Andy Hoffman: Central Banks Have Confused Investors About the Value of Gold
By Anthony Wile - December 07, 2014

Introduction: Andrew ("Andy") Hoffman, CFA joined Miles Franklin, one of America's oldest, largest bullion dealers, in October 2011 and serves as Marketing Director. For a decade, he was a US-based buy-side and sell-side analyst, most notably as an II-ranked oil service analyst at Salomon Smith Barney from 1999 through 2005. Since 2002, his focus has been entirely on precious metals, and since 2006 has written free missives regarding gold, silver and macroeconomics. Prior to joining the company he spent five years working as an investor relations officer or consultant to numerous junior mining companies. Andy's articles can be found on the Miles Franklin Blog, at

Daily Bell: What a month for gold. What's going on?

Andy Hoffman: Remember, all markets are now manipulated on a 24/7 basis. It is the only way TPTB have been able to maintain their fiat Ponzi scheme this long, by "painting" markets like stocks and precious metals to tell the story they want told. Of course, not all markets – like crude oil and Treasuries – are not cooperating. Nor, for that matter, the physical gold and silver markets, which tell a dramatically different story than the suppressed paper markets. This particular month, the paper-based raids were more aggressive, as TPTB were terrified the Swiss referendum would be passed, forcing the SNB to buy 1,500+ tonnes of gold.

Daily Bell: The Swiss gold referendum was soundly defeated. What happened?

Andy Hoffman: In a nutshell, even the "world's smartest 0.1%" regarding the value of gold have been brainwashed by central bankers and market manipulation into believing the referendum was a bad idea. Heck, these were the same people that allowed constitutional gold backing to be surreptitiously removed, enabling the SNB to sell 1,500 tonnes of their gold at less than $400 per ounce and subsequently, to peg the Franc to the dying Euro in 2011, preceding an historic 16% plunge that is on the verge of getting much worse. The reason given was to improve Switzerland's competitiveness, but Swiss GDP growth has averaged a paltry 0.4%/quarter since its cost of living is so high, they had a referendum this year about raising the minimum wage to $25/hour! In other words, TPTB still have the Swiss duped – which I assure you, they'll understand more clearly sooner rather than later.

Daily Bell: Were you disappointed by the Swiss referendum? Did you have higher expectations?

Andy Hoffman: Yes, I was, as the initial polls – before the aforementioned propaganda and market-rigging scheme were executed, favored a yes vote. In fact, the attempt to quell gold sentiment was so powerful, they closed down the eBay account where foreigners could contribute to the "yes" campaign, and didn't allow the leader of the "yes" movement to participate in the televised debate. In my view, this was the last chance for the people to deal a blow to TPTB before the real chaos begins, and they failed.

Daily Bell: Why do you think the Swiss voted against it and in such quantities?

Andy Hoffman: First of all, I have significant doubts regarding the integrity of the vote. However, it is not unheard of for such referendums – like in Catalonia, Spain, for example – to see major sentiment swings in short periods of time. However, assuming it was a legitimate vote, what I noted above – of massive anti-gold propaganda and viciously attacking PM prices for the preceding month – swayed public sentiment.

Daily Bell: Has Switzerland changed?

Andy Hoffman: The people haven't changed, but a decade of central banking market rigging have temporarily confused even the world's most financially savvy population. They are now essentially a European vassal state, but I assume they will re-embrace their financial neutrality when the next financial crisis hits and the Euro-pegged Franc collapses – and with it, the SNB's bloated, insolvent balance sheet.

Daily Bell: Is the old Swiss republic finished?

Andy Hoffman: I doubt it, but right now it's in a dramatically weaker financial position than at any time in its history. Heck, in just three years' time, the SNB's balance sheet has ballooned to 80% of GDP to protect the Euro peg. This compares to 25% for the Fed, 30% for the ECB and 50% for the Bank of Japan, to demonstrate just how suicidal the SNB's policy has been.

Daily Bell: What do you think of UBS and Credit Suisse? Are they a new kind of Swiss bank?

Andy Hoffman: No, just plain old criminal European banks. And now that they kowtow to U.S. political pressure, they no longer can even purport above average client privacy.

Daily Bell: What happened to Swiss private banking? It seems in disarray.

Andy Hoffman: Per above, the Swiss no longer value their neutrality and independence. Its politicians and bankers are now more interested in garnering favor with the corrupted London, Brussels and New York establishments, there appears to be little reason to trust their stewardship any more than the rest. If they had voted "yes" on the referendum, they could have reclaimed their heritage. But instead, they chose to sell their souls to the printing press.

Daily Bell: Do the Swiss really benefit from having the franc linked to the euro?

Andy Hoffman: NO, NO, NO! Per above, not a single benefit has accrued to Switzerland and the nation's financial condition has been dramatically weakened in just the three years since the peg commenced. And just wait until Europe really collapses next year and the ECB goes hog wild devaluing the Euro with QE.

Daily Bell: Where is the euro headed? Will Draghi be able to stimulate the way the US has with QE?

Andy Hoffman: The Fed has NOT stimulated anything except financial markets, whilst the Main Street U.S. economy has dramatically suffered. And now it's weakening anew, with record debt, zero interest rates and record low faith in central banking. As for the ECB, all I can say is LOL. Draghi doesn't even have the reserve currency to work with and politically, Europe is about to tear apart. Printing more money will only make things worse, as it always does.

Daily Bell: What about Japan? How has Abenomics worked?

Andy Hoffman: It's proven that money printing only makes things vastly worse. Heck, they just increased Abenomics dramatically and cancelled the sales tax increase that was supposed to "pay" for it. The Yen is in free fall and if the people re-elect Abe in this month's snap election, they will make the Swiss "no" vote look like no big deal. I continue to maintain that the "Land of the Setting Sun" will be the first "first world" nation to experience hyperinflation.

Daily Bell: Will the golden bull resume its momentum at some point? When?

Andy Hoffman: OF COURSE! It always beats the printing presses and always will. Ironically, the "bull market" is deemed to be over despite record global gold and silver demand in 2013, which will likely end 2014 at even higher levels. The gap between suppressed paper prices and real physical metal fundamentals has never been wider and the recognition of such is expanding like wildfire. In my view, gold and silver have never been cheaper throughout history – and I doubt they'll stay that way.

Daily Bell: Is gold unpopular in the West these days?

Andy Hoffman: Absolutely. Sentiment in the West – such as Miles Franklin – is as low as it's been since the bull market commenced in 2000. And yet, the U.S. and Royal Canadian Mints had record silver sales last year, which will be surpassed this year. This is because the wiser Easterners are actually buying them out!

Daily Bell: Is gold more popular in the East?

Andy Hoffman: That's the understatement of the century. Record demand in China, India, Russia and even Japan (where, by the way, Yen-priced gold is nearly at an all-time high). Eastern demand will NEVER stop growing; it's just a matter of when TPTB's efforts to suppress Western demand inevitably fail.

Daily Bell: Do you see the gold-buying habits of Asia and China diminishing?

Andy Hoffman: NEVER. They will only become more voracious, given their multi-century understanding of the dangers of fiat money.

Daily Bell: How about India? There were some changes regarding gold in India recently. Your take?

Andy Hoffman: The same. India has always been the world's largest PM consumer, and now that the fiat-loving Congress Party has been swept out of office, the insane tariffs and import restrictions they imposed – which, frankly, created nothing but a massive importing black market – are being lifted. India will likely reclaim its leadership in gold imports in 2015; and as for silver, tariffs notwithstanding, 2013 imports were at record levels and 2014 will be much higher.

Daily Bell: Where does gold go from here through the new year?

Andy Hoffman: That's quite a short timeframe. I have not a clue, as TPTB love to attack at year-end. That said, they did much of the year's attacking in November this year, ahead of the Swiss referendum. Consequently, it appears to be firming up; and with the news flow getting more bullish each day, as prices remain below the cost of production, it's difficult to make a convincing case of being past, or not far from, the ultimate bottom.

Daily Bell: Why, if the demand for gold is high, does the price continue to recede?

Andy Hoffman: Because of NAKED SHORTING in London and New York, via the same algorithms I have written of for years. The only difference between now and the past is that the volume of shorting has increased, whilst the Cartel's previous attempts to "mask" what they were doing are no longer used. This is why the aforementioned gap between physical and paper markets has never been wider; and why inevitably, it will tear apart.

Daily Bell: Paul Craig Roberts wrote, in a column we carried this week: "In a blatant and massive market intervention, the price of gold was smashed on Friday. Right after the Comex opened on Friday morning 7,008 paper gold contracts representing 20 tonnes of gold were dumped in the New York Comex futures market at 8:50 a.m. EST. At 12:35 a.m. EST 10,324 contracts representing 30 tonnes of gold were dropped on the Comex futures market." Your reaction?

Andy Hoffman: They do this essentially every day, and have been for years. PCR, frankly, knows little about gold trading at all. He relies on what Dave Kranzler tells him who, like me, has been following gold manipulation for years.

Daily Bell: He also wrote: "Massive sales concentrated within a few minutes minimize sales proceeds and are at odds with profit maximization. A rational seller would not behave in this way. What we are witnessing in the bullion futures market are short sales designed to drive down the price of bullion. This is price manipulation." Sound reasonable?

