- Ok, so you are looking at a certain price, ok. You are looking at the price of West Texas Intermediate Oil with a symbol of WTI, which is oil pumped in America and stored in a place in Texas. What happens is that there are essentially two types of oil, that people price the oil on. It is West Texas Intermediate, it is light sweet crude and then there is this Brent stuff, which is pumped out of the North Sea. Not as good as WTI, but pretty close. So half of the oil in the world is based on Brent. And the Libyan oil is priced on the based on the price of Brent. It is a benchmark for that. The stuff that is pumped in America is based on the West Texas Intermediate oil. Two different benchmarks there. And what you are seeing is one benchmark rising, which is West Texas and one benchmark falling, which is Brent. The reason why Brent is falling, as you were taught in your econ 101 class is because Libya might be pumping more oil soon and if it does, it is going to affect the price of oil, based on the Brent.

- So my instinct was right, but I was looking at the wrong indicator?

- Exactly! You are looking at the wrong indicator. The reason why the West Texas Oil is rising is because of this place called Cushioning, where they store all this oil. And it is all about the demand for that oil. It is stored, stockpiled in this place. And over the last few months we have had a lot of refineries, which doubled the demand, but could not get the oil. There is a lot more demand for the refineries, if not for the economy and that is increasing the price of the WTI. So this is why you are seeing this disparity of Brent going down, because of more production in Libya and WTI going up, because of more demand in the States.

- And what I hear you say is that Libya isn’t probably going to affect the price I pay at the pump?

- I think that what is going to affect the price that you pay at the pump more is the state of the global economy and the national economy. If there is less demand, if people aren’t going to be driving as much, then you will see the demand fall and prices will fall with that.

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There are lots of different methods to invest in silver and gold. Many prefer to purchase stocks of mining companies that deal in precious metals. Others rather go for purchasing the metals as a commodity, invest in mutual funds or ETFs. The most reliable way that experts advise people to go for is investing in real silver and gold – bullion and coins.

The reason for this is because a lot of these different methods are insecure and do not actually provide you with what you are looking for – preservation of value and wealth. Why is that – on the 16th of June the COMEX reported that silver inventories held are 119.5 million ounces. On the 24th of June, that is just 6 trading days later the total inventories had fallen to 114,9 million ounces. This amounts to a 4.6 million ounce total decline.

On the 24th of June, the COMEX silver market reported more than 137 thousand open contracts. Calculating the amount with 5,000 ounces per contract, this actually means that commodity contract sellers owed more than 685 million ounces of silver at the maturity date of the contracts. The COMEX warehouse inventories cover no more than 17% of all the silver owed.

Imagine if all contract owners wanted their silver delivered? It was not there! Even if one fifth of the contract holders did so, it would still not be sufficient. This is the main reason why funds, ETFs and other paper assets, even when based on precious metals are not a good investment choice!

Buying physical silver however is not an easy task sometimes. Finding a reputable coin or bullion dealer might turn out to be an obstacle. There are a few things one should do and learn before getting involved with investing in silver. First one is to go to a bank or a reputable coin dealer and buy 1 coin. No matter what the price is. You should examine the coin in details – the shine, the weight, the image on it – and get familiar with it.

Another important thing is to learn how to store these coins. Most of them are pure 0.999 silver and they should not be touched with hands or left outside a capsule. Humidity is also important.

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So the underlying scam here is beyond central banking. It is fractional reserve landing. If any other entity besides a bank can conduct what is called fractional reserve landing, they would be convicted of fraud, because that is based on a fraud. You can’t take somebody’s money, promise it to the person and lend it out at the same time. When I give my money to a mutual fund or a hedge fund those investment entities take my money and they tell me we are going to lend this money out and we may get you a 75% return, we may lose your half your money or lose all of your money. That’s a market free way of conducting business.

What banks do under fractional reserve landing is fraud. They take your money, they promise it to you and they lend it out at the same time. Now this creates a lot of inflation, because the money is lent out and then re-deposted and then lent out again. This inflation robs the average citizens and the depositors are fundamentally at risk, because their deposit money has been lent out. In the past, looking back in history, when banks did this type of fraud it would collaps fairly quickly. The loans wouldn’t get paid back and the depositors would make a run on the bank demanding their deposit money back, which wouldn’t be there at this moment. So, this type of fraud collapsed quickly and depositors were upset rather than insisting on the correct type of reform, which would require banks to be honest and say – yes we have lent out your money, you may not get it back, just like if you deposit your money with any other investment entity. And if you do want your money to be guaranteed, to simply put it in a separate type of account, which is not subject to fractional lending. That is the simplest solution in my opinion to the entire scam of fractional banking and central banking that is required to enable this scam.

However in the past this wasn’t the solution that the banks wanted, because the banks make a fortune through this scam. What banks chose was central banking, where the leverage loans started to collaps and the depositors demanded their money there is a central bank, which can create money out of thin air and inject it into the banks so that the depositors are paid with this currency. And then this counterfeit currency flows through the entire economy creating more inflation, so that it is easier for the loans to be paid back in that inflated money.

