By Patrick A. Heller
Commentary on Precious Metals Prepared for CoinWeek.com
According to the US Census Bureau as of 9 AM Eastern on October 2, 2012, the estimated population of the US was 314,544,755. As of January 1, 2009, the Census Bureau estimated that the US population was 305,529,237. So, since Barack Obama became president on January 20, 2009 the American population has grown by about 9 million.
The 2010 Census showed that about 59.8% of the population was between the ages of 18 and 61. Using that percentage as representing a conservative approximation of the available work force indicates that the number of potential US workers grew by about 5.4 million thus far in President Obama’s term.
According to the US Bureau of Labor Statistics (BLS), in September 2012, there were 4.5 million fewer civilian non-farm jobs in the US than there were in January 2009. Combining that with the increase in the work force population over the same time period, that means that about 10 million more potential workers did not have jobs last month than when Obama began serving as president.
Yet, for September 2012, the U-3 unemployment rate reported by the BLS was 7.8%, which was lower than the 7.9% for January 2009.
Huh?
The September 2012 non-farm payroll and unemployment data took almost all analysts by surprise. The consensus of experts was that the U-3 unemployment rate would rise from 8.1% in August to 8.2% in September. It seems more than obvious to me that the actual rate should be far higher than any of these numbers.
Neither the huge one-month decline in the unemployment rate nor the decline in the unemployment rate since January 2009 makes sense.
However, such a government report could make sense if taken in the context of US elections coming up in four weeks. No US incumbent president in the past 60 years has won re-election if the reported unemployment rate was higher than 8%. Therefore, the incumbent has a huge incentive to “influence” last week’s BLS unemployment report to come in at a lower number than that.
If you dig into the underlying numbers, there are some interesting anomalies. For instance, look at the non-seasonally adjusted figures for the number of jobs held by those ranging in age from 20 through 24. There had been a consistent decrease in employment each August to September for 32 consecutive years, from 1980 through 2011, with the declines ranging from 90,000 to more than 600,000. Yet, in September 2012, magically there were 101,000 more employed than there were the month before. The BLS provided no data to explain this miraculous turnaround. No other employment data confirmed this trend reversal.
Another curious bit of data was that the number of part-time jobs soared in September while the number of full-time jobs declined. The overall impact is that there were fewer full-time equivalent jobs in September, but the BLS was able to report that unemployment declined.
I expect more chicanery of this nature in the jobs and unemployment report coming out four days before the election.
I also expect the Dow Jones Industrial Average to magically sustain near its current levels until after the elections, despite the flood of US and foreign investors fleeing the US stock market. The same goes for interest rates being suppressed at rates so low that they are crippling the income of retirees.
So what does all this manipulation in other economic markets have to do with suppression of gold and silver prices? Plenty.
The price of gold (and, to a lesser extent, silver) represents a report card on the US government, the US economy, and the US dollar. The recently announced plan by the Federal Reserve to inflate the US money supply by more than one trillion dollars per year for an indefinite period of time would normally have the price of gold and silver soaring.
But this is election season. No incumbent politician wants to run for re-election and have the electorate paying attention to how much the value of the US dollar has collapsed since January 20, 2009. At the COMEX close on January 20, 2009, gold settled $858.50 and silver at $11.36. Through the COMEX close on October 8, the US dollar has fallen 51.6% against gold and 66.6% against silver since President Obama took office. How much further would the dollar have fallen if the US government wasn’t so active at suppressing the rise in gold and silver prices?
Slowing the rise of gold and silver prices is just part of the overall manipulation of data and markets used by politicians seeking to keep their power. I submit that the decline of the US dollar since January 20, 2009 goes hand in hand with the disappearance of millions of US jobs, the flight of investors from US stock markets, and is the reason why the Federal Reserve is now forced to purchase the majority of new US Treasury debt issues. Instead of thinking of last Friday’s jobs report as a single suspicious event, realize that it is part of an overall effort by politicians to deceive the voters, including the manipulation of gold and silver prices.
