Believe It or Not, Silver Producers Dumber Than Tree Sap!

Anybody remember the group of shriveled-up grapes singing and dancing their way through "I Heard It Through The Grapevine"? If you're under 40 then maybe not, but it was a big hit during a 1980s-era TV ad campaign. They even hired Michael Jackson to sing the theme song that Marvin Gaye made famous—can't get any bigger than that!

Frankly, I hadn't thought about the little guys since—well—the 1980s. Why should I? I eat them all the time without having to be "reminded" that the ones from California are somehow better—better singers?—than the ones from China. (Not that anyone cares, but my favorites are "golden raisins" made from the sultana grape.)

What's the point of all this? The whole dancing grapes phenomenon was a marketing plan masterminded by the California Raisin Marketing Board with the goal to persuade people to buy more California raisins. Nothing unusual going on here. Organizations that are created to further economic goals (make more money, eh?) are literally everywhere. You might not always notice them, but they're there. In fact, that's the point—get the sales price of the avocado or zucchini or raisin as high as possible in order to maximize the profit of the company without agitating or driving away the customers. (By the way, for everyone in Sacramento or Albany this means trying to make a — gulp — profit.) "Oooooo, the horror! Everyone knows that "profit" is just code for "exploitation" which is just code for excessive "profits"! "Quick, someone call the FDA... or the FBI... or the CIA! For God's sake, call 911!"

So, when I ran across the following story, I literally had a "WTF?" moment.

3 Arrested in Massive Maple Syrup Heist

(CNN) -- Fire up the griddle! Much of a huge cache of maple syrup snatched from a Quebec storage facility has been recovered, police say.

Three people have been arrested and five others are being sought in connection with the theft from a warehouse in Saint-Louis-de-Blandford, Quebec Provincial Police said in a statement Tuesday. The theft occurred between August 2011 and July 2012, police said.

Two-thirds of the syrup was recovered, according to a police statement. The Federation of Quebec Maple Syrup Producers, which bills itself as keeper of the global strategic maple syrup reserve [my bold], said in August that up to 10 million pounds of the sweet stuff was in the warehouse from which the theft occurred but could not say exactly how much was missing. The total value of all the syrup in the warehouse was put at $30 million.

The theft was discovered during a routine inventory check of the warehouse, which "had been secured by a fence and locks, and visited regularly," federation president Serge Beaulieu said in a statement in August.

The barrels that originally contained the syrup were empty, meaning it was somehow transferred to other containers to complete the theft, the federation said.

Police said Tuesday that they had seized vehicles that were used to transport the stolen sticky stuff as well as carts, lifts, scales and kettles.

They said their investigation of the thefts covered the provinces of Quebec, New Brunswick and Ontario as well as the northern United States. Almost 300 people were interviewed as part of the investigation, police said.

As much as 80% of the world's maple syrup comes from Quebec, the federation says.
Are you kidding me? There's actually an organization for maple syrup producers? Well, duh! (smacks forehead with palm of hand) Of course!—this makes complete sense. The guys and gals who "tap" maple trees and work an untold number of hours in half-frozen "sugar shacks" want to make as much coin as possible for all their effort. I sure would, so I don't blame them one delicious, sticky drop! If the group can "coordinate" a maximum price for their product—without significantly reducing overall demand—then voila!, they've achieved economic success.

I apologize for the long setup, so I'll steer this ship back to our bread & butter—the precious metals markets. In this case I will be focusing on silver—the extraordinarily beautiful metal used thousands of different ways all over the world. Inquiring silver investors would like to know the answer to the following question:

Is there ANY organization that (1) defend's the companies that bust their butts day after day to find and produce silver and (2) successfully lobbies for—and justifies—the highest possible price for silver?

None that I'm aware of.

Oh, yes, there's the Silver Institute (SI). You may have heard of it, or visited their website. I'm sorry, but the SI won't cut it. Give-me-a-break. First of all, the data you can find there you can also find on a bunch of other websites. Second, it's an "institute". I'm not sure what they mean by that, except that maybe the board of directors of the companies who are members should be in an "institute"? But wait! My third point is the best. The real problem
is that the SI membership list includes (plain as day on their website).... drum roll please.... Tiffany & Co.
Are you kidding me!

For cryin' out loud, Tiffany is ALSO on a member of the Silver Users Association (SUA)! But THAT makes sense. Right? They USE silver.

Now let's focus for a second. I know it's hard, but you can do it. We're just going to connect a couple of dots.

