Miles Franklin Daily Gold & Silver Summary

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Market Recap for

Thursday December 13, 2012


 $1697.30 Down $14.30


GOLD - one year ago today

 Up $66.40



 $32.54 Down $0.91


SILVER - one year ago today

 Up $1.70



 $1609.00 Down $24.00



 $692.00 Down $2.00



 436.68 Down 11.30



 163.67 Down 4.15



 79.92 Up 0.07



 1.3075 Up 0.0004



 13170.72 Down 74.73



 52.16 to 1

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Read more articles from Ranting Andy Hoffman
and Bill Holter on the Miles Franklin Blog site.
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daviddeskFrom David's Desk 

David Schectman 


The Fed is Buying 85 trillion in Bonds per Month 



Here is the link to our fourth quarter hard-copy (mailed to our readers who still refuse to use a computer). Andy Hoffman, Bill Holter and I all have articles in this latest edition of our Quarterly Report.


miles franklin report    

Miles Franklin Quarterly Report Winter 2012



Here is what the MSM had to say about yesterday's drop in gold.


PRECIOUS-Gold drops, Fed move raises concern on stimulus scope -


SINGAPORE, Dec 13 (Reuters) - Gold dropped about 1 percent on Thursday after the Federal Reserve linked its monetary policy to unemployment, raising concerns that future economic stimulus could be limited.


Gold benefits from easy monetary policy as it drives investors who fear diminishing value in fiat currencies to seek safety in hard assets such as bullion. Gold has risen nearly 9 percent so far this year.


The Fed said it plans to buy $45 billion in longer-term Treasuries each month on top of the $40 billion monthly purchase of mortgage-backed securities, as expected, but set unemployment and inflation thresholds for exit strategy.


"This announcement is a bit confusing to gold investors as it linked policy to unemployment, etc.," said a Tokyo-based trader. "Perhaps the market wanted unlimited QE."


Continue reading on


For a more accurate analysis, check out the comments from LeMetropole Cafe.


Looks like the short-term oriented funds "sold the news." What idiots! Here, the Fed does the most gold-friendly thing possible and the market sells off. Check the gold price a month from now and you will see the complete folly in this.


$84 billion/month in new purchases, all with newly created money equals over one trillion in the next 12 months. This is insanity and it is even more insane that anyone would dump gold after the announcement. Gold won't remain below $1,700 for long. Also, I read that the Indians have ramped up their gold purchases thanks to the low prices - and they are still in the midst of their wedding season. They must be thanking the fools who sold down gold yesterday.


Post Federal Reserve QE4 Analysis with Andy Hoffman "Inflate or Die"


In order to understand exactly what happened yesterday, take the time to listen to this great interview the just released with Andy Hoffman.


The FED is literally buying 85 trillion in bonds per month! Do the math on this one, the FED is printing $1 trillion in order to keep rates artificially low, distort the bond market, and attempt to spark price inflation.


Andy is also an expert on precious metals manipulation, so expect him to walk you through exactly what is going on in the precious metals market. Here is his interview with Sean of the SGT Report recorded literally minutes after the Fed announced "QE4."


12.12.12 - The Day Our Currency Died: Andy Hoffman - PT1
12.12.12 - The Day Our Currency Died: Andy Hoffman - PT1



12.12.12 - The Day Our Currency Died: Andy Hoffman - PT2
12.12.12 - The Day Our Currency Died: Andy Hoffman - PT2



Check out the graph of gold today vs. one year ago. Gold is now UP $66.40 after being behind for a while. One year ago, gold started a very steep plunge and I don't expect a repeat this year - which is why I expect gold to finish the year at least $150-$175 an ounce higher than the close in 2011.





David Schectman

Miles Franklin


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holterreportThe Holter Report

bill holter

What if they threw a party?
December 13th, 2012


I have asked the question several times: "What if the Fed threw a party and no one came?"  QE 1 came as a surprise party and the Fed surely got bang for their buck.  QE 2 and 3 were highly anticipated (or should I say anxiously anticipated) and each evoked less reaction and enthusiasm.  Today we effectively got confirmation of QE 4ever to a packed house of giddy and hopeful investors but quietly they shrugged their shoulders and slipped out the back door.