Andy Hoffman: Yes. I have been writing of this phenomenon for 13 years; which has never been worse than it is today, given how much closer TPTB are to losing control of their fiat Ponzi scheme.

Daily Bell: And he asks: "Why is manipulation of the price of gold in the futures market not investigated and prosecuted? The manipulation has been blatant and repetitious since 2011." Do you think there will be investigations?

Andy Hoffman: Why? Why are the manipulations of all markets ignored? Why is not a single person in jail for what happened in 2008, or a single politician impeached? Because evil currently rules the financial markets, which, fortunately, cannot last forever.

Daily Bell: He has an answer, as well: "The answer to the question is that suppressing the price of gold helps to protect the U.S. dollar's value from the excessive debt and money creation of the past six years … In other words, the illegal rigging of the price of gold in the futures market is deemed by the US government to be essential to the success of its economic policy … " Logical?

Andy Hoffman: Yes; but again, PCR is a brilliant politician and economist, but has only been in the "gold manipulation" game for about six months. I have been writing of this since 2002 – as have GATA and many others. This all goes back to the "Gibson's Paradox" article written by Larry Summers in the mid-'90s, essentially making the case that suppressing gold prices enables interest rates to remain low.

Daily Bell: He writes, "The rule of law and accountable government have been sacrificed to failed policies." Too radical a conclusion?

Andy Hoffman: Dead on, and not just in the financial sector, but all aspects of the dying American empire.

Daily Bell: Predictions for 2015?

Andy Hoffman: I do not "invest" in anything anymore, and am not a financial advisor. My gold and silver are my savings and I don't predict what their purchasing power will be in short timeframes, in a rigged market. That said, I have been dead on in my macroeconomic forecasting since the turn of the century and have never been more confident that the global economy will be dramatically worse 12 months now than they are today.

Will TPTB be able to keep stock markets higher amidst the chaos and carnage, as currencies the world round continue to collapse? Will they be able to hold gold and silver prices down as supply plunges and demand explodes? I don't know, but I'll just sit on my metal, sleep tight and wait.

Daily Bell: What about those who believe gold goes down to $700 against the dollar? Any possibility?

Andy Hoffman: The most ridiculous thing I've heard in 25 years in financial markets and anyone making such claims should be steered clear of. At current prices, the entire mining industry is collapsing. At $700 gold, there wouldn't be any mining at all. Ain't happening, or even close. Just propaganda and/or fear-mongering.

Daily Bell: How do you see silver against the dollar these days?

Andy Hoffman: Gold and silver have a 100% directional correlation, as they are both MONEY. Silver is far more undervalued, however, as it is more manipulated (because it is far smaller. When it finally, inevitably breaks out, the gold/silver ratio will surely decline significantly. Please listen to the "Miles Franklin Silver All-Star Panel Webinar" I hosted last month, as a wealth of great information on the topic was disseminated.

Daily Bell: Is silver going to close the ratio gap against gold?

Andy Hoffman: Absolutely. I expect that, in time, the historic gold/silver ratio of 15:1 will be revisited.

Daily Bell: Do you recommend paper gold?

Andy Hoffman: LOL, that's a trick question, right? I will never buy a paper security for the rest of my life; much less, in the world's most manipulated sector. And if anyone thinks "paper gold" is a way to protect oneself against the bankers, they're going to have quite the spiritual experience in the coming years.

Daily Bell: Do you recommend taking delivery? Where should one store gold?

Andy Hoffman: YES! Holding it at home is the best asset protection of all, assuming you do it responsibly and prudently. Otherwise, I recommend Miles Franklin's Brink's storage vault in Montreal – where I keep my personal metal.

Daily Bell: What about other tangible assets? Commodities?

Andy Hoffman: I have no comment. I am not a financial advisor, even though I've been in the financial business for 25 years, and have a CFA. Personally, I believe "financial defense" is the only way to act in today's horrific environment – which is why my only personal assets are my home, my gold and silver and a little cash to pay the bills.

Daily Bell: Are commodity prices going to continue to collapse?

Andy Hoffman: Unless hyperinflation emerges quickly – which it very well may – I expect plunging commodity prices a la 2008, just as I expect interest rates to plunge to zero the world 'round, as the entire world front runs central bank "QE to Infinity."

Daily Bell: What does that tell you about the stock market?

Andy Hoffman: Western markets are trading at all-time high valuations due to QE, PPT operations and in some cases – like Japan – overt monetization. They could just as easily hyper-inflate, like in Venezuela, as plunge, as in 2008. I couldn't care less; I won't invest in the stock market if I live another 1,000 years.

Daily Bell: How much of a portfolio would you allocate to gold or silver?

Andy Hoffman: As much as you feel comfortable with, particularly with prices so far below the cost of production, global demand at record highs, production on the verge of collapsing and news flow as PM-bullish as at any time in our lifetimes. Personally, I hold 90% of my liquid net assets in physical gold and silver, so I walk the walk.

Daily Bell: Any other thoughts?

Andy Hoffman: PROTECT YOURSELF, and do it NOW!

Daily Bell: Resources you want to recommend?

Andy Hoffman: Yes, the Miles Franklin Blog, which publishes for FREE daily. I write five articles per week, as does Bill Holter, and several from our firm's co-founder, David Schectman. Moreover, I do three to five podcasts each week, including my own "AudioBlog" each Thursday.

Daily Bell: Thanks for your time.

After Thoughts

Thanks to Andy Hoffman for his no-holds-barred support of gold and the gold market. Andy, of course, works with a gold broker, but that's no secret. He may be talking his book, but we agree with him on a number of fronts. With all the bad news about gold, it's nice to hear from a pro-gold bull.

Andy, of course, is not much of a stock fan. We still see value in equity, given the constant promotion of today's markets. In fact, we've promoted the Wall Street Party as a way of profiting from central bank monopoly money printing. And our suggestions have proven pretty accurate thus far. But just because you can make money in stocks, for now anyway, doesn't mean you ought to neglect other parts of your portfolio.

We have a fondness for gold and silver based on its historical record, which surely stretches back thousands of years. Gold and silver are indeed a store of value in a way that other forms of money, mostly state coins, are not. As Andy points out, central bankers attack gold because it is not an easily controlled money – as paper/fiat is.

Andy obviously understands that private purchases of gold and silver are the best weapon against currency debasement, especially if one takes physical delivery and attempts to ensure against confiscation. Confiscation is usually the end-game of bankrupt empires, as it was of even the most powerful empires such as Rome. Before confiscation occurs assets may be devalued via numerous types of state manipulations, as they are being today. History almost always repeats …

Posted in EXCLUSIVE INTERVIEW, Gold & Silver
  • The Bell does a great service to all by explaining and promoting the value of physical precious metals in your personal possession. So does Andy Hoffman and there is no doubt in my mind Andy that you will eventually be proven 100% correct in your assessments of the world financial situation and your recommendations for protection against same. However you sound a little overly confident – even adamant – that the price of Gold could “never” go back to 700/ounce…. never say never Andy, and remember that at one time in this country, you could buy a 50 pound sack of sugar on the exchange for less than the cost of the burlap sack it was in!! I feel it is unlikely we will see such a price again (700) in gold but I do feel it is possible. A deflationary collapse could have that effect although it seems that any such pricing would be brief – just long enough to bankrupt all the miners so they could be picked up for pennies on the dollar – which may be one (extreme but possible) strategy of our “elite”. It is certainly possible that the recent spike down (immediately after the Swiss vote) may have been the lows for this entire 3 year bear market in gold and silver. It is also possible that this wild day was just another chart painting head fake from the hidden hand…. time will tell. I would never place any upside limits on the price of gold in dollars and feel it is wise to take the same attitude when speaking of possibilities on the downside. One thing we DO know – gold will never go to zero….. unlike the Federal Reserve Note!

    • President U.S. Corporation, INC. – Lyndon B. Johnston
      Remarks at the Signing of the Coinage Act
      July 23, 1965

      “If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.”

      • Danny B

        Brother Jonathon, LBJ was BORN a crook. JFK used our silver to back his printing of U.S. Notes. For that, and related crimes, he was killed in Dallas. LBJ stopped the printing of U.S. Notes 11 days later and proceeded to use the Silver Users Association to push our 4 billion ounces of silver OUT of GOV coffers. It took a while to run it down. I watched it for quite a while. The silver ran out Sept. of 2005. I bought a bit 2 weeks later for $ 7.55

        • Oh good. I am happy to learn of your fortune.

          • Danny B

            “On June 4, 1963, a virtually unknown Presidential decree, Executive
            Order 11110, was signed with the authority to basically strip the
            Federal Reserve Bank of its power to loan money to the United States
            Federal Government at interest”
            He also planned to end the CIA
            “Every politician after Kennedy toed the line with the Israeli lobby after the assassination of John Kennedy.”
            His crimes were many in the eyes of his enemies.

          • “His crimes were many in the eyes of his enemies.” – Danny B

            Precisely who is “His”? What’s his name?

          • lulu

            i took ‘him’ to mean JFK.

          • I wandered and still wonder. Precisely, who is “His”, Danny B?

