How to Not Buy Precious Metals

One of Gerald Celente’s key “top trends” of 2015 is global price wars.  Citing the potentially bloody price war OPEC just initiated with high cost producers like the U.S. shale industry – and horrific “Black Friday” holiday sales – “deflation” is indeed expanding.  The “evil troika” of Washington, Wall Street and the MSM will have you believe this is a “good” thing, whilst out of the other side of their mouths screaming of how it will destroy the world.  Hence, justifying expanding “QE” and “ZIRP” to infinity schemes.

Of course, as we wrote in “crashing oil prices portend unspeakable horrors,” the massive negatives associated with plunging incomes and increased competition outweigh the piddling “positives” by multitudes.  And if the PPT wasn’t working 24/7 supporting stocks, which traditionally are the worst asset class to own during deflation, the entire world would quickly realize that “2008 is back” – with a vengeance.  You see, the Central banks that carry out such illicit, immoral activities could care less about “the economy”; and thus, when they speak of “deflation” fears, they are solely referring to the stock and bonds the “1%” own the vast majority of.

Deflation always follows monetary inflation – until eventually, hyper-inflation rears its ugly, world-destroying head.  This is how the previous 600 fiat currency Ponzi schemes have fared throughout history; and as sure as night follows day, how this, history’s largest Ponzi scheme will end.  Just ask the Japanese, Russians, Venezuelans and countless others whose currencies are already heading in that direction.  It’s only a matter of time before the fiat cancer circulates through the global monetary system’s entire “body” – and reaches the “head” that is the “reserve currency”; i.e., the dollar.  And as we wrote in “commodity crash,” not only is gold the best asset to own in deflationary times – as it was in both the 1930s and the 2008 crisis – but the only financial asset to own during hyperinflation.

Part and parcel to price deflation is vicious retail competition – as we saw during “Black Friday” weekend, and will continue to see into the foreseeable future.  Not in “need versus want” items like food, electricity and insurance, mind you, but nearly everything else.  As of today, gold and silver are still considered “want” items; but they surely weren’t in 2008 – and our guess is that in the big scheme of things, they won’t remain so for much longer.

Ironically, with global precious metals demand at an all-time high – particularly in Japan, where Yen-priced gold is within 5% of its all-time high, Western PM sentiment has been so brutally savaged by the Cartel, that U.S. and Canadian bullion industries are in dire shape; in some cases, as dire as the mining companies themselves.  Fortunately, Miles Franklin is in rock solid shape – in my view, due to the industry-leading service we have provided for 25 years; our unparalleled education platform; and the “world’s best Precious Metal storage program,” in Montreal, Canada.  Throw in our A+ Better Business Bureau rating, with not a single registered complaint since opening our doors in 1990 – and average broker experience of 20 years; and you can see why, as David Schectman put it earlier this year, “you can’t put a price on trust.”

When it comes to buying, selling or storing precious metals, we can’t emphasize enough to be careful who you deal with, as this is an entirely unregulated industry.  Well, not entirely – as by pure coincidence, our home state of Minnesota decided last year to be the only state to regulate bullion dealers.  Which Miles Franklin has complied with – making the case for working with us that much stronger.

For years, our industry has been plagued by vicious price competitors – like Tulving Company, which went bankrupt earlier this year after absconding with tens of millions of client funds.  Moreover, particularly in these difficult times for the precious metals industry, countless others have either fraudulently or simply unethically guided unseasoned clients to high risk, intrinsically worthless numismatics due to the higher margins such products bring.  To that end, another of our competitors, Merit, went out of business earlier this year after being sued for bait and switch tactics, focused principally on numismatics.  Here at Miles Franklin, for the record, we only recommend numismatics to experts – or in limited cases, when the subjective premiums they command decline to levels not much different than generic bullion coins.

Anyhow, the reason we’re writing of this today is because for many high-overhead dealers – of which, Miles Franklin is decidedly not – the pressure to cut prices and resort to bait and switch tactics has never been higher.  Western PM demand has been so weak – notwithstanding record U.S. and Royal Canadian Mint silver sales, which unquestionably are due to foreign buying – that many dealers are in dire shape.  This is what ultimately did in Tulving and Merit, and what likely will claim countless others if prices don’t rebound shortly and significantly.  To that end, when we saw this damning article yesterday, discussing potential issues at one of Canada’s largest dealers – the Northwest Territorial Mint – we felt the need to address the issue anew.

In an email from a NWT Mint client is published of how they have not delivered his order for a single “monster box” (500 coins) of Silver Maples, despite it having been ordered nearly six months ago.  Finally, when he requested a refund, it was promised but not delivered either.  We are not here to judge exactly what is going on; but assuming the email is authentic, it sounds eerily like what happened at Tulving in its final stages.  Again, the NWT Mint is one of Canada’s largest bullion dealers, demonstrating that “size” doesn’t guarantee strength.  Frankly, the larger a dealer is in today’s weak demand environment, the more difficult it is to stay in business.  Which is why we encourage you, more than ever, to do your due diligence – and heed the sage advice of Steve Quayle, that…

If a deal seems too good to be true, it is.  If dealers and distributors can’t buy at spot, what makes people think they can?  People who are penny wise and pound foolish when buying precious metals get burned.  And we are not talking about pennies here, we are talking about people’s life savings.