Patrick A. Heller was honored with the American Numismatic Association 2012 Harry J. Forman Numismatic Dealer of the Year Award. He owns Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (under “News & Articles) . His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.
Shameful right-wing tripe. Doesn’t say much for the way the ANA ranks dealers, does it?
While I’ve never suggested rare coin investments over commodity priced silver/gold, the ANA still represents tangible objects that can’t go broke. Heller understands about rarities and also about commodity priced metals. People who think government is allowing a free market to price metals are uninformed, on the other side, or genetically incapable of believing that powerful people collude to shear wealth from the public. Go on with your likely all paper holdings. When they combust there will be no door open to revelation and repentance. Carlos Slim just spent most of a billion dollars buying a gold mine; how come he didn’t buy paper mills instead? All FED chairmen and Treasury Secretaries are Pilgrims members, or members of its direct subsidiary, the Council on Foreign Relations. That’s how attacks on metals are coordinated–by membership organizations for the elite. Your terse statement takes the cake for nonplussing!
Yes, facts are stubborn things. Facts that don’t support a certain agenda might be viewed by some as tripe. There’s nothing shameful or right-wing about the facts in this commentary.
If the U.S. government is so intent on supressing the price of gold, why did the Fed recently launch a 3rd major round of QE, whose main impact is to support higher metal prices and decrease the value of the dollar (and I realize that doing so decreases the value of our debts)? The problem with most conspiracies is that they require the actors involved to have much more power than they really have.
The government is stalling for time QE3 had to be started its effect on metals prices was certainly known, the naked shorting of metals has increased to delay the rise, physical demand alone can overcome this. I can see you’re one of those unfortunate dreamers who believe in the innate goodness of human nature therefore, there are no (significant) conspiracies. You should be able upon request to obtain 2012 roster of The Pilgrims, 122 East 58th Street, New York 10022. Maybe you can ask Miner Hill Warner, the group’s president, for it. When you achieve this Biblical feat please post it on the web so we can see who these “actors” are, though a fair number are already confirmed. You really are a babe in the woods! There is no problem with this conspiracy, they have the power to pull things off. Just one man can order nationalization of gold and silver and ruin a million or more metals investors. He would not nationalize at any “inflationary” price! Because this group wants to prevent capital formation outside its influence circles! That same man can plunge civilization into another World War. That’s the President, and he’s owned by the group I cite; see start page at link, document dated 1969. The embedded 446 page report offers additional court acceptable proofs that the White House is real estate THEY own. Paul Volcker (Pilgrims VP) is there NOW as Obama’s adviser, he’s the bandit who wrenched 59 million silver ounces from the Hunts by 1986. And you say a few people can’t have so much power, how nauseatingly W-R-O-N-G you are pal! In January 1932 Texas Congressman Wright Patman started a movement to impeach three term Treasury Secretary Andrew Mellon (Pilgrims executive committee, he had holdings in over 300 corporations) who among many financial crimes, stole $14 million from U.S. silver miners, upheld by his fellow Pilgrims member Taft at the Supreme Court! Patman, who claimed that Mellon “illegally acquired more property to satisfy his personal greed than any other person on earth” alleged Mellon’s personal fortune to be “equal to the entire value of all the property in the State of Texas” (“Paul Mellon Portrait of An Oil Baron,” William Hoffman) and YOU say these conspirators just do not have enough power!
The main purpose of Bernanke’s QE is to support higher stock prices, thereby creating the illusion that the economy is improving. The reality is that QE is destroying the savings and retirements of millions of Americans. The Social Security trust fund will actuall go broke 10 years earlier because of Bernanke’s debt monetization and artificially low interest rates. http://www.zerohedge.com/contributed/2012-09-24/fed-systematically-destroying-social-security-and-retirement-plans-millions
Facts are not supported by Heller’s opinion on manipulation of gold and silver prices. Show me more Mr. Heller and I might believe your assertions.
