SGS Notes: We're sending out our newsletter mid-week this issue because there is so much going on right now we want you to be aware of. The JP Morgan news is HUGE… so we are featuring various articles this week about that and the implications for all of us.

There are also things happening in the Eurozone and in Greece that will affect us all dramatically. Hold on to your seats, the ride is about to get bumpy. We're looking for the end of the metals manipulation when physical silver prices detach from the ETC prices… should be soon. We saw silver spot dip below $27 this week, and, looking at the Gold/Silver ratio… it's up quite high - again. Remember: that ratio SHOULD be in the 16/1 range. Still a long way to go.

Dismal Metals Sentiment - Just What Bernanke Ordered
Jeff Lewis

Since the dramatic drops the silver market saw in May and September of last year, prices in the precious metals market have been suffering from an excess of negative sentiment. This adverse perception is weighing on metal prices and keeping investor demand at bay.

Furthermore, although investors have continued to buy physical silver, the overall quantity being purchased has declined significantly, resulting in reduced support for the metal's price.
Nevertheless, the supply of silver is naturally limited by the quantity existing in the Earth's crust, despite ever growing industrial applications for the metal and rising price inflation. This key combination of factors still provides a strong fundamental basis for continuing to hold silver over the long term.

Could Weak Silver Sentiment be Conveniently Manufactured by Central Bankers?
Interestingly, this depressed silver market sentiment picture seems to be the perfect political tool needed during a U.S. election year to lend much needed psychological support to an ever weakening U.S. Dollar in terms of its ability to purchase goods and services.

Keeping silver and other precious metal prices low by depressing market sentiment, and perhaps even engaging in covert market intervention, seems suspiciously convenient after such an excessive amount of liquidity has already been pumped into the U.S. monetary system by the U.S. Federal Reserve Bank's highly controversial quantitative easing measures promoted by Fed Chairman Ben Bernanke.

In addition, given the high amount of liquidity the European Central Bank needed to inject to deal with the debt troubled Eurozone countries like Greece, Spain, Italy, Ireland and Portugal, the increasingly obvious end result will be higher consumer price inflation, despite ongoing denials by central bank and government officials.

More QE Measures Likely as U.S. Economy Languishes in Election Year
Bearish for the Dollar, but very bullish for hard precious metal currencies like silver, is the view among many market participants that further rounds of quantitative easing or QE measures by the Fed are still practically a given during this election year to help lend support to a stubbornly struggling U.S. economy.

Nevertheless, allowing metals to trade higher based on their strong fundamentals would severely dampen the U.S. central bankers' ability to overtly increase the money supply in a substantial way.
EU Moves Toward Ratifying ESM to Provide More Permanent Bailout Mechanism
Another related development is that the European Stability Mechanism or ESM is expected to be ratified by July of this year, provided that enough of the 17 Eurozone member states approve of the bailout system to represent ninety percent of its capital commitments.

This new EU rescue program is expected to permanently replace the existing temporary European Financial Stability Facility within the Eurozone, thereby making meta-government bailouts an ongoing feature of the Eurozone's economy.

As in the United States, a reasonable person can only expect more liquidity increasing measures will soon also follow in the EU, thereby making an even stronger case for continuing to hold and accumulate precious metals like silver.

Does Jamie Dimon's Problem Actually Reside in SILVER DERIVATIVES?

Facts are facts. Since May 7th the price of silver has been mercifully driven down below $30 and on May 10th Jamie Dimon announced a $2B derivative loss. The price of silver is continuing to be driven down which in my mind means only one thing...JPM is losing the physical silver game and having to drive the price lower to get their hands on physical at a price that would reduce their overall losses. Never mind that the paper silver short will increase...this is now a physical game.
A clue lies in the COMEX data that shows that silver is in backwardization!

Bix Weir,
www.RoadtoRoota.com

Other Articles      

Soros Quadruples Gold Holdings
Wealth Wire

Gold, Money, and the Parable of the Three Little Pigs
Lew Rockwell

The 2 Billion Dollar Loss By JP Morgan Is Just A Preview Of The Coming Collapse Of The Derivatives Market

Full Blown Bank Run In Greece

How The U.S. Dollar Will Be Replaced

This is Why World Markets are Incredibly Unstable
Stephen Leeb

Will See Three Digit Silver In The Next Couple of Years
Stephen Leeb

JP Morgan's Losses A Canary in A Coal Mine?
Bill Moyers

'Like' Us on Facebook
To Receive Updates
Throughout the Week
[Hint: This is where we post
articles that don't make it into the
weekly newsletter.

Bix Weir
JP Morgan Derivatives Book
Blowing Up

Lindsey Williams Part 1
Derivatives Market Collapsing & JP Morgan

Lindsey Williams Part 2
Derivatives Market Collapsing & JP Morgan

What Good is it if you Can't Spend It?
Jason Hommel

This article is more valuable than a Harvard Education!

Buying silver and gold today will likely be better than buying Microsoft or Apple stock way back when they first came out, and this article addresses the fundamental reasons why.

People often ask, "What good is silver or gold if I can't spend it?"

But that's exactly why we all should buy it! Low monetary demand means silver and gold are still cheap and undervalued liquid assets that investors should crave.

And crave it, they do. But 99% of silver investors are duped into buying the wrong kind of "silver", the kind that is not silver at all.

"Investors" have "bought" up to 200 billion "dollars" worth of "silver" in "accounts", which would be 15-20 years of annual mine supply. Clearly, that silver was never bought by the "brokers" who "sold" that much "silver" in "accounts" to "investors".

Source: http://silverstockreport.com/2012/morgan-silver-manipulation.html

Every word in quotes above needs clarification and/or translation. Each word is quoted to highlight the fact that while I'm trying to tell the story in the silver market, it's difficult to do, because there so much fraud all over the place that if I stopped to define each word as I went, it would be so distracting that I could hardly write a single sentence. Here's how those lines should read, if the discussion were a bit more truthful:

"Misinformed greedy gamblers" have "gambled on the paper currency value" of up to 200 billion "units of paper currency" worth of "paper promises of silver" in "computers", which if it were actually what it was supposed to be, would be 15-20 years of annual mine supply. Clearly, that silver was never bought by the "broker / casino operator / thieves" who "took money for" that much "paper promises of silver" in "computers" for "the gamblers".

Getting back to the point of why people should want real physical silver (outside of brokerage accounts) especially when you can't spend it.

The point is that without monetary demand, gold and silver are cheaper than they otherwise would be.

Also, as long as 15-20 years' worth of mine supply worth of investor demand is siphoned away from the real silver market into "computer" accounts, then silver prices will not go up as fast as they should.

Lower demand means a lower value. Investors know that they want to buy things that have a low value, knowing that the value will likely go up. But investors are still not understanding what silver is, since they continue to be satisfied with "paper silver", or perhaps "computer silver".

So, here's the fundamental reasons why gold and silver will continue to gain in value. Gold and silver are true money, even if they can't be used to buy groceries yet.

What makes gold and silver good at being money?

Many people are beginning to re-learn why gold and silver are the best money, and have been money for thousands of years. They seem to be able to recognize some of the self-evident and obvious truths that those metals have certain unique features making them essential and especially good at being money.

But these need to be listed, because sometimes people have funny ideas about money, because we live in a society that must convince us that paper is the best money.

There is a lot more here than I can remember all at once. I need a list I can refer back to and update, and you just can't find the truth about this stuff anywhere else. So you might want to keep this for future reference, too. None of this is "news", but it will be news to some, because they just don't teach this stuff anywhere.

I have a Harvard Textbook, "Principles of Economics", 4th ed., that defines the three functions of money, the medium of exchange, the unit of account, and the store of value.

http://www.amazon.com/Principles-Economics-Gregory-Mankiw/dp/8131503127/ref=sr_1_4?ie=UTF8&qid=1335397369&sr=8-4

It has a 5 star rating! So, it must be one of the best. But how can it be, when it is filled with so many lies?!

The book encourages the reader to "examine" the three functions of money on page 643, (and that's also the only page that mentions the gold standard!), but the book just defines the terms -- but they don't even explain what makes an item good at being one of the three functions of money; the medium of exchange, the unit of account, or the store of value. Furthermore, the textbook is full of lies, misinformation, and false innuendo about money.

