CFTC to Meet with the Public!

Is the CFTC forming a plan to end the fraud in progress?

I will be flying out to Washington DC for the CFTC Public Meeting.  I have invited two congressmen and a senator to join me; my representative, Tom McClintock, former presidential candidate Ron Paul, and senator Jim DeMint.  Please invite your own congressmen and senators to attend this historic event.  Seating capacity is limited to about 100 people in the hearing room, and only about 40-50 for “overflow”.  The event will be webcast as well.

GATA will be there.

If you live in and around the DC area, please contact anyone you know in the media to let them know of this event.

CFTC to Hold Public Meeting to Examine Futures and Options Trading in the Metals Markets

CFTC event: March 25th, 9am to 3pm.

Further details, and pre-registration via email:
http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/massunshineactnotice03-25-10.pdf

I invited the congressmen and senator to attend, to see first hand the corruption of our monetary system at work, or, at least, the apologetics for the greatest fraud of our generation.

The CFTC is the Commodity Futures Trading Commission, and their job is to regulate futures contracts, to prevent fraud.  But they protect and encourage fraud!  How?  They place position limits on the longs (and there should never be limits on what you can buy in a free market), but they refuse to place and enforce position limits on the shorts (who fraudulently sell what they do not have).  If anything, to prevent fraud, they should limit the shorts, and not limit the longs.

Also, it is well known that JP Morgan is a major precious metals short, but the CFTC does nothing.
http://www.caseyresearch.com/displayGsd.php?id=106

http://www.investmentrarities.com/ted_butler_comentary02-16-10.shtml

Here are a few links of importance.

This shows that the notional value of JP Morgan’s derivatives exceed $72 trillion.

http://www.occ.treas.gov/ftp/release/2009-161a.pdf

The Bank of International Settlements (BIS) report shows that the notional value of “other precious metals” contracts went up by $107 billion in 6 months.

http://www.bis.org/statistics/otcder/dt21c22a.pdf

(Contracts expanded from $96 billion to $203 in a mere 6 months by June 2009, which is an increase of $107 billion, which, at $17/oz., would be 6 billion ounces if it were all silver.)

Yet, the CPM Group at cpmgroup.com shows that world annual silver production is less than 600 million ounces, which is 1/10th of the amount.

This means that the over the counter markets created, over 6 months, a precious metals liability, among banks, to deliver 10 times as much silver as is produced in a year.

Platinum and Palladium markets, the other precious metals that might be included, are just as small as the silver market, and thus, cannot be used as a valid excuse to say that no fraud was involved.

World annual produciton for all three markets stands at about:

Silver: 600 million oz. x $17/oz. = $10.2 billion
Platinum: 8 million oz. x $1500/oz. = $12 billion
Palladium: 8 million oz. x $450/oz. = $3.6 billion

The BIS report, and the OCC report, in contrast with the size of the silver market as reported by the CPM Group, are the three main public resources that prove that there is massively excessive fraud in the precious metals markets. 

The CFTC, by doing nothing, is contributing to the ongoing fraud, which is helping to keep alive the fraud of paper money.  When this fraud collapses suddenly, like it will, it will wipe out the living standard of most everyone in the USA. The fraud needs to end smoothly and in a open and transparent manner, not in an emergency or panic as will happen after the upcoming default that is guaranteed to happen, if the CFTC continues to ignore the problem and deny that it exists.

Questions to pose to the CFTC to demonstrate that they are not deceiving us: (Here’s a news article showing people are waking up to the fraud of paper money) 75 years of funny money

1.  Why do you claim there is “unrestricted access” to the silver market when you admit there are position limits on the longs which limit their access to the market?

2.  Why do you enforce position limits on longs, but not on shorts?  http://gata.org/node/8432

3.  Why does JP Morgan get to short all the silver they want, with no prosecution?

4.  Why does JP Morgan not have a conflict of interest in the silver market by holding the largest position of notional value of derivatives, according to the OCC report, which stands at $72 Trillion, with a T?

5.  Why does JP Morgan not have a conflict of interest in the silver market by being the custodian of the silver ETF, SLV, which means they are supposed to be the custodian of 299 million ounces of silver that they owe, which is like a short position.

6. Why is it not a conflict of interest to allow futures contracts for silver to be settled in SLV ETF shares?  Aren’t SLV shares backed up by futures contracts for silver, or OTC unallocated “bullion” accounts, such as those offered by JP Morgan?

7.  The BIS Report reveals that banks, primarily JP Morgan, have collectively created a short position in silver in the “other precious metals” category in the “over the counter” (OTC), non-transparent market, that is about ten times as large as the short positions on the COMEX.  The CFTC has no jurisdiction over those market segments.  But that market is clearly priced based on COMEX market prices, because the COMEX market transactions are public, whereas the OTC market is not. Thus, the very large OTC short positions are a significant motive for manipulating COMEX prices. The other motive would be keeping the financial system alive, as the $2.5 Trillion US deficit is about $10 billion per day, which is an amount that is equal to the entire world’s silver produciton in a year.  What is your plan to prevent all of this fraud from ending badly?  To just continue to lie to everyone?  May I humbly suggest that is not much of a plan?

8.  How are futures contracts, which create performance obligations, not likea form of voluntary slavery, which is illegal in the USA, and totally incompatible with free market philosophy?

My question:

In my letter to the CFTC from 2003, I asked, “Do the short sellers have the silver to back up their positions?”  Back then, my question was ignored.  Today, we know both the identity of the primary short seller, JP Morgan, and also, I believe with certainty that I can say that they most certainly do not have the silver to back up the huge $200 billion OTC “other precious metals” position, and the 300 million ETF position, and their COMEX position.

In 2003, you asked, “If you or anyone else has any, specific, first-hand evidence concerning violations of the Commodity Exchange Act, please forward it.”

I believe I have provided more than enough evidence.  Furthermore, your question is absurd in its face, since you have always known all along the identity of all the entities who are excessively short selling silver; it is you who are vainly failing to keeping their names hidden, that JP Morgan is the large short seller.

My question now is, “What is your plan to prevent the silver delivery default that is surely going to come if you do nothing?”

My plan is to warn my readers.  I believe that when the biggest market for price discover in silver, the COMEX, defaults, that the entire silver market will sustain severe disruptions; and the market may see a severe lack of supply, and severely higher prices.  Silver products may not be available at all, as major market dealers may take some time to find other more reliable suppliers, and producers may likewise take some time to find others markets to determine a market price for silver.

A plan in Idaho is to allow silver to become money again, by allowing the payment of state taxes in silver.
http://www.thestreet.com/story/10703026/1/idaho-bill-permits-state-taxes-be-paid-with-silver.html

Further reading:
CFTC: the Common Fraud Training Committee
http://silverstockreport.com/2010/CFTC.html

OPA Silver Letter
http://www.cftc.gov/files/opa/press04/opasilverletter.pdf

=====

Meanwhile, there is a last ditch panic going on to try to pass the hated health care bill.  Here’s how we can try to stop it:
John Stossel explains:
https://secure.conservativedonations.com/pijn_fax_bluedogs/?a=3855

=====

In more “government is a thief” news, Paul Craig Robers warns that government is about to steal private retirement accounts and pensions:

Is The Recovery Real?  March 02, 2010
http://vdare.com/roberts/100302_recovery.htm

“Money will have to be found somewhere if the Fed is to avoid printing it. During the Clinton administration a Treasury official proposed a 15 percent capital levy on all private pensions to make up for their tax deferral status. This idea didn’t fly, but today a desperate government, which has wasted $3 trillion invading countries that pose no danger to the U.S. and wasted more trillions of dollars combatting a crisis brought on by the government’s failure to regulate the financial sector, is likely to steal people’s pensions as well as to gut Social Security and Medicare.”