          • Danny B

            “JFK used our silver to back his printing of U.S. Notes. For that, and related crimes, he was killed”
            John Fitzgerald Kennedy

          • davidnrobyn

            Wow, BJ. “His” refers to the aforementioned JFK. Remember? The person DannyB was talking about?

          • Marcopolo

            Brother Jonathan,
            Sounds like your espousing the NAP. Good for you!
            Tis a shame that your government can ignore your comment with not so much as a by your leave, kick in your front door and take you, your family, and possessions away with them and lock you all away without benefit of writ or trial forever.
            I don’t worry about Danny B.; is my uncle who a psychopath.

          • I know that. All I am saying that owning a plot of land (laws of the land) in this life is quite good. I can grow my own vegetables and beef, pork, chicken, turkey, and fruit & nuts, as well as fish for food.

          • Marcopolo

            Brother Jonathan,
            I commend you on your position. Owning land is more important than owning gold (while you can trade gold for land if you find someone so inclined to sell). Land like gold, is a real asset; unlike gold, it’s a productive asset.
            I would posit, if one owns land (or gold), they should take advantages of the rights afforded them under the 2nd amendment, before our psychopathic uncle takes that right from us.
            Actually, if I am counting correctly, it is the last remaining amendment in the bill of rights that has not been cast aside.

          • Marcopolo, gold is transportable and land is stationary. That is the difference between “real” property and “personal” property. When someone mentions “property”, the first thing that should come to mind is “Real Property?” Or “Personal Property?”

            No one can take away your right to own a weapon. Your right to own a weapon is a gift from the creator. They can take away your weapon, but they can not take away your “right” to own a weapon anymore than they can take away your right to speak your mind.

          • Marcopolo

            Brother Jonathan,
            If someone mentions property to me in any discourse, if the discourse was not regarding personal or real property, the first thing that would come to my mind is to seek clarification: “Define for me what property to which you are speaking…real or personal?”
            If they take away my weapon and prevent me from securing another, or take me away for speaking my mind and confine me, without due process, then they have taken away my right to do both.

          • Without a doubt. They would have denied you your natural rights which is a crime.

          • Danny B

            “If you wish to live a dishonest life, Danny B, then all I ask is that you stay off my land.”
            This is weak and unrealistic. I have my own land.

            Those who would trespass on your land are certainly not going to desist just because you asked them.

            If you “own” land in an area with low population density, you can reasonably expect to preserve exclusive use with constant occupation and a “show” of weapons. With high density, you are out of luck. In desperate times, you can’t depend on the innate moral restraint of the masses. NOR, can you depend on weapons to protect your land. You can easily be “picked off” at 200 yards while you are farming. Weapons are for personal protection only. With high population density, there would just be TOO many desperate people.

            I have quite a few acres in a quiet river valley in Oregon. The land backs up on endless forest. I don’t plan to die for real estate. I’ll just fade back into the hills if confronted by people who are willing to kill me while I am farming.

            I’ve had guns pointed at me several times. Fortunately, I was unarmed every time. Have YOU ever looked at the barrel of a .44 magnum from 5 feet away,,, counted the cartridges?

            VERY few people understand what happens when 2 people have firearms. If 2 peaceful people meet, nothing happens. If 2 armed people met under hostile conditions, BOTH are afraid to turn their backs at any point. Because of this fear, there is no safe avenue for disengagement.
            Picture this; You are minding your own business, farming your land. Somebody armed comes up and robs you…. You are armed and farming your own land. Somebody comes up and wants to rob you. They see that you are armed and decide that they must kill you to rob your stuff. You are preoccupied and they can easily get the drop on you.
            You can’t know the intentions of strangers all the time so you can’t know if firearms will make things better or worse.

          • Marcopolo

            That’s why, aside from land, you own one or more dogs:-)
            Man’s best friend; they can smell strangers long before you see them; sense trouble/mal-intent.
            Served in Vietnam….don’t need firearm stories. Always carried; still do….except when I’m flying commercial;-)

            BTW, love Oregon, Washington and Idaho. Likely the only person capable of picking you off at 200 yds lives in your valley! If they’re from Portland, give them 3 tries while standing still, then shoot back:-)

          • Danny B

            Marcopolo, go to “maps”,, go to Myrtle Point, Or. ,,,, go 3 miles east on hwy 42s,,, zoom in and you can see mountain lions and bears all over the place. It’s not a good place for dogs. I’ve got a Winchester lever action 45-70. The big cats watch me from the bushes. The bears are more cautious but, NOT always;
            Life in the food-chain makes one a bit nervous.

          • Marcopolo

            Took a look! Let me rephrase that…Shoot some deer (if you get the chance…I assume with the numbers of predators in your neighborhood -4-legged kind- there’s food), cut into quarters or more, and should the valley be a destination for unsavory people, just scatter some sections on the property. The visitors may find it a less than ideal place to stop for the night:-)
            I own a 338 Lapua, pretty good out to 1000 meters. Not meant for hunting lower orders in the food chain. Just got very good in the military and keep it up at the range. Live in Ohio; Camp Perry-can go out to 1700+ meters; Haven’t hunted in 40 years.

            Farm with a friend, spouse or other family member to keep a watchful eye should the SHTF.
            Can appreciate the quandary being part of the food-chain; grew up in PA, but looking at where you’re at, it’s you who’s in the zoo!!
            Tough neighborhood you live in; nothing there that I saw you can out run….or out climb.

          • davidnrobyn

            Land is good; gold is good. They both have their advantages and disadvantages. The disadvantage to land is that it’s immoveable. And it’s an inviting target, basically saying to government, “Here I am, tax me, tax me!!”

          • davidnrobyn

            BJ, Danny was speaking ironically. You seem to have missed that.

          • I did miss that.

        • Marcopolo

          Danny B,
          Bulls-eye!!! Good for you!!
          Not to brag, but I got in $4:-)

          • Danny B

            That’s great,,, bought a “few” ounces,, did you?
            I never bought til I saw the collapse coming.

          • Marcopolo

            Danny B.
            Yes, quite a few:-)
            Also, Morgan’s were going for 2 bucks ea. in the late 90’s. Picked up “some” too.
            Still have it all, and like Andy in the DB article, I sleep soundly.
            I don’t pay attention to much to the rigged game today except to pick up more when they crash the price.
            I’ve got more years behind me than in front of me, and feel fortunate that a once in lifetime opportunity has come twice!!

        • Silver has never ran out.

          • Danny B

            Technically true.
            “This next chart shows the massive decline in U.S. silver stocks from
            1940 to present. As you can see, silver stocks at the U.S. Treasury
            declined from 3.1 billion ounces in 1940 to 7 million ounces currently.
            This is a staggering 99.99% decline.”

          • “silver stocks” – Danny B


          • Danny B

            “stocks”,,, short for stockpiles. Nothing to do with paper.

          • Homer

            You say– “Silver has never ran out”? After a long run Silver gets mighty tired. I remember from my childhood days that the Lone Ranger advocated Silver before anyone else even Andy. “…a hardy HiHo Silver away.” Hell, he even had silver bullets to take care of any vampires out there.

      • davidnrobyn

        His remark begs the question, “Then why take the silver content out?” I think the B in LBJ stood for BS.

  • Gil G

    It could be argued best money has dual values: the first is it being as currency and the second is it has a functionality when not being money. For example using eggs as (short term) money makes sense because If it is not valued as money you can eat it. If cigarettes are no longer used then you can always smoke them. If rum bottles are no longer used you can always drink it.

    On the other hand, what is gold’s non-money value? Um, it shiny and, um, it doesn’t rust. Likewise what separates gemstones from baubles? There’s a nonsensical tautology certain things such as “precious” metals and gemstones are valuable because they deemed valuable. I personally find “precious” metals and gemstones worthless because they do nothing whatsoever. I only find them “valuable” because other people are finding it valuable. If I discover a large gold nugget I find it valuable because I can get a lot of money for it however if gold was not deemed particularly valuable I would toss the nugget away as just another rock.

    In fact the price of gold is held artificial high by gold bugs: after gold is mined and refined it’s captured by gold bugs to create forced artificial scarcity. As 90% of gold has been mined since 1900 that means gold should worth ten times less than what it did in 1900.

    • Danny B

      Mother Nature is the great reductionist. She destroys everything. Mountains are turned to sand. Brussel sprouts were never a store of wealth,,, nor cabbage. Productive land was the ultimate store of wealth but, in uncertain times,,, it was not portable. ALL stores of wealth were stone or metal. Since times were always uncertain, the most portable stores of wealth were the most popular. Neither paper nor, the promises backing it are durable.

      • Yet gold as money stuff has been around for thousands of years.

      • “in uncertain times” – Danny B

        What does that mean? Isn’t that everyday?

