Anyone old enough to remember that catch-phrase in the title, is old enough to remember: “The Lone Ranger” in monochrome on old Black and White TV’s, back in the sixties.
And silver, in this case, was the Lone Ranger’s horse.
But the catch-phrase is also a likely predictor of where the price of silver is going to go.
We know that the silver annual supply is shy by about 200 million ounces a year. The world uses about 900million ounces per year (for both industrial and investment purposes), but supply is currently only around 700million ounces.
The difference is made up by the stockpiles of U.S. silver in coins and bullion that have been in storage since 1934 (in the case of bullion) which was seized – I don’t think that’s too strong a word – on the back of President Eisenhower’s Executive Order 6102, on 3rd April 1933, and in 1934, in which he seized the silver too, and in 1964 (in the case of coins), when silver was removed from coins by President Lyndon Baines Johnson, and the Federal Reserve.
Incidentally, just a few months before in November 1963, if we recall the President Kennedy, was fatally shot in Dallas, Texas, in the Deeley Plaza. Perhaps unknown to many just a few weeks prior to that shooting, on June 4th, 1963, President John Fitzgerald Kennedy quietly issued executive order 11110, that created a right for the treasury to issue a currency backed by precious metals, and that would have meant the money of America, would have to be further backed by Gold and Silver, and not purely credit based, which would have seriously hurt the Federal Reserve, and the Banking families that own that private organisation.
At any rate, we also know that just ten years’ later, a story emerged in the U.S. Tattler magazine, while the Vietnam war was raging, that all the Gold in the Federal Reserve’s Vaults was gone. Was this the reason President Nixon closed the “Gold window” on August 15th, 1971?
[Edit] And then I found this…
At this time, the Fed claimed to still have 8,700 tons of gold, though whether it was there or not is moot – a full audit of the Federal Reserve has not been carried out since 1953, and as a result of the article, a partial audit in front of cameras and the press was carried out – for public consumption… (Was this similar to the recent image of her Majesty Queen Elizabeth, visiting the vaults of the Bank of England, where she was pictured walking past surried ranks of gold bars – whose ownership is unknown?)
At any rate, just three days after the story was printed, – one Louise Auchincloss-Boyer, who was revealed as the source of this story, died after falling from the window of her 10th-floor apartment situated at 530, East 86th Street. The event was ruled a probable suicide and duly reported in the New York Times the following day.
Note: 59-year-old, Mrs. Boyer who died On July 3, 1974, was the grand-daughter of none other than Col. House, the man who guided the Federal Reserve Act through Congress way back in 1913, for J.P. Morgan, the Rockefellers, and Henry Warburg and company. Although to date it has not been determined whether there was a relationship, Jackie Kennedy’s father was Hugh Auchincloss. It is also known that Jackie’s grandfather helped John D. Rockefeller found Standard Oil.
Mrs. Boyer’s death lit the blue touch-paper of a firestorm of controversy and rocked a previously inviolable element of Americana — the security of the nation’s gold reserves held at Fort Knox.
Perhaps not coincidentally, Mrs. Boyer, stated that the Federal Reserve System was charged with the secret sale of U.S. Gold supplies overseas to super-rich David Rockefeller at below market rates.
The story stated that the Rockefeller family was manipulating the Federal Reserve to sell off Fort Knox gold at low prices to anonymous European speculators who were really fronting for them.
Mrs. Boyer was the executive assistant to former Gov. Nelson Aldrich Rockefeller (Remember where that name, Aldrich, came from?) Nelson’s grandfather, Senator Aldrich, was one of the founders of the Fed), and she had served him in various ways since 1944, as her husband had served Laurence S. Rockefeller for many years before his death two years earlier.
So if the Fed’s Gold, really has gone? What price gold on the open market?
Silver also has suffered a similar fate.
In between 1927 and 1938 (The Depression years), The U.S. Government and Federal Reserve Paymasters, purchased 50million ounces of silver, from the remnants of the Chinese dynasty – who would go on to form the government of Formosa, now known as Taiwan.
The price was paid in Federal Reserve Bonds – known as: “Federal Reserve Notes” Each note was for $500,000,000, and the series accrued interest at the prevailing rate.
Some years later in 1963, on November 11th, an agreement by President Kennedy, was made to pay the interest by issuing a series of new FRNs, known as “Kennedy Bonds”. The Silver thus bought, was never really paid for as to-date, these bonds have not been redeemed. (You can read the full-story in “The Coming Battle” available on www.scribd.com)
Are Kennedy’s death, and the two events mentioned above related? Perhaps… We can but speculate. But 1964, was the final year in which precious metals appeared in U.S. money.