Tags: CFTC

Why Earn 1-3% in Bonds?!

When you can earn so much more with honest money that leads also to freedom?!

Why earn 1-3% in Bonds, When silver and gold have done this?

• Gold is up 14.5% per year since 1999 (averaged) from $255/oz. to $1130/oz. over the last 11 years.
• Gold is up 9.3% per year since 1971 (averaged)  from $35/oz. to $1130/oz. over the last 39 years.
• Silver is up 22.7% per year since 2003  (averaged) from $4.15/oz. to $17.33/oz. over the last 7 years.
• Silver is up 5.6% per year since 1964  (averaged) from $1.40/oz. to $17.33/oz. over the last 46 years.

Calculations for the average annual percentage gain was courtesy of http://www.smartmoney.com/compoundcalc/

Use the online calculator to check the math of the average annual compounded gains for yourself. If you had invested $10,000 in a 10-year CD paying 3% in the year 2000, you would now have $13,493. If you had bought $10,000 worth of gold in the year 1999 (gold, which pays no interest) you would now have $44,355 worth of gold. The gold would have been about 39 gold troy ounces, and you would still have those same 39 gold coins or bars today, but they would be worth over 4 times as many paper dollars. But if you had trusted paper promises to deliver gold or silver, such as US dollars in 1971 or 1964, you would not have had any gain at all.

I would like to highlight the work of Bix Weir at http://www.roadtoroota.com/ He has done a fantastic job doing independent investigative reporting on the secret dealings in the gold world.  The highlights of his work include featuring a comic book by the Boston Fed, called “Road to Roota”, which seems to be a metaphor or teaching guide for returning to using gold as money.

Recently, Bix published a Gold quiz.  Wonderful.  See here: http://www.roadtoroota.com/public/197.cfm Bix also published a list of some 17 suggested guidelines for how the CFTC should regulate the gold market, in case the CFTC actually cares.  I’m more skeptical that the CFTC would or could do anything.

New CFTC Gold/Silver Regulatory Framework
OPEN LETTER TO THE CFTC
March 9, 2010
http://www.roadtoroota.com/public/207.cfm

Take, for example, suggestion number 13

13) Engage Outside Expert Consultants — As far as I know the CFTC has NEVER hired an outside expert on the gold or silver markets even though there are many who are willing to assist them for FREE! Not only does this raise suspicion about their competence but it begs the question of WHY NOT? I’d like to suggest that the CFTC create a “Panel of Outside Expert Consultants” to assist them in understanding the gold and silver markets.

If they consulted me, perhaps I’d say, “Admit that you can do nothing, and terminate your entire agency to save money for taxpayers, and eliminate the fraud of suggesting that you are actually able to ‘regulate’ these markets that are not markets at all, but contracts of enslavement.”  Or, perhaps I’d say, “Prosecute JP Morgan to the fullest extent of the law for the clear fraud that you know they are engaged in by selling excessive futures contracts for silver, put all the executives in jail for seven years, and terminate all their silver and gold short side contracts immediately with a cash settlement close out at current spot prices, and close down all new short selling in precious metals futures contracts for at least the next year, unless there is 100% of the metal on deposit to back up each new short contract.”  That, of course, would drive the gamblers to a new jurisdiction, many of which are already set up in other parts of the world, and would change very little, except that the CFTC might reveal some of the fraud to some people who might be paying attention.

My point is that people are willingly deceived by paper contracts that cannot be honored, and until and unless the people wake up to the fraud, and buy physical instead of all forms of “paper gold,” including paper bonds, inflation adjusted bonds, soverign debt default swaps, exchange traded funds, “over the counter precious metals derivatives”, “bullion accounts”, pool accounts, and gold and silver certificate programs (and not just futures and options on futures which are only a little part of the market of fraudulent bullion trading) then the deceptive practice of selling of paper metal will continue.

In the end, nobody will trust any paper contracts, and physical metal will have its day in the sun.

=====

I must report reader responses to my comments on 9-11, based on my last article:
http://silverstockreport.com/2010/silverordeath.html

One man reports that Flight 93 exploded in mid air, as can be verified by other reports, and the size of the debris field. Another man reports that there was no “stand down” order for the US Military. Another very well trusted source says that the jet fuel was indeed enough to cause the buildings to burn and collapse, and he should know, he was both a military and civilian pilot. I looked up “thermite” since that is accused to be a “source” of the collapse.  According to several articles on wikipedia, thermite can be a number of combinations of metals that can burn at high temperatures, including aluminum and even calcium.  Clearly, harmless sources of aluminum could have already been in the building, and also, so could calcium.

Another reports that the twin towers were designed to collapse, and that general government incompetence suggests that the entire event could not be a “government job”. Nevertheless, I still have questions about tower 7, which was not even mentioned in the official 911 commission report, nor any of the people who wrote to me.

BBC Reported Building 7 Collapse 20 Minutes Before It Fell
http://www.youtube.com/watch?v=C7SwOT29gbc

Why was it reported to have collapsed before it collapsed, unless there were scripts for news agencies written in advance, and the wrong script was read at the wrong time, due to such “incompetence”?  And if the news was created in advance, then this was, indeed, an inside job that transcended nations.  If the news agencies knew, and were in on it, why were they not prosecuted?

While I’m asking, why where the people who engaged in short selling the airline stocks never tracked down, and identified, and prosecuted?  If their brokers are hiding the identies of the traders, why are the brokers not prosecuted for “obstruction of justice”?  Were the brokers in on it?  It seems as if big brokers or banks are in control of everything these days, including our government.

=====

I must report further on the USS Liberty attack, based on a reader’s response. A man reports that it was general governmental incompetence, on both sides, that led to a mistaken attack by Israel on the USS Liberty during the confusion of the 1967 war. http://www.jewishvirtuallibrary.org/jsource/History/liberty1.html That’s a rather interesting report, and I did not have time to read more than half of it.

=====

According to free market principles, no man can ever know enough about everything to direct some sort of “top down” directives to people to make an economy work.  Similarly, I make mistakes from time to time.

I have “read” that there was a ’stand down’ order for US military jets to not intercept the terrorists flights on 9-11, and that when a commercial jet goes off course, military jets are always there within 20 minutes, and yet, on 9-11, some of the jets were off course for over an hour.  But, of course, I don’t KNOW those things, it’s just what I’ve read.  True or not true?  I remain suspicious and skeptical of our government, and I do KNOW that our government routinely lies to us about money and many other things, and continues to violate the Constitution in so many more ways each day, so why should I trust them about anything else?  If they want credibility, they should start by telling the truth, especially about the nation’s money!

