Introduction: Bob Chapman has been writing and analyzing the precious metals field for decades. As one of the largest gold brokers of the 1970s, Bob experienced the ins and outs of the industry at the highest levels and this experience has stood him in good stead. As the composer of the International Forecaster, Bob provides a savvy and often controversial take on how the industry works today and where precious metals are headed.
Daily Bell: Thanks for the interview.
Chapman: Glad to do it.
Daily Bell: You are well known for writing a good deal about a concerted, organized effort by the elite to control the global economy. What interactions have you had that provided you with this conclusion?
Chapman: I've been studying the elitists for 50 years, and I've been writing about them since 1967. None of this is new and now because of the Internet much of it is very visible. It begins with central banking and there is nothing to be said that can constitute a defense of central banking. A small group of men get together around a table and set interest rates, basically the price of money. They do so without supervision or the consent of those who use their money product and they do so pretty much in secret. There is no accountability and lately, again thanks to the Internet and YouTube, people can pretty well see how nonsensical the system is.
We had a classical gold standard for 200 years that provided a good deal more monetary stability than the current system. There were problems with it, but the problems had little to do with the creation of money itself. Today we have a money problem and it is very obvious where the responsibility lies. Just go on the Internet and read about it. Then ask yourself, where did this concept of a central bank come from? Is that all there is to it? Of course not. There are plenty of forces, families and extraordinarily wealthy individuals standing in the shadows of the central bank. They didn't get a lot of exposure in previous decades, but they are certainly exposed now.
Daily Bell: Yes, the Internet has made certain contributions a good deal more obvious. And you've become a very popular read on the Internet. Can you give us a sense of your evolution as a hard-money writer and thinker?
Chapman: What got me involved in gold and silver related assets in the early 1960s were as a result of my work in counterintelligence in the middle to late 1950s. Once I found out who ran things and how I became a hard-money thinker. It just didn't seem right to me that a few individuals held so much power, and did so in secret. The people in the intelligence community are basically a kind of Praetorian Guard. They're supposedly there to fight crime and protect national interests, but when you really look at what they're doing, it has more to do with protecting elite interests. If either the general population or the politicians get out of the line, there's this enormous intelligence community with the resources to make sure that they step back in.
Daily Bell: Regardless of what Western intel can or can't do, the system is obviously under stress. You've said your sources predict a bank holiday. Can you expand?
Chapman: An investigative source as well as three well-placed subscribers told me that a number of US Embassies were being instructed to purchase local currencies. That can only mean that government believes that foreign sources may not accept US dollars as happened in early 2008.
Daily Bell: They would be stockpiling currency to ensure local liquidity?
Chapman: It is not simply an exercise in embassy self-protection. My sources believe that this would be caused by a plunge in the dollar and perhaps even a short bank holiday as a training exercise for a bigger, longer holiday later.
Daily Bell: That's a pretty big story, especially if it happens. It shows the powerful forces at work beneath the surface. While you're obviously a free-market person, you also seem to believe that unions and other kinds of organized societal bodies have their place even in a free-market economy. Is this a case of the pragmatic overwhelming the theoretical?
Chapman: Yes, I would say so. Regulation is necessary in my opinion not theoretically but pragmatically – regulation that should protect the working-man and the middle class. They have the most to lose. Most of the 20th century was spent on workers rights and rightly so. Conditions and wages were dreadful. As a result of labor unions we established a large middle class, which formed the backbone of our country. What the future holds for unions I cannot say. It depends on how the depression plays out. The forces at play are extremely powerful and there needs to be some sort of organized mechanism that counteracts what has been created. While we can see that the free-market has been overtaken to a degree by elitists and their monetary creations, the question of how to live in such a world are real and immediate. In the long-term education may work but in the short term various entities, including those that some might call populist, have a role to play.
Daily Bell: What is the biggest financial challenge the world faces in your opinion?
Chapman: Exposure of the Fed. Who really owns the Fed and what they have been doing since 1913. How the banks and brokerage firms make billions via inside information and the complicity of the SEC in scams, such as Madoff. As I've said, along with many others, it all begins with the Fed and a handful of wealthy, unelected bankers meeting in private in a room somewhere deciding on the value of money for you and me.
Daily Bell: Are gold and silver markets manipulated?
Chapman: Gold and silver markets are manipulated, but so are most other markets as well. Under Executive Order 12631 the government does as it pleases in markets. I have the order right here. It is entitled "Working Group on Financial Markets" and it came into force on March 18, 1988 signed, unfortunately, by Ronald Reagan. It's very short and you could reprint so that your readers understand the full extent of what's going on. This is by no means a dead letter. When you combine this authority with the authority of the Fed to create money, you are basically dealing with a fairly well-controlled system. It's certainly not what it was.
