With A Phony Stock Market At 20,000 “Only Precious Metals Give Opportunity To Make REAL Gains”

This article was written by Stefan Gleason and originally published at Money Metals Exchange.

Editor’s Comment: While there is no guarantee about what will happen in the future, it seems certain that holdings in stock are paper thin and vulnerable as hell. Real assets aren’t there; bubbles go bust and boom, and the effect of Federal Reserve stimulus-retreat will leave everything open for manipulation – or even the big crash.

Under these circumstances, and other volatile economic factors, holding onto a certain investment in gold and silver seems only prudent, and perhaps one of the wisest investments an individual can make. Holding physical gold ensures control over the asset itself, and the slip and slide loss on investment in the markets means that these tangible commodities would only increase and appreciate in value during a major economic decline or monetary reset period (such as a transition away from the petrodollar into sort some of digital, global currency, etc.).

Though the state has often attempt to seize and control the trade of gold and silver and its store of wealth, reality dictates that possession of wealth is still an important factor, whether bartering, trading or hedging against a faltering and inept system. At least some of these precious materials should be considered by every serious prepper as one of the most favorable means of exchange during times both rough and relatively normal.

Stock Market Highs Make Strong Case For Precious Metal Buys

by Stefan Gleason

Dow 20,000 was ushered in with great fanfare. Traders on the New York Stock Exchange sported “Dow 20,000” hats. Even President Donald Trump joined the celebration.

Trump told ABC News he was “very honored” that the stock market gave his presidency a symbolic vote of confidence. “Now we have to go up, up, up. We don’t want it to stay there,” he said.

Everyone loves a bull market. Expecting stocks to go up forever, however, is a dangerous mindset to have as an investor. Recent history suggests that major milestones for the Dow should be viewed less as cause for celebration and more as warning signs.

What 1999 Can Teach Us About 2017

A case in point: Dow 10,000. On March 29, 1999, the Dow Jones Industrials closed above 10,000 for the first time ever.

The financial media, of course, cheered the milestone, feeding the public Wall Street propaganda rather than healthy skepticism.

Sure, the perma-bulls will always concede, there might be a pullback at some point. But books like Dow 36,000, released in 1999, bolstered the conventional wisdom that stocks were destined march higher over the next decade.

In fact, stocks went nowhere for 11 long years. The Dow suffered two crashes – one in 2002 and a bigger one in 2008.

In mid 2010, the blue chip average was right back where it was on March 29, 1999. The Dow crossed back above 10,000, as it had dozens of times before, to little fanfare.

It turned out to be the 10,000 cross that mattered. Finally, more than 11 years after the Dow first hit 10,000, stocks were in a new bull market. The Dow was on its way to 20,000.

Anyone thinking of buying stocks at today’s lofty valuations would be well advised to take heed of what happened to investors who bought at Dow 10,000 in 1999 and held on through today.

Yes, they did double their money (before dividends) in nominal terms.

But in real terms, the Dow hasn’t made any progress.

Investors would have been better off selling stocks when the Dow hit 10,000 and using the proceeds to purchase gold bullion.

Back in March 1999, silver sold for $5.20/oz and gold prices traded at a mere $285/oz. Gold values got as high as $1,900/oz in mid 2011 and today come in at $1,200/oz – still more than four times their 1999 levels.

That puts the Dow’s nominal rise from 10,000 to 20,000 in perspective. The index has merely flat-lined, at best, in real terms since 1999. Going forward, it may not even manage to do that.

Trump Knows He Inherited a Bubble

The price/earnings ratio on the Dow is now arguably in bubble territory. Valuations have been artificially inflated in no small part by the Federal Reserve. Last September, candidate Donald Trump called the Fed-fueled market “a big, fat, ugly bubble.”

President Donald Trump no longer sees it that way. Dow 36,000 here we come!

It will come eventually – even if only because of currency debasement. That doesn’t necessarily mean the next 5,000 point move in the Dow will be to the upside.

History suggests that investors will have better odds of making real gains in stocks by waiting to buy at lower valuations. A bear market in equities could commence at any time, and a final bottom could be years away. In the meantime, stocking up on alternative assets including precious metals will give you other opportunities to make real gains regardless of where the Dow heads over the next few years.

Will Trumpflation Be to Metals What Stagflation Was in the 1970s?

Gold and silver markets have posted some of their biggest up moves when the stock market has been down or flat. The stagflationary late 1970s weren’t kind to stocks, but they gave rise to a spectacular bull market in precious metals. It culminated in January 1980 with the price of an ounce of gold briefly equaling the quote on the Dow Jones Industrials.

From 1980 – 2000, Dow to gold ratio moved from as low as 1:1 to as high as 43:1. From 2000 – 2011, it fell to as low 6:1. The Dow to gold ratio now stands at around 17:1. Should it ultimately revisit the 1:1 ratio, we’d be looking at a massive stock market crash, an explosive move higher in precious metals prices, or some combination of both.

Could gold prices one day meet the Dow at 20,000 or some other number? A return to the 1:1 ratio is an extreme scenario, to be sure. But it’s not far fetched at all to suppose that history might repeat itself.

Even if Dow to gold only got back to a 4:1 ratio, moving out of stocks and into precious metals at current levels would be the trade of a lifetime. It would imply a potential $5,000 gold price to a 20,000 Dow – a 317% return on gold versus a 0% return on stocks in this hypothetical scenario.

In any major bull market for precious metals, the more volatile metal – silver – can be expected to post the bigger returns. Silver, being both a precious metal and an industrial metal, may also be well suited to benefit from Donald Trump’s pro-industrial policies. Silver is essential in many areas of manufacturing, especially electronic and high-tech products.