First, Tiffany & Co. is a dues-paying member of the main organization that supports the companies and entities that buy silver to use in their finished goods. In Tiffany's case this would be jewelry, fancy pens, etc. The following is straight from the SUA home page.

The Silver Users Association is a non-profit organization that was established in 1947 to represent the interests of companies that make, sell and distribute products and services in which silver is an essential component.

The Association’s members employ more than 200,000 workers and process 80% of all silver used in the United States. Members include representatives from photographic, electronic, silverware, mirror and jewelry industries, producers of semi-fabricated and industrial products, and trading and service organizations responding to member needs.

Hmmmm. Let's See... Just for kicks, do you think the SUA would like the price of silver to be higher or lower at any given point in time? Take your time. No hurry.  tick-tock, tick-tock  By the way, I really appreciate you hanging on this long... and your answer is.... Sorry, I didn't quite catch that... yes, yes, I believe you've got it, old chap.... "LOWER!" Ding-ding-ding.

(Very good. You can take a break while I continue to flesh this out.)

Just for the record, I bet the part in their "mission statement" where they say, "...to represent the interests of companies that make, sell and distribute products and services in which silver is an essential component." was your first clue. While your second clue should have been the fact that...

The SILVER USERS ASSOCIATION is going to represent the interests of the companies that BUY Silver!

They don't want silver to cost $100 per ounce! They want silver to cost $10 per ounce. Of course they will never change the prices they charge their customers! This way they can make more money—the evil, greedy corporations they are! Hey, isn't this why businesses are created in the first place? (That, by the way, is a rhetorical question for everyone in Santa Monica.) Folks, trust me, the goal ain't to lose money—it's to make as much money as possible. And by the way, that goes for the "little-guy" silver investor just as much as the huge NYSE-listed corporation!

Therefore, (focus again) is not the simple act of permitting Tiffany & Co. to be a member of the Silver Institute exactly like sending an engraved invitation to the fox to stop by the henhouse anytime he likes to keep intimate tabs on the chickens' best "anti-fox" plans?

You bet it is!

Almost all of the biggest silver mining companies are members of the SI. From Coeur d'Alene to Silver Wheaton—they're all there. So, I ask nobody in particular, "What are they doing allowing Tiffany to be part of their club?" I have no freakin' idea! To make membership meetings smell better? To get special discounts on overpriced necklaces and rings? Free shipping coupons? (insert hysterical scream here) Aaaaaaargh! Do they even know that Tiffany is a member of both organizations??

Of course there are fine organizations like the Association of Mining & Exploration Companies in Australia and the Mining Association of British Columbia (and undoubtedly others around the world). And, not surprisingly there are quite a few silver and gold mining companies as members. But, I'll bet an uncirculated silver eagle that AMEC and MBAC spend 99% of their time on "touchy-feely" public relations plus strategies to keep the government off their backs. I get it. But, other than keeping these businesses in business (which is definitely important)—what are they doing to help promote the finished product?

Objective: higher silver prices. Period. For today, tomorrow and the future.

Tactic: The silver producers—companies which produce and sell a lot of silver every year—need to create a single-issue alliance as soon as possible.

It would be easy. All they have to do is copy the folks in Quebec who store syrup in giant warehouses, build up the supply and then systematically release it on the market—to control the price they get paid. This is nothing new. Ever heard of DeBeers? or OPEC? or the "Dairy Boards" of practically every country in the world? So, now we know about the Canadian Syrup Cartel. (Another one of many that we're not yet aware.)

"Co—py Que—bec!" "Co—py Que—bec!" (Intentionally copying anything from Quebec may be a first!)

It may be hard to believe but—collectively—the silver companies are beginning to look dumber than a pile of junk silver.

As you could probably tell, I'm probably not going to be happy—genuinely happy—until all the shills on CNBC and Bloomberg regularly refer to "the Silver Producers Cartel" as the source of screaming higher silver prices... Day After F%#king Day! Hooray for that day! (don't hold your breath) Trust me, we'll throw a party!

As far as picking a name goes, no need to be fancy-schmancy here—just keep it simple, eh? So, I'm guessing the most obvious name for this pipe-dream is "Organization of Silver Producing Companies" or "O.S.P.C."

However, OSPC sounds a little too close to "ASPCA"—the well-known group working to prevent animal abuse. Therefore, admitting upfront that I'm no acronym expert, the following is my sincere suggestion for the "name" of the-group-that-someone-is-going-to-finally-organize-before-all-the-companies-go-out-business-because-the-price-of-silver-is-too-low!!:

F.U.J.P.M.C.O.M.E.X.C.F.T.C.

