but collectively we are engaging in the “bank reform” which our cowardly and corrupt political leaders have failed to do.

This means that each and every time you hear some media talking-head parrot the words “hoarding silver”, you can immediately translate that to mean “insuring our financial system”. The fact that it will ultimately help to “blow up the banksters” (as a consequence of their own greed) is merely a fringe benefit.

 

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Bix Weir Interview

 

 

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End of Forex.com Trading of Gold & Silver
June 19 , 2011
Issue 92
Today's Gold/Silver Ratio: 42/1 Same

Issue 112

Gold: $1539.50/ Silver: $36.16

SGS Notes: Don't mean to sound like a broken record, but this IS what is in the precious metals news lately every week! This week's focus is on the big announcement by Forex.com that has everyone feeling alarm...I wrote to Bix Weir and his response to everyone is below....

Have also added a "Watch List" in the right column... This is a 'short list' of everything we've been watching... encouraging everyone to watch for news along these lines...because things are happening fast and furious right now... feel free to send link and articles to us at admin@silverandgoldshop.com... we look at a lot of sites and may miss something important...

 

End of Forex.com Trading of Gold & Silver

Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15

Friday, June 17, 2011

Important Account Notice Re: Metals Trading

We wanted to make you aware of some upcoming changes to FOREX.com’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.

In conjunction with this new regulation, FOREX.com must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.
We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated.

We sincerely regret any inconvenience complying with the new U.S. regulation may cause you. Should you have any questions, please feel free to contact our customer service team.

Sincerely,
The Team at FOREX.com

 

Many are asking, "What is this all about? Does this mean we can't buy or sell silver or gold after July 15th?

Here's the official word on it from Bix Weir:

First of all the name of the company, FOREX.com, has scared many people as they believe that this relates to all FOREX, Gold and Silver transactions. FOREX.com is a fairly large online brokerage house and is not the FOREX market in general. They are ending their trading of electronic gold and silver for US residents do to their interpretation of the Dodd-Frank Law. My take...good riddance to ANY paper and electronic gold and silver trading! It is in the paper and electronic markets that the manipulation occurs.

As has been addressed in the Road to Roota Letters...ALL PAPER AND ELECTRONIC MARKETS WILL BE DESTROYED. These guys over at FOREX.com are just trying to limit their liability in the coming gold and silver chaos.

Very soon all paper/electronic gold and silver trading will end including on the COMEX and the LME.

You should be in physical gold and silver in your own possession preparing for these events.

This is another sign the END IS NEAR!

Quote of the Week                               

 

Honoring All Our Dads....
And Wishing You a Wonderful Father's Day 2011


News Items To Watch  For

  • CFTC & Position Limits
  • End Excessive Oil Speculation Now Act of 2011
  • Precious Metals Stocks, ETFs & all other Paper forms
  • JP Morgan, HSBC, Goldman Sachs
  • US Dollar, Devaluation, Currency values around the world
  • COMEX silver inventories
  • Retirement Fund Regulations

Other Articles      

Greek Default Could Trigger Chain Reaction

Gold Standard Myths & Lies

The Extinction of Retirement

How to Take A Bone From A Dog
Peter Schiff


COMEX Silver Falls To New Lows

 

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James Turk's presentation on the gold price and the US dollar

Transcript

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Precious Metals and Currency Dilution ~ Jeff Nielsen
June 12 , 2011
Issue 92
Today's Gold/Silver Ratio: 42/1 Same

Issue 111

Gold: $1533.00/ Silver: $36.29

Precious Metals And Currency Dilution

Jeff Nielsen, BullionBulls, Canada

As we saw recently during the May take-down of the gold and silver markets, not only was there a large cast of buffoons referring to the silver market (in particular) as a “bubble”, but an even greater number were asserting that at the least there had been a “top” in these markets. It is really difficult to envision a conclusion which demonstrates more fundamental stupidity.

When I head to the supermarket to do my grocery shopping, the same loaf of “premium” bread which I could purchase for about $2/loaf three years ago today costs me roughly $4 today. Obviously since it is the same loaf of bread, there can be no argument that I’m getting a “better” loaf of bread for twice the price. Instead, it is unequivocal that the purchasing power of the paper in my wallet has fallen by half in just three years.