It's propaganda of the State. Propaganda works best if you have to pay to learn it. Nobody would believe it if they strapped you to a chair, tied you down, and shouted at you, "believe our lies about the usefulness of paper money and the stupidity of gold, or else!" No, it only works when they make the kids have to pay to learn their propaganda, and then reward those who have the best memories for the lies, with high paying wall street jobs whereby they fleece the rest of the public.

The "Harvard" textbook actually suggests in two ways that only criminals have a large need for cash, because bank deposits leave a "paper trail", and because cash does not earn interest.

But paper is not the only form of "cash". There is also gold. Is all the gold owned by criminals, too? Nonsense. And why does gold have to earn 1% interest, when gold and silver have been going up in value by 15-30% per year for the last ten years? Interest on gold is nonsense.

Precious metals are a great store of value:

To be a store of value:

• It should be long lasting, durable, it must not be perishable or subject to decay. Gold does not decay, not even in seawater. Silver may tarnish and react with sulfur, but the tarnish is very thin and acts as a protective patina that prevents further decay. This is why food items, expensive spices, or even fine silks or oriental rugs, are not generally suitable as money.
• It should have a stable value. Gold and silver values do fluctuate, but their value has never gone to zero value, like paper money often does.
• It should be difficult to counterfeit, and the genuine must be easily recognizable. Paper money is rather easily counterfeited, and good counterfeits are very hard to detect.

Precious metals are a great unit of account:

To be a unit of account:

• It should be divisible into small units without destroying its value; precious metals can be coined from bars, or melted down into bars again, with a low percentage cost. Actually, gold gets more valuable when made into smaller tenth ounce coins, which carry a higher premium, or price percentage over spot. Furthermore, gold, when distributed to the people, creates monetary demand, and a higher value for the remaining gold in the world. Animal skins, or live animals, are not suitable as money, because they are not easily divisible, nor can they be put back together when taken apart. If an item can be divisible, it can be fungible, which is the next point.
• It should be fungible: that is, one unit or piece must be equivalent to another, which is why diamonds, works of art, or real estate are not suitable as money. If an item is fungible, then it can be countable, which is the next point.
• It must be a specific weight, or measure, or size to be verifiably countable. You must be able to weigh, measure, and count, your unit of account! And this is why paper dollars are not suitable as money any longer. What are you counting? What are you measuring? Dollars are nothing but promises to pay in more dollars.

Precious metals are a great medium of exchange:

To be a medium of exchange:

• It should be cheaply and easily tradeable, with a low spread between the prices to buy and sell, in other words, a low transaction cost, and be able to be quickly and easily bought and sold anywhere in the world. Land is not transportable. Even US cash is not accepted everywhere in the world anymore.
• It should have a high value to weight ratio, and thus be easily transportable, and cheap to store away. Precious metals have a high value to weight and size ratio. This is why oil, coal, or water are not suitable as money even though they are valuable. It's why real estate is not money, it's not portable at all. It's why copper is not money, nor is wheat, nor balloons. While even air is valuable and necessary to live more than 5 minutes, and while air can also fungible, air is neither rare nor valuable enough by any significantly measurable units to be useful -- unless perhaps you are a scuba diver under water.

  $300 of gold is .15 of an oz., and can be easily hiding in any wallet.
  $300 of silver is just under 10 oz., and such a bar easily fits into your back pocket.
  $300 of copper is 33 pounds, which is a major strain to lift.
  $300 of oil is 3 large barrels, and is too heavy to be lifted by a person's own strength.
  

• It should be durable. Gold does not decay. Silver tarnishes a bit, but it's negligible. Coins are often mixed with 10% copper to improve hardness and durability, and coins are made with ridges around the rim to prevent coin shaving or debasement. Paper money, surprisingly, is actually expensive as money, because paper wears out quickly, and it costs money to have to re-print the paper.

These fundamental reasons why silver and gold are true money, help to answer the top ten excuses why our friends have not bought silver and gold, which are listed here:

http://silverstockreport.com/2009/bashers-say.html

EXCUSE IN CAPS, followed by my answer/rebuttal.

TOO HIGH NOW. No, Gold and silver can never be valued "too high" against paper money. Paper money is by nature fraud, and always will be. It's interesting that people thought gold was "too high" at $1000/oz. back in Dec. 2009. Clearly, with gold at a stable $1600 just over two years later, we can see more clearly
that they were all wrong who called gold "too high" a few years ago.

HOW TO SELL? Gold and silver are easier to sell than US "dollars", which are not accepted in many nations these days.

CRAZY GOLD BUGS: No, we who understand gold are not crazy. People who pay hundreds of thousands of dollars to go to Harvard to be taught lies might be crazy.

I'M CLUELESS ABOUT GOLD: Well, if you went to Harvard, I can see why. And I hope this article helped to change that for you and your friends.

SHUT UP: Well, this is written, not oral.

PRICE CHANGES: As you can see, it's paper money that is changing in value, far more than gold and silver, but silver and gold will continue to gain value during this time.

GOVERNMENT WILL FIX: As you can see, government cannot change a single fundamental nature or property or feature of silver and gold. Gold and silver expose the lies of excess paper money printing by governments.

SILENCE: Yes, I know, the nay sayers are once again speechless. Hey, gold also doesn't talk, but that does not mean gold and the nay sayers are useless. Gold, if you examine it, reveals its properties to you. Similarly, by examining the arguments, or silence, of the nay sayers, we can see we are on the right track.

I'M BROKE: Hey, gold is not for every man. It's really just for those who would be kings.

BAD BROKERS: Now you can see why the brokers, and their lackeys, the "financial advisors", talk people out of gold and silver. They would go bankrupt if people bought the real things, because their short positions are 15-20 years of mine supply. Furthermore, brokers don't earn commissions on gold that you hold in your own possession and keep in your own vault, and neither do we. We only earn our commission one time, when you buy it from us.

Getting back to the fundamentals.

Gold is easily transportable. This means that the brokers really have no excuse to not send it to you when you buy it. Assays are free. Shipping and insurance for the shipping costs are less than 1% of the value. Thus, the only reason to not send you your gold or silver when you buy it, is because the sellers are running a scam, or are bankrupt.

And there you have it. You now know more about the essential nature of gold than 99.9% of people in the world.

http://www.silverbearcafe.com/private/04.12/whatgood.html

Other Articles              

Silver: The harsh realities behind diminshing supplies
Gaia Vince

Currency Debasement and Social Collapse
Ludwig von Mises

Why Did Gold Become Money?
Tyler Durden

JP Morgan Silver Manipulation
Jason Hommel

Why Silver Is Money
Jason Hommel

This is What I'm Doing with My Own Money Right Now
John Embry

A Return to the Gold Standard, or Gold Behind Currencies

Part 1
Part 2
Part 3
Part 4
Part 5

'Like' Us on Facebook
To Receive Updates
Throughout the Week
[Hint: This is where we post
articles that don't make it into the
weekly newsletter.

Silver is Money

This is fascinating… how silver is mined… and why it SHOULD be much more valuable! After you watch this, you will understand why everyone has been saying that silver is grossly UNDER priced… and… Why this price manipulation is causing a depletion /extinction of this metal in the marketplace.

Why Silver & Not Gold

The Silver Suppression Scheme
Is Ending
David Morgan

SGS Notes: Our key article this week is quite lengthy but very informative … I hope you will take the time to click the 'Read More' to see the full article… we are only able to publish the initial portion of it below:

The Coming Paradigm Shift in Silver

Steve St. Angelo

The biggest problem for investors today in trying to forecast the future price of silver is the enormous amount of contradictory analysis on the Internet. There are bulls, bears, paper traders, physical buyers, technical analysts, hedge funds, commercial banks and silver manufacturers all trying to play a part in this highly volatile silver market. Trying to sift through the huge volumes of silver analysis on the internet can be extremely frustrating. In addition, some of this information is not meant to inform, but rather to confuse or mislead the investor.

