David Morgan: Currency Wars, Paper Market & Metals Update

In his latest interview, silver analyst David Morgan of Silver-Investor.com chimes in on the escalating currency wars, and provides his perspective on the current paper futures market vs. the physical market. 
Morgan, who several months ago prominently stated silver would never dip below $30 again, gives his outlook on where to from here after silver has plunged to $22/oz.

2013 Silver Eagles As Low As $3.59 Over Spot at SDBullion!

 

Comments

  1. Please be kind

  2. As a self-proclaimed “Silver Expert”, Morgan should know by now that he should not give any guidance on short term price direction, even if he caveats his prognostications with “I believe the price will do X” or “I would be surprised if the price will do Y”.  It just undermines his reputation.  Stick to long-term calls.
    Just look a the chart–hardly anyone can predict the “Devil’s Metal” in the short run.
    And those that can…from those few we will never hear anything about.  They are too busy running the planet and doing “God’s work”….
     

    • From a wiccian text:
      “Metals resonate with their own, unique vibrations, and these resonances can be tapped for magickal purposes. Magicians often choose to fabricate their ritual tools from metals whose energies are in line with the magician’s purposes. A ceremonial chalice, for example, might be made of silver that vibrates with feminine energy” yea baby.

  3. I don’t tell people out in public that Silver is a good investment.  I tell them that I think acquiring and holding physical Silver is a way to fight back against current FED policy.  If the price falls in the short term well so what.  I’m not looking for the top of the market this time.  I’m just waiting for the 45 mark again so I can buy that sushi bar or what ever.  

  4. I made some sweet purchases today (3 week leadtime on everything here in EU), but I am not done. What would you guys do? Lock in within the next few hours, or await a Friday smack?
    Today’s rise from the bottom is peculiarly gradual.
    Thanks!
    J
    PS. Asked here as the forum is rarely read.

  5. Depends what your buying, silver bars, yup, tomorrow morning, on the am fix. Silver coins, doesn’t matter, for what I see, the premiums are making up the short fall. My feeling, got another drop to come. Probably week after next, the drops are fortnightly.

    • I buy at selected shops in Europe. Their premiums shift around somewhat, but on most coins, price drops are followed 1:1.
      I bought the cheapest Libertads and Panda’s in Europe today. Cheapest 10oz Koala, some 2012 10oz Koala at minute over-premium. . Polars Bears under the maple ounce price. All those babies follow the silver price nicely. 

      My main concern is stuff going out of the (forward) stock. Some shops still don’t take orders for Eagles and other basic coins. the deal I spot cannot last, and if they do, I f’d up.

    • @Wating,
      The problem with buying bars of any metal is that before you can cash them in and spend them, there is an assay expense.
      And the owner pays dearly for that.
       

    • @Ranger, roger that (stole that one from AXIIG).

    • @Ranger, I buy straight from refiner, I am a dealer in bullion.  The price I get is as low as you can get, apart from the dreadful 20% sales tax that I need to pass on to purchasers. The assay doesn’t cost that much to be honest, bars are a heck of a lot cheaper than coinage. Coins though are seeming to be a better option as the premiums are holding the prices above water, great for sellers of coins, dreadful if you try to sell back, on a buy back scheme. I saw on one site in the UK, selling 1 oz coin for £31.1, will buy back at 98% spot !

    • @Ranger, never had that essay expense you speak of, bars come with providence of authenticity, I just pass on the sales receipt from the refiner, plus all  my bars are fully certificated.

    • Hmm, EUR silver up, just when I hoped to buy cheaply…

  6. Guru’s can spout all they want, but the simple mathematical truth is that The (DXY) U S Dollar is strong against the 5 other currencies in The DXY. The Yen is weakening rapidly and constraints on the Eurozone are broadening daily. Draghi of the ECB will make the huge mistake of flooding more currency. All investors are looking for higher yields and that will be in another time, but not in any present economy. When The (DXY) goes down into the 70′s only then will you see upside to Gold and Silver, but until then we all must sit back and relax, because unless a really huge Black Swan event occurs other than the DXY going down, we are just in neutral. Treasuries and the stock market are going to pop big time, perhaps by July, maybe August. That would be The Black Swan to look for, else foreign defaults which is as good of a possibility. Personally I believe that if you are pleased with your stack, don’t buy any more. Nothing will be gained more than a very few dollars when Silver and Gold climb out of sight. As I have said before in previous posts, watch the DXY and Treasuries and your answers are solid and away from any Guru hype.
     

