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Past Wisdom And a Return To A Reality-based Monetary System ~ Larry Myles
December 10, 2010 
Issue 88

SGS Notes: This week's video is important to listen to. We are seeing increasing delays in obtaining inventory. I had a conversation with one of our suppliers today who informed me that they are starting to see delays in getting the silver to mint...EVERYONE PLEASE UNDERSTAND : it's beginning to 'hit the fan'... there is a very real silver shortage... You may see some dramatic dips that happen in conjunction with the manipulations going on, but the duration is getting shorter and shorter... the prices are quickly returning to free market rates... Gold/Silver ratio is now down to 48:1... still has a long way to go...

Past Wisdom And a Return To A Reality-based Monetary System
Larry Myles

"Precious metals alone are money. Paper notes are money because they are representative of metallic money."

Samuel Jones-Loyd, 1st Baron Overstone. (1852)

We can thank Baron Overstone for his words of wisdom; although it appears many of our modern leaders have forgotten the foundation of true wealth - prosperity through production and fair trade, along with a value-consistent currency based on gold and silver. True wealth… sustainable wealth cannot come about through the printing of air-backed fiat currency, followed by sophisticated multi-layered financial scheming that makes the collection of fiat an end unto itself. Sooner or later the inflationary factor will erode the wealth right out of those air-backed paper notes.

Worth noting: Prior to 1914, each of the above mentioned in-country paper notes were representative of a certain weight of gold. The U.S. Dollar equalled 1/20th of a gold ounce. The British Pound Sterling was representative of ¼ of an ounce of gold. I for one am not interested in debating the alleged absurdity of returning to the gold standard; other than to say the fiat-only model is clearly not working.

Making the case is the frequency of the recent spate of (unsuccessful) G20 meetings. In 1944 the Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states. The agreement lasted almost forty years. In 1971 Richard Nixon removed the U.S. from the gold standard and commented on the success reached by world leaders (Smithsonian Agreement): "The greatest single monetary agreement in the entire history of world civilization and will guarantee global prosperity." A little over a year later, the agreement collapsed in total failure.

Both of those agreements came after months of careful planning and were trumpeted as a final solution to monetary stability. Fast forward to the present; we are now enjoying G20 meetings that are becoming almost monthly events, replete with wrangling and finger-pointing. Yet no amount of trickery or shadowy alliance-building is working. Why? Trying to sculpt a coherent policy based on the irrational printing of air-backed fiat currency is a fool's game. Again, the futility of the Glass Bead Game comes to mind; especially when a monetary formula for success and prosperity is readily available - but it would mean wresting control away from the world's bankers!

Basing the worth of any and all currencies on the weight of gold would bring much-needed reality to a world awash in worthless paper money. Believing in a gold-based system too hard to swallow? Okay, what is your solution? That we remain rooted in the world of Reductio ad absurdum? That is no solution and I think you know it.

A personal solution; and one being practiced globally, is the growing number of people who are shunning paper money and turning to gold and silver. China is one nation that is openly encouraging its 1.3 billion citizens to get out there and accumulate the currency metals. It is the same story in India where you can even buy or order gold from neighbourhood postal outlets. You do not have to tell the Europeans twice; they are buying gold like there is no tomorrow. America? Two years ago we did not succumb to the scandalous falsehood that 'buying gold is un-American'. That whisper campaign failed miserably. Last year, the 'phony gold bubble' story enjoyed even less success. In 2010, the current administration in Washington, has proven itself to be pathologically stubborn. I am certainly not expecting an endorsement from our Keynesian enamoured leaders to buy gold. They will go down with their ship; but that does not mean you have to join them.

If Washington attempts to outlaw gold and silver, we will respond with scoffing defiance, followed by anarchy and lawlessness. As I have stated many times, the collapse of currencies is coming.

Hopefully, out of the rubble, a system may emerge based on two radical ideas; we will embrace a monetary system based on gold, and the world governments will adapt a plan that includes a schedule of debt forgiveness. Think about it. This is not a position of destructive radicalism; more a case of remorseless logic and a valid attempt to at least move the dialogue in a different direction.

When it comes to the demise of fiat currency throughout the ages, I am not just talking through my hat. I do have history on my side. Debauching the in-country currency toppled Rome and lead to the French Revolution. The audacity to think our system cannot collapse is almost laughable.

In the interim, fasten your seat belts and prepare for the global carnival of madness to continue! Expect currency swings, sovereign debt defaults, the collapse of national governments, isolationism and trade wars becoming the order of the day. The carnival show is already in progress. For those in the know, some are comparing this to a fiscal Greek Tragedy. Please, do not take yourselves that seriously. Looking back over 2,000 years of currency default, we are merely watching a repeat performance of a not very original, hackneyed misadventure in Black Comedy.

Other Articles of Interest

2012 IRS Rules Change

David Nguyen Activist Post

Silver Supply Crisis Looms
Part I

Part 2

Jef Nielsen Bullion Bulls Canada

Bernanke: 60 Minutes,
2 Big Lies

Michael Pento
Euro Pacific Capital

News: Backwoods Home
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SGS Volume Discounts

SGS has received several inquiries of late regarding our volume discount program. Our volume discounts apply only to non-numismatic rounds and begin with quantities of 200 ounces or more as follows:

200 -500 oz - $1.00 / oz discount
501 - 1000 oz - $1.50 / oz discount
1001 or more - $2.00 / oz discount

Volume orders will need to be placed by phone at present. We welcome individuals to enlist acquaintances to join them in a group order to take advantage of these discounts.



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"Precious metals alone are money. Paper notes are money because they are representative
of metallic money."