There is a great deal of misinformation on the internet when it comes to silver. I find it ironic that one of the so-called "bullion specialists" seems to give bearish commentary whenever the price of gold or silver rises to new highs. This is akin to a CEO of a corporation telling the media and shareholders that the company's stock price is too high and needs to drop down to more sustainable levels. What CEO on Earth would say something as stupid as this with the best interest of the company and shareholders in mind? Furthermore, how many CEOs would keep their job if they repeated this over and over for the past several years, and got it wrong time and time again?

Unless you have been in the precious metals markets for quite some time, it is easy to be misled by this type of information. This is the very reason behind the motivation that I had to write this article. In it, I will attempt to give the reader-investor a more detailed and fundamental comparative analysis of the future price of silver, rather than the typical fly-by-night technical charting or bull-bear rant. This should give a more commonsense methodology in forecasting the future path of silver and its eventual paradigm shift.

Paradigm Shift: -n, a radical change in underlying beliefs or theory

The coming paradigm shift in silver will not happen due to technical analysis, fundamentals, or supply & demand forces, but rather due to a change in mass psychology of investors. Even though fundamentals and supply-demand forces will play a part in this shift, they will not be the ultimate cause. I believe technical analysis as it is used today, only charts the amount of manipulation and mass psychology in the silver market.

Throughout history, a paradigm shift occurs in rigged markets when the manipulation of the financial system and economy is no longer sustainable. This occurred in the banking and housing markets in 2007-2008 when we had what I call a "Negative Paradigm Price Shift"- a trend where prices or values are declining.

Negative Paradigm Price Shift in Housing and Banking
Prior to 2007, the real estate market was kept alive by the work of clowns and magicians in the mortgage industry and banking system. For several years everyone was having a great time. As housing prices and sales continued towards the heavens, bank profits hit all-time records. Everything was going along just fine until the market realized one day that there was nothing left after "Liars Loans" were levied to keep the Ponzi going. Once the housing market collapsed, so too did the banking system. Like two twins attached at birth, one could not live without the other.

In true waterfall fashion, investment banks, commercial banks, government-sponsored entities and insurance companies went bankrupt, were either taken over or became a mere shadow of their former selves.

Read Full Article Here

Quote of the Week

Thus, the fight over gold and silver as media of exchange is about more than mere money, let alone making money. For it is a fight with only two possible outcomes: either control of their own lives by the people themselves, or control of the people and their lives by political and economic elitists.

- Dr. Edwin Vieira

Other Articles      

Blythe Masters Speaks Out On JPM and Market Manipulation: Take Our Word For It
Jesse's Café American

Why Blythe Masters Is Telling The Truth
SilverDoctors

The [Recovery] Has No Clothes
Sprott Asset Management

You Can't Beat Silver as an Investment
FutureMoneyTrends

A Massive Spike In The Price of Silver Is Imminent
SilverSeek

'Like' Us on Facebook
To Receive Updates
Throughout the Week
[Hint: This is where we post
articles that don't make it into the
weekly newsletter.

If Silver Goes Down All He** Will Break Loose
In The Physical Market

Silver is The Achilles' Heel to the Entire Economic System
David Morgan

The Banker's New Gold

Jeff Nielson
BullionBulls, Canada

In a fresh sign of bankster desperation, we recently learned that they have pushed lease rates for gold to the lowest, negative level in history - i.e. they are paying people more money to "borrow" their gold than at any other time. We know this is a sign of desperation, because back in the real world, buyers are paying premiums near record-highs to buy their (real) gold.
There are numerous implications regarding this latest bankster tactic to suppress the gold market, but before getting into those let's explore all of the reasons why bankers like "leasing gold" in the first place. The starting point is to note that it is with gold-leasing that we see the beginnings of the banksters' 100:1 leverage in the gold market.

A banker is holding a quantity of gold in his vault. He "lends" the gold to a trader, and suddenly you havetwo parties both pretending to be the "owners" of that gold. Naturally, the banksters also like the fact that this is a totally opaque, unregulated/unreported transaction. The banksters can secretly lend out their gold, and since the transactions are never reported, we lack the absolute proof that none of this "loaned gold" is ever repaid.

There is certainly plenty of circumstantial evidence on which to base such a conclusion, however. In order to review this evidence, we first need to know what is being done with the bankers' leased gold. A detailed analysis by veteran precious metals commentator Frank Veneroso explains how and why "The ultimate borrowers in the gold lending operation are these shorts in the gold futures and forward market."

We immediately see a second reason the bankers love gold-leasing: all of the "leased" gold ends up being shorted onto the market. What this directly implies then is that in order for these gold leases to ever be repaid the short positions must be closed out so that the gold (supposedly) backing the trade can be repatriated to the bank. However, what we see in the gold market is a huge, permanent short position in the gold market - which has swelled enormously since Veneroso wrote the article above nearly a decade ago.
We now know that at least some of these gold leases have never been repaid, since the gold that was loaned out remains on the market. However, as a matter of simple arithmetic we can deduce that few if any of these leases are ever repaid. As I noted above, each gold lease creates "paper gold" (i.e. a "fractional reserve" gold market) and increases the bankers' leverage in the gold market.

READ THE REST OF THE ARTICLE

DIVISIBLE TEA PARTY ROUNDS

The Divisible Tea Party Rounds will be available for purchase until Monday.
We will be minting a limited number of them next week.

If you would like to place your order, please go online to order before Monday.

Survival Podcast MSB Members Discount will apply. Find code after MSB Login on the Members Benefits page.

Take advantage of this offer while silver spot prices are low!

New Product: CIVIL WAR EAGLES

150 years ago, 11 US southern states declared succession from the Union to form the Confederate States of America. We refer to this as the American Civil War. This .999 fine silver medallion has been specifically designed to commemorate that event and those soldiers who died fighting for what they believed in.

Other Articles      

Gold, Silver, Currency Swaps and QE3
Matt Welke

Sprott Calls On Silver Producers To Hold Back Inventory

JP Morgan Crashed MF Global to Avert COMEX Failure, European Derivatives Implosion
Jim Willie

China Quietly Introduces New Currency System
Benjamin Fulford

'Like' Us on Facebook
To Receive Updates
Throughout the Week
[Hint: This is where we post
articles that don't make it into the
weekly newsletter.

David Morgan

SGS Notes: We're featuring a lot of material this week from Jeff Nielson, from BullionBulls, Canada... be sure to listen to the 3 Videos (which are really audio interviews)... We've had a lot of his articles in our Newsletter in the past... you can find them by searching his name on our Newsletter page on the SGS site.

In the past couple of weeks we have seen yet another bankster takedown of the precious metals prices... it is clear they are covering their short positions... see the link to the COT reports... and being allowed to do so by the very institutions that are to set position limits so that they cannot do this to the market. Wise investors should understand that this is an opportunity to BUY, because this activity will only create shortages in the marketplace which will drive prices to the moon...

Gold, Silver vs. 'Worthless' U.S. Treasuries

Jeff Nielson, BullionBulls, Canada

Two weeks ago, I wrote that volatility was "the new bankster weapon" in the gold and silver markets. In writing that this marked a "new phase" for these markets, I admit to never imagining that we would immediately see the bankers display this new phase with such a vivid "exclamation mark."

That said, it is now equally important to emphasize to investors that nothing at all has changed for gold and silver from a long-term perspective. What makes this current episode of market manipulation all the more surprising is that there wasn't even any serious attempt by the mainstream media to manufacture a "reason" for the plunge in gold and silver -- as "cover" for the banksters' actions.

With "competitive devaluation" still the mantra for the economically/intellectually bankrupt governments of the West, and with most of the rest of the world also being forced to play this game, we know that the banksters' fiat currencies will continue losing value at an increasing rate. Note the use of the word "competitive." It directly implies that these governments are driving down the value of their currencies as fast as they can.

Obviously, saying a currency is losing its value is exactly the same thing as saying that prices are going higher. As a matter of the simplest arithmetic, and the simplest logic, if most of the governments of the world are trying to push up prices (as fast as they can) then the prices for gold and silver can also only go higher over time.

Of course, some things are "different" in the gold and silver markets -- in comparison to where we were when this bull market started over 10 years ago.