The next few days and first days of January will be very interesting indeed because the Fed effectively announced a $1+ trillion party over the next year and ...nothing?  No party, no glee, no one on CNBC had their "giddy pants" on.  But... what if, what if reality begins to set in?  What if no bogus agreement to fix the "unfixable" fiscal cliff gets done?  Or what if the "fix" is so bogus that a 3rd grader could see through it.  What if stocks went down?  Or forbid my political incorrectness, interest rates just started going up?  What's next?

US budget deficit reaches $172B in November

The budget deficit for October and November blew out to $293 billion ($50 billion higher than last year), so... how is that/will that be funded?  Where's the money coming from?  Where does the money come from when markets don't do what they are supposed to and when the economy sinks even further?  Who will be the White Knight for Europe?  Japan?  And ultimately the Fed and U.S. Treasury?  There is no White Knight as he has been sullied, dirtied and bloodied over the last 4 years.

Ben Bernanke had always "wished" that he could inherit a depression and show that he could "fix" it with monetary policy.  He has gotten his wish and he now knows that he was wrong.  "Unlimited" printing or "dropping money from helicopters" doesn't work.  It never has in the past, will not now nor ever will in the future.  The problem is that we have already gone out to sea in the helicopter and the gas tank is less than half full.  There is no difference between turning back now or continuing, a crash landing into deep water is inevitable.

I can only imagine what is going through his mind; "We need to print more, we didn't print enough... or soon enough."  It does not matter, in a fiat system this is exactly where it has to end, whether it be sooner or later.  It always has and mathematically always will which is why "money" MUST be real in order to retain confidence.  A system which has real money as its base will ALWAYS have guests arrive for the little parties they throw from time to time.  But, when you have a fake currency and have thrown a non stop party for going on 40+ years and an open bar for nearly 4, "fatigue" sets in and no one shows up.  Watch the exits very closely here, investors have virtually stopped entering for quite some time,  a shoeshine boy yelling "fire" might be all it takes to close this party down for years to come.


Bill Holter
Associate Writer for Miles Franklin

Read more Bill Holter Articles on the Miles Franklin Blog
goldhighlightsGold Highlights

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LeMetropoleLeMetropole Cafe (



David's Comments:

On days like today, when the Cartel blatantly assaults gold and silver, the first place I go to for an honest "take" is the Caf�. Here is what Bill Murphy wrote about gold and silver late yesterday.




12/13 A Totally Different Ballgame Soon / Crime In A



A.M. Kitco Metals Roundup: Gold Drops Below $1,700 Following another Mysterious Price Drop in Asian Trading


Thursday December 13, 2012 8:21 AM


(Kitco News) - Comex gold futures prices are trading solidly lower Thursday morning, on some fresh technically based selling and on mildly bearish outside market forces. Once again, the gold market suffered a rapid and inexplicable price drop in early Asian trading Thursday, on reported sell stops being triggered. Sell stops are pre-placed market orders to sell if a certain price is hit. That marks the third week in a row of such price declines that occur for seemingly no fundamental reason...




What to say today after last night's email missive rant? Nothing worse than sounding like an angry ole man, which I am at the moment. Then again, I am not at all. It's the Billy Martin thing, who was a former ballplayer and coach of the New York Yankees, and renowned for kicking the bases while arguing with umpires over what he perceived as a bad call. He would kick and kick, get it out of his system and go on from there ... letting his emotions be yesterday.


Same deal here. This "mysterious" price tanking is aggravating in and of itself, but also because, again, NO ONE outside of The GATA camp will call a spade a spade and talk about market manipulation. Three weeks in a row, Kitco speaks of sharp price declines in Asia with no fundamental information to explain the price drops. But, would any of their ace reporters, my friend Daniela Cambone included, call up CP or me for a GATA comment? Not on your life ... even after we present them with the recently discovered IMF report which virtually says the gold market is manipulated.


Instead Market Watch trots out another know nothing clown, as PRICE ACTION MAKES MARKET COMMENTARY ... any commentary but the truth:


Gold set for dramatic correction: hedge fund manager


December 13, 2012, 10:21 AM


Long-term and perhaps even short-term investors of gold could be forgiven for getting rattled on Thursday as the precious metal dropped below $1,700 an ounce, down over $26 in the early hours of U.S. trading.