And so, I still have questions about 9-11, and the attack on the USS Liberty.

=====

A man who bought silver from us asked me for a price.  I responded in email:  We can buy a bag of 90% at about $11,778.48.  That’s 5% under spot x 720 oz.

He responded:  Thank you for your generous offer, but I took it to a local coin shop yesterday before hearing back from you and sold it at a loss at $10,950 (unfortunately).

I will always in the future try to buy and sell to you.  I can see that you are more than fair.

Again, I will re-iterate what I wrote in my last email:

Buying silver is not only directly good for your own prosperity, it is also one of the most effective ways to non-violently resist and dismantle deadly totalitarian empires, whether they are growing up in America, or around the world.  Ultimately, free market principles win.  Top-down totalitarianism (including price fixing and market manipulations) always fails, because it does not have a pricing mechanism to know if what they are doing is profitably sustainable, and thus, ultimately, they cannot pay for their errors.

Buying silver is 80 times as effective as buying gold, if not more effective.  Why?  Because it will take far less money to move the silver market up, which reveals the fraud of paper money all the same, and thus, thwarts the thieves of their ability to steal through issuing ever more paper money, which prevents them from paying the salaries of their thugs.

Inept Sovereign Fund or Gold Scam?

Does anyone know anyone who has 10 tonnes of gold to sell at 6-10% under spot?

In a previous email, I said that my mom handles the small orders, under 100 oz. of silver, and we handle the major bullion trades.
My Mom’s Silver Shop February 22nd, 2010

After that, I was contacted by three people who were inquiring about potentially large orders. The largest group, a man claiming to represent a sovereign wealth fund, wanted to buy a minimum of up to 10 tonnes of gold, and had $20 billion in cash set aside to buy $20 billion of gold.  Wow!  I know major gold sellers, so that’s quite a potential opportunity!  At today’s prices, 10 tonnes x 32,151 oz./tonne = 321,510 oz. x $1119.30/oz. = $359,866,143, that’s about $360 million dollars.  But, the buyers would entertain smaller orders, if more gold would be forthcoming.  Even better!

In years past, I’ve discerned that such offers, both to buy or sell, are a scam because they want a letter of intent, and a letter of credit.  I’ve since learned that a letter of credit basically gives your “partner” access to all the money up front, hence the scam.  This did not seem like a scam, as that is not what was requested. But there is another reason I suspect that this was a scam.  Trouble is that they want the name of the source of the seller, which never happens; that’s why there are brokers, to hide the sources and keep them anonymous.  Also, a broker goes out of business if he reveals his supplier, because then there is no need to deal with the broker anymore!

But further, they wanted only LBMA gold.  Well, all the LBMA refiners and banks are already on well published lists, you can find them all here:

1. LBMA refiners and banks
2. Good Delivery List of Acceptable Refiners, Gold List, Silver List
3. Market-Making Members
4. Full Members
5. Associates

So, then why would they need me or anyone else to act as a broker?

The 10 tonne amount is weird.  That should be a maximum, not a minimum.  The world’s gold output averages to about 10 tonnes per day.  The world’s mines produce about 2500 tonnes of gold per year, and there are about 250 business days per year, (5 x 52) (minus 10 holidays).  2500 / 250 = 10 tonnes! What this says is that this buyer wants to buy 100% of all the gold produced by all the world in a year.  Or, they want to buy 100% of all the world’s gold for at least an entire quarter, with their $20 billion or more.  Clearly, no buyer is doing that in the marketplace, because if they did, then the gold price would exceed $5000/oz., or maybe even $30,000/oz.!

Thus, it smells like a scam, because the numbers are just wrong. But interestingly, China has announced that they want to buy about $80 billion of gold, which, at $1000/oz., is 80 million oz., which, at 32,151 oz. per metric tonne, is 2488 tonnes.  That would work out to about 10 tonnes per day, of course.  And China, with over $2 trillion of foreign exchange, could buy a lot more, of course, if only it can be found. Is this a legit offer from China?  Or is it a bogus offer, posing as if they could be China?

Another sign it’s bogus is that they claim to be the largest current buyer in the marketplace.  Well, that’s India, not China. China announced that they have managed to accumulate only about 500 tonnes over the last 5 years, or only about 100 tonnes per year, far less than the apparent goals.  I have no idea if the sovereign wealth fund is China.  Maybe it is, and maybe it isn’t, but that’s not the point. The point is that it appears to me as if this sovereign wealth fund, if real, is going about the attempt to accumulate gold entirely the wrong way.

How? They did not include a price in the terms of their offer!

Who would be motivated to sell gold to an anonymous source at an unknown price?  What kind of buy offer, or bid, is it if the price is unknown?  There’s almost no need to respond.  I did respond, for fun, and just to get the term sheet, but again, no price.   It appears as if they want to buy at a discount to London afternoon price fix.  Discount?  How? Term sheet. This is the most professional looking term sheet for this kind of offer that I’ve ever seen, and it still reeks of a scam.  It’s kind of funny.

Price is everything.

India manages to accumulate up to 800 tonnes of gold per year, but that’s because the price of gold in India is always quoted at a premium, that means India pays higher, than western prices, plus the import duty or tax.  I hear from large bullion traders that they can get about 2% above spot in Europe, and less in the USA.  What I hear makes sense to me, because the USA does not buy nearly as much gold, hence the lower prices here.

We buy gold under spot all day long, if, and only if, people who are selling scrap gold walk in the door.  We don’t get to choose the amount that comes in, and we only get about a mere 30 ounces per month or so of scrap gold.  We get more gold in the form of coins, and we are paying higher for that, about 1-3% under spot for popular gold coins such as American Eagles, Philharmonics, Maples, Krugerrands, etc., but again, we don’t get to choose the amount, and it’s never more than about $250,000 of gold coin in a month at those prices in our area. Thus, offers to buy gold at 5-8% under spot, at 10 tonnes or more minimum, are clearly scams.

We are hesitant to pay more than the largest most reliable refiners in the USA, but we do for premium coins. There are reliable refiners who will pay up to 1.5% under spot, or 2% under spot, but only to dealers who have a regular supply.  Therefore, any “major” offer to buy gold at a significant discount under that, is clearly not real.  Nobody would sell for less to an anonymous buyer when they can sell for more to known public refiners!

Thus, it seems to me that if a sovereign wealth fund wants to buy gold at significant discounts to spot, in this market, they are dreaming.  It’s just not going to happen.  That’s my opinion, and I could be wrong, but it seems to me that China has also announced that they like to buy gold on the dips, and at under spot, and it seems to me like they are not really meeting their goals, because they don’t understand how price functions as a means to communicate intent to the broader market.

Price is everything in capitalism and free market theory!  Price is the ultimate means of communication to markets; it’s far more important than “who you know,” or a bunch of bogus terms.  But what is interesting is that it appears to me that the main way the Chinese do business is through the “who you know” theory of business, rather than through the capitalistic method, which is by price.

How can a buyer communicate intent without mentioning price?

