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October 20 2017

moneymetals

Gold/Silver vs. Bitcoin Comparisons: A No-Brainer... or Brainless?

For most of the year, as Bitcoin soared, crashed, and soared again, cryptocurrency vs. physical gold-silver talking heads engaged each other in heated rhetoric about which of these venues is here to stay.

Some of the biggest names in finance, government, and the newsletter analyst space have made comments that – to be charitable – appear less-than-fully informed. Comments like "Even though bitcoin could rise to $100,000, it's still going to zero!" don't offer much insight. Some other questionable assumptions:

2017 percent price change comparisons: Relating this year's gold and silver's price range to that of bitcoin misses an important point. Yes, bitcoin (BTC) has risen by a much greater percent, but it's also fallen more. I don't recall gold dropping 40% this year, which bitcoin has... on a couple of occasions.

Bitcoins

Please note: Bitcoin has no tangible, physical form.

Trash-talking gold and silver as "antiquated": Bitcoin is now considered legal tender in Japan, but at this time, its primary function is for use in the purchase and sale of the 900+ "alt coins" currently available.

Most of these exchange entries in the crypto-space are not really "currencies" at all and will never trade as such.

Rather they are "coins" or "tokens" digitally created and circulated to raise seed money, via initial coin offerings (ICOs) in order to solve some business application in a blockchain-connected manner. Many have no trading volume – possibly because the market is skeptical of their business plan – and have become more or less "dead" coins.

At present, a relative few have an actively trading market. Investors have dropped literally millions of dollars into scores, if not hundreds of entrants which have appeared on the scene like dragon's teeth, in many cases only to see volume dry up soon thereafter.

At present, digital apparitions can be created and marketed by just about anyone. The following example demonstrates how easy it is (for now), and how gullible some people really are...

Article Source


October 10 2017

moneymetals

September 19 2017

moneymetals

September 13 2017

moneymetals

The U.S. Government Massive ONE-DAY Debt Increase Impact On Interest Expense & Silver ETF

The U.S. Government’s massive one-day debt increase had a profound impact on the amount of money it will have to fork over just to service its interest payment. On Friday, Sept 9th, the U.S. Treasury increased the total debt by a stunning $318 billion. Thus, the total U.S. Government debt increased from $19.84 trillion on Thursday to $20.16 trillion on Friday.

We must remember when the U.S Treasury adds more debt to its balance sheet; the government is now obligated to pay additional funds to service the interest on that debt. So, for each increase in U.S. Government debt, comes with it, an increase in its debt service payment.

However, the U.S. Government has been able to control the rise in its annual interest payments by pushing the interest rate lower. For example, the average interest rate on U.S. Treasury debt in 2000 was 6.4% versus 2.2% currently. If we look at the chart below, we can see how the interest rate has declined as U.S. Government debt increased:

U.S. total debt vs average interest percentage rate

The RED DOLLAR bars represent total U.S. Government debt in billions of Dollars, while the WHITE LINEshows the annual average debt service interest rate. We can plainly see that total U.S. debt has nearly quadrupled from $5.6 trillion in 2000 to $20.1 trillion in 2017.

NOTE: I arrived at the average interest rate percentage figures by dividing the annual interest payments by the total outstanding debt.

This next chart from the Treasurydirect.gov website lists the annual U.S. debt service interest payments:

Available historical data fiscal year end

(interest expense on debt outstanding, Treasurydirect.gov)

By taking the interest payment of $362 billion in 2000 and dividing it by the total U.S. Government debt of $5,674 billion ($5.67 trillion), it equaled 6.4%. So, the U.S. Treasury paid an average 6.4% interest payment on its outstanding debt that year.

What is interesting about the figures in the table above is that the U.S. Treasury paid out a larger interest payment in 2008 of $451 billion versus $432 billion in 2016, even though the debt was much higher in 2016. The reason the interest payment was higher in 2008 than in 2016 had to do with a 4.5% interest rate on $10 trillion of debt compared to a 2.2% interest rate on $19.6 trillion in debt. By cutting the interest rate in half (4.5% down to 2.2%), the U.S. Treasury’s interest expense remained flat or slightly declined as the debt nearly doubled.

