For 12½ years, I’ve fought on the front lines of the “gold wars.” Nearly every day has in some way, shape or form been difficult; as aside from unrelenting Cartel attacks, I’ve endured the mental strain of propaganda, lies and ignorance from everyone from the baddest “bad guys” to the “best and smartest” of the lot. From my experience, so-called “good guys” can be as treacherous, or more so, than the bad – such as pied piper newsletter writers; bullion dealers promoting overpriced numismatics; or in the case of one particular dealer with an extremely popular website, consistently highlighting anti-PM propaganda as if they were JP Morgan or the Federal Reserve themselves. Heck, for seven years they employed a Marketing Director of sorts – in many ways, my peer – who was famous for his PM negativity. During his employ, I might add, gold rise from $600/oz. to $1,650/oz.
To that end, this morning’s topic relates to the powerful, overwhelming skepticism such surrealism has produced in the PM community; which in the scheme of time, will ultimately be a faded memory for those wise enough to have “bought and held” physical gold and silver today. Why did I focus specifically on that particular website, you might add? Because this morning, their “top headline” takes the cake.
For those not aware, GFMS is the former “Gold Fields Mineral Services” – a leading precious metals industry consultant. Over the years, I have found their work woefully inadequate; in many ways, paralleling that of fellow industry consultant CPM Group, run by none other than the infamous Jeffrey Christian. In other words, GFMS and CPM – and similarly, industry trade groups like the “World Gold Council” and “Silver Institute” – completely ignore the giant pink elephants in the room of price manipulation and the surreptitious leasing, swapping and dishoarding activities of Western central banks.
As for the aforementioned headline, it is pure madness that such data could be published, when essentially all empirical data confirms record demand across the board. Sure, Chinese silver demand data is not readily available; but given their monstrous gold imports and policy of NEVER exporting silver, it’s fair to say Chinese silver demand has not declined. As for India, the world’s largest silver importer, data has been more difficult to obtain than in the past due to the massive black market that has developed since last year’s ill-advised PM import tariffs were enacted. That said, officially reported first half Indian silver imports were down just 3% from last year’s record pace, and no doubt increased since prices were since smashed. Heck, even the leading MSM cheerleader, the Wall Street Journal, said so last week – highlighted by the following quote from the director of a leading Indian bullion dealer…“there is a tsunami in silver. Investors are pouring in.”
As for Western demand, U.S. and Canadian sentiment may be at historic lows, but demand is on pace to exceed last year’s record levels. At the Royal Canadian Mint (where sales data is released quarterly with a two month lag), first half silver Maple Leaf demand was 10% above last year’s record pace; while at the U.S. Mint, despite this month’s 12-day shutdown, 2014 is on a pace to exceed 2013’s record Silver Eagle sales by 8%. In fact, it just released updated November sales data yesterday afternoon, following the aforementioned 12-day sales suspension; and lo and behold, November Silver Eagle sales have been a whopping 2.57 million ounces in just the five days they were available, putting the month on a pace of nearly 4.3 million ounces, which would make it the eighth largest month ever! Throw in the fact that the severe PM backwardation – which hit new 14-year lows this morning – suggests massive physical tightness; let alone, the otherworldly open interest in the COMEX December silver contract that expires Monday, and you can see why one would be incredulous that a “leading authority” on silver demand could claim demand will be lower in 2014 than 2013. Then again, if it turned out to be just “6.7%” lower than last year’s record level, how on Earth can the price be down 17% – atop last year’s 36% decline, when demand was higher than at any prior time in history?
Yes, the lies are thick, the thieves thicker and the naked shorting unrelenting; even more so in mining shares, where the large caps breached 2008’s crisis lows last week, and juniors have continuously plunged since mid-2007. Thus, it’s not difficult to see why many have lost heart, even those who appropriately bought gold and silver as savings and/or insurance, as opposed to investments like stocks and bonds. Of course, nothing in life is easy, and “getting to the other side” of history’s largest wealth transfer, opposed by the powerful entities intent on preventing you from doing so, is as difficult an undertaking as is imaginable. Which is why adherence to the wisdom of the handful of “good, smart people” in our sector is so important – which in my view, the authors of the Miles Franklin Blog should be deemed.