    • Marcopolo

      Against my better inner judgement, I’m compelled to respond. It’s apparent that you do not understand “money” and “currency”, their properties and differences, and how they came about to become a medium of exchange. You also display an amazing ignorance of the use of PM’s as the medium of exchange for well over 6,000 years. Gold 6,000+ years ago was used as a medium of exchange based on weight as creating coins/tokens with a “stamped” value did not come about until about 4,000 years ago.
      You also do not understand the mining and refining of gold ore and that your statement about 90% being mined since 1900 is so far from reality as to consider it delusional.
      You counter your own point of view when you state you only find gold valuable because other people find it valuable. That’s the whole crux of the value of gold as a medium of exchange; people over millennia and all over the globe have come to a universal understanding that the metal has value and can be a store of value and used as a medium of exchange. That dear Gil is part of the definition of “money.”
      You don’t communicate you understand the words and sentences you just wrote. “The large gold nugget has value because I can get a lot of money for it.” Gold is money. You fail to connect your own dots that when you have that large gold nugget you already have “a lot of money.”
      You’re confusing money with “currency.”
      I’m done now.
      I would offer you thousands of links to help you move from a position of ignorance, but would offer, if you are so inclined, start with Wikipedia and work your way forward if you want to engage in any intelligent conversation about money, currency, central banking,….and mining and refining gold or silver ore.
      As today is December 7th, I give you credit for publishing a post with the same credibility and insight that Pearl Harbor was an unprovoked sneak attack by the Japanese.

      • davidnrobyn

        I suspect that Gil and Rodger are the same person.

      • Gil G

        There never was “universal agreement” about gold. Those in the New World didn’t understand why Europeans had a fixation on gold and why they would risk life and limb to get as much gold as they could. You assume just because some groups valued gold as money therefore all groups valued gold as money. A similar tautology works for the U.S. dollar: it only valuable as currency because enough powerful people say so and in wide enough circulation that even if you don’t personally value that much you’ll still use it anyway.

        As I said before I personally have no use for gold. I only find gold valuable because other people find it highly valuable. To say gold has some supernatural value is bunk. Doubly so when this site doesn’t take much notice with regards to real estate or shares for wealth preservation and growth. Even real estate and shares have a secondary value: people need somewhere to live as well as companies to produce the goods and services we enjoy.

    • Praetor

      Gunderson, as usual, you are down right “bone head” funny. And, please don’t ask me to elaborate, you may hear something you don’t like. Plus, who in their right mind uses a cartoon character as their avatar, and one that fails at everything he does. Why, did you chose, Gil Gunderson.

    • kenvandoren

      “ten times less” I know this usage is really popular now, but it is not mathematically or logically correct. Any real number times any other real number is always a larger, not a smaller number. “One tenth as valuable” would be a preferable way of stating your thought, I believe.

      In addition, you ignore the demand side of the equation. Gold is worth whatever it is, because people prefer to own or use it. The Keynesians falsely believe that all matters economic can be reduced to an equation. Not so. ALL value is subjective and variable. The Keynesians may argue in terms of “all else equal,” but that is NEVER the case. As Mises stated, change one parameter in an equation, and you change its relation to all others in ways that are seldom completely quantifiable.

  • Danny B

    I found a funny quote regarding the total crash of the ECB, ” The governing council
    discussed possible purchases of every major asset “other than gold” but has
    not yet agreed to go beyond the current mix of covered bonds and
    asset-backed securities.”
    It’s pretty funny when you consider that the euro is fractionally backed by gold BUT, they refuse to buy any more gold.
    This is an overlay of the Nikkei and the price of gold,, in obverse;
    Zero Hedge makes a good case that the Nikkei is being used to provide the liquidity to suppress the P.O.G.

    • Marcopolo

      I think when you blow away a bit of the ECB and CB fog, you’ll see CB have been buyers of late and for some time since the ~$1900 peak. They’re also quite active in the COMEX paper market for PM’s also. We an only see this once a month in the Bank Participation report published by the Commodities and Futures Board (yea, they’re part of the scam, but they do have to publish the real numbers – even though they point out the illegal cornering by JPM in silver and the smash downs/manipulations – like past Friday, when someone sold 30 tons in a second into a declining market-what rational investor does that?, and the largest gold producer in the world, Barrack, mines less than 30 tons in a year, even though they’re charged with regulating this scam).

  • Marcopolo

    While not directly about gold, I’ve included a link that provides a very interesting point of view of the current state of CB’s, their bubble blowing, and while DB has pointed out the current game has been in play for a long time, this time is likely different.
    As Gregg points out many of us appreciate DB providing an insightful article about PM’s, and while Andy may be talking his book a bit, after reading the article behind the link, Andy may be closer to reality than we may think.

    • Danny B

      I found some humor in the Prudent Bear article; “December 1 – Reuters (Jonathan Spicer and Ann Saphir): “With the U.S.
      economy humming along at its fastest clip in more than a decade, the
      Federal Reserve should be confident about its ability to weather a
      global slowdown”

      • Marcopolo

        The Prudent Bear is organized as follows: His point of view (main article), followed by a summary of what happened in the financial markets the past week-(just fact, no comment), followed by “Watches” which are collected articles from around the financial media in a topical listing, again what was published (in the Dec1st article, it was a Reuters article) with no commentary by him.
        I find it a great one stop shop on a weekly basis to gain an insight from his lead article (his point of view)-which was the reason for my including the link, followed by the “watches” which gives you what’s being said (propaganda) in the MSM.
        I do find humor in reading his point of view, then going through the “watches” to read what “they” really want you to believe.
        There’s a great connection many times in DB’s outing of meme’s and what I read in the “watches” section, which are the latest espousing of the meme’s DB’s identified (in many cases).
        The DB, like the Prudent Bear, are two of a few websites I visit that (apologies to all vegans) are all meat, no fat. They’re free, not trying to sell me any “sage investment advice,” and intersect many times in many ways.

  • Danny B

    Some gold notes; “In early 1971, de Gaulle sent a French battleship with a hoard of dollars
    to convert to gold at the Federal Reserve Bank of New York.” That was early in 1971.

    “The British ambassador to Washington conveyed the August 11 instruction
    of his government, conversion of $3 billion dollars into gold” The British bankers didn’t want to be left out. They knew that gold was leaving America that summer at the rate of 100 tons a week.
    That was august 11 and Nixon closed the gold window 4 days later.

    Moving closer to present day; Venezuela wanted it’s gold back. Germany wanted it’s gold back. Netherlands wanted it’s gold back. Switzerland wanted it’s gold back. France is interested in gold repatriation. Belgium is interested in gold repatriation;
    They all need to take a boat to China to get “their” gold.

    • Pilgrim

      The biggest swindle in history. Well, unless you consider the current fiat swindle.


    Andy is wise and spot on. I anticipate the markets will continue whip sawing as they did when approaching 17,000 DOW. Manipulation of private investors by the Treasury and Fed is the name of the game. If you’re foolish to be in the markets, be sure to
    put 5% stops on every position. Exception to Andy, with the Central banks continuing to manipulate precious metals, gold may revisit $500 – $700 oz. However when gold bottoms, the move upward will probably hit $3000 – $5000 oz. And don’t neglect that when Gold turns up, the better buy will be silver, as it recovers to the traditional 15 to on 1 ratio.
    Gil G. Mankind has always valued rare items with great values, the reason Oil paintings of the past masters are selling for millions of $$ each. Also rare gemstones and other artifacts command the attention of fanciers willing to trade worthless fiat paper for stores of value. As we have more millionaires and billionaires globally than ever before, there will be greater valuation of objects de art than at any time in the past. And as platinum, gold, silver, palladium, rare metals etc, stores of value throughout known history will
    also reach premiums. Why do you think gold is being manipulated down?? Because they buy low and sell high, over and over again.

    • Danny B
    • Gil G

      Gold isn’t manipulated “down” rather it’s manipulated to be high. Its price is determined by people squirreling away gold for when “the end of economy is nigh.” If something were to happen where everyone were to lose interest in gold and there was huge selloff then goldbugs would find gold is nowhere near as rare and valuable as they thought it was. Not only would the price of gold being really low but that would be its natural value.

      • Guy Christopher

        “…..Its price is determined by people squirreling away gold for when “the end of economy is nigh…..” Would that be three billion Asians, MidEasterners, Europeans, S. Americans who understand gold, and whose economies are moving in the opposite direction of the USA’s, and who are moving up the wealth ladder in opposite direction of majority of USA citizens, not to mention buying and accumulating by every central banker on Earth?

        “……Its price is determined by people squirreling away gold….” — Not according to thousands of documents, thousands of hours of testimony by hundreds of longtime experts, fifteen years of accumulated evidence by the dedicated analysts at GATA, ….AND… official accusations by government investigations on three continents, followed by guilty pleas of actual manipulators found culpable of manipulating every market, including gold. Even short-selling-paper-gold manipulators based at COMEX, US Fed Reserve, Bank of England, bullion banks have stopped bothering with denials. With no rule of law, and no law enforcement, in a totally lawless society, where there is no fear of law, they no longer have to worry about prison or the guillotine.

        “…Gold isn’t manipulated “down” rather it’s manipulated to be high…” — which is why the nominal price does not reflect the same inflation % you pay for your BigMac, 25 cents in 1967, $1.50 in 1992, $4.95 today? So, they are manipulating BigMacs up and gold down? They manipulated a 25 cent gallon of gas in Aug, 1965 DOWN to $5 in 2011 but manipulated 2011 gold at $1920 UP to $1195 today? Quite a fancy trick.

