Before I start, please realize that not only is the Miles Franklin Blog about the written word, but the spoken one as well. Aside from the 112 Audioblogs taped over the past two years, I have appeared on at least twice as many radio shows and podcasts. Currently, I am taping two to three each week, hosted by some of the most forward looking, intelligent personalities in the “alternative media” world – all of which, like these articles, are available in real-time, for FREE, at www.milesfranklin.com.
That said, one of the first people to interview me, upon joining Miles Franklin nearly four years ago, was Kerry Lutz of the Financial Survival Network. A fellow New Yorker, Kerry was an attorney and legal printing business owner in prior lives, before launching “FSN” in 2010. Since then, he (along with “Sean” of the SGT Report) has been the hardest working man in the financial podcasting business; interviewing countless people, of countless ilks, like a man on a mission – which, like the Miles Franklin Blog, focuses on education and protection. To that end, I urge you to peruse his highly valuable website – and for that matter, the SGT report as well – as in our view, it’s vital that such voices are not only heard, but supported. And by the way, those podcasts may prove just as valuable – or at times, more so – in your ongoing due diligence process. Such as, I might add, yesterday’s edition – which I believe is one of the most passionate, incrementally valuable podcasts I have taped in some time.
Among the vitally important topics discussed is my recently triggered “Defcon One” fears regarding rapidly vanishing silver supply; as based on what Miles Franklin, one of the nation’s largest bullion dealers, has witnessed in recent weeks; not to mention, the intensifying currency, commodity (and now equity) crash that may well portend the “Big One”; the odds of a near-term, 2008-like Precious Metal shortage – particularly in silver – are skyrocketing.
I first started “table pounding” this issue in last week’s “silver supply a 1.5 or 2.0 out of ten”; and followed up with extremely timely information yesterday, which only validated my fears further. And watching WTI crude prices on the verge of breaching $40/bbl this morning – barring hyperinflation or war, enroute to $30/bbl and below – I can’t help wondering when the “oil/silver” ratio will fall below one. I believe such a cataclysmic financial relationship is inevitable – eventually on “paper,” and perhaps far sooner in terms of physical prices, given the rapidly widening chasm between fraudulent, government-suppressed paper markets and the “razor-thin” physical markets, to paraphrase Miles Franklin’s President, Andy Schectman.
As I watch yesterday’s global equity and crude oil carnage expand this morning, I figured I’d show you a few pictures of just how tight silver supply is becoming. Which, I might add, mirrors 100% the experience of physical gold; except for the teensy, weensy fact that there is essentially no above ground, available-for-sale silver inventory – anywhere. To wit, in the silver world, it is becoming “common knowledge” that no more than two billion ounces of physical metal exists at all – given how nearly all the metal ever produced has been consumed by industry. And given that said two billion ounces includes decidedly NOT “available for sale” inventories – like mine – it’s entirely possible the actual amount one can actually buy is no more than a tenth of that amount. And doing some simple math, the entire two billion ounces is worth just a measly $30 billion or so – i.e., about half of what the ECB’s current QE program prints each month. As for a “tenth” of that amount, let’s just say there are more than 1,000 individual billionaires on the planet – and perhaps 10,000 institutions, Central banks, and sovereignties with that kind of “chump change.”
With that ominous introduction, here are a few of the statistics publicly available from the, generally speaking, highly opaque silver industry. Which, I might add, is not just due to Cartel efforts to suppress information, but the fact that roughly two-thirds of all silver production is the byproduct of other types of mines; including roughly half from copper, lead, and zinc mines – which, based on today’s horrifying, and likely indefinite trends, are on the verge of massive, long-term shutdowns.
Thus, without further ado, let’s start with a chart updated yesterday by metals expert extraordinaire Steve St. Angelo of the SRS Rocco Report; of how inventories at the world’s largest physical silver delivery mechanism, the Shanghai Futures Exchange, have plummeted by 80% since April 2013, to a piddling $115 million worth at current prices (yes, that’s million, not billion). As you can see, August has seen one of the biggest inventory drains on record. And by the way, isn’t it funny how the inventory peak “coincided” with the April 2013 “alternative currencies destruction” raids; in which, in the 36 hours following a now infamous “closed-door” meeting between Obama and the top “TBTF” bank CEOs, physical gold and silver prices plunged by 16% and 20%, respectively? Which, I might add, is the very same month COMEX registered (available for purchase) gold inventories peaked; which, like Shanghai silver inventory, has since plunged by 83%. And speaking of COMEX registered inventories, they have plunged for silver as well; down a whopping 21% since March to a measly 56 million ounces, worth a piddling $875 million at current prices (again, million not billion).