Get used to it, says Uri Landesman, president of Platinum Partners, a New York-based multi-strategy hedge fund. "Gold was overvalued and it's going to come down dramatically," he said. And he sees 2013 shaping up as a year where gold will trade in a range of $1,400 and $1,800, meaning current prices are on the high side.


ny spot gold 10 year chart   


"The Fed is pretty much saying that we're going to backstop the stock market forever," said Landesman, referring to the Federal Reserve's prior-day declaration that it wants unemployment in the U.S. - currently at 7.7% - to drop to 6.5% before it raises interest rates again. And backstopping equity markets more or less indefinitely is not good for the precious metal, he said.


"Gold tends to do best if there's a flight to quality. That's not the case right now because the Fed is being so accommodative and saying we'll be propping up gold until unemployment gets to 6.5%. That's a sharp signal that there's no reason to fly to gold, because gold is overvalued here."

And as stocks are set to benefit from the new Fed stance, equities and gold are going to detach, he said. "So people who have a finite amount of money are going to go to one asset class or two or three, bonds and stocks and go out of safer havens like gold."


He said his expectations are based as much on technicals as they are on analysis. "They both support the same thing. There's more downside than upside risk on gold. We've been in a 12 to 13-year super cycle. Gold was at $200 an ounce in the late 1990s. It's had a pretty nice run, if you punch up the chart on gold. What we're getting now is a standard correction, but it's going to be a big correction."

  • Barbara Kollmeyer




If that is not happy Horse S, I don't know what it is. But Market Watch will publish what that goofball has to say, yet won't mention what GATA has explained to them for 14 years and been right about the direction of the price of gold for the last 12 years.


Cannot stress this enough: BLACK IS WHITE AND WHITE IS BLACK in the gold/silver world. The more bullish the fundamentals, or the more bullish the news is, the more The Gold Cartel goes into attack mode. James Mc has brought this to our attention time and time again for some time now. What we are watching The Gold Cartel do to gold and silver at the moment is the best example of that over the last 14 years. As Kitco even mentions, they have done the same drill in Asia three weeks in a row. And the obvious hit job selling on the Comex has been documented in this column day after day, even hour after hour of late.


There can only be one plausible explanation for the gold/silver price action of yesterday and today ... after the about as bullish news as the gold world could get which emanated from the Fed yesterday. That explanation is the US Government knows they have NO SOLUTIONS to the US fiscal predicament, no solutions which will be acceptable to the kept in the dark American public and to any politician who wants to be re-elected. The situation is bleak and the Obama Administration/Fed fully intends to go to all out money printing mode, so their first step is to SHOOT THE MESSENGER ... which they are attempting to do at the moment.


That attempt will FAIL. And that is because the precious metals physical markets will overwhelm the Gold Cartel's paper game manipulation raids as demand will overwhelm their available supply. It is that simple. The timing of it all is far from simple. Look out how they have been able to stem the tide over the last year. But still, the price of gold is up over $130 for the year, and that is after they have thrown the kitchen sink at the market. The closing price of silver last year was $27.91. What market has performed better than silver this year, despite JPM and their friends?


My take on what is going on here is that something awful is brewing behind the scenes and the powers in Washington want gold off the favored radar scene when it hits. That is what their selling intensity EVERY noticeable day is telling me. We shall see. But, if that is the case, it should not be long until we find out.


As far as the markets went today, the price of gold was trashed all the way down to $1688 on the Comex. Silver fared much worse, dropping down to $32.19 and breaking support, which held for days. Silver broke OUT yesterday on the Comex. We always talk about no follow-through allowed in the precious metals, but this takedown is a bit extreme, even for them. The breakout meant NOTHING, so does this hit job ... NOTHING in terms of the big picture and what is coming in the near future.