I could come up with numerous other examples of items with such massive “price increases” (i.e. equivalent collapses in purchasing power) – especially with respect to food items. This broad-based explosion in prices totally rebuts any possible argument that particular items are “getting expensive”. The only exception to that would be with respect to goods where there are now acute shortages. In those cases however, prices have tended to explode by an even greater amount.

What this translates to is that the rampant inflation which has already sparked rioting (and revolution) in many poorer nations is totally a phenomenon of out-of-control currency dilution, which is the same thing as saying out-of-control money-printing. Yet we observe the inability of practically the entire body of “experts” to understand the concept (and effects) of currency dilution, despite the fact that these same individuals have no problem understanding the concept of “dilution” when it is applied to the share structure of a corporation.

Should the experts in our markets spot a company which is printing-up new shares at an excessive rate, these analysts will tell you to dump that stock faster than you can hit the “sell” button on your trading platform. And they won’t hesitate to tell you that only a “fool” would hang onto a company which is undermining shareholder value in that manner. Yet when these same experts watch Ben Bernanke running the Federal Reserve’s printing-press “white hot” year after year after year, at any given time roughly half of these clowns will be advising people to “buy dollars”.

The argument these esteemed financial advisors will use when they “recommend” that people increase their exposure to this rapidly-disintegrating paper is that “other currencies” (i.e. other paper) is supposedly even worse. Putting aside the fact that no paper is currently more worthless than the U.S. dollar, let us assume that the U.S. dollar would “win” a least-ugly contest. What does that imply?

With the same media talking-heads claiming that most European nations are near bankruptcy and Japan’s economy is in ruins, claiming the U.S. dollar is slightly less worthless than its “peers” is hardly an endorsement. Indeed, it is like watching two people being dropped out of an airplane on identical platforms – except that one platform was dropped a millisecond later than the other. And then the person perched on the slightly higher platform says to the person on the slightly lower platform “climb up here and save yourself.”

As bad as these paper currencies look over the short-term, their “value” (?) is even more horrifying when viewed with a long-term prism. As many already know, in the roughly 98 years since the Federal Reserve was created in 1913, it has managed to knock approximately 98% of the value out of the U.S. dollar – and its reckless money-printing in recent years exceeds any other monetary depravity in the entire remainder of its existence.

This is why the ounce of gold which was valued at less than $30/oz when the Federal Reserve was created now costs over $1500 (fifty times more) when using that same (debauched) paper. With the U.S. dollar having been one of the world’s strongest (paper) currencies over that period of time, the performance of other currencies (and the bankers entrusted with protecting those currencies) has been equally dismal.

What this means is that if a group of centenarians had each converted $1 million dollars into various paper currencies back in 1913, while one had converted his paper to gold, today that group would be composed of one “millionaire” – and a group of nearly-broke paupers.

Going back even further into time, we see history repeating again and again. Every “fiat” paper currency ever created (i.e. money backed by nothing) has been destroyed by the excesses of bankers. There is nothing surprising here. In playing the “game” of currency-dilution, the faster the bankers print money the more/faster they can steal from us.

Returning to the example of the hypothetical “millionaires” who would have lost their entire fortunes by simply holding it in U.S. dollars for 100 years, the obvious question to ask is “where did their wealth disappear to?”

The answer is even simpler: it all was sucked into the vaults of the bankers printing (and lending out) all of that money. When you “deposit” a dollar into the vault of a bank, the dollar you deposit has “full value”. Then the magic of “fractional reserve banking” takes over. With the normal 10:1 ratio that these thieves are allowed to use in their “operations”, for each $1 you deposit your friendly banker prints nine more – and lends those out to other suckers, pretending that every one of those dollars is worth just as much as the full-value dollar you originally deposited.

We arrive at the following set of parameters:

1) With the bankers having severed all ties between our currencies and precious metals, there is now nothing to prevent them from printing infinite scraps of paper currencies (just as the bankers have always done with these paper currencies, for more than a thousand years).

2) The faster they print their paper, the more they can steal from us.

3) The faster they print their paper, the sooner it goes to zero (like every other fiat currency, throughout all of history).