        “….the end of economy is nigh…..” – Cannot recall anyone ever saying the end of the economy is nigh, There will always be an economy, even if it means trading pet rocks for sand. It is history and mathematics which are predicting the end of the current global economy as it’s now formulated, but certainly, there will always be trade and commerce, and therefore, there will always be an economy.

        “…..If something were to happen where everyone were to lose interest in gold….” — which would be the first time in 6, 000 years. That would be quite an event. I think that would be cool to watch. See Citigroup 27Nov14 description of gold as a 6,000 year old bubble, which is quite a curious definition of bubble, but not such an extraordinary statement when you consider its source.

        “…Not only would the price of gold being really low but that would be its natural value….” – The value all other currencies are measured against gold and have been throughout the history of every recorded civilization. Paper money, printed willy nilly, is the man-made, unnatural product. A certain weight of gold doesn’t change, hasn’t changed, never will change. The whole number or fraction of paper money invented that it takes to trade for that weight of measure constantly changes, and because all paper money, since invented around 1200 years ago, is, in fact, unnatural, and is, in fact, based historically solely on a promise to redeem for precious metals. It would be a cool thing to see all of economic history repealed with a law or by official decree.

      • $6618258

        “He who has the gold makes the rules.”

        -True for thousands of years & most likely will be true in the future. Gold is an accepted storage form of work & wealth, since it takes time & energy to find, mine & then refine. As opposed to fiat currency which can be created out of thin air & is easily manipulated.

        One can store up a lot of gold & try to manipulate its price by selling it off, like Western Central Bankers are now doing or you can buy it up if you think the price is too low (like many in the East & Eastern Central Banks are doing). Regardless of the power of Central Banks to manipulate things, eventually the “invisible Hand” of the Free Market will reign with real “price discovery” in the end, although it may take a long time to get there. Western Bankers had a lot of stored gold. The gold is now flowing to the East. When the Western Bankers run out of gold, then we’ll see the real price of gold.

        “Only gold is money”.
        -J. P. Morgan

        • Gil G

          For thousand of years people lived the same way for that whole time. For the past century or so humans have lived rather differently in the developed world. Why not say the horse is premier method of transportation since it has much greater precedence than the automobile?
          The hilarious part is you and the rest can’t give a reason as to why gold’s valuable. “Um because it’s always been valued” is the standard reply and a tautology which answers nothing. As said this tautology seems to mean what I said before: I only value gold because it is valued by other however I have no value for a metal that is very soft and has a low melting point. Functionally gold is on par with lead (in other words not much). Iron and aluminium are in practice more valuable metals to humanity as they make great building materials. Gold’s only magical quality is that it’s shiny and early humans have apparently took to shiny things because clean enough drinking water sources were shiny.
          It’s also interesting people don’t mention much about gemstones. They have lost some their value as they are much cheaper to make than mine. Tough luck to those who tried to hold their wealth in gemstones over the 20th century.

          • Gil, it is difficult to educate you because you evidently haven’t read enough. There may well be reasons that gold and silver emerged as money metals of choice. But you have to read to find out. You might want to start with Rothbard.

          • Steve B

            Gold has always exhibited value because it is rare and has unique properties as noted above. Multi-billion dollar mining companies are not investing capital on a whim or for a trinket. So is the mining of gold an elaborate sham? Anyone with even a modicum of sense can see the truth in the value of precious metals, and really the person who boils it down to “shiny things” isn’t either well studied or intellectually honest…take your pick.

          • kenvandoren

            Historically many items have been used as currency. Beaver pelts. Problem- virtually indivisible as whole pelts have more value that sliced up ones. Not the same with gold. Each small piece retains a proportionate share of value

            Puka shells. Once thought rare by SE Pacific Islanders, going to nearby shoals revealed plenitude. Gold continues to be relatively rare.

            Tobacco- get it wet, what is it worth? Degrades quickly. Even iron, which corrodes easily loses value exposed to the elements. Gold retains value precisely because it does not corrode easily. Silver is both more plentiful than gold, and more corrodable. BOTH have value to the industrial system because of physical characteristics. High conductance, for expample. Corrosion resistance is important to electronics industry.

            Some characteristics which make something valuable as currency-

            1. Relatively scarce. This gives it a high unit of value per unit of weight

            2. Divisible

            3. Retains physical characterstics, not easily degraded (as in tobacco and even iron.)

            4. Recognizable

            5. Not easily counterfeited

            6. And yes, to your point, historical preference for commodity to be used as money. Of course this can change.over time, but given the monumental failures of fiat currency not only today but historically, I am betting on gold and silver for at least the rest of my lifetime.

            7. Portable. Land as mentioined in another post, is a great store of value, but not very portable. And a ton of iron my be portable, but has a low unit of weight value compared to gold and silver.

            The advantages of fiat currency-

            1. potentially infinite supply. But what about value? Since the FED was created in 1913, the US dallar has shrunk in value by about 96%. Even in my lifetime,

            2. Easily and politically manipulated. OOOPS, again that is not a positive, at least not in my book. In recent times, the banksters and Wall St. got the fiat currency “gold mine” most of the rest of us, the shaft.

    • Bruce C

      ” If you’re foolish [enough] to be in the markets, be sure to put 5% stops on every position.”

      No kind of “sell order” will protect you as much as one may think. The recorded and known “stop orders” placed by holders of brokerage accounts are incorporated into “HFT” (High Frequency Trading) algorithms to purposely by pass them. Not only that, most brokerage firms submit conditional orders only when those conditions are met based upon the info that the brokerage receives and not necessarily what is really happening. Secondly, those trading orders are sent only during US banking hours between 9:30 am and 4:00 pm EDT. Most of the crazy market action occurs during off hours so by the time the markets open in the US prices may be far lower than your stop price so you’ll be stopped out way below what you expect. That’s when HFTs will reverse and buy all those shares from “you” at pennies on the dollar.

      It’s already a known, rigged market even now and who knows what will happen if a crash is triggered. One thing you can count on though is that if the crash is engineered “they” will make sure “you” lose your proverbial shirt. After all, that would be the whole point.

      However, I guess you could always sue, if you can still afford a lawyer. Good luck. Ha Ha!

  • Proud Peasant


    Here is the rotating-door scam explained without the sand thrown in our faces:

    step 1- Fiends at the Feds prints trillions in worthless monopoly money then gives to Wall-Street friends. (it is used to buy stocks, etc…
    step 2- Fake money is then used to buy REAL assets such as, politicians, judicial system, defense apparatus, and of course buying Gold on the cheap (real asset).

    I am simply speaking of modern day Alchemy.

    • $6618258

      Nice, except I don’t know if I could call a politician an asset, or a judicial system an asset (except if it dispensed real justice) or a defense apparatus an asset (unless it was really used just for DEFENSE [not offense] of something worth defending).

  • davidnrobyn

    Haha! Don’t hold back, Andy–tell us what you really think! 🙂 Great, entertaining interview.

  • Praetor

    Gold, an “insurance policy” against disaster, calamity, upheaval or if you like, sudden and violent change. At this time, Gold and Sliver are the only store of value!! Yes, the fiat is still usable but its usefulness is waning. Don’t ever allow the Keynesian trolls, make you think the good times around the corner. The Keynesian trolls in the depression, where the ones jumping from windows and selling their property for a loaf of bread. You, have to think, what will the Keynesian troll sell you, when their fiat empire collapses, for an ounce of Gold or Silver. The future collapse maybe, an even larger transfer of wealth, than Barack Insane Obama could even imagine, that’s if you have Gold and Silver in your possession. That is the value and stored (UP) value of Gold and Sliver. So, jump you Keynesians nihilist’s, may your journey be short, but first give use back what you have stolen.

    • Gil G

      How can value be “stored?” In times of “disaster, calamity, upheaval and violent change” then gold and silver will be valued much differently than during safe periods. During sufficiently bad times the value of gold and silver will be really low.

      Good times aren’t around the corner? Why not? Modern technology relies on cheap energy not whether gold and silver are being used as money.

      • Homer

        The real value of gold or silver is it’s pricing mechanism. All good and services are rationed because they are in limited supply. An elastic fiat money substitute lacks the ability to efficiently ration these goods and services to the detriment of all. Socialist manipulation of the economy always, without exception, lead to higher prices and shortages.

      • Dr Stephen Nordstrom

        Hi Gil G,
        If you would care to understand the importance of gold, please read the essays of Antal Fekete.
        Self-education is important for us all.
        I hope you accept this advice with the sincerity it is given.

  • gordon

    Good article, Andy has his book to sell but nevertheless he speaks the truth. Why oh Why do the american public not wake up to the continous scam being perpetrated upon them and their familes? The banksters have paid out over 100 billion US $ in fines over the past 7 years but it is still business as usual and not one prosecution of a senior bankster. Wake up Yanks for goodness sake.

    • kenvandoren

      They do seem to suffer a rash of “suicides” however…

  • Chris

    The huge dam holding back all the money is the bond market.The existence of the dam is absolutely imaginary. It is an imaginary force called confidence like the confidence of Madoff’s clients just before he said it is all a lie. When a bank has a debt that is obviously not repayable as the borrower is borrowing more even though he is not paying to reduce the principal and worse, he is not paying the interest. This debt is called bad debt and good auditors will force the company holding the debt to write it off. Asset=bad debt=zero. When bond holders realised this, the money will start to flow and this is called money velocity. Momentum is mass X velocity and when it gains momentum, with so much money already in the system, it will hyperinflate. But it will start slowly, like now.

