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Silver Market Roller Coaster & QE∞

Today's Gold/Silver Ratio: 51/1 SAME

Issue 136

Gold: $1770.500/ Silver: $34.68

SGS Notes: Well, it's been another eventful week... if you had been watching silver prices this week, you would have seen the roller coaster we all experienced. I rarely write the SGS Newsletter main article(s), preferring to allow the 'experts' to speak since they can do it far better than I. However, I'd like to provide the following commentary to try to explain in simple terms what we saw happen this week, and some of the implications, taking information from the variety of sources I peruse daily.

Silver Market Roller Coaster & QE


Monday 10th -
Our week started out with silver spot at $33.69 as the market opened Sunday evening, and Monday was pretty uneventful closing at $33.51.... the calm before the storm.


"Everything going on these days behind the scenes is interconnected to the take down of the 'Bad Guys'. From the US elections to the European situation to the silver market volatility - it's all interconnected. It is all an orchestrated play that is coming to it's climax. OUR TIME is approaching fast and this go-round there is no stopping what is to come." Bix Weir 9/10

(See 'The Planned Silver End Game' at right)

Tuesday the 11th Monday was followed by a volatile day on Tuesday the 12th. Prices fluctuated all day in a $.40 range... and finally cloased the day at $33.62.

Tension is mounting as the world awaits the speech & anticipated announcement by Ben Bernanke on Thursday.

 

 

 

Wednesday, the 12th all is still fairly quiet when WHAM! around 10:30 a.m. EDT, we have an abrupt downturn of $1.
If there was any doubt in your mind about the silver market manipulation, this week's activity should lay it to rest.

Wednesday's smackdown by the manipulators is on record for all to see. How does a naturally occurring market make a instantaneous drop of almost $2.00, then rise $1 within the hour ???

So what was happening?

One of the favorite tools of the manipulators is to do a quick massive sell-off, which triggers the stop-losses of other investors and floods the market, thereby causing a sharp downturn in price. At the bottom of the downturn, they use the same money to buy up more positions before equilibrium returns. When you are dealing with millions of shares, $1 in price can make a big difference.

Remember we've been hearing how JP Morgan (primary culprit - there are others) holds a massive naked short position in silver derivatives.

Wednesday, I got this from Bix,

" Just a heads up about the Fed announcement tomorrow...

WATCH FOR A BACKFIRE!

I don't know what that backfire will be but in the Road to Roota Theory the Fed will have to be blamed for the global monetary meltdown. It may be the announcement of some form of QE3 as that would be something that is very visible.

Whatever comes from the announcement watch for the global meltdown to increase in speed over the weeks following."

Thursday, the 13th

Bernanke announces QE to infinity...

Bix's comments:

"No limits. No end date. This is QE to INFINITY!

Make no mistake...this is all on purpose. This is the END GAME and the blame for the global meltdown will be placed, rightfully, on the shoulders of the Federal Reserve.

Basically, the Fed has chosen to FALL ON IT'S OWN SWORD!

The Gold and Silver move upward has caught all the shorts off guard. The Bad Guys are in deep, deep trouble as they took their cues from the likes of Jeffrey Christian and Jon Nadler who were advising EVERYONE to short gold and silver. Now it gets exciting!"


Silver had a small drop right before the announcement, then a huge leap of $2.00 where it broke through the $34 ceiling almost reached $35 before dropping off a bit, and continued on almost flatlining throughout Friday.

What was the final outcome of the week? Check out this week's COT Report (at right).

"Clearly, the commercials were preparing for a massive raid on Thursday, until Bernanke dropped their pants by announcing QE." Watch for the upside in silver in coming weeks ahead.

Bix Weir is looking for a major CFTC announcement this month on the imposition of position limits, the beginning of the derivative implosion, followed by a silver 'moon shot' in October.

 

Other Articles      


The PLANNED Silver End Game
Bix Weir

Silver COT Report

German Court Caves to Euro-Zone Hyperinflation

Jeff Nielson

Bernanke Defends Unlimited QE, as Market Goes Wild

Business Insider

FED Press Release

Ron Paul is Right; the FED and Lunatics that run it is the heart of the problem
Zerohedge

Where Does Money Come From?

