Chris Martenson Interviews Robert Mish: Front-Line Evidence That We are Nowhere Near a Gold Bubble

Tyler Durden's picture

Submitted by Chris Martenson

Robert Mish: Front-Line Evidence That We are Nowhere Near a Gold Bubble

Robert Mish has been a precious metals dealer for nearly 50 years and knows what a gold bubble mania looks like. We are nowhere near that stage, in his opinion.

Instead, he sees a US populace largely unappreciative of holding precious metal as a store of wealth, and engaged in a slow process of dis-hording their gold and silver to eager foreign buyers who are more than happy to take the bullion back to their shores.

In terms of where we are on the gold mania spectrum, he sees us at a "2" out of 10.

But he foresees a very rude awakening ahead as the populace eventually wakes up to the increasing damage our over-debted global economy is doing to the purchasing power of world currencies. Because when the general investor finally realizes the protection the precious metals offer against currency debasement, much of the retail supply will already be out of the system in very tight hands, and largely overseas.

Moreover, when supply gets tight, there will be more challenges to obtaining physical bullion during a buying mania than there were during the last one in 1980. There are many fewer local sources to exchange bullion these days as much of that business is now transacted by online vendors dependent mail delivery to ship product, which are more vulnerable to supply chain disruptions.

And be sure you're aware of how the form you hold your bullion in will affect the price you get during a buying frenzy, when refining capacity is overwhelmed. You may find you gold or silver sells at a hefty discount because it's not in a preferred format for trade.

On What A True Gold Mania Looks Like

The phone calls were ringing so much we could not answer them. We had to just put all our lines on hold so we could service the customers, and our own customers we wanted to service first.


We world come in to open at nine in the morning and there would already be a line out the door and down the block. Sometimes the line was mostly buyers, sometimes there were sellers. We would run out of metal. We would run out of anything. And we would have to divide the line into two lines. We would take the sellers in first, get some product, and sort it before the buyers were let in.


And people were not very discriminating then; they were panicking. By the time it peaked in January 1980, there were people out there who did not even understand free market economics or precious metal economics, they were just buying because it was fashionable or because it was going up forever. Those are more the makings of a bubble, today most people are coming in to sell.

On Today's Typical Seller

The typical seller today is really the opposite of who they were 30, 40, 50 years ago. People used to save either through a bank account to keeping some coins around, putting away silver dollars when they came back from Reno or Lake Tahoe. They would be buying some interesting furniture or jewelry and then they had income in excess of their expenses. Today, so many households are stressed having expenses greater than their income or servicing a lot of debt that they are starting to sell the things, the heirlooms that they so prized before. So we are seeing people sell their Rolex they do not want anymore or cannot afford to keep, their old jewelry, their parent’s jewelry and belongings that they inherited. The coins they collected when they were a kid, it is sad in a way because what we are seeing is the dis-hoarding of a culture.

On Today's Typical Buyer

Well in the United States, the typical buyer is perhaps someone who has taken the Crash Course and has studied what is happening to our nation and understands that they have to protect themselves from the coming inflation and social ramifications of that inflation and the debt burdened economy. Big money is buying but for every one buyer there has got to be five sellers here and I am sure that is similar among my colleagues around the country, maybe even more so. Because over here we are in a wealthier area and I still have more sellers than buyers.

A lot of it is going overseas. A lot of the coins that came to America over the decades, over the generations, either through the fact that we had the money to buy them or through immigration or through the spoils of war, it is all going back now to the home countries. Especially if it is a home country, where their economies are rising and the people are saving rather than spending.


Just last night we had two visitors from China, colleagues of mine in Shanghai, they flew here just to see me, and they flew back the next morning. They cannot get enough coins in China; they are buying everything back that came here when the people in China could not buy their own coins. Next weekend I have more visitors coming. Coin shows, which have been all over America, are now appearing all over the world. There are now major coin shows in gathering marts in Singapore, Tokyo, Beijing, Hong Kong. It used to be once a year, now it is three, four times a year. Big auctions that used to be held in the United States are now organizing in Hong Kong and other countries.