The 50 million ounces, together with U.S. bullion, and the Treasury silver coinage amounted to a huge money supply, that for the Fed’s dominance to work as planned, had to be eliminated.
By all accounts 10 billion ounces have gone from the vaults over the last 70+years, and that over-supply has helped keep the price of silver depressed over that time period. But it has all but gone. And, as to the future price? Who knows?
It depends on how mission-critical silver is to business operations, and what percentage of that is required of the total value of their products, and whether the world supply can quickly rise to meet demand (or not).
If a business needs say 5 million ounces per year – highly possible, given that according to some reports, 15Kg is used in one Pershing II cruise missile… and it is used in tiny amounts, so a 100% rise might not matter much – neither might a 500% rise in price, but if you can’t GET ANY, at ANY PRICE… and your business has none, and there are NO substitutes…
Then the price is irrelevant… YOU WILL PAY… and for many applications… THERE ARE NO SUBSTITUTES. (Except Gold for some)
And the price of gold is currently 65x that of silver…
That’s one heck of a price jump. And when that happens – the dollar is toast.
And as yet another Bank is at risk of failure – Banco Espirito Sainto, in Portugal, and the Argentinian government defaults on its bond payments, is “The End” I spoke of recently upon us?
To paraphrase Churchill in 1940 after the Battle of Britain…
“It is not the end, it is not even the beginning of the end, but it is perhaps, the end of the beginning.”
As the British and American Media outlets focus on the downed Malaysian Airlines aeroplane, flight MH17, we have to look beyond the headlines, and the claims and counter-claims to look at the why…
The issue might even be taken to the United Nations. Words expressed. Actions condemned. Grand Speeches spoken. Accusations made and fingers pointed.
As I said in a former post, the crisis in Ukraine, may be the flashpoint that triggers the next round of the global currency war. And when we have currency wars, they usually end in hot wars.
(See here: http://moneymatterstoo.wordpress.com/2014/06/09/revenge-on-the-bankers/)
The events in the Ukraine, may be the prelude to a new hot war, just as in 1914 on 28 June 1914 the assassination of Franz Ferdinand sparked the First World War almost exactly one hundred years ago.
Archduke Ferdinand, (1863-1914) was born in Graz, Austria. As the heir to the Austro-Hungarian empire, he and his wife Sophie’s assassination, in an open topped car in Bosnia ended the attempts by Ferdinand to make European reforms.
Ferdinand, was asked to visit the capital of Bosnia, Sarajevo, to inspect army manoeuvres by General Oskar Potiorek of the Austro-Hungarian Army. Bosnia and Herzegovina were provinces that had been under Austro-Hungarian administration since 1878, by international agreement. Austria annexed the provinces outright in 1908, a controversial move which upset many governments in the west; however, some in Greater-Serbia were outraged.
They wanted the provinces to be part of a Serbian led pan-Slav state, (as finally actioned by Marshall Josip Broz Tito after WWII in the state of Yugoslavia) rather than part of the Austro-Hungarian empire. Ferdinand was also considering the idea of a federalism made up of 16 European states – an early version of the Euro Area perhaps?
A Serbian terrorist group, the Black Hand, resolved to assassinate Franz Ferdinand during his visit to Sarajevo on 28 June, thereby stalling his proposed reforms.
While riding in the motorcade through the streets of Sarajevo, Franz Ferdinand and his wife Sophie were shot and killed by Gavrilo Princip, a Bosnian member of the Black Hand; and due to alliances across Europe, the continent was dragged into a war, it could neither afford, nor avoid. Britain was forced to leave the Gold standard to pay for munitions, without giving up the Gold it held, it would not be able to buy the equipment and train its army.
BUT, the bankers got their pound of flesh… They always do. Notice something here?
Without Bankers and their flexible currencies, governments of all political persuasions, would have to balance their budgets and pay for things with real money – Gold and Silver. And if governments don’t have that gold or silver, they have to pay with promissary notes – a kind of I.O.U.
That’s what the origins of paper currency were… you can tell by the words on them…
“I promise to pay the bearer on demand the sum of…” It used to say “in gold” or “in silver”.
The British Pound was once literally a receipt for a one pound weight of Sterling Silver. And the British Guinea was a one ounce coin of pure gold. Latterly the gold sovereign, that became popular in the 1800s, and made the British Empire, was seen in the film: “From Russia With Love”. James Bond played by Sean Connery, is given 50 gold sovereigns to take on assignment, and this became the coin of choice for international transactions.
