5 Nov 2011

Silver's Secrets Exposed: A Timeline Tells All

Silver has long enjoyed its history, adored and coveted by all. Desired for it's lustrous appeal; used both for beautiful, and often ornate, jewelry and decoration but also as a safe and practical form of currency – thriving especially in times of economic woe when fiat currencies suffer.
Smart entrepreneurs and investors have been capitalizing on silver's potential for years. And their patience has truly paid off; this year especially amidst the wildy volatile markets and weakening currencies plaguing the global community.
Take a look at this Silver COMEX chart to see silver's staggering spikes since 1997.
silver 1
*Image courtesy of Gecko Software
Fun Facts About Silver
-Sterling silver (what pure silver becomes after being alloyed with other metals; typically copper) is harder than pure silver
-It has been used for hundreds of years as decoration AND currency
-It possesses high electrical conductivity
-Has a tendency to tarnish (which is why it is not used more-so for electrical purposes)
-Extractors remove silver from the earth through the process of chemical leeching or smelting
-Mining is the main way to supply silver products, although it can be recovered from scraps
-Even X-rays contain small amounts of silver!...Which may explain why many hospitals arenoticing higher rates of theft in their radiology departments as the price of silver spikes...
-Physical evidence suggests that silver was extracted even in ancient times. In the islands of the Aegean, there is evidence that extractors separted silver from lead as many as 6,000 years ago!
-After the Europeans discovered America, large deposits of silver were found in the New World
-Present day, America is home to many successful silver producing mines, primarily found in the western part of our nation.
The white pegs on the map (below) of the United States represent locations of silver mines.
U.S. silver mines
*Courtesy of USGS.
Globally, silver production is a key component to the wealth of many nations. See how production rates compare from country to country:
silver production
*Image courtesey of USGS.
In terms of supply and demand, the most demand for silver revolves around industrial uses. With the explosion of growing industries to combat the jobs crisis, silver demand is set to soar beyond 2011...It's demand for use in photography and jewelry tails close behind. Silver's least amount of demand comes from its use as coins, medals, and silverware.
silver demand
Comparatively, here's a breakdown of the silver supply:
silver supply
Since the 1970s, the silver market has changed greatly.
Here's a bulleted, brief summary of the history of the silver market since that time:
-In the 70s, silver hovered around $5 per ounce. Just before the 80s, two brothers – Nelson Bunker Hunt and William Herbert Hunt – became knows as silver hoarders. “Bullion prices were rising on a mix of inflation and geopolitical tensions and silver rode high - up from just over $6 an ounce to nearly $35.”
-By January of 1980, silver spiked over $50 an ounce making it a year to remember for silver investors.
-In the summer of 1982, silver fell back down to prices familiar to the 1970s. Prices rebounded to just over $8 an ounce after Mexico said they would nationalize banks.
-Throughout that 1990s, silver fell even lower – all the way down to $3.40 an ounce.
-By February of 1998, infamous investor Warren Buffet and his company purchased 130 million ounces of silver. Prices peaked at $7.40 that February.
-From 2004 onward, silver futures prices climbed steadily and even dramatically at times. In 2006, silver was stable at about $10 per ounce. Two years later, the commodity markets gained more mainstream attention because of the stock market crash of '08  and silver prices more than doubled. And very recently, we've seen silver dancing around the $50 range in lieu of the fiscal messes facing the U.S. and Europe.
*Indented excerpts and data from InsideFutures.com.

4 Nov 2011

Gold jumps to six-week high

GOLD futures rose for a second day this morning, reaching six-week highs on hopes Greece would scrap its bailout referendum and keep the debt-laden country from defaulting.
The yellow metal also drew support as the surprise interest rate cut by the European Central Bank boosted the metal's appeal as an alternative asset.

The most actively traded gold contract, for December delivery, rose $US35.50, or 2.1 per cent, to settle at $US1765.10 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest settlement price since September 21.