(As an aside, I’m glad for the profile on me in my local paper, but that’s not the important thing you need to know to do business with us, you need to know the prices, which is why our price board is up front at www.silverstockreport.com and www.jhmint.com.) If anyone wants a continuous supply of gold to come their way, they merely need to offer more for gold, a higher price, than anyone else.  Then, gold will easily flow their way.  Similarly, if any of our customers want gold to flow their way, they need to pay over the spot gold price, plus manufacturing costs, plus our replacement costs to get it, that means they must be willing to pay about 6-10% over spot for manufactured gold coins.

This is why I don’t believe recent internet rumors that large futures contract buyers refused a “cash settlement” of 25% over spot to cash out their gold futures contracts.  Any such buyer could take the 25% premium, and take the cash, and then start cleaning out up to 20 of the USA’s largest major gold dealers, placing many multi million dollar orders with each of them, and get far more gold for far less. Business is really rather simple, and it seems that this sovereign wealth fund does not understand basic business.  (And I’d expect that from a government agency, too.)  If they want gold to flow their way, they have to offer better terms than the competition.  Why would anyone sell gold to an anonymous source, for less than they can get from other established markets?

To be competitive, any entity has to offer to buy gold on better terms, such as higher prices, than other established markets.  Better terms also include such things as more convenient sized lots, faster methods of payment, reliable markets, and established jurisdictions in which to do business, etc. Everything is wrong about this sovereign offer to buy gold.  There’s no price!  And it’s a less convenient larger lot size!  And you have to give up the name of your supplier for no consideration!  And you cannot sue a sovereign wealth fund if things go bad.

Finally, words of wisdom for any potential gold buyer.  You are a customer.  He who has the gold makes the rules.  Why?  Because the owner of gold realizes and has realized certain truths; that only gold has value, and paper money might not.  Hence, any time I’ve ever bought gold, I ALWAYS had to pay first; that’s what customers do.  And I never buy from anonymous sources, I only buy from reputable dealers that I know.  Even when I go to buy gold from my suppliers, I pay first; that’s simply how it works.  I know all the major dealers in the USA, or know of them.  None of them would respond to an offer of the kind I ran across.  If you want gold, you buy gold on terms set buy the people who have the gold, not on your own terms.

Who walks into a grocery store and starts issuing demands and setting up terms on how you will buy food?  Nobody. I don’t want to conclude that this is a scam.  Maybe it’s not.  I don’t know everything.  On the off chance this is not a scam, I publish here.  Maybe somebody else who knows this sovereign wealth fund is paying attention, and can clue them in on how to really buy real gold, for real.  Here’s a similar offer that is clearly a scam.  For about six months, I would get about 1 of these every day, offers for both buying and selling:

Silver Bullion I can have the 12MT per month with possible rolls and extensions 8/5 discount bank to bank sellers banking details in tact FOB drafted to him.   The buyer takes delivery F.O.B. at Free Trade Zone of Benito Juarez Airport in Mexico city as destination port. (to be negotiated). Bank to Bank; sellers bank officer will extend invitation to buyers bank officer.

COMMODITY: (ARGENTUM) Silver Bars
ORIGIN:   Mexico.
FINENESS: 999.95 or Better
SIZE:  12.5 kgs in standard Silver Bars
HALLMARKS:    HALLMARK Met-Mex PEÑOLES
International Accepted
QTY IN TOTAL: 12 MT (960) SILVER BULLIONS X month per 5 years with possible Rolls & Extensions

PRICE: Based on the prevailing London Bullion Market Association Second Fix Price (LBMA Price), Silver Fixing on the day of sign of the contract, less discount, plus taxes.

PAYMENT: By Swift Wire to be done upon receipt of acceptable count/analysis certificate issued by refinery showing exact quantity and quality.

DISCOUNT: 8% Gross 5% Net to buyer and 3% to facilitator fees, as compensation, sharing 1% to buyer mandate, 1% to buyer side net and 1% to seller side net (closed)

That is clearly a scam offer to sell silver.  Why?  Because I know that Penoles sells silver in lots of 300,000 oz., which is 9.3 tonnes, at a flat, non-negotiable price of $.15/oz. over spot, delivered to anywhere in the USA.  They don’t sell silver at 8% under spot, nor do they pay any commissions!

People sometimes ask me, “Jason, why don’t you buy silver off the COMEX, and clean them out?”  I don’t do that because the terms are horrible, and the reputation is even worse!  I hear there are horrible delivery delays of up to a month or two beyond the delivery month.  Because even if they do deliver in the right month, it’s no good to have a delivery at a random time during 28 days!  In this business, we need to replace product almost immediately, within 2 days or so.  Instead, we buy silver from major wholesalers, who have it in stock, or who are getting it quickly from the refineries.  Locking in gold or silver for delivery “at any time within a month” is about the worst possible terms that could be imagined.  What kind of a lock is that?  Who can do business on those terms?  Ridiculous!

COMEX is a farce of a gold and silver market.  Attempting to regulate it just seems silly.

Refuting the Naysayers: 44 Poor Excuses

Have you ever tried to convince your friends and family to buy gold and silver? 
Of course you have, and of course it did not go well, or you had to literally nag them for over a year to get them to act.  I know, because my readers tell me.

This was my main presentation for the Phoenix show: I surveyed my readers, and 112 readers responded who all gave me feedback on what people said to them as they tried to convince their friends and families to buy gold.  I summarized the naysayers comments and so-called reasons, or excuses, that they gave to avoid buying silver or gold. It is very interesting to know what “the other side” is saying, and thinking. 

Their arguments should be closely scrutinized to see if there is any validity to the bearish arguments for gold. Some of my readers had no response to some of the reasons the naysayers had for not buying gold.  So here are some of the things I would say, if I was part of the conversations with the naysayers, to help convince them to buy silver and gold. Some of what the naysayers say is just silly.  But this entire issue is deadly serious.

NAYSAYERS SAY: TOO HIGH NOW: Gold and Silver are just too high/expensive now at “all time highs”, a “bubble”,  and perhaps they are bearish on the metals in the short term,waiting for a dip, or staying away, thinking it will crash.    Similar: Regret Wish I bought it cheaper, thinks it’s too late now.   (25 total)

Fact: Gold is far below the TRUE all time “inflation-adjusted highs” which would be about $7,000/oz. There’s 2 ways to adjust for inflation: Government CPI and money creation inflation.

NAYSAYERS SAY: HOW TO SELL?:  They are concerned about when, where, how to sell it, (confused about exit strategy), what will it buy, especially if cash becomes worthless, then who could afford to buy gold and silver to keep the price up?   OR: Gold and Silver are not liquid enough, You can’t spend, or buy anything with them by using them as currency.  (21 total)

Fact: You can always sell or trade gold or silver at any time to any gold dealer anywhere in the world, they are the most liquid assets in the world, a perfect store of value. How’s that housing market going for you?  Not too liquid now, is it? How are those defaulted bonds going for you, now that major portions of the bond market have frozen over?

NAYSAYERS SAY: CRAZY GOLD BUGS:  Gold bugs are nuts, weird.  OR: Those promoting gold and silver are not credible.   (19 total)

Fact: We are not making stuff up; the bullish argument is from government numbers: The Fed admits it is creating money at all time highs, that the U.S. federal annual budget is about $3 trillion, yet all the gold in all the world ever mined in all of human history is valued at a mere $5 trillion. How about those crazy real estate brokers pushing housing?  Now that’s crazy.