And Foreign governments, they want paying in Gold or Silver too, especially as paper currencies can be manipulated – devalued. You buy things with paper currency, then you devalue that currency, and the foreign nation feels aggrieved because it thought it was going to get full value for its goods supplied.
Just as President de Gaulle in 1965 sent his dollars to the Gold window to “cash them in” and Britain too requested $3billion in gold in 1971 just days before President Richard Milhous Nixon, announced to the world, that he was closing the Gold Window on August 15th, 1971.
As the BRICS nations – Brazil, Russia, India, China and South-Africa last week on 16th July, held a conference in Brazil, where they unveiled a new financial institution, as they had signed a deal to create a new $100bn (£58.3bn) development bank and emergency reserve fund – Is this the first volley in the battle against the U.S. and the Dollar hegemony, with its puppet-masters the IMF and Worldbank? Or is it just one of many recent nails in the dollar’s coffin?
The New Development Bank’s first president will be from India while the board’s chairman will be Brazilian, according to the declaration released at a summit in Fortaleza, Brazil.
Tuesday’s deal was reached after intense last-minute negotiations to settle a dispute between India and China over the headquarters of the new bank.
Brazilian President Dilma Rousseff, said setting up the currency reserve was a priority for the countries to protect themselves from crisis scenarios: “It will be a kind of security net to increase protection for BRICS countries as well as other countries. It’s a question of our security.” Those other members are expected to be many of the South American nations, with the number of citizens involved over half the world’s population.
The other four leaders present were Russian President Vladimir Putin, Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and South African President Jacob Zuma.
The bank and fund are seen as counterweights to the U.S. dominated World Bank and International Monetary Fund, which BRICS nations say needs more reform to give emerging nations more voting rights.
India’s presidency of the new BRICS bank will be for five years, according to Reuters, but no decision has been made yet regarding which country will hold the next presidency.
The bank is expected to make its first loans in 2016. Is that date significant?
The BRICS countries have a shared desire for a bigger voice in global economic policy, given that they now account for 21 percent of global economic output and have contributed 50 percent to world economic growth these last ten years.
Given China’s entry to the World Trade Organisation, which requires a freely floating currency, by 2015, will China’s gold acquisitions mean that it will gravitate towards Global Reserve Currency? I suspect so, and that might mean that the 2016 date IS significant.
India, in 2009, bought over 200 tons of Gold from the IMF at market rates to provide liquidity for the bank. So is the next volley to be fired in this global currency war likely to be this year?
And is the downing of the plane in Ukraine, and the political commentary, especially by David Cameron, a timely reminder of events in Europe of a hundred years ago?
It is just possible that Ukrainian forces might have deliberately targetted the plane to engage outside forces in a military campaign for their own ends. The “Why” is the question. “Qui Bono?”
And if this does become a hot war, between east and west, what price Gold and Silver, as hard up western governments have little or no gold left to sell. And most of the existing Gold has headed east. So, if you were trying to limit your opponents military, which minerals would you be stockpiling or removing from global markets? And what price on world markets? (See my previous post: Revenge on the Bankers)
As I’ve said before, when any currency falls due to banking madness and political lunacy, there’s only one solution really…
Those who have been reading this blog for some weeks or even months now, have perhaps lost interest in the machinations of the Federal Reserve, or the Chinese accumulation of Gold and Silver.
But if what I’ve been reading in recent days is even half-way true, then the next two years will reveal how the Chinese have been playing America for a “CHUMP” as the Americans might say.
If you’ve been reading my missives over the last 6 months, you will have learned that in 2012, China imported over 2,000 tons of Gold, and a similar amount last year. James Rickards thinks the Chinese have accumulated over 5,000 tons since they began their buying spree, which took on a life of its own in 2004, after modest accumulations in the preceding 30 years, sourced mainly from internal mining.
In the late nineties, the U.S. had lost approximately 200+ tons per year to overseas buyers. This little detail was discovered in document FT900.
And the Chinese have been accumulating through several import routes, though apart from their pronouncement in 2009 that they had over 1,000 tons, they have been remarkably silent on their current Gold holdings.
In 2009, when they made their last pronouncement along with it, they made what perhaps at the time seemed an unusual statement.
According to a Reuters article:
“China’s SOE regulator, the State-owned Assets Supervision and Administration Commission (SASAC), had told the financial institutions that SOEs reserved the right to default on contracts”
SOEs for those not familiar, are “State Owned Enerprises”, and includes Banks, and other large commercial organisations still under public, and thus communist party control.