It is SO important to keep in mind that The Gold Cartel does what they do to affect the thinking of the investing public and to affect their psychology about the precious metals vis-�-vis the US stock market, dollar, and interest rates. That is what this sick game they are playing is all about. No matter how well gold performs year after year, their aim is to put it in the doghouse. Love this extremely well written email from a Caf� member last night after my missive. VERY well written, but totally off the mark in terms of who is going to prevail and why. Take it away Jack:


Re: MIDAS Bulletin: SHOUT OUT: The Cockroaches Are In Trouble ... AND An Opportunity Of A Lifetime


Just mind-boggling. Forget the 1 Tr $$$ cranked out this coming year, alone; instead, focus on one odd feature of it that might not be PERFECT for gold. Of course, stocks doin' just fine.


Even if all this conspiracy stuff is true (and I have owned gold through 6 exhilarating and now frustrating years), we may need to face the facts that those in control cannot be dealt with and...THEY win. Why keep fighting it? Why not go with what they are going to let win: stocks, stocks and stocks. They want us in paper and they are going to get us in paper just like FDR did. If we try to hang onto gold after the confiscation order comes down (which I bet will happen as soon as they relay to their bosses that they can't keep the prices down anymore and the fiat is getting ready to get revealed as a sham), we'll never be able to spend it or even show it to anyone without worrying about whether they are feds/snitches. Those that kept gold in 1934 had to hold on for FOURTY YEARS without being able to call on the gold (who knows how long without Jim Blanchard). Not sure I can do that and I don't have kids.


After today and tonight's action, following two QEs in five months, I'm spent. There's no inflation; the stuff is just too manipulated; stocks go up no matter what (except my gold mutual fund - down, down, down); if the market improves, money leaves gold for stocks; if market worsens, money leaves gold for good old dollars. This has become a no-win; and, even if we "win", it'll be a nat'l/global meltdown where the first thing the central authority will do is ban gold. So, even if we win, we will lose. I see no option, realistically, outside this country. it's all just as manipulated and collectivist as we are becoming, if not worse.


I'm thinking of making contact with Blanchard and Sons and CNI and unloading it all and just putting it all into Fidelity high yield and emerging market and asian bond funds and cash and just forget it. Enough is enough. I'm like the farmers in Shane tired of dealing with Ryker and his gunslinger brought in special from Cheyenne. I don't see Shane on the horizon; I see Bernanke, JPM, Hillary, Obama, etc.


Subscribe to LeMetropole Cafe for the full article.




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Your ONLY Protection from the Coming Currency Wars

Tom Essaye | December 13, 2012


The Currency Wars:

How to Pick the Winning Side


What he means is that, as governments actively devalue their currency, it's causing their trade partners to do the same thing, devalue to stay competitive.


This vicious cycle plays out over and over again until all currencies have lost a significant amount of purchasing power. Meanwhile, investors who own assets in those currencies are left holding the proverbial bag!


There are certainly ways investors can protect themselves from those occurrences, but buying stocks and bonds still leaves you exposed to an area of risk - the currency those assets are priced in.


For instance, you can own U.S. Treasuries, German Bunds and Japanese bonds. But what if all those currencies decline in purchasing power simultaneously - a very real possibility in the future?


Then, your investment would suffer because the currency is declining. Your hedging of risk has provided no real benefit.


Gold bullion, however, eliminates this risk.


Bump up Your Buying Power: Long Gold Means

Being Short Every Other Currency in the World!


Gold bullion is the answer to the currency wars, because it is the only asset you can own that simultaneously lets you short every other currency in the world - all at the same time.


While most people watch the gold price in dollars, keep in mind gold is also priced in euros, yen, won and every other currency.


In fact, most people don't realize that, while gold has had a nice run in U.S. dollar terms, gold priced in yen and euros has produced equally good returns, and at some points even-better returns than the gold price in dollars.


So, unlike insurance policies, bond holdings or other "safe" investments, gold bullion has the ability to rise in value against every currency in the world - at the same time!


Think of it this way ...


Say I'm right and currency wars do erupt. It's five years from now, and exchange rates among the major currencies are roughly where they are now.


But the currency wars have been raging. So while the euro is still 1.31 to the U.S. dollar, both currencies have declined big-time against hard assets like oil, corn, copper, steel, coal and real estate.