4) In 98 years, the U.S. dollar has already lost 98% of its value.

5) The U.S. dollar is being diluted much more rapidly today.

Now let us return to all of the “rocket scientists” in the mainstream media who have just finished calling a “top” in the gold and/or silver market. Just as that loaf of bread is never going to decrease in value (while the paper we buy it with goes to zero) – and can only go up in value over time, the same is true of gold and silver.

It is not simply “unlikely” that gold and silver could have recently reached a “top”, as a matter of the simplest arithmetic it is impossible. Given that there is a “lag” of many months from the time new “money” is printed and its dilutive effect filters through the economy, we will know if/when gold or silver reaches a “top” – because it will be several months after the bankers cease their reckless money-printing. Unless and until that event occurs, gold and silver (and other hard assets) must move relentlessly higher in price, as the purchasing-power of our paper currencies move relentlessly toward zero.

 

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Other Articles      

Conversations With God About Gold & Silver Parts 1-3

Bix Weir

Bet on Gold And Silver, Not US Treasuries
Jeff Nielsen

Silver Take-Down: Anatomy of a Crime

What Every American Needs To Know About Gold

Porter Stansberry

Think Like A Thief

Jeff Clark

A Word on Corrections
Casey Research

The Practical Implementation of Honest Money

Doug Jaden

 

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Freedom Watch with Judge Napolitano, Ron Paul
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Basic Info on Silver for the Tea Party by Jason Hommel
June 5 , 2011
Issue 92
Today's Gold/Silver Ratio: 42/1 Up

Issue 110

Gold: $1546.90/ Silver: $36.79

SGS Notes: The BIG News this week has been the Senate Bill due to be introduced this coming week by Sen. Bernie Sanders requiring the CFTC (Commodity Futures Trading Commission) to use emergency authority to impose limits on the positions investors can take in crude oil, gasoline heating oil, and metals. Bix Weir says, 'Keep an eye out for an announcement of charges against JP Morgan for silver manipulation.'

Basic Info on Silver for the Tea Party

Jason Hommel

What is the Federal Reserve? And why do some say we should use Constitutional money, such as silver and gold?

I'm hearing that most Americans, even in the Tea Party, don't know who the Fed is, or why we need to use silver and gold as money. This article is for them.

If you have USA paper money in your wallet, or if you have money in the bank, then you have been ripped off. Paper money in the USA used to be called "silver certificates", as recently as 1964, which was 47 years ago.

They were called silver certificates, because each "note" stated: "This certifies that there have/has been deposited in the Treasury of the United States of America (number) silver dollar(s) payable to the bearer on demand."

This turned out to be a great big lie. It was fraud. Current paper money is the evidence of the theft.

I used to call paper money an "unjust weight and measure", but paper money today is no weight and measure of anything at all. It's a broken promise to pay a devalued amount and an unjust weight of silver!

Who cares? Well, you used to be able to get a silver dollar coin for a paper silver certificate. They were equal in value, as one was a promise to deliver the silver.

Today, the price of that same silver dollar coin, containing .76/oz. of silver, costs about $30 from a coin dealer, with silver prices at $36/oz.

The paper money buys much less silver, it buys less gas, it buys less of everything today compared with prices in 1964, and about 99% less of everything than 100 years ago in 1911.

The Federal Reserve was created in 1913. They got a 100 year charter that expires in 2012! Congressmen and Tea Party activists ought to seriously reconsider the Fed's charter very carefully right now!

Right after 1913, the USA had funding to fight in World War One, and then suffered the false bubble economy of the "roaring 20s" bull market in stocks which, when it popped, led to the great depression in the 1930s, followed by World War Two in the 40s.

After WWII, the US paper dollar became the world reserve currency, which helped to effectively loot the productivity of the rest of the world. Well, we did win the "world" war, and the world became the spoils of the war. The rest of the world's central banks began accumulating paper dollars, instead of gold.

This theft of the world's assets was both good and bad for the USA. Good, because the USA can simply print the money to send to the other nations in return for real assets such as oil, machines, food, clothing, or whatever. But it's bad, because our nation got addicted to the benefits of the false and inflated values of free paper money, and grew lazy, and we forgot that the benefits and bounty of freedom are greater than the benefits of a free lunch paid for by slaves.

