Thursday, April 25, 2019

Reflections of a Sell-Out

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by Dr Jerome, TF Metals:

Two weeks ago, on FOMC day, I loaded a number of ammo-cans into my truck and drove down to the LCS to show them what was inside and see if they wanted to buy it. The contents were precious to me, containing most of my stack of silver and all of my gold. but I learned a few things about myself and about dealing in precious metals.

I need to learn more.

Overall, I felt OK about the decision because we were keeping two ammo cans full of junk silver as crash insurance. (Of course, WW3 could change things).

Why sell out? Well, an opportunity to purchase real estate presented itself, providing a multi-family property where our son could live and have a part time job managing for us. The time came to pay off some borrowed fiat and smash the champagne bottle against the side of the ship. This particular ship should provide a nice monthly retirement check for a long time, and is actually a nice property where one could hunker down.

Now it is time to begin saving and re-stacking again. A death in the family gave a good start as my wife and her siblings divided up dad-in-law’s stack. But I learned a few things about selling-out that morning on the phone with online dealers, and finally at the LCS, in the hour before Yellen took the microphone.

First, a large amount of silver is very heavy, and quite inconvenient to lug around. I had dug it up the day before, blaming the various holes in our back yard on the dog when a nosey neighbor peeked over the fence. Then, I did not sleep well, knowing our future security was sitting in convenient-to-carry ammo cans next to the couch in the living room until the next morning.

Second, I learned that dealers like to change-up their buy-back price on you. I got on the phone  with my favorite online dealer to lock in a sell price before the FOMC minutes were released. I knew to the penny what that metal was worth at spot. And I also knew dealers pay various prices for different forms of metal.  I gave a list of what I had to sell: 10 oz and 100 oz AG bars, gold eagles, and some one ounce generic gold bars in protective plastic cards. They said they would have to call me back with their price. 15 minutes later I was shocked to hear a price $3500 below spot—much less than they advertised as a buy-back price on their website. They must read TFMR–seems that they knew the smash was in the cards.

I told them, “Hold that thought.”  Then I imagined the work involved in double boxing that metal in several cartons to keep the weight under 30lbs each, the rolls & rolls of tape, then paying postage for the weight, tracking, and insurance. Not cheap. (140 lbs oz of metal, if you must know.) A few years ago I arbitraged my Franklins into bars at 5$ over spot and the package burst open in the mail. The Post office delivered it in two parts. No metal was lost. Whew! Dodged a bullet.

Third, selling online is not quick. I’d be spending all day getting this metal in the mail, then have to wait 5 business days, after arrival, before they mailed out a check… 2 weeks to get the fiat. The interest on the renovation loan was beginning to sting a bit—two more weeks meant another few hundred dollars.

So I told them “No deal” and took the metal to the LCS. I had expected to receive spot price for the big bars (as I was told several weeks earlier) and spot for the eagles, and 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} under for the little bars. By the time I arrived, I figured he’d lowball me like the online dealer. Expecting the worst, I was pleasantly surprised when his price was only $1200 under spot. I was disappointed he was dealing hard, but his offer was far superior. So we took it and walked out with a check that we took straight to the bank. Yellen spoke. Metals were smashed.

Fourth: The eff-ing check bounced!  We found out late Saturday afternoon and had to wait all weekend to go to his shop. I worried all day Sunday that his doors would be locked on Monday morning. I even wondered if I’d really want a bankrupt coin shop if I won a lawsuit against him. Part of me felt absolutely sick.

He was totally apologetic and did not defend himself in any way. We followed him straight to his bank where he first did some transferring, then had a cashier’s check issued. I am convinced it really was a simple error on his part. Fortunately, we had an account at that same bank so they honored the check instantly and credited our account. Whew! That was too close for comfort.

Even though the dealer had problems paying us, I still trust him… but not with a big sale again. In fact, I have no plans to ever make a big sale again. I prefer the $1000-ish sales where a buyer hands you cash over the counter, or title to property, or a car title, or a truckload of firewood.