Samuel Jones-Loyd, 1st Baron Overstone. (1852)

Recurring Orders At SGS

We are asked occasionally to set up recurring orders for customers who desire to place monthly orders on a scheduled basis. We have done that on a case-by-case basis with a few customers who have requested it.


If you would like to set up a recurring order, please contact us by phone or eMail. There is some paperwork that must be completed for us to do this for you.

888-203-2232 x1


This Week's Video

NIA Interview with Bill Murphy
Note: Bill Murphy & Andrew Maguire testified at the CFTC Hearings in the spring regarding the
Fraud of naked shorting of precious metals. He is the world's top expert on the manipulation and price suppression scheme that has been taking place in the gold/silver markets.

By InflationUs


Ideas for Christmas Giving...
Silver makes a wonderful lasting and valuable gift!
Call us to arrange for a gift certificate !


Steel case wrapped with Leatherette, white satin interior top and Leatherette base. Available for Bars or Multiple Coins by Special Order


Sized to hold Airtite containers in sizes 39mm or 40.6 mm. Perfect presentation box for gift-giving. Available for Silver Bars by Special Order. Available in 3-coin size also by Special Order.



Album Storage Box by AirTite, in black. To be used with AirTite Storage inserts (In black, red, or blue sold separately) & Plastic Holders (sold separately)

And don't forget to get AirTite coin or bar holders to protect your gift...

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Phone: 888-203-2232 x 1
Shock And Awe in Precious Metals ~ Jeff Nielson
December 3, 2010 
Issue 87

SGS Notes: I trust you all had a wonderful Thanksgiving weekend... If you've been following silver and gold pricing since the weekend, you know that there has been a rapid rise in price of both metals... silver is now pushing $30 per ounce spot and gold is almost at $1415 per ounce...

Shock & Awe in Precious Metals
Jeff Nielson
December 1, 2010

Earlier this month, precious metals investors witnessed arguably the most concerted take-down of the precious metals sector since the Crash of ’08. First, investors were lathered-up into a mania, after World Bank head Robert Zoellick planted a piece in the Financial Times where he feigned interest in having a gold standard re-instituted.

Then the ambush took place.

This time, China was clearly participating as the ‘tag-team’ partner of the U.S. government. It began by raising reserve requirements for its banks – a move always seen as restraining the growth of an economy (and reducing commodities demand). Then the Chinese government leaked word that it was “planning interest rate increases” (even more bearish for commodities), all within the span of a couple of days.

What launched the “ambush”, however, was the utterly unprecedented move by the CME Group (owner of the Comex exchange) to radically increase margin requirements for silver halfway through a trading session. Clearly, the intent was to get precious metals investors as over-extended as possible – and then to “drop the hammer” on them at literally the best (i.e. most-damaging) moment.

This was immediately followed by yet another increase in bank reserves by China’s government, mere days after the previous reserve-increase was announced. With the U.S. having already taken radical action to curb commodities markets, it is simply not plausible that the Chinese government suddenly decided that further tightening was necessary. Instead, this was a move purely intended to generate more downside momentum in commodities by China, the world’s largest consumer of those commodities (including precious metals). And when those moves still did not generate the downward momentum desired by these market-manipulators, the CME Group announced yet another reduction of “margin” – this time for both gold and silver.

In previous years, a premeditated, orchestrated take-down of precious metals of this magnitude would derail the market for many weeks, if not months. However, that era is over.

Following the inevitable plunge of these commodities markets (as margin players were driven out), gold and silver quickly bottomed and firmed. This epitomizes the entirely different attitude of precious metals buyers. Whereas before such ambushes would create fear among investors that a “top” had occurred in the market, today all that goes through the minds of investors when precious metals go lower is “gold and silver are on sale!”

Buyers gleefully soaked-up every ounce of cheap bullion which the bullion banks chose to bestow upon them (as an early Christmas present). And now, with the month over, and “delivery” due in the Comex, those buyers are saying “give us our gold and silver.” While the numbers bounce around day-to-day, at present these buyers are wanting to take delivery on a large portion of total, available gold inventories and nearly ¾ of all available silver in Comex inventories.

Though it was the bankster cabal which launched this ‘shock’ on the precious metals market (and precious metals investors), the only ‘awe’ that was experienced was that of the banksters, themselves, as buyers are now holding out their hands and demanding that the bullion banks deliver most of their dwindling supplies of real bullion. Much like pointing a bazooka at someone – and not noticing that you were holding it backwards – this ambush has now blown up in the faces of these bankers.

If these manipulative buffoons had the slightest understanding of these markets, the spectacular failure of their attempt to (once again) “cap” precious metals would have come as no surprise. As I write regularly, anything under-priced (like precious metals) will be over-consumed. Push the price even lower, and inventories will disappear that much quicker.

The example I have used previously is chocolate bars. Price chocolate bars at 10 cents each (which was their price before 40 years of banker-produced inflation destroyed the value of our currency) and store shelves will be quickly stripped bare. Yet in the convoluted fantasy-world of the bullion banks, if they saw store shelves being cleaned-out with chocolate bars at 10 cents apiece, their “strategy” would be to attempt to kill demand by pricing them at 5 cents.

In previous years, the banksters could avoid being punished for their total ignorance of commodity fundamentals. Armed with countless tons of bullion which Western central banks had foolishly leased to them, when the cabal drove down precious metals prices and buyers stepped in to load-up, they would simply drive prices even lower (by dumping yet more bullion onto the market) – until even the most ardent bulls capitulated.