SASAC took over the job of overseeing SOEs’ derivatives trading from the securities regulator in February 2009, after several Chinese firms reported huge losses from derivatives, and quickly tightened the rules, ordering firms to quit risky contracts and report their positions on a quarterly basis.
As I have discussed before, China has been importing gold at a sprint since 2004, and increasing amounts.
China’s Yuan – New global reserve currency?
As well as this they have been for some time the world’s biggest producers of Gold.
Rumours abound of Chinese officials scouring West African nations, but particularly Democratic Republic of Congo, and Ghana, buying up Gold at the spot price from artisanal miners, and tales of Chinese miners with guns to protect themselves, and to intimidate local officials have come to light too, and those miners are sending their recovered gold back to China to support families back home, who will send it to the Chinese Central Authorities to add to their stock-piles.
These resources are perhaps approximately another 40 tons per month back home.
And there’s more – I also learned last week, that Russian junior Gold miners who have been mining small claims, are also sending their Gold to China, and because of export restrictions from the Soviet era, have been turning their gold into knives and forks to get through customs restrictions, (albeit illegally) and this too has been exporting several tons per annum.
When you add in the gold that comes from Canadian, African, Australian, and South American mines that the Chinese have bought in recent years, their Gold holdings could be now even bigger than the alleged 8,100 tons that the Fed claims to have, but which few in the Precious Metals sphere believe is still there.
So what is the Chinese game plan?
The statement made above by the SASAC could be a clue.
Ever since 2008, and even in 2003, the Federal Reserve have been expanding the money supply, according to some reports I’ve read this could be as much as $4 trillion since the end of the tech-boom, that fuelled the biggest stock-market rally in history.
The recent rally in 2014, in which the DOW climbed to 17,000 was largely pumped up because of the cheap money being pumped into the economy.
And the Chinese have stated that they “MAY” default on derivatives. Is this because they expect the Fed to default on its Gold supply, which according to several reports – using a motoring analogy – is on fumes. It has been stated by several experts, that the supply in the vaults at JPMorgan, Goldman-Sachs and the other large American Bullion banks are down to the tens of tons, at least according to Harvey Organ’s Blogspot.
Indeed according to figures provided by Harvey Organ, the American bullion banks have already defaulted on many of their contracts, but the parties to those contracts have been bought out.
And we know that ABN Amro the largest Dutch bank has already informed its clients that they will not be supplied with their precious metal, but the cash equivalent. What will happen if all those derivatives contracts decide they want their precious metals, and the cupboards are bare?
Can you say – KABOOM?
And to add one more piece to this particular jigsaw, I recently learned that the Federal Reserve, is planning to cut the cord between real money and those numbers on the bank’s ledgers, even further. The story goes that the Federal Reserve will stop the use of American paper currency in the very near future. Quite possibly as early as September 2014, which would mean that all those paper dollars sitting in private vaults, household safes, overseas corporate and money-laundering crime bosses’ underworld slush-funds, and drug-dealers’ suit-cases, will have to be spent, or deposited in bank accounts somewhere in the world or risk being lost.
The amount of paper currency in circulation, if spent in a wild spending spree could be the trigger point, that sends the value of the dollar into a tailspin, or more likely inflation into the hyper-sphere – giving the Feds, a huge problem as the US economy balloons and then busts taking the world with them.
And China’s gold reserves, would then become the hard asset backing that the United States currency used to have, and has used to attain global reserve currency status, and this will allow the Chinese the opportunity to become global overlords as the American Military became on the back of their free spending ways.
So is there an antidote to this forthcoming mayhem?
When any currency falls due to banking madness and political lunacy, there’s only one solution really…
Buy Gold, Silver and Crypto-currencies young man, and soon – It’s gonna get a lot more expensive.
“The financial illiteracy of the uneducated lower classes and the willful ignorance of the supposedly highly educated classes has never been more evident than when examining the concept of Federal Reserve created currency debasement – also known as inflation.
The insidious central banker created monetary inflation is the cause of all the ills in our warped, deformed, rigged financialized economic system.
The outright manipulation and falsity of government reported economic data is designed to obscure the truth and keep the populace unaware of the deception being executed by the owners of this country. They have utilized deceit, falsification, propaganda and outright lies to mislead the public about the true picture of the disastrous financial condition in this country.”
- James Quinn
James Quinn is a Senior Director of Strategic Planning for a major university. He has held financial positions with a retailer, a homebuilder and university in his 25-year career. He earned a BSc in Accounting from Drexel University and an MBA from Villanova University. He is a Certified Public Accountant (CPA).