Instead I’ll just wait and wait and continue to buy and sell silver and gold short and long and continue to make a tidy profit doing so (especially silver, because it is more volatile than gold)!!!
I need more FACTS Mr. Heller that G. & S. is being intentionally manipulated. The MARKET determines the prices; nothing more, nothing less!
I’m sorry to see the ANA rewarding such attitudes and have to say I agree with Dave (first commentator)!!!
Dear Steve,
You are not going to find statements where a US president or a recent chair of the Federal Reserve have flatly admitted that the US government is active in suppressing gold and silver prices, if that is the only standard you would accept as “proof.” However, here is a link of exhaustive research on the subject: http://www.gata.org/node/11507. You could also read the books written by Jelle Zijlstra who was Prime Minister of the Netherlands 1966-1967, then Governor of the Dutch Central Bank and President of the Bank for International Settlements from 1967-1981 where he discusses Paul Volcker’s admission of the US government’s suppression of gold prices. Or you could read declassified US government documents the reveal that the US government has manipulated gold prices from the Great Depression into the 1970s. I’m sure the link I posted here will help you find some of the specific citations You could also read some of Kevin Warsh’s interviews and Wall Street Journal essays since he left the Federal Reserve Board, some of current CFTC Commissioner Bart Chilton’s statements, or ex-FDIC chair Sheila Bair’s essays and interviews since she left government service. This is just the tip of the iceberg. Many people are afraid to consider that this mountain of evidence could possibly be true. I hope you are open to examing the facts for youself, and then consider whether they are sufficient to support my conclusion that the US government has continued manipulating gold and silver prices since the 1970s.
Only the market sets prices? Huh? What about when the President took gold from Americans at $20.67 the ounce & subsequently cheated them out of gains with a new official price rig of $35 the ounce? And they still couldn’t own it for two more generations! They took silver at 50.01 CENTS the ounce on August 9, 1934 by EO 6814, after which the world price moved up 40%! It also blows me away that anyone can cite GATA for “exhaustive research” when my works are also in the public domain see for ex http://cache.silver-investor.com/charlessavoie/cs_summer09_PreciousMetalsConfiscation.pdf
Wade through that to see if you think the government wasn’t controlling prices—AND OWNERSHIP! GATA has absolutely nothing to compare with this research piece. This is NOT about whose horn gets tooted the loudest, it’s about factual contrast. What they have to show you on FDR’s metals theft, next to this report, is an embryo compared to an Olympic athlete. From 1967-1970 Treasury silver was gifted to industrial users to the extent of 190,435,217 ounces, mostly from coin melts, for price suppression goals. Leading up to that, Treasury Secretary Dillon stated his desire to “ASSURE THE SILVER USERS THAT THE PRICE WILL NOT RISE BEYOND ITS PRESENT MARKET FOR A LONG TIME TO COME.”
(Wall Street Journal, March 12, 1963, page 4).
Dillon’s intent against silver prices was also reported overseas. The Economist,
July 13, 1963, page 166 reported the Treasury Department helping the Silver Users Association—
“DILLON, THE SECRETARY OF THE U.S. TREASURY, HAS SAID THAT SILVER
BULLION WOULD BE RELEASED ON DEMAND TO PREVENT SILVER RISING.”
Only the market sets prices? HUH? What about when Nixon’s Cost of Living Council price capped U.S. domestic silver at $1.61 the ounce? That was LESS than the giveaway prices than realized in the sardonically designated Treasury “auctions where the peak was $2.48!
