The Morgan Report Blog

New Political Battles Loom over Compulsory IRAs and Fed Secrecy

This week’s Market Wrap Podcast with Mike Gleason and David Morgan.

David gives us a sneak peak about what to expect in the gold and silver markets this year, and the likelihood gold and silver will reassert themselves as money in the face of a potential global currency collapse.

## Transcript ##

Mike Gleason: I’m happy to welcome back our friend David Morgan of the Morgan Report and David since we haven’t gotten together since last fall, I guess a belated happy New Year. It’s good to talk to you again. How are you?

David Morgan: I’m doing well, thank you Mike.

Mike Gleason: Let’s get right to it today because we’ve got a lot of things to cover as usual. First off, we’ve had a very positive start of the year for gold and silver. Although the metals are getting hit pretty hard today as we’re talking here on Thursday afternoon. What do you make of the market action so far this year and especially this pull back that we’re seeing today…that I understand had mostly to do with them raising margin requirements, is that it?

David Morgan: That certainly plays into it quite a bit. Constructive is the word I would use. It’s been constructive, I think the lows are in finally for both gold and silver. The end of last year we had a spike low in silver. One that was similar in gold. And we’ve been building up from there. Not ignoring today’s action with silver off a dollar and gold off $25, but that’s constructive really. Meaning that all markets go up and down. Regardless of the cause of manipulation. Margin requirements increases. Good news, bad news on the general economy, et cetera.

The trend has been up. It’s been strong. The volume has started to look pretty decent. So I think we’re going to have a better year, this year than we had for the last three years and gold in the last four or so.

It’s not going to be a barn burning year in my view, but it’ll be a constructive view with higher prices.

Mike Gleason: Last time we spoke you had mentioned the mining industry was taking a terrible beating given the prolong period of low spot prices in the futures markets. Now obviously you report on a handful of companies that are still doing well, but most you said are really struggling and they’re scaling back production or even going out of business altogether. What’s the latest there?

David Morgan: Well to back up, and you’re correct in what you said, but The Morgan Report did an analysis on all the companies we profile currently. The top tier, mid tier, and speculative section. Now we picked two, or found the two best in each category. Before like, ultra conservative investors, moderate conservative investors, speculators, and most investors sprinkle their portfolio with all three sections and we found the most undervalued companies, a couple of those in the top tier are up 30 to 40% from when we pull out the report for the January issue are still off today with the sell off in the metals today. But the real value is really there, but I don’t want to say anything that isn’t consistent of what I’ve said for many years and that is really starting a portfolio you have to have the (physical) precious metals first.

But in a way if you want to catch up to the people that were able to buy silver at $5 and gold at $200 or $300…the way to do that is to find the right mining companies today at very, very under-valued positions and buy into them and certainly you have to buy more than one for lots of reasons. But a good core holding of even like 6 companies would be something that have a lot of leverage to the metal.

So, the company going out of business, et cetera, that still is unstable. Many of these companies that were in the junior category are out of business. The ones that are hanging on many of them moved offices, 2 or 3 companies are in one office and they share the secretary expenses that way. These companies are in Vancouver, which is the resource capital of the world, they certainly, have been through hard times before. They know how to ebb and flow with market conditions. Most of them, they’re viable. They’ll do anything that they possibly can to stay in business.

Some of them are good prospects or proven them enough to maybe less risky than others, let’s say. They can be M&A’ed, a merger and acquisition type of network or something else. Still plenty to look forward to in the mining sector from the junior space all the way up to the top tier producers. But the field is getting narrowed.

The problem with these gold and silver companies is that, for the average company we’re right near the cost of production still. Gold is somewhere, and it varies from company to company, but the rule of thumb around the $1,450 level (in gold), silver somewhere around the $20 level, all-in costs of course and we’re below those levels. These companies can’t go on forever at those prices but they certainly will operate for quite some time.

Mike Gleason: Kind of staying on that topic here with the mining industry and cost of production so forth. I want to ask you about some of the figures you put out on true all in cost of silver production. I think you recently reported that for some it’s closer to $24, which is higher than I’ve seen some other people report. Talk about the reasons how you came up with that number. Some have put $15 to $20 as sort of an average all in cost of production, but you’ve factored the whole picture there, don’t you?

David Morgan: Right, and first of all, you have to set up the parameters. What are the givens? The givens are we’re looking at only primary silver producers. We’re not looking at big conglomerates like BHP, or RTZ, or one of these multi-national companies that mine base levels and silver is a credit to them. So, we’re talking about companies that make their living by mining silver. That would mean at least 50% or more, revenue is the bottom line is due to silver mining.
There is no such thing as a pure silver mine. First Majestic, Tahoe Resources, Endeavor Silver, US Silver, Helca Mining, Coeur d’Alene, you name it. They all mine silver but they mine lead, zinc, and copper or some variation thereof throughout the industry. So there’s no such thing as a mine, only mine silver only. Although First Majestic is pretty close with about 90% exposure to silver.

Regardless, you have to look at those companies and that’s a handful. I mean, you can put it along your two hands and have some fingers left over. Then you got to look at all the costs and we do the analysis. But the one thing that most leave out in the all-in costs, some of our friends in the business, is the tax situation.
A lot of these companies have a carry loss that they can take advantage of and that’s good for the years that they have a loss when situations like we’re currently in, where they’re mining at a loss and they take a loss against production and it helps them from an overall cost standpoint for that year or a few years.

Now the years that they’re making money. When silver was at $30 an ounce, their cost are $24 let’s say, obviously they that tax base. We look at that cost as well, since it is a true cost. We realize it’s not an every year thing. But one thing I’ll say is that we came in with about $22, I mean it varies again from company to company. But what I say is that that number may be a bit high now Mike, because when we did the last analysis so we can update it and make dropped to $20.
About 25% of the cost on a fully operating mine, and again this is a rule of thumb, it isn’t every mine is energy. Since we’ve seen such a drastic drop in the price of oil, the cost, the true all-in costs are going to be less, not more. Because that’s a huge part of the budget, it’s dropped substantially.

Are my numbers high? Yes, they are right now. But you know, all you can do is all you can do. With the absolute factual information at the time. Does it vary? Sure it varies. How much does it cost to heat your house, or run your car, or whatever? It’s different now than what it was 6 months ago.

Mike Gleason: Gold and silver have held up pretty well while oil was of course taken a major hit here. Is that surprise you at all?

David Morgan: It’s not a big surprise to me, and the reason being is that having studied this sector for so long and also having lived through one major market in the past in the metals as well as a couple of bull markets in the stock markets…we have observed that when we get near the end game, meaning where gold asserts itself of the ultimate currency against everything else. You will see the dollar going up – which is probably the most perceived safe haven investment that there is – going higher against all other currencies and at the same time gold going up a long with it.

This is contrary to a lot of thinking because there’s a lot of my peers that basically make the case that they’re inversely related. You know, gold up, dollar down, dollar up, gold down. So it’s an inverse relationship. That’s true for a great deal of the time.

Then again, near the end game what happens is you’ll get into what’s called a liquidity squeeze. People seek the most safe asset as they can. There’s nothing safer than cash except real cash and that’s precious metals. But only one, or two, or three percent of the population ever act on that knowledge. They know that only 5% even understand it or understand why did they have any exposure to it. Meaning, a grandson of somebody, a granddaughter of somebody that lived through a situation like the Weimar Republic. They’ve heard from their grandparents, or great grandparents, or fathers’ mother, that told story about their grandparents.