NAYSAYERS SAY: CLUE LESS: They admit they don’t understand metals.   No time to go buy it  or research it.   (18 total)

Fact: First, this is not an argument against gold at all. Classic proof that we are not in a bubble, especially if this is the 4th most common retort. You don’t need to research gold for over a year before you buy it, you just need to get some now.  NOW!

NAYSAYERS SAY: SHUT UP:  Please stop talking about it.   They don’t have the attention span to listen.  Or: They don’t want to think about the bad stuff.  (17 total)
Fact: It’s not really an argument against buying gold.That’s like saying, “I”m sinking in quicksand, please don’t throw me a branch”.

NAYSAYERS SAY: PRICE CHANGES:  Don’t like the volatility or uncertain & risky price changes.  (It’s a gamble). (17 total)
Fact: Don’t like uncertainty?  What about uncertain home prices?  What about uncertain futures of companies that go bankrupt, like Enron or GM?  What about bonds that default and go to zero? Gold is not a promise!  It’s solid, reliable,  & real.  And has been real for the entire history of humankind.

NAYSAYERS SAY: GOVERNMENT WILL FIX IT: They think stocks/housing/economy will come back.  The government will provide. (14 total)
Fact: UH, the economy will come back, after the fraud has been wrung out of the system, well after the gold bull run is done.  That’s what happened in 1980.

NAYSAYERS SAY: SILENCE:   Deer in the Headlights / No answer / ignore it.  (13 total)
Fact: Ah, this is not an argument, is it?  For those of us who are trying to convince people, we ought to remember that when a person “does not answer”, it might just be that they are learning to think for the very first time, and it takes a while to get those mental gears going.  We ought to be patient.

NAYSAYERS SAY: I’M BROKE:  No money to buy it,  I need to save, can’t afford the luxury of gold, got to pay down debt first (12 total)
Fact: Funny that people say they have to pay down debt first.  Interesting.  How is that going to happen when there is $2 trillion in cash in the banking system, and $20 – 30 trillion in total debt to pay off?  Not going to happen.  What is more likely to happen is that gold will go to $50,000/oz., and that the world’s gold stock of 5 billion oz. of gold increase in value from $5 trillion, where it is today, and increase to $250 trillion.  Then debt can be paid off.

NAYSAYERS SAY: BAD BROKERS:  Financial advisor talked them out of it.  (9 total)
Fact: Well, that wasn’t too smart was it?  One thing to ask people is if your broker is bearish on gold, ask the broker when they were ever bullish on gold.  IE, if they missed the first ten years of this constant bull market, then they are clueless and not a reliable source of information. Furthermore, all established brokers have an economic incentive to keep you out of gold.  If you buy it, they can’t earn any commission on your account.  Gold does not pay them, it only pays you.  Gold puts them out of business.

NAYSAYERS SAY: MIGHT BE STOLEN: No place to put it, it might be stolen, too difficult to buy a safe. OR, Worried about paying taxes on the capital gain, or outright confiscation. (9 total)
Fact: Anyone who can afford gold, can afford to spend a tiny fraction on the appropriate sized vault.  Even if you only have one gold coin, you can afford a wallet.  If you can afford 10 gold coins, you can afford a small lock box, etc.

NAYSAYERS SAY: Metals don’t pay a dividend or interest.  (6 total)

Fact: Metals don’t have to.  Only inferior investments with higher risk need to promise a higher return.  But do they?  Bonds pay 1-4%, and gold is going up 17% per year for the last 10 years! Bonds pay interest, and stocks pay dividends because they must compete with gold as an investment. That competition keeps us all honest.  Even most of the mining stocks have not kept pace with metals over the last 3 years.

NAYSAYERS SAY: No leverage in physical.  A 100% or more gain in non-leveraged physical metal is not enough to be worth it to improve their life.  (5 total)

Fact: Physical IS highly leveraged.  Banks practice fractional reserve “bullion holding”, and that creates leverage for physical holders. If gold can exceed $50,000/oz., that’s leverge of 50 to 1.  If gold can exceed a million per oz. with hyperinflation, that’s leverage of 1000 to 1.  If gold can go to infinity dollars per oz., as all dollars and all leveraged promises crash and burn, then the leverage in gold is near to infinity, and thus the most highly leveraged investment you could possibly buy, except sivler, of course.

NAYSAYERS SAY: You can’t eat gold, I’d rather buy food.  (4 total)
Fact: Good, buy food first.  And guns! But after $10,000 of food, you may wish to consider the metals.  $1 million of food is probably too much food, but not too much metals!  The best part of gold is that you can’t eat it, thus, high gold prices don’t cause starvation for the rest of the world! 

NAYSAYERS SAY: Media coverage:  Too much. (1)  Too little (1)  Too confusing (2) – (4 total)
Fact: Whatever.  Until most of the media in this nation is owned by Barrick and Newmont, we are not in a bubble.  Did you know that the Hearst Newspaper empire and Hearst Castle, was founded by the son of a man who made it in silver mining?

NAYSAYERS SAY: Gold is an archaic or barbarous relic.  (4 total)
Fact: Relics are valuable, which is why they are kept with tight security in museams.

NAYSAYERS SAY: They are too educated to buy “useless” gold that “does nothing”.  (4 total)
Fact: God keeps men honest.  Honesty is a good thing, and provides for your future.  It boils down to two things.  You can trust your future to gold, or you can rely on the promises of other men.  As long as men on earth know how to lie, I think gold is a good thing.

NAYSAYERS SAY: Being greedy is bad.  (3 total)
Fact: I agree.  Let’s shoot everyone who wants greater than 1% return in bonds; they are greedy usurers who should be put to death.  Just kidding, I have more tolerance than that, and I don’t believe in using force on others. But the point is that gold investors are not greedy, bondholders are, but they are both greedy and stupid, while gold investors are honest and wise..

NAYSAYERS SAY: If silver and gold are so great, why have they not kept pace with inflation since 1980?  (4 total Bloomberg was one)
Fact: But that’s why they are great!  As a recent underperformer, it stands to reason that it will outperform at some point.  But, in fact, if you go back to 1971, gold has outperformed everything else since then, and stands to continue to do so, until most of the fraud has been wrung out of stocks and bonds.

NAYSAYERS SAY: How does gold have any value at all?  (2 total)
Fact: It’s rare, and fits all the criteria that money must have.  Money must be a unit of account, a medium of exchange, and a store of value.  To be those things, money must have a number of specific properties that silver and gold alone have. 

NAYSAYERS SAY: Silver is too heavy.  (2 total)
Fact: Great!  That means you get so much for your money, and means it’s cheap.  If you would rather pay twice as much for your silver, so it will have half the weight, I’d be happy to overcharge you!   The point that silver is heavy is good, this keeps other buyers away right now, which proves again, that it is cheap!

NAYSAYERS SAY: The Lord will provide.  (2 total)
Fact: I agree!   The Lord has provided silver and gold for us.  If we don’t accept his provision, then we have nobody to blame but ourselves if we have chosen to trust in the frauds of men instead.

