Rock Star Amongst the Gold Bug Community

Alan Greenspan, former Federal Reserve Chairman, had a lot to say about gold, and a little about silver, at the recent Council on Foreign Relations meeting. Greenspan is saying things that make you go hmmmmm and begin asking questions like why now, what’s happening in the background that is about to explode to the forefront. The US Mint is currently sold out of the premier silver coinage in the world, the American Silver Eagle, without warning and more importantly, abut when they will resume production. The price to acquire both gold and silver have been beat into submission, to price levels not seen in many years. How low will they go? Only the manipulators can answer that question. But while we wait it may do a person good to breathe in what Greenspan had to say about gold, silver and the Central Banks role regarding real, honest money. It is also interesting to note what he has to say about currencies, fiat currencies in particular.

“…intrinsic currencies like gold and silver are acceptable without a third party guarantee”

Gold serves a very important place in monetary reserves…

Why did Central Banks put money into an asset which has no rate of return, but cost of storage and insurance and everything else like that; why are they doing that? If you look at the data, with very few exceptions, all of the developed countries have gold reserves. Why?”
– Alan Greenspan, October 29, 2014

Dave Kranzler reports

TETT:  Do you think that gold is currently a good investment?
GREENSPAN: Yes… Remember what we’re looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can macth it.  (source: Zerohedge).

Apparently that was part of an interview that never made it into the transcript published by the Council on Foreign Relations with Greenspan by the Financial Times’ Gillian Tett (LINK).

The precious metals’ sector spiked higher today by a considerable amount after the Government-manipulated employment report missed the markets’ expectations.  Gold and silver have been relentlessly pushed lower by the western Central Banks’ repeatedly dumping large quantities of gold and silver paper gold contracts onto the market during the least active trading periods of the trading day (typically overnight between the end of India/China trading and the start of London.

The mining shares have been demolished to the point at which their value collectively in relation to the price of gold is the cheapest in market history.   Mining industry godfather, Pierre Lassonde, stated in a interview with King World News that he just put $10 million in mining shares:    I just put $10 million into the market today in gold equities. I can’t help myself. From now until early December is the best time to buy shares because people are literally throwing the shares away. By the end of December the market will turn around, and at some time between January and March you will double your money.  (LINK)

I’m not close to calling a renewal of  a bull market in the sector but the mining shares had a huge day today.  Many individual stocks were up over 10%.  We know the U.S. Mint is out of silver eagles and has suspended all orders.  According to a few coin dealers with whom I chatted with today, the Royal Canadian Mint has apparently temporarily suspended sales of gold and silver bullion coins (I have not been able to directly confirm that).

At some point, the metals/miners are going to re-price at a significantly higher level.  Just on pure supply/demand, if nothing else.  My new favorite silver miner was up nearly 10% today.  It has outperformed the sector during this brutal sell-off period and I expect that it will outperform on the way back up:   Mining Stock Reports.   This Company now produces cash flow down to about $12/oz (base on all-in costs) and its operations were generating free cash flow late in the 3rd quarter.  My report shows probable price targets even it silver were to go sideways at the current price level.

So, the Royal Canadian Mint may be out of stock as well. hmmmm. The two largest government mints are either completely out or at levels that is making everyone uncomfortable. But the price goes down!! Welcome to the new normal.

Koos Jansen posted this video which so you can get the poop straight from the horses mouth

Alan explains there is only one real currency: gold.

For some reason, the Council of Foreign Relations, where ex-Fed-Chief Alan Greenspan spoke, decided the following discussion should be left out of the official transcript. We can perhaps understand why… as Gillian Tett concludes, “comments like that will be turning you into a rock star amongst the gold bug community.”