You have to experience during a hyperinflationary depression or more recently if you’re in Argentina. What’s happen there a few times recently … All these currency crisis that happen. People in Zimbabwe. I’ve done a video that is on the net. You could probably go to YouTube and search David Morgan and hyperinflation. But when that Zimbabwe dollar was about equivalent to the US dollar at one point. They had teachers that were retired making 30,000 Zimbabwe dollars a year. That was there retirement. At the time it was you know, it was enough, it wasn’t luxury living but it was enough to be retired.

Think of what happened to them. Now I’m not predicting hyperinflation, butthat doesn’t mean we can’t see the currency depreciate even further where it is detrimental to almost everybody. That is what I expect.

That means that there is a lot of people that will be moving in the gold market over time. There will be a point at some time, probably 2016 where that accelerates. Where people that are holding cash realize, geez I don’t want dollars…they are not as valuable or there’s too much problem with this currencies market or whatever. It could be multiple number of reasons, primarily it be depreciation of currency and moving into gold.

We’re going to see gold moving against the dollar. Which is doing now and I say, let’s go into the gold market. So if you see a choppy market here for the gold and silver, I think. But again constructive. Mostly up and I think the key levels we’re looking for is $26 in silver and $1,550 in gold. I think it will be achieved this year, but I’m not going to stick my whole reputation on it. What I do know is we’re far, far from the ultimate high in these markets. These markets did accelerate a few years back and that’s a taste of what’s to come. That is, just again, a taste of what I see in the future, because in the future it’s going to be, probably the kind of move in the metals markets that is going to go into the financial history books.

Mike Gleason: We seem to have a lot of fireworks brewing here in the currency world. You just mentioned hyperinflation a moment ago. Maybe we are starting to see the beginning of some sort of an end game developing here. The Swiss decided we’re going to unpeg the franc to the euro. A lot of the euro money is flowing into precious metals. What do you make of everything that’s going on there and then gold and silver re-asserting themselves as the true currency.

David Morgan: Absolutely. This is something that I’ve been forecasting, along with others, for a very long time. Because the ultimate game for the end game is a currency war. And it started with the oil situation and that brought (Russian) ruble to its knees. Then the Swiss said well Draghi is going to open the flood gates to money printing and they know what happens. So they exited themselves from euro peg so they wouldn’t be taking down with the ship in this hyperinflationary, or let me see inflationary mode that the euro is going to keep printing. So they exited that peg.

I’m addressing that in the latest Morgan Report that is going to go out this weekend. I don’t want to give away the farm. I’m certainly not an original thinker, all though somewhat be. There’s a question about that that I’ve got the attention of our subscribers that I think is full of the most important questions you can ask about these currency wars. If you very astute and you can read between the lines, they understand what I’m eluding too.

But that is Mike. All these things are coming together where you see who’s currency … Wild currency fluctuates. Wild, I mean look what happened to ruble. Look what happened to Swiss bank. Look what’s going on in the euro market. Look what’s happening in the dollar. Then you start scratching your head and gold is going up against all of them. Why is that?

So, all these things are starting play out pretty much how I would have expected them, if you would’ve asked me on which end game looked like 10 years ago. I say well, near the end, wild currency fluctuations. A lot less trust in the system. A lot of volatility that’s off the charts. Today we get the yen trade for example to kind of move you used to get over a year’s time back in the currency markets.

I never traded currencies often. I did a few, I did some, not a lot. But I did some yen versus dollar. I was pretty good at it, but I know from my trading days, when I was trading metals, but where, like I said, the move that you see now, in a matter of weeks is definitely (volatile) … It (used to) take a year to get those kind of percentage.

So things are accelerating, and changing, and causing people to wake up to the fact that something is not right in the financial section. Something is not right in the currency system, the geopolitical situation is obvious if you pick up anything from the mainstream press and or alternative media. So this just leads more and more to people that want what we all want and that’s certainty. They are going to rush to something that’s certain. There’s nothing more certain then something that’s been money for thousands of years. None of these currencies have lasted more than 200 years.

Mike Gleason: That’s certainly a key point and obviously we are seeing some big moves in a lot of volatility in these markets and that could be a foreshadowing of some major things to come. Well excellent insights as usual David. I know you’re a busy guy. Thanks again for always being so generous with your time and I look forward to catching up with you again real soon.

David Morgan: Thank you so much.

Mike Gleason: Well that will do for this week, thanks again to David Morgan. Publisher of The Morgan Report. As we’ve done in the past, we’re offering free Silver Eagle bonuses for anyone who signs up for risk-free trial of your newsletter. Our listeners can access this special offer from this week’s podcast playback page at


David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?


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Bread and Circuses

Bread and Circuses
(Not All Inflation Is about Footballs)
by Guy Christopher

I know it’s easy to brush off those constantly mounting reports and stories of decay, destruction, and despair. I sometimes find myself ignoring as much bad news as possible, just to keep my sanity.

Then I realize that heaping one atrocity after another onto my growing pile of information-overload is purposely designed to wear me out, so that I’ll ignore new attacks on my Constitution and new betrayals from those I elected to office. They want me to grow weary of learning what’s true, hoping I’ll overlook what I recognize as lies.

They want me to think I’m the one who’s crazy.Image1

They use an age old strategy to keep me in line. It’s the tried and true political ploy called “bread and circuses,” proven effective for dying governments to keep restless citizens fed just enough, and sufficiently entertained, to keep the pitchforks from the palace gates.

This propaganda tactic comes to us from the Ancient Roman Empire, which fearfully recognized it was suffocating under the weight of its own decadence.

The Caesars first made sure hungry citizens had rations of government grain to keep them fed. Then, to deflect attention from endless foreign wars and massive public corruption, the Caesars provided gladiator entertainment in grand coliseums. The brutal contests distracted attention from the other life and death issues of looming financial ruin and moral decay.

The dying Roman Empire invented bread and circuses to buy itself time.

Hiding Economic Misery and Distracting the Masses with Entertainment

The modern American version also begins with public grain handouts. But ratherthan remind everyone of the ugly soup kitchens of the 1930’s Great Depression, bread lines today are disguised by plastic food stamp debit cards to hide 47 million impoverished Americans in the supermarket checkout lanes.

Image2Government employment statistics distort the true human misery of 102 million out of work – 43 million men and 59 million women over age 16 – who cannot provide for themselves or their families without assistance. Among those who have work, a recent government survey found 57% of all Americans have less than $500 in savings, with 62% living paycheck to paycheck.

To keep me calm about these modern evils, I’m invited to mingle with a cheering crowd. The tricky part is convincing me my opinion actually matters, just as citizens in Roman coliseums were invited to recommend thumbs up or thumbs down. They have found for me the perfect circus.

They give me the Super Bowl.

And I get a new one every year, numbered in Latin in honor of Ancient Rome.

My first super bowl party was actually Super Bowl III. I watched the game in an Army barracks, joining other young soldiers just returned from overseas. We sat in folding chairs in front of a portable black and white TV sitting atop a card table. A coin-operated snack machine supplied the chips.