So we are seeing a movement back in the opposite direction and it is sad [for the US market]

On The Importance of Physical Form

Chris Martenson: So you mentioned refinery problems. What is a refinery problem?

Robert Mish: A refinery problem is where dealer buys the scrap gold and the scrap silver and his refiner cannot get it processed for several weeks or months. And that squeezes his cash flow so he has to pay less and less to the public.

Chris Martenson: So if I walk in with a bag of junk silver, it is 90% silver, it has always been trading well. But if we are in a real heyday, your refiner says "I am backed up 11 weeks. I can take that in 11 weeks". Meanwhile prices are gyrating. You are going to look at me and say what?

Robert Mish: I am going to say "Mr. Martenson, I wish you had come in here with pure tradable silver or something that is exchange ready."

The marketplace determines the choice for medium of exchange. If you have silver in any other form; if it is in odd form such as coins, broken spoons and knives, or whatever and I have to have it refined in order to get it back in a marketable form, it is going to suffer a discount. And that discount is going to be greater the longer it takes to turn that around.

Chris Martenson: So anything that has to cycle through a refinery has that refinery risk. What was the discount that got applied at its most maximum in the 1980’s?

Robert Mish: In the 1980s, when we were about eight weeks backlogged and not everyone even had a refiner relationship and had to rely on other dealers who did, it got to about a 30% discount for having the wrong form of silver versus the right form.

Click the play button below to listen to Chris' interview with Robert Mish (runtime 28m:19s):

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akak's picture

Gold will not, and can not, be in a bubble until the fiat bubble finally pops.

And even if the chances of a putative 'gold bubble' occurring were the same as those of the fiat bubble of which we are currently in the midst (i.e., a certainty), which bubble poses the greater risk to one's savings, or to the financial health of the entire world?

GetSome's picture

On average, excluding one's home, hard assets are still such a small part of most portfolios.

akak's picture

True, and that is most certainly NOT by coincidence either.

The anti-gold, pro-fiat, pro-Establishment brainwashing of the American boiled frogs has been most effective in that regard --- what others in the rest of the world consider common sense, or a historical given, is ridiculed by most Amerisheep as "kooky" and "Armageddonist".

wee-weed up's picture

The anti-gold, pro-fiat, pro-Establishment brainwashing of the American boiled frogs is thanks to the MSM (main stream media). They're responsible for that lie and many other "brainwashings" of the American sheeple - like being slobbering sycophants for the miserable excuse of a president we've been stuck with!

Spirit Of Truth's picture

Obviously the point I've been trying to make is that the lies go much deeper than what Ben Bernanke and Barack Obama represent.  The "bubble" in beliefs and expectations is with regard to what is valued, which is money, stocks, gold and Mammon in general.  What's not valued, as my standing well represents, is the truth.  People are placing all their hope and faith in absurd falsehoods.  Hence, an historic upset of collective beliefs and expectations is inevitable....and this is precisely what the long-term cycles indicate.

Pinch's picture

Remember that the Republicans are also part of the anti-gold establishment. Since I speak for Republicans, I should know.

trav7777's picture

this mania thing seemed to describe people buying the new iPad

Xkwisetly Paneful's picture

WOW a gold dealer advocating buying gold who would have thunk it?

He is as wrong as the day is long.

Instead of asking if I wanted starch in my collars the dry cleaners asked if I wanted some gold or silver with that.

Had people posting here they maxxed out credit cards to buy precious metals six months ago that equals mania but it sure is fun to pretend somewhere out there someone hasn't bought in yet.

Oh but gold can't crack until the fiat does, funny how last wave of margin calls gold cracked plenty to pay margin calls in fiat. 

GetZeeGold's picture



Missed the boat huh?


Just buy somemore's bubble proof.


RockyRacoon's picture

...last wave of margin calls gold cracked plenty...