Do James Quinn’s comments make you see red? Either for or against Bankers who buy politicians, and manipulate reality, to suit themselves?
If so… Do you want revenge on the Bankers?
Well to do that, the short answer is to get a whole lot more money than you currently have.
Are you asking: “How do I do that?”
Depending on where you’re starting from, that can be a lot easier than you think.
It’s a truism, that to become rich, you have to spend less than you earn, and invest the difference. If you have excess finance, in a low interest environment, it can pay to borrow to invest, and use the additional leverage to make money faster. Provided you can get a better return than the cost of borrowing. (But you have to watch borrowing costs carefully, as things can change quickly.)
And, it doesn’t matter how much you earn, it all starts with savings. BUT if the value of your savings are being stolen, time after time, by Central Bank induced price inflation, then what better revenge on those central bankers than to become rich using the very things that they seek to hold from you.
Twenty Five years ago, I was a Business Studies Lecturer in several Community Colleges, before the technology bug bit me, and I moved into the field of Computing, building PCs, PC Networks, and eventually writing Software in over 33 different computing languages and variants. I even went on to work at Dell Headquarters in Roundrock near Austin, Texas. However, about the same time I began teaching, a fourteen year old school-kid found an old Golf Cart in Wisconsin, abandoned from a nearby Golf resort, and the birth of a new technology had found its roots.
Like many 14yr old boys, J. B. Straubel, began playing about with this old vehicle, and “tinkering”; like I did at a similar age, when I bought a second hand Motor-Scooter to ride off-road on the local wasteground near my home. But, Straubel, was no ordinary kid. This boy was to become a technology genius.
The abandoned golf kart, had an 11 brake horse power motor, and a flat out top-speed of 15mph (24kph), if you took it on the open road; and like many teenagers enamored with their latest vehicle… Straubel asked the question, “How can I make it better; go faster?”
Straubel’s tinkering, resulted in him retro-fitting a “micro-turbine” and a high-speed flywheel, to assist in re-charging the battery, and this tinkering, eventually led him to two technology giants – the Rosen Brothers.
Harold Rosen, and his brother Ben.
Harold Rosen, is an aeronautical engineer, who had been instrumental in launching America’s first geo-stationary orbital satellite, in 1963.
Ben Rosen, had been the Chairman of Compaq Computers. Together they funnelled money to Straubel who by now had a Bachelor’s Degree in Energy Systems Engineering and a Master’s Degree in Energy Engineering from Stanford University, and a $24million research project. This led to the development of a Gas-turbine engine, which was coupled with a hybrid power-train with an energy storage sub-system that used regenerative braking. In plain English – A Hydrogen powered fuel-cell, with Batteries to store the energy which is also generated by the braking system.
This technology is expected to double the range of existing technologies, and uses can be found in the military sphere. The Company founded to produce this technology was Volacom, which Boeing eventually bought.
However, the technology led to NASA’s Phantom Eye project, which led to development of a Hydrogen Powered Aircraft, whereby an un-manned aerial vehicle could fly to 65,000 feet, and stay airborne for FOUR WHOLE DAYS! Imagine the military uses for an aerial vehicle that can stay aloft for that long? Weather Reports? Reconnaisance? Spy-Cameras? And no pilots to be shot down… And that was just the start…
The Phantom Eye project from NASA, led to a project codenamed “Vulture” which led to the development of a similar vehicle, but this time Solar-powered, that will fly to 90,000 feet and stay afloat for FIVE WHOLE YEARS… Now imagine the possibilities of THAT?
Straubel even went on to turn an old Porsche 944, from the 1980s into an electric vehicle, and briefly claimed the world record, for an electric vehicle using it.
But where is all this technology taking us?
In order for TESLA Motors, (TSLA:NYSE) to achieve their goals, to produce an electric car for the masses, they will have to get the price down to around $30,000. (circa £18,000)
To do that, they will need to build around half a million vehicles a year, at their so-called “Gigafactory”, and that’s where J. B. Straubel comes in.
Most of the patents filed by TESLA, have Straubel’s name on them, not CEO Elon Musk’s. Straubel is co-founder, and their Chief Technology Officer, and their Gigafactory whose intended location is still to be disclosed will be announced later this year, using many of these technologies.
But for TESLA to achieve the price they want, they will have to use every trick in their VERY extensive technological book, to reduce costs – Solar Power for the plant; huge land expanse, Lithium and Graphite close by, rail links, nearby technical staff, and of course all the materials to build the plant, and get materials into and finished cars out of the plant with ease. That means a rail main-line nearby, with an access raillink. It means rolling stock, and the weather needs to be just right – with 300+ days of sunshine per year.