NAYSAYERS SAY: I’m locked into my IRA / 401k.  (2 total)
Fact: Anyone can put their IRA into the Central Fund of Canada, it holds 95% of its assets in silver and gold, you can buy it as easy as any other stock, the ticker is CEF, look it up.

NAYSAYERS SAY: Silver’s just an industrial metal, and industrial demand will go down if the economy crashes.  1
Fact: Good argument.  If the economy crashes, it has to crash against something.  That something is gold and silver.  They have been going up, as investment demand has more than offset declining industrial demand.

NAYSAYERS SAY: “You can’t take it with you”.  (1 total)
Fact: I don’t intend to.  I have silver to help delay my own death.  The more money I have, the longer I can live here on earth!  There is a direct correlation between wealth and long life.  The great depression of the 1930’s greatly shortened the average lifespan, down to about 50-60 years.  Many people will die sooner than they should in the deepening depression, because they won’t have any silver or gold to protect their wealth.  It’s quite sad, and they won’t be taking any paper dollars into hell with them into their early deaths.

NAYSAYERS SAY: Gold and silver are only just metals.  (1 total)
Fact: And cash, stocks, and bonds are all only just paper. 

NAYSAYERS SAY: Jesus is coming.  (1 total)
Fact: And are you saying you’d rather be caught as a usurer when He comes back?  I’m making an argument between bonds and gold here, not between being a Christian and owning gold.  Being a Christian is not mutually exclusive with owning gold.  Actually if you believe in Jesus, it should be mandatory that you not put faith in the idolatry of paper money, and rather, trust in the provisions of God, like silver and gold, instead.

NAYSAYERS SAY: I’ll wait until it becomes popular, then I’ll buy it.  (1 total)
Fact: Oh Lord.  “A fool and his money…”

NAYSAYERS SAY: The dollar will never crash (1 total)
Fact: Really?  It already has! 

NAYSAYERS SAY: The government is not that dumb.  (1 total)
Fact: HA HA!

NAYSAYERS SAY: It’s a problem of the USA only.  (1 total)
Fact: Gold has been going up in all currencies over the last ten years, and other currencies are no better.

NAYSAYERS SAY: Gold and silver has been so disrespected and derided by the government and economists  (1 total)

NAYSAYERS SAY: Frightened about market manipulation.  (1 total)

NAYSAYERS SAY: Already sold gold jewelry. (1 total)
Fact: So making one bad decision means you have to make another, and will prevent you from making a good decision?

NAYSAYERS SAY: I’m not a gold bug.  (1 total)
Fact: And believe it or not, I’m not a silver bug!  100 years ago, the silver bugs advocated government price fixing of 15:1 for silver to gold.  No free market advocate advocates government price fixing today!

NAYSAYERS SAY: Gold is a scam.  (1 total)
Fact: As opposed to the dollar, which is something honest?  Come on. 

NAYSAYERS SAY: They don’t want to buy on a dip, because the metals are “trending down”.  (1 total)

NAYSAYERS SAY: “Nobody ran around with bags of coins during Katrina, and therefore metal will never been used in times of crisis.” (1 total)
Fact: Katrina in New Orleans is not the kind of crisis we are predicting.  In a monetary crisis, it’s a flood of dollars, not water. 

NAYSAYERS SAY: Why would they sell it if it’s so great? (1 total)
Fact: Do you think a salesman should rather sell crap?  I was personally drawn to silver, because I wanted to discover the greatest thing in the world, and then write about that.  Jesus, of course, is first, but silver is number two!

NAYSAYERS SAY: Why do I need it if you have some of it?  (Son to Father) (1 total)

NAYSAYERS SAY: There’s a silver VAT (value added tax) of 15-17%, plus a steeper markup in the UK than in the US. (1 total)
Fact: Try having a revolution like we did in the USA over 200 years ago!

NAYSAYERS SAY: Money is not important.  (1 total)
Fact: Fine, give me all of yours!

NAYSAYERS SAY: I know someone who knew someone who lost so much when silver crashed from $50/oz. in 1980. (1 total)
Fact: So you know that the inflation adjusted high is about $350/oz., but you still think silver can crash and lose another 95% from $15/oz.?

NAYSAYERS SAY: As interest rates rise, gold will fall.  (1 total)
Fact: OK, tell me when interest rates will get above 17%, and then maybe I’ll consider selling some gold.  But to get to 17% interest rates, the bond market will crash, and you better be in gold until then.

NAYSAYERS SAY: How do you know it’s real?  (1 total)
Fact: Would you like to buy some chocolate novelty “coins”?  $1,200 each!  Oh, you would not be fooled by that?  Then you probably won’t be fooled by electroplated silver coins either.  Silver is 1/2 the density of gold, and simply does not feel right. 

In conclusion, I didn’t note any rational argument that shows that we should not buy silver or gold.  I just found a lot of misinformation, ignorance, thoughtlessness and general foolishness.  That’s not a solid basis for making a sound investment decision.  Therefore, we must reject the bad notions of why we should not be buying silver and gold.  And thus, we ought to invest into silver and gold.  I’ve done just that, not only owning a lot of it, but I’m fully engaged in the trading of it, to help other people get into gold and silver, which people will probably do in much greater numbers in the future, which will drive this bull market and precious metals prices much higher.

(Note, many people are asking me about today’s dip.  I have no idea what drives silver in the short term, other than excessive paper trading, as I have noted in many past reports, such as can be found here: A Tribute to 7th Grade Math August 31, 2008 Currently, our wholesale supplier is out of Silver Eagles, which just broke record sales for 2009, and even greater sales for the first month of 2010.  We are rationing our remaining silver Eagles with higher than normal costs over spot prices.)  Currently, our sales at www.jhmint.com are at all time highs.

Phoenix Show Report: Signal Failure in Silver

I had a very fun time at the Phoenix show, especially meeting so many very long time readers, and re-meeting many people who I met at the show last year. One of the interesting bits of “buzz” at the show was that Sprott Asset Management is looking to buy about $1 billion worth of physical gold in the near future. Nobody was too concerned about the price dip that started on the evening of the first day of the show.

The best part of the Phoenix show, for me, was meeting Andrew Schiff, the brother of Peter Schiff, of Euro Pacific Capital, who manages about $3 billion in client assets, and has thousands of clients with certificates with the Perth Mint.  Sorry, Andrew laughed at being introduced as Peter’s brother, I suppose it happens to him all the time.  But, Andrew, I’m giving you an opportunity to be known for something much more important. It was extremely important, I feel, because of who Andrew is, and what he did not seem to know, and what he learned from me and many others at the show.

Andrew could become known for encouraging or speeding up the commercial signal failure in silver.  We have all long awaited a major delivery default that could cause a run on silver which could cause a major rise in price.  This is also known as a default, or a failure to deliver. These are important events, because it is usually after such a major failure to deliver that the price of gold begins to really take off.

In 1934, the banks were crashing, no longer being able to give out the gold that backed their dollars.  Then, the US government stepped in, made it illegal to own large amounts of gold in the US, and then raised the fixed price of gold from $20/oz. to $35/oz. In 1971, Nixon could no longer give out gold to foreigners at the fixed price of $35/oz.  So, once again, after that major failure to deliver, gold prices rose to $850/oz. by 1980.