    • Sound Advice

    • It’s time to enhance your stack. Be part of the supply, and use your stacking experience to stack back up cheaper, and thus : more. I am getting rid of my less desirable items (can’t expect to get it right from the start), and swapping into better/smaller stuff without loss of ounces, and usually even a gain. A bit of my effort in return for real ounces and a better stack composition. Totally worth it. I’ll spend all my day’s free time for one ounce when given the option. Because these low prices have not altered my vision/expectation much. One ounce now is a bag of groceries, and I expect it to become something much bigger. Perhaps not in groceries, but in term of real estate/stocks/labor. One ounce added to my stack I don’t otherwise have money for is a serious matter to me, more serious than $27 I can only spend on groceries.

    • @XC Skater,
       
      I wish I could buy more, but all my spare Fiat currency is tied up in gold and silver :-)  

    • @Waiting
      Then do as I. Sell you least favorite items (or those that have gained in collector’s premium % since you bought it), and replace them with lower cost or higher level of desirability, preferably with premium growing potential. Animal prints, typically. And stuff that’s just lowest price on the market, and best a combination of both of course. I sold Bisons and Koala’s over €26 this week, bought back under €23. In fact, I bought back 2012 Koala’s for the 2013′s I sold. In effect, I add 2-3 coins per roll/tube, as every Euro not needed to live, tends find its way to silver. 
      I lost my bars and bought back 1oz coins at the same price. Those coins I can sell as a markup usually. Then, I buy a semi-numi back, which I sell at a profit. Buy more semi back. Etc. The end is going from semi-numi to super cheap bars or gold or real estate.
      Sold tubes of Maples/Wieners (45oz) at €22.2 and bought back Noah’s and Suriname’s at €20.5 or so. 8% silver won from 2 tubes. And what I bought back tend to have times of higher premium than Maples/Wieners. Within weeks or months I will sell+replace my now ~48.6oz generic for either ~49 semi-numis or 51 new Maples. Likely the semi-numis. But you see how it goes. Just have a good dealer with zero or cheap shipping, and find people who like to trust a sales person, make it personal, and pay a bit of premium for the service. I have a negative purchasing power now, but I do manage to add to my stack rather than eat it prematurely at the bottom of the market. I am fighting for my stacks survival and development.

      If you give me 1kg of the least favorable silver today, I bet I can make it 1.5kg before 12 months have passed. The hard part : doing it with a multiple of that 1kg. I made some 10% profit trades this week. Even with identical silver being bought back. My input : prepared to wait for an online shop, and being registered as a buyer. It sucks, but I have little choices otherwise. This way I can fight to grow my stack with anywhere between zero and more than 1kg per month. Depending on my effort and the market. Main risk: being denied a delivery by a webshop. It’s happened to people shortly after the price drop. Money paid back, find your silver elsewhere. That’s not fun.

    • Been there done that, made a load of money. 33% of my stack was made just by buying and selling. Trouble I have now is that all my personal stack is good stuff, numismatics are good, bullion well priced. I am not going to make money from liquidating my stack, its too valuable. The problem I have is cash flow, you know the deal I got is sound, you won’t be able to get what I can get at the price I get. I am a registered bullion dealer with preferential prices. I just can’t sell anything to buy as the stuff I got is super keenly priced. I could probably shift some more American 1964 halves, but I like them :-)  so until the price goes up, will sit on my hands. And there is no way I am selling my Indian rupees or pre-decimal pre 1920 British silver. Its all good. But the current prices, great buying opportunity.