    • Danny B

      ,,, and then, it will speed up;
      Italy just got downgraded to one notch above junk.

      • kenvandoren

        Do not worry, the FED can always create more liquidity and do so at very little cost. Even ink these days is only virtual. Do not believe me? Just ask Paul Krugman….

        • Chris

          More liquidity more velocity but they will still do it like Zimbabwe.

          • Actually Chris, more “liquidity” equals less velocity, all other things being equal, since money velocity is calculated as, what percentage of all existing money is actually in circulation. If our friends at the fed create more digital dollars but the same amount of money remains in circulation then the velocity of money drops when shown on a chart that compares money velocity over time.

          • Chris

            Hello Gregg, I am not using the momentum theory of a closed system in engineering where m1v1=m2v2. I am trying to show that there is a huge amount of money held back in the asset market and not moving. This money would have zero velocity. As more money starts to leak out of the asset market, velocity begins to accelerate. When more money starts to chase after limited goods and services, price will begin to rise. If Fed provide more liquidity, it will add to the amount of money that is already increasing in velocity, thereby increasing the momentum dramatically as both mass and velocity are increasing at the same time. When momentum builds up, it is very hard to slow it down. Paul Volcker had that experience before and he nearly brought down the US economy by doing the right thing. Doing the right thing is not popular but look at the result. The present system is an exponential ponzi scheme that was the creation of Greenspan and is very popular. He never thought it could last for so long. So do I. So did Madoff. The longer it goes on, the worse it gets. Madoff may have gave it a thought of giving up earlier when he gets overcome by his conscience. It is very simple. To keep the system going, you keep rolling over old debts although they are never to be paid back. Imagine pension funds are invested in debts that are never to be paid. This is unconscionable. When the recession hits, it is game over. This time Fed is in the market. In other recessions, Fed is bigger than the market and can ride to the rescue. Now the market is bigger than Fed.

    • $6618258

      Well put! And once momentum hits a critical velocity, it will tend to go quickly into “warp drive” as bonds & fiat money holders will not be able to convert their holdings into real money (gold/silver) because the real money will be long gone off the shelfs to buy.

    • kenvandoren

      You mention money velocity, a factor that I think is over-emphasized as an unalloyed good, especially by Keynesians and advocates of fiat currency. Seems that velocity ALWAYS increases during crisis times, and that carnage is sure to follow. During stable times, velocity too should be stable. Our demand for daily needs, food, clothing, shelter do not vary that much, and hence velocity attributable to these needs varies. But events such as occurred n 2008 and 9 mean more assets are sold, more accounts liquidated, adding greatly to velocity, but often yielding little economic good.

  • Danny B

    ” 1-month GOFO or Gold Forward rate (GOFO = LIBOR – gold lease
    rate) has been negative for 30 days now and 6-month GOFO has been negative
    for 14 days for the first time on record.”

    “Gold should immediately be sold on spot market and bought with forward
    contract to extinguish the backwardation to secure guaranteed dollar profit –
    yet this isn’t happening.
    Gold price backwardation is a condition where gold is not bidding for
    dollars – guaranteed profit should be taken in dollars – an indication we
    are building toward currency crisis.”

    The NYSE compared to the LBMA;

    “$192 billion per day of gold gross trading volume (vs.
    NYSE $50 billion) on the LBMA is AVERAGE dollar value of trading in September
    In June 2013, LBMA traded 290 million oz. per day on average or
    $406 billion per day of gross daily trading volume.”

    “Current implied open interest using 2x 160 M oz. daily
    trading volume is 320 million oz.; using 3x trading volume open interest is
    480 million oz.”

    The longer that the GOFO is negative, the more nervous investors will become. The PTB can push down the P.O.G. but, they can’t cause the GOFO to go positive. The big boys don’t leave things to chance. You can bet that every forklift driver at the PM warehouses has a secret patron. It happened at the aluminum warehouses.

    480 MOZ a day of trading volume doesn’t leave much room for error. When the music stops, it will all be over with in 2–3 minutes. The FOREX trades up to $7 trillion a day. XAU is a very big part.

    The sudden stop will be one for the history books.

  • RUSS

    Hi!, Patrons Of The Daily Bell Et. Al.:
    Please register the following two comments into your brains’ memory file cabinet for instant recall which may help you keep a proper perspective regards future economic events: (1): International Man & Speculator, Doug Casey, has stated that the coming surge needed for buying gold can best be pictured by thinking of a garden hose being used to empty Hoover Dam & (2): One of OUR Nations’ past top economists, Mr. John Exeter, has famously described the economic pickle in which we find ourselves using his Inverted Pyramid you can find on the internet using your search engines. He further emphasized that “there is a huge contest going on in OUR world between paper, I Owe You Nothing, money which is abundant and gold money which is scarce. At the end of this contest, gold will win in a bigger and better way than ANYONE ever imagined” If we look at Mr. Exeter’s Inverted Pyramid, we see several listed types of paper denominated assets above the GOLD apex and, when the end game arrives he projects that all those paper based assets (which have continued to expand via QE etc. operations sense his statements) will attempt to find their safety net in the bottom GOLD apex as universal flights from fiat currencies. To what astronomical fiat currency prices under such conditions worldwide could cold achieve and would the present US government at that time sell its” (OUR Nations’) gold (if we still own the more than 8,000 metric tons advertised?) to meet its’ historically huge debt obligations etc.? The public of coarse is kept entirely in the dark in this regard in my opinion, as its’ attention has been diverted to watching the inflation vs. deflation debates and conflicts of interest rather than focusing on the security of OUR gold as gold coins outlined in Article 1; Section 10 of OUR US Constitution which calls for FREE gold and silver coins from OUR US Mint circulating amongst all US citizens freely in day to day commerce including payments of all labor contracts etc. which places the firmness of first rights of buying power into the hands of OUR public instead of in the hands of those running “their” and not our printing presses. My first lesson on this last sentence came home to me when my grandmother by her actions and words let me know she didn’t understand how her 6% savings account was a loosing proposition when inflation was running around 13% and why should she have had to understand, if OUR monetary authorities would have kept in lock step with her Constitutional rights to not understand but she would have surely seen her buying power protected non the less. Are we suppose to expect that everyone in society will understand all these things, especially when they are too busy just making and paying for their living each day working enough sometimes to barely pay their bills and quite frequently (as was my case prior to retirement) working two jobs daily and sometimes hoping to work the holidays and weekends, in order to achieve a little extra money these days that they might save for an unexpected bill or a rainy day fund? How many ordinary men and women in OUR Nations’ workforce at whatever levels and capacities they perform their jobs expect to see a 400 million dollar bonus check and my knowing these men and women after working with thousands of them for years is that they don’t want to expect that kind of extra pay. All most people want is to live comfortably and be a peace with their local and international neighbors and in such a though should rest the idea of power to the people in my humbled opinion. In OUR gospel we are provided the commandment to love each other even as He loves (and still loves) us and to ask to receive that OUR JOY might be FULL but present economic and geo political events are making the fulfillment of that commandment very difficult. I can not in good conscience feel real joy in reading of all the unemployment into which the lives of our millions of young people have fallen and of no fault of their own. How do you feel about these concerns dear reader(s)?
    RUSS SMITH, CA. (One Of Our Broke, Fiat Money Corrupt States)

  • TG Molitor

    Excellent interview! Of all the reasoned explanations Mr. Hoffman gives regarding the $USD’s recent run-up, I can’t help wondering if ‘normalcy bias’ might not be at the top of the list. That is, the incorrect belief that the future will resemble the past. The dollar has been the world’s preeminent
    monetary reserve for some 70 years, so the thinking goes, Why should
    that change now?

  • Coyote44

    Great interview , however history need not repeat its self -first-physical gold and second gold in the ground with management such as Seabridge make total sense–Major gold producers need to sell the gold to feed overblown budgets at any price,not a smart decision–death spiral financing ???

  • Danny B

    Governments have been printing money with wild abandon to pay for everything under the sun. Martin Armstrong clearly shows that capital is alternatively attracted to private debt and then public debt and then back to private. When confidence is lost, money moves to another arena.

    “will bring massive deflation as capital formation reduces from the public debt moving into default. This period will also bring about rising asset inflation from money trying to get off the grid, which is not the same as demand inflation led by consumer spending. ”
    “There will be a disconnect between the PRIVATE v PUBLIC issues of debt.The differential between AAA Corporate and government peaked in 1932.”
    “Attacking the rich will cause the VELOCITY of money to decline and with it; government will be unable to sell its bonds.”

    “One by one, the giant investment funds are quietly switching out of government bonds, the most overpriced assets on the planet. ”
    There are about $ 6 trillion in GOV bonds with negative interest rates. Combine that with price inflation and GOV bonds just aren’t worth the trouble. The funds are selling the bonds and somebody is holding the bag. ALL governments eventually default and somebody is going to get burned.