The list of TESLA’s suppliers is not long, but it is long enough. And if their new factory achieves its goals, and TSLA achieves its production and other targets, these suppliers will all make huge sums from their order book.
TESLA Motors’ Known Suppliers:
Hitachi Cable America
Zanini Auto Group
and of course TESLA themselves.
The above companies supply everything from disks and disk brake-pads, springs for suspension, tail-gate lift suspension arms, high-tech radio equipment, mirrors, cables and heat management units for the batteries. And currently these batteries are produced by Panasonic.
BUT there’s something that is not mentioned in this list of all this equipment… WHO Supplies the Lithium Carbonate for the Lithium-Ion batteries?
Or who delivers the batteries, and with freight costs for the Lithium for the batteries a big piece of the overall price, with each battery pack weighing upwards of 1300 lbs, keeping the distance between supply and final end use to a minimum will be a serious cost saving? BUT, what if the company supplying the Lithium has the lowest costs of production, large resources, and has access to large resources of Graphite – and you need 4 times as much Graphite as you do Lithium to make a Li-ion battery?
Graphite is four times more conductive than copper, and the Li-ion batteries rely on a thin graphite polymer film sheet, that can withstand temperatures that reach upto 400 degrees celcius (752° F).
There is one American Tech Company, which is, the same company that produced the Graphene shield (made from graphite) that shielded the Mars Rover that NASA recently landed on the moon that may become one of these suppliers.
This company holds many patents for a huge array of Graphene based technologies, and Graphene is 200x stronger than steel. So strong you could balance an elephant on a pencil on one sheet, and it would hold up. And so light it will revolutionise aircraft design. And that company is? Graftech International (GTI:NYSE).
Of course, the U.S. Geological Survey team already knows about 5.5million tons of Lithium, in the U.S., and just last year, in Wyoming, the University of Wyoming found 18million tons of Lithium, equivalent to about 720 years of current global lithium production.
But also, one North American based Corporation, has a Joint Venture with a British Company, who have recently found a considerable Lithium resource close to where it will be needed and the British Company owns 30% of the resource figures of 119,921,000 tonnes, at a 1.66% Lithium Carbonate Equivalent (LCE) giving 3.28 million tonnes, meaning this small Canadian Corporation owns the other 70%, and this company, as of 4th June, trades for less than one dollar with its price already up 538 per-cent from its year low.
That company is Bacanora Minerals Ltd (“Bacanora” – BCN:TSX).
And with TESLA set to announce the location of its Gigafactory later this year, and to build the infrastructure to build 500,000 electric vehicles per year by 2017, this means, this company’s share price is ready to pop further.
Rare Earth Minerals Plc (LSE AIM: REM) the British company just mentioned, has an option to purchase upto 49% of the project, and recently announced that the Mineral Resource for the Sonora Lithium Project in northern Mexico has increased by 37% to a new total of 3.28 million tonnes of Lithium Carbonate Equivalent (“LCE”) and has been upgraded from the Inferred to Indicated category. A Preliminary Economic Assessment (PEA) will now be carried out, and this will determine if the economics work out, but it will also give plenty of opportunities to buy at low prices, if as I suspect, a major stock-market downturn is not that far away – just about as soon as interest rates start climbing, to rein in inflation over 5% p.a. – though that may be several years away.
This corporation also has another mineral resource with a pilot plant in operation to test the potential of producing Boric Acid, which is used in hundreds of applications, and is likely to generate more income from the resource.
However, there are also lithium reserves at Rockwood Holdings’ (NYSE:ROC) Silver Peak site in Nevada which has an estimated total of 118,000 tons of Lithium in a 20-square mile area; Rockwood is also one of the world’s leading producers of Lithium Hydroxide.
And you better be ready soon, because Jim Rickards is CONVINCED, that as the old saw goes: “The End Is Nigh.” Some extraneous event will trigger the collapse. No-one really knows what that could be, but we can take a few wild guesses – Ukraine spiralling out of control, or a huge new event in middle-eastern politics, or even a military spat between China and Japan, or similar. And China recently sank a Vietnamese fishing vessel fishing in the South-China Sea. Could an event such as this trigger events between East and West? Just such an event instigated by an angry Serb, who shot Archduke Ferdinand, in modern day Bosnia, caused the start of the first world war, due to the number of cross-border alliances.
And if you’re not ready, then there is precious little time left.
As I recently said and as Miles Frankin has echoed – American “exceptionalism,” may be the death of us.
