The Morgan Report Blog

We receive a letter from a lady (Mrs, Walker) in the UK who wanted us to help create a buzz about her art, which has evolved from an awareness of the ongoing manipulation of the Precious Metals.

We scanned her letter and you can read it below.

Click on Letter image to view.

Click on Letter image to view.

Please feel free to visit her site at: www.silveroof.com

Silveroof artworks have evolved from an awareness of the manipulation of the precious metals complex

They primarily aim to make contemporary statements using age old gold and silver leafing processes

Each piece is hand crafted in layers of leaf and then numbered, dated and signed by the artist

Ruth Walker

 

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com 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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Chase Cracks Down on Cash… Is Your Bank Next?

 
Chase Cracks Down on Cash… Is Your Bank Next?
by Clint Siegner

The War on Cash Escalates

Image1The Federal Reserve bank and its owners, the largest banks on Wall Street, want badly to be able to charge you interest for the privilege of depositing your funds. The problem is getting you to stand for it.

Depositors already complain vigorously about zero percent returns on checking and savings accounts. If they must start actually paying the bank to hold funds on deposit, many will opt to simply withdraw the cash and stuff it under their mattress or into a safe deposit box. That simply won’t do.

The Goal Is to Force You to Deposit Cash and Charge YOU Interest

Bankers in the U.S. can learn something from the Swiss. The Swiss National Bank recently implemented negative interest rates without first solving the “problem” of how to prevent cash from fleeing the banks. Predictably, depositors started doing some math.

In one example, a sizable Swiss pension fund, calculated it would save 25,000 francs for every 10 million it held in the bank by simply withdrawing those millions and taking the bales of paper francs to be kept in a vault. The vault storage fees are less expensive than the negative interest rate.

Jumping the gun on the implementation of negative rates put the Swiss banks in an awkward situation. Like all fractional reserve lenders, they don’t have anywhere near enough cash to make good on the withdrawals that may be coming. The bank holding the pension money had little choice but to refuse the client’s demand for millions of francs – funds the client is contractually entitled to. Telling clients “sorry, you can’t make a withdrawal” never goes over too well!

Nevertheless, the Swiss National Bank is sticking to its guns. It is encouraging retail banks to be “restrictive” with regards to cash withdrawals. And it is berating actors such as the pension fund for trying to circumvent negative interest rates. Apparently no one should be questioning the wisdom behind the policy! But the bluster isn’t hiding the fact that bankers stand upon shaky legal ground. The potential for a run on the banks remains.

Insiders here look anxious to avoid a similar situation. Willem Buiter, the chief economist at CitiBank, thinks he’s got the answer to this banker’s quandary. Simply abolish cash. Or tax it punitively. He isn’t the only one supporting this radical solution. Other economists, including the prominent Harvard professor Kenneth Rogoff, also think banning cash is a grand idea.

If depositors’ response to negative interest rates is predictable, so is the reaction from central planners. Effective herding is all about limiting the escape routes for members of the herd.

Eliminating physical cash may well be a longer-term project, but it is not something the Fed can likely implement any time soon. In the meantime, there are other ways to prevent depositors from making their escape.

For starters, officials can criminalize the use of cash above certain amounts.

Banks can also implement new policies of their own. Joseph Salerno from the Mises Institute discovered JPMorgan Chase leading the way. The bank very recently began test driving new rules in Cleveland as well as other markets. The bank will no longer accept cash from customers who want to use it to make mortgage payments, pay credit card balances or to cover their automobile loan.

No Cash or Bullion Allowed in Safe Deposit Boxes

Image2Chase also rolled out new restrictions on what can be put into safe deposit boxes. The “Updated Safe Deposit Box Lease Agreement” customers must sign states, “You agree not to store any cash or coins other than those found to have a collectible value.”

Expect other banks to follow suit shortly. The new rules go on top of decades of inflationary monetary policy, making paper currencies worth perpetually less over time. Clearly bankers are plumbing customers’ tolerance for pain.

More and more people will be looking for ways to make it stop. This is where things promise to get interesting for gold and silver investors.

Financial repression, the attempt to force citizens to accept the government shears, has long been a driver of demand for physical precious metals. This demand will accelerate as measures become more draconian. Some bank customers, perhaps even the Swiss pension fund mentioned above, will decide that bullion is a better option than sitting on bales of depreciating paper currency or paying banks to hold deposits.

Here in the U.S., the banks are central to just about all bureaucratic efforts at control. Look for droves of people to try and sidestep the banks and the dollar itself. The next decade or two is almost certain to see rapid innovation in alternative ways to store value and transact. Ways that preserve privacy and are beyond the reach of bureaucrats. As these new systems seek to gain trust and acceptance, precious metals are almost certain to play a much bigger role.

 

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com 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.
  

World Governments Are Devaluing Silver! – Exclusive Interview

 
Why are governments pushing the value of this precious metal down? Why is an unconstitutional currency allowed to rule the world? What can you and I do to hedge what will soon be a rise in this very precious commodity.

David Morgan and Silver-Investor.com have been long standing supporters of the Truth Movement and The News In Two Minutes.

Join us as we discuss what will come in the future and ways to get involved now.

 

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com 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.
  

