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Q: I’m curious to know, if the Euro disintegrates, will this be bullish or

bearish for Gold, or will TPTB be able to just keep on pushing the

price down, as we’ve been seeing the last three years?

Thanks and regards,

A.J.
David Schectman’s Answer:

Dear A.J.

You could build a bullish or bearish case for gold. The bearish case would point that with the failure of the euro, wealth would pour into the dollar, which can be negative for gold. Or, you could build the case that if the euro fails, it will demonstrate the danger in all fiat currencies and open the floodgates to a renewed gold bull market. Confidence is the key ingredient in valuing currencies and when it wanes, money flows into the safety of gold.

I believe the bullish case for gold is more likely, but remember that gold is not allowed to rise (for now) under almost any circumstances and as long as the Gold Cartel (led by the Fed and JPM) wishes to use leveraged paper gold to control the price, any outside event will be met with great resistance.

When the demand for physical gold and silver overwhelms the supply, then gold will rise, regardless of what happens to the euro. With the advent of two new physical gold exchanges and price discovery mechanisms now starting up in the Far East, change is in the wind.

The fate of the euro is but one of many possible events that can and will turn about gold’s fortunes, but remember, rising gold means trouble is at hand and we need not be in a hurry for the price to rise.

Q: Lately, there have been more and more articles on the possibility of gold confiscation, despite the fact that this warning has been refuted by sages such as Richard Russell and others in the past. The refutations argue that it does not make sense for TPTB to try to round up gold when they can more easily confiscate from bank deposits and pension funds or by invoking a “one time capital tax”. Please comment.

As a side note, there are many exhortations to store one’s gold in private vaults outside one’s home country in order to be safe. The problems are to determine which vaults in which countries are REALLY safe as well as the risk of being able to access that gold if TPTB shut down all systems, including travel. (Remember what happened to European families who stored in Switzerland during WWII, never to see their gold again or having to fight for years and settle for smaller amounts.) Miles Franklin US clients storing with Brinks in Montreal are assumed to be safe because storage is in Canada. What about the safety of your Canadian clients who’s holdings are stored in the same place and, therefore, in their home country?

Thank you for your overall excellent services.

Jon W
Andy Hoffman’s Answer:

Jon,

Gold “confiscation” is more a propaganda theme than a likely reality.  First off, no actual gold was confiscated in 1933 – and trying to do so today would be next to impossible, let alone ineffectual given how little gold Americans own, and how much debt the government has.  Moreover, as gold is now a global market, in which the U.S. is neither the largest producer or consumer – in fact, barely worth mentioning on both counts – such an act would be an admission of gold’s superiority to the dollar, causing the dollar to plunge and gold prices to soar.

That said, all such arguments are purely hypothetical, as who know what the world will bring, and how it will bring it?  Which is why, whenever I get asked “what if” questions like “what if gold is confiscated?,” I answer with this catch-all article, written three years ago…

/priceless-precious-metals-vs-worthless-dollars/

As for storing metals, the first part of your question can be answered by the above article – as you are essentially asking, “what if travel is shut down?”  Again, if such a draconian measure was announced, what kind of world would be living in?  Would it really matter if you had gold?

And as for other storage facilities outside Canada.  We have access to programs in the U.S., Switzerland, Singapore, and Hong Kong as well.  However, we don’t actually administer those programs; and in our view, they are inferior to our unique Brink’s Canada product – per the interview I did below, with our President Andy Schectman…

/brinks-montreal-storage-program-interview-with-miles-franklins-president-andy-schectman/

Q: After reading Bill Holter’s reports about the reset of our economy, as well as global economies, to the price of gold as set or determined by countries like China, will the price of Silver follow this reset of gold.  It appears that most recent articles are all about Gold being real money, with little mention of Silver, as it is considered to be more of an industrial use commodity vs Gold being considered as the only “real money”. (although I do own several ounces of Silver Eagles, Maple Leafs, and some 90% junk which is real money as well).

I ask this question as I am 100% invested in Silver, although fairly diversified within this class. Yet I often wonder if I should be also acquiring some gold bullion if it is what the global economies will be reset to once the dollar is devalued to zero at some point in time.  If Gold were to be priced at say $10,000 an oz, in your opinion where would Silver be priced at given the current gold to silver ratios, or would this ratio change based upon factors such as supply and demand, since there is less Silver being mined. I guess my major concern is if it too risky to own Silver only without further diversification into other PM, including Uranium, since it too is considered to be an industrial metal in demand.

Thanks,

Mike

Bill Holters Answer:

Good question and one many people may have.  First off, it is always good to diversify.  If you are talking about big money, say $500,000, $1 million or more, then silver is just too bulky at current prices.  If I only had $100,000 I would personally purchase 20-30 gold ounces and the rest in silver.  You might consider a little platinum as it has normally traded above gold which is not currently doing.  Uranium?  I don’t know.

That said, I do not believe the price of silver will be “set” if gold is.  I believe silver will “float” alongside gold.  The silver to gold ratio is currently out whack in historical reference.  Currently 70-1, I believe we may see 10 to 1at some point which is very close to the amounts currently being mined.  If gold were to be pegged at $10,000, we may see $1,000 silver.  If I had to guess, China will peg gold to the yuan at some point.  The movement in dollar terms higher will result from the dollar devaluing versus the yuan.
The “re set” is not so much the “pegging” of prices.  In reality it will be Mother Nature recalculating the prices of everything.  This will include all commodities, stocks, bonds, interest rates and all currencies.  The central banks have so bastardized the discovery process to the point where many prices do not make any sense.  When Mother Nature is done with it, market prices will not in my opinion resemble what we have today.  The world will look far different and the price discovery process will be from true supply and demand and be determined by real transactions with real product changing hands.  The derivatives “tail” will be rendered irrelevant.