Equities markets on both sides of the Atlantic climbed, pushing gold higher as investors bet Greece would drop its plans for a referendum.

Precious metals had slumped along with commodities and equities early this week after Greek Prime Minister George Papandreou said he would put the country's bailout measures to a referendum, raising the prospect a "no" vote would lead the country to lose its financial backstop and default on its debt.

While some investors see gold as a safe haven that should hold its value well when the outlook for other assets is grim, the metal has moved largely in line with commodities and other risky assets in recent months. Worries about a potential credit crunch in Europe have caused traders to cash out of the metal amid economic storm clouds, rather than add to their holdings.

"The focus remains on Greece," said Matt Zeman, head of trading with Kingsview Financial. The Greeks "seem to go back and forth", he said, taking gold along for the ride.

France and Germany warned Greece aid to the country would be suspended until a referendum takes place, and senior Greek officials said the country's socialist leadership had entered talks yesterday to form a unity government and salvage its international support.

Opposition leaders called for Mr Papandreou's resignation.

Gold's earlier gains came after the ECB said it would cut interest rates, a move likely designed to stimulate spending in the eurozone's struggling economy.

"Any time you have a cut in rates, it makes gold a great alternative" asset, said George Gero, vice president and metals strategist with RBC Capital Markets.

Lower interest rates make gold, which offers no guaranteed yield, more attractive compared with interest-bearing investments. The reduced rates also raise the prospect that easy-credit policies will increase inflation down the line and devalue paper currencies.

Gold's steep gains since the financial crisis have been helped by governments and central banks easing the availability of credit. As a result of the government moves, investors bet the excess cash in the system would reduce the value of the world's main reserve currencies.


3 Nov 2011

Greece Must Decide- NOW!

German Chancellor Angela Merkel and French President Nicholas Sarkozy's message to Greece - be rescued, or resign from the European Union - makes explicit the choice Greece must make.
But it is unlikely to prevent that choice actually being made on December 4, the date Greek Prime Minister George Papandreou has set for a referendum on the second bailout plan for Greece that was negotiated in marathon talks between European leaders and bankers last week.
We all should have realised last week that the hammering out of a second, deeper debt recapitalisation for Greece was only half the bargain. The recap comes with even tighter controls on what Greece spends, and how much it raises in taxes. It demands, in effect, a tightening of a fiscal squeeze that is crushing the Greek economy.
There are many on the streets of Greece that think that the EU "rescue" will kill Greece, not save it.
Which brings us to the undeniable logic of what Papandreou did on Monday when he announced that Greece would hold a referendum on the new EU bailout.
The consent of the people of Greece, the birthplace of democracy, was always going to be required. And it is not assured: There is anger about the austerity programme that is accompanying the European bailouts. But a clear majority of Greeks when asked also say they wish to remain in the EU.
Papandreou will test that paradox now with the referendum. It will be nominally a vote on whether to accept the latest rescue package, but actually, as Merkel and Sarkozy have made clear, a referendum on whether Greece wants to remain in the EU, or secede, recreate the drachma, and go it alone.
The common sense decision would be to stay in the EU, and stay the course. If Greece leaves, its currency will be trashed, and its banks will collapse. It will need to go through a traumatic bankruptcy that massively devalues savings and asset values before it begins the slow climb back. The EU alternative is also very painful, but less severe.
But Greece absolutely must answer the question that its Prime Minister is asking. An EU deal with Papandreou is worthless if the PM does not have the country behind him. It would probably lead to him losing government, and, the new government would almost certainly repudiate the recapitalisation agreement that last week was being described as a breakthrough, for Greece, for Europe and the world.
All of Greece must decide, quickly, whether to stay in, or stay out. The markets should have known this last week. They do now.