Other Articles of Interest

The Dumping Begins:
Chinese Reserve Managers Notified That Any Non-USG Guaranteed Securities Must Be Divested


China, Russia Quit Dollar
China Daily

Why Governments Will
Buy Silver



Free Service

SGS Volume Discounts

SGS has received several inquiries of late regarding our volume discount program. Our volume discounts apply only to non-numismatic rounds and begin with quantities of 200 ounces or more as follows:

200 -500 oz - $1.00 / oz discount
501 - 1000 oz - $1.50 / oz discount
1001 or more - $2.00 / oz discount

Volume orders will need to be placed by phone at present. We welcome individuals to enlist acquaintances to join them in a group order to take advantage of these discounts.


Quote of the Week

“The future prosperity of everyone – including the needy – depends on encouraging persons to become millionaires.”


– Dean Williams


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Recurring Orders At SGS

We are asked occasionally to set up recurring orders for customers who desire to place monthly orders on a scheduled basis. We have done that on a case-by-case basis with a few customers who have requested it.


If you would like to set up a recurring order, please contact us by phone or eMail. There is some paperwork that must be completed for us to do this for you.

888-203-2232 x1


This Week's Video

The Day The Dollar Died

By InflationUs




Those days are gone, because the bullion is gone. Today, when bullion prices are driven down, and buyers step in to buy, it is the bullion banks who are now forced to capitulate. Much like a thug who points a revolver at someone – after the sixth shot is fired – the banksters now frighten no one in the precious metals market.

In the case of silver, the only “gun” now pointing at anyone is the gun which the bullion bankers are holding against their own temple (with a “silver bullet” in the chamber). As regular readers know, most of the total global stockpiles of silver (accumulated over roughly 5,000 years) are now gone. Used-up (in tiny amounts) in an infinite number of consumer and industrial goods, that silver can now never be economically recovered – unless/until the price rises to many multiples of the current price. Put another way, with gold now priced at roughly 50 times the price of silver, at some point before silver reaches $1400/oz, it will finally become valuable enough that industrial users will take measures to recover this silver, much like virtually 100% of all gold is recovered/recycled.

At the present time, the only message being sent (by the bankers) to silver’s multitude of industrial users is “silver is cheap”. With the bankers ensuring that silver is grossly under-priced, industrial demand is predictably soaring – up 18% year-over-year.

Readers must realize that these industrial users can obviously never be “frightened off” by cheap silver, but instead will simply increase their buying (as they have done). Having gotten industrial users ‘addicted’ to cheap silver, it is now up to the bullion banks to produce enough real bullion to satisfy the rabid appetite for industrial silver – or face the consequences: their own economic annihilation.

“Short” 100’s of millions of ounces of silver, JP Morgan is already facing $billions in losses on that part of their holdings, alone. However, after squandering their bullion inventories, the banksters turned to the derivatives market to use paper leverage to continue to manipulate prices.

Thanks to the CPM Group’s Jeffrey Christian, we have a rough idea of precisely how leveraged is that short position: about 100:1. So when JP Morgan starts with $billions in losses, and leverages that 100:1, the bottom-line is bankruptcy. And the harder these knuckle-draggers push-down on the market (thinking they are limiting their losses), the sooner the last bar of silver is gone – and with it, JP Morgan.

With available silver now nearly gone, we are very close to (if not already at) the point in time where industrial users make a frantic effort to buy and hoard every ounce of silver that they can lay their hands on, and soaring prices will only make them buy faster. Understand that the pretext of raising margin requirements in the silver market was to restore “order” to that market. Instead, because this move was motivated by corruption and malice rather than market fundamentals, raising margin requirements (and creating a “sale” for silver) is creating much more disorder – and rapidly setting the stage for an actual default (a fail to “deliver”) in the silver market.

It is because of this total reversal in attitudes (and the depletion of bullion inventories) that I continue to urge investors to “think like the big buyers”. They want to see bullion prices fall, because they know inventories are depleted, and any pull-backs will be shorter and shorter.

When bullion prices fall, gold and silver are “on sale”. Period. And as we are always reminded when any retailer advertises a sale, buy now – because quantities are limited.


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Howard Ruff on Buying Gold And Silver
November 19, 2010 
Issue 86
SGS Notes: Whew! What a week in the precious metals world... today some volatile action as many predicted would happen... Those 'in the know' expected to see JP Morgan sell lots of naked short contracts on silver today to drive the price down under $25 spot, in an attempt to close the day out before the weekend at a low point...

Let's see what actually happened today:

We can see a sharp drop of almost $1.00 from 4:00-10:00 a.m. EST... and then a rally back to previous position...

The past month has seen several of these. Look at this custom chart depicting silver spot prices from October 19 - November 19, 2010. In regard to the gold/silver ratio, October started with a ratio of 60:1, and ended at 54:1. Today's closing ratio ended around 50:1. It still has a long way to go to get back to the historic ratio of 16:1. At today's gold price, that would mean silver should be at almost $85 per ounce.

In an interview this week on Alex Jones' radio show, the international journalist Max Keiser suggested a mechanism for bringing down the 'House of Morgan': Every American should just buy some real silver. The relevant excerpt from the interview is three minutes long and you can listen to it here:

Listen to Max Keiser on Alex Jones here


Howard Ruff on Buying Gold & Silver

Gold and silver are perfect pure inflation hedges. Strictly seen as an investment, as the dollar shrinks in value, gold will be worth thousands of dollars an ounce and silver will be worth hundreds of dollars an ounce. Glenn Beck, one of my favorite talk show hosts, said he is “not buying gold as an investment, although it will be a good investment, but as insurance.” He doesn’t tell us what he is insuring against, but I’ll tell you. He’s insuring against the plummeting loss of purchasing power of all dollar-denominated investments (price inflation), even the possible collapse of the dollar.

