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Miles Franklin hosted a webinar on Febraury 13, 2012.  The webinar allowed for participants to submit their questions on-line,  regarding precious metals.  Following are the participants questions and the answers provided by Andy Hoffman.

Q: Andy,  how long do you think this bull market will run?
A: The question is not how long the PM bull will run, but how debased fiat currencies will be before a new, gold-backed currency system is reintroduced.  I don’t think PM’s will ever “crash” once this occurs, they will simply be revalued dramatically higher and stay that way once the new system is launched, perhaps in years.

Q: Any update on Eric Sprott’s success in acquiring the silver for his PSLV secondary?
A: Upon your prompting, I just put out some feelers.  However, I doubt they’ll say anything privately, instead waiting for a Press Release as they did with the last offering.

Q: Based on scarcity and industrial use of silver, doesn’t its prospect to rise even stronger than gold.


A:  Absolutely.  98% of all the silver ever produced has been consumed by industry, prompting the U.S. Geological Service to predict it will be the first extinct element on the periodic table.  Less than a billion ounces exist in the world, yet the gold:silver ratio is way above the historic 15:1 average. Moreover, recent buying trends (such as the two Sprott offerings – PSLV for silver and PHYS for gold) have been essentially 1:1 in dollar purchases of gold and silver!

Q: Compare owning precious metals to other commodities, ie. ag land, oil, cotton, etc.?
A: Precious Metals are MONEY, while other commodities are industrial.  You can’t save most commodities because they are perishable, plus you can’t store oil (or land, for that matter), and cotton is not fungible, as some cotton is worth more than others and it is nearly impossible to mete out in equal parts.  Plus, these markets are less liquid than PMs.

Q: What is indicative of all the street corner signs and TV adds “we buy gold, cash for gold”?
A: It means gold is the POLAR OPPOSITE of a bubble.  In a bubble, you’ll see adds trying to SELL gold, not BUY it from you!

Q: Do you think that there will be a confiscation of gold/silver in the US?
A: Nothing is impossible, but a confiscation makes no sense at all, in any way.  Moreover, not much gold resides in the U.S., certainly not enough to make a dent in the debt load.  Plus, as in 1933, they can decree confiscation, but no one will bring the gold in!
Q: How can you circumvent the system to keep your gold and silver and your net value?
A: I don’t understand the system.  To me, holding gold and silver IS the way to circumvent “the system.”

Q: Do you think the miners will end up outperforming gold and silver bullion? Why do you think they have been lagging so much?
A: I owned 100% mining stocks for nearly a decade, and spent the past five years working for mining companies, either as an Investor Relations consultant or officer.  I also was a Wall Street sell-side analyst for nearly a decade, and have done more work on valuing mining companies – and watching them trade – than nearly anyone.  I sold all my miners last year in favor of bullion due to the pervasive naked shorting I witnessed, as well as fears of eventually windfall taxes, nationalization rumors, and bank/brokerage/cap gains tax risks.  Ultimately, OUNCES of PHYSICAL gold and silver will protect you, while miners may not protect you at all.  Mining stocks peaked five years ago relative to bullion, and continue to fall each year.

Q: What are the above ground reserves of silver made up of ? i.e do they include all scrap, bullion coins ever minted.

A: Essentially, bullion coins and a bit of scrap, as all the production is consumed.

Q: Even though all the fundamentals indicate that silver should go up in value I always wonder about the fact that there are such powerful evil people controlling the prices of Precious Metals (Banking and everything financial as well) and they are committed to increasing and preserving their own wealth, power and prestige at the expense of everyone else not of their ilk….so…Given that, isn’t it possible that they somehow will continue (against all analysis) to do so for a very long time yet?

A: Mike, take a look at my blog at milesfranklin.com.  I am not too shy to say I am the pre-eminent expert on the topic of PM manipulation, which I write about every day.  They have been suppressing 24/7 for the entire eleven –year bull market, but gold and silver keep rising anyway.  The Cartel can only attack PAPER PMs with naked shorts, but cannot stop global demand for PHYSICAL PMs from continuing to explode.