    OK, so where does the money moves to? Energy used to be a good bet but, now we have too much oil. This is bringing down oil producers;
    Commodities don’t look so good because consumption is down.
    Real Estate used to be a good bet but, nobody has any money. They are living on the street. The money was created out of nothing and will return to nothing.
    The funds are currently switching to high quality corporate debt. With consumption falling, there just isn’t enough corporate debt to absorb all the liquidity. That leaves gold and Russian stocks.

  • Libertarian Jerry

    The problem arises when the elites refuse to give up their power and will go to any extreme to protect that power. Those holding gold,true,hold real wealth. But what will that wealth be worth in the market if the elites,who control the law,make it illegal to use gold or silver for market purchases? What happens when the elites draw up draconian laws to punish those who wish to trade,sell,barter or otherwise involve themselves in the market using gold or silver when it will be illegal to use gold and or silver for transactions? Yes you will own real wealth,and that will be permitted,but the use of that wealth for doing business or even surviving will be declared illegal. Any attempt to convert your gold or silver into fiat currency will be declared illegal. We will be forced to use fiat currency or worse yet electronic money that can be traced and controlled in order to crush the underground untaxed economy. In the end,holders of gold and silver will protect their wealth. But that wealth will be useless for buying and selling. Big Brother will be watching you. Its his way or the gulags.

  • Danny B

    At 3:21 in this vid, a member of the House of Lords clearly states that there can never be a one-world currency unless ALL other currencies are extinguished. Jim Rickards wrote, “The Death of Money”. He is pushing hard for the SDR.
    Logically, both the U.S. dollar and the Euro would have to be destroyed eventually. The Euro and the Yen seem to be falling hard. The dollar is another story. The rise of the U.S. dollar will eventually bring the default of the emerging markets. They have the institutions in place to re-create credit facilities. The cascade of defaults will definitely take down dollar bonds. This is all shaping up to be an East-West battle.
    If all currencies collapse, it will be very difficult to inspire faith in a fiat SDR. It will also be VERY difficult to attract investment in sovereign bonds. So, while the West is floundering trying to fly a concrete SDR, the East will be investing in gold-denominated bonds. Gresham’s Law says that there can’t be a gold-yuan. Economics 101 shows that your transactional currency can NOT be the same as your store of value.
    When morality leaves the house, trust walks out arm in arm. When trust leaves, credit soon follows. Most of our “money” supply is credit.

    In 2008, we saw the lockup of LIBOR. No trust anywhere. There is STILL no reason to trust european banks.
    “The €1tn (£706bn) of so-called non-performing loans amount to almost 6%
    of the total loans and advances of Europe’s banks and 10% when lending
    to other financial institutions are excluded.”

    Trust will lockup and only gold will un-freeze it.

  • chrisyew

    Money moves or money evaporates. If money has nowhere to move to, money evaporates due to the overvalued assets in a over liquefied money environment. The more QE, the higher the asset prices and it also increase the price to doing business. Less business less jobs and more of the bottom 99% move into poverty. The less spending power the 99% have, the less viable will be for business startups. This is vicious cycle to total destruction. To preserve wealth, money has to move somewhere where it is an asset and money. Sovereign bonds used to fit this requirements but with QE and most are unpayable, bonds are write-offs. The only asset left are the precious metals for wealth preservation. By revising the prices upwards, wealth will be preserved and this is the case not just for individuals but for countries too.

  • Sydney

    Andy, you are wrong.

    Not about everything. In fact you are mostly right except for the part about gold definitely rising in value some time soon (kinda what you are saying anyway). You see you must not overlook the even larger picture than you already look at. Gold is the money and currency of FREEDOM. Without freedom, gold does NOT rise in value. You see Andy, we are not free. No, we are not. Unpleasant reality, but true. Freedom starts with the mind. NO, not just your mind, or my mind either, but our neighbors mind as well, and very few people see it the way you do. Although I would agree with almost everything expressed in your interview, until a tipping point is achieved in the mind of the majority of participants in the economic and financial environment I would encourage you, for your own good to not put any more eggs into the gold or silver basket. That is, if you are interested solely in preserving your financial well being.

    It may even be worse than it seems. No one, no one who wants to be free anyway, has any money, real money I mean, compared to the irredeemable financial asset, oligarch controlled printing press or computer entry expander. Outside of that exclusive and getting ever more exclusive group, people are broke, generally speaking. So there you have it, the only people who can drive up the price of gold are broke, while the people who have the power to drive it down have ALL the currency required, and will continually hold it down, maybe for a very long time.

    Are there natural laws that prevent this. Assuredly yes. When will they go into effect. Well, this is unknown, and maybe not for a very long time.

    I propose, something that no one else has. Drum roll please. Invest in real tangible assets not because they will assuredly rise in value within our lifetimes, but simply because its the right thing to do. That’s it. The right thing to do. That’s what freedom is about isn’t it. Freedom to do what you think the right thing is, not what you are told it is.

    As far as I can tell it is becoming more and more obvious that the worst things in the world arrise from the difference between real value (gold/silver) and the inflated fake value of the irredeemable currency/credit/debt system that has fueled empire expansion for the past few hundred (thousand?) years. Guess what, you don’t have to be a part of it. You don’t even have to be complicit with it. Just save your wealth outside the system. Not so hard really.

    If it is simply about growing your wealth, or even preserving it, how is one any different from the slavery enforcing oligarchs who control the system now. Not much different really. The only worthy goal of freedom is freedom to do the right thing after all. The primary choice one has to make is how do you choose to preserve or grow wealth. Do you endeavor to accomplish this at some one else’s expense or not? With gold/silver it is NOT at some one else’s expense. This must be the underling reason for any investment otherwise you are better off joining the ranks of the cronies in the current irredeemable currency system. If this is the underling motivation, as it really should be, you will not lose. And don’t forget you may even come out ahead in more ways than one.

    Best wishes.

    • TG Molitor

      I think you attribute all sorts of silly and poetic things to gold. Gold is simply the best form of money the market has every produced. It’s convenient, consistent, durable, divisible, has intrinsic value, and can’t be created out of thin air. Those are gold’s attributes no matter what psychological associations you hang on it.

      • Sydney

        Gold is simple the best form of money…….The best for what exactly? It is NOT the best at consolidating wealth and power! That’s the point. There apparently is a very small group of people that are empowered by a monopoly on irredeemable currency/credit/debt that want nothing more than to consolidate wealth and power. Not just some, No that’s not enough. There goal is the extracting the entirety of wealth and power and at the expense of everyone else. This group or club membership is dependent on club members depreciating the value of gold/silver in any and every way. Manipulations, obfuscation, out right lying, chemical, physical, emotional, and Yes even psychologic means are employed to disparage the value of currency that is also a store of value or money that has intrinsic value. Goodness knows you don’t need me to point this out. So yes I agree Gold is simply the best form of money if one wishes to receive real value for their labor. Gold is simply the best if one wishes to live as a free person. Gold is the best if one wishes to better themselves while better others in parallel along the way. Gold is simply the best form of money because (along with the liquidity that is provided by gold bills (real bills of Adam Smith) and a gold bills market) it disperses power of real honest to goodness money as currency into the hands of the millions and even billions of people that labor, produce, and create, real, tangible and valuable things that actually improve the quality of life for everybody rather than the state of affairs that exists today. Presently ONLY the financier captures value with an endless panoply of irredeemable finical instruments, producing little to nothing of value. So yes I fully agree Gold is the best form of money for anyone who wishes to work, produce, meet the needs of the customer and make the world a better place for everyone, and yes even live as a free person in that world. Attribution of poetic thing to gold, yes, if by poetry you mean everything or any thing that you can strive for in this world while bettering yourself and your fellow man along the way (ha, maybe that is poetic ?) but no not silly, certainly not silly. Or at least I don’t think so.

        This kind of pitch just may increase sales of physical and lead to a tipping point. You never know.

        In any event, thank you for you interest and response. Best Wishes.

        • TG Molitor

          You make some interesting points, thanks.

  • Sydney

    To the contrary, the average global currency is at or below its previous all-time low, with far more pain to come as historic debt levels default, which will only worsen exponentially as the dollar strengthens, making them harder to pay down. Not that they could be anyway, but it will only foster the ultimate, global fiat currency implosion at a more rapid rate. – See more at:

    Andy, this, along with a compelling “domino effect” may mean deflation, on going, and unremitting.

    Look, if you were able to plow thru my comments below what I hope is obvious is that I am a big advocate for freedom of choice in currency (and banking for that matter) because some people still have to figure out, and likely will figure out, that for any number of reasons gold (and liquidity provided bt gold bills, or A. Smith real bills and the market that arrises for them) is indeed the best form of currency and money for everybody.

    In addition, we share common hopes, and purposes, that is to live to see a day where people fully embrace what would be a game changer so to speak, the restoration of gold to its rightful place in monetary affairs. I would ask you, humbly (pretty sure I don’t necessarily “know” more than you) to consider the full spectrum of tacts that can reasonably and fairly be made to promote the sale of physical (precious metals without counter party risk). Undoubtably you have, with great alacrity (I am actually a big fan of yours and want to thank you for the great work and this interview), exhausted the inflationary perspective, which may be wrong. In any event the inflationary perspective buyers of physical are likely tapped out by now. Why not consider if not very sound then at the very least thoughtful deflationary environment arguments for physically possessing precious metals.