In these current circumstances, not buying gold or silver is one of the dumbest money decisions you can make in 2010-2011. Here are just a few reasons why this is so:

1. Obamanomics: Socialist states always inflate the paper currency. Obama, Congress, and the Federal Reserve are diluting value of dollars like never before by creating more of them. Accommodating Obama and Congress, the Fed has manufactured trillions of dollars out of nothing at by far the fastest pace in history, and it’s accelerating. Currencies are supposed to be a “means of exchange and a store of value.” The dollar is still a means of exchange, but due to inflation, it is no longer a store of value.

The government has given trillions to the big banks, which will loan the dollars into circulation or give them to politicians to spend into circulation. This money expansion currently dwarfs several times over the monetary explosion that led to the Carter-driven metals bull market in the ‘70s. I can’t overstate what is happening. Economists may call this monetary-expansion process “inflation” but it really should be called “dilution”—dilution of the money supply and consequently its value. Inevitably, sooner or later, consumer prices rise and laymen then mistakenly call that “inflation.” Calling rising prices inflation is like calling falling trees hurricanes. When will the public catch on? Price inflation and gold prices are the chief measurements of public awareness. Sooner or later, awareness becomes a critical mass, the public catches on, and the metals go through the stratosphere.

2. Real money: Gold and silver (especially silver) have been real money over and over again, in all ages of time and on all continents. Ever since Gutenberg invented the printing press 400 years ago, the world has been littered with worthless dead paper currencies every seventy-five to eighty years, due to runaway money printing when the people discover they can vote themselves benefits from the public treasury. Every time the dominant currency has been inflated, gold and silver coins have become hugely profitable investments, and sometimes the only surviving currency!

Throughout history, each time a paper currency finally caved in to inflation, gold and silver (especially silver) became the only universally acceptable coin of the realm. Gold and silver as a means of exchange and a store of value have always survived. They have always been symbols of wealth, far more precious in our consciousness than any mere paper.

During periods of hyperinflation, there always comes a time when people refuse to accept more and more counterfeit, inflated money or base-metal coins in return for their hard-produced goods and services. At that point, society instinctively turns to gold and silver. It has happened over and over again, and as George Santayana said, “Those who cannot remember the past are condemned to repeat it.”

3. It’s early in the game: Gold and silver are early in an historic bull market (in fact, as this is written, it’s only a Golden Calf), making this a low-risk investment with an awesome upside for the long-term investor. Especially silver. This gold and silver bull market will dwarf the last great one in 1973-80, when fortunes were made by relatively small amounts of money invested by amateur investors (many of them my readers). All of the factors that created the last bull market are here again, only amplified several times.

4. Supply and demand: Both metals are far rarer than most people know. All the gold ever mined since the dawn of history, including that in Central banks, gold fillings, and sunken shipwrecks in the Caribbean, etc. would cover a football field about four-feet deep. It would make a cube about the size of a typical 8-room house. Demand is now leaping past new supplies.

Likewise, most of the easy silver has been mined over the centuries, even with primitive methods. For example, during the Roman millennium, they used silver coins for currency and exhausted the Spanish silver mines.

Now that prices are high enough to make gold and silver mining profitable again, it will take as much as seven to ten years to develop new mines, and stagnant supply and rising demand have made higher prices inevitable for the imminent future.

In 1980 the historic ‘70s gold bull market finally topped out at $850. After adjusting for inflation, to merely equal what it did in 1980, gold would have to go (only) to $2,300, and silver topped out at $50 in 1980. After adjusting for inflation since then, to merely make a new high, silver would have to go over $125 and gold to $2,300!

Why might the metals go even higher? Most compelling is the fact that the biggest single factor that drives gold and silver is monetary inflation, and that’s already several times greater now than it was during the great gold-and-silver bull market of the ‘70s. In fact, gold and silver have been rising in response to money creation since 2000. Add to that the silver supply/demand phenomenon, and that means far higher prices—unless they repealed the law of supply and demand when I wasn’t looking.

These are just a few of the reasons why ignoring gold or silver will cost you a fortune in missed opportunities. In the worst case, gold is headed towards at least $2,500 an ounce (currently over $1,000, up from $280 so far), and silver is headed for at least $100 (currently more than $19, up from $4). And the best by far is still ahead. Long term gold and silver investors should make as much as ten times their money—and maybe a lot more—before we get a sudden rush of brains to the head and create a sound, gold-backed currency.

Other Articles of Interest

Ted Butler & Chris Martensen
Discuss the End of the
Silver Price Manipulation

$53,957 in Circulation for Every Ounce of Gold

Delta-Hedging to Cause Gold Price to Explode


Free Service

SGS Volume Discounts

SGS has received several inquiries of late regarding our volume discount program. Our volume discounts apply only to non-numismatic rounds and begin with quantities of 200 ounces or more as follows:

200 -500 oz - $1.00 / oz discount
501 - 1000 oz - $1.50 / oz discount
1001 or more - $2.00 / oz discount

Volume orders will need to be placed by phone at present. We welcome individuals to enlist acquaintances to join them in a group order to take advantage of these discounts.


Quote of the Week

"The major monetary metal in history is silver, not gold.”

– Nobel Laureate Milton Friedman


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Recurring Orders At SGS

We are asked occasionally to set up recurring orders for customers who desire to place monthly orders on a scheduled basis. We have done that on a case-by-case basis with a few customers who have requested it.  

If you would like to set up a recurring order, please contact us by phone or eMail. There is some paperwork that must be completed for us to do this for you.



This Week's Video

David Morgan and James Turk on the Silver Price and CFTC


Special Thanksgiving

This Week's Ups, Downs And Gold Standard Discussions
November 12, 2010 
Issue 85

S&GS Notes: We apologize for the newsletter coming out a few days late this week... we had a family medical emergency on Friday, which is now mostly resolved...

