Posts Tagged ‘Silver’

My Last Forecast on Silver and Gold Prices

June 26, 2012 1 comment

By Jeff Nielson | SilverGold Bull
Jeff NielsonIt seems at the very least ironic that as I begin a new chapter in my own career as precious metals analyst for Silver Gold Bull, that simultaneously I’m writing my last chapter on one facet of that analysis. This will be my last effort at playing the increasingly irrelevant game of attempting to forecast gold and silver prices – in terms of the bankers’ paper.

Many readers will be aghast at this announcement. How can I “analyze” the gold and silver market without providing guidance on its (paper) prices? I would immediately reverse this proposition with a question of my own. How can anyone provide rational estimates for future prices of hard assets which are being priced in paper which is already effectively worthless?

Now it is the paper-peddlers who would be horrified by my stance. How dare I assert that the beloved fiat-currencies which they (and their propaganda machine) place in such high esteem are worthless? Here I have a host of arguments at my disposal, several of which I have used in the past.

There is the obvious analogy between paper currencies and the shares of a corporation. With nothing officially “backing” these paper currencies, our governments can only impute value in this paper as a claim against these sovereign entities which issue them. How much is a share worth in a bankrupt corporation? How much is a dollar worth, when it is issued by an obviously bankrupt debtor?

However we don’t need to go down that road, since it would inevitably lead to a debate between the phony, official numbers of the United State’s “national debt”, and the $200+ trillion in debts and liabilities which it would be forced to acknowledge if it had to follow the same accounting rules as all U.S. corporations are required by law to use.

There is a much simpler and more direct way to demonstrate the worthlessness of the U.S. dollar, one which is beyond any possible debate. As a tautology, anything which can be obtained in infinite quantities and produced at zero cost must be worthless. If this were not the case, then one would simply produce an infinite quantity of that item – and thenexchange it for all the goods (and services) in the entire world.

With most of our fiat currencies now being conjured into existence electronically, this is the ultimate example of an infinite quantity/zero cost item…with one exception. Since all of this funny-money is borrowed into existence, the bankers were previously able to claim that in fact this was not a “zero cost” item – because of the debt/interest attached to each currency unit.

However that argument, the only basis for claiming that the bankers’ fiat currency had any value whatsoever evaporated the day that the U.S. began its permanent era of 0% interest rates. On that day the U.S. dollar fully became a zero cost/infinite quantity item – and indisputably worthless as a basic proposition of logic.

Why do people think B.S. Bernanke attempted to peddle the myth of an “exit strategy” – i.e. an end to 0% interest rates – for nearly three years, before finally being forced to abandon that absurd pretense? Because he and the rest of the banking cabal are terrified that someone would stand up (as I have done on several occasions) and announce that “the Emperor is wearing no clothes.”

At the end of Tulipmania 400 years ago; one day a single tulip could be exchanged to buy a house. The next day that tulip was merely a flower. The tulip itself was unchanged. All that did change was that the mass delusion that tulips were items of considerable value suddenly and collectively evaporated. It is one of the reasons why every fiat currency ever created has gone to zero (or simply been removed from circulation before it hit zero). It is one of the reasons why they tend to go to zero very, very quickly – more commonly known as “hyperinflation”.

The moment we accept the logical fact that these fiat currencies are already worthless we see the absurdity of attempting to price valuable assets (like gold and silver) in paper which has no meaning. If I announce that in hyperinflation-ravaged Zimbabwe that an ounce of gold is “worth” $2.5 trillion Zimbabwe dollars, does that actually mean anything to anyone?

Sadly, we have collectively been so completely brainwashed (over the past century) that we are now almost incapable of conceiving a world which is not priced in paper. However, go back little more than a century (and for all the centuries preceding it throughout history) and we encounter a world virtually the mirror-opposite of our own.

