This page has been archived and commenting is disabled.
Front-Line Observations From A Seasoned Gold & Silver Bullion Dealer
Submitted by Adam Taggart of Peak Prosperity,
Spikes and plunges in the U.S. dollar price of gold; this is not new. It goes back to the early 1970s. We remember that for most of the past 40 years, physical gold and silver investors, particularly in the U.S., tended to chase big rallies and buy late, while too often selling after plunges or after long periods of price erosion. Gold was sold then primarily as an inflation hedge. When it was working, speculators bought much more. When it stopped working as an inflation hedge, they first became puzzled and frustrated, then fearful, and they sold out at bottoms.
So, fast-forward to this month, and today’s gold community starts to look a bit different as the breakdown below previous gold and silver price support levels began, and especially last week, with gold going below $1400. Physical buyers were outnumbering sellers in our store by at least 5 to 1. And some of the unfortunate sellers had not changed their thinking about gold long-term; they just needed fast liquidity, which is another benefit of gold.
80 – 90% of the people who have bought gold from us in the last two weeks on the drop were already gold owners, already gold savers.
Their attitude is, gold is on sale
Robert Mish kindly took a break from operations at his bullion dealership to return for another conversation with Chris on what he's been observing on the front lines this week, transacting with both retail and wholesale customers.
Gold
Gold is a little bit backlogged. The premiums are slightly elevated. Products commonly traded, such as gold maple leafs, American eagles, and refiner one-ounce bars are 2-3 weeks out. And for some of my colleagues further away in the supply chain, 4-6 weeks out. The premiums are up to maybe $5 to $15 dollars an ounce over normal.
Silver
Silver is another story. The demand for silver has completely overwhelmed existing inventories and the ability of the mints and their refiners to produce more product. The other big mystery is: how much more silver is there to make product out of? Will the buyers be able to keep the pressure on until the price of [physical] silver and paper silver have to move up just to return the market’s equilibrium? Right now, 100-ounce silver bars, which a few months ago were trading dealer-to-dealer around melt or a little over, are now 75 cents to a $1 an ounce – not retail, our cost – and 4 to 8 weeks out. 1-ounce and 10-ounce refiner product used to be 30, 40, 50 cents. Now it’s $1.10-$1.25, our cost, 2-4 weeks out. Silver maple leafs, our cost from the prime American distributor of the Canadian Royal Mint today: $3.75. It was $1.70 a month ago. 3-4 weeks out. Silver eagles, normally a little over $2, they are $5 if you want them live; $4 if you want them in 4-6 weeks.
These premiums are the physical market saying, we are willing to pay this for real silver right now. Whether the suppliers can meet this demand and bring the premium down, we’ll see weeks from now. It is much different this time than it was in the past, in that the drop in price is bringing in buyers rather than sellers. It used to be that a rally would bring in the buyers. So we have had an important change.
The Big Picture
The powers that be guided a lot of that potential demand into paper gold and exchanged traded products of various forms. Then they slaughter those products, and I’m sure in their mind hopefully discouraged those people for a long time. But in time, changing cultures and the prosperity of people internationally in cultures which understand gold, I think is going to take its toll on the shorting game. And the shorting game will end badly. And that doesn’t mean that those who have the other side of the equation necessarily will profit, because they will find a corrupt way to burn them.
What we have now is a game of chicken between the physical buyers and the paper shorters. It is like, who will quit first? We have a shortage of physical product. But we are told by the mint distributors and the refiners Oh, don’t worry. In two, three, four, five weeks your orders will arrive. If the buying continues at the pace it’s going, or begins to expand to a greater percent of the population in this country and worldwide, eventually, by asking for delivery, the physical buyers will change the game. It is a poker game of both real cards and bluffing. Are the shorts bluffing? Yeah. But they get away with it over and over again. This time when the longs fold as they have in the past, the shorts, they sandbag the river. But the flood of fiat currency keeps rising. If buyers would stick to their guns and develop habits and understand why they buy gold and silver, the shorts will run out of sand.
Robert also shares details on the buying activity of his Asian clients. There is much for the West to emulate, particularly if it does not want to wake up one day realizing it has dis-hoarded the bulk of its bullion overseas.
Click the play button below to listen to Chris' interview with Robert Mish (41m:34s):
Click here to read the full transcript
»
- 63890 reads
- Printer-friendly version
- Send to friend
- advertisements -
I have said this till I am blue in the face Manipuflation.
Five years ago I knew fucking nothing about all this shit, and then one day I did. These bastards have played me and you for fools for far too long, and now people like me, average blokes in mundane jobs are waking up exponentially.