My gold bullion, however, is much higher than it was - not only avoiding the loss, but most likely booking a profit, too.


So, while my friends and colleagues going on vacation abroad complain about how "expensive" everything is, my gold bullion has gone up in value against the euro, yen, pound, real, and very other currency in the world - making me wealthier across the globe!


Continue reading on

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sinclairJim Sinclair (

Gold Does Not Need You Or Me

December 13, 2012, at 10:31 am
by Jim Sinclair

Dear CIGAs,

Gold will trade at $3500 and above on its own merits with Eastern demand in the cash market being the engine of price.

The Fed via Goldman has capped gold in the paper market for months. They were so obvious between $1775 and $1800 that Petunia can call the strategy.

Goldman is, in all practical senses, the Exchange Stabilization Fund because ESF is only a brokerage account. There is no fund in terms of what one thinks a fund's office should look like. Read the law.

The President or US Secretary of the Treasury may appoint ANY person or entity to act on their behalf as the manager of the Exchange Stabilization Fund. The Exchange Stabilization Fund has a broad mandate that allows it to trade many things including GOLD. The USA is not the center of the Gold price in the full valuation move into 1980.

Right now the geniuses in charge of the ESF are driving gold via the paper market directly into Eastern hands. There is much speculation about the amount of Gold the USA holds and its deliverability as much gold and silver was used in the Manhattan Project and no audit has ever been carried out.

The gold price will in the not too distant future go through the cap and that will take it to full valuation above $3500. If you're speculating in gold in futures without at least 20 years of positive history and training as or under a professional you have a financial death wish.

If your reason for owning gold and silver is an exchange failure you are fundamentally challenged.

The volatility in gold and counter intuitive moves, thanks to Goldman as broker for the Exchange Stabilization fund investor, will migrate back to good gold shares with the real beef.




In The News Today

December 13, 2012, at 10:26 am
by Jim Sinclair

Jim Sinclair's Commentary

There is a definition of US Fascism in this illustration. It is certainly no joke, or cartoon, but spot on.


Jim Sinclair's Commentary

The instant gold mine that the regulators have forgot to regulate is now reaching almost 3 billion in one week. Not regulating is the new growth business. They might consider going public based on profit margin for not regulating.

Note please in the teaching illustration below the bowl of "I Don't Care" is full. Again this is no joke or cartoon.


HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering


State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world's largest banks and ultimately destabilize the global financial system.

Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.

While the settlement with HSBC is a major victory for the government, the case raises questions about whether certain financial institutions, having grown so large and interconnected, are too big to indict. Four years after the failure of Lehman Brothers nearly toppled the financial system, regulators are still wary that a single institution could undermine the recovery of the industry and the economy.

But the threat of criminal prosecution acts as a powerful deterrent. If authorities signal such actions are remote for big banks, the threat could lose its sting.

Behind the scenes, authorities debated for months the advantages and perils of a criminal indictment against HSBC.

Some prosecutors at the Justice Department's criminal division and the Manhattan district attorney's office wanted the bank to plead guilty to violations of the federal Bank Secrecy Act, according to the officials with direct knowledge of the matter, who spoke on the condition of anonymity. The law requires financial institutions to report any cash transaction of $10,000 or more and to bring any dubious activity to the attention of regulators.


Jim Sinclair's Commentary

This is an undeniable statistic.

When the China bashers speak of alternative statistics by which to judge China's economic health, how about Food Stamps as an alternate statistic to judge the health of the US economy?

The food stamp economic recovery - Food stamps increase by over 600,000 in last month of data. GDP at record levels yet US employment is 4 million below start of recession.

There was a startling figure that came across my desk from the United States Department of Agriculture regarding food stamp usage in the SNAP program. Food stamp usage has grown dramatically in the last decade even during the debt inspired boom times. Yet the devil is always in the details as we reported with the unemployment rate really dropping because of the over 500,000 Americans simply dropping out of the labor force. The food stamp figures are stunning because they show in the last two months food stamp usage has skyrocketed by over 1,000,000. In the last month of data observation, food stamp usage increased by more than 600,000. Keep in mind to qualify for food stamps you have to carefully demonstrate that you are earning very little and technically are classified as being in poverty. So what does it say that our nation now has 47.7 million Americans on food stamps?

