Silver & Gold: You Have to LIE!

“When it becomes serious, you have to lie.” – Jean-Claude Juncker

The Fed is creating $Trillions of “new money” while central bank bullion buying is at a 48 year high. The Fed is printing money and driving up consumer prices for Americans, while China, Russia, and many countries are buying gold. It would appear those other countries trust and value gold more than they trust the dollar – especially when it is being spent, borrowed, and printed in excessive quantities. People listen to political promises and the pronouncements of the Federal Reserve Chairman, but gold does NOT. Gold simply moves to where it is most respected and valued. Currently, there is a massive migration of gold bullion from the West to Eastern governments, central banks, and individuals.

 

2013 Silver Maples As Low as $2.29 Over Spot at SDBullion.com!!

Silver Maple

Submitted by Deviant Investor

“When it becomes serious, you have to lie.” That statement was made by Jean-Claude Juncker, head of the Eurozone. Let’s call this a Juncker Moment.

As per Tyler Durden, “He uttered (the above) after getting caught with a bold faced lie about the stability of the failed European project.”

He followed that statement with “My main concern is to protect people from detriment. That’s why I feel practically compelled to make sure that no dangerous rumors begin to circulate.” This sounds like code for “we certainly do not want the truth to get out – people might become worried as the financial situation is serious. Hence, when it seems serious, of course I’ll tell as many lies as needed.” He appears to be a politician following the code of politicians throughout history.

On this side of the pond, Simon Black of “Sovereign Man” writes. “I really hate to beat a dead horse, but I wouldn’t be doing my job for you if I didn’t point out some of the most intellectually dishonest, self-aggrandizing Bernanke-speak to come out of the Fed Chairman’s testimony yesterday.

(Bernanke) “[The Federal Reserve has] 25 years of success in keeping inflation low and stable, not just in the United States but around the world.”

(Black) Translation: “I have not set foot in a grocery store or gas station in decades.”

(Bernanke) “I am very much in favor of getting our fiscal house in order but I think it’s a long run issue and I would be supportive of a less front-loaded set of measures.”

(Black) Translation: “Feel free to continue kicking the can down the road.”

(Bernanke) “I don’t see any sign that that’s happening (the U.S. dollar losing status as world’s reserve currency).”

(Black) Translation: “I pay absolutely no attention to what’s going on in Russia, China, the Middle East, or the gold market.”

(Black) “I know this goes without saying, but entrusting this man with your life savings is a dangerous course of action. I strongly encourage you to consider diversifying into precious metals, productive farmland, or even a digital currency like Bitcoin.

After all, you know the old saying – it’s time to be very concerned when the politicians and bureaucrats tell you to not be concerned.”

Those answers from Mr. Bernanke seemed rather disingenuous and appeared to be a “Juncker Moment.” Other “Juncker Moments”:

  • (Bernanke) “We are not engaged in a currency war.” The Fed is printing well in excess of $1 Trillion per year of “new money” hoping to overwhelm deflationary forces, to create inflation, and drive down the relative value of the dollar. The same is occurring with the Euro and the Yen, but Mr. Bernanke claims we are not engaged in a currency war. I think this is serious and qualifies as a “Juncker Moment.”
  • (Bernanke) “My inflation record is the best of any Federal Reserve chairman in the postwar period.” Same chairman, same story, same serious situation, eventually the same result – much higher consumer price inflation. The Chairman must feel the need to assure us that future inflation will NOT become serious – hence his “Juncker Moment.”

The Fed is creating $Trillions of “new money” while, according to the World Gold Council, central bank bullion buying is at a 48 year high. The Fed is printing money and driving up consumer prices for Americans, while China, Russia, and many countries are buying gold. It would appear those other countries trust and value gold more than they trust the dollar – especially when it is being spent, borrowed, and printed in excessive quantities. People listen to political promises and the pronouncements of the Federal Reserve Chairman, but gold does NOT. Gold simply moves to where it is most respected and valued. Currently, there is a massive migration of gold bullion from the West to Eastern governments, central banks, and individuals.

Jon Corzine, former CEO of MFGlobal, after well over $1 Billion in “segregated” customer funds disappeared on his watch, testified to Congress that “I simply do not know where the money is.” Fortunately, Mr. Corzine had friends in high places, including the Department of Justice, so his “Juncker Moment” seems to have worked out well for him, but not so much for the clients of MFGlobal whose accounts were skimmed. The implications are serious – for your paper assets.