Silver Manipulation Solution: 17 Requirements for a Freely Traded Silver Market Structure

 
Silver Manipulation Solution: 17 Requirements for a Freely Traded Silver Market Structure
by Bix Weir

The silver market is broken and has been broken for a long, long time. Much longer than most people think although many people can finally SEE the problems with the market now as the paper market continues to distort the price of physical silver. It is silver derivatives and computer trading models introduced in the 1970’s that really started to distort the market value and it has never been more distorted than it is today. Hundreds of Billions of silver derivative ounces are transacted by the bullion banks every year to steer and control the price of silver. This volume of silver trading dwarfs the tiny physical silver market that only provides a few hundred million ounces of physical silver to the market annually for investors to buy.

Those of us who know this to be true have tried to position ourselves such that the wide ranging price dynamic would not effect the position we took to take advantage of the inevitable price spike that must happen AFTER price manipulation ends. To do that we have bought physical silver and removed it from the system and out of the hands of the manipulators. Because we knew the price riggers could place the price of silver derivatives at $0/oz or $1M/oz with a click of a mouse it was the only way to ride out the manipulation.

So that’s what we have done and now we sit and await the END of this manipulation. We all knew it would be chaotic and produce very extreme pricing swings (as we are seeing now with sub $20 silver) but we knew it must end.

That is were we are now.

Many around the world are preparing for the end of market manipulation not only from a government/populace standpoint but also from a regulatory standpoint. That is what the CFTC was working on as it related to the Dodd-Frank Rules. It was never intended to end the manipulation but rather it was a way to RESTART the system AFTER the manipulation was OVER.

I’d like to present (again for some) my 17 requirements to restart the silver trading markets after the current manipulative structure ends or AFTER THE CRASH. These are minimum requirements that will have to be addressed in a POST crash environment where nobody would trust the derivative market pricing structure after the years of abuse. This is what the silver market regulation SHOULD look like today.

Goal: A fair and viable silver derivative market where no trader or group of traders can intentionally influence the price of physical silver.

Market Requirements:

1) End Excessive Concentration — The size of positions held and traded in the silver derivative world should be realistically in line with the physical metal available. Enforceable regulations should be designed to both end the current manipulation and remove the potential for future manipulations using concentrated positions.

2) Require Public Position Disclosure — Any company that cannot operate an honest silver trading operation without a veil of secrecy should not be allowed to participate in the markets. All positions of large silver trading companies should be made public to both instill confidence in the free market and expose foul play. The benefits of transparency far outweigh the argument that public disclosure would impair the proprietary trading ability of the participants.

3) Verify/Certify Physical Metal Backing — Currently, the regulators are blind to the physical markets and should NOT take any traders pledge as fact that they have metal to backup any large short position. The CFTC should actively verify and certify ALL metal that is pledged against COMEX contracts. This certification should include onsite physical audit of bars, drilling of a random sampling of bars, CFTC certification of purity and on going oversight of physical inventories.

4) Physical Reconciliation Audit — The purity of physical gold and silver bars are being questioned like never before. There is very little trust that the metal is pure and has not been tainted by tungsten, molybdenum or lead. Unbelievably, large gold and silver bars are rarely drilled and tested for their purity or for tampering. The CFTC should spearhead a global “re-melt” program of the world’s inventories and set up a certification process such that any tampering with the newly minted and certified bars can be effectively tracked back to the perpetrator.

5) Analyze Significant Price Action — The silver market is highly volatile often moving in concert without any economic or supply/demand justification. These sudden drastic moves in metal prices should be analyzed to determine WHO started the move, WHAT trading actions did they take during the move, WHO benefited from the move and was the move only temporary. An intentional operation to artificially affect the price of the metal is illegal under the Commodities Exchange Act and should not be tolerated.

6) Audit Past Manipulative Maneuvers — The crimes of market manipulation in the past should not go unpunished. There is a mountain of excellent evidence collected by silver advocates that prove silver has been illegally manipulated for many years. Just because the criminals got away with a crime when it was committed does not mean they should be allowed to walk and trade freely among us. The COMEX crimes of the past should be investigated and prosecuted.

7) Audit/Verify/Certify “Approved Warehouses” — The COMEX approved warehouses are owned and controlled by most of the very same entities that are accused of rigging the gold and silver markets. The CFTC relies heavily on the warehouse data in determining the dynamics of the physical markets. The potential for deceptive practices, false reporting, metal alterations and flat out fraud are huge. The CFTC should monitor, verify and certify all metal stored in “Approved Warehouses” to ensure the market has access to correct information.

8) Audit/Verify/Certify Physical Metal Hedges — Commercial hedging of mining production is the reason the futures and options markets exist. Without the need for mining companies to hedge the market price of their product the COMEX would have no reason to exist other than being a gambling establishment. If large mining companies, such as Barrick, wish to hedge their production the CFTC should investigate if the reserves in the ground are verifiable, economic and have little risk associated with extraction such as the potential for nationalization.

9) Remove ETF Physical Substitution — The COMEX now allows shares of the ETF’s SLV and GLD to be substituted for physical metal delivery. This is a flat out scam of epic proportions! There are more holes and loopholes in the prospectus of these two ETF’s than any other investment vehicle in the world. ETF shares ARE NOT physical metal. JP Morgan, for example, is the custodian for the silver in SLV but does not own title to that silver nor do they have any right to justify their gigantic COMEX short using that physical silver. By not speaking up at this obvious attempt to distort the physical supply of metal the CFTC is exposing itself as either the most incompetent regulator in the world or the most corrupt.