GDP to record levels yet employment down by 4 million

Our Gross Domestic Product is now at record levels yet we are doing this with over 4 million workers less than in 2007:


The reason this is possible is that income inequality is simply growing more dramatically. That is why on one side of the spectrum we see big financial institutions back to making big bets and earning big bonuses while in the last month of data, we added 600,000 more Americans to the food stamp system. If you want to visualize how things have played out since the recession began here is an excellent chart:





In The News Today

December 12, 2012, at 1:01 pm
by Jim Sinclair

Jim Sinclair's Commentary

There is no way that financial perversity at the level of today can occur without total destruction of all those things we held as meaningful to a society.

Yes Banksters, the beloved of regulators, are financial perverts. The Banksters have done more damage to us than any international enemy we have ever had in the entire history of North American and Euroland.

The war against terrorism is totally focused on the wrong terrorists. Please consider that some people in high office, as in this article, really believe the demise of one major financial institution is the end of the financial world. What does that tell you about the financial world?

Too Big to Indict

Published: December 11, 2012

It is a dark day for the rule of law. Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system. They also have not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions.

Clearly, the government has bought into the notion that too big to fail is too big to jail. When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished. The deterrence that comes from the threat of criminal prosecution is weakened, if not lost.

In the HSBC case, prosecutors may want the public to focus on the $1.92 billion settlement, which includes forfeiture of $1.26 billion and other penalties, as well as requirements to improve its internal controls and submit to the oversight of an outside monitor for the next five years. But even large financial settlements are small compared with the size of international major banks. More important, once criminal sanctions are considered off limits, penalties and forfeitures become just another cost of doing business, a risk factor to consider on the road to profits.

There is no doubt that the wrongdoing at HSBC was serious and pervasive. Several foreign banks have been fined in recent years for flouting United States sanctions against transferring money through American subsidiaries on behalf of clients in countries like Iran, Sudan and Cuba. HSBC's actions were even more egregious. According to several law enforcement officials with knowledge of the inquiry, prosecutors found that, for years, HSBC had also moved tainted money from Mexican drug cartels and Saudi banks with ties to terrorist groups.


Jim Sinclair's Commentary

Should we start a countdown to our next war? You might look at this as Sinful Fiscal Stimulation Bankster Induced (SFS-BI) to accompany QE to infinity.

Truth be known, this would be a Bankster's take on how to fiscally stimulate.

Syria Fires Scud Missiles at Insurgents, U.S. Says


Published: December 12, 2012


WASHINGTON - Syrian forces loyal to President Bashar al-Assad have fired Scud missiles at rebel fighters in recent days, Obama administration officials said on Wednesday.

The move represents a significant escalation in the fighting, which has already killed more than 40,000 civilians in a nearly two-year-old conflict that has threatened to destabilize the Middle East, and suggests increased desperation on the part of the Assad government.

One American official, who asked not to be identified because he was discussing classified information, said that missiles had been fired from the Damascus area at targets in northern Syria.

"The total is number is probably north of six now," said another American official, adding that the targets were in areas controlled by the Free Syrian Army, the main armed insurgent group.

It is not clear how many casualties resulted from the attacks by the Scuds - a class of Soviet-era missiles made famous by Saddam Hussein of Iraq during the first Persian Gulf War. But it appeared to be the first that the Assad government had fired the missiles at targets inside Syria.



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phillipsJulian Phillips (

Confiscation of Gold - Then What? Part 1/4

Thursday December 13, 2012 13:21

Several analysts and respected members of the gold community have stated that the confiscation of gold is unlikely because the conditions that precipitated it in 1933 don't exist anymore. We agree wholeheartedly with that view. But we feel that the confiscation of gold is extremely likely for very different reasons.

For the last 40+ years, the world has used un-backed paper money and attempted to discredit gold. This system is entirely reliant on the confidence people have in governments and the central banks that issue money the money (at will). Over the 40 years of this experiment, gold has gone from $35 to $1,715, a rise of nearly 50 times. Since 2007 we've seen banking crises across the developed world leaving bankers borrowing money from central banks and lending it back to them, rather than lend it out into the general economies or in some cases to each other.

