Precious Metals: Crisis Protection - Jeff Nielson
April 10, 2017
Readers of these commentaries may have wondered if they were receiving mixed messages over these past many months. On the one hand, they have been told that converting our paper wealth into gold and silver is one of our most important wealth management strategies. Indeed, this has even been described as “the secret of wealth preservation” .
The strategy is a simple one (as opposed to simplistic). The banking crime syndicate is continually diluting our paper currencies as a covert means of stealing the wealth contained in those currencies. We know this, because we have a confession from one of the ringleaders of these financial criminals, before he became one of the ringleaders of these financial criminals.
In the absence of the gold standard, there is no way to protect savings from confiscation via inflation.
– Alan Greenspan , 1966
The word “confiscation” is just a polite term for theft. The excessive greed of whatever bankers are in control of the printing press inevitably results in the exchange rate of the paper currency being driven to zero. We know this, because in the 1,000 years since humanity first began using these un-backed “fiat” currencies they have always gone to zero – or been removed from circulation before that could happen.
The same fate which befalls these paper currencies – worthlessness – also affects any paper instruments directly attached to those currencies, with bonds being the notable example. Of course in the case of Western bonds, the debt instruments of hopelessly insolvent governments , they could plunge to worthlessness even before the paper currencies themselves. Just ask some of the bond-holders of Greece's debt.
Precious metals protect our wealth from theft-by-inflation while the bankers are perpetrating their crime. Gold and silver are also the ultimate insurance from the final death-spiral of these paper currencies which this excessive dilution always causes.
At the same time, readers have been frequently warned for the past two years that the bankers' current bubble-and-crash cycle in our markets is now ripe for detonation . U.S. markets, the apex of this fraud, have been at all-time highs for more than two years.
When these bubbles are detonated (including our real estate bubbles ) so that the bankers can also profit from the “crash”, readers were told that precious metals will not be spared. Indeed, this was the reason for the “fake rally” of 2016: to raise gold and silver prices off of multi-year lows so that they could be slammed lower along with virtually all other asset classes.
We know that the Next Crash is coming because there is little profit to be made by the banking crime syndicate in continuing to pump these bubbles higher. We merely await the bankers' timing.
If gold and silver will also see their nominal prices plummet in the Next Crash, where is the value/incentive for people to use these eternal metals to shield their own wealth? This is the crux of this article.
There are several reasons why people should be sheltering their wealth in gold and silver now, even knowing that the nominal price of those metals will drop over the short term.
1) When the paper goes to zero it never recovers.
This article will regularly refer to the “nominal price” for gold and silver. This is simply the number we attach to gold and silver, denominated in a particular form of the bankers' paper. Irrespective of how the bankers manipulate the paper price of gold and silver, that price can never and will never go to zero because gold and silver have intrinsic value.
These metals have aesthetic value, being greatly in demand as jewelry and in a near-infinite number of ornamental applications. Gold and silver are the world's best “money” – perfect instruments for that use. They are also incredibly useful in industrial applications.
Silver is the planet's most-versatile metal, incorporated into more new patents than any other metal. Gold is also extremely useful from a metallurgical standpoint, but it is deemed to be too important as a form of international money to be used in industrial applications.
The paper has no intrinsic value of any kind. When confidence fails in a paper currency it goes to zero. When a government reneges on its debts, its bonds go to zero.
When the bankers push gold or silver prices to particularly absurd lows, the price boomerangs higher because these are hard assets with real value. We saw this after the Crash of '08. We will see it again in the Crash of '17 ('18?).
The problem is that with these paper currencies already extremely debauched and with our governments already past the point of insolvency, the Next Crash could easily be the final death-spiral for all Western currencies and bonds .
The bankers have already hinted at this with respect to their paper currencies. For the past five years, these financial felons have been sounding a steadily louder drumbeat about “SDR's”. They want to use SDR's as our (next) currency.
What are SDR's? These are the Strategic Drawing Rights of the International Monetary Fund (IMF). They are nothing more than a line of credit. In no way at all does this line of credit resemble a currency.