Did the brash upstart Joe Namath keep his crowd pleasing, widely publicized boast to defeat the nationally beloved veteran Johnny “Golden Arm” Unitas that Sunday in January of 1969? I don’t remember. Turns out it wasn’t that important after all.

Forty-six years later, I plan to steal a few hours from my work to watch the game. My big screen and comfy recliner are improvements, but this time I’ll know what the game is really all about.

Also, I’ll see the same contest played out that each of us has seen each day of our lives.

I will see that victory and defeat are odds of chance, improved only by training, skill and self determination. I will see there is never success without sacrifice. I will see that triumph is possible, but survival is never guaranteed.

Watching This Year’s Super Bowl Is Seven Times More Expensive

One thing that certainly has not survived these 46 years is the value of the dollars we all earned and saved, thanks to government-planned inflation designed to cheat us every day of our wealth.

The cost to enjoy Super Bowl XLIX at home will be about seven times the cost to watch Super Bowl III in 1969. A 25 cent bag of chips now costs $1.77, according to the federal government’s under-stated numbers. A 20 cent bottle of brew is now $1.41 if you buy the 12-pack at the grocery. Chicken went for 29 cents per pound. Try getting even a whiff of one spicy wing for that today.

There’s a new and disturbing aspect to my modern bread and circuses. The value of a captive audience has proven too tempting for circus masters to waste on folks just wanting an entertaining break from their worries.

How do I avoid the growing political rants sandwiched into the game from players and sportscasters? I’d rather see athletes make great plays than make politically correct statements. Watching the end-zone victory dance blown apart by a satchel charge of political rhetoric is not what I tune in for.

“Deflate-Gate” Is the Wrong Inflation Scandal to Be Debating

This year, I cannot avoid the added drama of “deflate-gate,” the name given this overblown tactic for ball control. For millions of Americans out of work, surviving on government assistance – with no financial independence to turn to after that game ends Sunday night – it’s the wrong meaning of inflation to toss around, the wrong pumped-up ball to kick back and forth, the wrong hot air to test for integrity.

Image3It’s the wrong question of just who is cheating whom.

I’ll find myself in good company for Super Bowl XLIX. Bureau of Labor statistics show for every unemployed American who will spend those Sunday afternoon hours looking for work or minding other chores, six will be watching television. Together, they and I will help to fill the largest virtual coliseum ever known to mankind, handed down from a dying Ancient Rome, keeping pitchforks from the gates just a bit longer.

I recommend to Caesar thumbs down.

### columnist Guy Christopher is a veteran writer living on the Gulf Coast. A retired investigative journalist, published author, and former stockbroker, Christopher has taught college as an adjunct professor and is a veteran of the 101st Airborne in Vietnam.


David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?


Join The Morgan Report Free for 30 Days *
* 30 Day Trial applies to new user sign ups only!
Offer does not apply to Premium Memberships.

Housing Bubble 2.0 just met Pin 2.0

Housing Bubble 2.0 just met Pin 2.0


The 30 Year U.S. Treasury bond yield hit 2.35% yesterday. That is the lowest rate in U.S. history for the 30 Year Treasury. During the deepest darkest depths of the recession in March 2009, after the stock market had fallen over 50%, the yield was 3.5%. One year ago it was yielding 4.0%. Long term interest rates are not controlled by Yellen. They reflect the economic prospects of the country. When they are rising it means the economy is doing well. When they are plummeting to all time lows, the economy is either in recession or headed into recession. Take your pick. No amount of government data manipulation, feel good propaganda spewed by the captured mainstream media, or Ivy League educated Wall Street economist doublespeak, can change the fact this economy is in the dumper and headed much lower. The Greater Depression is resuming its downward march toward inevitable war.


– KBH SEES 1Q BOTTOM LINE ABOUT BREAK-EVEN (against expectations of a 17c rise!)

KB Home had revenues of $2.4 billion in 2014. They are one of the largest home builders in the country. It’s stock has dropped 30% in the last few days. It’s down 40% from its February 2014 high. It’s down 85% from its 2005 high. It had $9 billion of revenues and delivered 60,000 homes in 2005. Then Pin 1.0 popped the first bubble. Revenues collapsed to $1.3 billion and they lost hundreds of millions from 2007 through 2012.

Lennar had revenues of $7.0 billion in 2014. They are the largest home builder in the country. It’s stock has dropped 9% this week. It had been trading at a seven year high, but is still trading 33% below its 2005 bubble high. It had $14 billion of revenues and delivered 42,000 homes in 2005. Then Pin 1.0 popped their bubble. Revenues imploded to $3 billion and they also lost hundreds of millions from 2007 through 2012.

Their admissions earlier this week are proof Bubble 2.0 has met Pin 2.0. KB Home’s 85% increase in revenue and Lennar’s 130% increase in revenue since 2011 have been nothing but a Federal Reserve/Wall Street/U.S. Treasury engineered scheme to repair the balance sheets of the insolvent Too Big To Trust Wall Street banks. The financial industry oligarchs and their servile lackey puppet politicians decided an easy money, Wall Street created scheme to boost home prices would benefit the .1% and restore some of their fraudulently acquired wealth. It isn’t a coincidence home prices rose in parallel with the Fed’s QE programs. And it isn’t a coincidence the bubble is rapidly deflating now that QE3 is over.

The fraudulent nature of the supposed housing recovery can be deciphered by analyzing a few pertinent data points. 30 year mortgage rates were in the 5% to 6% range during the first bubble. Mortgage rates have been consistently below 4% for the last three years. In a healthy market driven economy, these low rates should have brought in first time home buyers and led to a sustainable long-term recovery.


Instead, the number of homes bought by first time buyers has languished at record low levels. The majority of homes sold in 2011 and 2012 were distressed foreclosures and short sales, and the vast majority of sales in the last two years have been to Federal Reserve financed Wall Street investors, Chinese billionaires and fast buck flippers. New home sales of just above 400,000 five years into an economic recovery are at previous recession lows, despite record low mortgage rates. They languish 65% below 2005 levels, when KB Home and Lennar were minting money. Existing home sales of 5 million are back at 1999 levels and 30% below the 2005 highs. This pitiful result is after $3.5 trillion of QE, extremely low mortgage rates, and tremendous hype from the NAR and the corporate MSM (It’s always the best time to buy).


The falsity of the housing recovery storyline can be seen in the fact that mortgage applications linger at 1995 levels, even though mortgage rates are 400 basis points lower than they were in 1995. A critical thinking individual might ask how home prices could rise by 20% since 2012 even though mortgage purchase applications are 20% lower than they were in 2012 and 65% below 2005 levels. The answer is they couldn’t have risen by 20% without massive monetary manipulation and insider deals between Wall Street banks, Wall Street hedge funds, FNMA, Freddie Mac, The Fed, and the U.S. Treasury.


You see, average Americans buy houses not as an investment, but as a place to live. They save enough for a down payment by spending less than they earn, and then make monthly payments for 30 years from their rising household income. Of course, that was the old days. Real median household income is exactly where it was in 1995. It is currently below the level of 1989. Average Americans have made no headway in 20 years. The median price of a home in 1995, according to the Census Bureau, was $128,000. The median price of a home today is $281,000. When prices go up 120% and your real income remains stagnant, even record low mortgage rates is just pushing on a string. With real wages continuing to fall, young people saddled with a trillion dollars of student loan debt, the full impact of the Obamacare neutron bomb (kills small business, doctors and jobs, but not insurance conglomerates or government bureaucracy) just detonating, and an economy clearly going into the tank, there is absolutely no possibility of a real housing recovery in the foreseeable future.


