Silver is leaving the Comex warehouses rather quickly at the moment as futures traders take delivery of the metal. When the warehouses are empty all offers to sell silver will be withdrawn. Get it while you can…

http://harveyorgan.blogspot.com/

Jeremy, is that really so? I know, for example, that the eDealer I buy and sell through takes rent for storing my gold and silver in the metal itself. I presume, therefore, that since some billions of pounds of bullion is being stored by Mat for them that GoldMoney will have silver and gold to sell much of the time.

Furthermore, with the price of silver and gold going down as well as up, though up more often at the moment, there are presumably some people selling their bullion which then becomes available to purchase by others.

Both of these operate regardless of whether there is still bullion left in the warehouses, as you say.

Thirdly, there are some banks, I believe, who are trying to keep the price down by selling their large stores back into the market.

I’d appreciate Ed’s thoughts on this matter of supply running out.

@ Peter:
Another great commentary, Peter! Without retribution (to those who have consistently been manipulating the price of silver!), you provided a rational explanation to the silver price suppression scheme that has been in existence for a very long time.

Beware of the Manipulators:
Even the casual investor should be able to use logic and a dash of judicious reasoning to determine that he/she should own some physical silver. I emphasize the word “physical” because JPM is the custodian of the “SLV” ETF, and HSBC (as of July 2009) is the custodian of the “SIVR” ETF. And we should all know by now that the biggest manipulators in this silver scheme are JPM and HSBC.

A Word to the Wise:
Please do yourself a big favor and avoid SLV as well as SIVR, as though these ETFs had the plague. When the bubble finally bursts, these phony ETFs will be exposed for the sham that they are, and will fall like a rock.

John Mark, The world’s monetary system will cease to exist the moment gold and silver become recognized as currency. This event will also fatally undermine the legal system, the sanctity of contracts, habeas corpus, and all the provisions of law and order that we take for granted. Under these conditions, nobody will be able to prevent the institutionalized theft of ETF holdings

Jeremy, your last comment is so apocalyptic that I don’t believe the situation you describe will ever occur. Indeed, though I own bullion and hope to continue to profit from it, I would not want gold and silver to become currency if all the bad things you list come to pass as a result.

Your first comment discussed the lack or potential lack of silver and how this would be problematic for investors. Now, you seem to be saying that there is enough gold and silver to replace fiat currencies. Aren’t you contradicting yourself here? Won’t we need tons and tons of bullion if g and s are to replace dollars, euros etc etc?

Just announced today

http://online.wsj.com/article/BT-CO-20101230-705589.html

Seems JPM are tainted everywhere

Oh, my, some of these comments are “way out there”. So let me add a few thoughts, and suggest some sites where one can find specific info on “what constitutes money.”

A Few Facts:
1. The “fiat currencies” of most western economies are rapidly being devalued, as each country tries to depreciate their own currency below others (trying to obtain a “trade advantage” over their trading partners).
2. Every fiat currency that has ever existed throughout history has died, eventually.
3. Gold and silver are already recognized as “money” by those who understand what it truly is.
4. Paper money, or fiat money, is not backed or supported by anything that is real. They have some “worth” only because a government says they have worth; when that trust is gone, then that fiat money becomes worthless.
5. There is not enough gold or silver (or both) in the world that could be used as currency, and it would be very, very inconvenient to do so.

Then What is Money?
Admittedly, gold is money, but it is not an easy medium of exchange (e.g. how do you buy a loaf of bread by offering a small piece of gold in exchange?). “Money” must have specific properties, some of which are:
- it must serve as an easy medium of exchange
- it must be easily divisible (i.e. in units, sub-units, etc.)
- it must represent a continuing store of value
- it must serve as a source of liquidity
- etc. (for more on this, just google “principles of money” !)