Continue reading... 
(ARTICLE SOURCE: https://www.moneymetals.com/news/2017/09/13/govt-debt-increase-impact-001157)

September 05 2017

moneymetals

August 22 2017

moneymetals

TOTAL WORLD GOLD & SILVER PRODUCTION: Fact vs Conspiracy

Inline image 1

Unfortunately for precious metals investors, there continues to be a great deal of misinformation about how much gold there is in the world. The biggest culprit that confuses precious metals investors is what I call, LOUSY CONSPIRACIES. Those who promote these unsound conspiracies aren’t able to differentiate between FACTS and FICTION.

This will be a short post, but it is important as it will lay some ground work for articles to come out over the next several weeks in comparing the new Bitcoin-Crypto currency market to gold and silver.

While conspiracies do indeed take place, they are based upon sound reasoning and evidence that either proves a conspiracy has occurred, or proves the official story is bogus. On the other hand, lousy conspiracies are easy to dismiss when facts and sound evidence are brought forward. Unfortunately, even when the facts or the evidence is presented step by step, those who either promote or believe these lousy conspiracies… continue to do so.

This has to be one of the most frustrating areas of my research, writing and analysis. Why? Because, I receive emails at least once a week bringing up one of my favorite LOUSY CONSPIRACIES.

One of the more insane conspiracies in the precious metals community is the notion that the world has 1-2 million tons of gold hidden in secret vaults. Some of these vaults are the infamous Yamashita’s Gold Treasure, Nazi Gold Vault, Bank of Hawaii Massive Gold Holding and etc.

You see, conspiracies, especially LOUSY CONSPIRACIES, are a great way to make a buck selling a newsletter or book. Because people don’t take the time to do the research and fact check, it’s much easier and a great deal more fun to believe in the hype of a conspiracy. This is quite a shame because lousy conspiracies give the few sound conspiracies a bad reputation.

Even though I wrote about this back in April, CONSPIRACY vs FACT: How Much Gold Is In The World??, it seems necessary to discuss this once again as an introduction to why gold and silver will still be better quality stores of wealth versus crypto currencies over the medium to longer term. This goes against some of the recent analysis put out in the Alternative Community suggesting that gold will no longer have value in the future due to crypto currencies taking over the role as a new digital monetary system.

Anyhow… the production of silver and gold are extracted out of the ground at a certain ratio. Recently, it is approximately 9 to 1, silver to gold. Let’s take a look at the following two charts:

World gold production 1493-2016

World silver production 1493-2016

As we can see in these two charts, most of world gold and silver production has been extracted since 1900. For gold, the world produced 91% of all gold since 1900, and 81% of all global silver production.According to the best sources (shown on the bottom of the chart), there have been approximately 173,000 metric tons (5.5 billion oz) of gold produced since 1493 and 48.5 billion oz of silver. This turns out to be a 9 to 1 ratio, which is the same as the ratio of silver to gold in the ground.

Continue reading: Article Source

August 18 2017

moneymetals

August 04 2017

moneymetals

Get Ready for an Historic Upside Gold and Silver Run

The Bigger the Base, the Greater the Upside Case. This saying among technical analysts/chartists helps define where we are today in the precious metals – and where we'll soon be headed.

July 24 2017

moneymetals

David Morgan: Gold and Silver at Breakout Point from 6-Year Downtrend

And now, back by popular demand, here’s our recent interview with a long-time friend of Money Metals Exchange and precious metals investors in general…

David morgan

Mike Gleason: It is my privilege now to welcome in our good friend David Morgan of The Morgan Report. David, it's always a real pleasure to have you on with us and I'm especially excited to talk with you about some of the topics we've got on tap today. How are you?

David Morgan: I'm doing well Mike, thank you very much.

Mike Gleason: Well, as we begin here David, I want to talk to you about the danger of complacency because I think it's a very appropriate topic for the times we're in right now. To you and me and to many others in our space with a similar world view, we see a whole slew of reasons to own precious metals. We have threats of war in many places throughout the globe. We have a president here in the U.S. who the establishment hates and is hoping to oust if they get the chance. We have nation central banks printing new fiat currency at unprecedented levels all throughout the world.