This week's precious metals news has revolved greatly around Tuesday's rapid rise of gold (to $1421. high) and silver prices (to $29.24) and subsequent abrupt plunge the same day (silver to $26.50 and gold to $1345) coupled with a lot of discussions regarding the potential for world currency(ies) returning to a gold or silver standard. The effects of QE2 is still being discussed as well, but since we covered that pretty thoroughly last week, we're going to talk this week mostly about this volatility we're all watching, and under "Other Articles" we'll provide some links to articles on the issue of precious metals as a currency standard...

Bix Weir

November 9, 2010

U.S. Commodity Futures Trading Commissioners
3 Lafayette Centre
1155 21st St. NW
Washington, DC 20581


CFTC Commissioners:

The blatant market manipulation of Silver on the COMEX has gotten to a point where even a non-believer in market manipulation can easily detect the illegal maneuvers. The latest side show in this decades long con job is simply EMBARRASSING to your organization and our country.


Case in point: On November 3rd I sent out an alert to people who follow my newsletter warning them that the CFTC has decided to allow the Banking Cabal one more shot at rigging the Silver market before they end the practice of "officially sanctioned" manipulation. Here's the alert:


November 3, 2010: Is the CFTC Letting it's Guard Down for the FINAL MANIPULATION?

Watching the current "mini-smash" of gold and silver right before the announcement of QE2 comes as no surprise to most of us OLD TIMERS in the manipulation markets BUT I found it very interesting to read CFTC Commissioner Dunn's latest statement:

(Kitco News) -- Under Dodd-Frank reform legislation, the Commodity Futures Trading Commission must start to increase regulation of swaps and other ways to lower risk. But CFTC Commissioner Michael Dunn is concerned over funding, especially since the CFTC is already operating on only a percentage of its full budget. "If we don't get fully funded, we still have to fulfill the mandate," he said on a panel at the Futures Industry Association Expo. If the commission doesn't get the funding, that means that some self-regulating organizations take some of the work, or the agency becomes "extremely restrictive on what we do." His concern is that requests to the CFTC will have to "go in a queue" and people will have to wait longer to see actions occur. He said one-third of the staff is working on writing regulations, which means they've had to cut back on surveillance and oversight. Another panelist said it is likely all federal budgets will be cut in the future, so some regulations might go to self-regulating organizations. Either that or Dodd-Frank might need to be retooled in some way. END

WOW! Talk about ANNOUNCING to the Banking Cabal that they can go ahead and play their games for a little while longer because THE CFTC IS TOO BUSY TO POLICE THE MARKET AT THE MOMENT!!!


Well. What do you think happened in the silver market today? Let's take a quick look:

When JPM/HSBC Don't Like The Results, The CME Just Changes The Rules: Full Revised Silver Margin Schedule




Other Articles of Interest

Germany Unwittingly Adopts A Silver Standard Due to Soaring Price
Toni Straka of The Prudent Investor


Zoellick seeks gold
standard debat
Financial Times

Going Back To A Gold Standard?
Adrian Ash

Silver Could Spike to $50 Based on Short Positions That Need To Be Bought Back

Three's Company Silver
Margin Change

Free Service

SGS Volume Discounts

SGS has received several inquiries of late regarding our volume discount program. Our volume discounts apply only to non-numismatic rounds and begin with quantities of 200 ounces or more as follows:

200 -500 oz - $1.00 / oz discount
501 - 1000 oz - $1.50 / oz discount
1001 or more - $2.00 / oz discount

Volume orders will need to be placed by phone at present. We welcome individuals to enlist acquaintances to join them in a group order to take advantage of these discounts.



Become a Fan on Facebook !

Become A Fan to receive
additional articles of information
as they come up throughout the week


This Week's Video


Contact us at
Phone: 888-203-2232 x 1
Quantifying Quantitative Easing ~ David Morgan
November 5, 2010 
Issue 84

S&GS Notes: Talking about Quantitative Easing in today's newsletter…it's all over the news.

There's been QE, QE1, and now the Fed has announced their plan to embark on QE2. With that announcement we've seen the prices of gold and silver rise dramatically in just hours/days… What exactly is QE? Why does it have this affect on silver and gold? What other affects will we see in other markets? I'm no expert on these things… I read, I listen, I learn… here's what the 'Guys That Know' have to say….

Why should you care about this? Well, for starters, it has a tremendous impact on your silver/gold investment...and it will have a BIG IMPACT on your budget in the coming months, food prices, and the prices of other basic necessities.

And… regardless of what you think of Glenn Beck… don't miss his 2-part Video on the subject of QE… explained as only Glenn can do it...

Quantifying Quantitative Easing

From David Morgan…

Many investors are struggling to understand the ramifications of the recently announced QE2 plan. Quantitative easing, or more simply known as money printing, is a dilution transaction similar to issuing more shares for a stock. The dilution has two primary affects: a decrease in the value of the initial shares and a redistribution of wealth from the original owners to the new owners.

The most significant difference between stock dilution and currency dilution is of course that publicly traded companies tend to use the funds raised through dilution to add value by investing those funds - whereas governments don't add value by diluting a currency.

In this case, $900 billion will be diluted to purchase US treasuries so the primary benefactor of the quantitative easing will be the US federal government and the financial institutions selling that debt. However, capital flows can rarely be controlled and the newly created money will find its way into other markets and asset classes.

Interestingly, the $100 billion per month figure that has been mentioned as the target rate for QE is almost exactly what is needed to rollover maturing treasuries coming due - so it could be argued that the plan is to effectively finance the US Federal debt which would eventually lead to a complete monetization of the treasury market. Supporting this argument is the recent projection made by ZeroHedge that the Federal Reserve will own more treasuries than China by the end of November.