10) Investigate Collusion between Large Traders — Collusion is often difficult to prove but it is not impossible. The CFTC should fully investigate emails, phone records, meetings and motives when collusion is suspected on suspicious large price moves. The CFTC “Enforcement Division” should have expanded powers to investigate anyone who wishes to trade gold and silver on the COMEX.

11) Compare Volatility to Supply/Demand Dynamics — Gold and silver has the highest price volatility of any commodity traded on the COMEX and yet they both have one of the most stable supply/demand dynamics. Gold and silver mine production and consumption/investment demand is very consistent year-over-year changing very gradually yet the prices are whipsawed in huge swings. This disconnect should be a glaring red light screaming… “MANIPULATION!”

12) Employ Experts to Regulate Gold/Silver Markets — When I call the CFTC to complain about gold or silver manipulation I get an “economist” who reads from a script off his computer screen which denies any manipulation. When I ask “who is in charge of overseeing the gold market?” he says “we all oversee all the markets”. I find it truly amazing that the CFTC does NOT have a dedicated specialist for silver or gold. What kind of oversight or regulation is possible without the most basic understanding of the commodity you are overseeing?! The CFTC should hire experts to concentrate on understanding all aspects of the gold and silver markets.

13) Engage Outside Expert Consultants — As far as I know the CFTC has NEVER hired an outside expert on the gold or silver markets even though there are many who are willing to assist them for FREE! Not only does this raise suspicion about their competence but it begs the question of WHY NOT? I’d like to suggest that the CFTC create a “Panel of Outside Expert Consultants” to assist them in understanding the gold and silver markets.

14) Control Gold/Silver Derivatives — The most insane part of this whole debacle is the outsized gold and silver derivative complex that dominates the trading activity of a very small physical market. The CFTC should get to the bottom of the gold and silver derivatives held at the major Bullion Banks as well as other institutions to determine if these derivatives were constructed to manipulate/control markets or is there a legitimate economic reason for them. Understanding the entire metal complex will assist them in understanding the COMEX gold and silver markets.

15) Ban High Frequency Computer Trading — High speed computer trading makes a mockery of the entire free market concept. Allowing individual firms or a small collection of firms to make millions of trades back and forth every second has done more to distort the price of commodities than any other pricing dynamic. Bernie Madoff’s firm specialized in trades like these and there are other firm still in operation rigging the markets today.

16) Daily Volume Limits and Public Disclosure — Although position limits are important in order to stop market manipulation, limits on daily trade volumes and public disclosure of participant trades is also vital in making sure no manipulation is taking place. A company that buys and sells tens of thousands of contracts each day but settles out near even won’t stand out as having a manipulative concentration but is clearly manipulating the price. Transparency is key to a free and open market and should trump the desire to hide proprietary trading positions.

17) CFTC Employment Restrictions — The revolving door between US Regulators and the Wall Street firms they are supposed to regulate is one of the most egregious travesties of justice ever perpetrated on the investing public. The CFTC Commissioners and legal staff are clearly as guilty as senior members of the SEC. CFTC employees should not be able to work for or be associated with any company or commodity they regulate for at least 10 years before and after their employment at the CFTC. Without this separation the urge to favor past or future employers is too strong. CFTC employees should be rewarded for enforcing the laws… not bending them.

Until these recommendations are met there is NO CHANCE of a truly free market in silver developing.

Unfortunately, it will likely take another Global Market Meltdown for the regulators to take these recommendations to heart.

May the Road you choose be the Right Road.

Bix Weir
www.RoadtoRoota.com

PS – *Buy the book as it tells you all about who, how, why and WHEN!

The Book: “Silver, Gold, Bitcoin…and God!”
http://www.roadtoroota.com/public/1530.cfm

 

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com 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.
  

SILVER Story

I am a owner operator of a small successful construction renovation company in Peterborough Ontario, Canada.(population approx 80,000)

I started my business here in Peterborough in 1999 and am working in the local economy on a daily basis. I learned almost everything I know from the school of hard knocks. We are currently very busy but I am not confident in the current system the way it is, or in the powers that be that be running things.

In fall 2009, SILVER started doing its job! I noticed its price starting to rise dramatically! It perked my interest and have become fascinated by it ever since! Silver was the trigger that made me want to learn about the REAL economy.

I needed to learn why its price was rising so fast and about all its wonderful uses and characteristics!

In 2010 we decided to cancel our satellite TV, it was a great decision! I turned to the internet and discovered alternative media. I realized how bad I was being dooped by the Main Stream Media i.e.. 2004 Iraq war etc. etc. On the net I discovered people like David Morgan, Eric Sprott, Turd Ferguson,
Brother John F., Mike Maloney, Peter Schiff, Gerald Celente, Dr. Paul Craig Roberts,Dan Norcini,and sites like Gata, Silver Seek, Zero Hedge, and RT News etc. etc.

I now was learning about the history of silver and currencies, our monetary systems and how things really work, like fractional reserve banking which was never taught to me! Stuff like EROEI and Bitcoin and the Blockchain as well. I also learned of the industrial military complex and medical complex, and how in my opinion, are causing more harm than good! I was now aware that our economies are broken. Although Peterborough is somewhat isolated from Major macro market swings and downturns I see the ever growing gap between the Haves and the Have-nots. I volunteer at a homeless shelter( The Warming Room ) – https://warmingroom.wordpress.com – and see people on the margin, many on a concoction of medication they probably shouldn’t be on. Peterborough has one of the highest unemployment rates in Canada.

