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Every one dollar in three is spent on the economy comes from the U.S. Government.  The Government borrows 43% of every dollar it spends.  This is clearly not sustainable.

Dow Jones Industrial Avg Graph

The dollar is rising against everything!  Yen, Euro, Yuan and all other currencies.  Talk about the “best of a bad lot!”  We are in real trouble – could the rest of the world be in even more trouble?  If you go by the strength of the dollar, the answer is yes, because they are not coming over here to buy virtually zero percent bonds.

Heavily Laden Graph

Last night Susan and I had dinner with our friends Terry and Sharon.  They are also long-time Miles Franklin clients.  Terry asked me how many people complain to us about the drop in prices.  I told him very, very few – certainly less than half a dozen (out of thousands of clients).  He was surprised.  But, when you think about it, it is not at all that surprising.  Our clients understand that physical gold is not for trading.  It is for LONG-TERM needs, or to be passed down to the kids.  The drop is only in the “dollar price,” which is temporary.  The number of ounces we hold remains the same – and we can choose to add to our portfolio at a 30% discount!  The only people who are upset are the people who think they own gold and silver, and participate in the paper market via GLD and SLV.  They never understood what gold is all about in the first place (or they wouldn’t own the ETFs).

The talk is that the Internet Tax will become a law in the next 12 months.  It has already passed the Senate and the feeling is that it will pass the House too, in spite of John Boehner’s promise of “no new taxes.”  We sure hope not.  The tax will affect all Internet sales – including gold and silver.  You will have to pay your state sales tax in addition to the price of your physical metals.  Your state will make several times as much on the sale as your dealer does.  This is simply wrong!

This is another reason to ratchet up your purchases now, before you have to add another un-necessary 5% – 10% to the price you pay for your coins and bars.

There will be no way around this.  It is so unfair that we are forced to pay a sales tax on physical gold and silver investments, but not on ETFs and mining shares.  They will do anything they can to discourage you from buying physical gold and silver.  Well, we will just have to pay more.  It won’t stop most of us from continuing to buy more, but it will be more costly.

This is so simple you have to work very hard not to understand it:

In The News Today

Posted May 18th, 2013 at 3:19 PM (CST) by Jim Sinclair

The physical market for gold will drain the warehouses of the futures exchange resulting in the physical market taking over the price setting mechanism of gold.



China’s Gold hunger to continue in 2013

BEIJING (Scrap Register): World’s second biggest gold buyer China’s gold hunger to continue this year, according to the latest reports.

As per latest reports, China’s gold imports from Hong Kong reached a record high in March and country’s yellow metal consumption rose by 26% in the first quarter of this year.

China’s Gold imports from Hong Kong 

As per latest figures released by Hong Kong Census and Statistics Department, Mainland China’s gold imports from Hong Kong more than doubled to a record high level in March.

China boosted their gold purchases from Hong Kong by 223,519 kilograms in March including scrap, an increase of 130% compared with 97,106 kilograms a month earlier.

According to Bloomberg, China’s net gold imports reached 130,038 kilograms in March compared with 60,947 kilograms a month earlier.

China’s Gold consumption

The world’s second-largest economy China’s consumption advanced sharply by 26% year-on-year in the first three month of this year mainly due to the strong bullion sales and rising jewelry demand, as per China Gold Association.

According to the Association, China’s gold usage hit 320.54 metric tons in the first quarter of this year. Purchases of gold bars surged 49 percent to 120.39 tons, while jewelry gained 16 percent to 178.59 tons.


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The following from SilverDoctors.com.  I wonder what this is all about.  Any of you out there have an idea?  Is supply so tight that they can’t make a go of it?  Email me if you think you have an answer.


May 19, 2013 By The Doc

When the Rothschild’s HKMEx was launched in 2011, much of the metals community assumed that the COMEX & LBMA, were they not to outright default, would fade into irrelevance with the advent of the new Asian metals exchange. Two years to the day after the exchange’s launch however, in perhaps the most glaring evidence of physical gold & silver shortage to date, the HKMEx has announced it will voluntarily cease trading, and all open positions will be closed out and financially (cash) settled on Monday 5/20! [Read more…]