The Too Big To Trust banks have consistently accounted for 35% to 55% of all mortgage originations in the U.S. over the last four years. Wells Fargo is the undisputed leader. All of these banks have reported dreadful financial results this week, with plunging revenues and profits, even with accounting shenanigans like relieving loan loss reserves and marking their balance sheets to fantasy rather than true market values. In the midst of a supposed housing recovery, with mortgage rates at historic lows, the largest mortgage originator in the world, saw their mortgage originations FALL by 12% over last year. They are down 65% from two years ago. JP Morgan and Citigroup also saw their mortgage businesses contracting. These banks have been firing thousands of people in their mortgage divisions. This is surely a sign of a healthy growing housing market. Right?


Essentially, the entire housing recovery storyline has revolved around the Federal Reserve providing free money to Wall Street banks, who then withheld foreclosures from the market, sold them in bulk at inflated prices to Wall Street hedge funds like Blackstone, who then created a nationwide rental business, driving prices higher. FNMA and Freddie Mac did their part by selling their bulk foreclosures to the same connected hedge funds. The average person had no opportunity to bid on foreclosed homes and reap the benefits of lower prices. Blackstone has since created a new derivative, by packaging their rental income streams into an “investment” to sell to muppets. Their rental properties are concentrated in the previous bubble markets of Arizona, California, Florida, and Nevada. What a beautiful business concept. Free money from their Federal Reserve sugar daddy, kicking people out of their homes and then renting their houses back to them, driving prices higher by restricting supply and stopping new household formations, double dipping by creating a new exotic subprime investment opportunity, and then exiting stage left before it all blows sky high again.


The areas of the country with the highest percentage of Wall Street owned rental properties have had the largest price increases over the last three years. Some people never learn. Blackstone and the rest of the Wall Street crowd stopped buying properties in 2014. They’ve achieved their objective – easy profits. They have no intention of being long-term landlords. They are seeking the greater fools to take these properties off their hands at inflated prices. The result will be rapidly falling prices, as there is no real demand for these properties.


The only thing propping up the housing market has been QE, connected Wall Street insiders, Chinese billionaires trying to get their money out of China before their collapse, and the usual flip that house morons you’ve seen on cable TV. QE has ceased. The Wall Street shysters are selling. The Chinese billionaires are only impacting the high end. The low IQ flippers are stuck holding the bag again. It’s no coincidence the Case-Shiller Index has been in a steady DECLINE since the beginning of 2014. Prices have round tripped back to 2012 levels and are headed back to 2009 levels. What a shame. Maybe they can hand out t-shirts that say:



Two of the biggest home builders in the country have already warned that 2015 is going to be bad. And they are surely painting a rosier picture than they will ever admit. Corporate executives aren’t known for honesty or forthrightness. A perfect storm is brewing and the second Fed induced housing bubble of this century is deflating rapidly. The plunge in oil prices is not due to over-supply. It’s due to under-demand. A global deflationary contraction is underway. What higher paying employment growth and capital investment that has occurred since 2009 was spurred by high oil prices. Texas has led the charge. Energy related companies are announcing thousands of layoffs, and the fun has just begun. Lance Roberts explains the ripple effects:

The majority of the jobs “created” since the financial crisis have been lower wage paying jobs in retail, healthcare and other service sectors of the economy. Conversely, the jobs created within the energy space are some of the highest wage paying opportunities available in engineering, technology, accounting, legal, etc. In fact, each job created in energy related areas has had a “ripple effect” of creating 2.8 jobs elsewhere in the economy from piping to coatings, trucking and transportation, restaurants and retail.

Energy companies have accounted for 25% of all S&P 500 capital expenditures. They are slashing cap-ex budgets by billions. Revenues and profits of energy companies are collapsing. Unemployment claims have already begun to rise. Retail sales growth below 3% always portends or confirms recession. People without jobs, burdened with student loan debt, and living on the same income they had in 1989, do not buy houses. Without QE and Wall Street hedge funds to prop up the market, the bubble is popped. Maybe someone should ask Ben Bernanke at one of his $300,000 lunch time speeches for Bank of America what he thinks about the housing market. He does have an Ivy league education and did save the world.

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.” – Ben Bernanke – July 2005


David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?


Join The Morgan Report Free for 30 Days *
* 30 Day Trial applies to new user sign ups only!
Offer does not apply to Premium Memberships.

Exclusive Interview: Evidence Surfaces of Alarming Government Manipulation of Gold Market

Exclusive Interview: Evidence Surfaces of Alarming Government Manipulation of Gold Market

Money Metals Exchange conducted an amazing interview (audio found here) about the secretive and far-reaching gold price suppression scheme that’s appears to be underway. Chris Powell of the Gold Anti-Trust Action Committee, or GATA, tells all in his exclusive interview with Money Metals.

Mike Gleason, Director, Money Metals Exchange: It is my privilege now to welcome in Chris Powell, Secretary/Treasurer at the Gold Anti-Trust Action Committee, also known as GATA. Chris is a long-time journalist and hard-money advocate, and through his tireless efforts at GATA, he is working to expose the manipulation of the gold and silver markets. Through GATA’s work over the years, some important revelations have come to light, which quite honestly should concern everyone. It’s great to finally get a chance to talk to him. Chris, how are you? Thanks for taking the time to join us today.

Chris Powell, Secretary-Treasurer, GATA: Very glad to be here, Mike. Thanks for your interest.

Mike Gleason: Well, Chris, I want to start out by asking how GATA came about some 15 years ago, and give our listeners a bit of background on the organization’s purpose and mission, if you will.

Chris Powell: It was a bit of an accident, Mike. I was beginning to follow the gold market, mainly out of contrarian curiosity, and I vaguely realized something was wrong when I bumped into our chairman Bill Murphy’s internet site of commentary about the gold and silver markets. He was repeatedly describing, back in the fall of 1998, what seemed like manipulation of the gold and silver markets by the big New York investment and bullion banks, which seemed to intervene in the market to knock the price down at strategic price points.

I wrote him a note saying that if what he was writing about was correct, what he was observing was a violation of the Sherman Act and Clayton Act and 50 state antitrust acts, and instead of him just complaining about it every night, somebody ought to form a committee and hire some lawyers on a contingency basis and sue the bastards under antitrust law and collect triple damages. I told him that if somebody wanted to form such a committee, I’d donate, I don’t know what it was, $500 to it. He thought that was a good idea, and that’s really how GATA was formed.

Now, really after we incorporated and began to research the market more and got some help from certain experts in the market, we began to realize that the New York investment banks that Bill had spotted suppressing the gold price were really working as the agents of Western central banks and that Western central banks actually had been the big players in the nominally free gold market for decades. The central banks used to rig the gold market openly, back in the 1960s, through a mechanism called the London Gold Pool. Now they were doing it, we discovered, through their intermediaries, the New York and London bullion banks that were doing it through the leasing and swapping and secretive central bank gold reserves.

We’ve brought lawsuits about it twice. I think both of them have elicited some pretty critical disclosures, even though we did not stop the manipulation. We just tried to publicize the destruction of free markets, not only in gold and other financial instruments, but in commodities generally in the hope of restoring free markets and restoring some democracy and justice in the world, because probably the biggest victims of the gold price suppression scheme and the commodity price suppression scheme generally are poor, developing countries that rely on natural-resource exports to survive.