    • @Waiting
      I don’t get it.
      If you can buy at such deals, and your stack is so sound, why not sell any desirable item(s) and create cash flow? 
      You need to accept nominal losses though. I sold bars today, more than 35% loss. But I got coins of the same total weight back. Those will sell easier, the bars took me a long while to sell at a price that would allow me a decent “swap” trade.
      Just don’t be too protective of your stack. I also got used to a certain total weight, but realized that my cashflow to jump on hot deals was also all-in. I still hate cash passionately, and the same for selling, but hey of you’re a brilliant buyer, just do a decent sale and get it going again. Only sell when the price is cool to you (no ebay but classifieds), meaning : can reasonably safely buy back better.
      Sitting on 4-years of numis won’t grow your stack much more I am afraid. Get rid of it in 1-3 years. See what Cougars did in a year’s time, compared to Bisons. That is doable with one transaction only. But you being a better buyer dan do it even easier than I can, and thus also more often. Your prices will be hard to pass up for anyone, and you make a quick 5%. “Free silver”, with only a price risk for the amount of silver sold, the amount of time it takes you to get new.

    • The coins you describe to me are bullion. Numismatic coins are coins that were actually used in circulation. I have never believed in modern numismatics, the rarity is marketed, to sell bullion at higher prices than the raw material. I have a passion for old coins, they have to be silver or gold, they have to have a history. Luckily in Britain we have a stupid amount of history and pre decimal circulated coins. I have made quite a bit from numismatic coins over the years through ignorance. For example, I bought a batch of coins knowing that one coin was worth £300 for less than £40. The seller thought they were getting a good price on weight. The one coin was a 1934 wreath crown, only 50% silver, but less than 1000 ever made. So it all depends what you mean by numismatics. My numismatics could not be replaced easily, my bullion stock (bars, coins) is above water, I don’t need to sell. But thanks for your browser input, I think I will sell more 1964 half dollars and get some bullion coins. Check my other post below, been eyeing up Armenian coins :-)  

    • I use the term semi-numi as learned from Americans and Germans. Bullion that is semi-rare.
      I also think it’s nonsense for silve rto gain premium, but if it does, I am game! I will invest minute premiums (2-6%) on it, and get more out. I hardly have any of my first such bullion coins left.
      If I would score a coin with collector’s value like that $300 one I’d sell it NOW. Low price means high premium. Means more bullion for you. When (not if) silver hit $200, good luck getting 18 ounces of even tin or zinc for your precious miracle coin. 
      I envision a time line which ends in us all lining up for a smelting pot to sell our silver. By that time, I hope to be clear of any coins of any interest at all. Volume is key then. And for SHTF : variation in coin sizes. Still, no 1/4oz for me (I ordered 2 today actually, to lure and suck up to buyers) unless I learn of a special trick they do.
      See how much stupid bullion coins such as Cougar and Moose appreciated in a year’s time for the investment of 2-5% over Maples when bought early. I like that game. You’ll need to undercut dealers to sell probably, but do it with enough of your stack, frequently as possible, and doubling your stack becomes very viable.
      I have a 2010 kilo Tiger, and am trying to unload it. Got it at a deal this year else it would not be in my possession. There is a serious effort involved, but if I can “cash” in a 20-25% ounce gain over the silver i’ll buy to replace it, for a 2-3 month possession that’ll be mighty sweet.
      Buy only ultra-sweet deals, cash flow is hard enough as it is. Sell only when you know you can replace it at terms you like.

      It’s a nice hobby I’m sure but if you rate you stack to be 1.5x it’s silver weight orr more because of fancy numismatics, you are in the business of holding an air castle under siege. Only when you fight your way in and free+marry the princess she was actually there. 
      I am no old coin specialist, but I’ve been told % premiums are best at low metal prices. Seems like a great time to swap to stupid plain bullion and embrace the gains it can provide you with, as long as we are allowed to play what is essentially a ponzi sub-scheme.

    • @xc,
       
      Real numismatics are not miracle coins. They are valuable because they are old and rare. If you get the balance right they can be a decent hedge if silver prices go down. They work outside of the silver prices, but if silver rises, their price will also rise, but they don’t drop the in price as quickly because numismatic types look at book price not silver price. The £300 miracle coin was sold two days after I bought it. I didn’t like it, it was boring. I prefer the 1935 rocking horse crown, great art deco design. I bought 20 of them for £8 a piece , they are 50% silver and contain 14 grams of silver. If I relied on the silver weight I would make a loss on these, however the numismstic book price. Is still around £15 a piece. You getting it yet xc?