In the aftermath, I feared that I’d have “Stack-Seller’s remorse” in a bad way. But it never hit me. My world did not end. It helped that metals prices continued to fall the following two weeks. I reviewed the risk/reward factors of our real estate purchase, versus the risk/ reward factors of holding the metal—or even getting caught without it when our dream day finally arrives. I felt good about the deal overall—especially since it gave us a property free & clear with no obligations to any banks. And I think I proved to myself that I am not motivated by mammon—that I really only serve one master.

We began planning how to budget and rebuild the stack, deciding I’d be a different kind of stacker in the future: smarter, shrewder, patient.

For starters, no more big bars. They are easy to count but, adding & subtracting the premium both ways puts them in the ballpark with Eagles or Maples, which do get spot price from the dealers. And as AGXIIK pointed out, when/if the AG price ever hits $100 per ounce, each big bar’s sale must be reported to the IRS. I don’t plan to have to sell the stack again, so when I do sell, it will be in smaller amounts, with smaller units of silver. The gold was so much easier to count, move, and brought a better price. Smaller denominations of gold will gain the same advantage—perhaps ½ ounce coins rather than a full ounce. And when we all may be forced to sell to survive, the economy around us will not be what it is today. Finding a dealer who can buy a large quantity may not be easy, or safe, nor would we want to sell it all at once then.

Read More @ TFMetals.com

The Fix Was In

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Turd Ferguson, TF Metals:

Just as how a negative job print doesn’t matter, and just as how earnings rising solely due to hurricane-related overtime doesn’t matter, the fix was in today for the “metals”…just as we’ve been expecting for over three weeks. Now comes the test. Will we also be proven correct that the lows for this latest Spec wash are now upon us?

Look, there’s really no sense in going over all of this stuff again. In fact, it’s all so egregious that even Eric Sprott was left speechless this morning: https://www.sprottmoney.com/Blog/october-6-2017-weekly-wrap-up-with-eric-sprott.html

Since everything turned on September 8, we’ve targeted today as the day where this latest Spec washout would be at or near completion. The only missing piece is that we though the all-important USDJPY would stretch back to 114.00-114.50 before it was done and, despite today’s shenanigans, we still have a last of just 113.35. However, if it remains above 113 through the day, then an early week move next week should take care of that, too.

From there, prices will begin to recover and, as the old adage goes, today is the day to buy some as things certainly couldn’t look or feel much worse.

Adding some level of confidence, the charts for the “metals” are pretty much right where we expected them to be today. It was at least three weeks ago when we began discussing $1260 and the 200-day MA as The Cartel target for CDG and $16.20-$16.40 as the target for CDS. Well, look below:

We also speculated early this week that any big dip today would bring the RSI in CDS down to the 30 level. Again, look below. It’s now at 28.

Read More @ TFMetals.com

Is The World About To Take A “Gold Shower?”

by Dave Kranzler, Investment Research Dynamics:

The 1944 Bretton Woods international monetary system as it has developed to the present is become, honestly said, the greatest hindrance to world peace and prosperity. Now China, increasingly backed by Russia—the two great Eurasian nations—are taking decisive steps to create a very viable alternative to the tyranny of the US dollar over the world trade and finance. Wall Street and Washington are not amused, but they are powerless to stop it…Now, ironically, two of the foreign economies that allowed the dollar an artificial life extension beyond 1989—Russia and China—are carefully unveiling that most feared alternative, a viable, gold-backed international currency and potentially, several similar currencies that can displace the unjust hegemonic role of the dollar today.

The above is an excerpt from William Engdahl’s essay, “Gold, Oil, Dollars, Russia and China.” The essay is a must-read if you want to understand how the dollar was cleverly forced on the world as the reserve currency and how it is about to be cleverly removed and replaced with a trade system that reintroduces gold into the global monetary system.

Unfortunately, the U.S. educational system presents a fraudulent account of world financial and economic history from Bretton Woods to present.  Fed on a steady educational diet of U.S. propaganda, anyone raised and educated in the U.S. will wake up one day to an economic cold shower and eventual poverty unless they’ve taken the steps necessary to protect their savings (if they have any).