President Obama has often spoken regarding spending cuts and deficit reduction. Of course, Congress and previous presidents also have a history of making pious pronouncements about deficit reduction while approving legislation with huge spending increases for “favored” industries. Let’s call it a history of joint President-Congressional “Juncker Moments.”

  • October 15, 2008: “What I’ve done throughout this campaign is to propose a net spending cut.”
  • February 23, 2009: “Today I’m pledging to cut the deficit we inherited by half by the end of my first term in office.”
  • September 5, 2012: “I will use the money we’re no longer spending on war to pay down our debt.”
  • State of the Union Message 2013: “Nothing I’m proposing tonight should increase our deficit by a single dime.”
  • And many more – all, I think we can safely say, were serious situations involving national insolvency, unsustainable budget deficits, supposedly necessary bond monetization (printing money by the Fed), and a sick economy overwhelmed by out-of-control government spending. Hence, a series of “Juncker Moments” were necessary to maintain the illusion that all is well.

The following are the official national debt figures from the past few years. Remember, this is just the official debt and official deficits, not the unfunded liabilities, which are MUCH larger. But, insolvent is insolvent, and what is the difference between $16 Trillion in debt and $200 Trillion in debt when neither can be repaid? The “jig is up” when the interest can’t be paid, which is why it is so important that the Federal Reserve maintain interest rates at historic lows while pumping $Trillions into the banks and the government. More “Juncker Moments” will occur when confidence drops even further.

Date Official National Debt
($Millions)
Deficit (from previous year)
($Millions)
1/1/2008 $9,210,587 $530,363
1/1/2009 10,627,961 1,417,374
1/1/2010 12,290,238 1,662,277
1/1/2011 13,997,933 1,707,695
1/1/2012 15,226,217 1,228,284
1/1/2013 16,432,730 1,206,513

From 1/1/2008 – 1/1/2013, the official debt increased at 12.2% compounded annually. The unfunded liabilities for Social Security, Medicare, Medicaid, and government pensions increased substantially faster. Does this appear to be sustainable, prudent, and financially solvent? What are you doing NOW to protect your life savings, knowing that unsustainable deficits and money printing will create a weaker dollar? Why Buy Gold?

How “serious” is this massive deficit spending and the huge increase in national debt? Numbers in the Trillions are difficult to comprehend, so let’s describe it in terms of gold – the gold that the US supposedly holds. The official story is that our gold reserves total about 260,000,000 ounces, which at about $1,700 per ounce, is worth about $440 Billion. The average annual deficit for the past five years was about $1,400 Billion – over three times the value of all the gold that the US government supposedly owns. So, the US government is deficit spending and thereby increasing its national debt, on average each year, by about three times the value of the national treasure as measured in gold. Total debt is currently over 35 times the value of all the gold that supposedly is held by the US government.

Mayor Michael Bloomberg recently stated, “We are spending money we don’t have…When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money…Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more.” This looks like a confidence building “Juncker Moment” to me. The summary from Mac Slavo seems accurate and astute. He concluded, regarding the above pronouncements, that “What’s the plan from the best and brightest of our politicians, economists, and central bankers? Two words: Infinite Borrowing.”

It is your choice: Believing “Juncker Moments” or increasing your gold and silver investments? My vote is for gold and silver. And, every “Juncker Moment” from our politicians and central bankers should reinforce your belief that gold and silver are more valuable than pious pronouncements, confidence building “Juncker Moments,” and economic actions that lead us further down into the black-hole of insolvency, inflation, currency wars, and a sovereign debt crisis.

What are you doing to protect your savings and retirement funds?

 

Gold Maples As Low As $57.99 Over Spot at SDBullion.com!

Gold Maple

Comments

  1. I hope more people catch on soon, so the goddamn train can leave the station before my children bury me ( I’m 38 ). lmao.

    • If that happens, just make sure they place a couple of eagles over your eyes.

    • I think of myself as a nice guy, so I’ve instructed them to put 1 1.5oz canadian polar bear over each of my eyes, a maple over each nipple and a cougar over my belly button.

    • Being early 50′s I hope I am not around when the really bad times hit. They are coming, matter of when…

    • “I think of myself as a nice guy, so I’ve instructed them to put 1 1.5oz canadian polar bear over each of my eyes, a maple over each nipple and a cougar over my belly button.”
       