If the QE2 funds went into the currency market, its value would fall in half. However, $900 billion is roughly 6 percent of US Federal Debt. Inflation is defined by the growth in the money supply. If using M2, the QE2 plan would dilute the money supply by 10 percent. $900 billion represents 36% of the world's gold supply, so an equivalent move upward in price could be seen if the money finds its way into the gold market. QE2 is 37 times the size of the world's estimated silver supply so a flow of capital into the silver market could be explosive.

A dollar on November 1st is now worth 92 cents if measured in treasuries or 91 cents if measured with the money supply. It can be seen that inflation as measured by the growth in money supply is projected to increase by 10 to 20 percent on an annualized basis.

The result will be a double digit real negative interest rate and a carry trade opportunity to sell treasuries and other US dollar secured paper at a cost of near 0 percent while accumulating real assets such as precious metals and other resources that cannot be diluted.

Glenn Beck Explains Quantitative Easing
Part I & II


Other Articles of Interest

Not A Good Time To
Be Short Silver

Why The Price Of Gold
Soared After the QE Announcement

Bill Bonner, Daily Reckoning

How High Would Gold & Silver Prices Go if GS, JPM and HSBC Were Barred from Participation in Gold/Silver Markets?
JS Kim - SmartKnowledge

Gold Jumps $50 in 21 Hours As Fed Prints Money
Adrian Ash

Silver Blasts Through
To 30 Year High

Mad Hedge Fund Trader

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"I doubt we will ever see sub $1300 gold again for the duration of this secular bull. Now that the HUI and silver have broken to new all time highs we have a rare condition in that the entire precious metal sector is trading in a vacuum with no real overhead resistance. This is the only sector in the world in this position. That is the recipe for an incredible move higher in a short period of time as funds begin to chase the out-performance in the precious metal sector."

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The Precious Metals Roller Coaster ~ Exerpts from Ted Butler, Larry Edelson, and John Embry
The Precious Metals RollerCoaster - From The Experts
Summary of information from Ted Butler, Larry Edelson, & John Embry
SG&S: With the high volatility in the precious metals market this past week, I thought I would provide you with some good resources to help you understand what this has been all about, and what forces are impacting the price of precious metals right now.

Larry Edelson - Financial Advisor, Weiss Research & Uncommon Wisdom Publisher.

Notes: Larry talks about how the markets are all in 'chop city', which means that when they are moving up and down quite violently they have a 'tendency to chop up short term traders with a lot of losses and a lot of sideways action'. He says this is due to the fact that many of the important cycles are now in a transition phase; indicating that the next big move, while certainly around the corner, is just not yet here yet. So all the major markets-all of them-- are floundering and swinging wildly trying to find their next positioning for their next big moves. This market could continue to be choppy for another 4 weeks.
He believes that gold on the short term will hold above its floor position swinging between the $1060 mark and the $1160 range…with wild swings. On the other hand, if it breaks through the support level of $1000, there will be no long term trend change. He is still very bullish on gold. On the flip side there is mounting evidence the gold will hold its own, and rise above the $1160 range and take off again.
As for the dollar, it's been 'rallying' lately because of the imminent threat of sovereign debt default in Greece, Italy, Spain & Portugal, which are valid concerns. So many European countries holding these currencies are being driven into the dollar… pushing it higher. However, the long term trend for the dollar is substantially lower. So this short-term rally for the dollar is not so much of a real 'rally' in the strength of the dollar, bur a reflection of the weakness of other world fiat currencies.

Ted Butler Butler Research
Notes: The Big Commercial Bank Shorts (i.e. JP Morgan) in silver have begun covering their short positions in the last few weeks. They have reduced their net short position by about 20,000 contracts (100 million ounces). This is the largest 2 week decline in the net short position in 2 years and represents about 80% of the total short position.

The good news, is that it's really improved the situation; they've liquidated just about as much of the technical accounts as they can liquidate. It's a very exciting development, and very encouraging because while painful, when they are done, they are unlikely to short again, paving the way for a price explosion.

And, from his recent newsletter,
"Silver is not money, it is Super Money, a kind of money that's different than any of us has ever experienced. It's sort of like there is ordinary man, but then there is Superman, who can bend steel in his bare hands, has x-ray vision and can leap tall buildings in a single bound. The main characteristic behind Super Money is that it is outside any government's edict. The value isn't based on what a government says. Simply stated, there is less silver available as money or investment to the world's citizens than at any point in history. Silver's rarity is unlikely to change in the relative near future. And remember - rarity is the first determinate of value.

As long as there are far more efficient mediums of exchange, like cash and electronic payments, silver or gold can't function as a realistic medium of exchange. This is Gresham's Law ; bad money will drive good money out of circulation. Here's a corollary to that law; Super Money drives itself out of circulation. As people start to realize the great difference that exists between money and Super Money, more demand for Super Money is certain.

Silver, more than gold, is the true Super Money. That's because, as time has evolved, there is less of it, relative to total world population. There is less above ground silver bullion in the world than there is gold bullion. Due to relentless industrial consumption over the past 70 years, there is 90% less silver bullion in the world than there was back then. This is something that cannot be said of gold.

Super Money is money that can't be created at will; it only comes from blood, sweat and tears, and at great expense. It is money that can't become worthless. It is money that can be passed to future generations without fear of what the future may hold. It is money whose value will be determined by the collective judgment of the world's citizens. One of the main factors that guarantees that silver is the Super Money of the present and future is how few people are aware of the facts surrounding silver. As those facts become increasingly known, the demand for silver must grow. The next time someone tells you that silver is money, please correct them. Let them know it is Super Money, and make sure you own as much as you can."
John Embry - Chief Investment Strategist at Sprott Investment Management
Notes: John talks about what he considers to be the final death throes of paper currency market.