Let’s face it, the entire western monetary system is basically a fraud. It is privately made and privately owned, with the entire international payment system being controlled by the FED – which is totally privately owned – and the BIS (Bank for International Settlement, in Basle, Switzerland – also called the central bank of centrals banks). – from an interview with Peter Koenig, geopolitical analyst and a former staff-member of the World Bank

Without a doubt, the Russia-China led BRICS axis is working toward a “reset” of the U.S.-centric dollar reserve global currency system: “Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”

That quote was delivered by Putin at the annual BRICS summit in Xiamen, China.  I don’t know how Putin could have more plainly, yet diplomatically,  laid out the inevitable demise of the dollar’s status as the world’s sole reserve currency.

The news report from the Nikkei Asian Review of a gold-backed yuan oil futures contract to be traded in Shanghai was treated with predictable skepticism from the those who require an event to have already occurred in order to “see it.”

That report surfaced shortly after the BRICS summit in China.  I suspect China intentionally has made the world aware of its plan to roll out this contract eventually well ahead of the actual event.  China is imminently launching a yuan-denominated crude oil contract on the Shanghai Futures Exchange.  Please note, for anyone skeptical of this event, that  the announcement came from the vice chairman of the China Securities Regulatory Commission.  I suspect that once this contract is trading smoothly with a high level of liquidity, the next logical step would be to enable the users of this contract  to convert the yuan received for oil into gold.  The gold-backing would be an incentive “sweetener” to use this contract instead of dollar-settled futures contracts.

A gold-backed, yuan-denominated oil futures contract makes sense certainly from the perspective that Russia and China are already settling Russian energy sales to China in yuan.  They have also set up a mechanism by which Russia can convert the yuan received into gold.  Furthermore, the Central Banks of Russia and China combined, are  by far, the two largest buyers of gold in the world.  Why else would Russia/China accumulate a massive Central Bank gold reserve other than to eventually reintroduce gold as a currency stabilizer and a trade settlement “equalizer”  into the global monetary ?

Read More @ InvestmentResearchDynamics.com

Koos Jansen: Four Paragraph Article DEBUNKS Silver Price Suppression

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from SilverDoctors:

Koos Jansen has shared a 4 paragraph article that shreds the belief that the silver price is suppressed…

First, the public tip:

And here’s the four paragraph reason why there is no silver price suppression:

Embracing the belief that a bank or a cartel of banks has suppressed the prices of gold and silver for decades via the short-selling of futures contracts is like adopting a child. It’s a lifetime commitment through thick and thin, meaning that once this belief takes hold there is no amount of evidence or logic that can dislodge it.

Entering a debate with someone who is incapable of being swayed by evidence that invalidates their position is a waste of time and energy, so these days I devote no TSI commentary space and minimal blog space to debunking the manipulation-centric gold and silver articles that regularly appear. However, Keith Weiner has taken on the challenge in a recent post.

Keith’s article is brilliant. In essence, it proves that the silver market has NOT been dominated by the “naked” short-selling of futures. His arguments might not be as interesting as many of the manipulation stories, but they have the advantage of being based on facts and logic.

Don’t get me wrong; for as long as I can remember it has been apparent to me that gold, silver and all the other important financial markets are manipulated. However, it is also apparent to me that the price manipulation happens in both directions and never overrides the fundamentals for long. Of course, to see that this is the case you first have to know what the true fundamentals are.

Thank goodness it’s settled.

All this time, we thought there was an incentive for the governments and central banks around the world to keep the silver price artificially low.

We sure are glad that silver is worth $16.62 an ounce and not one single penny more.

Perhaps we should start stacking some other market-efficient similarly priced commodity that’s been around for thousands of years too:

Read More @ SilverDoctors.com

An Interesting Discussion with James Turk

by Turd Ferguson, TF Metals:

Earlier today, we had the opportunity to get caught up with James Turk, legendary founder of GoldMoney. Besides giving us an update on the global precious metal markets, James also provided some background information on an important new venture he has started called Lend & Borrow Trust Company.