People are suffering a Global Corporate takeover and most don’t recognize it! Our food, our Gov’ts, our Media, our economies are all being hijacked!

I needed to make a few changes to help my family and others enjoy a better life for the rest of our time here on earth.

One day while at the farmers market getting real local un-pakaged food, I met two fellas promoting a local currency- The Kawartha Loon! I was skeptical at first but after learning about it, and its benefits, I embraced it. I am now serving on the Board of Governors of the Kawartha Loon Exchange.

The Kawartha Loon Exchange or KLE is the governing body for the local economic initiative using a local currency called Kawartha Loons. The KLE oversees an organized system of exchange between local producers, retailers and consumers primarily for life essential goods and services including food, water, energy, wellness and culture using the Kawartha Loon. http://thegreenzineonline.com/kawartha_loon/index.html

The way It works is, anyone can exchange $.90 Can. for $1 Kawartha Loon at the local Credit Union Bank or at an exchange location. It can be spent at any local business @ par with the Canadian Dollar, giving a 10% increase in your purchasing power! In turn, these businesses can spend them at other businesses that honour them. There are now approx. 140 businesses engaged and growing! At any point the Loons can be taken back to the Credit Union or an exchange and trade back to the Canadian Dollar for 10% less.

This promotes the local economy and eventually job growth. The multiplier effect! It helps to take back our economy from the Wall Marts and the Home Depots etc.

A Grass Roots Movement.

The KLE is part of Transition Town Peterborough! http://transitiontownpeterborough.ca

I’ve heard stories of Hyperinflation, like my Grandparents in Weimar Republic when a postage stamp costs 5 billion marks. A wheelbarrow full of currency bought a loaf of bread!

I’m not sure we will get hyperinflation but I wonder about the trillions of $ pumped into the system?
An interesting fact people should consider is a trillion seconds = over 31000 years!

The central planners and state leaders are so far removed from the masses in the real economy, some have a sickness of more more more more.

I believe SILVER will eventually regain its place as a store of its true value.

SILVER is an amazing element with so many uses!

The challenge is convincing the average Joe of its true value!

Derry O’Byrne

To Win Now with Gold and Silver, “You’ve got to Shut out the Doubt”

 
To Win Now with Gold and Silver, “You’ve got to Shut out the Doubt”
An Interview with David Morgan and David Smith

This month we begin the “educational” part of our letter with an excellent communiqué from our long-time friend and associate, David Morgan, of The Morgan-Report/Silver-investor.com. Known to his many admirers as the Silver Guru, he speaks at conferences in North America, Europe and Asia. David, in collaboration with Chris Marchese has recently published his second book on silver, titled The Silver Manifesto, which you can order here.

As David says in his new book, There are factors that produce immense profits and these occur but rarely. Investors stand at a unique point in monetary history where the death of paper currencies on a global scale is taking place before their eyes.

We know it’s been a struggle since 2011, and as David likes to say, “the corrections in a precious metals’ bull market will either wear you out or scare you out.” Part of our job here at Resource Consultants (800-494-4149) is to give you the support you need to make informed decisions as to how to protect a portion of your wealth from the continued ravages of government mismanagement, massive debt creation, and (highly) understated inflation.

We also know that those of you who have continued to dollar-cost average your purchase of precious metals from us – whether on a regular monthly basis, or whenever you’ve got some extra paper currency to exchange for real money – gold, silver and palladium, you are probably now sitting on a lot more ounces than you would have if you had simply stopped buying when prices made their intermediate top in May, 2011.

WE think you will find David Morgan’s brief, but powerful comments below to be a real morale booster, as we watch the next leg up of the secular bull market in silver and gold get underway. Says David:

The dollar appears to be the strongest paper currency available. Investors all over the globe are fleeing INTO the dollar from the Euro, the Ruble and almost any currency you care to name. Even in the BRICS countries, Argentina’s currency has been one of the weakest during the last couple of months.

Therefore, the dollar keeps going up, up, and up. And it will continue to do so, as long as investors continue to believe it is a safe haven asset class.

However, the truth is that gold is the ultimate money, not the dollar. And once the market determines that this is a fact, you will see a run into gold like we have never seen before. This is the simple and succinct way of looking at monetary history.

The ability for investors to perceive the future is very unlikely, as most people are herd-instinct animals, and will follow the herd – without ever considering critical thinking.

However, those few who are above the herd – the leaders – the people who really understand what’s going on, are already positioning themselves in the precious metals, for what will become the longest, strongest, most dynamic bull market in the history of mankind. Don’t worry folks, the best is ahead. It’s only a matter of time.

Thank you, David Morgan!
…………………………………………………………………………………………………………………………………………
Readers of our newsletter over the last few years should be well-acquainted with one of our frequent contributors, David H. Smith. David is Senior Analyst and frequent contributor at The Morgan Report. When Dr. Dorn and Pat were working on the book Personal Responsibility: The Power of You – David contributed a chapter, and he has presented at several of our Wealth Preservation Conferences. He and I were able to get together on a conference call recently, and I posed some question for him. I think you will find his response along with commentary of my own, to be helpful in keeping you informed – and optimistic (!) about what’s in store for the precious metals – perhaps a lot sooner than you might expect!