Back then, the banksters had lots and lots of bullion to dump onto the market to depress prices. Now they don't. Back then, the governments of the world were not deliberately trying to drive up prices. Now they are. Back then, our governments were not obviously insolvent, and gold and silver were not viewed as "safe havens." Now they are.

In short, 10 years ago there were lots of reasons to worry about the "strength" and "stamina" of the gold and silver markets (as "long" investments). What happened at that time? The price of gold nearly quadrupled from under $300/oz to over $1000/oz. The price of silver more than quintupled, from under $4/oz to nearly $20/oz.

Another 'Must See' Video:

Other Articles      

Return to Good Money
Jeff Neilson

Extreme Times For Central Bankers - A Time For Gold
MineWeb

Big Hitters Very Sharply Reduce COMEX Silver Shorts
MineWeb

Currency Wars: Restricting Gold and Silver Sales In France
Jesse's Cafe American

Plan To Return America To the Gold Standard Set To Be Offered at Washington
NY Sun

It's Official: HFT Breaks Speed-of-Light Barrier, Sets Trading Speed World Record

This is the key to taking back our FREE MARKETS and until it is banned "they" will be behind the curtain pulling the strings of the market manipulation.This is the key to taking back our FREE MARKETS and until it is banned "they" will be behind the curtain pulling the strings of the market manipulation.

CFTC Facilitates Cartel Silver Raid
See also CFTC

'Like' Us on Facebook
To Receive Updates
Throughout the Week
[Hint: This is where we post
articles that don't make it into the
weekly newsletter.

Bankers Have Lost The War
Part 1 Interview with Jeff Nielson

Bond Fraud & Brainwashing
Part 2 Interview with Jeff Nielson

Bullion, Mining Stocks & Hyperinflation
Part 3 Interview with Jeff Nielson

SGS Notes: Our main article this week is one of several from the Cheviot Sound Money Conference that was held in the January. Clicking on the photo link will allow you to listen to one of the key speakers of the conference who gave this speech below. Don't miss the links in the right column of that page to other very informative other speeches...

Gold & Silver Are The Currencies of the Free

Dominic Frisby
Goldcore 

The President of the World Bank, Robert Zoellick, called for a new post Bretton-Woods currency system involving gold, in November 2010. Zoellick said that gold was worthy of consideration as a reference point for modern currencies and as an indicator to help set foreign exchange rates.

At the end of January, the Cheviot Sound Money Conference held an excellent conference in London which examined the practical application of gold and silver as money within a modern context.

The context to these proposals is crucial as without an understanding of the modern financial and monetary system one cannot possibly comprehend the continuing importance of gold and silver.

We live in an era of surging trillion dollar deficits and surging national debts in the US and internationally.

The US recorded its biggest monthly deficit in history two days ago with a $223 billion deficit for February alone, the 29th straight month of deficits – a modern record. The US budget deficit in 2010 was over $1.45 trillion and is forecast to be of a similar magnitude in 2011. At the close of business on Feb. 28, the total federal debt stood at $14.195 trillion ($14,194,764,339,462.64).

We live in an era of massive creation of government bonds.

Foreign central banks hold $5 trillion in US Treasury bonds and agency debt alone. Chinese foreign exchange reserves alone are soon to reach the $3 trillion level.

We live in an era of of thousands of trillions of dollars, euros, pounds etc. of derivatives.

The enormous OTC sector of derivatives alone is worth nearly $600 trillion on paper, roughly 10 times world economic output.

We live in an era seeing the creation of and speculation with trillions of dollars (euro, pound etc.) of electronic currency.

According to the Bank for International Settlements, as of April 2010, average daily turnover in global foreign exchange markets was estimated at $3.98 trillion, a growth of approximately 20% over the $3.21 trillion daily volume as of April 2007 - soon after the financial crisis began. Some firms specialising in foreign exchange have put the average daily turnover in excess of US$4 trillion.

We are experiencing a scale of global currency debasement, the likes of which the world has never seen before.

We live in an era where thousands of millions of people live on less than a dollar or two a day in the "developing world". While millions of people in the "developed world" are now debt slaves - both individually and as citizens of increasingly bankrupt nation states.

Reformation or replacement of our debt-based fiat paper and electronic financial and monetary system is one of the most important debates of our times.

The modern monetary system of paper and electronic money is inherently unstable and unsustainable and there is a strong case for considering using gold and silver as money once again.

At the Cheviot conference, Money Week's Dominic Frisby gave an excellent talk in which he outlined why gold is the currency of the free.

Frisby eloquently outlined how the modern system of finance, banking and credit (or debt) impoverishes and enslaves. It has "made wars that should never have happened possible; its brought about a relentless needless commercial expansion and malinvestment that has raped the earth."

He points out how the world is cursed by monetary illiteracy and it is amazing how few people understand the modern monetary system, and how it is to blame for the huge inequalities in wealth we see in the world today.

"Money must be sound and true, at the moment it is neither and society is corrupted as a consequence."

Dominic Frisby's lecture can be watched here:
http://www.cheviot.co.uk/sound-money-conference/presentations/why-gold-is-the-currency-of-the-free

There were a number of other excellent talks all of which are worth viewing. The highlights include Chris Powell, the Secretary/Treasurer of GATA (Gold Anti-Trust Action Committee), lecture 'Gold price suppression purposes and proofs':
http://www.cheviot.co.uk/sound-money-conference/presentations/gold-price-suppression-purposes-and-proofs

There is then an excellent panel discussion and question and answer session on gold at the end which involved Max Keiser, James Turk, David Morgan, Ben Davies, Richard Cragg, Sandeep Jaitly. It is surprisingly entertaining and very informative:

http://www.cheviot.co.uk/sound-money-conference/presentations/panel-discussion-with-audience-q-and-a

GoldNomics - Cash or Gold Bullion?

Our educational video, 'Goldnomics - Cash or Gold Bullion?' complements the excellent interviews from the conference. It clearly shows how gold has retained value throughout history.

'GoldNomics' can be viewed by clicking on the image above or on our YouTube channel: www.youtube.com/goldcorelimited

The US dollar has been the strongest fiat currency in the world in the last 100 years and indeed it became the reserve currency of the world during the period (due to victories in the two World Wars and the accumulation of the largest gold reserves in the world).

Despite that the dollar has lost 97% of its value in 97 years. The massive loss of purchasing power of the preeminent currency of our age, the US dollar, clearly shows gold's importance as a currency, as money and as a store of value.

Individuals, families and societies can never be free as long as money is based on debt and compounded interest and as long as the money we use day to day is constantly depreciating and being debased.

Other Articles      

Once Upon A Time

The story of two different monetary conferences, two "committees of experts" that both met in Genoa, and changed the course of monetary history.

Advanced Q & A on the Silver Manipulation
Bix Weir


Donald Trump Confirms His Confidence in Gold
NY Magazine

Identities of JP Morgan Silver Manipulators Exposed
King World News
 

The New Bankster 'Weapon' Against Gold/Silver
Jeff Nielson

The Precious Metals Tsunami
Goldrunner

Run To Safety
Mary Anne & Pamela Aden
 

Central Banks Waging War on Gold At This Hour
Trader Dan

Gold-Backed Dollar Puts ‘Fair Value’ at $10,000 an Ounce
Bloomberg
 

The Case for Gold and Silver Investment Gets Stronger and Stronger
MineWeb

'Like' Us on Facebook
To Receive Updates
Throughout the Week
[Hint: This is where we post
articles that don't make it into the
weekly newsletter.

Silver Shortage This Decade, Silver
Will Be Worth More Than Gold
Future Money Trends

SGS Notes: These days, events are happening almost daily in the precious metals market. The latest big news this week is the move by Hugo Chavez, dictator of Venezuela, to Nationalize the Venezuela gold industry, and to repatriate the country's gold holdings around the world. See links in 'Other Articles' about this.

Gold, Silver And 'Leaky Buckets
Jeff Nielson, BullionBulls, Canada

To those of us who have "found" precious metals, their (financially) life-saving properties are blatantly apparent. Indeed, apart from explaining the 5,000 year heritage of gold and silver as premier financial assets in our civilization, most of the arguments in favor of gold and silver are straightforward, simple arithmetic.