China Launching Gold-Backed Worldwide Currency

Judge says $80M Gold Coins belong to the Government

 


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GATA's Bill Murphy on
the JP Morgan Silver Shortage
and the next Bullion Bank Run!

 

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Sell-Off in Dollar Should Evolve into Hyperinflation

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A 'Lehman Moment' Will Ensure Gold and Silver Will Soar Again ~ Mineweb
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Today's Gold/Silver Ratio: 57/1 UP

Issue 132

Gold: $1616.50/ Silver: $28.18

SGS Notes: Have had a little 'vacation' from newsletter lately, but events in the silver market and related economy/banking/financial worlds have been mushrooming… This week's newsletter is a 'catch-up' on things going on… what's happening in finance has a direct relationship in the precious metals marketplace… things are heating up on every side… and, with the CFTC gearing up to impose position limits, it won't be long until we see the coming breakout to the upside in precious metals.

A 'Lehman Moment' Will Ensure Gold and Silver Will Soar Again
Mineweb

Be sure that a huge volume of money printing will soon be on the way in Europe, and in the U.S. too, and the gold speculators' long awaited stimulus to drive prices up will at last become a reality.

Nowadays it seems that every time there is inaction, or minimal stimulative action, by the Fed that gold - and silver - take a dive. It appears to be long forgotten by the markets that gold performed extremely well throughout most of its bull run without overt Fed stimulus - but then gold investors on the fringe tend to be fickle animals increasingly overtly swayed by short term pronouncements with little cognizance taken of many of the underlying changes in the marketplace that have to be extremely bullish for precious metals. Not least of these factors include declining gold output in most of the world's major gold producing nations, hugely increasing Chinese demand - and perhaps most of all the fact that the global economy and banking system is teetering on the edge of a cliff with only a slight push needed to make it plunge to who knows where.
In his latest commentary on gold, Jeff Nichols - Managing Director of American Precious Metals Advisors and Senior Economic Adviser to Rosland Capital ponders on gold's performance vis-a-vis U.S. Fed pronouncements. "Gold shed more than $50 an ounce in a blink following last Wednesday's news from the Federal Reserve that America's central bank would not, at least not now, initiate another round of quantitative easing, opting instead for more muted monetary stimulus by extending its "Operation Twist" through year-end"

  As Nichols then notes, "the recent correction in gold and silver prices has some precious metals pundits already writing obituaries for these metals. Last week, gold in New York was off more than three percent, falling from a recent high near $1,627 to $1,570 - just about giving up all of this year's gains and, worse yet, down some 18 percent from its all-time high last September. Meanwhile, silver fell by more than six percent from $28.75 an ounce to $26.90 - and at week's end silver was off some 3.4 percent for the year to date and more than 45 percent from its April 2011 peak."

But, Nichols avers, "This backtracking in gold and silver does not signal a new bearish phase for precious metals prices. At worst, it calls for more patience from investors and savers holding these metals as they await the next major move up in a still very much intact bull market. More importantly, the current weakness in gold and silver prices simply gives smart investors and fearful savers more time to buy the protection and financial insurance offered by these metals."

 

Most long term holders of gold invest in the knowledge that over time gold has proved to be a great wealth protector. In bull markets, yes it can generate short term gains and it is the prospect of these that brings in the speculators and leads to the kind of volatility which is currently affecting the gold and silver markets. Even the out and out gold bulls who predict soaring prices do so not in the belief that gold will provide speculative gains per se, but that fiat currencies will collapse and that say a 50% increase in the gold price will be due, in effect, to a 50% corresponding fall in the purchasing power of their local currencies. Indeed the real gold bulls believe that the increase will be far greater than 50% as fiat currency purchasing power collapses totally.