Linda Gorman: Hello David. It’s a pleasure to speak with you today.

David H. Smith: I fully agree, Linda! Here we are I believe, on the very cusp of a new bull run in gold and silver, which we at The Morgan Report feel, over the next few years, will take the metals to new all-time highs, making today’s prices in retrospect look like real bargains!

Linda: People have become pretty discouraged over the last few years as metal’s prices seem to get cheaper and cheaper, in spite of what we all know is very strong demand for them from investors, industrial users and Central Banks. Should we expect more of the same, or are there valid reasons to expect things to change to the better for precious metals’ holders?

David: I fully understand why a lot of investors have all but given up hope that the things we are discussing today will EVER take place. We have been chewed up over the last few years as metals’ prices and mining stocks dropped further and stayed down longer than almost anyone thought possible. The entire resource sector has been decimated, with even the best producers dropping 60-70% in share price. A lot of exploration companies have gone out of business, with more likely to do so later this year.

But here’s the thing. Mining stocks and precious metals’ prices are cyclical. That means that they move up and down in price at fairly regular intervals. Yes, it’s hard to remember that a few years ago, gold was trading briefly for $1,900 per ounce and now it’s clinging on to just $1,200. But it’s also easy to forget that, 10 years before, gold was under $300. So even today, the price is still four times higher.

When we factor in inflation, the case for owning gold and silver today is really compelling. David Morgan’s research indicates that $16 silver today is equivalent to $5 silver at the beginning of its secular bull market that started around 2003. So if you believe that the bull run is far from over – which we certainly do – then today’s market is presenting us with a “second chance” to get in or add more metal at what can best be described as “beginning-of-the-bull-market prices”.

When I see a one-mine company that sold for $10 four years ago – now with a second mine in the pipeline – selling last week for .26 CENTS; or a world-class gold/silver producer at $18 that was going for $52; not to mention a heading-for-production Yukon gold stock that was $5, and now goes for just .65 cents – then I am compelled to pay attention, and consider taking action. More to the point about your customers at Resource Consultants, many of whom probably do not care about holding mining stocks – which are certainly more volatile and risky than the physical metals themselves, the distress in the mining sector is going to have an impact on new metals’ supply – Raising the question of how much there will be, and eventually, IF there will be anywhere close to enough supply to handle demand.

Money Markets Will Change Next Year – Big Time

Something that not many people are aware of, is that going into next year, some big changes are going to be taking place in an old standby investment vehicle that tens of millions of Americans depend upon – the “solid as a rock” money market fund industry. There is almost $3 trillion dollars in “parking money” stored there. People see money markets as absolutely safe since their NAV – Net Asset Value – always remains at $1/share – thus avoiding “breaking the buck – and that your money can be withdrawn whenever you need some or all of it.

If you go to FDIC.gov here you will see that indeed these funds are still currently insured:

FDIC-Insured:
Checking Accounts (including money market deposit accounts)
Savings Accounts (including passbook accounts)
Certificates of Deposit

But as of October, 2016, while FDIC insurance may still apply, the Security and Exchanges Commission (SEC) has announced that the value of a money market share will “float”. Thus the customer may believe that he or she is simply depositing their money into a depository account, but what they are actually doing is buying a share of the fund with each dollar that they deposit. Upon your decision to redeem it, that share may not be worth a dollar. This money will now also potentially become available for use by the fund managers themselves – in effect your dollars will be comingled with those of the firm whose name is on your account.

You will be charged withdrawal fees, and the funds can temporarily block withdrawals when they “are under pressure”. If the fund is in danger of becoming insolvent, they can use your money to pay themselves first. You will thus have the privilege of participating –whether you want to or not – in a “bail in” – language now being increasingly written into the agreement language for depository accounts in banks large and small.

Some large banks are already converting their money market accounts into funds that invest only in government securities. This is in effect, the beginning of forced investment into U.S. treasuries. Over time, the federal government will have access to the money which now resides in your money market account. The upshot of all this is that your funds will now be commingled with that the bank where you do business.

“Dark” markets…and dark operators

You’ve probably heard about so-called “crypto-currency”. There are a number of them out there, but the most well-known and widely used is Bitcoin. This “currency” only exists in digital form and is used in a number of online trading platforms. Though some of the largest companies in the U.S. and Europe accept it in buying/selling of their products, it is still far from entrenched as a reliable form of exchange with a reasonably predictable value affixed to it. It first started with a value of – literally, several cents – then rocketed up a few years ago to over $1,200 apiece, and now trades in the $250 area. Several large Bitcoin exchanges have gone under in the last couple of years, due to mismanagement, fraud and in some cases, outright criminal activity. Most recently, “Evolution Marketplace” – “dark web” site trafficking in drugs and other illegal goods, shut down, apparently spiriting away with an estimated $12 million in Bitcoins. The Administrator, in a message that sounds like it may have been written after he ingested some of the drugs he was selling, stated laconically:

Due to unforseen events I decided to close down Evolution Marketplace. We want to thank you guys for your effort and help making this the most profitable and popular marketplace. This wasn’t an easy decision but due to other marketplaces getting shut down and the forum going downhill I decided to cut my ties and exit with an eight figure profit. The millions from evo will be divided up amongst the mods a few admin and members. Since this is such an abundance of money I may consider buy ins from former evo members in exchange for 1k bitcoins. I’ll be around for a short period of time before permanently moving to the caribbeans (sic), I hope you guys understand.