For those keen to learn a little more about crypto-currencies, and hear a debate between those for and those against watch this.
And for those looking to maybe dip a toe in the water and get some crypto-currency – go here —>>> http://qoinpro.com
And we know that Russia is taking its own revenge as they unload U.S. Treasuries. Unknown to the world until recently was what they were doing with their money. Well now we know. According to Billionaire Eric Sprott, here’s what he had to say in a May 28th report…
“Since the economic crisis began, Russia has unloaded an estimated $50 billion in U.S. Treasuries.
Until recently, investors were unsure of what Russia would do with the proceeds of them. Last week, the Central Bank of Russia shed some light on that question when it disclosed that it acquired an additional 900,000 ounces of gold in the month of April.
This brought Russian gold holdings to 34.4 million ounces, making it a major and actively growing player in the world gold market.
Since 2006, Russia has been acquiring the yellow metal at a rapid rate.
On average, they have been adding 0.5 million ounces per month to their reserves, as seen in the chart below.”
|Russian Gold Reserves – Source – Eric Sprott of Sprott Money|
And if you think that the recent price fall of Gold and Silver over the last 2+ years portends what is to come, then perhaps you ought to check out a chart I posted in a previous post, that showed how the Gold price responded in the 1970s. Two major arcs from the late 1960s, to early 1980.
Are we seeing the same processes played out, but over a longer timescale, as the baby-boomer generation retire, and in retiring, their pension companies sell their investment portfolios, to raise the capital to pay the income, or to buy the annuity. That constant drip drip of selling – 10,000 per day in the U.S. alone, and a similar number in Europe, is the driver of the stock markets in the absence of Central Bank Quantitative Easing. As Fed QE is tapered, this trend may re-assert itself.
Once the number of pensioners retiring begins to fall – circa 2018 to 2019, then we should see inflation beginning to rise – possibly precipitously.
Just like in 1978. The time to buy any silver or Gold will be in the next year or so, to sock it away ready for the J-Curve, I mentioned in one of my posts last year.
And if you want some Silver or Gold, then here’s a great way to buy it, as the price reaches its interim lows. Liberty Silver
Those economy watchers wondering why today’s U.S. jobs numbers were below expectations might like this little piece. Which gives an insight into China’s economy.
Will the PBOC and the Fed reverse their tapering? We shall see, but you can bet that if the pull-back gets much worse, the expected tapering will become the thin end of the wedge.
And what to do about it? There’s a few clues.
The latest skuttlebutt from China, is that China’s phenomenol growth story of the last 15years is coming to an end.
HSBC, reporting from the far continent suggested that a number of datapoints strongly indicate that the 10% plus growth of 15 years ago, and the 7.5% growth that has been normal throughout the last 5+ years while the west has been in the worst recession in over 70 years, is finally weakening.
Supply of houses in some of the larger cities, reached 15months supply, in tier 2 cities, and about 2 years in tier 3 and 4 cities.
However, house prices climbed in 44 of the 70 cities, but down from the 56 cities where prices had climbed in March, as monitored by the government’s statisticians.
Greenpoint, one of the largest Property Developers in Zheijang province reported that propery prices dropped 0.7% from the previous month, and housing in some of the northern cities is close to ten years’ supply.
Off the record remarks from one large company exec – Mao Da Qing, of Vanke Group, admitted that its stock of housing units was at over a 100 month’s supply.
Some developers in the Beijing area are attempting to stimulate demand by slashing prices. One even offered discounts, of upto 50%, and some with “Zero-down” loans such as were common in western economies in the lead up to the bubble of 2008, while others are attempting to add capital to their businesses to provide some security. All this is just more grist to the mill of the Boom becoming a Bust, and the over-development being similar to the bubbles that built up in western economies during the heat of the housing boom, but on a far grander scale.
In fact reporters from America have noted on several occasions of the huge number of vacant properties in some of the newer cities, as over development has meant visitors to these towns say they resemble “Ghost Cities”. But will this over-development mean a hangover, for the financial authorities as loans for development go unpaid, as properties go unsold?
China’s political leadership may not be too concerned, in regards to the cooling market, and they appear unwilling (at the moment) to reflate the economy via more Quantitative Easing, but going forward, if unemployment rises from the circa 15% reported by Will Hutton in his 2007 book, “The Writing on the Wall”, at around 170,000,000. (I suspect they may change their mind if the economy goes into freefall – as anything less than about 5% growth, would be seen as insufficient to keep the population quiescent)
Even if Bank of China has seen its market capitalisation shrink from RMB1 Trillion in 2010, to RMB740 Billion in recent months, will this mean less, or more, government intervention to keep the economy burbling along?