Lately, Steve has published volumes of valuable data – such as this article confirming what I have written about expanding silver shortages; and the below chart depicting record 2014 “U.S. plus India” silver imports; which, I might add, is unquestionably enroute to a new record in 2015 – for myriad reasons, including surging Indian buying (in Steve St. Angelo’s words, “on track to smash all records”); and the record pace of U.S. Mint Silver Eagle sales).
In light of the intensifying global currency and commodity crash, even PPT-supported stock markets are starting to look ominously like the out-of-control 2008 versions; although don’t kid yourself, we haven’t reached that level yet – not even close. However, aside from the 23 global stock markets already in confirmed bear markets, the Western markets thus far “PPT-protected” from such financial horror – particularly the “Dow Jones Propaganda Average” – are badly breaking down. Key moving averages are breaking down, and market breadth has never been worse – attesting to how obvious it is that only PPT buying of stock index futures (and in the Bank of Japan’s case, equity ETFs) has prevented an all-out collapse thus far. Let alone, as we are dealing with the highest ever stock valuations; amidst the weakest economy of our lifetimes; and the worst, across-the-board financial conditions ever.
Last night’s renewed Shanghai stock exchange plunge depicts just how close we have come to government market control being overwhelmed by “Economic Mother Nature” and her “unstoppable tsunami of reality”; and when reading articles like this horrifying depiction of the potential collapse of the world’s largest commodities traders (which cumulatively, hold tens of billions of futures contracts that might need to be liquidated), it’s difficult to not imagine something far worse than 2008 occurring now. Which, call it what you will, would be quite the “coincidence,” given how the long-prophesized “Shemitah” arrives just three weeks from now.
Which is why, yet again, I bring up the historic money printing, market manipulation, and propaganda scheme cooked up “coincidentally” at the same time as said “closed door” meeting in April 2013. After which, we first heard the term “tapering” (LOL); followed by the “end of QE” (ROFLMAO); and last but not least, the “imminent rate hikes” that have been used by the Cartel’s minions as an “excuse” to attack Precious Metals, despite not a shred of empirical evidence supporting such reasoning. Let alone, the aforementioned record gold and silver buying and vanishing inventories, amidst a mining industry on the verge of collapse.
Helicopter Ben oversaw the scheme’s launch – followed by the equally inept (and incredibly, worse communicator) Whirlybird Janet last year. Since then, no matter what has transpired – from collapsing commodities, currencies, and economies; to political upheavals; social unrest; and the Greek, Chinese, and Ukrainian crises; the relentless drum beat of “recovery” and “imminent rate hikes” has been spewed by the “evil Troika” of Washington, Wall Street, and the MSM – in a pathetic effort to “prove” QE worked, and create a potential “exit strategy” for the Fed’s massive, $4.5 trillion balance sheet of toxic, massively overvalued Treasuries and mortgage-backed bonds. Manipulating markets, with the purpose of manipulating perception, have only made the underlying issues – of debt, oversupply, inflation, and wealth disparity – dramatically worse, to the point that everyone now knows it; including the Fed itself, per what I discussed in yesterday’s “way too little, way too late” – of a St. Louis Fed research paper claiming QE to be completely ineffective. Not to mention, Maestro Greenspan himself – who yesterday, yet again, warned of an historic bond market bubble.