Move Your Money or Move Your Currency

With all the anti-Wall Street fervor going around, this Saturday is Bank Transfer Day—a day when people are going to transfer their money  currency out of too-big-to-fail banks and into community banks and credit unions. This. of course, could hurt big banks, who survive by preying on their customers, large and small.
But the problem isn’t simply that banks are too-big-to-fail or that there are a few evil bankers at the top of these big corporations—the real problem is the fractional reserve monetary system, and the fact that our economic system is predicated on an imaginary document called a dollar. Credit unions still have the ability to create new currency by making loans.
But banking, for most people, is a practical necessity—if you want to live life within some realm of convenience, you simply need a bank to handle payments, to cash paychecks, and to have a place to store some amount of cash. Many on the WealthCycles.com team bank with credit unions and community banks simply because they are more convenient, their people are nicer, and you’re not simply handing your hard-earned currency to a bank that’s teetering on collapse. In the United States, credit unions are not-for-profit, and they usually have higher deposit insurance and capital ratios than big banks that exist to enrich their shareholders.  
Many think that big banks don’t really give a hoot about the little guy moving his funds out.
With such an inherently flawed system, it’s hard to imagine that banks in their current form will go on forever. The system is changing, and we will need to change as well. Felix Salmon, in his Why The Big Banks Aren’t Sweating Bank Transfer Day, writes this:    
…[T]he big banks don’t particularly want all those retail-deposit funds — they’re getting precious little interest on them, and they come with all manner of expensive obligations to mail out statements and provide smiling service at teller windows and generally do the whole customer-service thing, which as we all know big banks are very bad at. Historically, they’ve done what they have to do on that front because they’ve been able to extract all manner of overdraft fees and interchange fees and the like, but that fee income is shrinking now, thanks to Dodd-Frank, and the fact is that millions of small bank accounts are actually unprofitable now for the big banks, and those banks won’t shed many tears if those customers go off to a credit union instead.
Meanwhile, the big-fish customers — large corporations, and municipal governments, and the like — are moving their millions to the TBTF banks, using a kind of ‘no one ever got fired for buying IBM’ logic.
So while I think it’s great that people are moving to smaller banks and credit unions, I’m not kidding myself that doing so is going to harm the big banks at all. In fact, it might even help them, at the margin.
Do you have any plans to move your currency out of the big banks, or have you already done so?


2 Nov 2011

The Great Silver Debate Manipulation: Fact or Fiction? - GATA vs. CPM Group

Showtime! Watch the Great Debate featuring CPM's Jeffrey Christian and GATA's Bill Murphy as they battle it out on the topic of silver and gold manipulation -- is it fact or fiction? You be the judge

1 Nov 2011

Throwing Ever More Money At World Financial Problems

It is now clear to the most casual observer that the world’s monetary and financial system cannot function without massive amounts of additional money and credit. That means the system no longer functions the way it should. Europe really doesn’t know what to do and neither does the Fed anda the Bank of England. The exception is throwing more money at the problem and keeping interest rates near zero indefinitely. Many US, UK and European banks are insolvent. The real estate market continues to deflate throughout Europe with the exception of Germany, which never really rose in price. Again, there are no solutions offered to solve this problem. Just as there are no solutions elsewhere. These conditions tell us the euro has serious problems to face as does the pound and the US dollar. You have to then say to yourself against what. Each currency has its own problems, thus, the only alterative is to measure each currency versus gold and silver. These are the true benchmarks, and when compared over the last 11-1/2 years, versus nine major currencies gold and silver on average annually have appreciated more than 20%. That tells you anyone holding currencies has been a major loser.
In the US and the UK banks are insolvent as well, because books are market-to-model, not to market and many carry two sets of books. Without a total audit one does not know the actual condition of these financial institutions. Market players and investors do not want to know the truth, because they cannot handle it. It means it is the end of the game – it’s over. That is why Wall Street and the City of London casts a blind eye at all the government manipulation going on. They go with the flow hoping the system will keep functioning.
Americans and others have been sold a bill of goods concerning US supremacy in the business and financial worlds, which means they have been propagandized since WWII. It is beyond the capability of most Americans to understand that they have been sold one lie after another and they bought it hook, line and sinker. Even if they discover the truth making seminal changes is very difficult. Thus, you can have 70% of people over 65 years old that have discovered the truth that are generally incapable of acting on it. The 25% of these retirees that have investable funds are frozen in the headlights and few make the necessary changes to hold on to their assets. If their assets remained static inflation is destroying their purchasing power year after year. Some will switch into gold and silver related assets, but very few. Good people who have led exemplary lives could lose most of their assets if they do not make changes. Once the system goes down there will be no way back. Ask the people who didn’t listen in 1929.