In that world, everything was “priced” in gold and silver. The only way that mere paper could ever acquire value was as a certificate directly backed by gold or silver. The concept of a world where everything was “priced” in fiat paper which was backed by nothing (and effectively worthless) would have been a proposition much too ludicrous for any of our ancestors to consider – except during their own, brief, disastrous experiments with such paper.

As our fiat currencies begin their final descent into history’s dust-bin of failed paper, we are entering a period of transition and re-education. We must reintroduce into our minds the concept of once again pricing goods and services in terms of items of enduring value (i.e. real money).

There is no space here to explain (yet one more time) why gold and silver are “money” while our paper currencies are obviously not. Readers will have to refer to previous explanations of the definition of money. Once readers have completed this second step in their mental transition, they are ready to return to a world of real money – and rational “value”.

How many ounces of gold does a house cost? How many pairs of shoes could one purchase with an ounce of silver? When the “dimes” and “quarters” in our wallets once again contain actual silver (real money), we could once again buy a chocolate bar with a dime (as we could only a few decades ago) – and perhaps several.

This mental transition will naturally seem like a very intimidating concept to many, just as the Dutch couldn’t conceive of a world which was not “priced” in tulips – the day before Tulipmania ended. Here it’s important to make readers explicitly aware of the penalties for being one of the last to make the transition away from the bankers’ world of worthless, fraudulent paper.

If you were a Dutch resident who exchanged his/her tulips for items of real value before the day Tulipmania ended, you fully protected/insured your wealth. If you did not do so, you were completely wiped-out financially – with nothing to console you except a handful of pretty flowers.

If we exchange our dollars (or euros) for hard assets (i.e. silver and gold) now, before they inevitably suffer the same fate as the Zimbabwe dollar, we can still protect what is left of our wealth. If we attempt to exchange our paper the day after our own “Tulipmania” comes to an end we will find we are holding nothing but an inferior brand of toilet paper.

It is because the speed at which this final collapse will occur is so unpredictable that it has become a Fool’s Game attempting to guess short-term prices for silver and gold – and now even predicting longer term prices as well.  Indeed, this is now so speculative that it only makes sense to do so in a “best-case scenario” for the bankers’ paper (i.e. where they are able to delay the collapse of their paper with the maximum amount of success). Obviously in their worst-case scenario the paper would be absolutely worthless, inferring infinite prices for gold, silver, and other hard assets.

Thus my worst-case scenario for the price of gold is a price of at least $5,000/oz within the next 2 – 5 years. Similarly, my prediction for the price of silver would be a minimum of $200/oz within that same 2 – 5 year time horizon. Some will accuse me of making a “prediction” so loose as to be useless. I make no apologies.

Read more: My Last Forecast on Silver and Gold Prices

Related Articles:


Silver Bomb

June 25, 2012 1 comment


Paper silver prices have been subjected to severe downward pressure lately. If you identify yourself with the chap who wrote “I purchased my physical silver at $45.88/oz“ and viewed your silver purchases as an investment rather than a store of wealth, this interview may help calm your nerves.

Sean of SGTreport interviews Michael McDonald, co-author of the new book ‘The Silver Bomb’. Michael talks about:

  • Opportunity that will never happen again
  • Mathematical certainty that current global debt cannot be paid off
  • Silver could go down to $5/oz, but there’ll be no silver to buy at that price.
  • Manipulation of the silver market, & more
Part 2 discusses:

  • What happens if you “buy silver one day and the next it drops 20%”
  • Be your own Central Banker
  • Silver an irreplaceable metal in industry
  • Palladium Vs Silver
  • $500/oz silver, does it mean anything at all?
  • Fate of the USD as the world reserve currency


This chart helps to put into perspective some of the key points discussed above.


The BIG Picture (Where is Gold & Silver in the global financial landscape)
Mouse over each bar for details. Click on bars for data source.

Coming Soon! New 1:1 silver exchange that will suck metal away from the LBMA.