An entire continent over there in Europe that appears to be potentially at risk of seeing their political and currency union falling apart, terror threats all over the place, the refugee crisis, the list goes on and on. But all the while we have this stock market continuing to make all-time highs with most people seeming to believe that everything is hunky dory while completely ignoring all of those geopolitical and monetary headwinds, or for those who seem to grasp all of that, all that's going on, maybe starting to believe that it doesn't matter. Because, after all, the feds and the central planners are going to be able to manage this thing forever.

So, talk about complacency here David, why aren't we seeing more flock to safe havens, at least not here in the Western world, and discuss the dangers that exist if we let ourselves fall into the complacency or the “nothing is ever going to change” type of mindset.

July 19 2017

moneymetals

National Debt Too High, Silver Price Too Low

Silver currently sells around $16, which would be sensible if the U.S. national debt was much less than its current $20 trillion.

Fine silver bar

Given the massive national debt and 100 years of experience, silver prices could easily be double or triple their current prices, and far higher in a panic.

WHY?

Examine over a century of official national debt data graphed on a log scale. Official debt in 1913 was $3 billion. Since then it has risen 8% to 9% every year to reach $20 trillion or $20,000 billion. Debt will continue rising as long as politicians spend and bankers lend.

Proof: Name the Senators, Representatives, Presidents, military contractors, pharmaceutical companies, and Medicare recipients who wish to see the government reduce expenses.

moneymetals

GOLD & SILVER MARKET: Four Interesting Developments

There are four interesting developments taking place in the gold and silver market that precious metals investors should be aware of. While Americans continue to place all the BETS in the CASINO called Wall Street, via stocks, bonds and real estate, the EAST has been acquiring record amounts of gold and silver. Furthermore, something interesting seems to have changed recently in the Silver Eagle sales market.

FIRST DEVELOPMENT: Let’s start off with showing the stunning amount of silver India imported in May. According to Smaulgld.com, India imported nearly 2,000% more silver in May 2017 vs May 2016:

Indian silver imports may 2016 - may 2017

Matter-a-fact, India imported nearly the same amount of silver in May, than they received from January-April. Also, we can see that May’s 1,473 metric tons of silver imports is 2-4 times more than any of the prior months. Something has inspired the Indians to import that much silver this past May.

SECOND DEVELOPMENT: India also imported a record amount of gold in May:

Monthly indian gold imports july 2014 - may 2017

According to Smaulgld’s article, INDIAN GOLD IMPORTS ON RECORD PACE IN 2017:

Continue reading...

July 10 2017

moneymetals

The Reason Why Gold & Silver Have Frustrated Investors Since 2011

The biggest frustration to many precious metals investors, is why have the gold and silver prices under-performed the market since 2011? Actually, for gold it was since 2012. Even though gold hit a new record high of $1,900 in September 2011, its average annual price was higher in 2012 at $1,669 compared to $1,571 the prior year.

Regardless, the precious metals analysts back in 2012 were forecasting the market was going to experience even higher gold and silver prices, especially after the Fed announced QE 3 at the end of 2012. However, the precious metals community was taken by surprise as the gold and silver prices were hammered at the end of 2012 and into the beginning of 2013:

Gold continuous contract - july 3 2017

During this period, the gold price fell 30% and the silver price declined nearly 50%. Did something fundamental change in the markets for investors to suddenly ditch precious metals? Actually, something really big happened... THE MARKETS BROKE. Of course, many in the alternative media believe the financial market died in 2008, but when we look at another indicator... it clearly shows that the markets drastically changed even further in 2012.

The following charts (below) from the article, Deutsche: The Market Broke In 2012, “This Is What Everyone Is Talking About”, show that the market is totally under-pricing RISK by orders of magnitude never seen before. Now, when I say “under-pricing risk”, all that means is that the market has no idea of the dangers ahead. It is similar to someone driving a car that doesn’t realize the engine is burning up and the brakes don’t work because the WARNING LIGHTS aren’t functioning. So, the poor slob continues to speed down the road, without out a care in the world… until the car blows up or he heads over a cliff.

In the Deutsche Bank article linked above, analyst Aleksandar Kocic providing actual evidence that the WARNING LIGHTS in the market are no longer working:

Continue reading the entire article here.

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