  7. Celente says that after currency wars come real wars, WWIII, here we come.

  8. Sorry boys, feeling giddy today, someone might get lucky.

  9. I have a serious question if anyone is willing to give a serious answer.  As a stacker, I’m in for the long run.  Nonetheless, it does get old listening to all the gurus with their “to the moon” predictions.  My question is this….In the immediate future what do you see happening that would be the start of a rise in PM prices? 

    • Nothing whatsoever. The macro signs have been good for silver/gold for the last three years, and nothing has changed to improve the macro economic crisis. So what needs to change? Short term speculation stopped, US QE distorting the stock market data, if they stopped pumping, maybe the truth will out.
       
      Maybe a large financial entity collapsing, which will never happen. Its all smoke and mirrors at the moment. The inflation however will be the smoking gun to the lies, if you notice world news from the main outputs, inflation apparently is lowering , just check you super market prices weekly, you will see the real inflation in the prices there.
       
      The macro situation has not improved. If I had more Fiat currency, this is the time to buy.

    • The collapse of the stock and bond bubbles due to a currency crisis and the end of ZIRP (see interview below).

    • Click here.

    • I’m hoping an obama impeachment will be the black swan. We also have adam kokesh’s armed march to D.C. on July 4th. Who knows what’ll happen…

    • IMO, the catalyst for higher PM prices will very likely be the fall of the US dollar from its current World Reserve Currency status.  The BRICS countries could completely by-pass the dollar in world trade and eventually refuse to accept it at all in trade settlements.  As this spreads to other countries, the dollar will be devalued and perhaps considerably.  Most of the estimates I have read on dollar value say that about 1/3 of its current value hinges on its WRC status.  If that is lost, so too will be that 1/3 of its value.  This could also have a domino effect for other dollar-denominated assets, such as UST bonds.  Topping this off, this could be something that happens virtually over-night, adding a big dose of citizen shock to the situation.

    • My opinion matches Ed’s.  Right now world currencies are struggling, with a couple obvious ones topping the list.  This is generally leaving the US Dollar as king (read: least sh***y).  Since gold and silver trade in major exchanges and are priced in US Dollars, there is no reason for them to go higher for those of us who buy in US$ terms.
       
      Now if you are in Japan, you are probably feeling very good about your precious metals.  Your yen used to have good global purchasing power, now it does not.  The value of your precious metals is protecting your position in a global market, especially in an economy where some very basic things are imported (food).  *lightswitch moment*  Is the pace of chinese consumption tied to a belief of a rise of gold in $US terms or in Yuan terms?  Almost certainly the latter…

  10. I’m not a KWD listener, but this William S. Kaye interview is one of the best I’ve ever heard (and that’s saying something after 12 to 15 years of following this stuff almost everyday). He absolutely demolishes the gold bear case being put forward right now. Fantastic analysis, IMO.

    http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/5/14_William_Kaye.html
    http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/5/15_William_Kaye__Part_II.html

  11. Quick question to you coin fellas, what do you make of quarter oz Armenian ‘Noahs ark’ coins?

    • Price is right for a 1/4, but I would not buy it to hold, only to turn asap. Premium for a bad size, not my cup of tea really.
      Recently someone asked about 1/4oz coins, but he seemed to want one of each…

      Why a 1/4oz I wonder? Isn’t junk silver better at that size?

    • I like the design :-)  
       
      I also had a great experience selling 1/2 oz 2011 Britannias, trying to replicate a good sale :-)  
       
      I suspect that mintage figures on these smallest coins will be lower than the more typical 1 oz coins. I seen some going for less than £55 for  10. The premium is high because of the size, although I am not to sure if Armenian silver is well recognized.

