The Miles Franklin Newsletter
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From The Desk Of David Schectman
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European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.... And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!
–Donald Trump
As you can tell, 'da boyz'/PPT are no longer shy about who sees their handiwork, or what we think about it when they do appear. These markets...the precious metals and the currencies, plus the equity markets...are only doing what they're doing because of massive 24/7 interventions.
It wouldn't take much...a few hours of inattention, deliberate or otherwise...to start the great unwind in all things paper -- and the rush to hard or so-called 'safe' assets, would be on in earnest. That's what we were witness to yesterday morning, before JPMorgan et al. put in an appearance.
– Ed Steer
Even though we have all been conditioned to view our dollar as real money it is not very real at all. It can be conjured up in the trillions at virtually no cost. Actually, Dr. Mark Skidmore of Michigan State University discovered $21 TRILLION missing just from the Department of Defense and HUD from 2000-2015. So far, no one has an answer on that one.
That “money in the bank” that you see on your statement is, according to the FDIC, an asset of the bank and a liability of the bank. Once you make that deposit the bank owns the money and simultaneously owes you the money. Oh- by the way- less than 10% has to be available as they do their fractional reserve lending. As a matter of fact, again according to the FDIC, you are an UNSECURED creditor of the bank. That means that in the event of a default you will be one of the last to be repaid. Of course, first would be the derivative bets of the banks, which COULD render the banks insolvent right there.
Don’t worry though- they won’t just keep the money- you’ll get shares in the bank!
I recommend going to the
FDIC.gov
website and educating yourself about the bail-in procedures that are in place for when the next downturn occurs. As Jamie Dimon, CEO of JP Morgan said a few years ago It is not a question of if there will be another financial crisis- only when.
Mr. Dimon is as connected as you can get. His company, according to Ted Butler back in April had amassed 20 million ounces of gold and over 850 million ounces of silver in their vaults for themselves. I have also heard from friends in the physical gold and silver business since then that getting physical metals from the smelters is next to impossible because a “major bank” is taking all of the supply.
– Mike Savage
Here are two pictures of all of the gold in the world visualized.
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And here is a picture of all of the gold mined throughout the entire history of the world.
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David's Commentary (In Blue):
There is a good chance that gold will move higher this week after the drone strikes knock out half of the Saudi oil capacity - 5 million barrels a day.
Secretary Pompeo blames Iran. Iran fires back that U.S. bases and aircraft carriers are within range of their missiles and that they are prepared for a full-fledged war. Another “black swan” has suddenly appeared. How serious is this one? Watch the price of gold. The higher it goes, the bigger the threat of war in the middle east.
Gary Savage is great with his charts. This backs up Gary’s view also, after gold reached the 1545-60 level about 9-12 days time after Fed cut.
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Gold is now selling in Europe for nearly 1,400 euros as I write this letter— an ALL-TIME high.
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A few decades ago Harry Browne devised an investment strategy he dubbed the “Permanent Portfolio.” The idea was so simple it seemed almost moronic. And yet, with the passage of time we have discovered that his idea was pure genius.
He suggested building an investment portfolio out of only four components: gold, bonds, stocks and cash.
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The idea was that at any given time, two or three of these four components might underperform — but the other portfolio components would perform so strongly, you’d get an overall gain that would outpace any increase in the cost of living.
By all means, do watch the video, in the link below, of Andy Schectman speaking to the audience at the recent Sprott Symposium in Vancouver.
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Dear Friend of GATA and Gold:
GATA doesn't get invited anymore to financial conferences in Toronto and Vancouver now that touting mining shares takes precedence over warning monetary metals investors about manipulation of the markets by governments and central banks. But at the Sprott Natural Resources Symposium in Vancouver six weeks ago the president of Miles Franklin Precious Metals, Andy Schectman, gave a wonderful presentation about the comprehensive deception being waged against the monetary metals by governments, central banks, and their investment bank allies and thanked GATA for helping to expose it.
Let's hope that Schectman's comments don't get him knocked off the program for next year's conference.
Schectman's presentation was titled "Gold and the Art of Financial War Revisited," it's 23 minutes long, and it can be viewed at YouTube here:
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The following is from my mentor Jesse Cornish. It is interesting.
