In this week’s talk with National Numismatics’ Tom Cloud, he explains
why Germany’s gold repatriation is just the beginning, the US Mint’s
silver shortage will continue, and the big money is right about precious
metals.
DollarCollapse: Hi Tom. It’s been an eventful few
weeks in precious metals, though you wouldn’t know from the price action
alone. Hit the high points for us.
Tom Cloud: Germany’s gold repatriation is obviously a
game changer. They got all their gold back from France right away. But
the US government put them off for 7 years, probably by offering them
some kind of premium to take their gold back slowly. More gold,
Treasuries, no one knows what exactly but clearly it was a big
inducement. It’s also clear that Germany won’t be the last country to
bring its gold home. The Netherlands is next and then probably
Switzerland. It’s become a game of musical chairs. No one wants to be
caught when the music stops. And make no mistake, it will stop.
Everybody in the industry knows the US doesn’t have the gold and can’t
deliver it. They’ve leased it all out.
It’s important to understand that there are two big stashes of gold
in the US. Fort Knox supposedly holds the gold that belongs to us. And
the New York Fed holds gold that has been deposited by other countries
for safe keeping. That’s where Germany’s gold would be if the US hadn’t
leased it out.
DC: Then there’s the US Mint running out of silver eagles.
TC: They sold out in the first three weeks of the
year and had to stop taking orders. They’ve since started back up but
demand is immense [editor’s note: silver eagle sales are now running at
roughly 5 times the December rate – see
US Mint silver coin sales in January climb to a record
]. Premiums are way up on silver eagles since a lot of customers are
willing to pay up for the most recognizable coin. Others are either
waiting for the premiums to go down or are buying maple leafs or silver
buffalo or philharmonics, which have lower premiums.
DC: I thought buffalos were US government coins. Why aren’t they selling out too?
TC: The gold buffalo is made by the US Mint but the
silver buffalo is not. It’s made by a private mint, which we shouldn’t
name because we they don’t need people calling them and bothering them.
They’re doing great though.
DC: So who’s doing the buying now?
TC: Right now the big money is moving and the little
money is not. The little guy is gonna wait till gold jumps over 1700 to
start buying. We’ve been in this channel between 1600 and 1700 for a
long time, but we’ll break out pretty soon. Then you’ll see everybody
pile in.
DC: And what do your clients want to talk about?
TC: It seems almost funny for a gold guy to spend a
third of his time answering questions about interest rates. But big gold
buyers have a lot of bonds too. Everybody knows the top [in bonds] will
be soon if we haven’t already seen it. Just like people get the gold
stashes confused, people also get confused on interest rates because
they read about “no interest rate increases till 2014”. But can you
borrow money from the fed at zero percent? Not if you’re not a bank.
Interest rates aren’t stable in the real world and have actually been
edging up for a while. The rate on ten-year Treasuries is up from 1.6%
to 2% lately. Very soon everyone will discover that the Fed can’t
control this.
For more information or to place an order, call 800-247-2812 or email Tom Cloud at
tgcloud@bellsouth.net. Mention
DollarCollapse.com for free shipping and insurance.