I don't know about you, but I think it works!

Never forget: it's a great day to be a gold and silver investor!

# #                                    # #

Gold Fever is the "contagious excitement of a Gold Rush". It happens over and over again—all around the world—because every few generations the price of gold zooms higher in a scramble to adjust its true value. Nurse Nugget will be happy to help you calm down a bit with a good old fashioned "vaccination".


Hi-Ho Silver, Awaaaay! was made famous by the Lone Ranger when he needed to get his trusty steed's attention and Get Out Of Dodge. On the other hand, mere mortals can gear-up with a T-shirt or baseball cap and show their support for real money. Help wake up the sheeple and get them on the right horse!



$2,000 Gold is going to make headlines in your local newspaper this year. How can I say this? Because when REAL MONEY is this far undervalued it's only a matter of time before market equilibrium is restored. Get yours before we have to make re-make them into "Au$3K" caps!

The Road to Serfdom is a Round-a-Bout

Here is an excellent article on the current state of the "First World's" collapse into financial and social disaster. It is written by Detlev Schlichter, author of Paper Money Collapse. As my title to this post suggests, the road to serfdom eventually resembles a closed circle that all wellfare states finally merge onto and then offer zero, if any, options for exit. Early in the process—50 years ago, maybe—things might have looked promising every now and then as we travelled north, east, south and west along our route to nowhere. At least the sun came up every now and then and offered some sort of "hope"—and several real exits—for better days ahead. Lately, however, the never-ending round-and-round-and-round-we-go-where-we-stop-nobody-knows is becoming faster and faster. For those paying attention, it's obvious that this tragedy isn't some sort of long-forgotten childhood game but, rather, the real-time saga of the EU and US as they slip—relentlessly—closer and closer to the center of a toiletbowl whirlpool.

As Mr. Schlichter concludes, "This will end badly." Unfortunately, I believe that the "end" will actually be worse than most people can imagine. When you are being sucked down into the center of the porcelain throne it doesn't really matter if it's one of those fancy electronic endorned Japanese creations or a basic, American-made flusher. Rich or poor, we can all feel the undertow taking us right where we don't want to go—no matter how much we swim for what looks like the traditional safe havens. They ain't going to work this time around so, if possible, you need to make alternate plans.

Diversified portfolios? Low-income Real Estate? Bonds? REITs? Large Cap Equities? Growth anything? I'm afraid you will need to begin thinking "outside the box" if these asset classes are your "go to" choices in times of uncertainty. Maybe you should read the article and see what ideas for navigating the future come to mind.

We are now five years into the Great Fiat Money Endgame and our freedom is increasingly under attack from the state, liberty’s eternal enemy. It is true that by any realistic measure most states today are heading for bankruptcy. But it would be wrong to assume that ‘austerity’ policies must now lead to a diminishing of government influence and a shrinking of state power. The opposite is true: The state asserts itself more forcefully in the economy, and the political class feels licensed by the crisis to abandon whatever restraint it may have adhered to in the past. Ever more prices in financial markets are manipulated by the central banks, either directly or indirectly; and through legislation, regulation, and taxation the state takes more control of the employment of scarce means. An anti-wealth rhetoric is seeping back into political discourse everywhere and is setting the stage for more confiscation of wealth and income in the future.

War is the health of the state, and so is financial crisis, ironically even a crisis in government finances. As the democratic masses sense that their living standards are threatened, they authorize their governments to do “whatever it takes” to arrest the collapse, prop up asset prices, and to enforce some form of stability. The state is a gigantic hammer, and at times of uncertainty the public wants nothing more than seeing everything nailed to the floor. Saving the status quo and spreading the pain are the dominant political postulates today, and they will shape policy for years to come.

Unlimited fiat money is a political tool

A free society requires hard and apolitical money. But the reality today is that money is merely a political tool. Central banks around the world are getting ever bolder in using it to rig markets and manipulate asset prices. The results are evident: Equities are trading not far from historic highs, the bonds of reckless and clueless governments are trading at record low interest rates, and corporate debt is priced for perfection. While in the real economy the risks remain palpable and the financial sector on life support from the central banks, my friends in money management tell me that the biggest risk they have faced of late was the risk of not being bullish enough and missing the rallies. Welcome to Planet QE.

I wish my friends luck but I am concerned about the consequences. With free and unlimited fiat money at the core of the financial industry, mis-allocations of capital will not diminish but increase. The damage done to the economy will be spectacular in the final assessment. There is no natural end to QE. Once it has propped up markets it has to be continued ad infinitum to keep ‘prices’ where the authorities want them. None of this is a one-off or temporary. It is a new form of finance socialism. It will not end through the political process but via complete currency collapse.