Fiat Currencies Will be Replaced with New Fiat Currencies:
So at some point in the not too distant future, some fiat currencies will be replaced by “new” fiat currencies which might be partially backed by gold. For an interesting read on this topic, read Robert Landis great commentary here:
http://www.goldensextant.com/
and Ambrose Evans Pritchard’s remarks a few months ago, where he talks about the eventual death of unbacked “paper” money:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7909432/The-Death-of-Paper-Money.html

There’s much more to this dialog, but enough for now!

obewon, thank you for going to the trouble of explaining money! It was helpful. It makes sense to me that fiat currencies fail given time and that new fiat currencies enter to replace the old ones.

I would be grateful if you would be more specific on Robert Landis’ article since there are so many essay titles on the webpage that I could not distinguish his nor did I actually feel like making the effort.

I am intrigued about partially-gold-backed fiat currency since it seems impossible to me that one part of a fiat currency is gold-backed and another is not. I guess Landis’ article deals with this.

JM, the lack of credibility of irredeemable currency evidenced by QE1, QE2, QE3 (coming soon) etc etc etc will be such that no one in his right mind will accept it in exchange for gold or silver. The stock, or lack of it, in the Comex warehouses provides a real time snapshot of the remaining confidence, or lack of it, surrounding what is only a faith based currency

Happy New Year !

@ John Mark:

Sorry for the confusion; in my haste to type a response, I didn’t realize that my link to Landis’ Speech was inadequate.

Getting to Landis’ Speech:
There is no direct “hotlink” to Landis’ speech, so here’s the steps to get there:
1. go to: http://www.goldensextant.com/
2. Scroll down to “Speeches”
3. Click on “Viva La Restoration”

In his commentary, he makes a simple, yet very profound statement that few Americans seem to understand; he says:
” we can’t understand gold until we realize that it has a political dimension.”

Then he takes an unusual approach to the “gold discussion” by summarizing:
a) what actually happened (related to the on-going global financial crisis),
b) how we can get out of this mess,
c) why this crisis is “all about maintaining power”,
d) a few tidbits regarding the Austrian School of Economics, and finally
e) the concept of money and gold itself.

A Fascinating Read on the Subject of “New” Currencies:
While there are a number of good commentaries on this subject, arguably one of the best is from Jim Rickards (this dude knows what he is talking about, and is always a “must read” for me).
Go here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/6/21_Jim_Rickards_-_G20_&_Revaluation_of_Gold.html

Rickards discusses the “big alternatives” that the world powers now face, relative to the current “very sick” global financial system and the advent of newly introduced currencies.

My Personal View:
Without a doubt, the world faces tremendous uncertainty over the next two years, regarding “the future” of the global financial system; but amid all the forthcoming spin and resulting chaos, two things are certain, in my view:
1. New currencies will be introduced (and sooner than we think!), and
2. In desperation, some governments will “claim” to use gold for partial backing.

@ John Mark:

The Euro (which is currently one of the 3 “viable” currencies in the world, the others being the USD and gold) is presenting a real problem for the Euro powers, principally because of the PIIGS, one of which could default on its sovereign bonds. My response here takes into consideration the gold which EUR countries have in storage, and how they may have to use that physical gold to “save the Euro.”

So my blog entry above would not be complete without also mentioning the fact that they (i.e. the Euro powers) have a “Nuclear Option” (e.g. using their gold hoards) that they may eventually have to use in order to save the Euro. Certainly, if the Euro becomes toast (i.e. beyond the 20% depreciation vs. gold per year), it may be the first domino in a long chain of failures, threatening the collapse of the global financial system itself. Clearly, they don’t want this to happen; therefore, the “Nuclear Option” becomes more likely with time.

“Political” Dimension of Physical Gold:
European countries store a considerable amount of gold; Greece, for example, is a basket case, but if they ran out of options, they could use their gold to “get out of jail”, if gold were valued at a much higher price (say $5,000 per ounce or more).

