bottom of the barrel

Americans are in big trouble and they don’t even know it.
The financial system in which they are totally invested is heading towards an epic collapse.
Printing money and increasing debt (exponentially) are not sustainable business practices.
These artificial techniques to prop up a Zombie Economy have a certain lifespan… one that will end much sooner than later.

US Gold Production JAN-OCT 2014According to USGS, U.S. gold production declined 11% in October compared to same month last year.
This was due to lower seasonal production in Alaska and lower grades at Rio Tinto’s Bingham Caynon Mine in Utah.  U.S. gold production in October was 16.8 metric tons (mt) compared to 18.9 mt last year.

Total U.S. Gold Exports 2014 MAY - OCT.NEW2U.S. gold exports to Hong Kong and China jumped significantly in October.  Not only were U.S. gold exports strong in October, they were the second highest for the year.  Shipments of gold out of the U.S. spiked in January, declined in February and March and remained subdued during the summer months.
However, U.S. gold exports Jumped 70% In September, at 50.1 metric tons (mt), with the majority going to Switzerland (15.3 mt) and the United Kingdom (13 mt).
If we look at the chart below, U.S. gold exports to Hong Kong (8.5 mt) and China (3.3 mt) placed in the third and fourth position respectively:

 

2015 Best & Worst Peforming Commodities IndexesWith the new year now in full swing, Silver is one of the top performing commodities in 2015.  After falling over 71% from its high of $49.82 in April 2011, to a low of $14.16 in December 2014, silver is up 16.3% in 2015.
Not only is silver up higher than gold in percentage terms, it’s nearly double gold’s performance of 9.3% in January.

World Mutual Fund Net Inflows vs  Gold Investment Q1-Q3 2014Total global physical gold investment of $33 billion was 3% in the first nine months of 2014 compared to the $962 billion of worldwide mutual fund net inflows.
Smart Asians and Indians continue to trade in fiat money to purchase REAL ASSETS while Europeans and Americans forge blindly ahead into the GREAT MUTUAL FUND PAPER BLACK HOLE.
While the West believes it has the UPPER HAND in the great game of FINANCE… the EAST will most definitely have the LAST LAUGH.

US Mint

Sales of U.S. Mint Silver Eagles started off strong this year with 3.6 million sold in the first two reporting days of 2015!
The U.S. Mint starting selling Gold Eagles last week with 51,500 ounces reported on the first day of sales.  The U.S. Mint released the official first day of Silver Eagle sales on January 12th.
As we can see from the chart below, the U.S. Mint sold 2,958,000 Silver Eagles on January 12th, then another 656,000 on Tuesday, January 13th.  So far this year, the U.S. Mint sold 3,614,000 Silver Eagles compared to 56,500 oz of Gold Eagles:

Total Global Oil Demand 2013-2014There is this notion put forth by the media that a decline in global oil demand caused the huge drop in the price of oil.  Ironically, global oil demand is higher than ever… that is, according to the IEA – International Energy Agency.
Not only did the world consume the most oil it had ever in the third quarter of 2014, it was 600,000 barrels per day more than it did in the same period last year!
So just what exactly is causing the price of oil to collapse? 

gold

Recovering gold and other valuable metals from retired nuclear weapons had been a little-known mission of the government’s uranium enrichment plants over the past five decades.   At Paducah, the process began in the 1950s and was conducted under extraordinary security, with heavily armed guards escorting warheads into the plant under cover of darkness.
Based on available records, DOE estimates that between 2,800 and 5,300 pounds of gold from retired nuclear weapon assemblies and scrap parts was recovered and shipped from the Paducah Plant from 1964 to 1985.
The operations used to reclaim gold were kept separate from other materials and contaminated processes onsite, but were conducted in contaminated areas of two buildings.   For much of this period, recovered gold was shipped to the U.S. Department of Treasury for refinement and reuse

So, as the lights go out at the only uranium enrichment plant in the United States, there is high probability that gold bars are glowing brightly at some lucky vault
The real question is this… are they part of the remaining gold at Fort Knox, or is some unfortunate Central Bank now the owner of the HOTTEST GOLD on the planet?

When it comes to global silver demand growth over the past decade, the coin and bar investment category is the big winner.  Unfortunately, the media tends to focus on growth of industrial silver consumption, while investment demand continues to take a back seat.
2014 global silver coin and bar demand may actually be closer to 230-240 Moz, than the 192 Moz figure GFMS forecast in the preliminary report.