Precisely.   Those who had an actual store of value had to tap it to pay expenses.   Just as described in the article.  Whether those expenses be margin calls or putting food on the table, the overall construct is the same.    Get it?  Store of value.   That's what the PMs are.   Poor planning or misfortune can provide the impetus to tap that store, but the ultimate "value" is in the world-wide recognition of same.  If any of my sentences were too long for you to follow, let me know and I'll clarify in simpler terms.

Think for yourself's picture

This post is a proxy to provide arrows to parent (who can not be modded because of starting his post with an italic line)

RockyRacoon's picture

Hey, thanks.   I guess I didn't get that memo.

Xkwisetly Paneful's picture

Actually you don't get it.

Relative value.

There is no reason why from this moment forward gold should provide any greater relative value over any other asset class.

and since the retail equity investor has not participated in the recent stock rally,

mainly because they are neck deep in gold and silver.

there is actually future demand.

Given you are a fanatic, not only can't you get it, no matter how simple it is,

but you can fanatically underperform then blame manipulators like the rest.

There is currently no squarer trade on earth, don't believe me? Find folks who are advocating shorting metals they are as common as nuclear skittles shitting unicorns.

Wouldn't know a mania if it jumped up and gave you the mnia but this time is different just understand value and it is easy to see.


Think for yourself's picture

Gave you a green because you're starting to discuss like a normal human being, not because I agree. There might be a gold mania right now, but it lays in the small smart money discovering the inverse bubble nature of precious metals at the moment. It's obvious from the current global situation that we will need a system that strikes a better balance with PMs' role as stabilizing agent/store of value, and it's quite evident that the balance lies on the side of a greater role, not a lesser.

Once a new equilibrium has been established around the role of PMs as a stabilizing foundation to the system, a more reasonable value will be established, and only from that point will it be possible to even start entering bubble territory.

In short, I contradict your fear of already being in a bubble with simple fundamentals. This is also why many people would not care whether gold is at $1000 or $2000, as long as the fundamentals don't change, keep stacking. That's not bein a fanatic, that's understanding the situation we're in.

RockyRacoon's picture

"and since the retail equity investor has not participated in the recent stock rally, mainly because they are neck deep in gold and silver."

Say, what?   If your conclusions are based on this then you might have some rethinking to do.

Retail investors are neck deep in gold?   What sort of gold?  You mean ETFs?  

That's not gold.

I'm not a fanatic.   I've been at this for about 20 years, both as an accumulator and coin dealer.

To use an old but pertinent cliche:  It is what it is.

wee-weed up's picture

Republicans yes... Conservatives NO! Many folks have no idea there is a difference between Republicans and Conservatives... a big difference

LowProfile's picture

Too bad there's God so damned little of you in either party anymore.

Y'all seriously fucked up, ya should have listened to that OTHER Barry.


Hobbleknee's picture

...and then there are social conservatives and fiscal conservatives.

lindenlee's picture

Social conservatives are almost always fiscal conservatives. It just doesn't work the other way around.

The things that social conservatives believe in (like marriage) have provided the relational and financial stability that gives rise to investable income, that creates capital formation. Divorce leads to poverty of at least one party (usually the mother), and borrowing, government dependency, debt, etc.

This  only one of several examples. If you wil look at the societal/social conventions favored by social conservatives, you will see that they contribute positively to the fiscal health of them and their community at large.

disabledvet's picture

there's a lot to this actually. but whatever "cabal" exists is still simply overwhelmed by the treasury complex. the problem is the size and scope of the Federal really doesn't matter in this context "but is simply part of an over-all investment portfolio." in other words "we're all stuck in the world of buy low/sell high" and whether we sell or not is an irrelevant side bar. in other words "first you must study the difference between a bid and an ask" and THEN "buy all the gold you want." (or in fact "lawyer up" as that's where the real battles are waged in the USA now) then i hear where you're coming from. everything else is simply "gazing into the crystal ball" and on that score "the market has better eyes than you and me." my gripe is with the value of cash...not gold. Always has been...always will be. the destruction of fiat money when paired with trillion dollar monetized debt truly is "a crime against humanity."

sosoome's picture

Don't forget to thank the skooz for raising all the tadpoles.

wee-weed up's picture

Comes the r3volution... first against the wall... the MSM!

passwordis's picture

 The MSM IS the corporations institutions and banks. So let's be clear on that point and lets not forget the other arm of propaganda... education. The money power IS the Corporations Institution, all Media and all education and they control all three branches of government. Further more, evidence strongly suggests that those sitting on the very top of the money power have different DNA than 97.5 % of us.(if you believe the statistics).