Because of this reality, one of the great frustrations for all precious metals bulls are the thankless (and generally fruitless) efforts we make to try to enlighten friends/relatives/associates. The pattern of such attempts is maddeningly similar.

Some friend or loved one mentions how "inflation" is hurting them financially. So the gold/silver bull begins to explain what inflation really is, who is causing it, and how it is done. So far, so good. However, as soon as we move on to explain how we protect ourselves from this "inflation" (i.e. through accumulating gold and/or silver), a subtle metamorphosis inevitably takes place with our subject.

A bland/placid expression creeps over their face, and is frozen into their features. Through years of experience with this phenomenon, I know exactly what that expression translates to in terms of the person's thoughts: "I'm trapped with this dangerous lunatic. How can I escape?" At that point, any attempt at "conversion" becomes purely an exercise in futility.

After each such failure, I inevitably review the process which has taken place, and ask myself where I could have gone wrong. The reality, of course, is that the fault does not lie with ourselves, nor with the individual whom we have failed to convince. Rather, the "blame" belongs to the propaganda machine of the bankers, which for the past century has blared out one message above all others: paper currency = money = wealth.

It is the fact that this simple, but totally erroneous equation is embedded in the "programming" of most of us which prevents the precious metals message of financial salvation from penetrating the psyche of those so afflicted. Thus, the initial step in being able to re-program the minds of these propaganda victims is to de-program them first. It starts with repudiating the bankers' odious "equation" (above).

First of all, paper currency does not equal "money". This is actually an entire discussion in itself. I could abbreviate it by listing the four qualities which all "good money" must possess. However, without expanding on the reasoning behind those traits, such mere assertions will not sway the brainwashed mind. Readers can review my own previous discussion on this, or the many similar efforts of other commentators, however the conclusion is unequivocal: paper currency is not money.

Now let's examine the third element in this propaganda-chain: wealth. The more cumbersome way to refute this equality/equivalence would be to explain why paper currency does not equal wealth. However, the better way to do this would be to simply point out the basic difference in the properties of these three elements. Paper currency is tangible. Money is tangible. Wealth is intangible.

This can be easily demonstrated anecdotally. Many people (including myself) often go days at a time carrying out all of our commercial transactions without ever once using "money". Thanks to the credit card (which is simply an electronic cheque-book), we no longer need money to convey our wealth to a vendor to make a purchase. It can all be done electronically because of the intangible nature of our wealth.

In similar terms, if we get up in the morning to discover that interest rates have been raised or lowered, this immediately affects property values - and the wealth of each/every property owner. Our properties have not changed in any way. We have not done anything ourselves. However, our level of wealth has gone up (or down). In fact, countless exogenous events affect our precise level of wealth at any given moment. Clearly, if wealth was not intangible than its exact level at any moment in time would not be so fluid.

Our equity markets leap higher or plunge lower (affecting the wealth of any/every equities-holder) often based only on "sentiment" or "expectations" - purely intangible drivers themselves. Obviously anything which can be altered by mere attitudes is intangible. As with any "intangible" (in our material world), we often find it helpful to adopt a (tangible) metaphor to allow us to have a better conceptual grasp. In the case of wealth, the obvious metaphor is a liquid. Indeed, the very frequent use of the term "liquidity" as a synonym for wealth is proof of such suitability.

Once we have conceptualized wealth as a "liquid", then it becomes equally simple to conceptualize "money" and "paper currency" within the same metaphor. They are containers for this liquid. Now let us make our metaphor even more tangible and precise.

Instead of "money", let us divide this into two "containers": gold and silver - the best/most-preferred forms of money in the history of our species. And instead of "paper currency", let's call that container "U.S. dollar". Finally, let's simply refer to these containers as "buckets".

We now have a very specific metaphor, and a very clear choice for each of us. We each have our own quantity of liquid (wealth), and we can store/hold that liquid in the "gold" bucket, the "silver" bucket, or the "U.S. dollar" bucket. Now let's examine the quality of each bucket.

Why have gold and silver been the preferred forms of money for our species for 5,000 years? Because they perfectly preserve (i.e. contain) the wealth of the holder. Look back 2,000 years to ancient Rome, and a stylish Roman could adorn himself in the finest toga, sandals and accessories for the cost of 1 oz of gold. Flash ahead to today, and any gentleman could obtain a top-quality suit, shoes and accessories for the cost of 1 oz of gold. Clearly, the gold bucket does not leak.

Now let's look at the U.S. dollar bucket. In the less than 100 years since the creation of the odious Federal Reserve, the U.S. dollar has lost approximately 98% of its value. Obviously the U.S. dollar bucket does leak. Hold your liquid in the U.S. dollar bucket long enough and you will lose all of it.

A (literal) "Devil's Advocate" would argue that a bucket which takes nearly 100 years to lose all of its liquid is "good enough". The rebuttal to this is as frightening as it is simple.

In the 40 years since Nixon severed the last connection between the U.S. dollar and gold, the dollar has lost more than 75% of its value. In other words, the hole in the bucket has gotten much larger. Today, as the price of food soars, and the price of gas soars, and the price of gold soars, and the price of silver soars none of these items have changed in any way, rather it is the value of the U.S. dollar which is plummeting. The hole in the bucket is rapidly getting larger.

Throughout history, all paper currencies which have not been backed by gold or silver (i.e. "fiat currencies") have failed. The most common means of failure is through the destruction of these paper currencies via hyperinflation: the value of the currency plummeting to zero. We can describe "hyperinflation" in our metaphor very easily: it's when the entire bottom of the U.S. dollar bucket has disappeared. Liquid (i.e. wealth) pours out the bottom as fast as we can funnel it in.

Looking at the first two buckets provides us with a crystal-clear picture. We have the gold bucket which never leaks. Not in 100 years, not in thousands of years. We have the U.S. dollar bucket. Not only does this bucket "leak", guaranteeing the loss of all liquid/wealth over time, but the hole in the bottom is getting larger every day - and soon it won't be capable of holding any liquid at all.

Given this stark illustration with just two buckets, some might presume that my inclusion of a silver bucket in this metaphor is redundant. However (as we shall see), the silver bucket is actually quite distinct from the gold bucket.

Obviously the silver bucket is just as leak-proof as the gold bucket, but silver buckets cost much less. After decades of being impoverished by our own, elitist governments (primarily through storing our wealth in 'leaky buckets'), many people can no longer afford gold buckets - however virtually everyone can still afford silver buckets.

This makes silver the "People's Bucket", a leak-proof container to store our "liquid" (wealth) which everyone can afford. However it gets even better. In continuing with our metaphor, we must all understand that the bankers have their own "Magic Bucket". How magical? Every drop of liquid which leaks out of the U.S. dollar bucket ends up in the bankers' Magic Bucket. That's pretty "magical"!

It is because the bankers have their own Magic Bucket that they hate silver buckets with every fiber of their evil beings. For the last century, and especially the last 50 years the bankers have made a concerted effort to destroy all of the world's silver buckets. How? Through manipulating the price of silver to a ridiculous low (in real dollars, the price of silver hit a 600-year low in the 1990's), they simultaneously destroyed "supply" (by bankrupting more than 90% of the world's silver miners), while causing demand to explode. Global inventories and stockpiles have been obliterated.

The result of this is that in relative terms there has not been this little silver in the world (above ground) in thousands of years. This is true both in relation to the quantity of gold and on a per capita basis. This means that in relation to gold buckets, silver buckets are now very rare - some might even call them "magical" too.

Not only is silver a leak-proof bucket to carry our liquid (wealth) which is still affordable for the average person, but it has become extremely useful in countless industrial applications - meaning that "everyone" wants silver buckets. Because of this high scarcity and soaring demand, it is a matter of elementary supply/demand analysis that the price of silver must rise to many multiples of its current price.

To translate this back to our metaphor, when we put liquid in our silver bucket, not only does the silver bucket prevent any leaks, but it actually increases the amount of liquid in our bucket. The silver bucket is also a Magic Bucket - but not an "evil" Magic Bucket like the one owned by the bankers. The bankers' liquid increases through leeching all of the liquid out of the U.S. dollar buckets, while the silver Magic Bucket increases the liquid of the holder without stealing any liquid from anyone else.