This suppression has continued from that time to this moment, using every resource available. Oh, and this on Dillon (Pilgrims Society)—when Kennedy’s strings got pulled by Henry Clay Alexander (Pilgrims Society) of JP Morgan & Co. and David Rockefeller (Pilgrims Society) of Chase Manhattan Bank. to issue Executive Order 11037 on July 20, 1962, forbidding Americans to own gold overseas, Dillon, as Treasury Secretary, was empowered to selectively dodge the EO for anyone to whom he issued special exempt gold licenses to (read—other Pilgrims Society members; the topic of this organizations members being the apex metals suppressors for over a century, while being covered by more and more metals sites, is stubbornly ignored by GATA!) For “exhaustive” info on precious metals price suppression, see site linked. FYI—I’m one of two (2) long side commentators ever cited by the Silver Users Association (January 2006 Washington Report), Ted Butler is the other. GATA they do not mention.
Opinions are the result of years of market observations and facts. Mr. Heller is defintely entitled to his opinion and many of us appreciate his perspective. The fact that exponetially more “paper gold and silver” trades occur than the physical metals to redeem them is enough to supress prices. As an A.N.A. Life Member, I suggest that Mr. Heller is entitled to both his opinion and his recognition from the A.N.A.
While generally skeptical of gold as a monetary standard (a return to Mercantilism would certainly bring about an economic apocalypse like the one so many fear is at hand), I agree with Scott and his defense of Mr. Heller’s credentials and experience. Mr. Heller’s ideas are clearly informed by years of making a living as a coin dealer.
I don’t agree with or appreciate Mr. Heller’s political economics, nor have I ever. That said, he IS MORE THAN APPROPRIATELY HONORED BY THE ANA! He promotes the coin hobby and industry. Does he ever! He also trades at among the fairest buy/sell margins I’ve ever seen. I don’t quite know how he does it. And while his writings are sometimes self-serving, at least he IS WRITING, and stimulating debate and discussion. Again, I think his politics is ill-informed. But I’ll tell you this – if I were buying at these levels, which I am not, but if I were, Heller’s company would be on my short list of people to buy from.
My older brother had an early 1960’s paper route. I’d help him sift through the coins. On the Lincoln Memorial side of a 1965 cent I noticed a double dot on the left. I sold that cent to a dealer for $5. I was 10 years 10 months of age at the time. 500 to 1 returns are tough to come by. In that instance, numismatics made it possible.
Here’s the whole problem in a nutshell: the entire physical delivery metals market, ALL OF IT, every coin, bar or medal Mr. Heller and all the hundreds of other dealers send out every year, ALL PUT TOGETHER AS A GIANT UNIT, don’t account for as much market clout as just the three biggest banks trading in metals at the NYMEX.
Physical delivery traders couldn’t move these markets if they all got together and coordinated their trades perfectly. There is no GOVERNMENT manipulating squat, UNLESS you consider the super-banks and “government” to be the same thing. They’re not, of course, but neither are they strictly arm’s length independent, either.
Think of it. 3 or 4 super-banks have enough market clout to swamp the ENTIRE physical delivery metals market any time they want to. Why anyone woould want to put all their eggs in this basket amazes me.
Too big to fail??? I say too big to EXIST!
From “Scream Until Comatose,” my Essay of the Month for February 2007 at http://www.silver-investor.com — from John Witherspoon, Presbyterian minister and a signatory to the Declaration of Independence—
“What is commonly called paper money, that is, bills bearing that the person holding them is entitled to receive a certain sum specified in them, IS NOT, PROPERLY SPEAKING, MONEY AT ALL. It is barely a sign without being a pledge of standard of value, and therefore is effectually DEFECTIVE AS A MEDIUM OF UNIVERSAL COMMERCE. To arm such bills with the authority of the state, and make them a legal tender in all payments, is an absurdity so great that is not easy to speak with propriety upon it. It has been found by the experience of ages, that money must have a standard of value, and if any prince or state debase the metal below the standard, it is utterly impossible to make it succeed. HOW THEN CAN IT BE POSSIBLE TO MAKE THAT SUCCEED WHICH HAS NO VALUE AT ALL? In all such instances there may be great injuries done to particular persons by wiping off debt; but to give such money general currency is wholly impossible. The measure carries absurdity in its very face. Why will you make a law to oblige men to take money when it is offered them? Are there any who refuse it when it is good? If it is necessary to force them, does not this demonstrate that it is not good? We have seen indeed this system produce a most ludicrous inversion of the nature of things. For two or three years we constantly saw and were informed of CREDITORS RUNNING AWAY FROM THEIR DEBTOR, AND THE DEBTORS PURSUING THEM IN TRIUMPH, AND PAYING THEM WITHOUT MERCY.”—John Witherspoon, 1723-1794, “Essay On Money IV”
The overwhelming motive back of price attacks on gold and silver is to prop up the vitiating joke money emitted by the Federal Reserve System, the most immense colostomy bag in history. President Garfield was another honest man on money, and it cost him his life—“A banknote is not money; and no power on earth can make it money.”