      And a dime over…?  lol
       

  2. If you know the fundamentals, understand the argument of paper vs. physical and can see the obvious price manipulation then what are you griping about? Silver is on sale!! *cue the mexican celebratory music*

  3. Silver Doc:
     
    I read much at your site. I respect your grasp of precious metals. My broker has said that the bottom for gold was reached March 1 at $1564. Do you agree or have a different opinion.
    I would appreciate your thoughts.
    James Bullock
     

    • James… that is a possibility.  In fact, gold has flirted with the $1550 level in the spring of 2012.  It moved up from there and has pulled back some.  I am using this price pull-back to buy some gold but I have no idea what the future price will be.  It is not a consideration for me at this time.  If it goes lower, I will buy more.  If not, then I will probably hold what I have and call it good.
       
       
      Most brokers either do not want their clients to buy physical metals or try to steer them into buying paper PMs, such as ETFs or mining shares.  While those can be viable investments, the general consensus here is that physical PMs held in our possession / outside the banking system is the best way to protect the wealth that we have.  Wealth protection insurance is how I look at PMs.  Neither the Fed nor the US Gov can print gold or silver out of thin air, so these cannot be inflated via fiat policy.  One cannot say the same thing for the value of the US dollar.  The dollar, like all fiat currencies, has some rather severe limitations built into it.  For one thing, dollars are BORROWED into existence AT INTEREST.  Because of this, the US economy MUST grow at this rate or more if the debt is to be paid.  For the past 4-5 years, however, the US economy has not been growing at this rate and the national debt has spiraled higher and higher.  This weakens the dollar because of the increasing financial obligation against the US Gov, the dollar’s sponsor.  Additionally, there is inflation built into the fiat dollar system that necessarily makes dollars worth less with time.  Consider that in 1960, a mere 53 years ago, a gallon of gasoline cost a quarter of a dollar.  Today, gasoline prices are around $4.  Why is this?  Primarily because the US dollar is a lot cheaper than when it was backed by gold and our coin money was 90% silver (dimes, quarters, halves, and dollars).  That same 90% silver quarter from 1960 is now worth about $5.20 in silver content.  In silver terms gasoline is cheaper today than it was 50+ years ago.  In dollar terms, however, it is about 16x as expensive.  If we look at gold and silver as monetary standards, the things to which all other things of a monetary nature are to be compared, a good argument can be made for their prices not changing; rather it is the prices of fiat currencies that are bouncing up and down continuously, making it look as if gold and silver prices are changing.
       
      Brokers and other professional money managers and advisers are well aware of the fact that when people buy physical precious metals, they tend to keep them for long periods of time.  Because of this, money taken from an investment account, where it contributes to the broker’s income, tends not to return and is lost as a source of broker income.  This fact is not lost on these people, so they tend to come up with all sorts of reasons as to why this is a bad idea.  In point of fact, gold and silver have soundly whipped the stock market indexes for the past several years but they tend to overlook this point.
       
      An honest broker will advise their clients that they should have an asset allocation plan that includes various asset classes, such as gold and silver, but also stocks, bonds, commodities, real estate, utilities, etc.  In most cases, the recommendation will be for a person to have 10-15% of their portfolio in precious metals and the rest in the other asset classes, including other commodities.
       
      This is a long-winded way of saying that a broker is not necessarily the best source of information on whether or not one should own precious metals.  You will need to make up your own mind on that but there is a lot of info on the Internet that you can browse before making that decision.  Whatever you end up deciding, it should be an informed decision.

  4. James, I personally bought gold for the first time in nearly 5 years into that low at $1570.

    -Doc

  5. Someone, maybe my dad, said to me “Wish in one hand, poop in the other and see which gets full first” 
    So we can believe the wishy-hopey lie laden crapola that rolls down hill from DC,  or we can fill our hands with gold and silver.  The latter works for me.

  6. Dirt, you certainly have a fragrance to your prose!!!!!!!!!!!!!!!!!!!

  7. From my math the National Deficit actually expanded at a CAGR of 17.9% (not 12.2%) annually from January 2008 to January 2013.

  8. “When it becomes serious, you have to lie.”
    That’s a solid sign that the bad and corrupted people are lying to us. The American founding fathers said that we should never trust our governments. Just like the British Royal family says: “Keep calm and carry on”

Speak Your Mind