So what really is the chance of this 'worst case' scenario taking place? Unpleasantly and worryingly near. A sovereign default in Europe would not be purely a local phenomenon but would have global repercussions. A Greek default for example - which ultimately looks to be inevitable - if it happens soon will likely bring down some major European banks with it. The knock-on effect across the global financial system will be far worse with governments finding it increasingly difficult to find the wherewithal to meet their guarantees to major bank investors - and Greece is only a tiny economy. If much larger economies like Spain, or Italy, were to default, the impact on the global banking system would be truly horrendous.

All the European Community is really doing with its Greek bailouts is buying time in the hope that the banks will be able to make arrangements in the meantime to mitigate the impact of the pending default.

And the American investor can't just sit back in the hope that a European meltdown won't affect the U.S. economy and its banking system. It will. The global banking system is completely interconnected and bank failures in Europe will trigger similar failures in the U.S. Like it or not the U.S. Fed will likely need to help out Europe by pumping money into the system to prevent the dominoes starting to fall - a possibly futile gesture in the long term. The next dose of real QE from the Fed may thus not be to prop up the U.S. economy, but the European one too - and could be the biggest injection of new money into the economy yet.

  Nichols puts it succinctly: "The timing of more monetary stimulus from the Fed - and the next major upward move in gold and silver prices - depends either on the economic news here in America (with bad news raising the chances of more quantitative easing sooner rather than later) or an impending financial disaster in Europe."

However he expects a round of QE in the U.S. regardless of the European situation - perhaps as soon as August given the continuing failure of the U.S. economy to show any real growth and unemployment remaining unacceptably high.

Nichols goes on "Despite yet another round of funding for Europe's sickest economies and banks - and regardless of whatever decisions are taken at the European summit this week - the Eurozone will continue to unravel. There's just no way that citizens of the peripheral economies will continue to accept austerity, collapsing economies, rising joblessness, and deteriorating living conditions for years to come."

"Sooner or later, I expect an impending if not actual default by one or another sovereign borrower or failure of one or another major European bank (what some are calling a "Lehman" moment recalling America's 2008 banking crisis) will trigger an unprecedented flood of new money from the Fed, the European Central Bank, and other central banks in Europe and Asia - assuring that gold and silver once again shine brightly."

This is perhaps an understatement. If this degree of monetary stimulation does come about the impact on gold and silver prices would be immense, and way beyond the power of governments, compliant central banks and their banking sector allies to maintain any degree of control of what is seen as the ultimate standard against which fiat currencies are measured.


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Other Articles      


Now the FED gets Dragged into LIBOR-Gate
Zerohedge

BigBanks Craft 'Living Wills' in Case They Fail
Reuters

JP Morgan Trading Loss May Reach $9 Billion
NY Times

One Billion Silver Ounces and 100 Billion Owners
Jeff Lewis

Silver: A Tier 1 Asset for All
Jeff Lewis

Precious Metals Paper Sellers Conveniently Trapped
Jeff Lewis

US Dollar VS Gold: Epic Money Battle
Golden Jackass

We're About to Have the Most Devastating COLLAPSE in World History
Harley Schlanger

Federal Reserve encourages Banks to Hold Gold
Gary North

CFTC Sets Precedent and Lays Groundwork For Ending Silver Manipulation


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'The mob learned from Wall Street': Eliot Spitzer on the 'cartel-style' corruption' behind Libor scam

The Next Crash Will Be A Lot Worse!

 

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Gold, Silver vs. 'Worthless' U.S. Treasuries ~ Jeff Nielson
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Today's Gold/Silver Ratio: 54/1 UP from 44/1

Issue 125

Gold: $1650.00/ Silver: $30.33

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

 

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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

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Why I'm Buying Silver at $30 ~ Jeff Clark
February 24, 2011
Issue 92
Today's Gold/Silver Ratio: 42/1

Issue 97

Gold: $1409.60 / Silver: $33.38

Why  I'm Buying Silver at $30
Jeff Clark, BIG GOLD

The silver price has bounced 27% since January 28, a huge advance for a measly 16 trading days. It's already soared past its 2010 high and was selling for less than $16 this time last year, a double in 12 months. So, is it pricy? Or should we ignore the run-up and keep buying?

