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We are currently in the midst of the largest ever Ebola outbreak in Western Africa, and this could just be the beginning. The number of cases and deaths has risen steadily, from a handful of people in Guinea at the end of March 2014 to several thousand now, not only in Guinea, but in Liberia, Sierra Leone, recently extending to Nigeria and the Democratic Republic of Congo.
On August 16th, residents of the West Point slum in Liberia went on a “looting spree” at an Ebola clinic, taking with them mattresses, sheets and equipment that had been soiled with bodily fluids that are known to spread the disease.  Approximately 30 Ebola patients at the health center fled during the raid.  Just a few days later, authorities in Monrovia established a quarantine on all of West Point.  This area of 50,000 inhabitants has now become an incubation hub for the disease.
It appears the Ebola disaster may be nearing a tipping point, and turn into a full-blown contagion. 

Caption Contest 1

The most important factor right now is the physical shortage of gold.  The declining amounts of gold in Shanghai storage suggest we are getting close.   So I expect something to happen in the physical gold markets soon.
I probably have 70 or 80 percent of my portfolio in precious metals right now, and I believe that’s the right amount to have. Time will tell whether I’m right or not…
Since before the crash of ’00, I have thought the banking system was susceptible to pressure.  I didn’t want to have my money in a bank because I thought the banks could go broke very quickly.
Fast forward to 2008 — all the banks were essentially broke, as far as I could tell.  The Fed came in to support the banking system, which they’ve now been doing for the past six years.  And yet, there has been essentially no improvement in capital ratios at the banks and the risk of putting money there.  In fact, you now lose money when you put it in the bank because of negative real interest rates – and you still take on the risks associated with the bank.
To me, it’s just totally ludicrous to put yourself in that position when you realize how levered the banks are.
The time to get your money out of banks, & into something tangible is NOW. 

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The Unlooked for Juggernaut
As many commentators point to very significant signs that the imbalance in silver’s supply and demand are reaching critical points, very few of them seem to be paying attention to a forgotten metric to watch in silver.  

It is that metric which may be about to broadside the silver market again and break it open for good:

Besides what the Fed is doing by printing money, there is another big threat to the dollar, warns Alasdair Macleod. Countries in Asia are banding together in order to rid themselves of using the dollar in international trade.

There is a thing called the Shanghai Cooperation Organization, an agreement principally between China and Russia, whereby they tie up the whole of Asia as their backyard.   Other members are the countries north of Tibet, Tajikistan, Kyrgyzstan, Uzbekistan, and so on.
In or soon after September, four new members will join – India, Pakistan, Iran, and Mongolia.  That’s almost half the world’s population. The objective of the SCO is basically to settle international trades between these countries without using the dollar.

It’s not just members of the SCO, either, that could eschew the dollar.  The Middle East, for example, now principally sends exports to China and India, so there’s no pressing reason to use the dollar there.
If they succeed, the whole Asian continent, at some point in the future, will be off the dollar
They’ll use their own currencies, gold, or something else.  That’s a very big change, and I don’t think people fully appreciate what that means for the dollar.”

For those unable to make the trip to Vancouver last weekend for the Sprott Natural Resource Symposium, you won’t want to miss the summary and recap of keynote speakers from the event, including Rick Rule, Adrian Day, & reclusive billionaire Robert Friedland.
Full recap of the Sprott Natural Resource Symposium from Vancouver is below: 

sprottI just think that the COMEX data is corrupted.  It’s very hard to make any sense of it all. The fact that there’s no deliveries from the dealers is incredible. You’d think there’d be some change in the inventory. I don’t care whether it’s up or down, but at least you’d think there’d be some change.”  -Eric Sprott

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SilvaSprott’s Tekoa Da Silva joins The Doc & Eric Dubin on this week’s Metals & Markets from the Sprott Natural Resource Symposium in Vancouver discussing:

  • PM futures roller coaster: metals smashed under $1300 and $21 ahead of options expiration, but close week with a strong Friday afternoon rally- is the take-down over?
  • Tekoa discusses his journey from PM journalist and pod-caster to Investment Executive at Sprott Global- what he’s learned from the brilliant minds there including Sprott, Rick Rule, and John Embry, and how SD listeners can apply lessons he’s learned at Sprott to their investing
  • With the BRICS announcing the $100 billion central banking alternative to the West, Tekoa discusses the death of the US & the dollar as occurring gradually so as not to alarm the boiling lobster: “At some point the lobster will pass away, and be eaten by outside groups!
  • Tekoa reveals how he was able to get the  ECB’s Mario Draghi to admit central banks’ gold leasing has been unsuccessful 
  • From the stunning “Castle in the City” in Vancouver, Tekoa gives an inside update on the Sprott Natural Resource Symposium, and reveals how excited the Sprott team is about the next major bull upleg in the PM and natural resource sector. 

The SD Weekly Metals & Markets With Tekoa Da Silva from the Sprott Natural Resource Symposium in Vancouver is below: 

sprottThere is clearly no recovery…
If one looks past headline figures, things are not really getting better.   Real disposable income per capita in the U.S. has increased only modestly since the Great Recession. However, all of this increase is due to Government Transfers, not from an improvement in the real economy. If we exclude those transfers from the numbers, disposable income per capita is actually lower than it was at the end of 2005 and has been painfully flat since 2011. Also, those numbers assume that the headline Consumer Price Index (CPI) accurately represents people’s purchasing power.