China’s Answer To Deflation?
If deflation does begin to take affect, with energy growth declining, and China’s Coal fired power stations looking for ways to reduce the pollution, that China seems to endemically suffer from, by cleaning exhaust fumes, without pushing up costs even while Mr Putin signed a deal to provide Gas to China, in an effort to clean up China’s air; what will the political elite do?
It is well known that China has been accumulating precious metals with increasing fervour in recent years. Is it the intention of the government and its economic wizzards to hedge their economy with large doses of Gold?
According to Byron King of King Capital, precious metals and natural resources commentator, and regular visitor to the middle-east’s hotspots, China is on track for being the world’s largest Gold holder sometime in the next 18months. Jim Willie who also comments on such matters has weighed in with a perhaps rash claim that they already have 10,000 tonnes, and Russia with 20,000 tonnes.
However, as imports through Hong Kong are reported via their financial authorities, China has also begun importing directly through Shanghai’s and Beijing’s financial heart and reports of buying through alternative channels, which are not reported, so this is a distinct possibility.
Reports of Chinese miners working in sub-Saharan Africa, sending back Gold to support families back home, and of Chinese officials buying at spot price from artisanal miners in Democratic Republic of Congo (DRC) bringing in upto 40tonnes per month. It is therefore not outside the bounds of possibility.
And as a recent report of Dark Dealing in the Banking world suggests it is not just the “Morgue” (JP Morgan-Chase) and Goldman-Sachs who are involved in manipulating the Gold markets for their own (political?) ends.
Daniel Plunkett was a precious metals options trader for Barclays. On 28th June 2012, he was in hot water about to lose a considerable sum unless the Gold price fell that day. The Bank would have had to make a $3.9m payment to a client on an options contract. Plunkett had other ideas… He began selling Gold just before the 3 o’clock fix, and the contract was due to expire, and the price fell, netting him and the bank a $1.75m profit.
Of course the plan didn’t have a happy ending – at least not for the Bank, or the Trader. The client smelled a rat, and after an internal investigation, Barclays agreed to repay the $3.9million. The Financial Conduct Authority, fined Barclays £26m, and the trader £95,600 and a ban from ever working in the city again.
But is shows what happens where large sums are involved – desperate people do desparate things – and the Chinese? With the Fed’s policy of loosening of monetary stimulus, still at $45 Billion per month, and the Chinese holding $1.3 trillion in currency reserves, every 1% fall in their dollar reserves value is the equivalent of $13 Billion in lost purchasing power – enough to build 25 hospitals at half a billion each.
America’s Deflation Gathering Strength
If the figures released recently by the American statisticians indicate anything, it’s that the U.S. economy is also far from strong. Housing prices in the U.S. have risen recently partly because investment funds have been snapping up what were perceived to have been low prices in housing. But we also need to consider whether today’s youth of America are as wedded to the idea of home ownership as their more affluent forbears.
Many twenty somethings are now leaving college heavily indebted and without the jobs that would sustain long term mortgage payments as rapid changes in technology mean jobs are no longer secure for life, but until the next big thing comes along to disrupt the economy.
As I’ve said on many occasions before, the antidote to more financial manipulation by those in the centralised financial services industry is to decentralise.
Bitcoin, and the 80 or so other digital currencies may yet prove to be the undoing of so much influence, and skulduggery, as banks are stripped of their money creating powers over time, and governments are stripped of their tax raising powers, except on those with hard visible assets, such as property.
Perhaps that is one more reason, why the young are eschewing property. What you can’t see, you can’t tax. And at least for now, Bitcoin, Litecoin, Feathercoin, Maxcoin, Ultracoin and the others allow people to exchange values, without money changing hands.
And in recent weeks the big pull-back in Bitcoin that happened after the bankruptcy of Mount Gox, has partly been regained as the price of one coin, rose to $581 late this last week from its $400 lows.
For those keen to learn a little more about crypto-currencies, and hear a debate for and against: watch this – Peter Schiff, and Stefan Molyneux.
And for those looking to maybe dip a toe in the water and get some currency
- go here —>>> http://qoinpro.com/1cb9b86337f6a2ef22a0c9bb1db4fad8
Those who think Peter Schiff has it right, maybe they will need to address that by buying what I believe is the most undervalued metal on the planet, and I’m not the only one who thinks so either… Ted Butler of the Butler Research Group thinks so too.
And if you are looking for a way to buy some silver. I can heartily recommend Liberty Silver
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