    • The 1oz are very well made. In Bavaria, Germany actually.
      They are popular there. Seems the German govt doesn’t want to issue silver money, so mints make deals with countries such as Armenia, Somaliland, Suriname, etc, to recognize a design as money, and thus grant it the legal tender status required to be compatitive in the VAT-reigned silver market.
      Soon, this will end. It almost did last Januari 1st. Germany was to raise VAT on coins from 7% to 19%. This would have meant a huge shift in stacking volume and nature. Now, rumors say it’s a done deal for next Jan 1st, possibly EU-wide. It will be good to have silver before the change.

      I have the 2012 1oz Noah’s. Tried to sell them too high, and now have them still. They seem to do better for collector premium than Mapes/Phils. And I only buy them, today 10 or so, when the price is the lowest of all. Good product, lowest price, chance to appreciate, that’s a nice deal for me. Next year I’ll try to unload the 2013′s and get other nicer silver, or just more 2014′s.
      Not sure how or where to sell the 2012′s yet, the market is small for it. May look at ebay.de

    • I get collectors paying for special versions of old coins.
      Just, I do not possess knowledge of it, and many who do hunt the market.
      What I did last summer and autumn, was hunt for all silver coins, preferably high purity, sub spot. Most I got was sub-spot, and it too many bids. Nice about single coins and small lots (without perceived collectors value) : a simple stamp suffices for shipment.
      So I have a modest album of mostly European silver coins, no older than 1863, but on average bought under spot. I can’t get screaming deals, but sometimes a single Swiss or Italian coin was 30% under, and I tallied it up as a *win*. Such coins might best be unloaded when traveling. Local Plain Jane coins enjoy premium (Germans fight a bidding war for their own old silver), abroad no-one wants it. I don’t have much, but it’s nice to look at. See the 1870′s 5 Lire Italian coin (25g, 90%) go to like 12g and 83% for a 5 HUNDRED coin in well under a decade. Inflation anyone?
      As more stackers join the hunt, premiums will remain strong. Circulated coins under spot may go extinct. I welcome it.
      Heck, perhaps I should start dumping the Queen Wilhelmina guilders I scored around and under spot (when it was higher than now of course), and still get more bullion than I would have without the oldies as a bridging storage of value.
      A lot of sterling coins I got for spot, now get 6% bids. And I am not selling that just yet.

  12. tater salad and me have been thrown into better bars than that NYC dump.  drunk in pub-lick has always been a great spectator sport as far as I was concerned.
    You know it just occured to me that another side benefit from te Fed and TBTF banks and their vicious price smack downs is to make the precious metal gurus look bad.  And most have stunk up the joint including Morgan and Sinclair.  I have not animus towards the silver speakers. They’ve been hornswoggled worse than us, probably because they have more phyzz and they have 20-40 year reputations and newsletter subscriptions at stake.  The more the pundits are made to  look like idiots, the easier TPTB propaganda meme and MOPE will be swallowed by the sheeples—and unfortunately some of use silver seekers.  The big lies of the propaganda masters is designed to force people into FIAT and digital currency until they lower the boom. 
    “See what we’ve been telling you all along” “precious metals will never be a good investment’  ‘look at these pretty pieces of paper we have for you—all bright, shiny, new and golden’  Thus the bullshirt continues.
    Stay the course These MF’er can only win if the brave few quail in their mission.

  13. My friends, I need your advice. I’d like to hear who you consider the best dealers in Europe. Thank you.

    • @Silvermail
      I’ve had terrible experiences with several shops over the past months. The only painless one after the price crash was Geiger. Prices are decent, not always very best. Shipping is reasonable but not cheap either. Selection is wide but not quite a one-stop-shop (none are). They have price lists to order from. Just scroll down it line for line.
      They had my items on 7-9 days shipment after receipt of payment, but it went way quick than that.

      Some shops have peculiar shipping costs schemes, so you need to order quite small or pay dearly. Soon, most German once will cease shipping abroad. Most already don’t. 2-3 weeks lead time on pretty much every single gram I ordered the past days.

      And always : try the local classifieds. Saves on shipping. And that can add up.

    • I don’t buy drugs in Europe, so wouldn’t know.

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