A few years ago, I discovered delivery problems at the Perth Mint.  My readers told me stories of it taking 6 months or more to get about 10,000 ounces in silver from the mint.  This should not be.  Perth had $800 million in capital, from their silver and gold certificate program, which is to be used to facilitate such orders.  I began reporting the emails of these problems of my readers, to my readers, and the absurdity of them, given the size of Perth’s capital, and I was flooded with up to 60 similar complaints from customers of the Perth Mint.

The Perth Mint is no minor institution in the gold and silver world.  They have now issued up to $2 billion worth of silver and gold certificates through such dealers as Kitco, and Euro Pacific Capital.  Ostensibly, that capital is to be used to facilitate operations, and I believe it should be more than enough to fund the entire silver investment market, and thus, there should not be any delivery delays or failures from such a wealthy institution. In fact, since I’ve been in business, we have not had any delivery delays or failures at all, and we have 1/1000th of the capital as the Perth Mint.

So I urged Andrew Schiff to look into the matter.  I shared with him the facts of the situation, and I introduced to him other knowledgeable people who had similar concerns about the Perth Mint, and all other sorts of paper silver investment products. One of Andrew’s concerns is the problem of “churning”, or getting a client to sell something for something similar, as charging commissions on that seems unfair, and getting over 1000 client accounts to switch for free is no easy task.

Actually, I implored Andrew to make this a priority; saying that if he looks into it, and saves his clients, and helps to cause a run on silver, he’ll be a hero, and it can help all of his clients mining stocks to move up.  He exclaimed the danger of engaging in such “market manipulation”.  I retorted, “How can it be manipulation if your clients are merely standing up for their rights and asking for their own property?”  In fact, instigating this can cause other bigger firms to make similar recommendations, which can lead people to question other forms of paper silver investment products, and cause further increases in the silver price.

I warned him that Perth Mint is part of the government, and thus beyond the jurisdiction of any prosecuting authority, except invasion by other nations and thus, it’s the perfect entity to run a gold and silver scam.  On the other hand, investment advisors and investment firms are not immune from being sued when things run bad, and when scams are discovered. What’s ironic is that Peter Schiff appears to be on the side of the honest money movement.  Yet he facilitates and encourages people to hold their bullion with the Perth Mint, who, in my opinion is not honest and should not be trusted.

I was encouraged by Andrew’s overall attitude.  He gave me his ear; he really listened.  He was interested, and he had questions.  But he said that he may not have any influence on his brother, even though he will bring it up at the next board meeting. His firm is planning on rolling out coins produced by the Perth Mint, and the goal is to be able to deliver in about 2-3 days.  I hope his business succeeds.  Supplying real silver to buyers is a very good thing.  But I think there will be problems; because Perth does not have a good track record according to the reports of my readers.

If you have ever had problems obtaining silver from the Perth Mint, please email your concerns to Peter Schiff and Andrew Schiff at Euro Pacific Capital, and/or email them to me, by replying to this email, or sending them to j@silverstockreport.com.  I suspect that there have been much less problems over the last year, but I don’t know for sure. You can find Peter and Andrew’s emails at the contact page, under their ”management” section, here.

Chatting With a Friend

I chatted with a good friend of mine until the wee hours of the night, until 3am.  I shared with him information about angioprim, and isometric exercises for his health.  He soaked it in, and shared with me stories about his time in our business.  My friend purchased some gold from us at our booth for a friend of his, a kind of rare gold that we don’t have much demand for, which was nice for us.

We sold about $21 k worth of silver at the show.  That, plus the rare gold sold, was not quite enough to pay for the $5000 booth and the air fares (dealing is a very competitive business), but we think we made up the difference in phone referrals to the JH MINT’s “buy it now” phones.  Call to order:  JH MINT & Coin Shop, Grass Valley, CA (530) 273-8175.

Discussion with Adrian Douglas

I had an interesting discussion with Adrian Douglas about God.  Adrian is one of the smartest men in the business who writes commentary for lemetropolecafe that appears in the daily midas report.  Adrian says he read the whole bible when he was about 12, for school.  That kind of intellectual skills to require and allow that kind of reading demand is just not seen today, which is a pity.  Today, Adrian is 52. 40 years have passed.  I suggested that he just might get more out of reading the Bible a second time through, especially since it validates his current view of economics and warns of the dangers of usury, and both allows, and condemns the practice.

Bill Murphy Roast

We roasted Bill Murphy of GATA.org in an evening roast.  It was a bit difficult, as none of us are comedians, but we tried.  Unfortunately for me, my self-deprecating roast was a only little funny, but daring, and it was caught on tape. So several of us writers tried our best to pay an endearing tribute to a man who has done so much for the gold price, and so unappreciated or even unknown by the gold industry.  Bill remains one of the best kept secrets in the gold world; he just does not get enough respect, or press.  I read him daily at www.lemetropolecafe.com.

Republicans, Democrats, and the $14.5 trillion national debt

The Democrats are generally a bit more totalitarian than Republicans, but both are extremely bad and uninformed, except for the one Republican, Ron Paul, who wrote a great book called ”End The Fed”.

The good news is that the Dems lost a few seats due to them not listening to the growing outrage of most Americans who oppose socialist and dictatorial heath care.  Ironic that the Dems would support the “no choice” form of government medicine.  I thought Dems were “pro choice” such as on abortion and gay rights. The good news is that the growing Republican tea party movement may help put America back on track to regain lost freedoms.

The good news is that Obama is beginning to try to lay blame to the bankers, where it really belongs.  Unfortunately, it seems to be just another ruse or con game.  Obama has recently proposed limiting or preventing banks from trading for their own account.  This would destroy the derivatives trade.  I would actually support that! But maybe the banks are now asking for exactly that!  See, if there is a government edict, banning banks from offering those kinds of deals, it gives the banks a chance to “cash out” all such bets at current, manipulated, artificial values.

Many on my list know that precious metals markets are manipulated.  How much more are interest rates manipulated!  Most of the derivatives trade consists of interest rate derivatives.  Most of those bets are probably just as lopsided as the precious metals trade.  Most people in bonds, and most people are in bonds, would want insurance against interest rates rising, which would tank the values of bonds.  Most large banks would take the opposite side of that trade, while lowering interest rates, to help make a killing.

There would be no way to unwind such a lopsided trade that is in the hundreds of trillions, without getting let out of the trades by a new government edict saying that the banks must close out all such trades.  Oh, poor banks, they can’t trade.  It’s probably exactly what they need to avoid another few hundred trillion in bail out money. Perhaps Obama is shrewd.  Perhaps he is partly being led by God now.  In the State of the Union address, there were two very surprising things that I had to agree with.

Obama wants to limit student loans to a 10-20 year payback time frame!  How interesting.  God said in the Bible that all debts should be forgiven after the 6th year, on the 7th year, implying that no loan terms should extend beyond 7 years, (except for land leases, which can be up to 49 years).  I wonder where Obama got the idea?! Second, Obama appears to be angry at the banks!  Right on!  And Obama seems to sense that Republicans who support banks is their weakness.  Again, right on!

