My name is Shawn Ozbun, and our goal is to keep you up to date with what’s going on in the world of Gold and Silver by providing you with current news and precious metals pricing.
The Silvertowne Vault Cast is brought to you by www.Silvertowne.com
Welcome to the SilverTowne Vault Cast. Today we are going to talk a little about collapse 101, what to look for. I have some interesting thoughts to share on this matter as well. I also had someone email me a question and I would like to address it really quickly before we get started.
Hi Shawn,
Thanks so much for doing the Vaultcast, I listen to every episode at work. I was just wondering if you have thought about investing in copper and if you could talk about copper in an episode. I have heard it could be the "poor mans" currency in the event of a crisis or collapse. It seems cheap to get into and since it is priced by the pound one can acquire quite a bit of it. In addition to those factors JP Morgan has applied to sell a physical copper ETF. If that happens prices would surely spike. I would like to hear your thoughts about those things as a precious metals investor. Claud
Claud thanks for your question and if anyone else would like to ask me a question, you can do that by emailing me at vaultcast@silvertowne.com. The truth is I don’t know much about copper. It’s value is much lower then say Silver and I would personally rather take what money I have and put it into silver over copper for sure. However I will say this. I don’t consider myself a precious metals investor at all. I’m simply trying to own things that have value and that will help me hedge against the coming inflation.
Let’s put it this way. If the economy were to collapse, and we ended up with a situation like Germany had and our dollar isn’t worth the paper it’s printed on. Meaning that it takes trillions to by a loaf of bread, then copper will most defiantly be more valuable to own. So yes it could help hedge against inflation but I think more people will recognize silver as a valuable metal then say if you tried to barter with copper or trade it in for a new currency. You have to think though, in a situation like that even toilet paper would be more valuable then a dollar bill. I bottle of water when people don’t have the ability to go to the grocery store will be of great value.
I know that doesn’t quite answer your question. All I am saying is that any precious metal will be worth way more then a useless dollar bill if things go into a hyperinflation type situation and that includes copper.
I hope that helps you a little bit Claud. I will be taking a closer look at the copper market here in the future and try to cover it more in one of our episodes.
Now lets get into today's precious metals pricing!
Gold - $1589.79 down $6.78
Silver - $28.94 down $0.03
Platinum - $1597.20 Up $1.20
Palladium - $736.00 down $4.00
The Big Dogs On Wall Street Are Starting To Get Very Nervous
Why are some of the biggest names in the corporate world unloading stock like there is no tomorrow, and why are some of the most prominent investors on Wall Street loudly warning about the possibility of a market crash? Should we be alarmed that the big dogs on Wall Street are starting to get very nervous? In a previous article, I got very excited about a report that indicated that corporate insiders were selling nine times more of their own shares than they were buying.
Well, according to a brand new Bloomberg article, insider sales of stock have outnumbered insider purchases of stock by a ratio of twelve to one over the past three months. That is highly unusual. And right now some of the most respected investors in the financial world are ringing the alarm bells. Dennis Gartman says that it is time to "rush to the sidelines", Seth Klarman is warning about "the un-abating risks of collapse", and Doug Kass is proclaiming that "we're headed for a sharp fall". So does all of this mean that a market crash is definitely on the way? No, but when you combine all of this with the weak economic data constantly coming out of the U.S. and Europe, it certainly does not paint a pretty picture.
According to Bloomberg, it has been two years since we have seen insider sales of stock at this level. And when insider sales of stock are this high, that usually means that the market is about to decline. Read More...
Economic Collapse 101: What Will It Look Like, and How It May Start
The Illusion Is Unraveling
The problem is, using one credit card to pay another credit card bill only works for so long. As long as a debt addict can continue to find lenders who are willing to extend additional credit, the game can continue. But once the pool of lenders dries up, the game is over.
No, I can’t say exactly when this will happen. But it’s coming, folks — and when it does, middle-class America’s way of life will undergo a catastrophic change that will dramatically drop their standard of living forever more.
Until recently, the United States’ profligate spending wasn’t much of an issue. For years, plenty of investors — both foreign and domestic — have willingly parked a portion of their money into the perceived safety of America’s bonds. But over the long march of time, the dollar’s standing has seriously deteriorated and, as a result, foreign nations are becoming increasingly reluctant to buy US Treasury bonds because, thanks to the Fed’s near-zero interest rate policy, the risks are no longer worth the reward.
Normally, depressed demand for bonds results in higher interest rates, but so far the Fed has managed to keep bond demand artificially inflated via their quantitative easing campaigns. And the Fed is keeping US Treasury bond rates as low as possible now because interest payments on the National Debt already consume roughly 10% of annual revenue. If US Treasury bond rates increased to merely 5%, America would be forking over one-third of its annual revenue just to satisfy the interest on its $16.5 trillion National Debt; it would also be increasing its annual deficit by more than $800 billion.
The Beginning of “the End”
Although they won’t admit it, the Fed backed itself into a corner with its reckless easy-money policy. They know that once the money-printing party stops, interest rates will have to rise — and then the bond market will almost certainly crash. If that happens, things are going to get very interesting.
For example:
• As bond rates rise, mortgage interest rates will naturally follow them upwards. And since higher mortgage rates ultimately result in higher house payments for a given size loan, it follows that home prices will have to drop in order to keep them affordable — and the decline could be devastating.
• The cost of borrowing will also go up for everyone else including small businesses, corporations, and state and local governments.
• The stock market should fall as higher interest rates hurt economic growth and hurt stocks’ value.
Once interest rates start rising, a vicious cycle can ensue as higher interest rates beget larger deficits, which in turn lead to still higher interest rates. As the debt piles up, and the faith in the US dollar continues to diminish, the US will eventually reach its day of reckoning. The US will then be faced with two very unpleasant choices for solving the crisis: print away the debt or default.
Default would lead to the loss of the US dollar’s standing as the world’s reserve currency which would, among other things, cause the price of imports to skyrocket. Consumers’ purchasing power would plummet, and the government would be forced to severely cut back on its spending since it would no longer be able to finance its deficits. However, this is politically untenable. Read More...
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[Disclaimer] Shawn Ozbun is not a licensed financial adviser, there is risk associated with all investment including gold and silver. You should seek advise from a licensed financial expert before making a purchase.