Let us review (one last time) the three "buckets" we can choose from to store our liquid/wealth. We can choose the gold bucket, a leak-proof bucket guaranteed to hold every drop of our liquid over the long term. We can choose the U.S. dollar bucket: a leaky bucket, with a hole in the bottom that gets larger every day - and which is guaranteed to lose all the liquid contained over time.

Lastly there are the silver "Magic Buckets". These marvelous devices not only ensure against leaks, but actually cause the liquid contained to increase in volume. The only down-side to these Magic Buckets? There is a very limited supply.

It can be virtually impossible to explain to a brainwashed mind how/why U.S. dollars are just scraps of worthless paper - just as it was impossible to convince the Dutch 400 years ago that tulips were mere flowers. It can be equally difficult to explain the concept of "saving our money" (i.e. wealth) in the form of gold and/or silver - despite the fact that 100's of millions of Indian peasants understand it and have been doing it all their lives.

Conversely, even the most brainwashed mind should still be capable of understanding the difference in "utility" between a 'leaky bucket' guaranteed to fail in its sole purpose, and buckets which have demonstrated themselves to be leak-proof over thousands of years.

Other Articles      

Eric Sprott Sells Gold Holdings to Buy Silver
The Globe Investor

As Chavez Pulls Venezuela's Gold From JP Morgan, Is The Great Scramble For Physical Starting?

Zerohedge

Chavez to nationalize Venezuelan Gold Industry

Reuters

Chavez Launches War Against US Dollar

The Daily Bell

What's Pushing Gold to New Highs
Jason Hommel

Honest Work For Honest Silver Pay

Silver Shield

'Like' Us on Facebook
To Receive Updates
Throughout the Week
[Hint: This is where we post
articles that don't make it into the
weekly newsletter. ]

Bill Murphy : The Gold cartels have lost control over the market

King World News:

John Embry - Silver About to Roar Through $50 All-Time High

Ben Davies - Expect $2,100 Gold by the End of December

Richard Russell - Expect Mass Entry Into Gold By Retail Public

Eric Sprott - The Price of Silver Should be $110 to $120 Today

SGS Notes: This week the GATA Gold Rush 2011 Conference was held in London. GATA is the Gold Anti-Trust Action Committe (http://www.gatagoldrush.com/ ) ... and we've seen material in the past from Andrew Maguire, Bill Murphy, and Ted Butler and others who have been actively involved in fighting the precious metals' manipulation over the years. Speakers this week at the conference include such big names as James Turk, Eric Sprott, Hugo Salinas Price, John Embry, Jim Sinclair... you've read articles by these folks and others in the SGS Newsletter since we began it.

The issue of the possible re-monetization of gold and silver is a hot one as we watch fiat currencies around the globe crumble into ruin. It's been on our radar screen at SGS since we began in 2008. There are many credible experts that believe it is coming faster than a speeding freight train... Bix Weir, of Road To Roota, is one such person. He has long been associated with GATA. As the world wakes up to the fiat schemes of the central bankers, there will be a rush... supplies will be in limitation... prices will skyrocket...

Dorothy's Silver Shoes or The Re-monetization of  Silver Currency of the United States of America

Hugo Salinas Price

President, Mexican Civic Association Pro Silver

www.plata.com.mx

Download article + bonus article, Gold Standard Generator & Protection Of Jobs

Why not re-monetize the silver dollar? Re-monetization could put the silver dollar and its subsidiary silver coinage into circulation in parallel with FRNs – “Federal Reserve Notes”.

There are several reasons that make this action possible, and only one that might be considered as an unimportant material obstacle.

In favor:

The silver dollar is the money that is still the Constitutional “coin of the realm”, defined by Act of Congress as 371.25 grains of pure silver. (The Troy ounce contains 480 grains.)

The silver dollar is familiar or at least known to almost all Americans.
A considerable quantity of these silver dollars is owned by Americans.

The silver dollar is a cherished symbol of a great past.

The monetized silver dollar would ignite a desire to save such as America has perhaps never seen before. The very first thing that must be done, to encourage people to save, is to give them something worth saving. As the US government gallops toward the abyss of bankruptcy by unlimited spending, the American people desperately require a refuge for their savings!

In this writer’s opinion, a large majority of the American people can see themselves as owners of silver money and, if a poll were taken, one can imagine that most Americans would express themselves in favor of silver money. Not so with gold, towards which the American people have little emotional attachment: gold is seen as the money of the élite. William Jennings Bryan exploited this fundamental attitude of the American people with his “Cross of Gold” speech. (Note: this should not be taken as disparaging gold; it is simply the statement of an opinion about the attitude of Americans regarding gold.)

Against:

The silver dollar bears a value stamped upon it: “One Dollar”.

***

The branch of government which the Constitution has designated as the agency “to coin money [and] regulate the value thereof” is the Treasury.

If the Treasury were to monetize the silver dollar coin by attributing to it a monetary value in terms of FRNs - “Federal Reserve Notes” - the public would very probably ignore the inscription of “One Dollar” upon the coin and accept it as legal tender money for the amount of the Treasury quote given to it. It would not be necessary to explain that twice, to anyone owning a silver dollar coin! In a short time, people would regard the term “One Dollar” as the name of a coin, rather than as a numeric indicator of legal tender value.

Determining the value of the silver dollar falls quite nicely into the Constitutional mandate to the Treasury: “To coin money [and] regulate the value thereof…”

How would the Treasury go about determining a quote to regulate the value of the silver dollar? Let bureaucrats and lawyers write books about how it should be done; here it is in a few words:

Suppose the price of silver bullion is $35 per ounce.

The silver dollar contains 77.34166% of a Troy ounce.

$35 X .7734166 = $27.07, the value of the silver in the silver dollar.

The Treasury will quote the silver dollar’s value in FRNs, with a margin of 15%, and round the figure to the next highest multiple of four:

$27.07 X 1.15 = $31.13, rounded up to $32.

The silver dollar as a legal tender coin worth $32 FRNs. The American public would eagerly purchase these silver dollars, worth $32 FRN dollars, and which could be used for all transactions without any haggling. The silver dollar worth $32 FRNs could even be deposited for that value in banks, if anyone had a mind to do such a thing.

If the price of silver rose to $37.61, the margin of profit of the Treasury, or seigniorage as it is formally known, would be reduced to 10%; at that point, a new and higher quote would be issued, to restore the 15% profit of the Treasury:

$37.61 X .7734166 = $29.09 value of silver in the silver dollar X 1.15 = $33.45, rounded up to $36 FRNs - 36 being the next highest multiple of four.

Why “the next highest multiple of four”? Because by doing so, the result would be the re-monetization of the entire silver currency system of the United States as it existed up until the Sixties of the last century.

In the last example, the silver half-dollars would automatically be worth $18 FRNs, the quarter-dollars would be worth $9 FRNs, and the dimes would be worth one-tenth of the silver dollar: $3.60 FRNs.

As pointed out in many articles at www.plata.com.mx, in the section in English, the last quote of the Treasury would remain firm and not subject to reduction, just as if the value in FRNs had been re-stamped upon the coin. The Treasury quote would simply take the place of a stamped quote, which cannot be reduced. The Treasury quote would only be raised, to follow the rising price of silver. In this way, the silver dollar would be a coin that would remain in use permanently.

This program would return the silver dollar and its subsidiary silver coinage of half-dollars, quarters and dimes to the American people in such a way as never to disappear again: all rises in the price of silver would be matched with rises in the quoted monetary value of the silver dollar and by derivation, of its subsidiary coinage: the silver half-dollar, the quarter and the dime.

This program would not cost the Federal Government – or the taxpayers that support it – one single cent! And yet, it would constitute the greatest gift to the American people that any US Congress could possibly invent, next only in importance to the return of the Gold Standard. The restoration of the silver currency of the United States to circulation, in parallel with the fiat FRN, can be considered the prelude to the revived Gold Standard.

By paying the Treasury a premium of 15% over the bullion price of silver, the American people would actually be subsidizing the Treasury’s work of monetization. This cost would be a one-time cost of obtaining real money of permanent value and utility, independent of the Fed and the banking system.