Today, we are still free to go into the market and buy physical silver, and let me tell of this wonderful opportunity in silver.

To create this paper money world in which we live, the world's bankers launched a propaganda and education war against silver first, and then gold, to prevent their use as money. This war dates back to the late 1860's. They succeeded, as no nation on earth uses silver as money. Reduced monetary demand has reduced the value for silver, making it an attractive and cheap investment.

Then, by the end of WWII, the age of electronics began, and the use of silver as a conductor of electricity in all sorts of electrical devices simply exploded, about ten times as much as previously. Modern nations use about 3/4 of an ounce of silver, per person, per year, in industrial applications.

Today, world industry consumes about 600 million ounces of silver per year. Industry consumes nearly all of world mine supply, leaving only recycled silver, only about 200 million ounces, available for investment demand. This scarcity of silver makes it an even more attractive investment.

The bankers of the world have not cornered the market on silver. The exact opposite happened. They tried to make silver as cheap as possible, by not buying it themselves, and trying to divert investment demand away from the metal where ever and when ever they could.

For example, any time any of the clients of any of the major western LBMA (London Bullion Market Association) banks wanted to buy silver, the banks said, "sure", and opened up silver and gold accounts for their clients, without going out to buy and store the actual metal, yet they charged their clients storage fees. This created, according to the BIS (the Bank of International Settlements) a "gold and silver" liability that is up to about $600 billion in gold, and about $200 billion in silver. That's about 6 years worth of world mine annual production of gold, and about 10 year's worth of annual production of silver. That's silver and gold that the major banks owe their clients, and never bought in the real market, to help suppress prices, and prop up paper money.

Another way that banks suppress silver prices includes offering investment-grade sized silver certificates (not paper money), as they do in Canada and Australia even today.

But when they offer bullion accounts, or certificates, those trade in a non-transparent way, as they don't create price quotes, and it's difficult to find information on how much bullion fraud has taken place.

The main way that the banks manipulate the prices of silver and gold is through the futures markets that generate minute by minute price quotes that other industry players such as refiners and miners and large bullion wholesalers must look to in order to conduct business to buy and sell silver and gold.

Futures markets are price manipulative and price suppressive because the sellers offer far more silver than they have, and they offer silver on the worst possible terms and conditions.

They offer to sell up to 800 million ounces of silver, on paper, over a year, when they only have about 30 million oz. of silver in their vaults ready for delivery. Why then, do people buy paper silver? The lure of greed through leverage. You can put only about 10-15% of the money down to buy silver, and thus, if silver prices double, you can earn 1000% on your investment, instead of 100%.

But what honest industrial participant needs silver "a month or so from now" for delivery at some vague time within a whopping 30 day time period, and in the form of a bulky 1000 oz. bar that is particularly difficult to ship by mail or even melt down? I won't even bother ordering any silver from any supplier who will take even 21 days to ship it out. I expect my suppliers to ship out silver the next day, like we do, or maybe at the most, a week after I wire them the money.

The modern way to keep people away from buying and taking delivery of real silver is to offer silver in the form of an "Exchange Traded Fund" or ETF, such as SLV, which can be bought or sold as easily as a share of a stock in a company like Microsoft. Recently, it was pointed out that the modern forms of paper silver, such as the futures markets and ETF's traded an entire year's worth of silver production in a single day. I don't think that would be possible unless there was a massive amount of fraud taking place, instead of any real delivery of real silver taking place, but that's just my opinion, of course.

Real silver is real freedom.

All forms of paper silver are like slavery; the paper virtually enslaves the promising party, the seller, to deliver and perform for the promised party, the buyer. But the promises are often broken, especially when entities promise to deliver many more times worth of gold and silver than flows in the world on an annual basis.

The slavery is bad. Defrauding others is bad.

But real silver creates real freedom.

A real understanding and commitment to own and trade real silver also destroys the power of governments to steal from the people through the Federal Reserve's monopoly power to print money, which devalues people's money.

The paper money in your pocket (formerly silver certificates) is the best evidence and reminder that promises to deliver silver are always created to excess, for the purpose of fraud.

Think: What kind of business is it, if you can take people's money, and never have to deliver the underlying product? That's what banking is.