I've read a few articles that say we should expect silver to drop to the $25 level, and one pinpointed $22. Others, of course, see bullish tea leaves for the near term and believe it's headed higher. Of those that assert silver will decline, most believe it will be temporary, though one writer claims the bull market in precious metals is over (I think he's a holdout from the gold-is-a-bubble camp).

These authors could be right about a near-term decline, but I'm less concerned with what the price does this month or even the next few months, and more focused on where it's likely headed over the next few years. Caution: the chart ahead may cause excitement.
While there are lots of reasons to be bullish on silver, what everyone really wants to know is how high the price can go. Here's one hint, based strictly on historical price performance.

Silver rose an incredible 3,646% from the November 1971 low of $1.32 to its January 21, 1980 high of $49.45 (London PM fix prices). Our current advance, through February 4, is 596%. At $30, silver would have to climb over five times to match the last great bull market. If it did, the price would hit $160.89 per ounce (from its bottom of $4.295 on March 30, 2001).

You'll also notice silver has a record of outperforming gold in these two bull markets. In spite of the price dropping 26.9% in 2008 (while gold gained 5%), the metal has outrun its yellow cousin by 38.6% since their respective lows in 2001.

Gold advanced 2,333% in the 1970s; it's currently up 430%. If it matched the last run, the price would hit $6,227.26 per ounce, a return of four-and-a-half times the gold you buy today.

From solely a historical price perspective, the chart certainly suggests we've got a long way to go with both metals. The question is if the fundamentals support such price advances (show me a healthy dollar and no threat of inflation, and we'll talk), but my point for the moment is that there is an established precedence for the price of these metals to climb much higher. And just as important, to keep one's eye on the big picture.

So, yes, I'm buying silver at $30, in part because I think the potential for enormous gains is high.

However, I'll add that I'm not draining my cash account to do so. I think it's important for the precious metals investor to always be in the game, but given silver's volatility and the precarious nature of most markets right now, prudence suggests we keep some powder dry as well.
Let's say one of the soothsayers noted above is correct and silver temporarily falls to $25. If you snag it at that level, your endgame return would be 543%, vs. the 436% gain from $30 (excluding premiums and storage costs). That's more than another 100% gain on your original investment.

But how does one buy silver not knowing if the price will plummet or soar? For example, silver could take off from these levels, never to see $30 again, leaving those of you waiting for a sell-off out of the market. Or it could sink to $25, making investors who went all in now regret they didn't wait for a better price. Or it could trade sideways until, say, next fall, leaving both parties uncertain and on the sidelines.

In my opinion, there's a one-word answer to the question. It solves all dilemmas - it keeps you in the market, while simultaneously letting you buy at lower prices if that occurs. It lets you build your position bigger and bigger without the worry of whether you're getting a good price.
That one-word verb is, accumulate. Or in the vernacular made popular in the '80s by the financial planning community, dollar cost average. In other words, buy a little now, buy a little next month, etc., until you have a position sufficient in size to fight off inflation and any other economic woe we're likely to encounter over the next few years.

So my advice is, buy, hold, repeat. Because if our silver market ends up looking anything like that left bar in the chart, you may regret not having bought at $30, too.

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Quote of the Week                               

"The expense of our civil government we have always borne, and can easily bear, because it is small. A virtuous and laborious people may be cheaply governed. Determining, as we do, to have no offices of profit, nor any sinecures or useless appointments, so common in ancient or corrupted states, we can govern ourselves a year for the sum you [Englishmen] pay in a single department, or for what one jobbing contractor, by the favor of a minister, can cheat you out of in a single article."

Benjamin Franklin, 1778 

Other Articles      

China Embraces The Gold Standard
The New American
 

$400 Silver, Backwardation…
James Turk

Professor Antal E. Fekete
Silver Summit 2011

Kirsty Hogg

Silver Default Looms
Jason Hommel

Silver Can Double In A Week
Bill Murphy - GATA

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The Government Lied...
There is No More Silver!