Mike Gleason: We’ve seen unprecedented US government and Federal Reserve intervention in virtually all asset markets in the past decade, and all of them are pretty much out in the open…whether it be buying bonds, buying stocks, bailing out industries, and so forth. The US government even buys oil in the open market to fill the Strategic Petroleum Reserve, something we could see happening again soon given the dramatic fall in oil prices recently and the negative impact on domestic producers. But while these other interventions are freely disclosed to the public, no one in government seems willing to admit to interventions in the gold and silver markets. Why the secrecy, and why don’t the “powers that be” want to see a free gold market?

Chris Powell: Well, some of the interventions are acknowledged, Mike. I think the interventions go far beyond what has been acknowledged so far, but gold, I think, is most sensitive to the central banks because gold is itself a currency, an international currency with no central bank behind it, something that free people can resort to whenever they are dissatisfied with government currencies. It’s a competitive currency whose valuation, in turn, sets the valuation of government currencies.

In fact, it has a huge influence on interest rates and the value of government bonds. There’s a lot of academic literature about the causal connections between the gold price and interest rates and government bond prices, so I think central banks are most sensitive about the gold price because gold is a determinant to the value of their currencies, to the value of government bonds. That’s probably why they are most reluctant to admit those interventions. Other interventions are not as sensitive to them.

Mike Gleason: This sort of thing has been going on for quite some time, hasn’t it? This isn’t just a recent phenomenon here the last couple years.

Chris Powell: Oh, sure. The gold standard itself was a market-rigging mechanism. It was a pretty clumsy one, but it did tie the price of gold to a particular unit of currency. When the world got away from the gold standard, the Western central banks undertook, in the 1960s, what was known as the London Gold Pool, which was a very public, candid scheme of just hoarding of Western central bank gold reserves to hold the gold price to $35 an ounce.

The London Gold Pool collapsed in March, 1968, as the gold offtake proved too much for the Western central banks that were rigging the gold price. That’s really when the Western central banks withdrew for a while and regrouped and calculated that they could much better rig the gold market through derivatives, through futures and options trading, which is really what they do now, along with swaps and leases, in a scheme that gives the world the impression that there is much more investment-grade gold available than there really is.

Mike Gleason: Expanding on that thought a little bit, how specifically are they suppressing gold prices today? By what means are they doing that? Talk about how the central banks are working in concert with certain third-party representatives to pull this off.

Chris Powell: Well, I’d refer investors and researchers to the annual report of the Bank for International Settlements (BIS), which is the central bank of the central banks. The annual report of the BIS candidly acknowledges that it is the gold broker for central banks and is selling and buying not only gold, but gold futures and options and other derivatives on behalf of central banks. This is secret trading in the gold market by central banks in order to manage the price.

I’d refer investors and researchers also to the secret March, 1999, report to the board of the International Monetary Fund by the IMF staff, which reported that Western central banks were opposed to disclosing their gold swaps and leases because transparency with central-bank gold operations would impair central-bank interventions in the gold market and other markets. That is, these interventions are undertaken in secret precisely to deceive the markets and to rig the gold and currency markets. This is a matter of official documentation. The secret March, 1999, IMF staff report is on GATA’s internet site ( The annual report of the Bank for National Settlements is on our internet site.

There’s recent documents. For example, the address of the Director of Market Operations of the French Central Bank, Alexandre Gautier, to the London Bullion Market Association conference in Rome in September, 2013, disclosed that central banks are trading gold through the Bank of France as their broker nearly every day, the Bank of France official said. The same official spoke to the LBMA meeting in Lima, Peru, a few weeks ago, and he said that the central banks had gotten far more aggressive in their gold trading lately.

The purpose here is to control the currency markets, to control interest rates, to control government-bond prices, and really to control all markets because a free gold market is compatible only with free markets everywhere. The gold price has a huge influence on all prices. If you rig the gold market, if you rig the gold price, you’re basically rigging all prices because prices are denominated in currencies. Gold is really the denominator of currencies, so if you rig the gold market to rig currencies, you’re rigging all markets.

The documentation of this, Mike, is overwhelming. All one has to do, if one is a financial journalist, is to call up a central bank and ask a few specific questions. Can the public see the record of your gold transactions? Can the public see the record of your gold swaps and leases with other central banks and with bullion banks? Are you trading in the gold market? What is the purpose of your trading in the gold market? Is your trading in the gold market just for fun, or are there policy purposes to your secret trading in the gold market?

This is elementary journalism. Really any first-year journalism student could do it, but the mainstream financial press refuses to do it, I think largely because it is so sensitive to governments. Governments don’t want this done, but anybody can do it. You can get an idea of what’s going on simply by putting your own questions to your own central bank, and if they are specific enough about gold, you will be told to drop dead if you get any answer at all. But the first rule of mainstream financial journalism in the West is that no central bank can ever be questioned critically and specifically about gold and really that no central bank could ever be questioned critically and specifically about anything it does.

If you follow reporting about central banks, you’ll find that there simply are no serious, critical, specific questions put to the central banks about what they are doing in secret. That’s really my real objection here. Central banks control the valuation of all capital, labor, goods, and services in the world, and yet they do it in secret. They do it even though they are not elected by anybody. They’re appointed officials. They effectively control everything important in the world, and yet they do it in secret and without any accountability at all. To me, that’s really a tyrannical system, and that’s what I object to.

Mike Gleason: It’ll be interesting to see if we get the “Audit the Fed” bill passed through the Senate. I guess it passed the House last fall and never even reached a vote in the Senate. Now that the Senate’s changed hands, that might be the first step in getting some transparency there. Of course, they’re going to go kicking and screaming. They don’t want any of that information shown to the general public. As you mentioned, they like to operate in secret. That’s sort of how they’ve been ever since they started a hundred years ago.

You’ve got a lot of great examples there of specific evidence of how they’ve been intervening in the gold markets, and I urge people to check out that information at Great site there. All that documentation that Chris was alluding to is pretty much available on that site, but there’s one in particular that I want to ask you about, and that’s how the CME Group gives special preferences to central banks who trade in the futures markets. Talk about that because that just boggles my mind.

Chris Powell: Yeah. A few months ago, the founder of a market data research firm in Winnetka, Illinois … the firm is Nanex, and its founder is Eric Scott Hunsader. He discovered some documents on the internet site of the US Commodity Futures Trading Commission and the US Securities and Exchange Commission. They were filings by CME Group, which is the operator of the major US futures exchanges. They showed that CME Group has been offering volume discounts for trading to central banks for trading all futures contracts offered on CME Group exchanges, and not just futures contracts for government bonds, but for all financial instruments for the monetary metals, gold and silver, and even for agricultural futures contracts.

The SEC document that Hunsader discovered is the 10-K statement filed by CME Group, which is the basic general corporate filing every public corporation has to make with the US government. The 10-K statement for 2014 for CME Group, on page 9, has a paragraph identifying the CME Group’s customers. Among the customers that CME Group lists for trading futures on its exchanges are governments and central banks. Now, the governments and central banks are secretly trading the full range of financial and commodity futures contracts in the United States. It strikes me as a monumental news story. I have never seen this reported in the mainstream financial press.