Read the rest from Bob Chapman here

31 Oct 2011

Euro bailout - an animated explanation


Worlds Biggest Pure Gold Coin- Weighing in at 1 Tonne

PERTH, AUSTRALIA (Commodity Online):

 The Perth Mint has announced the launch of a massive one tonne 99.99 pure Gold coin inspired by Australia's Kangaroo gold coin series.

The historic precious mint has described it as a monumental coin that embodies the pinnacle of ingenuity and innovation.The colossal coin measures nearly 80cms wide and more than 12cms deep.  As the showpiece of the Australian Kangaroo Gold Bullion Coin Program, its classic design by Dr Stuart Devlin AO CMG, goldsmith and jeweller to Her Majesty Queen Elizabeth II, has featured on each annual 1 kilo release in the series for more than 20 years.

The one tonne masterpiece features a bounding red kangaroo surrounded by stylised rays of sunlight and bordered by the inscription AUSTRALIAN KANGAROO 1 TONNE 9999 GOLD and the year-date 2012.

Issued as Australian legal tender, the obverse of the coin features the Ian Rank-Broadley effigy of Her Majesty Queen Elizabeth II, accompanied by the inscriptions ELIZABETH II, AUSTRALIA and the monetary denomination of 1 MILLION DOLLARS!

The popular Australian Kangaroo Gold Bullion Coin Program offers a stunning choice of gold bullion coins in a range of sizes, with various mintage limits and annual design changes, Perth Mint said.

The Sydney Morning Herald reported it took the mint 18 months to create the coin. It is legal Australian tender of $1 million but is actually worth more than $53.5 million in Australian dollars or $55 million in US currency.

"To cast and handcraft a coin of this size and weight was an incredible challenge – one which few other mints would even consider," Perth Mint chief executive Ed Harbuz told NDTV.com .

The Wall Street Journal speculated the Perth Mint is settling a grudge with the Royal Canadian Mint, which cast a 100-kilogram or 220.5 pound Gold Maple Leaf weighing more than an adult man in 2007. That coin beat out the Perth's 10-kilogram or 22-pound bullion coins as the world's largest at that time.