Manipulation Fails
Metals Spike over $34

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Physical Gold and Silver Supplies Are Tighter Than Reported ~ Patrick A. Heller
January 28, 2011
Issue 92
 
Issue 93

Physical Gold and Silver Supplies Are Tighter Than Reported
By Patrick A. Heller

There are two main markets for trading gold and silver: the London Bullion Market Exchange and the COMEX in New York. London by far has the higher volume. There are other exchanges elsewhere in the US and around the globe, but large traders tend to buy and sell in these two markets.

The London market is supposed to be for purchasing contracts for delivery of the physical metal at the maturity of the contract. In theory, there is supposed to be enough physical gold and silver in the London vaults to fulfill 100% of the outstanding contracts. This has not been true for some time. At the Commodity Futures Trading Commission March 25, 2010 hearings on gold and silver regulations, both Jeffrey Christian and Adrian Douglas testified that the London vaults only have enough gold and silver to cover 1-3% of open contracts.

The COMEX, in contrast, is more meant for the trading of paper contracts by investors who do not want to take physical delivery (although they can). The COMEX warehouses only have a fraction of the physical gold and silver that would needed if all long positions demanded delivery of physical metal at contract maturity. Realizing this potential problem, the COMEX allows contracts to be settled for cash rather than the commodity. Gold and silver contracts can also now be settled, at the option of the seller of the contract, with shares of exchange traded funds for the same metal.

In normal commodity markets, the price of future contracts trade at higher prices than those maturing this month. The price difference normally reflects the prevailing interest rate minus a bit for the cost of storage. This typical market order is called contango…

Read The Rest of the Article ...

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Quote of the Week                               

"If you want to remain slaves of the bankers and pay for the costs of your own slavery, let them continue to create money and control the nation's credit."

- Sir Josiah Stamp [1880-1941]   

Other Articles      

Buy When There Is Blood In The Streets
By: Clive Maund

How gold became politically correct
Michael J. Kosares

Silver: Supply & Demand
Silver Institute

Silver in Backwardation:
Price Set To Explode

James Turk

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Silver Eagle Shortage
David Morgan & Mike Maloney

Too Much Gold Paper
Not Enough Metal

John Hathaway

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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 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:

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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

 

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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...


BLATANT MARKET MANIPULATION IS EMBARRASSING THE "NEW" CFTC
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.

WE EVEN KNOW WHEN IT'S GOING TO HAPPEN!!!

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
e
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


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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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Will the CFTC Actually ACT to Protect Silver Investors? ~ Tradeplacer.com
October 29, 2010 
Issue 83

S&GS Notes: There has been more developing this week on the issue of manipulation of the gold & silver markets. While we've covered this topic in the past, we felt it best to devote this week's newsletter to an update on what is happening on this scene to keep our subscribers informed.

What does this have to do with silver investing you may well ask? Well, it's been driving the price points for some time now; and the more pressure is brought to bear on the guilty parties, we may well see significant spikes in the pricing as they try to cover their short positions, and the downward manipulation of price ends due to public pressure and possible CFTC regulatory activity. Grab your silver and hang on for the ride…

Will the CFTC Actually ACT to Protect Silver Investors?
from Tradeplacer.com

The silver market has seen a lot of surprises this year, and the statement today made by CFTC Commissioner Bart Chilton is probably the most unexpected yet. After more than two years of "investigation" into the silver market with no acknowledgment of structural issues, Chilton gave a public meeting in which he was quoted as saying "There have been fraudulent efforts to persuade and deviously control that price... the public deserves some answers to their concerns that silver markets are being, and have been, manipulated." He went on to state that the CFTC would be introducing new regulations to curb manipulation in the precious metals markets. Silver rose nearly 80 cents from its intraday low on the news.

Silver analyst Ted Butler has been writing letters and warning the CFTC of the consequences of manipulation in the silver market for more than 20 years. Not many people would bother to warn of these issues when ignored and ridiculed, however Butler persisted with his call for action to remove manipulators from the market. Up until recently, these warnings have been completely ignored.

