Tim Murphy
Precious Metals Advisor
Tim Murphy is a Precious Metals Advisor with over 15 years of experience. He started on the New York Commodity Exchange floor before founding his own brokerage firm. Tim joined Scottsdale Bullion & Coin to leverage the small-company feel with national exposure, focusing on personalized, client-first service and fostering long-term relationships.
Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few, gold has been the asset of last resort.–Antony C. Sutton
There is a high probability the stock market will be ‘flat’ for an entire decade.–Legendary investor Stanley Druckenmiller
I would say interest in a Gold and Silver IRA is up about three-fold recently and it’s not surprising given the following:
- The Federal Reserve is raising interest rates at the same time we are facing a recession.
- Sanctions on Russia, along with supply chain issues, are pointing towards a potential horror show this winter regarding energy and food prices.
- Interest rates are likely to continue rising as they play catch-up with inflation and the stock/bond/real estate markets are only just beginning to roll over from the biggest financial bubbles of all time.
- And lastly, even though the dollar has been strong of late, it is only a matter of time before the it declines along with all other fiat currency.
Why?
Because many of the world’s biggest economies like China, Russia and India are pulling away from the Petrodollar and the fundamentals backing the dollar are abysmal.
Gold and silver prices are down because the bullion banks, led by JP Morgan, have been leaning on the metals at a time when interest rates are on the rise, in turn causing a relatively strong dollar. However, as mentioned in my prior weekly emails, it appears these banks are taking advantage of the lower prices by covering their paper short gold positions and are most likely adding to their physical holdings. The signs of gold and silver nearing a major bottom are most evident. The bullish sentiment is quite low, which is best illustrated in the COMEX “open interest” levels. At 132,000 contracts, silver is as oversold as it was in early May 2020, just before the price rocketed higher from under $15, doubling in only three months. Plus, physical gold and silver inventories on the COMEX have all but dried up and physical demand for gold and silver, via the central banks, is VERY strong worldwide. For what it’s worth, I put out the following on July 20th, 2022:
“I know predicting anything short term is folly, but it wouldn’t surprise me to see the gold market get hit one more time, break technical support at $1675oz, and drop another $50oz or so. (And in doing so, confusing the “street” even further and further demoralizing bullish sentiment). Regardless, gold and silver are at their bottoms or very close. The public currently has little interest in gold and that is so typical at major bottoms. Along with the major top spikes now in place in the stock and bond markets, the artificially low gold and silver prices will be very soon a thing of the past, and gold/silver should trend sharply higher for years to come.”
Over the weekend, Alasdair Macleod put out another brilliant piece, entitled “Gold Has Never Been So Attractive.” Macleod is a brilliant economist and gold expert, so it would serve you well to take heed:
“In theory, interest rates should be multiples higher, to compensate for the current loss of currency purchasing power, enhanced counterparty risk, and a rapidly deteriorating economic and monetary outlook. There is no doubt that the majority of investors are not even aware of the true scale of danger that interest rates pose to their financial assets. The clear solution is to get out of fiat by selling financial assets and owning physical gold/silver. But the argument usually falls on deaf ears because people only understood the monetary role of gold before WWII. That generation has mainly passed away. Why gold is so important has to be explained all over again to a sceptical audience.”
A bit later on, Macleod states,
“Only those who think for themselves have come to understand that there is something seriously wrong. Investment risks are escalating and investors must take proactive steps to protect their capital.”
Macleod places a huge emphasis on the role of bank credit in the economy and warns the following:
“Banks are withdrawing credit. They know economic conditions are deteriorating and understand business as a whole is not good. Early signs of a global liquidity crisis are all there.”
Also, Macleod relates today’s economy and inflation to the stagflation period of the 1970’s and believes the combination of a stagnant economy and soaring inflation is not understood by mainstream economists today:
“The effect they ignore is that inflation is a transfer of wealth from the private sector to the state, and from savers to the commercial banks. The more the expansion of currency and credit, the greater the transfer of wealth becomes, and the impoverishment of ordinary citizen results.”
But in conclusion, Macleod says,
“Surely, central banks and their governments will do what they have always done in the past in these circumstances: inflate their currencies, if necessary towards worthlessness. The argument in favor of getting out of financial and currency risks into real money – that is gold – has rarely been more conclusive.”