Before I get to the “punchline” of today’s article, I thought I’d barrage you with TPTB’s cumulative foolishness, to empower you with the knowledge of just how far off the track reality has been pushed – and thus, how close we are to “Economic Mother Nature” re-asserting herself and then some. To that end, let’s start with the blatantly compromised Standard & Poor’s “warning” of how the ECB has just “one last arrow in its quiver of quantitative easing of €1 trillion.” Even I am floored by such lunacy, as the world’s leading credit agency is claiming Europe’s only hope for salvation is massive, unprecedented money printing. And this is after six years of the most maniacal, global money printing ever has produced a veritable debt explosion, and the worst European economy since World War II.
Speaking of the shear incompetence and foolishness of Central banks and rating agencies, how about the Bank of Japan “warning” Shinzo Abe about fiscal irresponsibility, just days after enacting the most hyperinflationary monetary policy in history? Which, by the way, has the Yen in utter FREEFALL this morning, and yen-priced gold within 10% of its all-time high. To that end, recall a year ago, when S&P warned it would downgrade Japan’s AA- rating if it didn’t demonstrate greater fiscal responsibility? In fact, they specifically cited planned sales tax increases as a potential fiscal savior – but “strangely,” they haven’t downgraded Japan now that the sales tax was cancelled. Mark our words, Japan will be the first “first-world” nation to experience hyper-inflation; and when it does, I wonder if S&P will have anything to say about it. Then again, recall what happened to S&P when they downgraded the U.S. in 2011 – i.e., they were sued by the U.S. government. For the record, they threatened further downgrades if the U.S. didn’t get its fiscal house in order. However, today, barely three years later, the U.S. national debt is $3.8 trillion higher and the “debt ceiling,” for all intents and purposes, abolished. Yet, not only did they maintain America’s credit rating but upgraded its fiscal outlook!
Then we have China, which claims to be growing by “7.5%” per annum, despite crashing investment, home prices, commodities and credit quality. This week, both iron ore and steel prices plunged to their 2008 lows, whilst bad loans surged at their most rapid pace in a decade, and home prices had their largest year-over-year price decline in years – ominously, in an economy where three-quarters of all household assets are represented by real estate holdings. And yet, we’re told Chinese “housing starts” rose by – this is not a typo – 39% from a year ago, in a nation that has already become the universe’s largest “ghost city.”
Oh, shoot! I just don’t have enough space to write of the irony of Greek bonds plunging in the face of imminent default, whilst the MSM says Greece is not only “fixed,” but the “fastest growing economy” in Europe – as following a six-year, 23% plunge, Greek GDP supposedly increased 0.7% last quarter. Or the propaganda machine that is the “North American Home Builders Association” claiming homebuilding “sentiment” has quadrupled in the past three years, despite the fact actual home sales have barely budged; mortgage purchase applications are at 19-year lows (despite record low interest rates and a “recovering” economy); home prices are declining; construction activity contracting; and the equally biased industry cheerleader, Zillow, claims housing will be weak for at least three years. Or the “common knowledge” that the Ukraine has “de-escalated,” when both sides are speaking of imminent war. Or that plunging oil and industrial commodity prices are a “good thing,” when producers (particularly shale producers) and sovereign nations alike are amidst massive political and economic upheaval – which will only worsen as the historic plunge in commodity currencies like the Ruble, Real, Rupee and Rand accelerates. Or my favorite lie, that the world is awash with “deflation,” when not a single country is reporting a declining cost of living – with key “need versus want” staples like milk and beef hitting all-time highs.
Within this context, and this week’s painfully blatant Cartel defense of $1,200/oz. gold, we fully understand your frustrations. However, said “Economic Mother Nature” has decidedly not gone away, so we can only warn PM holders to relax; particularly as the mining industry teeters on all-out collapse, GOFO rates contract further and demand rapidly escalates globally.
To that end, for the first time in years, even my skepticism is starting to abate. To wit, just weeks ago, we were told the Catalonian “no’s” would win the day; yet, an astounding 81% voted for secession whilst just 4% voted against. Meanwhile in Switzerland, even a Goebbels-esque propaganda campaign – led by “Lady Macbeth” Thomas Jordan, the Swiss National Bank’s Chairman – appears to be floundering as the “yes” contingent, which could alter monetary history remains in the lead. To that end, Alan Greenspan himself is publicly supporting gold’s virtues; as is Yves Marche, the ECB board member that stated that the ECB is considering gold purchases. Not that I believe they actually would or could buy gold, but the fact they are even mentioning it speaks volumes of the evolving global mindset. Meanwhile, in the Eastern Hemisphere, precious metal demand has never been higher; and quite vocally, the emerging Sino-Russian economic bloc is promoting its intention to utilize gold as its primary monetary asset.