June 15, 2012 2 comments


It’s getting cold and dull here in NZ, but for most sound money enthusiasts north of the equator, summer is finally here, but this is no ordinary summer! As discussed in this piece, “PAGE is Dead. New Allocated Silver Exchange in the Making“, many are bubbling with exciment in anticipation of the launch of the new Chinese exchange that will trade 1:1 fully allocated silver contracts. Please read the abovementioned article if you’re not sure what the exciment is all about.

In a timely interview with the good doctor at, Ned Naylor Leyland gave an update on the debut of the new exchange that will “in due course suck metal away from the LBMA system”. You’ll be glad to note that it is “on schedule”, will indeed be launched “this summer”, and to be more specific, “mid summer”.

It’s quite unsurprising what happened with the PAGE, although ultimately we’re in a better situation than we were before, and I’ll explain why.

The Pan Asian Gold Exchange was a sort of dual functioning exchange based in the Hunan Province down in southern China.   The thing about it is it was a regional program to develop that area into a trade zone within SE Asia.  The main part of the exchange was for domestic use, leveraged products, etc., but they also had this very, very interesting plan for a fully allocated spot contract in gold.

Now two things happened.  The first thing is the bit you alluded to that other shareholders within PAGE, because PAGE is effectively made of up 10 shareholder groups.  One is the one that I’m involved with, and then the other 9 were effectively Chinese SOE’s or Chinese companies.   The one Chinese company that was listed on NASDAQ  is an information technology business.   They were the ones that blocked it.  Effectively they started saying that they insisted (and they owned slightly more than the others in truth) on building the platform from ground up using Chinese tech and Chinese workers.

Now that would have taken a very, very long time and that wasn’t the original plan, which was very frustrating for the people I know who wanted to roll-out the fully allocated contract by buying a platform off the shelf.

So that happened, which for the guys in China they were a bit confused.  I wasn’t, I thought it stunk straight away.   But then interestingly, following that  was then a change in Chinese laws as well.
They turned around in the Central Government and said we’re now not allowing any trading in gold outside of Shanghai.   So it got smashed on two levels.

The reason I say we’re in a bit of a better situation is that the guys behind the allocated contract then understood what they were trying to achieve better, and understood the dynamics of the market better.
They realized that they weren’t necessarily going to be welcomed with open arms by the rest of the bullion trading community, or at least on the custodial side.

So they thought about it carefully and they’ve gone about setting up a new exchange which unfortunately I can’t give you the name right now, but it should I’m very much hoping, mid-summer we’ll be there, and I intend to go out there at some point as well.   It’s a fully allocated spot receipt in silver which will have monthly offerings, and the idea is for it to offer an alternative for those guys who are trading spot in size through the LBMA system, to own something which is transparent, tradable, and should in due course suck metal away from the LBMA system across to this new exchange.

Now Eric (Sprot) would be able to tell you this himself, it’s not a straightforward process setting something like this up.  It requires a lot of hard work that goes into it.  There are always little gremlins here and there that need to be ironed out, particularly with something like this where it’s an international offering.   There’s a lot of serious people behind it, it’s very much on schedule to happen this summer, and I’m very excited about what it could do once it’s up and running!

Other topics of interests include:

  • Euro zone crisis and the 100 billion Euro Spanish banking system bailout
  • Solved mystery behind the now famous “GLD bar” purportedly owned by the GLD ETF
  • Posibility and implications of bond fund managers flooding the physical gold market, and more…

The Bottoms Debate

June 6, 2012 Leave a comment

With last Friday’s historic largest single daily gain in gold on a COMEX close basis (up almost 4%), many analysts are calling this the bottom for PMs. It’s refreshing therefore to hear a contrarian (not bear) view on this. David Bond, editor of The Wallace Street Journal at, argues that

We may well see $18 silver and $1,200 gold and a 66.6-to-1 silver:gold ratio before the bloodiest is over.