By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:
Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee;
(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;
(3) the Chairman of the Securities and Exchange Commission, or his designee; and
(4) the Chairman of the Commodity Futures Trading Commission, or her designee.
(b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.
Sec. 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:
(1) the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and
(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.
(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.
(c) The Working Group shall report to the President initially within 60 days (and periodically thereafter) on its progress and, if appropriate, its views on any recommended legislative changes.
Sec. 3. Administration. (a) The heads of Executive departments, agencies, and independent instrumentalities shall, to the extent permitted by law, provide the Working Group such information as it may require for the purpose of carrying out this Order.
(b) Members of the Working Group shall serve without additional compensation for their work on the Working Group.
(c) To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions.
Daily Bell: That's certainly a broad brief. And there is plenty of evidence that markets are being pushed around. But in the long term, the Invisible Hand will have its way. Where do you think gold and silver are headed pricewise?
Chapman: Gold should conservatively reach $2,500 an ounce. It could go considerably higher dependent on what happens. Silver as a result could make it to $100 an ounce. There's so much money in the system now and so little faith as to how the American administration is going to handle the current deficits that the genie is virtually out of the bottle.
Daily Bell: Do the fundamentals remain bullish for gold and silver?
Chapman: If the US and other governments had not suppressed gold prices it would currently be at $2,500. Thus, gold on fundamentals is a steal at current prices. Sooner or later the elitists will lose control.
Daily Bell: Is the world headed toward a one-world currency?
Chapman: The elitists want a one-world currency, but I don¹t think they will get one. The dollar will fall in value and default may occur and that could be replaced by a basket of ten currencies or a new world currency could be created, but I don¹t think the people would accept it.
Daily Bell: Sounds like the elite has miscalculated when it came to the Internet.
Chapman: The Internet is the elitists' biggest nightmare. The people are getting the truth and the elite does not like that one bit. Already a full generation has grown up with the Internet and their educational experience is a good deal different than yours or mine. There are literally millions of pages of information out there on the blogosphere that you simply could not find in your local library. But it is even broader than that. All that information is being translated into action, into broad political movements and Tea Party protests that are going to make it even more difficult for a full-level of globalism to be realized. In the 20th century, it was a good deal easier. But in the 21st, things are far more difficult. It's even hard to start a real war these days.
Daily Bell: What countries are most hospitable to gold and silver mining today?
Chapman: Canada, Chile, Argentina, Peru, Australia and South Africa.
Daily Bell: Can you give us the names of some important mining companies?
Chapman: Agnico Eagle is tops in my book followed by Goldcorp, Silver Standard and Minefinders. There are other good ones, but I like these best.
Daily Bell: Can you elaborate?
Chapman: They are all leveraged due to their small number of shares outstanding and they have outstanding management, which I have known for 14 to 25 years
Daily Bell: What are the most important – seminal — articles of yours that you would encourage everyone to read? Where can they be found?
Chapman: Go to our site, TheInternationalForecaster.com , or visit YouTube. They are there and elsewhere. I write so much I cannot really tell which is best.
Daily Bell: On behalf of all of our readers we thank you for sharing your views with us.
Bob Chapman has been writing and commenting on precious metals and the larger Western political economy for years. His views, while certainly in some cases controversial, have often been borne out by current circumstances – as have the views of many similar commentators. You can find his writing on the ‘Net and on ‘Net media as well. It is safe to say that his large audience would not have been possible without the current technology – and his message would not have been available so regularly or persuasively.
It is not a message, perhaps, that the monetary elite wishes to hear, but Bob is not the only one verbalizing these sorts of ideas. The ground rules have changed and the groundswell that is rising up, especially in America, is gradually challenging some basic assumptions about economics, culture, and even history.
It is ironic that the hard-money community, which would not have received a place at the media table in the 20th century, has been far more accurate with its prognostications than the mainstream media. And yet you will rarely see this point of view presented within the mainstream no matter how accurate it proves to be.
The mainstream media, for better or worse, seems to be engaged in a dialogue currently of Keynes versus Keynes Lite. John Maynard Keynes, the socialist Bloomsbury economist, prescribed government spending to cure economic downturns, and his nostrums are being applied even today. They don't really work because government is a most inefficient mechanism to use for capital disbursement and because the money tends to prop up businesses that are inefficient and need to shrink or shut down.
Bob's point of view is distinctly that the rot travels very deeply and that it is most difficult to sterilize. However, Bob himself, has devoted most of his life to counteracting the choices that the elite provides to us, and obviously believes the Internet is offering additional resources to help in that regard. The 20th century seems far away from us now. It is a brave new world, as Bob would probably agree, but hopefully it will be a freer one as well.