Amazingly, skepticism amongst the PM community has become so pervasive, even some of its wisest strongest leaders are fearful TPTB will be able to suppress gold and silver prices in the event of a Swiss “yes” vote. Claims that “swaps” will be substituted for the real thing are a specific “goldbug fear” I have read of, and the SNB dragging their feet on mandated gold purchases another; as clearly, many of us have been lulled into a fear that somehow the Cartel will always “find a way to win.” However, “Economic Mother Nature” assures us prices cannot stay this low for long, and the reality of a global monetary awakening is clearly occurring as we speak. Remember, it’s always “darkest before the dawn”; and right now, the “darkness” been more pervasive. Have faith in your insurance and don’t put yourself in a position to lose it. As unlike health, fire and flood insurance – which may one day be needed; fiat currency insurance will be required – likely sooner rather than later.
Thanks for the truth as it is hard to get today.
With regard to the lies, at this point I don’t know whom they are intended for. The middle class is disappearing and those still in the middle class have nothing extra to purchase with. The poor can’t buy any way and the rich already have what they want.
It was usually the middle class that kept the ponzi scheme going, but they can’t any more.
The lies will no longer fool any one into spending as that game has ended.
I guess the liars just can’t stop even though it won’t help them any longer.
Happy holidays to you and your family.
Thanks, and the same to you and your family!
The lies will come back to bite them in the butt.
I am privileged to have the personal email of an internationally known CEO of a mining interest.
Without disclosing his name I can say that everyone here knows this man and like myself likely have the greatest amount of respect for him.
I asked him a few months ago if it was a possibility of mining interest going after the manipulators to recover losses.
His response was affirmative that the industry would likely go after them.
So Andy I think we all can take solace in knowing that every dog gets his day.
A charade can only go on for so long.
The jig is up.imho
I respectively disagree that mining companies can, or will, do a thing – aside from token actions like First Majestic (which just happens to be run by one of the few CEO’s that understands the manipulation).
When prices rise, it will NOT be due to anything the miners consciously do.
The jig is decidedly not up yet….everything written above is the truth, but until the sheep wake up, nothing will change.
I still talk to many of my friends about gold and silver, none of them understand things like money vs currency, counterparty risk, anonymity and protection. They’d rather discuss MERs and dividend rates. I have tried to have detailed discussions about manipulation, gold leasing, gold reserves, GDP, inflation etc, their eyes glaze over and its like fighting a lost cause….they just don’t care.
I have had a rule of thumb, nothing will change until I start to hear my hair dresser talk about PMs…that’s when I’ll know the sheep have awaken, but for them, but then it will be too late.
Only this time, unlike the internet or housing bubbles, the hoi polloi will decidedly NOT participate in the bull run.
What do you think is the possibility that the US Mint intentionally under reports its Eagle sales? I mean, the mint is an arm of TBTB so i can’t see why it would feel compelled to accurately report sales data which which would have the effect of increasing PM sentiment.
Who knows? They could be lying about everything they’ve ever said.
That said, the TREND they’ve shown, of surging sales each year, matches what the rest of the world sees.
Yesterday I went to my hair dresser and his wife who works there came over to say hello.
The next thing they did blew me away.
He reached into his pocket an pulled out some cash and said to me (You know this is not real money.)
The next thing she said to me. Mike you have to read this book I am reading.. The Death of Money.
Needless to say the conversation that followed was interesting.
So Andy..Maybe there is hope for us..
For the first time, I have become hopeful for (some of) humanity. Between the Scotch, Swiss, and Catalonian votes, the people are starting to fight back. To that end, last week’s Audioblog was titled “Revenge of the People.”
The recent spade of secession movements has me hopeful for (some) of mankind, for the first time in years.
India’s metal demand (and especially silver) in October was reported to be catastrophic. Through the roof.
And this is expected to have continued (or even accelerated) through November.
Hopefully, it’s getting very close to the finish line for paper frauds to snap.
More info here:
Yes, on pace to BLOW Away 2013’s record import level – and this, with the enormous import tariffs still in place.
The unnamed company you have referred to is Kitco, (I realize that you didn’t wish to be explicit, but I have no compunction in this regard). I bought quite a bit of PM coins from them about nine years ago, and held them in their pool account until I realized their true nature.
Speculation (which I completely understand you do not want to engage in), is that Kitco may be short their pool holdings, or (gasp), even their allocated metals. My philosophy is to expect the worst, particularly when they are revealed to be anti-PM.
Thanks Moe, I didn’t even realize they had that pooled account garbage.