As always, this site attempts to dig out stories from both sides of the coin for your analysis and due diligence before taking any actions. Enjoy this read…

This Ain’t The Bottom (But you can see it from here)
By David Bond | The Wallace Street Journal at silverminers

Wallace, Idaho – Bernard Baruch famously said: “Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.” Good advice. So many ersatz experts are calling this the bottom for silver and gold that it absolutely cannot be the actual bottom. It may be so close that we can see it, but we’re willing to ride this elevator down a few more floors before we hit that big red STOP button.

At the last bottom, in 2008, Hecla was a buck and Teck was only $5 ahead of it. If you read Jeff Clark’s article at Casey Research, read it again. If you haven’t, return to Go.

But smugness is the enemy. Until you feel panic in your loins – and you don’t feel it now, just yet – stand pat. Not that you’re going to be burned, buying just now, but the fire sale is ahead.

Our own crystal balls – Paul Sarnoff told us that prognosticators don’t have crystal balls, they just walk like then –tell us that we will see a massive sell-off in silver, down to the $18 level.

(Paul first brought to this writer’s attention what Clark’s article drives home: that decreasing open interest during a price trend signals a price trend reversal. If the price of gold keeps going up, but fewer and fewer people are jumping in, then jump out. The converse is true: If the price of silver and gold are going down, and fewer and fewer players enter the markets every day, then the price is headed northward.) Watch the open interest. If prices rise and more people jump in, that is the end of the bottom.

Three events will transpire this year that will send us and our little silver mining camp, temporarily, cratering. They haven’t happened, yet:

First, the pretender now occupying the White House will be defeated, which will incite riots by feral adolescents in every major U.S. city. (He might also prevail, in which case the same conditions will apply.)

Second, the young man who got the best of that fight with Trayvon Williams, will be acquitted on facts. This again will incite riots by feral adolescents in every major U.S. city.

Third, the Euro will collapse, which will incite government workers, feral whites and feral Muslims in the European capitals to tear down what’s left of the decent places there. What the Czars and the Nazis could not accomplish, Paris’ own recently-imported citizens will obtain the destruction of that magnificent city – in the harmless name of diversity, one supposes. Last chance to walk the fairarrondissements of the City of Light along the Seine without having to look over your shoulder. (What has been built on faith is easily destroyed on the altar of nihilism – just like fiat currency.)

These three events will drive the U$D up to record high levels as the Euro collapses. Probably happen late summer, early fall. The flight to the U$D will momentarily suck the wind out of the gold and silver sectors. The crash will be hard. We may well see $18 silver and $1,200 gold and a 66.6-to-1 silver:gold ratio before the bloodiest is over.

It will happen and it is going to suck. But it will be temporary.

Then, sometime late this year of early next year, a few bright people will discover that the U$Dollar has no meaning, no value, other than its reputation as a pledge of the “full faith and credit” of the United Snakes. But there is scant credit to obtain from this nation of debtors. We are not a country of farm-owners, of factory-owners, or even property owners or free men. We’re just renters without equity, and there is nothing to secure our debt.

I fear there will be violence at the portals of our great mines. Unlike the Mine Wars of a century ago, which pitted management against workers, this violence will pit Us against Them. Either Obama or Romney will need to seize ownership of our mines in order to secure the debt of these United Snakes. Our miners will be conscripted, and paid a barely meaningful wage – but enough to keep the cable TV turned on and the NFL package live.

If you are a shareholder in one of these mines, your future is secure. After all, even slaves need to be fed, and dividends will be paid as promised. Corporations and their shareholders are whores: if they’re paid, they’re fine.

Some things we have recently noted:

National Public Radio’s muppets are encouraging a U.S. military involvement in Syria. One supposes they would encourage Obama to enter into a third regional conflict, one more than He inherited, and blame it on Bush;

California will increase its cigarette tax by $10 per carton, on the heels of the Messiah’s tax increase of $10 federal tax per carton upon his inauguration. Having run out of Germans, Russians and Blacks to despise, the government is turning the hatred inward. What’s next? A call for school children to snitch off parents who do smoke?