Charles,
What you write used to be true. Paper money was a representation of actual money and traded only out of convenience (and longevity of pocket wear). But Charles, you’re a scholar of history (at least YOUR version of history).
But you seem to have forgotten that history KEEPS moving on. Beginning with the “Red Seal” United States Notes in the 1960’s, money began to transform forever. Now those notes ARE the money. We will not be going back. Not now. Not soon. Not ever.
The next money, if there needs to be one, will be one we can’t even imagine rright now, much as our grandfathers could not conceive of real money that wasn’t discs of metal.
Paper money isn’t even the main problem you complain of. Fiat currency is the LEAST of your problems. Most of our money is now entirely conceptual, existing only in computer memories and storage media, lacking any physical manifestation whatsoever, greenback or metallic.
“My version of history” is that which wasn’t bribed to dishonest representations and outright blacking out of important facts/events by Pilgrims Society entities including Ford, Rockefeller, Mellon, Duke, Carnegie fellowships, Baker scholars, Pell grants, Rhodes scholarships ad nauseam so as to intentionally mislead the public to perpetuate the banking abuse that’s sucked them so dry that large portions of the middle class have slipped into borderline poverty. It’s your rhetoric only about I’ve forgotten history moves on and on—not so, I’ve closed ranks with many fine minds on metallic vs synthetic currency including Hugo Salinas Price and deceased but not forgotten Silver Senators such as William Borah (“The Great Opposer”), Key Pittman and Patrick McCarran. Your likely disparaging view of these titans will not faze me! Kurt, you’re not going to have an airport named after you as they did for McCarran nor a State high mountain peak as for Borah! You say we won’t go back to previous money; however, that’s your PREDICTION, not your DECISION! The marketplace will prevail over government in selecting what it prefers as medium of exchange! FDR said that “sea shells with holes in them are a monetary base in the South seas” (New York Times, December 23, 1933, front page), this was the THIEF who criminalized private ownership of gold/silver. The German Rentenmark was imposed by the United States, which laughably was alleged to be nonspecific title notes corresponding to the value of the land in Germany! Our screwing with their money was another USA/UK goad to cause a second World War, which the Allies wanted and planned for! German monetary desperation made Hitler possible! The Depression’s effects here caused numerous cities like Knoxville, Tennessee to issue $1 million in “scrip” currency (NY Times, 2/6/1933, page 9); wooden nickels were born in the Depression in Washington State; cigarette coupons were proposed as money elsewhere (NYT, 3/26/1933, page 17); a letter in The London Times, March 8, 1933, page 10, suggested wheat as a universal monetary standard–it was perishable and so could not be hoarded; the First Unitarian Society of New York espoused the wildly absurd “technocratic money,” an alleged conversion of labor expenditure into energy (NY Times, 1/9/1933, page 28); barter of course raged; all because the UK/USA elite destroyed the silver system of India and China and caused the Depression, slashing the value of their currency, causing exports to the Far East to plummet, causing mass unemployment! Please don’t belch out the the stock market crash caused mass unemployment; it did NOT! A letter to the NY Times, 10/2/1933, page 18, remarking on the Colombian revolution of 1900, said it was paid for by printing press money and lamented—“There was owing to me the sum of $2,000 before the debacle for which I received in payment $20.” V. Kurt, you wanna shop for some FDR sea shells at the tourist shops over at Steve McGarret’s island? I have a huge trove of 90% dimes unfortunately bearing FDR’s likeness; it’s the silver that makes them good, not the image of that tyrannical criminal! We’re gravitating towards gold, silver—yes, and copper, for we need