As Butler and others have documented, a concentrated group of four to eight traders have been responsible for nearly 70 percent of all short positions in silver on the COMEX. These traders have consistently traded in unison to move prices while collecting large profits along the way. It is suspected that JP Morgan holds the majority of these short positions; however the CTFC has refused to acknowledge this and trading positions are not publicly disclosed.

Why Now? What does the CFTC and the short commercial banks know that we don't?

It doesn't take 20 years, or 2 years for that matter, to realize that there are obvious structural problems with the silver market - especially when the issues are spoon fed by letters from thousands of individuals. Given the reactive nature of the CFTC, it is unlikely that Chilton is acting preemptively to protect the small investor. It is more likely that the CFTC position is changing due to the structural change in the silver market. In 2008 weak long speculators were categorically replaced with blood thirsty hedge funds, wealthy investors, and developing nations who buy in cash.

(click to enlarge)

As previously documented on Tradeplacer.com, the commercial banks began to cover their short positions in a rising market about four weeks ago which is highly unusual. While silver has oscillated between $23 and $25 over the last month, the banks have continued to quietly cover. Perhaps Chilten means what he says and the banks began to cover in anticipation of further regulation by the CFTC.

Is it too late?

As of October 19th, the commercial traders were still net short 58,150 contracts - roughly 290 million ounces of silver. There are currently only 52 million registered ounces and 59 million eligible ounces held in COMEX warehouses. It would not be possible to remove the short commercials from the silver market in an orderly fashion. The majority of contracts would have to be settled in paper at much higher prices. As pointed out by Butler, the worst case scenario - and increasingly likely - would be a closure of the paper precious metals markets. If that occurs physical silver would likely trade in multiples of its previous paper price and would be unavailable to most buyers. The apparent choice by the CFTC to act is most likely no choice at all. It is a desperate move to maintain the status quo and a reaction to an eminent emergence of either physical shortages or dollar devaluation instigated by a wave of quantitative easing.

Jeff Lewis, of Silver Coin Investor, has the following perspective on this week's announcement by Bart Chilton:

"Almost every major financial media entity ran the story about CFTC regulator, Bart Chilton's statement regarding silver manipulation.

This is quite a remarkable event for our small, yet growing community. 

But given the fact that governments have little incentive to prevent a crisis, I believe this was a very well-crafted and strategic announcement.

Yes, I'm feeling a bit cynical about it.
 


Other Articles of Interest

Commercials Begin To
Cover Silver Short Position
s

Tradeplacer.com

Could This Be It?
David Bond, Publisher

Traders Accuse HSBC,
JP Morgan
of Silver Manipulation

Forbes Magazine

Silver to 30 In 18 Days
James Turk

The Return to Good Money
Jeff Nielson


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SGS: We saw a 'correction' briefly this past week in the price of silver/gold… this was more likely the combination of manipulative activity plus the drop that usually accompanies the gold/silver options expiration date each month (Oct 26). We see this over and over… when these dips happen, buying RETRACTS… it is the old 'loss of confidence' phenomenon… wise investors don't let themselves get caught by this…. BUYING SHOULD SURGE on the price dips…

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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"This fiat currency experiment will end badly in a currency crisis, and when that happens, as it surely will, gold will go parabolic and silver along with it but even more so as the gold/silver ratio adjusts itself to a more historical correlation. The wealthiest people in the world will be those who put 10% to 15% (or perhaps more, much more!) of their portfolios into physical silver today."

Lorimore Wilson
Editor Financial Article Summaries today


 


 

Dollar, Silver, GDP, QE2, elections
Peter Schiff - Schiff Report

 


On the surface, The Wall Street Journal's 'C1' article provided one of the most compelling and in-depth accounts:

http://online.wsj.com/article/SB10001424052702303341904575576203310056046.html

There was mention of the concentrated short position.
They named the major players -- HSBC and JP Morgan.
Many of the other reports were phrased in such a way that it almost sounded like prices were being manipulated higher, not lower.