The federal drumbeat to inform authorities of any suspicious activities on the part of one’s neighbors, no matter how harmless they really might be. My mother told me not to be a tattle-tale.

The continued irradiation and groping of people boarding airplanes. (Back when I was a child, you could just walk out onto the ramp, meet the pilots, extinguish a cigarette if they were refuelling. If you were polite they’d let you board and maybe even fly jump-seat for the next leg without a ticket. Nobody but your uncle took a picture. Try that now and you will be shot tazered or shot.

Imagine, if in 2021, a small group of screwed-up Americans hi-jacked an airplane and flew it into the Burj Al-Arab tower in Dubai, UAE. Imagine if then the United Arab Emirates spent the next decade invading Canada and torturing its citizens, leaving 8 million dead. Get the picture? Or am I being subtle?

Welcome to the Nazification of Amerika, land of the fleeced: We have ring-side seats to the planet’s greatest calamity, the death of its largest-ever Republic. Guilty until proven innocent – that’s our way. Gold and silver are no longer just a good investment. They will be the only way out of this snake-infested hole.


Related Articles:


From Canada to NZ, and everywhere in between, people are waking up!

June 4, 2012 Leave a comment


From Canada to NZ, and everywhere in between, people are waking up! Waking up to the fact that the existing global monetary & banking system is seriously flawed. Many would even go as far as saying it is a fraud. Unless governments the world over change the way national currencies are created and managed, it is a mathematical certainty the system will collapse like a house of cards. Here’s a small collection of voices explaining the flawed or fraudulent system together with their calls for change and your personal action.

Canada: Victoria Grant, a 12-year-old Canadian spoke at the inaugural Annual Public Banking Conference in Philadelphia, April 27&28 2012. She called for monetary reform and her contention was that governments, not banks, should create and lend a nation’s money. Why should governments borrow money from private bankers and pay compounding interest on the debt when that money never existed in the first place, but was created out of thin air by the bankers. Watch Victoria’s interview on RTamerica.
New ZealandPositiveMoneyNZ is a campaign to move NZ from a debt-based economy to one that operates with a full reserve in which money has been issued debt-free and interest-free. A draft bill “Reserve Bank of New Zealand (Creation of Currency) Bill” has been crafted to get the initiative going. Watch this short video explaining the problems behind the existing monetary system, how YOU have been affected and why a total change is required.
UK: We now have a Debt Crisis because almost every pound we need in our economy must first be borrowed by us from a high street bank, and banks don’t need to have any real money before it can make a loan to someone. To end this crisis, stop banks from creating new money and let the government, through the Bank of England, create debt-free money instead. PositiveMoneyUK, formed in March 2010 is campaigning against the deep flaws in our current monetary system.
USA: Congressman Ron Paul, the champion of small government and sound money (gold & silver) is at the forefront of the campaign to “Audit the Fed” and to “End the Fed”. Going by the enormous crowdsall along his campaign trail, Americans have finally awoken to the truth behind Thomas Jefferson’s famous quote “And I sincerely believe, with you, that banking establishments are more dangerous than standing armies…”Watch more “End the Fed” grassroots campaigns.
Congratulations for coming so far down the page! Relax and reward yourself with this final video - Every breath you take, every move you make, we’ll be watching you - Ben Bernanke.

If all this is new to you, it’ll do you good to study the materials in the order they are listed below.

  1. What is Fractional Reserve Banking
  2. Crash Course on Banking, Finance & Economy – By Chris Martenson
  3. Central Banking & the Federal Reserve System
  4. Financial Repression – What is it and how does it silently steal from you
  5. Calm Before the Storm



Get every new post delivered to your Inbox.

Join 210 other followers