The CME Group’s letter to the CFTC justified this discount trading program for central banks as a matter of adding liquidity to the futures markets. I had to laugh at this, but liquidity is in the case of an ocean because central banks are empowered to create infinite money. Nobody can trade against the central bank in a futures market. A central bank trading in the futures market can take that market anywhere it wants to. It has infinite money. It can out-trade anybody, and yet the CME Group defended this secret trading by central banks as a matter of adding liquidity to the market. Actually, it was a mechanism for destroying every market.

Now, the CME Group’s filing with the CFTC doesn’t prove that any particular central bank is trading any particular market on any particular day, but it does say that there is this general discount program for central banks trading all major futures markets in the United States. To me, this means there are no markets anymore. There are only central bank interventions, and I think it’s an enormous news story. These documents have been sent to most of the major mainstream financial news organizations in the United States and Europe, GATA has done that, and we simply cannot get them to touch this story. I mean, one or two journalists have told me, “Gee, this does seem very important.” One journalist for a mainstream organization said that if people reported this, they’d be fired.

I was emailing yesterday with another news organization, who was really resisting getting into the issue, and their business editor was telling me that they simply assumed that there was nothing out of the ordinary going on here, but they hadn’t even asked. So we keep clamoring about this, but I would ask anyone who has seen a mainstream financial news organization do any reporting at all about the secret trading in the US futures markets being done by central banks through the CME Group’s volume discount program to let me know because I’ve missed it.

Mike Gleason: Is this a losing battle, Chris? I mean, the old saying, “You can’t fight city hall.” I mean, what’s the end game here? Are they going to be able to just get away with this forever? What do you think happens, and how do we get some sort of traction in this issue?

Chris Powell: Well, I think the Fed audit legislation is one option. I think eventually this scheme will be publicized enough, where certain mainstream financial news organizations will have to pick it up. Probably most likely are two options. One, as in March, 1968, one of the commodities whose price is being suppressed will simply run out. In March, 1968, the gold that was available to central banks for price suppression simply got down too low, and the central banks and the London Gold Pool decided they couldn’t expend anymore without exhausting their reserves, and the price suppression scheme was ended for a few years.

Or a foreign government may decide that it wants to pull the plug on the scheme. I mean, any government that has a reasonably comfortable foreign-exchange reserve could destroy the scheme simply by exchanging that reserve for gold. There isn’t enough real metal available to exchange, I think, really even $10 billion of treasuries for gold. I think the problem here is that most central banks are probably aware of the gold price suppression scheme and they’re probably participating in it, or at least colluding in it, because they don’t want to destroy the value of their US dollar reserves. Those that want to hedge their US dollar reserves realize they’ve got to do it very gently, very delicately.

China particularly being so foolish to have amassed something like a $4 trillion foreign-exchange reserve mostly in US dollars, it can’t unload those dollars very quickly. It certainly can’t unload them quickly for gold. China very likely wants to hedge its dollar surplus with gold and other real assets, but it’s decided it has to do that very, very gradually. It can’t just do it all at once, so it will probably proceed for years of exchanging dollars for metal, exchanging dollars for real assets, until China has decided that it’s adequately hedged and that it can let the dollar go and it will be offset in its losses on dollars by the price increase in the real assets it has maintained.

But foreign central banks could pull their plug on this. They could pull their plug on it as a matter of self-interest in their own portfolios. They could pull the plug on this as a matter of economic war against the West. There’s lots of options here. I think the retail investor can participate in the battle in a very small way by purchasing gold and taking it out of the banking system where it can be shorted and re-hypothecated a million times, but I don’t know exactly what will change the scheme here.

We are up against all the money and power in the world. They control not only governments. They have an enormous influence over the mainstream financial news organizations. Getting the word out when you’re up against powers like this is a struggle. On the other hand, I think we’ve made a lot of progress over 15 years. I think most people who are seriously involved in the gold market know that central banks are active in it surreptitiously. It’s just that it’s very bad for business for people to talk about it.

Mike Gleason: Some may be listening to this and might be thinking that it doesn’t really matter that much or what these governments and central banks are doing is somehow in the best interests of the people. The greater good is being served perhaps. But speak to that and discuss why it is in fact harmful, and then talk about who’s getting hurt here by this gold suppression scheme. Basically, why should people care about what’s going on here?

Chris Powell: Well, I’d say, in the developing world, people should care about it because it’s basically a commodity price suppression scheme that is exploiting the developing countries, the countries that are dependent on natural-resource exports for their revenue. I mean, all countries develop by selling their natural resources. That’s how the United States established itself back in colonial times. In early times the United States exported fish and lumber and pelts and raw materials, and then became a developed industrial country, and it got out of that business.

Now, the developing world is in the natural-resource business, and the West, operating through the gold price suppression scheme and the commodity price suppression scheme, generally is suppressing the price that the developing world gets for its resources and its labor.

But even people in the developed world are, I think, harmed because this scheme is largely a market-destruction scheme. If you believe, as GATA does, that free, transparent markets are the great engines of not only democracy and liberty, but economic progress, then anything that destroys markets and makes them less transparent is an impediment to human progress. So I think the great majority of people around the world have an interest in what GATA does.

Mike Gleason: Well, excellent stuff, Chris. I really want to thank you for your insights today and for the work you’re doing there at GATA. Now, before we let you go here, give our listeners more info on how they can learn more about this and follow what you’re doing there at GATA.

Chris Powell: Sure. Our internet site is If you want some basics on GATA’s research, there’s a little line on the left side of the page, the headline “The Basics.” You can go into that and get a summary of the gold price suppression scheme and links to really all the important, really important documents. There’s another section on the left side of the page called “Documentation,” which is a much more extensive collection of documentation of the gold price suppression scheme.

We are a 501c3 organization under the US Internal Revenue code, which means we’re a non-profit, non-stock, tax-exempt corporation. We operate entirely on donations from people who are interested in reasserting the free markets. People can contribute to us by check or by Bitcoin or by credit card over the internet in the “How to Help” section of GATA’s internet site.

So if anybody’s inclined to help us, please go to and go to the “How to Help” section on the left side of the page, and you can see how to send us a check or make a credit-card contribution.

Mike Gleason: Well, we’re big fans of your efforts there, and I would love to follow this unfolding story with you, so we hope we can visit with you again down the road. Thanks very much, Chris.

Chris Powell: No, thank you Mike.

Mike Gleason: Thanks again to Chris Powell at the Gold Anti-Trust Action Committee. Again, check out for more information. They publish a lot of great stuff there at GATA, and we highly recommend everyone check that out and contribute, as well.

Well, that will do it for this week’s Market Wrap Podcast. Check back next week and throughout the year as we look to bring more great content and more exclusive interviews. Until then, this has been Mike Gleason with Money Metals Exchange. Thanks for listening, and have a great weekend, everybody.

Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 35,000 customers. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. Gleason has hosted a weekly precious metals podcast since 2010, a program listened to by thousands each week.


David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?


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China’s Global Gold Supply “Game of Stones”

China’s Global Gold Supply “Game of Stones”
By David H. Smith

China has a 4-way global gold supply domination strategy. And it’s starting to corner the market.

First, China buys physical gold in world markets, fabricates it where necessary into “good delivery” bars – in Switzerland or the Middle East – then ships the bullion, transparently through Hong Kong or Shanghai (or quietly through Beijing and other ports of entry).