For a fascinating but very long read on this topic, go here:
http://fofoa.blogspot.com/2010/02/greece-is-word.html

Yes, Jeremy, but they’ll accept a new fiat currency, as obewon has said. You should try to answer his arguments FOR a fiat currency because they are extremely powerful.

Many QEs will or may lead to a new fiat currency or set of them but not to g and s as the currency.

People in their right minds DO need a fiat currency. I do and will continue to do so whilst I invest in g and s

I still don’t see that a lack of s in Comex warehouses means that there is an overall lack for people to buy – for reasons I’ve already given. It just means that Comex warehouses have run out of silver, does it not?

A bullion-prosperous New Year to all of us!

A Final Thought on Gold & Silver:
I sincerely hope that ArabianMoney.net readers took the time to go to those sites I’ve referenced above, and carefully reviewed what the authors have to say about the “political dimension” that is inherent in physical gold.

After reading those articles, one may come to the conclusion that the use of physical gold and silver as currency would “theoretically” be good for the 6.5 billion people on this earth, since it would minimize the extreme financial fraud, corruption, and cover-up schemes that are continuously being orchestrated by governments and their central banks, together with the big banks around the world.

But it just wouldn’t be practical for many reasons, some of which are cited in those links above. On the subject of the global financial fraud and corruption, and the alternative currency option schemes CURRENTLY being contemplated by the world’s politicians and central banks, here’s a great read, cited below. No doubt, folks like Ben Bernanke are staying awake at night, trying to determine how best to perpetuate the global Ponzi schemes that are masquerading as “Central Banks”.

An Absolutely, Positively “Great Read”: A Cross of Gold
Several months ago, I read a paper written by Edwin Vieira in which he discusses these Central-Bank-Ponzi-Schemes at length. I originally had read his paper as a PDF file, the topic of which I could not recall until yesterday. This morning, I “googled” the title (“A Cross of Gold”), so I could obtain a link for others to access it. It deserves to be read slowly, in order to digest it fully. Here are the links:

Link: http://www.gata.org/files/Vieira-ACrossOfGold-10-21-2010.pdf

I was pleasantly surprised to learn that US Congressman Ron Paul has also endorsed this paper on his website.
Link: http://www.dailypaul.com/node/147955
A special salute to Ron Paul, a rare person among a den of thieves and corrupt politicians.

obewon, I had begun a reply to your very last post when I noticed that you had kindly addressed two posts to me. I will try to look at the references you gave but, in the meanwhile, I would like to continue my current response to you.

I read through Vieira’s paper. In recommending gold as the actual currency (as opposed to the dollar or pound in the hand), he says that the individual will possess the gold in himself. He also said, I think, that the people would, in effect, decide how much gold should be held by the people (and not in the central banks’ vaults) and, as a result of this personal ownership, multiplied by the population, business would set its prices in the value of this gold held in private hands.

I am perplexed by your enthusiasm for this paper since gold in the hand is not a user friendly currency, as you have previously stated, for example, how do you buy a loaf of bread with gold? You have also said, I think, that there simply is not enough gold for individuals to own it personally to use it as a real currency. For these two reasons, Vieira’s idea of real gold as currency falls flat on its face. And I haven’t mentioned the security problem of, say, little old ladies trying to keep their gold-in-the-house safe from thieves etc.

Whilst it is true that gold has a political dimension, it also true, surely, that currency, money, has a psychological dimension. The psychology is that people in power will always try to express their greediness whatever currency system is operating. So, if there ever was a gold currency, those with power over others, from common thieves up to senior politicians and bankers will go on and on finding ways of benefitting themselves at the expense of others.

Vieira’s interesting history of the problems of fractional banking and the need to have a bank above them all shows that it is human nature which torpedoes it over time. He talks about greedy people in the past who have brought us to this present calamity, but there will be other greedy people who will take us on from where we are now to further calamity in the future, even if gold does become the currency of the world.