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Jim Cook is a dear friend. He hired me in 1983 and taught me the precious metals business. We talk several times a week and share a common passion for professional basketball, football and baseball and go to games together. We see the Minnesota Timberwolves and Minnesota Twins using my tickets. It balances out. We stay at his second home in Boca Grand, Florida for a week or more every winter. We also share common interests in, and have a mutual understanding of, the gold and silver markets. Between the metals markets, the economy and our love for local sports, we always have much to talk about.
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Jim Cook Interviews Ted Butler
The case for a silver price explosion has never been stronger.
Q
: For a number of years, you have been insisting that silver would experience dramatic price gains. Any change in your thinking these days?
A
: Not only has there been no change in my thinking, the case for a silver price explosion has never been stronger.
Q
: In what way?
A
: Well for starters, there is now more buying power in the world and less silver than ever. Every asset class has risen to all-time highs, while silver has gotten cheaper. The slightest switch from more expensive assets to dirt-cheap silver will light a rocket under the price of silver.
Q
: What else?
A
: Interest rates. While we’ve yet to see negative interest rates in the U.S., they are a fact of life in Europe. Getting nothing on a deposit should spur people to buy assets that are cheap and capable of rising in price.
Q
: What about the possibility of more quantitative easing?
A
: Yes, I think concerns about monetary policies have caused some big investors and institutions to acquire gold or silver lately.
Q
: Like a hedge fund?
A
: I don’t know who. I call one of them a “whale” because I believe they just bought 100 million ounces of silver.
Q
: What about the biggest silver hoarder of all, JPMorgan?
A
: Yes, they have recently become aggressive again and are the leader in taking delivery from the COMEX. They have around 850 million ounces of physical silver, which is the equivalent of all the silver mined worldwide in one year. Between the ETFs and JPMorgan, they own most of the silver in the world.
Q
: Is JPM the whole story in silver?
A
: Yes, they are in complete control.
Q
: Any chance they might use all that physical silver to hold down the price?
A
: JPM holds enough physical silver to stave off any physical shortage for years, but the compelling question is why would they? They are already billions of dollars ahead on their physical gold and silver holdings after being in the red until this year. And they stand to make many tens of billions more by holding it and not supplying physical silver to the market.
Q
: I wish more people could see the opportunity that JPMorgan sees in holding silver for the long term.
A
: This business about JPMorgan buying up more physical silver (and gold) than ever seen in history is not known to most people. JPMorgan has been buying massive amounts of physical silver for eight years now. As the kingpin of the silver and gold markets, JPMorgan is now positioned to make an absolute fortune on higher prices. Your readers should do the same thing that JPMorgan is doing. They would also have a chance to make a fortune.
Q
: The recent price rise in silver has been pretty dramatic. Do you see anything that could keep it rising in such an overheated fashion?
A
: The biggest short sellers in COMEX gold and silver are now underwater as much as $4 billion and more likely than ever before to buy back short positions. If they panic and rush to cover, then prices will truly explode.
Q
: Care to put a number on it?
A
: No, you know I don't put specific numbers out because that involves a degree of precision that borders on hubris. But if the big shorts truly start to panic, silver could move dollars per day
Q
: Any signs of a silver shortage?
A
: Sure, everywhere you look, starting with the silver ETFs which are suddenly not getting timely physical deliveries when due. It comes down to whether JPMorgan will let go of some of its physical stockpile.
Q
: These seven big shorts that are out so much money will certainly be trying to drive the price down so they can escape the pain, won’t they?
A
: Of course, but if they are successful in getting out of those big losses I don’t see them ever going short again.
Q
: What happens then?
A
: The price of silver will skyrocket. It’s inevitable that thirty years of manipulation on the COMEX will end with a bang.
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Ed Steer
But whether it's death by a thousand cuts, or death by one single thrust, there is no doubt that zero percent interest rates, or lower, lie in our future. No other option exists as we slowly spiral down to whatever fate awaits us...or is being planned for us.
This situation will continue until something blows up...or melts down...or both. What happens after that will be, as Jim Rickards says..."chaos". I still fear it could be worse.
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But I suspect that long before Armageddon arrives, the flight to hard assets of all kinds will be on in earnest...even more than it already is. And despite the current shenanigans in the COMEX futures market, at some point this JP Morgan-led price management scheme will fail...either by circumstance, or design. And when it does, it will fail spectacularly. Because, as Ted Butler has pointed out on numerous occasions recently, that's the only way it can end -- and I agree totally.
I'm still "all in".