30 Oct 2011

The Pope Occupies Wall Street- Calls for New World Bank

On Monday, the Vatican called for creation of a “global public authority” and a “central world bank” to regulate the world’s financial institutions.  As Reuters reported, “The document from the Vatican’s Justice and Peace department should please the ‘Occupy Wall Street’ demonstrators and similar movements around the world who have protested against the economic downturn.”
The Vatican got very specific in its recommendations.  It condemned the “idolatry of the market” and called for global wealth redistribution, asking nations of the world to participate in an “ethic of solidarity.”  In a passage that could have been ripped from Marx, the Vatican stated, “If no solutions are found to the various problems of injustice, the negative effects that will follow on the social, political and economic level will be destined to create a climate of growing hostility and even violence, and ultimately undermine the very foundation of democratic institutions, even the ones considered most solid.”
This is wrongheaded in the extreme.  By impoverishing the middle and upper class in order to press for greater “fairness,” the socialism implicitly supported by this document pushes a utopia of equality in poverty.
But the Vatican’s call for a “central world bank” is telling. It shows where countries that want to cut the U.S. down to size are putting their efforts – into multilateral financial schemes.  China, in language creepily mirroring that of the Vatican, called months ago for “international supervision over the issue of U.S. dollars” and the creation of a “new, stable and secured global reserve currency.”  Brazil, Russia, India, China and South Africa have called for a new basket of currencies that would act as the global reserve.
Our opponents for fiscal dominance are right to put their focus on our currency, since that is where America is most vulnerable.
When it comes to America’s ability to raise debt in order to finance its outlandish spending habit, we rely on the one foundation-point in an unstable financial world: our status as the global reserve currency.  Being a global reserve currency means that foreign countries stock up on dollars, knowing that they can always use it in trade.  If the dollar lost its status as the global reserve currency, other countries would hold fewer dollars; they would buy fewer bonds, since bonds wouldn’t be as valuable; we wouldn’t be able to raise cash.
There is another problematic element to dropping bond prices – it means that we would have to print dollars or raise taxes in order to pay off bond inflation rates.  When bond prices drop, the interest rates automatically rise.  For example, if a $100 bond has a maturity of $110, it has an interest rate of 9.09%; if then the price goes down to $95, the interest rate will be 13.6%.  With higher interest rates, we have to pay back more money to those who buy bonds.  The deficit worsens.  We either have to raise taxes or print dollars to rectify the imbalance.
So far, the only thing keeping other countries in the fold is the lack of an alternative reserve currency.  As financial threat expert James Rickards says, “The number one vulnerability is the dollar itself.  We’re printing them and shoving them out the door, and the Fed is basically out of bullets. So why hasn’t the dollar collapsed? The short answer is that for now global investors don’t have any other choice.”
As Politico’s Eamon Javers expains:
That is, there simply aren’t enough Euro- or Yen-backed securities for investors to shift their money out of dollars and into some other currency.
But what if some kind of global coalition – say a trillion-dollar sovereign wealth fund allied with several countries around the world – banded together to create a gold-backed alternative to the dollar?
“If that happens, that’s the end of the dollar,” Rickards warned.
So why is the Vatican so gung ho for a global reserve currency?  Skeptics would say that the Vatican opposes the U.S.’s control over the global economy.  The Vatican under Pope Benedict XVI has routinely gone out of its way to criticize capitalism as unfair and problematic – in 2009, for example, the Pope issued an encyclical calling for a “profoundly new way” of organizing business, suggesting that a global political authority be established to push for “the common good.”  This is well within the tradition of modern Popes, who have almost universally endorsed the notion of a super-national government.  This is understandable given the universalist mission of the Catholic Church.
The real problem here isn’t with the Vatican.  The real problem lies at home.  If we don’t want a global reserve currency, all we have to do is shore up the dollar. If we want to shore up the dollar, all we have to do is cut spending.  And if we want to cut spending, all we have to do is stop electing politicians based on how much bacon they bring home.  If we do not, the Vatican has already spelled out how America will collapse – and in that, at the very least, Pope Benedict is right on the money.

The world's monetary and financial system is flat assed broke!

From Bill Holder for GATA on Oct. 25They can't see it?

To all; as the title implies, I just don't understand how ANYONE "can't see it". "It" being the most blatant and obvious fact that the world's monetary and financial system is flat assed broke! Europe is absolute toast, fair value on Greek bonds is less than 50% of par value and everyone knows it. Their banks are insolvent even without any haircut from Greek holdings and everyone knows this. Italy, Portugal and Spain are all beyond fiscal sanity or repair and this also passes as common knowledge. The real estate markets are deflating across Europe (and the entire globe) after previously being blown to huge overvaluation levels with the help (prodding) of European banks and this is also widely known. The European Central Bank does not have enough money, muscle, options (or even competent leaders it seems) to even flatten out the path much less pull out of it's nosedive and even mainstream media is reporting on this. If you add these "well knowns" together then you can logically make the leap that the Euro currency is done, it's life ended and will be replaced.
Then you "cross the pond" to the U.S.A. and guess what? Same thing! The banks are insolvent if they actually marked assets to market, everyone knows this.