a trimetallic system as we once had—copper coins from private mints offered on EBAY fill the vacuum for those who can’t afford silver! People still hoard the 1982 & earlier cents and today’s nickels, including Kyle Bass, who owns 20,000,000 nickels, because their metal is worth some 40% over face! Carbon credits, IMF SDR’s, Ameros, Euros, The Mark of The Beast 666, RFID chips in plastic cards or other cone-nose bug banker scheme to replace their failed currency with a new, more exploitative issue won’t quite go over, because there are too many non-banker controlled websites getting facts out to the public. “some of our money was printed on wrapping paper,” quote from the 1950 film “An American Guerrilla In The Philippines,” the public backlash won’t allow any new monetary scheme to be imposed by the same LOOTERS who foisted unfunded paper on us! Kurt, I’m stunned to read that you believe my view was that there’s more dollars existing in cash than in electronic credits! I again ask a question of you—what does the “V” stand for? It can’t stand for “Victorious,” because that you are not, pal! Kurt, how come State legislators in assorted States aren’t half as smart as you? They’re proposing remonetization of gold/silver, not crawling to the American Bankers Association for some new spurious “money” to spew out of their rectum for our alleged benefit! “Citizens may prefer specie to currency. The courts cannot control preferences for one kind of money over another”—The Times, London, May 31, 1933, page 21.
What legislators in some states (very few) are doing is carrying the extremist ideological water of ALEC, the American Legislative Exchange Council, an ultra-right lobby. In no cosmopolitan state is the ALEC agenda being successfully advanced. In my state, the ALEC guru, Daryl Metcalfe, is watching bill after bill fail or be struck down by our Supreme Court.
People who wish to run their own affairs rather than being dictated to by the District of Columbia and by unknown extension, the financial camarilla using DC to delete powers from the States and impoverish the citizenry, you call “extremist ideological.” Too many lights are turning on in people’s heads to let Federal power grabs go unopposed. The trend is reversing in our lifetime and your definition of cosmopolitan will be chortled at. You are the most toxic pinata to ever post here, V. Kurt, and I now regret swinging the stick to bust you open, spilling your pro-authoritarian contents into this forum! If you don’t have a British redcoat soldier uniform in your closet, there sure should be one hanging there.
Says the rant of the extremeist Anglophobe conspiracy theorist. Mr. Savoie, I wear your disdain as the finest Honor ever bestowed upon me. It almost makes life worth living all by itself, sir.
Since you’ve already trotted out the emotional rants against a so-called secret society and tied it to the (gasp!) Council on Foreign Relations, I’m wondering how far late-night syndicated radio talk show boogiemen like the Illuminati and the Bildeburgs might be. Why don’t we wrap it up in one neat tidy little paranoid schizophenic little bow for the readers? One stop shopping for paranoid conspiracy theorists who have gone off their lithium prescriptions. Get back in touch with your shrink, Charles. We wouldn’t want him to be racked with guilt when your brain explodes. Your sanity already clearly has.
It’s consistent how any time brazen demagogues like Bellman are taking a pounding on logical argumentation, they can’t help themselves—they have to fall back on psychiatry in illegitimate attempt to gain the upper hand. Folks, bear in mind this is the occupation that plays the same role in modern society played centuries past by witch finders and Inquisitors.
This is the central point:
What makes a dollar worth what it is? Belief. Nothing more or less.
What makes an ounce of silver or gold what it is? Belief. Nothing more or less.
Same thing. It all depends on what you believe about relative values, now and in the future. So far, all the deeply held beliefs of the Austrian Fool adherants have failed to happen.
QED