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We're exploring the old adage: What goes around comes around. And what we see coming around almost everywhere is inflation.
We make haste to explain that we're not talking about common consumer price inflation, but about inflation of the money supply, which could show up almost anywhere.
In the interest of conserving the reader's time, here is our hypothesis: All major economies are caught in an "Inflate-or-Die" trap... and what went around Zimbabwe, Argentina, and Venezuela will be coming soon to an economy near you.
Central banks and governments are lowering rates, increasing deficits, and finding ways to dodge debt limits. The idea is always the same - to increase the amount of money in circulation. And here's the latest. Bloomberg:
"President Donald Trump said Thursday that he's planning a tax cut directed at the middle class that will be announced in the next year.
"It will be a very substantial tax cut," Trump told congressional Republicans at a retreat in Baltimore. He said the tax cut would be "very, very inspirational" without providing details."
Cutting taxes without cutting spending leaves both taxpayers and the feds with more money to spend.
This
worthwhile
commentary from Bill was posted on the
bonnerandpartners.com
Internet site early on Friday morning EDT -- and another link to it is
here
.
Gregory Mannarino
's post market close rant on Friday is linked
here
-- and it's
worth your while
.
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International Man
: We seem to be near the top of the "everything bubble." Almost nothing is cheap... anywhere. What are your thoughts on where people should put their money for prudence and for profit?
David Stockman
: I would recommend recognizing that the "everything bubble" is the most extreme, exaggerated, severe financial bubble in world history. It will inevitably collapse, and there will be massive losses, even greater than occurred in 2008 and 2001.
So, the first thing is to stay out of the casino. By that, I mean the financial-market stocks, bonds, and everything else.
These markets are so artificial. They're just chasing what the central banks are doing. There's no honest price discoveries or supply and demand; nobody's discounting the future of economic growth, productivity, and investment. You've got the chart monkeys, 29-year-old day traders who are in charge of the market.
When the big correction comes, there are going to be massive losses, and the panic will be great. All correlations will go to 1-which means everything will fall: the good, the bad, and the indifferent.
There's this old saying among traders that when the cops raid the house of ill repute, they carry out the good girls, the bad girls, and the piano player too. That's essentially what's going to happen.
This
longish, but very worthwhile
Q&A session with David, appeared on the
internationalman.com
Internet site on Friday sometime -- and I thank Phil Manuel for pointing it out. Another link to it is
here
.
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As we head toward the fourth quarter, it’s getting to be that time for us to start to think about tax loss trades. I dug up this article by Bill Holter out of our files. It is as appropriate today as it was when he wrote it for us two years ago.
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Year end tax season and precious metals
We are now close to the end of the year where people adjust portfolios with taxes in mind. For securities there is a “wash rule” provision not allowing the repurchase of the same security for 30 days. Otherwise in the case of a loss, the loss will be disallowed and cannot be used against gains to lower your taxes.
This is not the case in commodities. Physical gold and silver are considered “commodities” for tax purposes and are not subject to the 30-day wash rule. Miles Franklin has solicited legal opinion on this but as with any tax question, you should contact your own accountant or tax lawyer.
Since gold and silver are not under the 30-day wash rule, it does offer up a unique situation. If you have losses in gold or silver bullion and would like to take the loss for tax purposes but do not want to give up your position, we can help you with this. You can “swap” with Miles Franklin and lock both sides of the trade in at the beginning. In other words, you sell, and buy at the same time and thus do not give up your position.
There are physical mechanics to this and it is not just a paper accounting. You must ship your metal to Miles Franklin, they will ship your metal back to you the following day. This must be one so that ownership clearly changes hands and a paper trail of custody change occurs so you can show if you are ever audited. There is a cost for you to do this. You will be required to ship the metal and to prepay for shipping back to you. There is also a 2% transaction charge that applies.
This strategy works in the case of “bullion” (eagles, maples, etc.) but works even better in the case of numismatics because you are receiving the same coins back that you originally sent. In the past, some numismatics were bought with 70-80% premiums to spot or even more. For example, when gold was trading at $1,700-$1,900, it was not uncommon to see MS 63 Libs or Saints change hands well over $2,500. Now, they trade at roughly only 10% over spot. You can swap these now at wholesaler “bid” prices in order to take the maximum tax loss possible and still have your same coins returned to you!