Municipalities and States are fiscal beggars on their way to bankruptcy courts and this is already widely known and visible in the last couple of weeks with the first actual filings. Next you turn your eyes to Uncle Sam and his finances, yep another deadbeat here and even the "hometeam" rating's services have taken notice of this. You could do a poll from any inner city to remote corner of the country and EVERYONE knows deep down that the U.S. is financially (and morally) broke beyond any repair. EVERYONE knowa that EVERYTHING is broke, busted and insolvent!

So what is my point? My point is this, THIS is how every financial panic in all of history has happened. THIS is how the children's tale of "The King with no clothes" was penned. So if everyone knows that everything is broke then why do hear on CNBC et al that "we can work our way through this and muddle along"? Because as Jack Nicholson said in A Few Good Men, "you can't handle the truth!". This has to be it. I cannot think of anything else because to me it has been MORE THAN obvious for quite some time. I have heard plumbers, farmers, bankers, real estate agents, city workers, you name it, tell me that "the government is broke" yet when I ask "what are you doing about it?", they say, Ï have my money in an FDIC insured bank account". Yes, some are now getting around to buying some physical Gold and Silver but mostly because "they are going up". The point is this, people "know" but they just can't make the leap to acting on what they know.

I believe that this phenomenon along with "you can't handle the truth" is a function of very long term brainwashing and "false education", it must be. Using ANY logic at all would lead you to "pull" as much of your investable assets OUT of the system. "Out" meaning out and away from the obvious damage that the broken fiat system will inflict. "OUT" meaning into physical metals and assets, OUT meaning into the companies that produce these physical metals and assets. To me, it is so, so sad to see people who have worked, lived and saved their entire lives within this fiat system like "good little boys and girls", about to get completely wiped out. When I say "wiped out", I mean penniless!

Think about it, everything, and I do mean EVERYTHING within the current fiat, paper, fraudulent system is going to be valued at what it is truly worth...ZERO. If you can wrap your head around this (admit it to yourself), you can act accordingly. The day is coming when EVERYTHING "paper" is going to stop. Banks will not open, credit cards not function, (I believe physical Dollars will actually spend for anywhere from 2-10 days until they too become unacceptable) and the entire system will sieze up and into a barter society until a NEW and "acceptable" (from a confidence standpoint) is issued and circulated.

We are very, very close as there are now calls for a new "World Central Bank". This has been floated in recent days by none other that The Vatican. I do not want to get into religion here, I bring this up because there is very credible evidence that The Vatican accumulated massive amounts of Gold during and especially toward the end of WWII. It is possible that they are actually the largest holders of Gold in the world. I mention this because any new currency MUST have some tie to Gold and the limited Gold that is above ground MUST be revalued higher as there is not enough at current prices to support a 7 Billion person global economy...but I digressed didn't I? Long story short... how can anyone not see what is about to happen? The whole fiat episode is like your crazy Aunt in the basement, everyone knows she is there but no one is willing to talk about it. Those who do are branded as crazy and no one wants to believe it anyway. Regards, Bill H. P.S. maybe there are a few more investors who "do see it", Gold is up nearly 3% today and thus violating it's decade+ long 2% collar!


