-- Published: Tuesday, 2 February 2016 | Print | Disqus
By Andrew Hoffman
The PPT can huff and puff until its cancerous, tar-filled lungs are empty. Central banks can take rates to unprecedentedly negative levels; and the MSM can create all the – pardon my French – bulls–t rumors about potential Saudi Arabia and Russian production cuts. The Cartel can fix the silver “fix”; the Spanish government can “outlaw” Catalonian secession; the Troika can pretend Greece is “bailed-out”; and the BLS can claim 5% unemployment to its heart’s desire. But when all is said and done, “Economic Mother Nature” and the “unstoppable tsunami of reality” are rolling through such petty manipulations like Neo at the end of the Matrix.
I mean, it was just 3½ months ago when I wrote “the worst global economy of our lifetimes” – and since that time, to give you a sampling of how rapidly things are imploding, the CRB Commodity Index has plunged another 20%, to a new 40-year low; WTI crude oil 38%; and the Baltic Dry Index 60%, to a new all-time low. Here in the United States of Inflation Exportation, where the strengthening dollar – or more aptly put, the collapse of all competing fiat toilet paper – where the economy is theoretically the world’s “strongest,” fourth quarter GDP “growth” was overestimated at reported to be a mere 0.7%. And after yesterday’s abominal personal spending, ISM manufacturing, and construction spending numbers, the Atlanta Fed is already down to 1.2% for the first quarter. Which, like the fourth quarter, WILL eventually turn negative, confirming the Fed’s “policy error,” and putting it on the razor’s edge of the inevitable “Yellen Reversal” – when all hope for economic “recovery” permanently dies. As well as all “powers that be” hopes of containing gold and silver prices. Or, for that matter, any remaining prayer of reigning in – or even “masking” – the unprecedented, global, economic contagion destined to be remembered as the worst since biblical times.
Throw in this week’s freefall plunge in oil prices – about to plunge through $30/bbl as I speak, from last week’s aforementioned bulls—t rumor engendered short squeeze to $34/bbl. And oh yeah, the U.S. national debt exploding through $19 trillion last night – just two weeks after Obama claimed to have tamed the budget – and you can see just how rapidly last week’s pathetically desperate, and PPT-aided, Bank of Japan desperation move has failed; enroute to the entire world’s inevitable, and dare I say imminent, rendezvous with the “Big One.” Which, frankly, has already commenced in most of the world; and currently, is on the verge of swallowing “leading” Western nations as well, whose cumulative powers of money printing, market manipulation, and propaganda have lost all effectiveness; whilst its political, corporate, and monetary “leadership” has lost all credibility, for generations to come.
Amidst the carnage, fear is rising to levels far exceeding 2008 – which, care of Central banks having used their last remaining “ammunition” to “kick the can” six or seven years – can no longer be contained by the mirage of said money printing, market manipulation, and propaganda. Global economic activity is far lower than 2008, and going a lot lower. And I do mean a lot. Moreover, geopolitical stress hasn’t been this terrifying since World War II – whilst draconian government decrees are turning Orwellian; as social outrage, revolution, and unrest is surging – at time when 7.3 billion people inhabit the globe, “99%” of whom are either destitute, or one more leg down in economic activity from becoming so. Debt levels have gone parabolic, currencies are imploding, and the only government “responses” will be more money printing, interest rate repression, and capital controls. And oh yeah, WAR. In other words, the time to PROTECT oneself has never been greater – as you can probably tell from the passion in this article. Perhaps, more than any before it.
To that end, from my perch as Marketing Director of one of the nation’s oldest and largest bullion dealers, I get a lot of feedback of how people are feeling, both directly and indirectly. To wit, the incredible outpouring of interest in my nationwide speaking tour with Andy Schectman – which, I might add, we may be announcing one or two new dates for imminently. As well as the explosive increase in the Miles Franklin Blog’s readership, and the surging number of hits on my podcasts – in a schedule getting so crowded, I may have to stop rejecting interview requests.
However, where I see said fear the most is in the type of inquiries I receive from clients – starting with “junk silver”, i.e., the “ultimate fear product.” Which, yet again, is becoming extremely short in supply – just as we saw during last August’s post-Yuan devaluation market plunges, as premiums are starting to rise anew. And likely, will explode in the coming weeks, in my view, amidst a financial crisis which, unlike last August, will decidedly NOT be reversible via money printing, market manipulation, and propaganda.
To that end, Miles Franklin’s President, Andy Schectman, has been one of the best Precious Metal “swapping” experts in the industry. And after several years of explosive demand for junk silver – which, in theory, is the optimal “bartering” item under the “worst case scenario” of currency collapse – he truly believes the opportunity to swap junk silver into freshly minted coins, such as 2016 Australian Kangaroos, has never been better.
As for me, I think there’s room for junk silver in any diversified Precious Metal portfolio, particularly as I believe its numismatic value will continue to rise as it gets older. Let alone, its practical value as a potential bartering tool.
That said, under such a “worst case” scenario, I assure you the entire world will rapidly educate itself of the value of diverse silver products – from bars, to buffaloes, junk silver, and…Australian Kangaroos. In which case, it’s difficult to argue that a standard one ounce, 2016-issued coin will be any less “barterable” than a 60-year old dime with a difficult to measure silver “content” – aside from junk silver’s obvious advantage of having extremely low denominations.
Generally speaking, there is no wrong way to invest in Precious Metals. However, the beauty of its art is that there are many ways to personally optimize your holdings. And if swapping junk silver into Australian Kangaroos – whilst Kangaroos are still available at reasonable premiums – and taking tax losses in the process, is something you deem optimal, please give us a call, at 800-822-8080.
Additionally, the fear-related inquiries I have received regarding the conversion of conventionally-invested IRAs into Precious Metal IRAs – including so-called “passport” IRAs, in which you can personally hold your IRA-governed gold and silver assets – have gone off the charts. Certainly more than at any time since I joined Miles Franklin 4½ years ago; and likely, the most since 2008, when Congress actively debated the confiscation and/or draconian restriction of IRA holders’ assets and redemption rights. Heck, both Andy Schectman and I cashed out our IRAs entirely in 2009 – both, at age 39 – due to such fear; and never looked back, having gladly paid the 10% early withdrawal penalty for the right to control our financial destinies – and, as Jim Sinclair would put it, “get out of the system.” And I’m sure you can guess how I invested said proceeds.
Personally, I believe the wisest course of action – particularly here in the Socialist States of America, where the taxes you will eventually have to pay upon cashing out IRAs are likely to go parabolic – is to do exactly what Andy and I did; particularly if you are over 59½, and thus, not subject to the early withdrawal penalty. That said, for a variety of reasons, many people prefer to hold assets in government-sponsored, tax-deferred retirement plans like IRAs, Roth IRAs, and pensions. If you are amongst that group, and seek to convert your IRA to one that holds Precious Metals – either on your own person, or via third party custodians, Miles Franklin can help you with any and all of your needs. To that end, we have learned a thing or two in 27 years of business. And thus, whatever Precious Metal strategy you seek to deploy, I assure you our brokers – on average, with nearly 25 years of industry experience – can help you execute it.
And don’t forget for a second that what starts with fear, often ends in panic. And this time around, as the long-awaited “Big One” envelops the planet, if you haven’t protected yourself beforehand, it will already be too late to do so, when the proverbial “s—t” hits the fan.
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