Linda: David, your colleagues at The Morgan Report, David Morgan and Chris Marchese recently wrote The Silver Manifesto. One major theme is the “Debt Bomb.” Could you explain why investors should care about it?

David: The Silver Manifesto’s discussion of The Debt Bomb was written to inform all readers – from those new to the silver story through “precious metals’ veterans”. David and Chris wanted to build a philosophical and practical framework for discussing the unusual potential of silver going forward. Having said that, I would suggest – given that many of your readers are well grounded in the elements of the massive overhang of government liabilities and banking derivatives world-wide – “The Debt Bomb” as it were – that the most critical thing now is to become prepared – laying in some precious metals and considering a few carefully selected mining stocks. Some of us have been criticized –perhaps rightly so… at least for now – for having sounded the alarm too early, but I think it is the height of folly for ANYONE to think they can “wait until the debt bomb explodes” and then take action. Go against your emotions now and buy some insurance, rather than wait until the financial house is on fire.

Linda: What are some examples of events that might be likely to set it off?

David: I like Jim Rickard’s “snowflake” analogy, wherein a rather small event could start an avalanche and bring down the whole mess before the Central Banks could react. It certainly could be something relatively large like Greece leaving the Eurozone, a shooting war between the U.S. and Russia in Ukraine, or a depositor bank run caused by a major European or U.S. bank going under. (BTW, right now banks in Crete and Greece are experiencing 5x normal withdrawals of Euros.). OR it could be something that in retrospect was not seen as “a big a deal” – like the 1931 failure of the Creditanstalt Bank in Austria – which historians credit with starting a global panic and ushering in the Great Depression.

Central Banks think they can control bank runs or a credit contraction by pumping money into the system, or capital controls, but they are playing with fire. As evidence, I would point to an excellent study done by Dr. Antal Fekete a few years ago (not long before the 2008 crisis by the way), where he demonstrated that it was entirely possible to have hyperinflation (with the price of derivatives spinning out of control) and deflation –where money/credit drained from the system so fast that it overwhelms Central Banking ability to cope.

With the speed of Internet communications nowadays, I don’t see how most of us will be able to “see it coming” and take action. Markets trade 24/7. We could go to bed one night and wake up the next morning staring at a global collapse. Would any of us have the courage to buy silver $10 higher and gold $200 higher on that day? – IF you can find any?

As proof of how fast things can move, look at the January Swiss National Bank (SNB) decision to drop the Eurodollar peg, or the one-day 500 basis point intraday swing the US Dollar Index (USDX)! – It reminds me of something Ian Teller once said, “I’m more of an opportunist than a visionary.” – a good way of looking at things! It is just not possible to predict the timing when the wheels are going to start falling off, bringing the whole thing to a screeching halt.

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Linda: David, are you willing to look into your crystal ball – cloudy though it may be – and give us a solid prediction for this year?

David: As Moe Howard, my favorite philosopher, would say, “We shall see what we shall see!” So, here’s my ‘walk out on a limb’ moment…

I believe this year will mark the absolute end of the cyclical precious metals’ bear market that began in May, 2011, and the re-ignition of the Long-term SECULAR Bull Market in Gold and Silver. It is highly probable that the lows for the metals and mining stocks as a whole are in now, but even if they are not, I believe that by September, it will be apparent from the charts, that we are now ready to start the “movin’ on up” phase of a multi-year bull run. In a worst case “Plan ‘B’” scenario I could envision a new primary low being established by late June, then a higher low in late August. (This time-frame, c. August 23 if memory serves, would accord with an excellent study done some years ago by Reg Ogden (The Ultimate Gold Stock Trader), where he demonstrates that, on an annual basis, the miners tend to react just this way, and during this time-frame.

Regardless, I believe much of the smart money will have already established most of their positions by that time. Remember – these serially-successful investors are, to paraphrase Ian Telfer “opportunists, not prognosticators”.

It’s during times like this when Clint Eastwood’s comment many years ago after swimming ashore at night when a military plane he was a passenger on crashed off the coast of CA, rings true. He somehow navigated through kelp, waves and rock obstacles to make it ashore – a journey that if, I remember correctly, the pilot did not. When asked how he survived, he replied simply, “You’ve got to shut out the doubt.”

A Powerful now-is-the-time to own gold and silver signal

Linda, I would like to close our interview with two comments. The first is one my colleague, Jeff Clark made last month in a newsletter he edits for Casey Research. The second is from his boss. I think these two statements summarize accurately and succinctly both the problem and the great promise that people like your readers who hold precious metals are looking at as they steel themselves to keep doing what they know deep down inside to be right. Jeff said:

“We want to own gold when it’s in a global bull market. Gold rising in U.S. dollar terms alone doesn’t show us we have a real gold bull market. That could just mean the U.S. dollar is in a bear market. But gold rising against all four of the world’s major currencies – the U.S. dollar, euro, yen, and pound – shows we’re in a major gold bull market.”

And from his boss, Doug Casey, a man who has lived through – and made big money coming out of – as many resource sector cycles as anyone who is alive today. Recently Doug said:

“There’s no question that gold has had a severe retracement since its high in September of 2011. I understand the [gloomy] feelings. But we’re not talking about feelings here; we’re talking about markets. Markets cycle. This one has cycled about as low as any gold market in past corrections, and now I think it’s time for it to cycle up again.”