A Trickle Now, Niagra Later

In light of the confusing and difficult PM market right now, I thought I would post the following article by Jeff Thomas about a month ago. The original article is hosted at International Man.

It does a good job of talking about ONE aspect of the manipulation in the gold markets—the total lack of physical metal backing up "paper gold" at all bullion banks. As the article points out, the number of investors who are asking to "see" their gold and then "take delivery" is only a trickle right now. BUT, the big problem that the banks have is that "owner psychology" can turn on a dime and turn things into Niagra Falls literally overnight.

Manipulation of the Gold Price

Published on Monday, 24 September 2012 08:06

By Jeff Thomas

There is much discussion these days as to whether the price of gold is being manipulated. The answer is simply “yes.”

It is likely that most potential gold investors would agree that the major financial institutions have the ability to influence the gold price. They would also agree that to do so would be of benefit to those institutions. Yet, many investors still have difficulty making the final leap to agree that, if the institutions can manipulate the gold price and, by doing so, will profit from it, they will actually manipulate the price. Odd, as this would seem to me to be the easiest of the three premises to accept.

However, there are also many investors who do believe that manipulation exists. From time to time, investors have commented to me, “I don’t know how they’re going about it, but I’m sure it’s being done.”

This view suggests that the method of manipulation is difficult to understand.

Much of the manipulations that financial institutions perform are complex and confusing to those who are not involved in the industry, and this is intentional. The muddier the waters, the less transparent the activities are.

So, let’s take away the detail and express one common method of gold price manipulation in simple terms:

Bullion banks generally hold only a small percentage of what they sell. Banks claim to hold 10%, but a real number may be as low as 1%. This is possible because most buyers keep the gold stored in the bank where they bought it. All the buyer really has is a piece of paper stating that the gold exists in the bank and is being held for him.

As the economy worsens, the price of gold will rise. The worse the economy is, the greater the fear of owning fiat currencies. The greater this fear is, the greater the demand to hold gold. The greater the demand, the more the price goes up.

As the price of gold rises, the banks will make periodic moves to cause it to drop. They will make an offering of more gold for sale (which, again, they do not possess). Like any commodity, the more there is on the market at any given time, the lower the price will be. Thus, the price is forced down by the banks, collectively.

The manipulation is made possible due to the fact that what has been sold does not exist. The regularity of manipulation is unlimited, as the bank is only buying a fraction of the gold it sells. As long as the bank’s clients are willing to invest in “paper” gold, the price may always be driven down, due to new “sales.”

Of course, this charade cannot go on forever. Eventually, the buyers realise what is being done and will then demand delivery of their gold. This will bring about two major events: a crash in the paper gold market and a dramatic increase in the price of physical gold.

Apple Should Buy Silver!

     An article by Bob Kirtley on StockHouse suggests that it will be more profitable to own Silver Wheaton stock (SLW) than Apple Computer Company stock (AAPL) between now (late Sept., 2012) and the end of the year.

     Although I believe that he will be correct—who knows?

     Regardless which company wins that particular race, I say the most profitable "trade" would actually be for Apple to exchange (trade) a few billion dollars (of the $50B, approximately, it has on hand) for real, physical, silver bullion.

     Wow! That would be a game-changer!

     Not only would this blow the lid off the silver manipulation game, but—assuming that Apple took delivery—it would effectively lock out most other cell phone and computer companies from a reliable supply of critical components.

     No silver, no new electronic thingy.

     (Obviously, this same strategy could be employed by any of Apple's competitors with similar results. I wonder if any of them are going to wake up and smell the empty storage vaults sometime soon?)

Apple or Silver Wheaton?

Clearly, Apple has outperformed and has been the place to be. So well done to Apple shareholders.

On Sunday, March 4, 2012 we posted an article comparing two of the markets popular stocks and as a short re-cap we wrote the following:

Apple Inc. or Silver Wheaton Corp.? Some would say it’s a little like David and Goliath or Bambi meets Godzilla. Apple is currently the darling of the technology sector and Silver Wheaton is hugely popular in the precious metals space.

Continue reading...

Got Silver?

One Nation Under Water

     Here is a short, not-to-be-missed video about the USA's current balance sheet.

     Wake up! Folks, these problems can't be fixed. The numbers are way too big. And the point of no return was passed a number of years ago.

     So, when you finally come to grips with these facts—what are you gonna do about it?

Got Gold?

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