    Some deflationary thoughts in which gold is still the right answer:

    1. The western world is debt saturated. everybody but the financial oligarchs are broke. Nobody to bid up gold. The oligarchs will NOT.
    2. The irredeemable currency/credit/debt system is based on compound interest, so it is not a linear curve that represents the new currency/debt creation required to prevent default on past and present loans but an exponential curve i.e. hockey stick at the end which eventually goes nearly straight up!
    3. As the oligarchs and the matrix they have created, which we are all imprisoned by, move toward the hockey stick end of the curve they frantically push the solutions they have which include empire expansion (world war and physical domination), welfare state growth (communism) and Immorality in the private sector (big debt generator if people actually believe they can please themselves with more money/debt). These are the debt peddlers three big customers so to speak. Overall they are deflationary mal investments.
    3a. Mal investment is overall deflationary.
    4. You see and you know the oligarchs are all bond holders. They will do anything to prevent debt default. Hyperinflation no biggy (just print more) to them really but they don’t want to give up the control their bonds (common root word with bondage) have over other people and the world.
    4a. You are well aware interest rates will never, nerver, ever be deliberately raised simply because this would cause the value of the bonds in existence, 99.9 percent of which are held by the fed, owners of the fed, the owners of the big banks (all the same group by the way) to lose the value of the bonds currently held, which took over a century to acquire. The real value of the bonds is control.
    4b. If “they” lose control and interest rates do rise organically then the collapse of the bond market, followed by the collapse of the derivatives market will be deflationary to the extreme. Don’t forget already existing derivatives and bonds go down in value as interest rates go up!
    5. The new Austrian school and Dr. Fekete would maintain that the monetization of debt is NOT inflationary at all. They say the big banks front run the fed, when they know interest rates are going down (they probable own the fed) they buy the bonds first and then sell them marked up for risk free profits. This front running actually sucks whatever real capital (based on savings) that exists from the system by this draft of fake capital (created “out of thin air”). Risk free profit I guess. This is deflationary. I believe them to be right, but the point is that even in deflation physical precious metals is still the right choice.
    6. Once deflation gains momentum whatever business still exist that run on a balance sheet (are there any non multinational corporation goods and service provided? probably not for world trade, huh) have there assets disappear, as those assets are just liabilities on someone else’s balance sheet and they just went out of business. Domino effect deflation, I guess.
    7. Fine, the Fed prints and prints and prints but it doesn’t go anywhere, ever, but to their own derivative and bond market (ok some to the stock market) to make good their bad bonds (and derrivatives) causing a great sucking sound vacuuming up all the stored wealth on the planet. Velocity approaches zero, Deflation.
    8. Malinvestment of a thirty years period of overall falling interest rates is poof, gone. Deflation.
    9. To Quantify this deflationary force behind this phenomena you really have to understand what exponential mean. If I can so can you!

    So where does this leave the idea of possessing precious metals?

    Undoubtable (maybe undoubtably, Ha) inflation, if true follows deflation. That sequence, deflation followed by inflation, is certainly not a stretch. And remember this is no ordinary deflation mind you. This deflation is exponential. Exponential deflation means an ounce of gold is worth twenty bucks. No not on decimals on computer screens. Nobody would be fool enough to take that make believe money after the third party poof its gone disappearance of perceived value that will occur in this looming exponential deflation. I am talking about paper bills money you can hold in your hand. Yup twenty buck. That’s what it was worth when this whole farce began and that’s what it will be worth when all the illicit gain from fake currency/credit/debt disappears.

    Still buy gold? Are you crazy? No I am not crazy. Physical precious metals are still very important because:
    1. You do not own anything you cannot hold and you can hold Au/Ag.
    2. Precious metal are the ONLY asset that extinguish debt and there is a lot of debt to extinguish.
    3. When on ounce of gold equals twenty bucks, twenty buck will have tremendous purchasing power in that environment at least what on ounce of gold has now. Of course the value of the paper bill is short lived because more can then be printed don’t ya know.
    3a. There may come a time where the ONLY form of capital is physical gold. This places a profound privilege AND responsibility on the owners of gold.
    4. Believe it or not it will be a lot harder for someone (government) to steal the gold you own than any thing else you think you own.
    5. You can run and hid with Au/Ag if you have to, hopefully it won’t be quite that bad.
    6. After exponential deflation comes exponential inflation! When inflation hits after this deflation you will never, ever, ever have a chance to buy gold again, for any price, for you and yours will forever then be…… serfs.
    7. And of course, its the right thing to do, you can potentially gain at no one else’s expense. You and yours can forever be one of the good guys. Priceless!

    Thank You for a Great Web Site, Great Interviews, and Insight!

    Best Wishes in Human Action!

    Best Wishes


    • Thanks for contributing.

    • TG Molitor

      This is an interesting question to explore: the inflation vs deflation affects on the price of gold (though store of value is much more important reason to own physical gold than price). The libertarian view of owning physical gold is as an “insurance policy” against fiat printing (inflation). Yet, in the US (and recent Black Friday sales seem to support this), I see nothing but deflation in the marketplace. Any thoughts on this, Sydney?

      • Sydney

        For whatever its worth I forecast massive, exponential deflation, followed by inflation to some degree of uncertain magnitude, timing and velocity. No amount of printing can stop the ongoing and then massive deflation. Pushing on a string as they say. They print but it all goes to stabilize the derivative and bond market which is their power plant so to speak. Yes some currency leaks into the stock market by design so none of the serfs become alarmed and feel the need to get to the bottom of the problem. Currency, that is USD paper note (not decimal or computer entry!) that you can hold in your hand I believe will sore (during proof read i noticed this slip up in spelling—a prescient slip? kinda like a freudian slip, ugh!) in value until actual printing and distribution of notes catches up and devalues again. There might not be much time between the increased and then decreased value of the physical note to actually get your hands on physical gold, so your probably much better off getting physical Au while you can, kind of dollar cost average, but have both! and stay out of debt! There is no such thing as a debt jubilee with these people. They will have you work it off in one of their low calorie diet work camps before they forgive a dime of debt.

        I have to confess that I am puzzled by my on the ground observations of economic acitivity. I believe in my bones their is deflation currently in the marketplace but every time I go out shopping there are long lines at the check out isle? I avoid credit cards like the plague so I wouldn’t know but maybe they are lowering credit card standards? Less guests at the homeless shelter I help some at than last year I have noticed? I just can’t figure the two nor will I conceal these observations. On the other hand, gas is under two dollars a gallon for the first time in a long time.

        Yet my bones say deflation is on going and even accelerating. It is the petro dollar after all. From what I understand there is an enormous glut of petro (oil) which spells deflation, an enormous over supply of dollars (decimal dollars NOT paper notes) which suggests inflation BUT cannot forget the debt that comes into existence right along side the expansion of the currency which balances this currency creation out, doesn’t it, and with interest payments spells (deflation). The ratio of the huge number of decimal dollars created to relatively small numbers of actual physical dollars goes in the deflation column. The incentive banks have NOT to lend exits as they get paid more money to deposit at the fed than lend it out is deflation. At some point people will be done borrowing, won’t they?

        TG Molitor, The Absolute Bottom line is I simply don’t know what the future holds! You can take that to the bank, Ha.

        Actually its worse than that. I have such a long record of being wrong with my predications for what the future holds that the best bet is that whatever I predicted above is the only series of events that likely will NOT occur.

        At least I know this about myself, and I am not keeping it from you! That is the reason why I try my best to invest on principle alone. If I do what I think is the right thing and lose I guess I am ok with it, as ok as you can be with a loss.

        In any event thank you for sharing your thoughts and Best Wishes.

        • TG Molitor

          > TG Molitor, The Absolute Bottom line is I simply don’t know what the future holds!

          The future is never obvious. Not even Anthony Wile knows the future. If he did, he’d have the largest and costliest financial newsletter on the planet.

  • Bruce C.

    I disagree with the consensus opinion that if the Fed raises interest rates that the US dollar will “strengthen.” Not that this has much to do with the gist of the Interview, but if the Fed raises the “Fed funds rate” under these circumstances then I say the dollar will “weaken.”

    Just as a “weak” currency implies high borrowing costs (interest rates) to compensate the lender for the volatility inherent in a weak currency, borrowing costs (interest rates) for a “strong” currency are lower because there is less risk of the lender losing buying power after the loan matures. Right now there is an economic relationship between the dollar’s strength and the prevailing interest rates, but if those rates are ARTIFICIALLY raised BY FIAT from the Fed then the dollar must necessarily weaken to maintain the same economic relationship. Another way to look at it is to say that if rates are increased (i.e., the cost of money) then there will be less demand for dollars, which manifests as “weakness.”

    The consensus believes that higher interest rates will attract more investment (savings) and thus increase demand for dollars (“strengthen” it) but that is akin to saying that such investors will be willing to pay more for even more dollars than they borrow now just to gain slightly more return. That’s backwards. The higher borrowing costs will necessarily exceed the higher savings rates.