Second, it keeps virtually all domestically mined gold “in house.”

Third, China partners with or buys high grade, in-situ gold (and silver) projects around the globe. One of the most well-known recent actions has involved negotiations to partner with Barrick Gold on its massive cost-overrun-plagued Pascua Lama project, which straddles the Chilean-Argentine border.

Most recently, China’s largest gold producer, Zinjin Mining Group, made a strategic investment in Pretium Resources’ high-grade Brucejack gold Project in northwestern British Columbia to the tune of $80 million. This latter investment will facilitate eventual construction of a 2,700 tonne-per-day underground mine.

Fourth, and virtually impossible to quantify with a reasonable level of accuracy, are China’s efforts to purchase “off the books” gold production from what are known as informa or artisanal gold miners in Africa and South America. This gold, which will never show up on an import manifest, nevertheless adds one more acquisition stream to the literal river of bullion flowing directly into the coffers of China’s golden hoard.

U.S. intelligence advisor Jim Rickards, author of The Death of Money, recounts an episode told to him by a friend who is a senior officer of a high-security transporter of physical metals who had brought gold into China at the head of an armored column, guarded by heavily-armed troops.

One of these days, at a time of its choosing, China may reveal just how much gold it does hold, alongside a possible decision to enable a newly gold-backed currency, the Yuan, to make its debut on the world’s financial stage. Such an event would have profound implications for the primacy of the U.S. dollar, as well as America’s ability to continue running printing press deficits, long financed by Chinese purchases of U.S. debt instruments, to the tune of several trillion dollars.

China’s Undisclosed Gold Reserves: “A dagger pointed at the heart of the dollar”

When this event takes place, it will become evident to the world’s financial players that, as Rickards so poignantly remarks, China’s true gold reserves will have become “a dagger pointed at the heart of the dollar.”

Most Westerners fail to appreciate the methodology by which China has traditionally pursued – and often successfully achieved – its geopolitical ends.

Image1China’s strategies are oriented from the perspective of many years or even decades, unlike Western governments, who often judge success or failure based upon quarterly or annual progress reports. They are not likely to be concerned if the Pascua Lama project is not in production 10 years from now. They know that the gold – and silver is in the ground, so it’s just a question of when – not if – they can acquire a substantial amount, adding it to their continually-growing stash.

Some Westerners are familiar with a Japanese board game of strategy called “Go.” Few know that this game actually originated in China more than 2,500 years ago. Though the two player game has fairly simple rules, the number of possible games is several times that of chess. The objective is to outmaneuver the opponent, surrounding the largest area of the board with one’s own stones.

China Is “Surrounding” the Global Gold Supply

In the figure above, a situation known as “seki” or “mutual life” has taken place. The player with the black stones – labeled here as the Chinese currency, the Yuan, has positioned in such a way that if its opponent moves first – in this case, the U.S. dollar, he will be captured.

This Go board move offers an excellent analogy for the U.S. dollar competition with the Chinese Yuan. In order to be “dethroned,” the dollar does not have to be eliminated from global currency completion. It may not be necessary for China – using chess terminology – to fully checkmate the dollar. Instead, simply relegating it to “first among equals” might be enough to effectively cripple its historic full-spectrum functionality, because at that point, the Federal Reserve would no longer have the ability to issue unlimited, un-backed, U.S. dollar-denominated debt instruments.

A Game of Stones and Silk

“Surrounding” global gold production is just one aspect of China’s grand strategy for achieving political and economic dominance in Central Asia and beyond. The revitalization of modern-day trade routes, throughout direct spheres of influence, integrated with connections into Europe – once known as The Silk Road – is well underway.

Think of this term as a plural. These “roads” will see Chinese companies investing along their paths in dozens of countries, a significance that is almost impossible to overestimate. Pepe Escobar, the roving correspondent for Asia Times/Hong Kong, describes it this way:

The Yiwu-Madrid route across Eurasia represents the beginning of a set of game-changing developments. It will be an efficient logistics channel of incredible length. It will represent geopolitics with a human touch, knitting together small traders and huge markets across a vast landmass. It’s already a graphic example of Eurasian integration on the go. And most of all, it’s the first building block on China’s ‘New Silk Road,’ conceivably the project of the new century and undoubtedly the greatest trade story in the world for the next decade.

Meanwhile, the systemic issues which drove gold to $1,900 and silver to almost $50 in 2011 – deficit spending, leveraged derivatives expansion, and misallocation of money due to artificially low interest rates – continue to worsen. Divining the exact timing when all these things reach a crisis point is less important (provided you are not too late!) than making sure you have “laid in” some financial protection to help keep you safe from the inevitable fallout’s worst effects.

The progression of China’s Go game strategy – and rising affluence among Asian nations which enables them to buy increasing amounts of gold and silver – are all positive factors supporting higher precious metals prices.

When push finally comes to shove, David Galland of Casey Research seems to have nailed it when he said, “The dollar is headed toward the sacrificial altar, with a knife made of gold. Sooner or later, the central bankers will have to throw in the towel, and just let gold run.”

When that happens, the only question – other than trying to find some metal to buy – will be “How high is high?” Having enough gold and silver within arms’ reach before then may be one of the best decisions you can make.


David Smith is Senior Analyst for and is a regular contributor to For the last 15 years, he has investigated precious metals mines and exploration sites all over Argentina, Chile, Mexico, China, Canada, and the U.S. and shared his findings and investment wisdom with readers, radio listeners, and audiences at North American investment conferences.


David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?


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Offer does not apply to Premium Memberships.

The Morgan Report Newsletter January 2015

The Morgan Report Newsletter January 2015

Financial System Folly

The financial industry is growing in size and influence, and this is reshaping the culture by placing the focus on short-term profits instead of creating long-term value. According to an International Monetary Fund (IMF) study, once the financial sector becomes too large, it actually inhibits growth and increases volatility. 

The IMF’s study found that the economy is damaged when private-sector credit reaches 80 percent to 100 percent of GDP. In 2012, private-sector credit in the U.S. was 183.8 percent of GDP. The growth of the financial sector as a share of gross domestic product is called “financialization.”  

Profits in the finance and insurance industries are also outpacing the rest of the economy, and in truth benefit the real economy very little, as much of it consists of pushing paper “financial” instruments around. When nonfinancial corporations such as Ford Motor Company that make more by financing their products than building them are included, the total value of U.S. financial assets was 5 times the country’s GDP in 1980. By 2007, it had doubled to 10 times GDP.
The reason all of this is cause for alarm is that there is a historical pattern in which excessive financialization is followed by economic collapse. This happened to Spain in the 14th century, to the Netherlands in the late 18th century, and to Britain in the late 19th and early 20th centuries.
So this is the backdrop we have stated many times before in TMR. However, you are among the very few who will not only see the situation for what it is, but perhaps by preparing ahead of time, you will be part of the rebuilding process. This is why we are so cautious about the stock market at this time because the financial measuring method, for example the DJI (Dow Jones Industrials), is so far removed from the physical economy that it is due to come down and reflect reality at some point, and this could begin in 2015 at some point.