Detailed information on Lend & Borrow Trust can be found at the website. Please take a few minutes to look it over: https://lendborrowtrust.com

Over the course of this call, James gives his views on several important topics, including:

  • the current supply/demand equation for metal at the wholesale level
  • how/if the uptick in base metal prices is impacting silver
  • global sovereign gold demand and how this relates to the demise of dollar hegemony
  • his views on the events in Catalonia and how this could impact the EU

And, of course, we conclude with a detailed discussion of Lend & Borrow Trust and how this unique, new company is positioned to alter the peer-to-peer lending environment while at the same time providing unique new options for precious metal holders around the globe.

Thanks again to James for his time to today and thanks to everyone for giving this a thorough listen.

TF

Click HERE to listen

Read More @ TFMetals.com

10 FACTORS TO PROPEL GOLD 10 FOLD

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by Egon von Greyerz, GoldSwitzerland:

Inflation is coming and it will have a major effect on the world economy and financial markets. This is one of the factors that will drive gold to levels which few can imagine today. Later in this piece, I am discussing 10 Factors which will make gold surge.

NO FEAR

Markets are expressing no fear and seem very comfortable at or near all-time tops. There is no concern that stocks are massively overvalued or that bond rates are at historical lows and only have one way to go. Nor is anyone worried that house prices are at levels which most people can’t afford. Money printing and interest rate manipulation has created such cheap financing that most people don’t look at the price of the property but only at the financing costs. In many European countries, mortgages are around 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. At that level the monthly cost is negligible for many people. Neither the banks nor the borrowers worry about interest rates going back to the teens as in the 1970s.

So whilst we are waiting for markets to wake up from the dream state they are in now, what signals should we look for and what about timing.

These are the areas that we see as critical and below are our near term and long-term views on:

  • Interest rates / bonds
  • Inflation, Commodities, Oil, CRB.
  • Dollar
  • Stocks
  • Gold

INTEREST RATES – ONLY ONE WAY TO GO

Interest rates are critical to a world with $250 trillion debt plus derivatives of $1.5 quadrillion and global unfunded liabilities of 3/4 quadrillion. Minor increases in rates will have a catastrophic effect on global debt. Derivatives are also extremely interest rate sensitive. Also, derivatives represent an unfathomable amount that will blow up the global financial system when counterparty fails.

The very long interest rate cycle bottomed a year ago. Since the dollar debt is the biggest, dollar rates are the most important to the world. The US 10-year Treasury bond bottomed in July 2016 at 1.3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} and is now 2.3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. US rates have turned up from a 35-year cycle bottom and are likely to go considerably higher into the teens or more like in the 1970s. This could be a very slow process but we could also see a rapid rise. As the 10-year chart shows below, there was a rapid rate rise into December 2016. The 10-month correction finished in early Sep 2017 and a strong uptrend has now resumed.

The long-term trend from 1994 on the chart below, shows the July 2016 bottom. The 23-year downtrend shown from 1994 actually goes back to 1987. This 30-year trend will be broken when the rate goes above 2.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. With the 10-year at 2.35{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} currently, we are not far from a break of this trend.

In summary interest rates bottomed in 2016, right on cue as that was the end of the 35-year cycle. The trend is now up for a very long time. This is initially linked to a rise in inflation and will later on be fuelled by a collapse of bond markets and hyperinflation.

INFLATION – ON THE RISE

There are many ways to measure inflation. We can take the official government figures which are manipulated and lagging the real economy. US CPI bottomed in 2015-16 at 0{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} and is now 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. If we take the Shadowstat figures, real US inflation is nearer 6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} and in a clear uptrend.

Read More @ GoldSwitzerland.com

The Gold Worm on the Yuan Hook

by Hugo Salinas Price, Plata:

Once again, I turn over in my mind the Chinese plan regarding their imported oil, which consists in convincing their oil suppliers to accept yuan in payment (and thus re-directing their sales outside the orbit of the US dollar) with an additional sweetener in case the oil exporters do not wish to hold assets denominated in yuan: the sweetener consists in offering to exchange the yuan received by the oil exporters, for gold purchased on the world markets – and not out of Chinese reserves.

