As I am writing this gold, silver and other metals are on sale right now- even more than they have been in the last few weeks. There is a lot of talk about Basel 3 rules and that the US and UK banks will likely be neutered in their assault on the gold price by these new rules which take effect at the end of the year.
Basically, the banks, up until now, could list their unallocated (unowned) paper gold on their balance sheets. Basel 3 rules will not allow the banks to count paper contracts as assets. I haven’t heard anyone else mention it, but this will take most of the assumed supply that exists and likely expose just how tight physical supply really is. Of course, many are reporting that the US Mint is having trouble sourcing silver and is basically allowing everyone to know that there is, indeed, a global shortage of physical silver.
My guess is that gold will have a similar epiphany in the next few months. This should lead to drastically higher prices shortly.
Of course, there are also EU banks which are involved in the price-supression scheme also that have the rules take place at the end of June. This is why June could be a volatile month as many of these banks will attempt to extricate themselves from deeply underwater short positions. Those same naked shorts that they use to manipulate the prices lower.
Let’s look at the facts. Demand is off the charts by central banks, major banks and sovereign wealth funds. Premiums for actual metal products are skyrocketing, there is a physical shortage, The US dollar is being “printed” into oblivion and … the price goes down? As Paul Craig Roberts (Former Treasury Deputy Secretary) says it can be explained in one way-FRAUD.
To me, this may be the last, greatest buying opportunity for these assets that we may have in our lifetimes.
Of course, I am not saying that the coast is clear. Right now, at least until the end of this month it appears that any pressure that can be brought to bear on the prices of particularly gold and silver will be applied so that those rigging the markets can avoid being wiped out.
For those who have a longer time horizon than a few weeks or months this appears to me to be one of the best set-ups I could imagine. It also appears that the companies that mine these assets are in a position to really fly as many are already making fat profits with the prices being artificially held down. What might it look like when the glass ceiling is pierced?
There is a lot of speculation that the BIS (Bank Of International Settlements) the central bank of central banks, was forced to act by Russia and China who were rumored to be announcing that their currencies would have a tie to gold- which would likely undermine the US dollar and could cause it to actually implode if that action were taken.
On the other hand, those in charge may just believe that they have procured enough gold and silver at discounted rates that they can now let the price fly and in the meantime bolster their bottom lines at a time when it appears that the debts are becoming insurmountable. Time will tell.
In the meantime, it appears that the fraud on Wall Street seems to have no bounds as hedge funds and major banks appear to be running pump and dump schemes with these meme stocks and blaming it on teens and twenty-something traders. Of course, in the last blowup earlier in the year it came out that miraculously JP Morgan and Goldman Sachs had monstrous positions JUST PRIOR to those major short squeezes (Reported by Wall Street on Parade). Of course, when some buddies were getting hurt they just changed the rules so that the designated winners win.
I am looking at MANY companies that have dire debt to equity ratios and many are bankrupt without acknowledging it yet. There are many iconic companies whose book value is NEGATIVE right now. They have no earnings and are carrying massive amounts of debt.
Many cities and states are feeling rich after getting billions from Washington in the latest bailout but a look at the books reveals that many cities and states can also be deemed bankrupt- particularly when the magic money machine fails to work anymore. It likely won’t stop- it will just become worthless.
Even the federal government is technically broke and is, in my eyes, a massive ponzi scheme that has us (admitted) spending over $7 TRILLION (Likely FAR higher in reality) and collecting $3.5 trillion in taxes.
Let’s not forget about the social security, medicare, and prescription drug programs that have us at least another $150 Trillion in debt that we have no assets set aside for.
These little pieces of information are the greatest reasons to be buying REAL assets or companies that produce them. The companies should have pristine balance sheets. Yes, there are many out there that meet that criteria. Gold, silver and many other hard assets are just that- ASSETS rather than liabilities. There is no counterparty risk where you are counting on someone else’s promise to pay.
With the world drowning in debt and conjuring up hundreds of trillions of currency units what are the chances that you will get repaid in a currency that has anywhere near its current value? By the way, it takes a dollar to buy what a penny bought when the Fed took over in 1913. We are around 2% away from Zero.
What is your plan to protect your purchasing power?
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