Q: The government appears to be getting more desperate. For example, the NDAA, which one would expect from North Korea, not the USA. Now, the FBI has identified those interested in gold as “extremists” who represent a serious threat to law enforcement. In your view, are these early warnings that the government is going to take steps to control gold ownership, and demonize those who have attempted to protect themselves from the coming economic and monetary collapse?
A: They have been demonizing gold ownership for centuries, as their PAPER money gives them their power, and will continue to do so until the fiat system collapses.  As noted in earlier answers above, as well as my ongoing comments, decreeing gold confiscation makes no practical sense, and attempting to actually FIND it and TAKE it impossible.

Q: Hello Andy, you sometimes talk about PPT, and the evidence is pretty much there, there Are algorithms that act at certain times, its undeniable. The thing I wonder, Whom are they accountable to? Because, thanks to RP and others, FED Can be looked into after some time, but What is the situation with PPT?
A: The PPT was established by the President, including leaders of the Treasury, Fed, SEC, and CFTC.  It is beholden to NO ONE.

Q: HYPERINFLATION IN AMERICA…. please explain it in a practical way that we all can understand.  Assuming eventual hyperinflation, how will owning gold and silver actually work as far as paying debts, etc.  What will this do to the overall system?……. What will the government will do in a time of hyperinflation.
A: Such a situation in America is unprecedented, but then again collapse of the dollar will be a GLOBAL event as all currencies are un-backed.  No one can ever know what truly will happen, but I do know this:  ALL savings in dollars will be wiped out, as will all bonds and many stocks.  Unemployment and inflation will explode, as will crime and draconian government decree, possibly martial law.  At some point when the pain has gotten too bad, a new gold-backed currency will be launched, and those that still own their bullion will be well off (although other safety risks will be present).

Q: I am a Canadian and have been about 85% invested in physical silver since 2005. Do you feel that the Canadian dollar will see a similar fate as the US dollar and fiat currencies generally, or should Canadians keep a $CDN cash reserve in the event that there is a global panic into Canadian dollars?
A: The Canadian financial system is dramatically stronger than America’s, and the nation does have many resources implicitly backing its position.  However, the Loonie is still a fiat currency, and thus will fall sharply in value against ITEMS OF REAL VALUE in the future.  I keep just enough cash around to pay bills, and I wouldn’t advise any different in Canada.

Q: I just traveled through St. Martin. The airport is on the Dutch side of the island. They would only take my dollars and not my Euros.
A: I was there in 1983, beautiful place.  St. Martin (or St. Maarten on the Dutch side) takes dollars because most of its economy is American tourism.

Q: Impact of the new PAGE coming online in June?
A: I have written of this for some time now.  PAGE is expected to be a game-changer, eventually moving the gold pricing mechanism from NY to Beijing, although it will likely take some time to build critical mass.

Q: Why would the CME/Crimex reduce margins? Is it due to lack of paper trading the futures due to the MF GLobal @*!# up?
A: I ignore EVERYTHING the CME does, it is all lies and fraud.  Gold did NOTHING on the margin decrease, but if they increased it the Cartel would naked short it into oblivion.  I wouldn’t worry too much about it.

Q: Is there any hope that the CFTC, SEC, DOJ, FBI … will get interested in trying to restore integrity to the PM markets?


A: NO, NO, NO, NO, NO!

Q: It’s my belief that if the economy doesn’t collapse before the election, then the next administration will surely get the blame when it does collapse.  What’s your opinion?
A: It collapsed during Bush’s term, it’s collapsing now, and it will collapse after the next election.  All politicians do is blame, nothing new.

Q: Do you foresee metals confiscation or windfall profits tax in US. I’m interested in having some stored in Canada with your storage facilities. I live in SC, I understand they are considering gold/silver to be used as alternate currency, if so will Fed Cap gains tax apply?
A: Yes, I believe we will see windfall taxes, and certainly nationalization of mines.  But not confiscation, as it makes no sense, and even if they try, good luck getting the gold from the public.  No one handed in gold voluntarily in 1933 (good times, compared to now), and no one would now.  As for the alternative currency, that is just a minor movement, and against the Constitution to boot.  I can see states seceding, but not staying in the Union with their own currencies.

Q: Please clear this up for my mind. Are PM’s an investment or insurance? Explain the difference?
A: I know it can be semantics, but the fact is gold is NEITHER in my mind.  Yes, it fluctuates in value (hence, an investment), and yes it can protect your during catastrophes (insurance), but it really is just MONEY, whose job is to protect your net worth against inflation, which it has done for 5,000 years.