But not this one.
And to top it all off, we are now considered 'manipulation theorists', rather than 'conspiracy theorists' - which has a more credible sounding ring….
I don't mean to diminish the significance of this event, but...

Below the surface of this news, I believe we are witnessing a political announcement meant to create the sense that we are being protected by regulators.

If and when the price of silver explodes, the noise from this statement may serve to position blame in such a way that the call for more regulation will once again have the political will of the people behind it.
Recall the politics surrounding the formation of the Federal Reserve Act.

The bill was presented as a way of protecting the people from a crisis caused by banks.
Look what that got us.
I want to believe this is a step in the right direction in terms of the general awareness created in the mainstream.
However, the reactionary nature of governments to form committees after the fact leaves me suspicious.
And the natural laws of supply and demand will come to pass, despite efforts to interfere - for or against. "

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An Encore Presentation ~ Art Cashin
October 22, 2010 
Issue 82

An Encore Presentation
by Art Cashin 10/12/2010

(Today we will revisit one of the most devastating economic events in recorded history.It all began with the efforts of a few, well-intentioned government officials.)

Originally, on this day (-2) in 1922, the German Central Bank and the German Treasury took an inevitable step in a process which had begun with their previous effort to "jump start" a stagnant economy. Many months earlier they had decided that what was needed was easier money. Their initial efforts brought little response. So, using the governmental "more is better" theory they simply created more and more money.

But economic stagnation continued and so did the money growth. They kept making money more available. No reaction. Then, suddenly prices began to explode unbelievably (but, perversely, not business activity).
So, on this day government officials decided to bring figures in line with market realities. They devalued the mark. The new value would be 2 billion marks to a dollar. At the start of World War I the exchange rate had been a mere 4.2 marks to the dollar. In simple terms you needed 4.2 marks in order to get one dollar. Now it was 2 billion marks to get one dollar. And thirteen months from this date (late November 1923) you would need 4.2 trillion marks to get one dollar. In ten years the amount of money had increased a trillion fold.

Numbers like billions and trillions tend to numb the mind. They are too large to grasp in any "real" sense. Thirty years ago an older member of the NYSE (there were some then) gave me a graphic and memorable (at least for me) example. "Young man," he said, "would you like a million dollars?" "I sure would, sir!", I replied anxiously. "Then just put aside $500 every week for the next 40 years." I have never forgotten that a million dollars is enough to pay you $500 per week for 40 years (and that's without benefit of interest). To get a billion dollars you would have to set aside $500,000 dollars per week for 40 years. And a…..trillion that would require $500 million every week for 40 years. Even with these examples, the enormity is difficult to grasp.

Let's take a different tack. To understand the incomprehensible scope of the German inflation maybe it's best to start with something basic….like a loaf of bread. (To keep things simple we'll substitute dollars and cents in place of marks and pfennigs. You'll get the picture.) In the middle of 1914, just before the war, a one pound loaf of bread cost 13 cents. Two years later it was 19 cents. Two years more and it sold for 22 cents. By 1919 it was 26 cents. Now the fun begins.

In 1920, a loaf of bread soared to $1.20, and then in 1921 it hit $1.35. By the middle of 1922 it was $3.50. At the start of 1923 it rocketed to $700 a loaf. Five months later a loaf went for $1200. By September it was $2 million. A month later it was $670 million (wide spread rioting broke out). The next month it hit $3 billion. By mid month it was $100 billion. Then it all collapsed.
Let's go back to "marks". In 1913, the total currency of Germany was a grand total of 6 billion marks. In November of 1923 that loaf of bread we just talked about cost 428 billion marks. A kilo of fresh butter cost 6000 billion marks (as you will note that kilo of butter cost 1000 times more than the entire money supply of the nations just 10 years earlier).