The problem with Republicans in general, is that they typically think that banking is a legitimate business.  It is not.  Usury, or charging any interest rate at all, is criminal, according to the Bible.  But it’s not just the Bible that says so, you can also understand this by studying the basic math alone.  Any reasonable mind who knows how to calculate compound interest on an Excel spreadsheet can figure this out.

The reason is that at an interest rate of 1/3 of 1% per year, you can compound 1 oz. of gold, over 6000 years, to become the 5 billion oz. of gold in the entire world!  And at 2.25%, you can compound that oz. of gold into all the atoms of the entire universe, it would all be gold, and all belong to one person, which is utterly impossible.

See you don’t need to charge interest on loans under a gold standard, when deflation is the natural birthright and common blessing of humans living in a state of freedom.  Deflation means that gold naturally should buy more things over time, so a “rate of return” is naturally built in to every loan, even if you don’t get back any more gold.

But Obama seems to fail to understand that the nature of the national debt is unpayable in anything real, and thus, the debt was fraudulent to begin with.  The national debt expanded beyond all reason by the end of WWII, when it soared past $250 billion.  Does not sound like much today, but that was when gold was pegged at $35/oz., which meant that the debt was equivalent to 7.14 billion ounces of gold. The clear problem is that even today, there is only about 5 billion oz. of gold estimated to have been mined in all of human history, making that debt unpayable, even as far back as 1945.

Today, with 5 billion oz. of gold in the world, at $1200/oz., worth about $6 trillion is not enough to cover the national debt which stands now at nearly $14.5 trillion. Again, the world’s gold cannot pay down US debt, which should never be higher than only a tiny fraction of the value of the world’s gold.

Tags: national debt

CFTC: the Common Fraud Training Committee

If you ever write to someone, like me, to say that you disagree with them, you should at least be able to say why. I do, and I will. Here’s an example: I think futures contracts are a form of fraud because there are more paper contracts than real silver, and I think “regulating” fraud is simply fraud on top of fraud.

So far, nobody has demonstrated any capacity to explain how new position limits on metals, even applied to short sellers, would end the endless short selling. Nobody has explained how the Commodity Futures Trading Commission (CFTC) would be able to detect, and/or catch, and/or prevent an entity like JP Morgan from setting up many dummy shell corporations to short all the silver contracts that they wanted to avoid and get around any new regulation.

Therefore, my view is that new position limits contemplated by the CFTC would be irrelevant. CFTC regulation of short positions is impossible and a waste of time. What the CFTC has been capable of doing so far is to criminalize and outlaw “excessive” long positions, as if it’s somehow criminal to spend your money on what you want. Furthermore, if I acted or believed as if I could help convince the CFTC to do a “better job” of regulating silver futures contracts, doing so would merely help the deception. Therefore, I have no interest in trying to “be nice” to the CFTC in the hopes that my tone would have a meaningful impact on the silver market.

What are the sayings that come to mind? You can put lipstick on a pig, but it’s still a pig.

“Regulating” futures contracts is a doubly fraudulent concept to begin with. The so-called regulation makes futures appear more honorable than they are, but it is all a deception. The CFTC is the lipstick on the pig of futures contracts. I have no interest in helping to apply the lipstick. My ministry is one of pointing out that the pig is still a pig, despite the appearances of lipstick!

The CFTC’s real job is to help make the prostitute look more tempting. People will falsely reason to themselves, “Futures contracts must be safe, after all, they are regulated by the CFTC who oversees the markets and prevents manipulation from taking place.” But it’s all just lies upon lies.

How can anyone deliver between 600 to 800 million ounces of silver in futures contracts, when there are only about 50 million ounces in the warehouses? Easy! Most futures contract holders, only putting down a small fraction of the value of the silver, never can afford, nor do they intend, to take delivery, so the scam of “endless” paper silver contracts continues.

What’s worse is that the BIS, the Bank of International Settlements, released a report showing that “over the counter”, “other precious metals” (mostly all silver) derivatives, (which are not futures contracts, which are IN ADDITION TO FUTURES CONTRACTS), could expand by a notional value of over $107 billion in a mere 6 months! The BIS report fails to mention that the total global annual production of silver, at 600 million ounces, is worth less than $11 billion!

The unregulated “over the counter” silver bullion market is ten times larger than the futures contracts the CFTC is authorized to regulate, further making the CFTC completely irrelevant, and in fact, impotent as far as regulation goes, even if they could regulate futures, which they can’t. They only help to prosecute the righteous, not the criminal. Some people say that our CFTC Appreciation Medallion is offensive. But the CFTC is part of the group that allows cheap silver to exist. We should thank them and bless them for creating this wonderful investment opportunity that exists only for the little guys, and is completely closed to all billionaires. Billionaires can’t buy silver because they will be prosecuted for having an “illegal” long position exceeding 1500 contracts!

For those who understand the nature and limits of the fraud, and why it can’t last forever, there is the realization of silver as the best investment opportunity in the history of humanity.

Adrian Douglas released a report explaining how and why banks hold more gold than exists for their customers who never take delivery in his latest article: Adrian Douglas: The ‘tiny’ gold market is actually the world’s biggest – By “biggest” he means that the daily volume turnover of “gold held on account” by bullion banks and brokers is about 3 times larger than oil. But the daily gold turnover is about as much as annual gold production, indicating that it’s mostly all fraud.

Here are two more examples of good men prosecuted to the fullest extent of creative law:

Walter Burien had his 5 year old son kidnapped by police in 2005, and to this day has not seen his son. He is asking, no, challenging, any righteous FBI agent or US Attorney to come to his aid in his case. Walter writes: I just launched my new video “The Only Game in Town – The Way Our Government Can Be” as a $3 click per view for a 24-hour pass. It hits the nail on the head and shows the comprehension on how all taxation can be phased out. Not reduced but eliminated and have a thriving economy to boot!

Martin Armstrong was put in prison and now writes one of the best financial newsletters exposing corruption in the business–still writing from prison. His latest letter, Behind the Curtain – The Full Monty starts off explaining the corruption of the CFTC.

It’s all so utterly typical.

The government always does the opposite of the intended, or proposed effect.

• Government healthcare will destroy healthcare.
• Government welfare creates generations of people addicted to welfare.
• Government bail outs for big banks encourages bankrupt behavior of leaders of big banks.
• Making war on people all over the world makes the US less safe as it increases retaliation called blowback.
• Someone should come up with a “strengthen the dollar” bill in congress that mandates the US government pay for everything only in silver or gold coin. Why? Obviously, it would reveal the fraud of the dollar, and destroy it!

So, the CFTC is supposed to regulate markets to make sure they are fair? No. The CFTC guarantees the markets remain unfair, that the government granted monopoly of printing paper money is protected.

Again, if you write to say you disagree with me, please have the courtesy to say WHY. And by WHY, I don’t mean to suggest that you simply state that you believe I’m a pompous fool. No, please suggest to me how the CFTC would actually be able to detect, catch, and prosecute dummy corporations set up by JP Morgan, in the event that position limits are ever applied to the short sellers. Simply saying that you think I’m a pompous fool, does not count as a reason why you disagree with me.