 They also have superior cognitive ability and are able to squash criticism of their actions by referencing an "historic event" which never actually took place. They also know that a tiny segment of society will figure it all out so they pass hate laws to address that threat. 

Let's identify the enemy.

CrazyCooter's picture

Whoa, whoa, whoa ... coins are like broken spoons? I really have a strong disagreement with this point. I would think a clearly recongizable Washington quarter that is 90% would trade at bullion weight. Same thing for ASEs and GSEs.

Anyone here with experience have a good reason why not?



Pool Shark's picture



I was thinking the exact same thing Cooter;

Anything silver or gold from the US Mint (with the possible exception of 40% silver) should trade at weight; with ASE's and AGE's (as well as other widely-recognized bullion coins from government mints) trading at a premium over spot.

DoChenRollingBearing's picture

+ 1  Cooter and Pool

I agree.  That is why I have standardized my PMs (well, for the most part) on Gold, Platinum and Silver Eagles.

chumbawamba's picture

You guys missed the cue.  What he says about it isn't important, because he's only one member of the overall market.  It's what he feels about it, and this translates to how he feels about the premium he charges for junk silver.  Robert Mish has probably the lowest premium on junk silver of any dealer anywhere.

I am Chumbawamba.

natty light's picture

+1 here too.

90% US coinage will not be "refined" as it is the best pm exchange mechanism for small purchases we have; every farmer would recognize a silver quarter e.g.

Transformer's picture

And the big question is. . . .  how long would it take for merchants an store owners to begin accepting those old coins at silver value, ie. items in the store have two prices.  One, the FRN price, and  X  the price in junk silver, which may have to be computed at the cash register.  So. . ..

How long (in days) if some version of HI is occurring?

How long if the banks are on holiday?

Who's got an opinion on this?



RockyRacoon's picture

Any non-commercial farmer's market merchant will accept your silver dimes, quarters, etc.    It's done here all the time.   The sellers are usually the growers themselves, and they know the current spot prices.   Most have a handy chart.   You can get a nice bushel of corn for that quarter.   Try it and see.

As for junk silver vs spot price, remember that actual junk (circulated) has lost some weight thru wear.  So, to keep from weighing each coin, a discount is applied to all junk and/or common date coins.   It's the most free market you'll find so look for the buyer who'll give you the best deal.


Hobbleknee's picture

You guys aren't considering all the factors involved.  Is he supposed to take your 25-pound bag of coins and just take your word for it that it's 90% silver, or is he supposed to spend hours checking the dates on them, or is he going to melt it down and have it purified?  Either way, all those options are more costly than accepting a stack of 1,000 oz .999 fine bars.


JNM's picture

I'm a market participant.  I wouldn't pay bullion rates for a washington quarter.  Somebody else might, but that's why the bid is lower.  Depth of market, isn't there.

FWIW, I'm Canadian. Maybe there is depth of market, in your geographic region.

TN Jed's picture

Yes, but rates are not what's in question.  Nobody pays bullion rates for 90%, they pay 90%!  Mish stated that 90% isn't marketable in it's present form so it must be melted.  Who melts 90% coins?  Run from a dealer who tells you otherwise. I call dealer-numi bullshit.

aphlaque_duck's picture

When you buy 90% you pay based on the silver content not the gross weight. So it's already discounted by 10% (and even a little more to account for wear). 