My conclusion is that financial utopia can never be reached and that, therefore, Vieira’s enthusiastic ideas will fall given time. Economic tinkering will go on to ameliorate matters but never to cure them. Economic tinkering may well involve a world government with its world bank and, eventually, its world dictator who might be given the name of the Man of Lawlessness.

I’ve been thinking overnight that Vieira may possibly be a Marxist thinker! It would be marxist to damn capitalism in its banking failures so severely that readers of his article are likely to be left with the only possible solution, according to Vieira, and that is to put the gold into the hands of the people.

He speaks abusively of US bankers down through the decades and centuries, and I have no quarrel with this per se. However, he goes on after a while to abuse these bankers of being fascists and somehow manages to fit Mussolini into his picture of these capitalist monsters.

His solution to the fractional reserve banking and the need for a superior bank over these is to abolish any superior bank of any sort, empty the state’s vaults of gold and put the gold into the hands of the people, and perhaps I could say into the hands of the proletariat.

Marxism failed so dramatically in the 1980s and its Cuban fossil is collapsing as we speak – economically. Soviet communism collapsed – economically as the middle class increased in numbers and skills. Whilst I accept much of the history of capitalistic fractional reserve banking as being corrupt and intrinsically bad, as described well by Vieira, I am totally unprepared to accept that any Marxist solution is going to be any better over time.

The problem is not, therefore, with Marxism or with Capitalism. The problem is with us, human beings, in our corrupt human nature where greed possesses those with more power than others, whether those in power be Marxists, like Stalin, or Capitalists, like Bernanke.

I am flagging this up because an intellectual and middle-class form of Marxism is trying to make a big noise at the present time. I am convinced by those who say that Marxism is behind the dire warnings issued in regard to man-made global warming. To take money from the wealthy, especially businesses and bankers, and to give it to the people in other countries, on the grounds that this is the only way to reduce carbon output and global warming, is a Marxist scam, in my opinion.

So, it is worth looking for any Marxist thinking as you read between the lines of any economic solutions presented to us.

@John Mark:
When it comes to the continued use of fiat currencies, the central issue always has been, and always will be whether, or to what extent, the citizens of a government have trust and faith, or the lack thereof, in their government. This correlates with your point about the “psychological dimension” of money. It didn’t take Zimbabwe’s citizens very long to figure out that the fiat paper currency being printed by their government was only “paper”. With the US deep in debt and with no way out, how long is it going to take before the average US citizen begins to understand what we understand? Another 5 years? Dunno, for sure.

Why I recommended Vieira’s Commentary:
While I don’t agree with some of Edwin Vieira’s key points, my primary objective in recommending it as a “great read” was because he adeptly exposed government politicians, governments, and government central banks as the central figures in the “on-going Ponzi schemes” against humanity. I erred in my prior response because I neglected to state my position clearly; but in retrospect, if I said that I didn’t agree with Vieira’s key points, perhaps there would be less folks on this blog who would take the time to read Vieira’s commentary . . . and that would be unfortunate.

Vieira’s Main Points are Impractical and Not Possible:
As you correctly stated, this world is full of greed, and there will always be a portion of any society that will not want to earn their livelihood by honest means. That is the nature of humanity, and greed often becomes more pronounced when one becomes more wealthy and/or more powerful, e.g. a poor, revolutionary leader who wants “only to help his poor peasants in his country”, then eventually becomes the country’s President, and promptly forgets his pledge to his country’s citizens (Mexico has many examples in this regard!!!) What Vieira proposes isn’t practical nor is it even possible, for a number of reasons (some of which I cited in a prior response; i.e. gold isn’t easily divisible, etc. etc.); some additional reasons are:
1. An adjunct to “there ain’t enough gold to go around!” A large amount of the world’s current gold storage is either owned by, or totally controlled by a small number of people who happen to belong to one of the following categories: a) the Power Elite, or b) the extremely wealthy, or c) powerful politicians, or d) very powerful bankers (some folks will fit in multiple categories!). These greedy and powerful folk ain’t about to relinquish their power; nor will they ever allow the “common person” to share their power. An old saying applies here: “whoever owns real money will be in control…”
2. An overwhelming majority of people in the world are poor, uneducated folk, and many of them are very “trusting” of their government. Given what I’ve said above, how could they ever get their hands on physical gold?