-King World News, December 4, 2014

Next up, before I get to today’s “all-important” jobs report, I want to point out just how pathetic the ECB meeting was yesterday – with Mario Draghi’s official comments purposefully “feigning indifference” about the upcoming QE expansion, no doubt to appease the Fed and other “competitors” in the “final currency war.”  Just hours later, however, he made sure to “leak” expectations of a massive QE package being prepared for the January meeting, in order to prevent it coming from his own mouth.  The Euro resumed its plunge thereafter – and with it, thanks to the Swiss blowing their chance of a lifetime, the Swiss Franc.  Of course, the one thing Draghi did manage to say without equivocation was that the ECB’s QE discussions have included “all assets but gold.”  Thus, as we rest on the cusp of historical, global financial chaos, Draghi may have for all intents and purposes uttered some of the most “famous last words” in history.  Irving Fisher’s October 1929 quote (three days before the crash) that, “stock prices have reached what looks like a permanently high plateau” held that distinction for nearly a century, rivalled only by Ben Bernanke’s 2007 comment that, “the impact on the broader economy and financial markets of the problems in the subprime market seem likely to be contained.”  However, something tells me “Goldman Mario” will give them a run for their money.

Well, the November jobs report is out, and all I can say is this.  NEVER in America’s history has the government abdicated the truth so completely – at least, when it comes to reporting the state of its dying economy.  To that end, recall that essentially every November economic indicator – including Wednesday’s ADP employment report, which generated its lowest November print since 2010, and first November decline (relative to October) since 2008.  And yet, the BLS reported a whopping 321,000 jobs compared to the 230,000 consensus representing the largest increase since January 2012!

Once I get to the internals, no doubt the truth will become clearer.  However, just based on the headline – which by the way, did NOT include a reduced unemployment rate (major red flag), my initial thought is this.  The Fed is terrified of what we wrote in “the most damning proof yet of QE failure” – i.e., plunging rates despite so-called “recovery.”  And thus, with the entire world lowering rates, the U.S. needed to “prove” its economy was strong enough for the miniscule rate increase the Fed promises in “June 2015.”  And thus, the most outlandishly ridiculous NFP report imaginable was created – literally, out of thin air.

Well, the aforementioned internals are coming in, and my dominant emotion is incredulity.  Yes, the government lies about everything.  However, it appears they are literally making up the NFP report at this point.  Last week, for instance, we wrote of how analysts were expecting a big number due to temporary UPS and Fed-Ex truck driver hiring’s for the holidays; which in our mind, don’t even count as half jobs.  And thus, with today’s “321,000” job print, it makes us wonder if Mrs. Jones hiring Little Johnny to mow her lawn now counts as a “job” according to the BLS.

To wit, the accompanying “household survey” not only didn’t incorporate a massive job gain; but instead, a 4,000 job loss, including a net 150,000 decline in full-time jobs.  Moreover, the reason the unemployment rate didn’t change – as you can imagine – was another decrease in the Labor Participation Rate to essentially its lowest print since 1978.  Yes, we’re to believe job growth “exploded” in November, whilst all other U.S. economic data declined – not to mention, throughout the rest of the world.  And yet, the Labor Force declined!  And don’t forget that the majority of U.S. job growth in recent years has been in the retail sector; which in and of itself, is an alarming trend given that most retail jobs are of the low paying, part-time variety.  However, given that retail sales have been weak all year long – and last week’s “Black Friday” sales an utter catastrophe – it’s difficult to believe such “job” gains are real to start with.  And if so, common sense dictates they will shortly be dramatically reversed.

It’s 9:45 AM EST, and since the NFP report was published an hour ago – accompanied by worse than expected trade deficit, and must worse than expected, negative factory order growth; nearly all the Treasury yield gains have been reversed – to the chagrin of the Fed, we’re sure.  PMs, as usual, were initially attacked viciously but gold is again fighting its eternal war at $1,200/oz. and silver is down just a dime.  More ominously, however, oil prices are again down dramatically – which we assure you, will shortly result in MASSIVE job losses in the energy sector, of which a third of all S&P 500 capital spending emanates from, and 15% of all junk bonds – totaling an incredible $210 billion!  Moreover, the dollar is on fire, wreaking havoc on countless currencies already on the verge of collapse.  Stay tuned, as I wouldn’t be surprised if today is the day the U.S. “economic lie” machine is finally, permanently, discredited by the global financial community.Similar Posts:

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