In the Anglo-American Empire today, the preferred path to building wealth is to “make money out of money,” instead of producing real goods and services. It seems that the BRICS nations are more concerned with the real economy. However, we will address clearly that many in our industry think the entire “resistance” of the BRICS nations is nothing more than a setup, with the banking elite controlling both sides. At this point we are not convinced and so will continue to observe and report as the situation develops.

All of this runs counter to management guru Peter Drucker’s observation in 1973 that, “The only valid purpose of a firm is to create a customer.” Drucker’s insight was that when companies satisfy customers, profits and shareholder value follow. Today, however, profits and shareholder value are put first. This could be shifting, as many outside the elite one percent, as “they” are known, have protested this idea in both peaceful and injurious ways. Signs are appearing globally that many average people have literally taken to the streets to protest the current situation, be it bailouts, food, transportation, bail-in, or any other grievance.

Could it be that financialization is not some nefarious plot hatched by a cabal of greedy people? Could it be the result of people making rational decisions that unintentionally add up to the potential for an economic disaster based upon wording within the system? We will leave the answer to you, but sometimes the plot is not necessarily determined ahead of time and simply “going along with the system” leads to unintended consequences.

What we want our members to know about the financialization is that the recent G20 meeting in Australia has very significant outcomes for you! It was agreed upon that all future bailouts will not be at taxpayer expense but will be taken from the banking system. All creditors (depositors) of the banking system may get “Cyprused” and see that they “bailed-in” their respective bank! Please verify this, as it can be verified rather easily using the Internet. What is not clear is what levels will be used to determine whether your account is going to be used in the process. Some have suggested that if your account is below what is “protected” by FDIC, as an example, your account balance would not be used in the bail-in. Simply, we do not know, and we recommend that all of our readers take action and decide for themselves what the correct amount to keep on deposit would be for your living conditions.

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Challenging the Mainstream Propaganda

Challenging the Mainstream Propaganda
By: Nick_Barisheff

Paul Joseph Goebbels was the Minister of Propaganda in Nazi Germany from 1933 to 1945. He once said that if you tell a big enough lie and keep repeating it, people eventually come to believe it.

Today’s governments together with the mainstream media seems to have taken Goebbels’ comment to heart. They omit facts and distort the truth to suit their agenda, while a completely different point of view is presented by highly qualified, intelligent analysts through blogs, websites and Internet articles. This article by Raul Ilargi Meijer gives an excellent overview of the propaganda disseminated by the press today.

For investors, it is up to each individual to carefully examine the arguments from both sides and come to his or her own conclusion about what is reality and what is propaganda. This knowledge will allow them to make the right decisions and prosper, and avoid painful mistakes in the coming years.

In the area of economics and finance, the manipulation, distortion and outright lies should be obvious to anyone who cares to do even the slightest amount of research outside of the normal channels. At the root of the coming economic disaster is Keynesian economic philosophy of increasing debt implemented by Western central banks. The experiment that started in 1933, and peaked in 1971 with the abandonment of gold convertibility, has gone into the hyperbolic stage, with Japan being the poster child of an economic system gone mad.

Once the world’s second-largest economy, with land in Tokyo selling by the square inch and the Nikkei Index peaking at 38,957 in December 1989, today Japan has the world’s highest debt-to-GDP of about 230%, and the Nikkei is still down about 55% after 25 years. David Stockman, former Assistant Treasury Secretary, does an excellent job of summarizing Japan’s gruesome statistics in this article: ‘The Keynesian End Game Crystalizes In Japan’s Monetary Madness’.

Read the entire article here…


David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?


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The Economist 2015 Cover is Filled With Cryptic Symbols and Dire Predictions

The magazine The Economist published an issue named “The World in 2015″. On the cover are odd images. A mushroom cloud, the Federal Reserve in a game called “Panic” and much more.


I wouldn’t normally dedicate an entire article analyzing the cover of a publication, but this isn’t any publication. It is The Economist and it is directly related to the world elite. It is partly owned by the Rothschild banking family of England and its editor-in-chief, John Micklethwait, attended several times to the Bilderberg Conference – the secretive meeting where the world’s most powerful figures from the world of politics, finance business and media discuss global policies. The outcome of those meetings is totally secret. It is therefore safe to say that the people at The Economist know things that most people don’t. For this reason, its “2015 prediction” cover is rather puzzling.

The bleak and sinister cover features political figures, fictional characters and pop culture icons that will surely make the news in 2015. However, most importantly, it also includes several drawings that are extremely symbolic and allude to important elements of the elite’s Agenda. Here’s the cover.


Read the rest of the article here…

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David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?


Join The Morgan Report Free for 30 Days *
* 30 Day Trial applies to new user sign ups only!
Offer does not apply to Premium Memberships.

New Year Updates in Gold and SP 500

New Year Updates in Gold and SP 500

Our long term subscribers have been following the Gold and SP 500 markets with us for years, and for sure last year was full of volatility in both. Right now we are continuing to stay on the sidelines in Gold until we can see a confirmed close over $1232 per ounce (US Dollars). We like to keep it simple and avoid a lot of the noise that the charts on a daily basis can bring, as well as day to day and week to week volatility.

The reality is that Gold has been in a Bear Cycle since the top in 2011 and over the past year or so has been attempting to establish a base pattern from which to bottom out and emerge back into a Bull cycle. However, the technical evidence does not yet support the Bull case and in fact suggests there is still potential for a final drop to the $1,050 per ounce area before a final washout low takes hold in 2015.

With that said, we are not biased in either direction and prefer to let the price action dictate our views and not our personal biases. We think a close over $1232 would represent a bullish change in direction as it represents the 30 week moving average line on weekly charts. We like to use this big picture charting for both the SP 500 and Gold because frankly its simple and it works. Yes, we can drill down on Elliott Wave patterns with the best of them and we do so as appropriate, but for the purpose of the general investing audience lets avoid that boredom and short term labeling issues and just focus on the big picture.

Over $1232 we start to get interested, under that we are out of the pool on the sidelines:


Now let’ts take a quick look at the SP 500 index. We have been calling this Primary wave 5 of the Bull cycle from March 2009. Others may certainly disagree but our view is for a low end target of 2181 and a high end target of 2525 for the SP 500 before Primary wave 5 ends and we start another bear cycle. We are certainly willing to adjust our views based on action but those are our current intermediate to longer term forecast points for the SP 500. Shorter term, keep an eye on that “Gap Fill” area on the daily SP 500 charts around 2012-2015 as likely to fill as early 2015 trading gets underway. We caution our stock trading and market forecast subscribers that early January volatility is notorious and caution is warranted in the first few weeks until we see where the rotations are taking place , tax selling ends, and other changes are completed by portfolio managers. Then of course earnings start coming out, so January as a rule is tough for most investors and traders.


If you would like to join us we offer regular forecasts with stunning accuracy using a combination of Elliott Wave Theory and other technical indicators sprinkled in to keep us in check. Check us out at for a discount offer today. Our stock trading service has smashed the SP 500 index with swing positions and some long term positions as well. That is at

David Banister


David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?


Join The Morgan Report Free for 30 Days *
* 30 Day Trial applies to new user sign ups only!
Offer does not apply to Premium Memberships.

Catch the 2015 Silver Tsunami Return-Wave

David Smith on Howestreet Raido


David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.

As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?


Join The Morgan Report Free for 30 Days *
* 30 Day Trial applies to new user sign ups only!
Offer does not apply to Premium Memberships.

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