How Could This All Happen? - In 1913 Germany had a solid, prosperous, advanced culture and population. Like much of Europe it was a monarchy (under the Kaiser). Then, following the assassination of the Archduke Franz Ferdinand in Sarajevo in 1914, the world moved toward war. Each side was convinced the other would not dare go to war. So, in a global game of chicken they stumbled into the Great War.

The German General Staff thought the war would be short and sweet and that they could finance the costs with the post war reparations that they, as victors, would exact. The war was long. The flower of their manhood was killed or injured. They lost and, thus, it was they who had to pay reparations rather than receive them.
Things did not go badly instantly. Yes, the deficit soared but much of it was borne by foreign and domestic bond buyers. As had been noted by scholars….."The foreign and domestic public willingly purchased new debt issues when it believed that the government could run future surpluses to offset contemporaneous deficits." In layman's English that means foreign bond buyers said - "Hey this is a great nation and this is probably just a speed bump in the economy." (Can you imagine such a thing happening again?)


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


Free Service

 

Other Articles


One Hellish Predicament
BY Jim Cook

The World According to Gold
James West, Midas Letter

Don't Worry About A
Gold Correction


How High For Gold & Silver
Part I & Part II

Jeff Nielson


New CFTC Whistleblower

 



 

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"True individual freedom cannot exist without economic security and independence. People who are hungry and out of a job are the stuff of which dictatorships are made."

Franklin D. Roosevelt
 


Warning! The Bullion Banks
Are Losing Control

 

When things began to disintegrate, no one dared to take away the punchbowl. They feared shutting off the monetary heroin would lead to riots, civil war, and, worst of all communism. So, realizing that what they were doing was destructive, they kept doing it out of fear that stopping would be even more destructive.

Currencies, Culture And Chaos - If it is difficult to grasp the enormity of the numbers in this tale of hyper-inflation, it is far more difficult to grasp how it destroyed a culture, a nation and, almost, the world.

People's savings were suddenly worthless. Pensions were meaningless. If you had a 400 mark monthly pension, you went from comfortable to penniless in a matter of months. People demanded to be paid daily so they would not have their wages devalued by a few days passing. Ultimately, they demanded their pay twice daily just to cover changes in trolley fare. People heated their homes by burning money instead of coal. (It was more plentiful and cheaper to get.)

The middle class was destroyed. It was an age of renters, not of home ownership, so thousands became homeless.

But the cultural collapse may have had other more pernicious effects.

Some sociologists note that it was still an era of arranged marriages. Families scrimped and saved for years to build a dowry so that their daughter might marry well. Suddenly, the dowry was worthless - wiped out. And with it was gone all hope of marriage. Girls who had stayed prim and proper awaiting some future Prince Charming now had no hope at all. Social morality began to collapse. The roar of the roaring twenties began to rumble.

All hope and belief in systems, governmental or otherwise, collapsed. With its culture and its economy disintegrating, Germany saw a guy named Hitler begin a ten year effort to come to power by trading on the chaos and street rioting. And then came World War II.
We think it's best to close this review with a statement from a man whom many consider (probably incorrectly) the father of modern inflation with his endorsement of deficit spending. Here's what John Maynard Keynes said on the topic:

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some…..Those to whom the system brings windfalls….become profiteers.

To convert the business man into a profiteer is to strike a blow at capitalism, because it destroys the psychological equilibrium which permits the perpetuance of unequal rewards.

Lenin was certainly right. There is no subtler, no surer means of over-turning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose….By combining a popular hatred of the class of entrepreneurs with the blow already given to social security by the violent and arbitrary disturbance of contract….governments are fast rendering impossible a continuance of the social and economic order of the nineteenth century.

To celebrate, have a jagermeister or two at the Pre Fuhrer Lounge and try to explain that for over half a century America's trauma has been depression-era unemployment and deflation while Germany's trauma has been runaway inflation. But drink fast, prices change radically after happy hour. And, tell Fed Chairman Bernanke that it was the "German Experience" that caused many folks to raise an eyebrow when he alluded to the power of the "printing press" a few years ago. But, rest assured that no one would let it happen again.
 

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