 

Quote of the Week                               

 


Other Articles      

Comex Silver Inventories Reach New Lows

LeCafe American

 

Silver Drop is JP Morgan Trying to Protect Their...
John Embry


US Senate Bill On Position Limits

Reuters

 

China Divests Itself of 97% of Treasury Holdings

 

Fess Up, Fed

Dr. Ron Paul

 

Treasury Continues to Dip into Retirement Accounts

 

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Hugo Salinas

'Silver in the Hands
of the People
'

Summary of the lecture given by Hugo Salinas vice President of the Mexican Civic Association for Silver in January 2011," How to monetize silver so that it can circulate permanently in parallel with paper and digital money"

See also:

Forbes: The Modern Gold Standard

 

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When Bad is Good; What is Money Anyway? ~ Dan Eden
May 28 , 2011
Issue 92
Today's Gold/Silver Ratio: 40/1 Down

Issue 109

Gold: $1538.10/ Silver: $38.12

SGS Notes: Still a lot of chatter out there about a return to the gold standard… honest money… increasing investment demand for gold and silver in China and India… (What do THEY know that we don't?)

When Bad is Good; What is Money Anyway?

Dan Eden


Here's the REAL reason the US Dollar is shrinking... and will continue to shrink!

When you finish reading this article, you may change your mind about the war in Iraq.

I've written about extraterrestrials, HAARP and even the end of the world. So when Viewzone asked me to write about a boring topic like "global currency" I was inclined to say, "no way!" Heck, I can't even balance my checkbook. Money has always slipped through my fingers like beach sand. But I like a challenge, so here it is.

The information they gave me came from a brilliant investigative journalist, Rudo de Ruijter. It took time for me to digest what he wrote, and even more time to understand the importance of what he revealed. I must confess, I'm still shocked by what I learned.

This information is not new. International bankers and politicians know these facts all too well. It's the ordinary people -- the little guys like us -- who are told that these things are too complex for us to understand; yet it is because of "global currency" that we invaded Iraq, Afghanistan and, perhaps soon, also Iran. Sure, it's all about oil -- but not the way you think.

What Is Money?

At the dawn of civilization, the earliest way to get something that you needed was called barter. I give you a cow and you build me a hut to live in. But what if I want a tiny hut? Do I give you half a cow? Placing a standard value on goods and services was first achieved through the use of currency, or money. Almost every culture has money. Ancient cultures used everything from sea shells and beads to huge circular stones to buy and sell. Eventually, precious metals were used and more recently the standard currency has been based on gold.

The value of precious metal is determined by its weight. Instead of carrying chunks or nuggets of gold and silver, early empires made standard "coins" of the metals and set a standard valuein the marketplace. Coins were great for most transactions, but they were heavy and wore out your pants pockets quickly. Soon a new idea, paper money, was invented.

The original idea behind paper money was convenience. Each piece of paper represented a specific weight of a precious metal, usually silver or gold, that was kept somewhere in a treasury. If an individual wanted to, he could exchange the paper money for the gold or silver that it represented. It was all based on trust and a promise. In fact, the early paper money in America was called a "promisary note."

If you can find old dollar bills, you will read the promise written on each note. You will also notice that the notes are numbered. In this way, each note is unique and represents a corresponding weight of silver or gold in the US Treasury vaults.

On a global scale, when someone in America bought something from a foreign country, they would pay in US dollars. The foreign company would then go to their local bank and exchange the dollars for their local currency. When foreign banks had a surplus of US dollars, they would then exchange them for gold. This meant that the US Treasury was always needing to acquire more gold to replenish its vaults and maintain the "gold backed" dollars in circulation.

Prior to 1971 the dollars of the US were trusted all over the world. Each dollar was based on 1/35th ounce of gold, held in the US Treasury. The value of gold was fixed by law at 35 dollars = 1 ounce, so the value of each dollar was very stable. This made the dollar attractive as an international currency. But in 1971 this all changed.

