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.