In the case of “bars”, we can ship your bars back to you but now is a great opportunity to change your bars into either bullion or numismatics. Whether you have 1, 10, 100, or even 1,000 ounce bars, it is the poorest form of ownership (other than “paper” obviously). In a barter situation, I would personally hesitate more accepting a bar versus a coin because they are much more easily counterfeited. In the case of a sealed and graded pre 1933 coin, counterfeits have almost never been found. Also, bars will never, ever accrue “premium” whereas certain coins available today and close to bar prices have had significant premiums in the past and highly likely will again in the future. All I am saying is this, if you own metal in bar form, it is THE worst form of ownership and changing into coin form has never been more economical than currently because premiums are the lowest they have ever been!
While I illustrated above using gold, if you hold silver or any other metal such as platinum, palladium, or even rhodium, they can be used in this swap technique also. If you are interested and would like to look into this further, please contact Miles Franklin at 800-822-8080. The strategy for tax year 2017 is available until Dec. 29 as that is the last business day of the year.
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Gerald Celente is a futurist. He studies trends. He is not a gold bug or a precious metals perma-bull. Let’s call him “objective.” Here are his latest thoughts on where gold is headed and why.
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Gerald Celente’s Trend Alert
How Low Will Gold Go? How High Will it Rise?
KINGSTON, NY, 11 September 2019 — Since gold hit a six-year high on 4 September, it has fallen over $60 per ounce. How low will gold go? How high will it rise?
Now trading in the high $1,490s per ounce range, the word on the Street is that gold prices moved lower because positive U.S./China trade negotiations are at hand, equity markets are moving higher, bond yields are rising, and Middle East tensions are easing.
All of the above are factors that pushed down gold prices will not only reverse, some will worsen.
I forecast U.S./China trade relations will long term deteriorate rather than improve. And as recent data shows, despite its yuan moving lower, China’s exports again declined last month as the world’s #2 economy continues its down trend.
The global equity market rise is temporary, boosted by over 30 central banks lowering interest rates this year, thus injecting more monetary methadone to keep the addicted Bull running.
And, the more cheap money being pumped into the system, the lower bond yields will fall.
Middle East tensions will continue to increase as detailed in our Trends Journal and Trends in The News video podcasts.
The key driver behind rising gold prices is the global flood of cheap money being injected into the economic system.
Indeed, today President Trump continued his attacks on the Fed’s interest rate policy, blaming them for slowing down the U.S. economy. He tweeted: “The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term.”
And once again, as it happened before, negative/zero interest rate policy, quantitative easing bond buying, lowering reserve requirement ratios – plus new rounds of fiscal stimulus from nations across the globe and whatever new cheap-money-injection schemes central banksters will invent – are fundamentals that will push gold prices higher.
TREND FORECAST:
The Gold Bull Run will continue to run.
How fast it runs depends on how much cheap money – and how quickly – the central banksters inject into the economic/financial system.
Tomorrow, the European Central Bank is expected to lower interest rates further into negative territory and announce more quantitative easing policy. Thus, how low interest rates go and how much QE is injected will affect how fast gold prices rise.
And next week, the U.S. Federal Reserve is expected to cut U.S. interest rates by 0.25 percent … unless the latest pressure from President Trump pushes The Fed to lower rates 0.50 basis points.
I maintain my years-long forecast that gold had to break strongly above $1,450 ounce, which it now has following my 6 June Trend Alert, "The Gold Bull Run," for it to spike toward the $2,000 range and above.
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Private Safe Deposit Boxes
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Unencumbered / Segregated Storage
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About Miles Franklin
Miles Franklin was founded in January, 1990 by David MILES Schectman. David's son, Andy Schectman, our CEO, joined Miles Franklin in 1991. Miles Franklin's primary focus from 1990 through 1998 was the Swiss Annuity and we were one of the two top firms in the industry. In November, 2000, we decided to de-emphasize our focus on off-shore investing and moved primarily into gold and silver, which we felt were about to enter into a long-term bull market cycle. Our timing and our new direction proved to be the right thing to do.
We are rated A+ by the BBB with zero complaints on our record. We are recommended by many prominent newsletter writers including Doug Casey, Jim Sinclair, David Morgan, Future Money Trends and the SGT Report.
For your protection, we are licensed, regulated, bonded and background checked droppable-1564579585984per Minnesota State law.
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Miles Franklin
801 Twelve Oaks Center Drive
Suite 834
Wayzata, MN 55391
1-800-822-8080
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