But even based on just silver content you can buy 90% for less than pure silver because there is a higher cost to refine it due to the impurity. I don't think anybody actually refines it though, since it is perfectly useful aready as a tradeable unit of silver. If you want pure silver for utility puposes, you would buy Engelhard bars or whatever.

Xploregon's picture

My understanding is that 90% "junk" silver being, half-dollars, quarters and dimes, is melt valued as being exactly what it is- 90% silver. The BENEFIT of junk silver isn't just the low premium you can buy it at (not necessarily discount you may pay to sell it) but the fact that even though warn by passing through many hands, junk silver is easily recognizable by anyone thus, not requiring a chemical assay to prove its authenticity.

Any thoughts?

aphlaque_duck's picture

Yes I agree, but the premiums ARE lower for junk than pure silver. 

For example Tulving sells 90% at spot -$0.15, and pure bars at spot +$0.49.

Junk gives you the maximum silver exposure for your $. Bars have slightly lower buy/sell spreads, but only by a cunt hair.

Either is perfectly fine in terms of resale. In a mania situation I'd expect junk to be MORE liquid because it is more identifiable.

LowProfile's picture

Those comments on "junk silver" threw up a big red flag all over this.

90% is considered to be if not the most, one of the most tradable forms of silver.  Not to mention it's illegal to melt it down.

Other alloys (e.g. gold jewelry) can easily be assayed with a precious metals analyzer at a decent jeweler's.

Somebody is talking out their ass here, should have done their homework.

natty light's picture

It is a lot easier to make fake silver-plated bars than to try to make fake coins. Who would go to the trouble to make fake silver dimes?

Stuck on Zero's picture

At the same time there are just little local laws enforced by bunko against making a fake silver bar.  Fake a U.S. coin and you're up against Federal laws with Treasury Agents to nail you.  Stick to U.S. mintages and you are much better off.  There's also the tax issue - a dollar is a dollar.

Transformer's picture

In the months before the Y2K debacle, junk silver got up to a 50% premium over spot.  Why?   Because people thought it would be very tradable, and serve as currency.


Doña K's picture

I agree with you.

Whoever bought junk silver bought for one reason only. Trading it for goods when TSHTF. Why would anyone want to sell it? If you do need the money for it, sell it to other individuals, not the dealers. The dealer must have a discount from you and a profit for carrying it and reselling it.

I don't believe however that any dealer will bother melting it. As a matter of fact, if things get so bad, junk silver will actually have higher premium, as you mentioned and because it's legal. 

chumbawamba's picture

You guys obviously don't know Robert Mish.


RiotActing's picture

My family does, very well, since 2002.

Flocking swans's picture

I don't buy this: ..."expect junk to be MORE liquid because it is more identifiable."

"identifiable." to who? Your family members, friends, and neighbors that you can not convince to buy silver today? Sure, 'the dealers' will recognize ur 'junk' and might buy if they are still open....but not the three above I just listed. To those people you will be engaged in this fun argument : "my quarter is better than ur quarter".... No thanks, I'll stick w/ clearly marked 1, 1/2, and 1/4 oz clearly marked .999 rounds.


LowProfile's picture


"identifiable." to who?

Chinese people.

Likstane's picture

I dont believe anyone said the quarter is being sold for 100% of its weight.  The question was about the market rate for the silver content of varied forms.    

on another subject, Mish is a retard

edit.sorry-wrong mish, was thinking shedlock-much apoligies to this mish guy

TN Jed's picture

You're right and I'm just tripping over semantics in a rush to call BS on this.  We're all on the same page.

disabledvet's picture

how about the market rate for treasury note? or Intel Corporation? are those markets not deep enough? Seems to me "the price is the price"...and that's that. Not that i'm not willing to "make a market in Washington quarters" for you if you like. My phone hasn't been ringing much lately...

DosZap's picture


 I wouldn't pay bullion rates for a washington quarter. 

No one here I know of is either, its sold by $1.00 face value.

Purchasing would be at spot, less 10%,including smelting costs, if one were inclined to maybe go to prison by destrying US coinage..