If You Can't Beat 'Em, Join 'Em

Gold bars placed on top of each other

Suddenly it seems that nearly all of The Banks and Bullion Banks are raising price forecasts and rallying around the precious metals. Is this a good thing or a bad thing?

That's the question, of course. Banks like Goldman Sachs have earned a reputation for leading their clients into taking the opposite side of whichever trade the firm prefers. If you've forgotten the origin of this story, here's a link from 2012:

It has been long established that the major Banks, which also operate as Bullion Banks for the CME/LBMA, benefit handsomely by manipulating and managing the prices of gold and silver. Recently, however, there have been a spate of admissions and convictions as it relates to these criminal activities. A summary can be found here:

So when you read below of all the recent Bank analyst "upgrades" for gold and silver, what are you to make of them? Is this a BAD sign...where The Banks are simply luring everyone they can persuade onto the wrong side of the boat? Or is this a GOOD sign...where The Banks are finally understanding and admitting that their days as Market Manipulators are coming to a close, so they might as well start moving themselves and their clients to the long side?

At the risk of sounding hopelessly naive, I believe it's the latter.


Because just about anyone can see that we stand at the doorstep of an epochal change in the global monetary system. The Great Keynesian Experiment is failing, as the monetary growth needed to service the existing global debt is finally exceeding the capacity of the system to provide for itself. Put another way, the global central banks are now permanently in a mode where only the continual and rapid creation of additional fiat currency can feed The Beast of exponential debt.

Chairman Powell has said as much in his recent public appearances, where he has been practically begging the U.S. Congress to give him more treasury debt to monetize. Lagarde of the ECB finds herself in the same position, and the Swiss National Bank is now, for all intents and purposes, one of the largest equity hedge funds in the world.

And that new debt is coming, too. In response to The Covid Crisis, the U.S. posted a mind-blowing $3.2 TRILLION deficit in the fiscal year that ended on September 30. If President Trump wins re-election in two weeks, expect a similar shortfall in fiscal 2021. If Joe Biden wins, additional spending programs may take the deficit to $5 TRILLION and beyond.

As a precious metals investor, you already know this. Now The Banks are finally catching on, too, and they are beginning to recognize that any prudent investor must have at least some precious metal exposure. To wit, here are just a few of the recent headlines and "upgrades" from the major Banks:

About the only Bank that's NOT excited by the prospects for gold and silver is JP Morgan. Big shock there, huh?

So we'll keep an eye on this in the months ahead. Could there be a battle brewing amongst The Banks? Maybe. And if it plays out that way, which side "wins" will go a long way toward determining whether gold and silver will finally break free of the shackles imposed by The Banks' fractional reserve and digital derivative pricing scheme.

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About the Author

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities.

Since 2010, he has been the editor and publisher of the TF Metals Report found at, an online community for precious metal investors.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, 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.


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