Q: With Warren Buffet badmouthing, the FBI threatening, and general news articles on Gold taxes don’t you think Q3 is coming and they need to get the public out of gold?
A: “QE” never ended, it’s just not COVERT anymore (except for OPERATION TWIST and the Fed “swap facility.”  Bernanke just said ZIRP until at least 2015, i.e. “QE to Infinity.”  Buffett is just a criminal government shill, as you said used to get people out of gold.  But not due to a CHANGE in monetary policy – conversely, due to a CONTINUATION of ZIRP policy. 

Q: Question for help for a Middle Class Person.  Age 50 have 5000 oz Silver and 118 oz Gold and it is 64% of the total net asset.  very little liquid cash left (other than $6000USD in HKD and China RMB).   Have 125K stuck in 401k and about 50K in IRA non PM IRA.  (56 oz of Gold in IRA of the total 118 oz).    How can this grow more or am I safe right now.
A: I cannot advise your personal situation, but you already have a nice PM nest egg.  My advice to ANYONE is to liquidate ALL government retirement plans (topic of today’s RANT) and pay all the taxes and penalties, as ultimately I expect confiscation.  As for you 401k, yes you are stuck unless you can claim emergency.

Q: I have 20%/80% by value gold/silver.  What ratio would you suggest?
A: It is up to you, depending on your personal needs.  Silver is better for bartering, gold is better for saving (less volume and weight), but both will rise dramatically.  Silver is a smaller, more volatile (read: more rigged) market, but it will rise far more in percentage terms as it is more undervalued.

Q: The prices of precious metals have been manipulated for decades – why can’t they keep doing it? – it won’t do me any good if they succeed for another 30 years!
A: They will keep doing it, but gold is up 7x and silver 8x since the PM bull began, so obviously they can’t keep them down.  They just want the rise to be slow, to prevent the IMMINENT frenzy that will end the fiat currency system.

Q: What are some tips for shopping for gold and silver coins.
A: You can call Miles Franklin at 800-822-8080 and we will connect you with an experience broker. 

Q: What do you think of the Keenan Complaint?
A: I believe this is another of those unverified lawsuits we will never understand, such as the Dragon lawsuit (may be the same thing).

Q: What are your thoughts about the U.S. getting back on the gold standard in some shape or form?
A: It is INEVITABLE.  TPTB hate it because their power emanates from MONEY PRINTING ability, but MONEY PRINTING is what destroyed the system (as it always does), and the only cure is a gold standard.

Q: What is your view on premiums–is it best to go for generic bullion rounds at a lower premium, or minted coins?  Why?  Thanks–and keep up the great work!
A: Lower denomination coins have higher premiums due to higher liquidity, so you must be careful not to pay too much.  One ounce coins tend to be the best value, in my opinion.  Minted coins have higher premiums because they are more reliable, but equal because they are more recognized.  Certain generics will one day trade close to minted coins, in my view, once the world starts to think in terms of PMs as money again.  Best to have a healthy core of minted coins, and some diversification with well-known generics.

Q: What will the overall effect be on other currencies around the world like the AUD when the USD finally is removed as the worlds reserve currency?


A: The Australian financial system is dramatically stronger than America’s, and the nation does have many resources implicitly backing its position.  However, the Aussie is still a fiat currency, and thus will fall sharply in value against ITEMS OF REAL VALUE in the future.  I keep just enough cash around to pay bills, and I wouldn’t advise any different in Canada.

Q: When do we start selling.  What are the things to look for to start selling?
A: PMs are not “investments,” they are money and have been suppressed. When the fiat currency system collapses, they will reach their full value and be linked to currency.  Not anytime soon, no worries.
Q: What ratio of gold to silver should one invest in.  Like every ounce of gold to be 200 oz of silver? 

A: I believe 50/50 in dollars is a good start, depending on your goals (saving, barter, upside potential, etc.), keeping in mind that silver is much heavier and thus bulkier to store.

Q: Can you speak on confiscation possibilities please.
A: Nothing is impossible, but a confiscation makes no sense at all, in any way.  Moreover, not much gold resides in the U.S., certainly not enough to make a dent in the debt load.  Plus, as in 1933, they can decree confiscation, but no one will bring the gold in!