We Are Witnessing The Death of the Dollar

What do you get when the producer of the world's reserve currency takes on too much debt? Nothing less than the end of the US Treasury-based monetary system.
So says Eric Jansen, economic and financial market analyst and proprietor of iTulip.com. In chronicling the decline of the global economy over the past decade, Eric has formulated a framework called the "Ka-POOM" theory, which endeavors to understand how the immense run-up in global debt will be resolved.
In short, it looks at the credit bubble that began in the early 1980's, started accelerating in 1995, and has now reached epic proportions. The amounts are so staggering at this stage that Eric believes it is too politically undesirable to let natural market adjustments clear them away -- the magnitude of the deflationary pain this would create is simply unacceptable for politicians looking to get re-elected. The only other available option is to service these debts via a dramatically devalued currency. Hence the key role the Fed is playing today.
The Fed is at the epicenter of this process, intervening heavily to keep the natural corrective market forces at bay. In this, it has a dual strategy. The first is to keep asset prices high (i.e., fight asset deflation), which it is doing by keeping interest rates historically low. The second is to keep wage and commodity costs under control, which it primarily does via devaluing the currency (maintaining a "weak dollar").
And, of course, through its intervention, the Fed is doing all it can to keep the current financial system in place to perpetuate the process for as long as possible. The end result is a fundamental shift in risk from Wall Street to the taxpayer.
So the big question is: How long can this last?  Is there a point at which confidence in the system breaks and market forces finally overwhelm the intervention?
Eric's answers: "Much longer than most people expect." And "Yes."
First off, as the most important central bank in the world, the Fed has supernormal powers. In theory, it can expand its balance sheet infinitely. Its ability to absorb massive amounts of new liabilities is theoretically limitless, much of which can be easily concealed from an accounting standpoint.
And since the US is both the world's largest economy, as well as the provider of its reserve currency, other countries are compelled to support the current regime. A mortal crack-up in the US economy would deliver undue pain to all its trading partners, so they continue to buy Treasuries in sufficient amount to fund US economic activity.
But that's not to say they're happy about it. And here's where attention should be paid (and where the importance of gold comes in).
For much of the past century, the United States comprised approximately 54-58% of the global economy. Today, its share has shrunk down to about 18%, meaning its relative importance to the global system has diminished.
Issuing the world's reserve currency is a privilege that must be continually earned through transparency and sound stewardship -- qualities the US has flagrantly lacked in the past several decades as it has been blowing asset bubbles and running trillion-dollar deficits, via incurring massive debts and increasing its money supply tremendously. So, even as they continue to support the current Treasury-backed monetary regime, the world's central banks have begun hedging their exposure.
After several decades of being net sellers, the world's central banks became net buyers of gold in the second quarter of 2009. As Eric puts it:
There was no Plan B in the global monetary system when it switched over to the US dollar reserve basis for global monetary reserves. The only fallback is gold, gold is the only reserve asset that central banks hold other than dollars, and to some extent euros, but it is mostly gold. So gold is the fallback. So what I thought was going to happen is that over time, gradually, that there would be an increase at some point in gold holdings by central banks as they hedged the marginal increase and the number of Treasury bonds that they needed to hold as a result of conducting trade with the US and also simply maintaining the US economy through low interest rates and providing sufficient investment to continue to offer the US government.
So what is very interesting to me is [that] starting in the second quarter of 2009, right after the financial crisis, is when global central banks became net buyers of gold, which to me indicated that they had as a group, determined that it was time to more seriously hedge their dollar assets, even as they continue to buy Treasury bonds to increase their hedging.
Before that, there were effectively two teams: There were the buyers, who were countries like India and Russia and China, and the sellers, which are most of your European countries. And that structure of the gold market occurred and was maintained until the second quarter of 2009, and it shifted to a much broader base increase in the number of governments participating in the gold market, including Saudi Arabia, Mexico, and other allies of the United States.
Eric sees this move by central banks, of positioning themselves closer to the door, as a natural step to the inevitable endgame here, which is the dissolution of the US Treasury dollar-based monetary system. Due to entrenched special interests, politics, escalating commodity scarcity, and other factors, he does not see the US taking necessary corrective action before confidence in the solvency of the US and its currency collapses.
As such, Eric advises investors position themselves into gold and assets that take advantage of rising rents and energy prices.

Click the play button below to listen to Chris' interview with Eric Janszen (runtime 43m:46s):