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Q:  If government institutes capital controls not only on bank funds but also possession of gold so that the government makes it illegal to own, buy, or sell gold, how will my gold holding be of any value to me since I will not be able to sell gold to use as legal tender to buy necessities such as food or pay my bills just to survive?

Brokers such as Miles Franklin will cease to exist as a business entity if government capital controls make it illegal to buy or sell precious metals.

Research from trusted financial analysts about the collapse of the economy and the dollar are advising people to own precious metals.  No one really knows the true value of gold, but men such as Sinclair and others are predicting astronomical values for gold.

Do you think that these bankster market rigging control freaks will allow the small ordinary investor, who is trading his paper dollars for gold, to survive the New World Order Fascist government military state (e.g. USA).

Possession of gold will not change this fact because they will take it from you and your life.  Have you heard of FEMMA camps?

David Schectman’s Answer:

Thank you for your question – actually for your questions.  I have written about some of your concerns in the past and will address them shortly but let’s start at the end and work backwards.  I guess if you are really worried that you will be carted off to a FEMMA camp or worse, killed, then nothing much matters.  If all you have done “wrong” is to own gold, I think your concerns are overblown.  There is no question that we are surrendering our freedoms (Patriot Act, etc.) but I believe your “end game” is rather unlikely.  Higher taxes and a devalued dollar are highly likely and I suspect in dire times, perhaps even restrictions on owning (and buying and selling) precious metals are possible.  But you make the assumption that your gold will have no value and you will not have an avenue to sell it.

Gold’s value will be in part, determined by the weakness of the dollar.  The more the dollar falls, the higher the price of gold goes.  So before any extreme measures are adopted, the price of gold will be much, much higher.  Then, at that point (let’s say $5,000/oz. as an example), the government could “confiscate,” as they did in 1933.  But they will pay you the current value.  Why steal it from you when they can print the money to pay for it?  No one will be knocking on your door looking to arrest you or take your gold.  They will pay you, handsomely, for it.  Outright confiscation may occur to gold in bank safety deposit boxes or gold ETFs, but not from the citizens.  U.S. citizens own very little, not enough to bother with.

You are correct about your comments that companies like Miles Franklin will no longer be allowed to sell precious metals, but we will try our best to stick around.  We spent the first decade of our existence guiding people toward Swiss annuities.  There will be something out there that will be legal to own that you will be interested in that we will find a way to provide you with.  But don’t confuse the difficulties gold and silver firms may experience with your personal difficulties in gold and silver.

It may not be the best choice to turn your gold (and silver) in for dollars, but it is better than not having it to turn in (for a bunch of them).  The trick will be to quickly find something tangible (like diamonds, artwork, real estate, etc.) to trade them before they lose value.

We try and hedge “our” bets and yours to by suggesting that you store a lot of your gold and silver out of the country, now while you still can.  We have a fabulous, industry-leading program with Brinks in Montreal.  You may not be able to bring it home, but you can sell it for any currency you want and bring that back home.  Hey, it beats the alternatives.

Gold is not legal tender now so that is not an issue.  But it can be sold or traded for legal tender, which you then use to buy things or pay bills.

Many people that know me probably consider my views to be somewhat (?) extreme, but they are very conservative compared to your outlook.

Yes, I suspect there will be hard times ahead, especially for folks who have not prepared for them, for people who have only dollar-denominated paper assets (including stocks and bonds).  Trust me, if you think it will be bad for those who own gold in the future, it will be worse for those who do not.

That’s my story and I’m sticking with it.

Chill out, it won’t be as bad as you think.  How do I know that?  I don’t, but decades of being in this business and writing a financial newsletter have taught me that it is never as bad as we think it will be and it always takes longer for the bad things to happen.  I was warning about topics like this 30 years ago.  And I’m still waiting – thank God.

Best of everything to you!

Q:  Hi! I am constantly hearing about gold and silver pricing being manipulated by TPTB for example JPM. I never hear anything about India, Russia or China having a hand in any manipulation of prices. I can’t think of any country who would benefit more than India, Russia or China from lower prices. They are doing all the buying. Do you think they arecontent to depend on the U.S. to lower the pricing in the paper market so they can buy up all the physical gold at whatever price we push it down to? Or are they in the paper market also and I just don’t hear about it?

Bill Holter’s Answer:

Excellent question and one we have written about several times in the past.  I do believe it is very possible China could be in the COMEX on the short side suppressing prices from time to time.  This would fit nicely with the (unofficial) wishes of the U.S. government as a low gold (and silver) price also point toward lower interest rates and a strong dollar.  This would also go for Russia and India but much less likely as they are not large U.S. debt holders and thus tougher to arrange some sort of mutual quid pro quo.

I have written in the past that China very well could be short gold futures and will ultimately default when there is no gold left to deliver.  China declared 6 months to a year ago their right to “default” on ANY derivative contract held by a state agency.  If they truly are in the market and helping suppress the price, what a brilliant plan.  They get to accumulate and transfer physical metal and then just walk away from the table in a default scenario.

That said, I do not believe this to be the case.  I do not believe the Chinese have helped to depress gold and silver prices as they simply want to accumulate physical.  It is my contention that China (via proxies) is what is behind the very large open interest in silver.  I wrote about this theory in an article entitled “Kill Switch” a couple of weeks ago.

“Nothing,” and I do mean nothing at all would surprise me in today’s insane markets.  We did find out last week that central banks do trade S+P futures and are even subsidized to do so through CME group …but they surely wouldn’t trade in the gold or silver markets would they?

Q: Love your newsletter-one if the few places where one can find honest commentary on the real state of the world. I would appreciate your comments regarding what has changed and why? For the longest time there has been, according to GATA and many others, a “managed retreat” by TPTB in the apparent control of any increase in PM prices. This scenario has seemingly been replaced now by a solid brick wall stopping any and all upward movement of prices-the line in the sand seems to have been replaced by a bunker set in reinforced concrete. Nothing (black swans included) seems to have any noticeable effect on weakening their iron-fisted control. Perhaps only an implosion of the entire fiat-based financial system will be required before we see any hopeful changes/? Sometimes I feel that I am either blessed or cursed with vision in a world that is either asleep or blind.

Andy Hoffman’s Answer:

I couldn’t have said it better – regarding the “managed retreat,” the “brick wall,” or the “blessing versus curse” die hard sound money believers are being forced to ponder.

I wish I could answer your question with one overarching answer; but instead, I’ll simply say that as each successive iteration of money printing has failed to produce the hoped 3for (better put, prayed for) effect, TPTB have been forced to tighten the clamps exponentially further – regarding all manner of economic data, market manipulation and other propaganda.

As you know full well, precious metals represent the “financial world’s Achilles Heel“; and thus, no market has been attacked more viciously – over the past 15 years, but particularly the past three, since TPTB realized they had breached the “point of no return.”

Fortunately – for precious metals, but not the world – their can-kicking machinations will suffer the same catastrophic death as all others before it; likely, much sooner than most can imagine.  And when they do, precious metal prices – and purchasing power – will surge beyond our wildest expectations; albeit, amidst a scary world that I shudder to think about.

Have faith and DO NOT be tempted to “speculate” with “paper PM investments” that could disappear in the blink of an eye.  Only physical gold and silver are immune from what’s coming – which is why I hold the vast majority of my liquid net worth in them.