Silver is also one of the world’s most enduring forms of money. Along with gold, silver stands as a “hard” alternative to depreciating fiat currencies and bubbly financial assets.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, TheStreet.com, Seeking Alpha, Detroit News, Washington Times, and National Review.

This article was written by Stefan Gleason and originally published at Money Metals Exchange.

Proof Gold Prices Are Manipulated: Plot to “Negate Long-Term Hoarding By U.S. Citizens”

This article was written by Clint Siegner and originally published at Money Metals Exchange.

Editor’s Comment: For years, those close to gold and silver investing have understood the ongoing suppression. Having competing currencies and alternate stores of value invades upon the hegemony of the fiat currency system. With the set up of a futures market, the bankers could have it all – limit the physical holdings in gold, and collect money of the suckers in the bubble. Trading on 90%+ non-existent commodities, the financial markets did what they have done with other assets – make it difficult for outsiders to store value and get ahead.

In the long run, however, the fiat currency system is doomed to collapse, and those who are prepared will always have back-ups, fail-safes and other alternatives to turn to. With hard evidence of manipulation, perhaps prosecutions and regulation reforms could even peg gold back near reality sometime in the foreseeable future. What is today trading at $1191 may really be worth $3,000, $4,000 or $5,000 grand. The question is: who controls reality?

Gold Prices Are Being Hacked

by Clint Siegner

Major U.S. and international banks cheat their customers and rig markets. Revelations have been piling up since the 2008 financial crisis. Hundreds of billions have been paid in fines, penalties, and settlements. The fraud, price manipulation, lying, and theft – once considered conspiracy theories – are now incontrovertible conspiracy facts.

This reality is dawning now in the precious metals industry. GATA, the Gold Anti-Trust Action Committee, labored for years making the case for price manipulation in the markets. They, and others, made a powerful argument complete with price charts and trading patterns that simply could not be explained in free and fair markets.

But their argument was universally disregarded by regulators and largely ignored by major players inside the industry. Gold and silver miners, refiners, and users never took meaningful action to combat price rigging, even as price volatility wreaked havoc in their business. GATA lacked enough “smoking gun” evidence, and most people simply assumed their claims couldn’t be true.

The recent settlement deal in which Deutsche Bank handed over 350,000 pages of internal documents and more than 70 voice recordings is changing that. Attorney’s behind class action suits against a handful of major banks say the trove of information is “smoking gun” evidence of a widespread and systemic campaign to cheat customers and rig markets.

It is one thing to look at trading data and surmise that someone is trying to manipulate prices. It’s another to see chat logs where traders laugh about actually manipulating prices and sticking it to unwitting market participants:

June 8, 2011

UBS [Trader A]: and if u have stops…

UBS [Trader A]: oh boy

Deutsche Bank [Trader B]: HAHA

Deutsche Bank [Trader B]: who ya gonna call!

Deutsche Bank [Trader B]: STOP BUSTERS

Deutsche Bank [Trader B]: deh deh deh deh dehdehdeh deh deh deh deh dehdehdeh

Deutsche Bank [Trader B]: haha16

The chat above, and a host of others like it, demonstrate what GATA has been saying for almost 20 years. The metals markets are a playground for unscrupulous bankers, and price discovery is completely dishonest.

It looks more and more like these phony markets are working just as officials in our government hoped. Here is an excerpt from a memo sent from London to the U.S. Treasury Department in 1974, compliments of Wikileaks:

TO THE DEALERS’ EXPECTATIONS, WILL BE THE FORMATION OF A SIZABLE GOLD FUTURES MARKET. EACH OF THE DEALERS EXPRESSED THE BELIEF THAT THE FUTURES MARKET WOULD BE OF SIGNIFICANT PROPORTION AND PHYSICAL TRADING WOULD BE MINISCULE BY COMPARISON. ALSO EXPRESSED WAS THE EXPECTATION THAT LARGE VOLUME FUTURES DEALING WOULD CREATE A HIGHLY VOLATILE MARKET. IN TURN, THE VOLATILE PRICE MOVEMENTS WOULD DIMINISH THE INITIAL DEMAND FOR PHYSICAL HOLDING AND MOST LIKELY NEGATE LONG-TERM HOARDING BY U.S. CITIZENS.

The “expectations” were spot on. The futures markets have been plagued by extraordinary volatility, paper trading is hundreds of times bigger than physical trading, and ownership of bullion today is a tiny fraction of what it once was.

A conspiracy theorist might say our government has an interest in undermining gold as money, in favor of the fiat dollar.

Officials view the futures markets as an essential tool for achieving those ends.

Price volatility, concentrated short selling, and pain for metals investors serves to discourage ownership so regulatory agencies like the Commodity Futures Trading Commission (CFTC) turn a blind eye.

After all the CFTC spent five years investigating price rigging in silver and failed to prosecute a single case. One wonders how they managed to miss what appears to be overwhelming evidence of systemic cheating, and if the trove of documents and voice recordings now available will be grounds enough to reopen an investigation.

The civil courts, not the regulators, appear to be metals investors best shot at recovery of some of what has been stolen from them in these rigged markets, and for moving toward free and honest price discovery. The Deutsche Bank settlement and the evidence it produced is changing the game.

Last week, Keith Neumeyer of First Majestic Silver, one of the largest primary silver producers in the world, announced he hopes to join in the class action. He is also working to recruit other big players in the industry. Mr. Neumeyer will be our guest on the Money Metals podcast to discuss these issues Friday. Stay tuned.

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Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

This article was written by Clint Siegner and originally published at Money Metals Exchange.