Regardless, the huge increase in silver coin and bar investment demand over the past decade took place by less than 5% of the population… probably more like 2%.
What would happen to global silver coin and bar investment demand if only say 10-15% of the population became interested??

silver rush

According to global market data from the top Official Mints, sales of Silver Eagles  originate overwhelmingly from public retail investment demand rather than by one large bank… such as JP Morgan.  
I say this in response to the allegation put forth by silver analyst, Ted Butler who believes JP Morgan purchased half of all Silver Eagles since April, 2011.

Ted Butler, who has made this claim over the past several months, does so again in his recent article, The Perfect Crime.
I wanted to provide a rebuttal to Butler’s allegation that JP Morgan was the large buyer of Silver Eagles because his opinion takes CREDIT AWAY FROM THE PUBLIC, and puts it in the hands of the BANKERS.
While Ted Butler provides excellent information on the silver market, I believe his opinion on this matter is incorrect:

2012 Amercian Silver Eagle

Amazingly, retail investors purchased 84 Silver Eagles in 2014 for every ounce of Gold Eagles.
It will be interesting to see how 2015 unfolds.
With all the geopolitical, financial and economic uncertainty… next year just may be GANG BUSTERS for the U.S. Mint.

india silver

With imports in the first ten months totalling a massive 169 Moz many vaults in the UK, traditionally the largest supplier to India, have seen significant drawdowns, leading to more supply flowing from China and Russia. -GFMS

If London was already suffering a drawdown of silver inventories in October from huge Indian demand, how bad is the situation after another 1,254 mt was imported by India in November?  How tight is the wholesale silver market now?
The world has consumed its huge stockpile of above ground silver for the past 3-4 decades, and I believe will soon be faced with a serious problem: where will the market acquire silver stocks to offset annual deficits and increased demand in the future?
Currently, investors are swimming in worthless paper assets up to their eyeballs.
This is very unfortunate as when the time comes to move into physical assets such as gold and silver to protect their wealth, there will be very little to go around… EXCEPT at much HIGHER PRICES.

bottom of the barrel

In its 2014 Silver Interim Report, GFMS predicted 2014 silver mine supply to reach record levels: 

On the supply side, mine production is forecast to reach all-time highs in the silver industry in 2014 as supply from Guatemala, Mexico, Chile and Peru increases.

As we near the close of 2014, did GFMS massively overestimate 2014 silver supply? 

freefall

Once the Great Bakken and Eagle Ford Fields head into terminal decline, the GREAT ILLUSION of prosperity in the United States will be overThis will have severe consequences for the U.S. Dollar and Treasury Market.
Investors who see the WRITING ON THE WALL will make sure they have protected their wealth in hard assets such as gold and silver before the Shale Oil Dominoes fall.

silver oil ratio

Based on the historic 1960’s oil-silver ratio, the current price of silver should be $50 an ounce!
According to the 1960’s Oil-Silver ratio of 1.3/1, the price of silver would have peaked in 2011 at $85.58, and would still be $50 with the current price of a barrel of oil at $64
The U.S. & Global Retirement Markets are being propped up by the Fed and foreign central banks.  Without this continued manipulation, the value of most paper assets would implode.  Furthermore, the coming peak of global oil production will be the final nail in the CENTRAL BANK’S COFFIN.

As the value of the highly leveraged financial-derivatives market heads south in earnest, investors will be forced to move back into hard assets, such as the precious metals and commodities.
This will push the value of these assets up to levels thought unimaginable.

$50 silver is coming… however that will probably be just the beginning stage of a much higher price in the future.

silver eagle sales

In the wake of a MONSTROUS sales spike with silver’s dip to $14, Silver American Eagles sales have soared above 43 million oz in 2014, a new all-time annual sales record for the second consecutive year. 
In addition, I believe sales of the 2015 Silver Eagles will be very strong in the beginning of the year.  Today, the price of gold and silver are skyrocketing as the broader stock indices plummet.  This may be the sign precious metal investors have been waiting for… A REAL BOTTOM.
If we truly seeing the MOTHER OF ALL REVERSALS, 2015 may turn out to be quite the pivotal year.