That said, it shouldn’t surprise anyone that yesterday afternoon’s “minutes” of the FOMC’s July 29th meeting were far more dovish than even the initial uber-dovishness policy statement issued just three weeks ago. I have long espoused my belief – no, knowledge – that such minutes are doctored to account for post-meeting events; and this was no exception, with the Fed essentially saying the “September rate hike” everyone was expected was off the table – causing money market “betting” on such an outcome to immediately drop the odds from 75% to 40%. Even the Fed’s own “mouthpiece” – Jon Hilsenrath of the Wall Street Journal – has been violently dovish in recent weeks (since the July 29th meeting, in fact); and since he is told what to say, you’d have to be an idiot naive to not realize what the Fed is intimating. Let alone, when this morning, San Francisco Fed President John Williams said raising rates could risk the popping of bubbles; whilst uber-dove Narayana Kocherlakota, President of the Minneapolis Fed, actually proposed the Fed raise not interest rates, but the inflation target used as a guidepost as to when rates should be raised! Bond yields plunged following said “minutes,” and my guess is front-running of the inevitable “Yellen Reversal” I predicted a year ago – just after QE was supposedly ended – will cause the benchmark 10-year yield to fall below the key round number of 2% in the coming months; or perhaps weeks, if the ongoing global market collapse cannot be contained.
Since said “end of QE” last October, I have steadfastly maintained it was only a matter of time before the aforementioned tapering/end of QE/imminent rate hike propaganda campaign would be forced to be reversed – just as I predicted four months ago that the PBOC would be forced by collapsing currency markets to devalue the Yuan. When said “Yellen Reversal” emerges – potentially, as early as this Fall (ironically, just as interest rates were expected to be increased); not only will the accompanying “QE4” make the combined amounts of QE 1-3 pale in comparison, but we may well be looking at an ECB-like NIRP, or negative interest rate policy, as well. When that inevitably occurs, it will represent the end game of trust in Central banks – which, what do you know, I wrote of last week. And when it does, if you don’t have your (already rapidly dwindling supply of) physical gold and silver, good luck acquiring it – certainly at prices anywhere near today’s historically suppressed levels.
San Francisco Fed President John Williams?!?! Wait, is this a different John Williams than our shadowstats one, or he took on a new job?
(Or doing a Jekyll & Hyde double-job? 😉
As far as I remember, the shadowstats John Williams lives in San Francisco.
Nope, and it’s not the Star Wars composer either.
I sang with a John Williams in my Barbershop group, but when I asked him, he said it wasn’t him either…. anybody else out there willing to wear the hat?
Thanks for your valuable update.
I can feel the Greater Depression coming in like a cold north wind.
Better get food, water, personal protection, gold, silver, etc. and then start praying to get through to the other side.
Loved the audio blog last week, floor hockey in Long Island. I loved it too, and still play in Alabama but we call it floor Floorball. Whats up with that. Anyways, gold up big and I have been hesitant about cashing in my 401k for physical gold. Also, what is your view on Gold Miners?
Floorball? Funny, I’ve never heard that term.
As for cashing out your IRA, both I and Miles Franklin’s President, Andy Schectman, both did so in 2009 (before I joined MF), when we were 39 years old. Best decision I ever made, as I now sleep the “sleep of the just” (/sleep-of-the-just). Investment options in IRAs are limited to overvalued junk; tax rates will only keep rising (making the cash out value of IRAs lower); and, of course, they will ultimately, very likely be confiscated in some way, shape, or form (/retirement-plan-confiscation) and (/out-out-damn-ira).
As for miners, after a lifetime of owning them, and five years (06-10) working for them, I’ve spent the past four years being the most vocally anti-miner advocate. Not that they can’t go up, but that their risks are too high, when you can just own the metal with none of the risk – and likely make more “money” than 99% of all historical investments.
If you decided to cash out, please give Miles Franklin the chance to EARN your business!
But I think I am ready to call you on 401k to Gold
Real nice, well it’s thurday & you know what happened today –So hold on to your hat tomorrow b/c things may get
The good news, that as Friday begins, silver and gold have run into overhead resistance and done what one would expect – reversed…bottom on Friday for the stock market will come with the European close. Metals have likely seen their short covering rally …tough sledding ahead as far as further price increases in the short term. A major change like a new QE will be needed to change the metals trends to positive….in my humble opinion.
“Good news” in the perspective that good purchase prices may still be soon available.
They’re reporting some Nazi train containing 300 tons of gold has been found in Southwest Poland. Maybe they’ll use those 300 tons for re-hypothecations to get their much needed slam of paper gold price, if at all the story has any validity & not BS from couple of Polish guys.
God bless Bill Holter, haven’t noticed him posting here for a while. But he’s saying a major margin call will occur tomorrow, with forced credit unwind going into a death spiral of more necessary credit unwind.
If Bill Holter is correct, the Shemitah has come 1 month early!
Keep all your lead bullion ready.