 

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com 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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True Investments VS Speculative in Gold & Oil

 
A couple of weeks ago I was listening to an hour-long segment on CNBC with Warren Buffett. He brought up a great point about the type of investments he prefers and the difference between an investment versus a speculative trade. I feel what he mentioned is worth sharing so here it is.

He stated that he prefers to hold an investment which is earning money and generating cash flow. Meaning he prefers to own equities of companies which generate income for its shareholders versus a commodity which does not generate any revenue.

While Mr. Buffett said that gold is a commodity everyone should own some of, he also clearly stated that buying a commodity in hopes that someone will pay you more for it later is purely speculative. Lets face it, would you rather own something that paid you monthly or annually a cash dividend or something that might go in in value, but may also lose value?

Investors and traders are primarily focused on purchasing gold stocks, physical gold via ETF’s, gold bars and coins which none of these provide any income the holder. But after doing some in-depth research I have found another way to invest in precious metals and commodities that will not only give you exposure to the gold, silver, and oil sector but it can also generate a monthly income stream to your portfolio.

Through Gabelli closed-end funds like the Global Gold, Natural Resource & Income Trust (GGN), or Natural Resource, Gold & Income Trust (GNT) you can get the best of both worlds.

Each fund is currently providing a 10% annual dividend paid out in monthly distributions. The Fund’s investment objective is to provide a high level of current income. The Fund’s secondary investment objective is to seek capital appreciation consistent with the Fund’s strategy and primary objective. Under normal market conditions, the Fund will attempt to achieve its objectives by investing 80% of its assets in equity securities of companies principally engaged in natural resource and gold industries, and by writing covered call options on the underlying equity securities.

If you don’t know what covered calls – Explained Below:
A “covered call” is an income-producing strategy where you sell, or “write”, call options against shares of stock you already own. Typically, you will sell one contract for every 100 shares of gold or oil stock. In exchange for selling the call options, you collect an option premium.

With the US stock market slowly nearing a bull market top and with commodities trading at multiyear lows we should eventually see a shift in money flows out of stocks and into commodities. With rising commodity prices resource base stocks should start a new bull market that will send these funds dramatically higher in value while still paying a juicy dividend income.

In conclusion, if you want to invest in precious metals long-term I think owning an income strategy based around that investment is a great way to add diversification and income to your portfolio. Learn more about trading ETFs, funds and copy every trade I place with my own money at www.TheGoldAndOilGuy.com

Chris Vermeulen
Disclaimer: I currently own shares of GGN

 

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com 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.
  

Turning A Corner: The U.S. Economy Will Soon Officially Re-Enter The “Super Recession”

 
First quarter economic contraction is all but a guarantee. Over 7 years after the “super recession” started, the economy will almost assuredly enter an “Official Recession” that began in January. The economic data, which is heavily manipulated by the government to such a degree that it has shown the U.S. recovered from the “super recession” of 08’, is beyond ridiculous. A long book could be written on this topic, both how GDP is calculated as well as the C.P.I (nominal GDP growth – C.P.I = real GDP growth), so we will only make a brief mention of this.

Regarding GDP growth, how can a healthy and growing economy have consumption accounting for 70% of the economy while engaging in massive deficit spending, unthinkable surges in government, corporate and household debt with such massive structural issues it NEEDS continual debt financing? The answer is, it can’t. Regarding the C.P.I, if we use how it was calculated in 1980 (which has averaged over 9.0% from the start of 2009-to-present day) and how it was calculated in 1990 (which has averaged roughly 5.50% from the start of 2009-present day), the “super recession” never ended (remember the economy exists a recession after two sequential quarters of positive real GDP growth). This has to do with the countless gimmicks employed in today’s calculation including geometric weighting, hedonic weighting and much more frequent substitutions.

Despite all the gimmickry employed in an attempt to try and fool the American people that the U.S. economy is humming along nicely, it undoubtedly entered at least the first leg of falling back into an official recession territory. This will continue in the near future as the policies to foster real economic growth are absent and have been for 15-years!. Granted, a possibility does exist for the first and even second print of Q1 2015 GDP to show it grew, however should this occur it will a fraction of one percent and by the final print turn negative.

  • The holiday shopping season in 2014 was the weakest since 2008. This
    speaks volumes as the U.S. in a consumer based nation
     
  • The Labor Market has been nothing short of horrendous! Most recently the
    March 2015 payroll gains were just over half of consensus estimates at
    126,000. This, however, is distorted as net of the January and February
    revisions, March payroll gains were a meager 57,000 or less than 25% of
    consensus estimates.
     
  • The Labor Participation Rate hit another low not seen since 1978 or over
    35 years ago. This combined with the fact real median household income fell
    to a low not seen since 1995 or 20 years ago speaks volumes, especially
    because this was in the face of a technological revolution (The Internet and
    related technologies) whereby this rare occurrence greatly increases
    productivity and therefore substantial gains in median household income
    (over the course of a decade or so) should have been the result.
     