These swines are running out of time, and they know this. We will have the upper hand for a time mate, lets use it well, and fair play you may be over the pond but our haerts are in the same place.
When the time comes, lets give these downright cunts war. They really do deserve no less. Not in my name friends, not in 96's name does he condone what these nefarious bastards are doing to mankind. We deserve better. And if I can do anything to put these cunts right I will.
We aint done yet, there be a lot of good folk in this world, its time to hear our voices for a change.
Nixxon was my wake up call. I headed for the woods then.
Agreed!
"Bern" over .... grab your "Ankers" .... and kiss your "Farce" good bye !
Remember .... a real "Millionaire" has 50,000 x 20 dollar gold coins .... or 40,000 trounces of gold .... any real millionaires out there ?
Isn't it funny .... that 50 years ago .... when silver coins and some gold coins still circulated .... there was never a precise relationship .... between metal content .... and face value .... was that .... the beginning of PSYOPS separation .... between fiat .... and real money .... the people who put a man on the moon .... couldn't count .... 4 quarters = .715 trounces Ag .... silver dollar = .8 trounces Ag .... kind of a dismissive way to treat intrinsic value .... we held our butchers .... to a higher standard .... of honesty .... than the Mint .... wash, rinse and repeat around the world ? The biggest arbitrage play in history .... trade 200 pennies .... for a $20 gold coin ? Did the North Koreans counterfeit copper pennies .... I would have .... in my garage .... beats panning in the icy Klondike !
... I ... Agree, ... will .....take ... deep .... breath ..... now.
Well, church service starts in a ten minutes. The bells are ringing. I won't be able to attend.
I dreaded Sunday mornings .... I would go out and get the Sunday paper with Comics .... and await the dreaded decision .... at least we got to go out to breakfast afterwards !
I dreaded Sunday School and Confirmation. I am well confirmed now. Maybe just not how they originally intended me to be "confirmed". "Confirmed" sounds a bit too close to "confinement" to me anyway.
The first time I manipulflated .... and it worked .... I was 17 .... I think I poked a toilet bowl brush .... felt like pocupine pussy !
What?
I digress ! In the Amazon and Congo basins .... 10 year old girls are having babies .... us Nordic types are slow to mature .... we are doomed .... in the population race ? Those seed depositories in Norway and Sweden .... better save a little human seed .... while they're at it ?
I say we rename the planet "Goldberg", as in Rube Goldberg. It works, as they say, on so many levels.
What a guy .... way ahead of his time .... he didn't live to see Bernanke's "Rube Goldberg" Keynesian economics ! I saw "Song of the South" in 1956 in Asheville, NC on my 11th Bday .... would love to see it again .... Disney really hoards their old movies ? I like Jews .... is there something wrong with me ? (except liberal Jews)
Zappa, not Disney.
I saw "Ben Hur" at a drive-in in Biloxi. MS. In a VW bus, long before the hippies.
There weren't many Microbuses around then .... late fifties .... early sixties .... we had a 1963 .... loved the underpowered bitch .... it was like drive a miniature .... real bus !
My father used to make extra money driving new Volkswagens up from the Gulf coast where they came in from Germany to dealers in the South. This was late 50's, very early 60's.
What a dream job !
Growing up in the 60's in Kentucky, my best friend's dad brought one of those VW thingies back from Germany when he got home from the military. It had the front end of a van and the back end of a pick-up. We drove the crap out of it in our little piece of the neighborhood, hauling crap around their property and trying to do doughnuts in his back yard with a motor that wasn't strong enough to pull the skin off a hot cup of milk. THOSE were the days my friends!!!
Buyers outnumber sellers in the store!!!!!!!!!! OMG!!!!!
I bet there are more buyers of bread than there are sellers too. What a revelation.
Nwtmint.com sells .45 silver bullet (among other sizes) says: "while not actual ammunition for your weapon, they take deadly aim at deficit spending, fiat currency, sovereign debt, quantitative easing, failed Federal Reserve policy, and rampant inflation". It contains 1 oz pure silver per bullet.
In a few weeks inventory will be up. Silver keeps falling, gold keeps falling, finally people give up on PM's and we get capitulation. We get a bottom.
I think you mean that people give up on paper PMs.
Paper holders are the only people you can expect to capitulate. For physical holders, if this happens it will make an excellent buying opportunity.
Was at my bullion dealer last Friday. Dude has oodles of gold/silver maples, AGE, gold Kruggerands, silver bars, gold phillharmonics (Schilling not Euro).
Funny, in Canada the rush isn't quite on for PM's.