Imagine going to the bank to make a “withdrawal” from your own account , and what the bank gives you is essentially a loan. Not only does it totally obscure the concept of “wealth”, it totally blurs the distinction of who owns that wealth.
You go to the bank to withdraw your SDR's, but your bank loans them to you? It's no more (or less) insane than so-called “negative interest rates”. You deposit your wealth into a bank, effectively loaning that wealth to the bank, and then the bank charges you interest?
This is the world of paper fraud in which the banking crime syndicate is immersing us. Perversity piled atop perversity. Crime piled atop crime.
Keeping one's wealth in paper because we are afraid that the (nominal) price of gold and silver will decline temporarily keeps that wealth continually exposed to the ever-worsening frauds of the bankers, condoned by our puppet governments.
If your wealth is in paper, the bankers control it. This is the ever-louder message as the financial laws of these fascists grow ever more extreme. If your wealth is in gold and silver, you control it.
2) Gold and silver will recover stronger/faster than other asset classes
The Crash of '08 caught all precious metals investors by surprise. Not the Crash itself, most of us could see that coming. What surprised us was the plunge in gold and silver prices – knowing that these metals are humanity's oldest and surest Safe Havens. We were surprised that the bankers were capable of pushing price lower, while a financial panic was occurring.
What did not surprise us was what came after that Crash: the longest-and-strongest part of a ten-year bull run for gold and silver.
In 2009, 2010, and the first part of 2011, gold and silver led all asset classes – with silver leading gold by a healthy margin. The price of silver ran from $8/oz (USD) to $49/oz, a six-fold increase. The price of gold ran from below $700/oz to nearly $2,000/oz, close to tripling.
Even then, there was absolutely no fundamental reason for gold and silver prices to have reversed lower in 2011. Gold is a monetary metal. When B.S. Bernanke quintupled the U.S. monetary base after the Crash of '08, the price of gold had to perfectly reflect that quintupling.
The price of gold was at roughly $800/oz when Bernanke began the Bernanke Helicopter Drop. This meant that when Bernanke (officially) ended his money-printing binge in the end of 2013, the price of gold had to be at least $4,000/oz.
Silver, meanwhile, is grossly undervalued versus gold. For over 4,000 years; the gold/silver price ratio gravitated around 15:1. Over the past 100 years; silver has become more and more important in a wide array of industrial applications. In other words, it has gotten even more valuable. Yet instead of the price ratio shrinking below 15:1, it has expanded as high as 100:1.
Consequently, most of the world's stockpiles of silver have literally been consumed: strewn across landfills all over the world in tiny concentrations, in 10's of billions of consumer goods. Between 1990 and 2005 alone , global silver inventories plummeted by 90%.
The silver market has now been in a continuous supply deficit for at least 30 years. When default occurs in the silver market, the gold/silver price ratio will be restored.
The price of gold and silver was never allowed to come close to fair market value even by 2011. Since that time, prices have been pushed back down to utterly absurd levels – and will go lower still (for reasons already explained).
Only traders seek to profit on their buying and selling every week of every year, and most go broke in the attempt. Investors put their wealth into an asset class not based upon the short-term price of that asset tomorrow, but rather with their mind focused on the long-term value of that asset in the future.
We should be converting our paper wealth into gold and silver today because it provides us with the ultimate financial insurance:
1) before the Next Crash,
2) during the Next Crash,
3) and after the Next Crash.
Gold and silver protect us now by saving our wealth from the bankers' relentless theft-by-inflation (the same “inflation” that these lying criminals pretend does not exist).
Gold and silver will provide us with the ultimate financial insurance during the Next Crash. Precious metals do so by making all wealth sheltered in those metals immune to any calamities which occur to the bankers' paper (i.e. the inevitable death-spiral to zero).
Gold and silver will provide us with superior value after the Next Crash because (for many reasons) they will once again be the best-performing asset classes when we emerge from the financial rubble – in whatever troubled future the bankers have created for us.
Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers and investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but with a background in economics and law, he soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.
The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.