The re-monetization of the silver currency of the United States would create a new, vast market for physical silver and drive the price of silver very much higher. Those who might not be able to afford the purchase of monetized silver dollars could purchase half-dollars, quarters or dimes, which would provide the same security: they too, would rise with the rise in the price of silver. The rise in the price of silver would affect gold, which would also rise in price.

In order to facilitate larger transactions in silver, the Treasury could once again issue “Silver Certificates” attesting to the existence of silver held in its vaults.

With regard to the present faux-silver coinage in circulation, the American people are too intelligent to be deceived by it; this coinage may remain in circulation until the Treasury issues new coins for the purpose of making change in small transactions.

Though the restored silver currency may legally circulate, in practice it will be saved in its entirety and only be used in cases of emergency. Its “velocity of circulation” will be effectively close to zero.

******

Dorothy wore silver shoes, in L. Frank Baum’s classic book. Silver shoes on the yellow brick road! Dorothy symbolized then and still does today, the American people. Dorothy was unaware of the magic power of her silver shoes – and the American people are still equally unaware of the magic power of the re-monetized silver dollar: the power to recover America as the land of Hope and Opportunity!

What are the obstacles to regaining the silver dollar as money which can circulate in parallel with Federal Reserve Notes? The main obstacle will be the weapon of fear wielded by the entrenched interests of banking and the Federal Reserve, the intellectual centre of the banking cartel. These fiat money-mongers will rely on generating fear of the consequences of silver money so that they can maintain their huge fraud of fiat money FRNs; the Fed and the “Too Big to Fail” Banks are deathly afraid of the competition of silver. They know that the slightest crack in their monopoly of issuing fiat money will expose their scheme.

The Fed and the banking system will without doubt claim that “silver money is very costly”, but they will certainly not mention that the American people will fall over themselves to acquire it and even pay a premium of 15% to the Treasury, for the blessing of owning real money. Nor will the Fed and the banking system ever mention the gigantic costs that the depreciating FRNs have inflicted upon American savers; nor will they wish to recognize that the fiat FRN and the Fed are directly responsible for the present financial and economic destruction of the once great United States of America.

Another objection which will be put forward forcefully is that what the American economy requires is more spending on the part of the public. They will argue that more savings on the part of the American people spells doom for the economy: “More drink for the drunkard” is essential, according to the prevailing Keynesian thinking.

However, the humbug wizard has already been exposed and the Fed has lost its prestige forever. Toto has drawn the curtain! The State of Utah has already voiced its dissatisfaction with the present monetary system, by legislating in favor of gold and silver as legal tender money. If this project - monetizing the silver dollar by the Treasury’s giving it a numeric monetary value in FRNs, which immediately places it alongside the Federal Reserve Note as money – if this project comes to the notice of the several States of the Union, they together may force the issue.

The present policy is to “kick the can down the road” and postpone the final reckoning. But, the end of the road is already in sight! The condition is one of utter helplessness. The re-monetization of the silver dollar is the first step toward regaining health for the economy of America. Paper, fiat money will probably remain in use for some time, but the presence of the monetized silver dollar will force the Federal Reserve, the banking system and the US Government itself, to a more prudent financial course. It will be possible to regain financial health, because an alternative is available. Savings, the foundation of prosperity, will bloom as Americans opt for massive voluntary austerity by saving monetized silver dollars, half-dollars, quarters and dimes.

The banking system in the United States will be anxious to receive the massive savings in silver of the American people as deposits, but this will only be possible when the price of silver bullion has stabilized. Thus, the American people will have the upper hand; they will bend the banking system to their will by refusing to deposit their silver in the banks and thus force the banking system to reform itself to prudent monetary practice and desist from inflating by expanding credit out of nothing. After a stabilization of the banking system, the way would be open to a resumption of the Gold Standard.

Americans are today caught in a financial calamity with no parallel in history. They are being told this every day by every medium of communication. But they watch their crumbling economy in utter paralysis, because there is no alternative to which they may turn. The whole world is a mirror of their plight.

The restoration of the silver currency of the United States of America by the very simple procedure outlined here can provide the life-saving alternative. There is, at present, no other practical proposal for a viable action in the field of money. Perhaps there can be no other practical proposal? Perhaps a return to silver money is the only path out of the present crisis of civilization?

Let us hope that a political leader in the United States understands this message. The popular appeal of silver is universal; “silver shoes” will take that leader far – and the American people will follow him on that road!

Other Articles      

Road To Roota Theory
Bix Weir

Silver Money For Americans

Hugo Salinas Price

Next Leg Up for Silver Could Take it To $65-$75
David Morgan

Silver To Go Nuts
Bill Murphy

11 Mentality Shifts of Silver Investors

Silver Shield

5 Stages of the Awakening

Silver Shield

Get Out Of ALL Paper Assets and Into REAL Assets

Silver Shield

'Like' Us on Facebook
To Receive Updates
Throughout the Week
[Hint: This is where we post
articles that don't make it into the
weekly newsletter. ]

Gold Rush 21
GATA Conference

GATA Gold Rush #1

GATA Gold Rush #2

GATA Gold Rush #3

SGS Notes: The big news this week was the downgrading of the US credit rating from AAA to AA+ with S&P. I won't fill the newsletter with that since it's been in all the news... But what we are about to watch is the coming spike in gold and silver prices due to this and other factors... The downgrading of the US Dollar will have a huge domino effect on other currencies around the world. So we will be seeing unbelievable volatility everywhere in the markets... and demand is about to go sky high.

Silver's Performance to Triple That of Gold over The Next 3-5 Years..

Eric Sprott

Silver is likely to be the investment of the decade in the same way that gold was the investment of the last one as both industrial and investment demand come to the fore, says Eric Sprott

According to Sprott Asset Management CEO, Eric Sprott, Silver is the investment of the decade. Not only is it likely to reach $50 an ounce by the end of the year but, he says, over the next three to five years, it's performance is likely to treble that of gold's.

Speaking on Mineweb.com's Metals Weekly podcast, Sprott said, "We've been huge proponents of gold over the last 11 years, and we've been involved in silver over that same time period but beginning about a year ago it became extremely evident to us that the investment demand for silver was massively understated."

This move also appears to be occurring in India, where festival celebrants, deterred by high gold prices have been buying silver ornaments as gifts. (See: Silver puts gold in the shade.)

He adds, as a result of this, the ratio between the two metals is likely to get back to a more "appropriate" level around 16:1 - it is currently around 37:1 and only in June last year it was sitting around the 70:1 level.

"If one looked at the silver and gold sales as an example of the US Mint, so far this year, people have put the same dollars into silver as they've put into gold - which can't carry on with the price being 38:1 - you just can't have the same amount of money going in. We see the same thing in the ETFs - the silver ETFs have been growing while the gold ETFs so far this year, have declined," he says.

One of the main reasons for this, according to Sprott is that more and more people are viewing gold, and now silver, as the reserve currency and given the state of the world, there is a shift from paper to hard currencies.

It is not, however, just Sprott who sees this shift toward hard currencies. The state of Utah, recently signed a law which has made it the first U.S. state to recognize federally issued gold and silver coins as legal tender.

Asked why there is likely to be such a large relative outperformance, Sprott says, "the fundamentals for the two metals are entirely different. There is huge industrial demand for silver, there's not much industrial demand for gold. It's interesting when you look at how many dollars of gold are produced in a year and what's available for saving, and how many ounces of silver are produced per year, and how many of those ounces are available for investment, the ratio is something like there are 10 times more gold available for investment in dollars every year, than there is silver. So if the guy is just as happy to own silver as gold, the fundamentals are going to diverge markedly here."

With the growing industrial uses for the metal in, among other areas, photovoltaic cells, and the medical field (for its antibacterial properties) on top of the growing investment demand, higher prices could result in some substitution but, according to Sprott this is not really a concern as the dollar value of the silver is almost immaterial to the total cost of the product.

Any clouds to the silver lining?