Click Here to read the rest of this article…

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Other Articles     

The Gold Standard
Gold Standard Institute News


The Patriotic and Moral Imperative for Owning Gold and Silver
Johnny Silver Bear


Indian Investors Returning to Silver


UAE Precious Metals Demand


China Gold Demand


Mexico to Back Peso With Silver


Return to Honest Money

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Bill Murphy
GATA

Chairman of the Gold Anti-Trust Action Committee, and James Turk, Director of the GoldMoney Foundation examine how the silver futures market remains in backwardation, and how intense demand for the physical metal could render the paper market irrelevant.

See Also
The Collapse of the Dollar

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Get Ready For Accelerating Devaluation of All Fiat Currencies ~ John Rubino & Chris Martenson
May 21 , 2011
Issue 92
Today's Gold/Silver Ratio: 43/1 Up

Issue 108

Gold: $1515.10/ Silver: $35.17

SGS Notes: Glad to be back with a new newsletter this week… our computers were down last week and in the shop for several days getting their 'tune up'…

This week, the focus is on the U.S. Dollar and the high potential for its collapse. I know I will be accused of being a 'doom and gloomer' for posting these articles… but when you see similar content being put out by many places, and by people of high respectability and high expertise in the area of economics and monetary system… then you have to sit up and take notice. While we all want to remain positive in the face of adversity, it is folly to refuse to be informed and prepared for potential crises that may be coming our way. I don't make this stuff up… I simply report it to educate and inform… and to help others be as prepared as possible…

Get Ready For Accelerating Devaluation of All Fiat Currencies

John Rubino


"What is happening now is we are exporting our inflation to the rest of the world. We are forcing countries like Brazil and China to endure the pain that we should be enduring. Brazil's interest rates are like 12% right now. China is doing something new every couple of days to scale back bank lending, spending domestically, and everything. They are countries where a big part of the population makes just a few dollars a day. Rising food and energy prices are devastating for these guys. They do not really control the global price of energy and food, yet they have to endure the pain of slowing their economies down and throwing people out of work. Have them have to spend more and more of their money on food and energy so we can keep on borrowing and growing. The government can keep on spending as much as they want to here.

Clearly that is unsustainable. At some point these countries are going to say 'No, we want our currencies to depreciate, too. We want to be able to continue to export to you.' So what we will end up with is sort of like what happened in the depression. Everybody was trying to cut the value of their currencies at the same time. What that leads to obviously is global inflation instead of just localized inflation where a few countries are debasing their currencies. You have got everybody doing it at once. That is because the US, with the world's reserve currency, basically controls this process. We have chosen to decrease the value of the dollar dramatically over the next few years. That is going to force the rest of the world to do the same thing or endure a rocketing economy or a rocketing currency value and recession. No elected politician can put up with that.

So what's out there? Maybe after a mini recession or some kind of correction in the next year or two is another round -- an even bigger round -- of global inflation. Basically all the fiat currencies of the world start decreasing in value at an accelerating rate. So we basically destroy most of them. At some point out there, the whole concept of fiat currency, of governments in charge of their own monetary printing presses is going to be discredited."


Click Here for full transcript of interview with Chris Martenson & John Rubino

 

Quote of the Week                               

 

Fractionals Are Back                               

We have brought back the silver fractional rounds…
½ oz, ¼ oz and now 1/10 oz
.999 Fine silver rounds are now available for purchase.

 

Does SGS BUY BACK Silver?

We get inquiries about this all the time… Our answer is a qualified 'Yes'.
We are purchasing inventory replacement all the time. Consequently, timing is everything.

Customers have first priority over our vendors.
So, while we don't recommend selling at this time… we understand that circumstances sometimes dictate liquidation.

Don't hesitate to call and ask us if you need to liquidate some of your holdings.

Other Articles      

Final Checklist for Meltdown
Bix Weir

 

Dollar Collapse Will Shock The World
James Turk

 

The End of The Dollar As We Know It
Part 2 & Part 3
The Daily Reckoning

 

Hyperinflation & US Dollar Collapse
John Williams

 

States Honest Money Resolutions

 

All Paper Currencies Are Dying
Larry Edelson

 

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Biggest Names Discussion Of Silver

Hosted by David Morgan:
Eric Sprott, Bill Murphy, Rob Kirby, Bob Quartermain, Sean SGTReport and James Anderson



Part 1

Part 2


Part 3


Part 4

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