Again, I mention that for the first time in 46 years – ever since that fateful date, August 15th, 1971, when Nixon took the US “off gold” – gold is once again mentioned as part of a commercial deal – and one of great importance.

“There is more than one way to skin a cat” says an old proverb. And there is another way to bring the US to its knees, besides using hydrogen bombs or EMPs.

If the US cannot stop China from implementing its “oil – for yuan – for gold” program, then the fate of the US is at hand.

Once the oil exporters accept the deal, they will all be permanently caught. The price of gold will begin to rise, and rise and rise as more and more oil income is exchanged for gold. Thus, the gold income received from prior oil sales will become much more valueable for the oil exporters. I do not see the price of oil going up in terms of yuan. The first sellers of oil to China in exchange for yuan, and then exchangeable for gold, will get a lot of gold for their oil. As the scheme progresses, the oil exporters will get progressively smaller amounts of gold for their oil.

As gold commences a historic rise, the dollar will suffer a historic decline in acceptability, because higher gold means a lower dollar – more dollars will be needed to purchase gold.

Here I pose a question: once the oil exporters get a good deal, receiving gold for their exports to China, what will the other major exporters of commodities to China be thinking? Think of iron ore, copper and all the other commodities that make up the recently recorded $1.817 Trillion of yearly imports by China.

I think we can expect that other exporters to China will also want to get in on the deal – their commodities sold to China for gold – not dollars. The sooner they decide to ask for this, the more gold they will receive, initially.

It may be that we are on the verge of a monetary revolution in the world. One which will end the predominance of the US dollar, and with it, its world empire. The dollar may swiftly become worthless in terms of gold. As a world power, the US would be effectively castrated.

All the countries that hold US dollars as Reserves will be aghast as they see the value of their Reserves collapse in terms of gold. Too late, they will hasten to acquire more gold for their Reserves, adding to the rush for gold.

The implications I see for the Chinese move are vast. We may witness the return of the gold standard, not as we had imagined, but simply as the result of a spontaneous turn to gold as a means of trade initiated by the Chinese measure.

Read More @ Plata.com.mx

Committee Forming to Establish Indian Spot Gold Exchange

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by Peter Schiff, SchiffGold:

The World Gold Council has announced plans to form a committee that will help set up India’s first physical gold exchange. Officials say they hope to have the exchange up and running in 12 to 18 months.

The committee will not actually set up the exchange, but will provide guidance. WGC Indian operations managing director PR Somasundaram told Bloomberg the council is in the process of creating an industry committee of jewelry trade associations, dealers, miners, regulators, foreign and Indian banks, and eventually some consumers.

Indians have a love affair with gold. The country ranks as the second largest consumer of the yellow metal in the world. It’s not just a luxury. Even the poor buy gold in India. The yellow metal is interwoven into the country’s marriage ceremonies, and cultural and religious rites. Indians also value gold as a store of wealth, especially in poor rural regions. According to the World Gold Council, Indian households hold over 22,500 tons of gold.

Two-thirds of India’s gold demand comes from these areas, where the vast majority of people live outside the official tax system.  Owning gold provides a vital economic lifeline, especially for Indian women. It allows them to gain access to cash, and even goods and services, during difficult times.

The exchange would allow retail investors to bring their physical gold to formal financial channels and make it easier to monetize it. According to the WGC report, a physical exchange would enable jewelers, retailers, refiners and banks to trade over a regulated platform.

While banks’ widespread network and trust factor are essential to facilitate retail investors to bring their gold to formal financial channels, the spot exchange can be a key enabler for the success of these efforts.”

Only China consumes more gold than India. But officials say despite the size of the Indian market and its significant global position, it can’t realize its full potential. Officials say a formal exchange will boost transparency and streamline bullion trading. The goal is to ensure standardization, facilitate better price discovery, bring unorganized players into the formal sector, and to give consumers better access to supply. According to the WGC report, “Given the broad push for greater transparency and appetite for reform, the time is opportune to introduce structural reforms.”

How average Indians will view a formal exchange remains to be seen, especially in rural areas. Large segments of the Indian economy operate underground. The government has aggressively pushed stop it.

Read More @ SchiffGold.com