  • The holiday shopping season in 2014 was the weakest since 2008. This
    speaks volumes as the U.S. in a consumer based nation
     
  • The Labor Market has been nothing short of horrendous! Most recently the
    March 2015 payroll gains were just over half of consensus estimates at
    126,000. This, however, is distorted as net of the January and February
    revisions, March payroll gains were a meager 57,000 or less than 25% of
    consensus estimates.
     
  • The Labor Participation Rate hit another low not seen since 1978 or over
    35 years ago. This combined with the fact real median household income fell
    to a low not seen since 1995 or 20 years ago speaks volumes, especially
    because this was in the face of a technological revolution (The Internet and
    related technologies) whereby this rare occurrence greatly increases
    productivity and therefore substantial gains in median household income
    (over the course of a decade or so) should have been the result.
     
  • January retail sales contracted 0.79% (-0.79%) prior to December
    downward revision and contracted 0.71% (-0.71%) following December’s
    downward revision.
     
  • January 2015 industrial Production contracted January 2015 housing
    starts contracted
     
  • February automobile manufacturing contracted
     
  • February housing starts drop like a rock (17% contraction!)
     
  • February industrial production contracted February retail sales
    contracted very substantially
     
  • Durable goods orders were flat in January and contracted in February
     
  • March Retail Sales and Industrial Production should be nail in the
    coffin that the U.S. economy contracted in Q1 2015’ likely by a materially
    degree.

Whether we are correct in our forecast is beside the point as even in the best case scenario (where manipulating economic data is enough to overcome reality), the economy will show to have grown just a fraction of one percent. So even in the best case scenario, this announcement at the end of the month should prove to be a big net positive for the precious metals and may act as a catalyst, confirming a resumption in the precious metals bull market has begun. This of course will kill the talks of a rate hike this summer and for 2015.

 

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com 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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Silver Is Historically Undervalued

 
Silver Is Historically Undervalued
David Morgan

“This market isn’t a nightmare, it’s just plain silly – stupid silly” – Dave Kranzler, Shadow of Truth

Watch video below.

Based on all the data available, serious market analysts – note: Wall Street robots are not considered serious analysts – silver is historically undervalued. We can point to several metrics, like the gold/silver ratio or the ratio of paper silver claims vs. the amount of available silver to deliver, in order to start making the case.

Instead of going through the monotony of presenting quantitave analysis, the Shadow of Truth hosted David “Mr. Silver” Morgan to make his case for investing in silver right now. Everyone with one brain cell knows that the silver market is the most manipulated in history. But Mr. Morgan makes a very interesting and valid argument with regard to reasons for not focusing on the the degree to which the market is manipulated.

All of the billionaires I know were buying silver aggressively at $4 when the precious metals bull began. Currently silver, on an inflation-adjusted basis, is back to the $4 – 5 dollar level of 2000/2001. Don’t be afraid. Buy when no one else wants to buy – think like a billionaire. The silver market is a gift right now:

Towards the end of this interview David let’s his hair down and begins discussing, with all the passion he can muster, his convictions regarding the Constitution, personal liberties and responsibilities. Well worth sticking around to hear Mr. Morgan lay it on the line!! It is truly amazing.

 

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com 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.
  

Logical 4 Month Market Forecast – Gold, Oil, Stocks & Bonds

 
Logical 4 Month Market Forecast – Gold, Oil, Stocks & Bonds
By Chris Vermuelen, GoldandOilGuy.com

Everyone is looking for the holy grail of the financial market which will tell what will happen next in stocks, commodities, bonds etc… Knowing that the holy grail of trading does not exist I am going to step out on a limb and share my four month stock market forecast along with commodities and bonds.

It is vital that you understand this is a 2-4 month forecast only and as the market evolves my outlook will change as I follow price action as closely as possible.

Here are some key points you need to know:

1. Bonds should perform well for a few months and possibly a long time until the bear market in US stocks takes hold and is well under way. BUT, the bond bubble will burst eventually when rates start to climb. This could be June, or much later in the year but until then I expect them to rise as the safe haven.

2. Commodities typically outperform equities during the late staged of the bull market which is what I feel the US stock market is. Resource stocks and resource rich countries like Canada should hold up well, and possibly make new highs going into summer.

3. Notice how gold and oil have moved from opposite corners of the chart compared to the US and Canadian stock indexes.

4. During the 2000 and 2008 bear market we saw gold, silver, oil and mining stocks get hit very hard in the second half of the bear market. Will this happen again? I do not think it will because this time rates are at zero and there is only one way to go when they are at the bottom… Up!. This means stocks and bonds will likely both enter a bear market, maybe not at the same time, but they will eventually. This means the only places to protect your capital will be commodities, resource based investments, or simply cash CAD & USD.

Click Image to Enlarge

Click Image to Enlarge

Take a look at this 10 year bond price overlaid on the S&P 500 index. So far this year bonds have popped and rallied above short term resistance which we have seen in the past. Big money is rotating into bonds for the time being and this is a warning sign of a stock market top.

Click Image to Enlarge

Click Image to Enlarge

Market Forecast Conclusion:

In short, safe havens for investor’s capital will be more of a dance during the next bear market in US equities.

With many countries devaluing their currencies and a potential bull market in commodities I expect the Canadian Loonie and US Green Back to hold the value if not rise over the next year or two.

If you want my long term investing signals my ETF swing trades so you can protect your capital and profit during the next bear market – Sign Up Today!

Chris Vermeulen
GoldandOilGuy.com

 

David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com 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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