Q: When do you feel the top will be and when is it time to start transitioning out of PMs to say real estate. David Morgan talks about a high where 2500 oz of silver will buy 2 houses. Maloney talks about 1 oz of gold = 1.25 of a med home.
A: There won’t be a “top,” but a revaluation upward when the world inevitably returns to a gold standard.  I cannot possibly guess when that will be (1 year?  3 years? Etc.), and thus I have no idea what other markets will look like then.  Rest assured, holding PMs now will put you in a position to buy real estate cheaply in the future, all else equal.

Q: When do you think the Fed will initiate QE3 (publically)? And how big will it be?
A: They have never stopped “QE,” and never will until the fiat system collapses (per Bernanke’s comments last week.  If we have another massive market collapse, they will probably be forced to start being more covert with their announcements, although I’d say his comments last week were pretty covert, as well as initiation of the Fed’s “swap facility” in December.

Q: When should one consider selling precious metals?


A: PMs are not “investments,” they are money and have been suppressed. When the fiat currency system collapses, they will reach their full value and be linked to currency.  Not anytime soon, no worries.

Q: When will be the moment to change the silver and the gold for another thing, and what? real estate, agriculture land?
A: Gold and silver are MONEY, real estate and farms are commodities.  They are no interchangeable, and thus only you can determine when you think one is more valuable relative to the other.  If food is in shortage due to hyperinflation, people may be desperately selling gold to get it.  Who knows?

Q: When will CFTC become the auditor they should be, or are they just another mouthpiece for the Cabal trying to keep the prices down.


A: NEVER, as the CFTC is a government agency, part of the PROBLEM, not the solution.

Q: If the powers that be can manipulate the price of gold and silver, do you not think that they could control those that have private vaults of gold and silver?
A: They absolutely can, and may very well do that.  Vaulting is not for everyone, only if in large enough amounts to make storage dangerous or impractical, or if you are in a very politically unstable country.
Q: What about having copper in your precious metals portfolio?
A: We answered this on the call.  It is NOT a precious metal, but a base metal, and meets essentially none of the definitions of MONEY.  Yes, I’d rather have copper than collapsing dollars, but otherwise it is impractical and illiquid.
Q: Can you succinctly explain the basics of how the prices of gold and silver are being manipulated?
A: I write about this everyday, so please subscribe to my free daily piece or simply go to my archive at milesfranklin.com.  If you email me at ahoffman@milesfranklin.com, I can give you further guidance.
Q: How would you divide your ownership between gold and silver holdings on a percentage basis?
A: I believe 50/50 in dollars is a good start, depending on your goals (saving, barter, upside potential, etc.), keeping in mind that silver is much heavier and thus bulkier to store.

Q: With so little silver out there, why can’t a few smart and strong hand make the default happen ? Similar to what admiral Sprott is trying to do ?
A: Great question.  Certainly Sprott is doing his part, and others behind the scene are doing the same, mostly in ASIA.  Particularly in silver, it is a game of chicken because very little PHYSICAL silver exists, and no one wants to get caught with PAPER metal.  In due time, it WILL happen.

Q: You can buy platinum eagles right now at the us mint.  and you could last year also
A: Yes, very sporadically, and they are usually sold out.
Q: gold and silver runs a 30 year cycle.  the last one was 1981 to 2011..  what about that?
A: –I don’t understand this question.  PMs fell in 1980 to 2000, the last ten years of which was due to surreptitious, unreported selling, and has been rising since.  There is no “timetable,” as gold and silver will now rise until the fiat system collapses, which will happen when TPTB can no longer paper over the damage – very soon, in my opinion.

Q: you mentioned that platinum is usually higher than the price of gold… do you think that means that gold is over valued at all? and that gold will pull back to where platinum is?
A: It has nothing to do with gold’s value, in my view, but platinum’s.  Is it truly a monetary metal or not, that is the question.  I believe it has modest monetary value, but do not expect it to outpace gold and silver.  That said, platinum is VERY rare and thus could experience a supply shortage at any time, as we saw in early 2008.

Q: You talk about the gold cartel which suppresses the gold price.  Do you think this cartel is backed by Chinese money?
A:Very doubtful, as the Chinese are primary BUYERS in the world.  Some have speculated that the Chinese are shorting PAPER PMs to get better prices for buying PHYSICAL metal.  Perhaps, but that game doesn’t work well as PHYSICAL demand explodes each time the PAPER price falls materially, causing huge competition for the little PHYSICAL metal.