Asked if there are any potential hiccoughs to the run for silver that he is predicting, Sprott says that while there are a few things that would cause him to change his mind, he does not really see any of them coming to pass any time soon

The first cloud, according to Sprott would be fiscal and monetary responsibility by governments and central banks but, he says, this is certainly not evident at present and would go so far as to say, " ever since we had QE1, the reason to own gold and silver has just changed materially here because of the irresponsibility of the central banks in the world

The other potential hiccough, he says would be some kind of massive mania type blow off, " you have to take your best guesses when something like that might end - I don't see it as being anywhere near that stage at this point."

And, finally he says, "The other thing that would have an impact is if, ultimately, gold and silver in fact are named reserve currencies - then we will all have accomplished what we're after and you may or may not need it neat because it's now money."

Where to from here?

According to Sprott Silver will move to $50 dollars this year before powering ahead, "If you ask me in the three to five year time frame, obviously I think it's going to go north of $100 simply because we'll get that 16:1 ratio and I certainly see gold going a lot higher, so that's my outlook here and therefore the rewards for owning silver and the equities will be quite outstanding."

Quote of the Week                               

“By this means (fractional reserve banking) government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.”

--John Maynard Keynes
The Economic Consequences of the Peace (1920

Other Articles      

8 Reasons Why Silver Is the Investment of the Decade
Eric Sprott

3 Reasons Silver Should Head Higher Than $50 Now

Seeking Alpha

JP Morgue Increases Physical Silver In New Vaule 39% In 2 Days!

U.S. Debt Ceiling Crisis Only A Minor Player in Gold And Silver Prices

MineWeb

Gold Is The True Reserve Currency

We Are at the Cusp of a Global Move into Gold and Silver

Chris Weber

'Like' Us on Facebook
To Receive Updates
Throughout the Week
[Hint: This is where we post
articles that don't make it into the
weekly newsletter. ]

Jim Sinclair Interview
with James Turk

SGS Notes: This week's news has centered around the debt ceiling, the budget 'crisis', and the impending economic crises for Europe, Italy, Greece (again)... all of these things are having an impact on gold and silver prices.

Central Banks Unanimously Prefer Gold Over Paper

Jeff Nielson

After the Western banking cabal engineered the "crash" of the global gold market in 1980, Western central banks spent more than a quarter-century perpetrating the lie that gold was a "barbarous relic" - which was supposedly "inferior" to the worthless, un-backed paper they were cranking out (in record amounts) on their privately-owned printing presses.

Their incentive was obvious. In getting the entire world to believe that lie, they were able to enrich themselves by $10's of trillions of dollars. This was done by creating those $10's of trillions ("out of thin air"), pretending that this paper actually represented real wealth - and then getting people all over the world to give them $trillions more paying interest on worthless paper which never represented any real wealth in the first place.

While it was the largest fraud (and theft) in the history of the world (by a factor of more than 1,000), it was by no means an original act of fraud - being nothing more than the same scam which all bankers always perpetrate, whenever they are (foolishly) granted the privilege of inventing "money" out of thin air, going back a thousand years.

During the first twenty-five years of this institutionalized fraud/theft, the bankers supported their fraud by dumping their vast hoards of gold onto the market (in the largest quantities in history). "Look," they would say, pointing with their evil talons, "Even we bankers, the greediest creatures ever hatched on this planet, have no use for this archaic, yellow metal - so why would any of you want to own it?"

The price of gold was pushed to an all-time low (in real dollars), so low that more than 90% of the world's gold mines were forced to close since they couldn't manage to break-even at those fraud-induced prices. And individual holdings of gold (especially in the West) fell to their lowest level in history.

Obviously, with that privilege to print money not having been revoked yet (a literal "license to steal"), their incentive to continue this fraud/theft is as strong as ever. However, over the past five years a "funny" thing has occurred. First these central banks rapidly slowed their dumping of gold, then they stopped it altogether, and now they are the single-largest bloc of gold-buyers on the planet.

Recent statistics released by the World Gold Council allow us to go even further. Over the past two years, the world's central banks have demonstrated a 100% unanimous preference for gold over their own banker-paper (i.e. all those un-backed "fiat currencies"). During that span of time, only three nations have been modest "net sellers" of gold - and in all three cases this related to "long term sales agreements" (i.e. old obligations). During the past two years, not one single central bank on the face of the Earth has chosen to be a net-seller of gold over that time.

I drive a Toyota

Let me construct an analogy here. A person goes shopping for a car. He goes to a Ford dealership, and after getting the full "sales pitch" on what wonderful vehicles all Ford products are, the shopper asks the salesman "what kind of car do you drive?" And the salesman answers "I drive a Toyota."

The car-shopper then goes to a GM dealership, a Chrysler dealership, a Volkswagen dealership, and every other auto-dealership he can find. At each dealership, the salesman tells the shopper what "wonderful vehicles" they make, but when the shopper asks each one what car they drive themselves, every one replies "Toyota". The obvious question to ask is that armed with such data, is there a single (rational) auto-buyer who would buy anything other than a Toyota?

The equally obvious answer is that "no", no rational buyer would ever choose any vehicle other than a Toyota - unless he/she simply couldn't afford the purchase price.

The most charitable statement we can make about the world's central bankers is that they are the world's "sellers of money". Indeed, since I have already pointed out that what they are selling is worthless, we could obviously come up with a long list of terms less-neutral than "sellers". Unquestionably, with armies of statisticians and data-gatherers at their disposal, they are the world's foremost experts on "money" (assuming we generously include their fiat currencies with that label).

Much like a hypothetical world where all the sellers of automobiles (who know these cars the best) all buy a single brand of automobile themselves, all of the world's foremost experts on "money" are showing a 100% preference for one kind of money: gold. The message from the world's central bankers is absolutely unequivocal: only chumps would choose to hold paper over gold.

Clearly, the massive paper-fraud of these banksters is in its final stages of decay: a Ponzi-scheme of unimaginable proportions, where people willingly funneled $trillions of their own wealth into the clutches of Western bankers - only to ultimately end up with zero (or near-zero, or less-than-zero). We know this, because the scammers themselves are now publicly fleeing from their own scam.

Ironically, the same, semi-comatose mainstream media which still alerts us when "insiders" in our equity markets are "dumping" their shares, has been 100% oblivious to the "insiders" in our monetary markets dumping their banker-paper (in favor of gold). The parallel cannot be missed: when corporate insiders are unanimously dumping their shares, only the "Mother of All Fools" would be a buyer in equity markets. When all of the world's monetary "insiders" are dumping their banker-paper in favor of gold, only an equivalent "fool" would attempt to swim against that tide.

To avoid getting "lynched" by all of the silver-bulls who follow my work, let me take a moment to include silver in this analysis. To begin with, if anything the bankers have even more fear/hatred of silver than gold. However, their hatred/aversion to silver is so extreme that rather than merely lie about silver (so people would not want to hold it), and then hoarding as much as possible themselves, they decided on the "nuclear option": destroying the world's stockpiles of silver. The only reason why the world's central banks have shown no interest in silver is because inventories have been decimated to such an extreme (more than 90% lower than 15 years ago) that (relative to gold) there is no silver for the central banks to start hoarding.

At the household level, the world's silver shortage is not yet that extreme. We can still buy what we want/need as individuals - and at "sale" prices, thanks to the recent ambush of the silver market by the CME Group. Of particular relevance, for those small investors who are finding the price of gold moving out of their "reach", silver remains accessible - and a fantastic bargain.

Short of B.S. Bernanke starting to walk around with a neon sign hanging around his neck saying "buy gold", it is impossible for ordinary investors to get any clearer warning that "cash is trash" and bullion is "golden". Ignore such a warning at your own peril.

Quote of the Week                               

Other Articles      

$600 Purchase Reporting Repealed
GATA

Cartel Caught In The Act 250 M oz of Paper Silver Sold in 1 Minute

Silver Doctor Blog

Silver May Rebound To Test $100

Bloomberg

Gold & Silver Accelerate to Upside

MineWeb

Retirement Accounts & The Coming Tax Code Revolution

Daniel Amerman

Silver Price Manipulation, Delivery Default & Supply Shortage Risks

David Morgan

Dark Days Ahead for COMEX as China Enters Silver Market

George Maniere

'Like' Us on Facebook
To Receive Updates
Throughout the Week

Silver is a Powder Keg
Waiting To Explode
Andy Schectman, CEO
Miles Franklin