Human Nature Still Will Prevail:
Yes, I agree with your conclusions. Power Corrupts; and Absolute Power Corrupts Absolutely! And Financial Utopia simply ain’t possible; this was one of your main points, and it’s certainly true. The Power Elite and the powerful politicians of the world ain’t about to relinquish their power & wealth; and their “principal weapon” employed to keep them in power (for as long as possible!) is to deceive the masses. This deceit comes in many flavors, some of which are: a) use of fractional reserve banking and excessive banking leverage b) use of fiat paper currencies that are not backed by anything tangible, such as gold, c) “fear-based” memes that spread dis-information and propaganda; the Daily Bell refers to these as “dominant social themes”. The Daily Bell Bell (go here: http://www.thedailybell.com/archive.asp ) does an excellent job of exposing these dominant social themes, from a “free-market”, perspective.

To gain a better glimpse of the 2010 dominant social themes promulgated by the Power Elite, go here:
http://www.thedailybell.com/1648/A-New-Years-Message-from-CEO-Anthony-Wile.html

Final Thought on the Forthcoming, New “Fiat” Currencies:
Because of all this, I believe that the forthcoming “new fiat currencies” (coming soon, to a bank near you, sometime within this decade!) will only have the “appearance” of being backed by gold, or by a basket of commodities. In reality, they will likely be “partially” backed by gold, primarily to regain the trust of the masses.

On Whether Vieira is a Marxist:
In your most recent response, you gave your assessment of Vieira’s ideas, and concluded that he may be a Marxist; I’m not sure. But like you, I’m certain that the problems are not with capitalism or Marxism, per se.

The Global Warming Scam:
On whether the origin of the “Global Warming Scam” is from Marxist intellectuals, I’m not sure. But as a technologist for many years, I know that 90% to 95% of the heat-trapping around the globe is caused by water vapor, and not by human action. Given this fact, whatever humanity does will not reduce this trapped heat by more than 1% or so. The Daily Bell has a lot to say about this scam; if you search their site, they provide additional compelling rationale for why this is a scam of epic proportions.

Why I’m Prolific on This Blog:
Some of ArabianMoney.Net’s readers may wonder why my responses are so detailed. Simply stated, the Internet is an extremely powerful device that is exposing the truth about the great propaganda and fear-based promotions which the wealthy & powerful are projecting onto the masses. Similar to the Gutenberg Press, the Internet continues to expose these lies; it continues to expose government and central banking fraud for what it is . . . and this knowledge greatly benefits all of humanity.

In my opinion, the powers currently controlling fiat paper money WANT a gold standard. A worldwide one, backed by several central banks, with digital gold. But they don’t want to impose that gold standard. They want the demand for it to come from the “grass roots”. And the best thing to make that happen is to make people lose confidence in paper money. That is happening now, and it will continue and get worse.
Once we have a gold standard in place, presto, there is your one world currency. And that is what the controllers always wanted to have. Can’t think of a way that’s easier to get there.

@ Peter:
I agree that the Power Elite “want a one-world-currency” as you’ve stated, as well as a one-world-central-government, but there’s overwhelming evidence that they do not want a currency that is backed by gold. If this were to happen, the Power Elite would no longer control the global financial system. Over the last 2 years, the world’s most powerful politicians and so-called “financial leaders” have repeatedly been caught in the web of their own lies and deliberate mis-representations which are designed to deceive the general public. The greatest lie of all, however, is our global, “fiat-based” monetary system and the suppression of gold and silver prices that support this lie.