On gold detractors: There is a lot of angst among mainstream commentators fearing a drop of $300 or worse… these are the same individuals trying to frighten the public with prophecies of falls in the gold price. Despite this ongoing aggravation John is even more bullish on the prospects for gold than he was a year ago.

On how price affects psychology: This is a classic example of where gold has moved nicely higher but people are still afraid. Psychology is a big part of the arsenal of the anti-gold group. Price action creates commentary and if you can knock gold value you can come up with all sorts of reasons that are false which does keep people away from the metals. He says, "I think that's part of the plan".

He says, "I still have the strong feeling that the vast majority of people have no clue about gold and aren't aware that gold is experiencing an historic bull market with much, much further to go. What we have seen today is merely a prelude to the appreciation we are going to see in future years which is going to greatly exceed what we have seen today. "

On Gold re-establishing itself as money: If you go back and look throughout 6000 years history, gold has always been the mainstream currency . It always tends to come back and re-establish itself when fiat money founders or comes under suspicion. We're in a period right now with a lot of debt problems, and sovereign debt is becoming strongly suspect (TP Notes: with just this past week several European countries in danger of default having a dramatic volatile affect on the market). I believe gold is really going to come back to the forefront, because people aren't going to be able to trust any paper currency on this planet.
Parting shots: Most of the experts are saying this: Use this short term down-trend to buy as much as you can.
Silver Makes Sense For Gold Investors ~ from
Note from S&GS: Today (at this writing) the spot price of gold is at $1103.80 and spot price of silver is at $17.59. Doing the math… this represents a ratio of 62.75 to 1. If silver were to maintain or return to its historic ratio of 16 to 1, it would be priced at $68.99 today. So, as you can see, buying silver at prices of even $25 or $30 would be a great buy… let alone our prices of $23, $21.50, and $20.50…
Silver Makes Sense For Gold Investors
September 10, 2006

If you are convinced by the gold bull case, and the gold price trend is still up according to chartists, silver is not only a logical diversification, it could prove an even more profitable investment. Let us review the relationship between these two metals in general and the silver-to-gold ratio in particular.

Silver behaves much like gold in times of financial crisis and is often spoken of in the same breath under the portmanteau of precious metals. But the best reason for gold bugs to diversify into silver is something called the gold-to-silver price ratio.
Now the long-term historical average gold-to-silver price ratio is 16. But this relationship does sometimes get rather out of kilter. Like today when gold is at $610 an ounce and silver hovers around $12 an ounce. And not at $38 as its long-term gold-to-silver price average would suggest.
This has happened because silver presently has no perceived monetary role, while the moment a financial crisis is at hand people look for quasi-currencies and silver is a longstanding currency of last resort from ancient times.
Monetary role
What that means is that in historical terms silver is cheap in relation to gold. Even more importantly it means that in a financial crisis silver is likely to close this gap and then move in line with gold. In short, silver will outperform gold.
Let us say that gold moves to $2,500 an ounce by the end of next year, which is a figure at which options are now being struck. If silver followed gold upwards and regained its historic relationship, then silver would be $156 an ounce, up 13-fold on current prices while gold would be 'only' up four-fold.
Highly successful investor Chris Weber has written an excellent report on this subject. He notes the gold-to-silver ratio has reverted to 16 during other major crisis periods of modern times: World War II; the early 1970s; and in 1979-80 when gold hit its all-time high.
Crisis time?
Of course, for this to be correct, then you have to agree with the assumption that another major financial crisis is around the corner. Will the US housing downturn precipitate an October crash in US stocks anticipating a recession in 2007? Will problems in Iran cause an oil price spike and a collapse in global stock markets?
This is admittedly a bit gloom laden. But why not hedge your bets and prepare for the worst? Then you will be a winner whether your other investments come off nicely or not.
It has to be said that Chris Weber is one of the most successful general investors known to the financial community, and that he is long on silver. This is not another fund manager who places your money and takes his commission while you bare the risk. It is a strategy to win whatever happens!
HyperInflation Nation, Part 2 ~ National Inflation Association (NIA)

Hyperinflation Nation Part II
National Inflation Association

HyperInflation Nation ~ Part 3 - National Inflation Association (NIA)