In this Markets at a Glance, we investigate the U.S. consumer and show that for a large portion of the population, things are not anywhere close to being better, in fact they are worse than before the recession.

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hyperinflationSprott Global Resources Chairman Rick Rule joins The Doc & Eric Dubin this week to discuss: 

  • Platinum & palladium- is the run over, or is the real move to the upside yet to come? 
  • Rick discusses the “ugly set of circumstances” facing mining in South Africa, and the implications on the supply side for gold, silver, platinum, and palladium over the next few years
  • Why water will be the investment story of the next decade
  • Rule discusses the pernicious devaluation of the dollar over the past 30 years, and predicts that the impact of the shift in global trade settlement & savings from dollars even slightly (1%) into gold will result in a 100% move in the valuation of gold. 
  • Rick also provides his outlook for precious metals in the face of continued manipulation, and states: “In my 30 years of experience in the markets, I’ve seen alot of manipulations, and the markets always, ALWAYS win.”

The MUST LISTEN SD Weekly Metals & Markets with Sprott Global Resources Chairman Rick Rule is below: 

goldBack in 2002, I was talking about $1,000 gold. When we hit that mark in ’05 and ’06 I began predicting that gold would rise to $2,000.
Now, I’m saying gold will probably go to $5,000 in the next move up.
Looking at the performance of gold from 1976 to 1980, the metal went up eight times.   If we repeated that performance, gold would be at over $8,000 from today by the end of the decade.   I don’t know if the same thing will happen this time, but it tells you that $5,000 per ounce is not unthinkable.

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Source: Nanex

In this EXCLUSIVE, MUST LISTEN interview with The Doc, Eric Sprott dissects the fundamentals in the gold and silver markets, coverage of manipulation finally reaching the mainstream, and reveals his updated outlook on gold & silver.
Eric discusses why the precious metals options markets always expire at MAX PAIN for the customers, and why he urges all PM investors to STAY OUT of the futures options markets, and simply accumulate physical metal.
Sprott explains how PM manipulation shifted from being conducted solely by the Central banks to the dealers active daily participation that we see now, and discusses how much he personally lost when a Barclays trader manipulated gold down into the London fix.  

Regarding his price outlook for the metals, with silver trading under $20 and gold trading near $1250, is Eric still looking for new highs in 2014?
His answer might shock you.

The Doc’s full Exclusive interview with Eric Sprott of Sprott Asset Management is below:

SProttWe believe that any rational investor considering the collection of facts below would consider, like us, that gold prices are long overdue for a re-rate.  As we all well know, almost all markets are manipulated; and the recent Barclays settlement is one example vindicating our views.
» The global macro environment is weak,
» Supply/demand numbers in our favour,
» Ponzi finance is in full bloom.

We encourage readers to protect themselves with any/all precious metals.

I am very excited about developments in the gold and silver markets today. I have been speculating since late 2012 that Western central banks could be running out of gold. I put the sell-off in gold and silver in 2013 to the fact that the Western banks needed a way to generate physical gold supplies. As the metals prices went down, there was a lot of liquidation of gold which increased the supply by an estimated 900 tonnes last year.
Let’s look at the figures. The annual supply of gold is around 4,300 tonnes. 3,000 tonnes come from mining and the other 1,300 tonnes or so from recycled material2. In 2013, an additional 900 tonnes came onto the market from ETFs that were being liquidated – a supply increase of around 21%.
Quite frankly, I believe this was all orchestrated in order to create this supply. During the time when the price was knocked down, a tsunami of buying started. India bought 336 tonnes from April to June of 20133.  I’m sure that the central bankers went to the Reserve Bank of India and said: “You’ve got to stop people from buying gold.
Ultimately, we will find out the extent of manipulation in the gold market when someone finally fails – most probably the U.S. running out of gold to supply the market. And I don’t think we are far off here.”  -Eric Sprott

Caption Contest 1When asked how governments will react to the next global economic decline, legendary investor Jim Rogers warned that Western governments will loot pensions and savings:

For one, there will be more confiscation of wealth. Americans and Europeans have already made it legal to take money from private bank accounts, or at least parts of them, in order to bail out banks. They will likely help themselves to pension plans too.
Gold and silver should provide investors some protection against government confiscation.  They will probably go for bank accounts and retirement funds, because they need cash. In fact, that is already happening in Argentina and Poland. Gold and silver are no longer part of the monetary system, which they were back in the 1930s’ when they last confiscated gold and silver. From the government’s point of view, gold and silver are not ideal – it is money they need.”

Caption Contest 1I don’t think that the situation that we have here is sustainable. We are going to have to create a sufficient amount of money to keep the debt load afloat. We are going to have to keep interest rates low because if those basic requirements are not met – that is lots of liquidity and maintenance of low interest rates – the system is going to collapse.
I think that’s why you own gold; because the odds favor something going badly wrong – a ‘black swan’ if you like. And to continue they will have to jam liquidity, and at some point there will be a massive recognition that the money is no good and people will want out into real things.
The fiat Ponzi Scheme will continue until it doesn’t, but the minute that it stops, people will be asking themselves what they really own through their ‘paper gold’ vehicles. I think that this will have an unbelievably large impact on the price of physical gold.