What Happens if There’s a True Gold Standard?
There are a great many articles and commentaries that have exposed the real truth behind the gold and silver price suppression; in brief, this scheme allows governments to continue the great Ponzi scheme known as the perpetuation of debt-based, deficit spending through use of “fiat” currencies. With a gold standard in place, governments can’t continue to print money (or the electronic equivalent), and the powerful banks in the world can’t easily defraud the public.

One of the most powerful arguments here comes from Alan Greenspan himself. In 1966, Greenspan wrote an extraordinary essay in support of a gold standard; this essay is entitled “Gold and Economic Freedom,” and was written for Ayan Rand’s book on Capitalism. Here’s a brief excerpt from that essay:
”without a gold standard in place, there is little to prevent governments indulging in wild credit creation. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

In the years since he penned that essay, Greenspan partly backed away from those ideas (and he blatantly ignored their implications when he was Chairman at the FED). But now they look prescient. I encourage you to read it in its entirety. For Greenspan’s full 2 or 3 page commentary, go here:
http://www.financialsense.com/metals/greenspan1966.html

And here’s another link to a 2009 commentary about Greenspan’s “Gold and Economic Freedom” essay.
http://www.theundergroundinvestor.com/2009/05/gold-and-economic-freedom-reinterpreted-for-the-21st-century/

Footnote:
I find it absolutely fascinating that, just a few years ago, after Greenspan retired, he was quoted as telling Congressman Ron Paul that “he would never change a word” of his essay that he wrote for Ayn Rand in 1966.

Gold not physically convenient as a currency? Not true. Gold can be made extremely thin. Thinner than any other metal perhaps. Imagine a currency where higher denomination notes have a visible piece of gold on them. Perhaps a 2 x 2 cm square under a very thin laminate. Ie, physical gold could be used to buy a loaf of bread. Smaller denomination notes would be backed by the larger ones which contained visible gold. There would be no point in cutting the gold out of the notes, as you would only be left with a piece of gold valued the same as the note from which it was extricated.

“Reliable market estimates suggest that there around two billion ounces of gold held above ground in bullion, and only one billion ounces of silver. Over time there has been far more silver mined than gold, say around 45 billion ounces, but it has almost all been consumed by industry. Much more of the five million ounces of gold mined by mankind remains.”

- is it only me that sees the millions and billions of ounces of gold not adding up?

“two billion ounces of gold held above ground…” yet, “…five million ounces of gold mined by mankind…” Suggesting, most of the gold above ground was never even mined?

24January Update:

NewsFlash:
In an interview last week, Alan Greenspan re-iterated his view for a gold standard. Go here for info.
http://www.infiniteunknown.net/2011/01/21/and-now-alan-greenspan-supports-the-gold-standard-after-he-did-an-outstanding-job-in-destroying-the-us-dollar/

@ Jason:
The reason that it “doesn’t add up” is due to fraudulent schemes perpetuated by the gold cartel. For example, take the LBMA, where 90% of physical gold is traded every day. Over many years, the very wealthy have purchased their physical gold from the LBMA, and the LBMA convinced these clients that they should “store their gold” at the LBMA. The “problem” arises when wealthy customers insist on taking physical possession of their “allocated” gold (which isn’t really allocated to them!).

The LBMA Gold Schemes, Revisited:
The problem here is that this same physical gold was sold to many other clients of the LBMA. The latest estimates on the “leverage” used by the LBMA are almost incredible; each ounce of gold was sold to approx. 90 to 100 different customers. To add “insult to injury”, they also charged heavy “storage” fees to these customers, who never really had direct allocation to this gold in the first place.

Commentaries on this “fractional reserve gold scheme” are on the internet. Go here
http://gata.org/node/8388

Or Here:
http://themonetaryfuture.blogspot.com/2010/01/lbma-operates-fractional-reserve-system.html