Hyperinflation Nation Part III
National Inflation Association

China: The World of Gold and Silver Demand Is Changing
Note from SG&S:
I've compiled a couple of articles together from this source this week because I felt they were both informative and apropos to the rise/fall/rise of silver spot we've seen in the last week. Many of you have commented on this; and, as investors, we all scratch our heads and say, "What's going on here?".
From my readings, it's clear the volatility is a reflection of 1) what's happening with US currency devaluation 2) what's going on in Asia, and more specifically, China and 3) what's happening with the manipulators (short-sellers) of precious metals in this country. (I will provide more info about this manipulation next time).
Without going into a lot of detail, let me summarize most expert writings of the last week: gold and silver are showing a lot of volatility, which is to be expected due to the issues of destabilization & devaluation of US currency, and we may still see some downward trend for the short term. However, longer term, there will be an upturn of price again and a climb to new heights… hang on for the ride! Silver will follow Gold… and often out-perform it.
As for my observations since I've been in this business: People tend to purchase NOT when price is low but when price rises. I find this inexplicable and counter to what conventional wisdom would dictate. Let me speak frankly when spot rises, Tea Party Silver will be forced to increase our prices as well. (We've had to do this in the past week, but have dropped prices back to previous rates now as spot has dropped back). The prudent thing to do would be to purchase on these down-turns… and on upcoming sales and introductory rates.
China: The World of Gold and Silver Demand Is Changing
Aug. 31, 2009
Darren Long
When the Chinese decide to invest, it causes ripples across the world...
TWO YEARS AGO on August 21 2007, China's government allowed its citizens to invest in an entirely new asset. It allowed them to invest in Hong Kong-listed stocks.
Hong Kong is a special region of China. It's one of the most dynamic, capitalistic places on Earth. The move from the government was a move toward "investment freedom" for the Chinese people.
On that day, Hong Kong's benchmark stock index rose 8.74%. Over the next two and a half months, it skyrocketed from 11,000 to over 20,000. It was a chapter in a story that you should get used to over the coming years; when the Chinese decide to invest in something, it causes giant ripples across the world. And this sort of situation is starting to happen again, this time in Precious Metals, and especially Silver.
The Chinese have a centuries-old affinity with Silver. It began in the 1500s with the explosion of trade with Mexico via the Spanish galleons. These sailing ships were the super-tankers of their age. They made one voyage per year, carrying tea, silks, and spices from Asia to Mexico. The ships returned to Asia with Gold and Silver. After the Chinese threw off imperial rule in 1912, the country used Silver money. Today, the Chinese word for "bank" (Yin Hang) means "Silver Okay". And now that China is becoming one of the richest, most dynamic capitalistic countries on Earth, this story is about to take a modern twist. The Chinese want Silver again.
Thanks to a decade of wealth accumulated by regular Chinese citizens, there is plenty of cash to chase good investments. As the famed global investor Jim Rogers points out, these people are the best capitalists in the world. They are great savers. Chinese people want their money to work for they invest.
I recently watched a China Central Television piece on Gold investing. According to the program, there are some 400 million households in China, with an average ownership of about 0.1 ounces of Gold. The average Gold ownership in most emerging countries works out to about 1 ounce per household. The Chinese are beginning to make up that gap. From 2006 to 2007, domestic demand for Gold rose 60% to around 700,000 ounces. Experts continue to urge citizens to put 3% to 5% of their net worth in Precious Metals; and that is a conservative suggestion. Chinese government statistics show the average urban Chinese household has about $1,300 in disposable income to invest. While that doesn't seem like much, when you add up all those households, there's about $36 billion that could move into the next big investment opportunity - Precious Metals.
The government is now actively encouraging its citizens to Buy Gold and Silver. They recently unveiled Silver bullion for investing. The premise is that Gold was approximately 50 times more expensive than Silver in 2007...but is now 65 times more expensive. Silver is a bargain. The government is promoting Silver bullion as an investment for regular citizens. And remember, a bunch of Chinese students laughed at US Treasury Secretary Tim Geithner this year when he claimed the dollar was safe. The Chinese know the value of real assets...real money like Gold and Silver.
What does this mean for Silver prices? It's impossible to say. But here's a little math that interests me. According to the Silver Institute, demand for Silver in 2008 (for industry, jewelry, and investing) was 832 million ounces. At today's price, that's an $11.5 billion market...or about one-third the annual discretionary capital available in China alone.
The most important thing to understand about this situation is the Chinese people become freer every time the government loosens up a restriction. These people couldn't legally buy Silver bars before. Now, they can. They're becoming richer...and they will continue to do so for decades.
Add this to a world already waking up to the grand currency debasement of the West, and you have a recipe for the continuation of the big bull market in Silver and other Precious Metals.

Don't Take Our Advice …
Darren Long
Sept. 21, 2009
The last time I signaled a major move pending, short-term technical indicators pointed downward, entirely contrary to a long-term bullish fundamental outlook that has only gathered strength in the meantime. After dipping to $870 per ounce in the weeks that followed, Gold held the $900 line throughout the notoriously weak summer months, and now has forged ahead to over $1000 Oz testing it all time highs while Silver has delightfully moved up some 20% plus in the same period of time. Both metals are well positioned to forge new all-time highs.
Precious-metal investors are tracking a hurricane, with a deteriorating U.S. dollar as its eye, a destructive wind of toxic derivatives swirling about, and a downpour of continuing reverberations for the economies in its path. It doesn't look so good from our perspective for the more traditional markets.
While the degree of certainty over a hurricane's track decreases as one projects further into the future, I believe the opposite holds true for Gold and Silver. I claim no prescience over tomorrow's Gold or Silver price, but my research continues to support an expectation that gold will surpass the $2,000 mark before this storm subsides and Silver will reach its all time high, well over $50 Oz.
I could point to technical analysis of Gold and Silver's contracting Bollinger bands and inverse head-and-shoulders formation, or the fascinating discussions and Elliott wave analysis that suggest an imminent breakout for both, but in truth Gold and Silver are about as predictable in the near term as Robin Williams with a movie script. Still, the irreverent speculator inside me can't help agreeing with John Embry, chief investment strategist for Sprott Asset Management:
"I think there is a very small probability that Gold will fall below $900 in the very near term. Monetary debasement is driving investment demand, western central banks are running out of available supply, eastern central banks, who are awash in dollars, want to buy and mine supply is cratering. We are close to lift off and the Gold price at worst will trade at several multiples of the current price."
Seasoned precious-metal investors maintain a staunchly long-term focus, and constantly hone their fundamental understanding to inform and tweak price expectations as the bull market roars onward. Choosing price targets will always be an exercise in speculation, and as with any storm those forecasts will remain subject to change, but that long-term focus is instrumental to success the way satellites are indispensible to meteorologists.
The truth is folks that you just 'gotta' step up to the plate and get involved. Buy into this market and create yourself a little sense of urgency. Fire all the guns up and begin to get motivated about the transfer of wealth that is occurring right now in front of your eyes. Silver and Gold are at the forefront of that transfer of wealth and I want you to take advantage of that.
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