Before we continue, we would like to stress one point that gold investors must be made aware of. This is not simply an academic discussion. If we are wrong, you will continue to own your gold with it under your full control. If we are right and you haven't acted prudently to protect against confiscation, you will lose your gold. It's all about risks and rewards.

With gold being of a value far in excess of its price in the monetary system -as seen in its use as collateral via the Bank of International Settlements currency/gold swaps of the last few years- and with gold soon to become a level 1 asset on bank balance sheets, the demand for physical gold from the banking system as well as from emerging world central banks is set to rise tremendously and soon. The Basel III discussions allow for this to happen any time between 1 January 2013 and 1 January 2015. If gold is re-rated to a level I asset, as is proposed by Basel III (U.S. bankers are in on the discussions) then there is not enough readily-available gold to provide both the central banks of the world and the banking system with sufficient for gold to play this role.

That's why your gold may be confiscated.

The consequential impact on the gold price is overwhelming. We're moving into dangerous financial waters in this regard which reminds us that 'gold is money in extreme times', as Alan Greenspan said. But how? Investors hold gold in the correct belief that it will rise as the monetary system decays; it has done this since the turn of the century. When these times arrive, the price of gold will not be as important as the number of ounces held by anyone.

What most gold investors have done is to shrug off the probability that they may have their gold confiscated by their government, 'in the interests of national financial security'. Confiscation is far more than just an event that will hurt individuals. It will hurt institutions (who are allowed to own gold) and change the world's monetary system significantly.

Importantly, Central Banks and the Authorities possibly will not wait for the monetary system to crash before acting to ensure they have enough gold to keep the monetary system working. They will act well ahead of that time to make sure they avoid a collapse and attempt to engineer the event so as to catch gold investors by surprise, removing their chances of making any contingency plans. With their prime objective being to shore up confidence in the monetary and banking system, they could not afford to signal the market about their intentions beforehand. We are not just talking about the U.S.A. but many other countries that may precede or follow the United States in these acts.

The trouble is that the gold they 'acquire' may be yours. Wisdom demands that the banking crises, which have been occurring since 2007, do not happen again because this time around they may well collapse. Prudence demands that investors don't take that risk but act before it is too late. The risks of not guarding against this eventuality are enormous; the rewards of guarding against it are massive. If it doesn't happen, then you will lose little if anything. If confiscation does happen, then you lose a lot. It's a matter of risk and reward.

We believe that the confiscation of gold for this purpose is a very real and present danger and have organized a way to protect against that eventuality.

This prospect brings to the table the following questions, which all gold investors, including institutions need to address now before they are caught in the net. We will look at these questions in subsequent articles:

Part 2

1. What will happen to your gold if it is owned directly in your name?

2. What if it is in a safe and hidden place at home?

3. What if it is in a safe deposit box at the bank?

4. What if it is unallocated and sitting in an E.T.F.?

5. Does it help for your gold to be allocated?

6. What if a bank holds it for you?


Part 3

1. What will the Authorities do when they want your gold?

2. How will you use your gold if it is illegal to own it?

3. Will a 'Black Market' in gold work?

4. Is it enough to hold your gold outside your country?

5. What if the Authorities order you to repatriate it?

6. What if the Authorities order you to transfer ownership of your gold to them?

7. What if the Custodians banks of your gold E.T.F. are told to pass your gold to the Authorities?


Part 4

1. The evidence of history on Confiscation and Exchange/Capital Controls.

2. After U.B.S. is Switzerland really safe?

3. Are Private Vaults safer?

4. Will you be forced to sell your gold under a confiscation Order?

5. How can you sell or use your gold if it is illegal to own it?

6. Do you have time to wait before you act?

7. How can S.M.A./U.G.T. overcome a Gold Confiscation Order?

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aboutAbout 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 sell over $100 million a year in gold, silver, platinum and palladium.  We are rated A+ by the BBB.  We are recommended by many prominent newsletter writers including Doug Casey, David Morgan, Jean Paul Louvet, LeMetropole Caf�.  Our reputation for service, education, quality product and pricing is outstanding.


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