So central banking is really just a system that is necessary to enable the underlying fraud of fractional reserve lending. It is almost unimaginable how much wealth is robbed through this system. Because all of this inflated money benefits the banks and it is an enormous amount of inflation – trillions of dollars a year. This has caused the dollar to lose 98% of its value since we had a central bank almost a hundred years ago. This is an incredible amount of wealth that has been stolen and what’s more it makes it almost impossible for the average american to effectively save money, because the underlying currency is constantly inflating and plus you are being taxed on the imaginary inflated value of your savings. And when the average american can’t save money effectively they are forced to go to a bank and take a loan for everything and then you have a nation of servants, which we have developed very quickly into.

Maybe the simplest way to view this and to explain it to other people is just to ask why would banks be given the exclusive right to counterfeit currency? If your neighbour in his basement counterfeited hundred dollar bills and the Secret Service came to arrest him and your neighbour said – oh, no, don’t arrest me, I am going to spend these 100 dollar bills and stimulate the economy you would laugh at that deffence. And yet when banks counterfeit money and they say that it is necessary to stimulate the economy people believe it, because they repeat this lie often enough.

Winking George coin

People actually get confused and think that an inflating currency equals creation of underlying value. Only production gives underlying value. And inflating currency just benefits the people who are able to counterfeit the currency at the expense of the people who don’t get to do so. Now it is great to see that more and more people are waking up to this fundamental issue which controls their lives and a few politicians are now looking at dismantling the system. But really the vast majority of Americans are cut up chasing after side political issues and they follow politicians that are sold out to the entities who control our financial system. And unless a politician is really focused on getting rid of the central bank and reforming fractional reserve lending then that politician either doesn’t understand how the financial system works or more likely they are sold out to the financial entities which have control.

Personally I do not hold too much hope for a political reform. I think that what is more likely to happen is that the system will simply collaps under its own weight, as it very often does, because fractional reserve lending and central banking require constant growth. And when you get to an issue like peak oil and the decline of european and US manifacturing as their jobs are transferred to China suddenly you do not have fundamental growth in the economy anymore. There is nothing to take up all that inflation that is created.

Now the people that are counterfeiting money will always try to delay the currency collapse, where its the banking industry or a dictatorship. But ultimately this eventually leads to a currency collapse unless they can maintain such a rigid control over people’s lives that people have no freedom to protect their wealth. Another option is to have another country intervene – like the USA did for the Japanese Yen and it prevented its collaps in the 90s. People however always find a way around this, whenever there is a sustained downturn in the economy for years and years this always leads to a currency collapse. You cannot find an example where there has been deflation in the long term. This is simply not possible when there is at least one entity that constantly counterfeits money.

So at least by understanding how the system works, even if there is no political reform you can protect your self and the hardest thing to do is really just overtime a lifetime of conditioning where you have been taught that this paper currency baked by nothing has value. It does not have any fundamental value and it is being counterfeited at an outrageous rate currently to try to stay off the collapse. The faster you can overcome the life time of conditioning, the sooner you will start transferring your paper currency into something that actually retains value.

Wish you all success!

The first thing that you need to understand about investing is that you are operating in a system that is completely stacked against you and none in the media is going to tell you this. The average american however has realized that subconsciously and that’s why people hardly save money anymore and that is why we have become a nation of debtors.

The first massive way in which the system is stacked against you is that we have a central bank. This central bank is not set up to help the little guy, but instead it is intended to take money from the average saver and transfer it to the banking industry and the way in which it does it is very subtle. Basically under central banking system you will never gain in the long term by holding any type of interest bearing certificate. This is because if the banks paid ot more in interest payments than they took in by inflating and skimming the currency then they would be losing money, so no investor who hold interest bearing certificates in the long term can ever succeed under a central banking system. This of course does not mean that you cannot succeed as a speculator who jumps in and out of the bond market at the right time.

The next way in which the system is stacked against you also has to do with the central banking system. As the currency inflates every year the government taxes you on the imaginary inflated value. So even if you are holding something that isn’t really gaining value and is only getting value on paper and you are taxed on that isn’t really fair as the government is confiscating a percentage every year. This is one reason why anyone saves any money anymore.

The central banking system is a great benefit for the government and to the banking industry but it is a great detriment to the average person who is trying to save money. The main reason why people fail to save money is that we have a central bank and a constantly inflating currency. This is why almost everyone has given up on saving and has instead gone into debt and has been forced into wage slavery. Once people realize they cannot succeed by investing in interest bearing certificates they are usually told to go invest in the stock market. Of course corporate America and the financial industry are constantly putting out stories what a good idea it is to invest in the stock market and how the value of the stock market is constantly going up. These are totally misleading stories. The real truth, that nobody in corporate America is going to tell you, is that every company eventually goes bankrupt. Yes, some people do make money speculating in the stock market, but most of them will lose in the end because all stocks eventually end up worthless. Now if you are a genious and a speculator and you have a lot of time to devote to it, then maybe you can succeed. Very few people do. I don’t even try because in a system which works against you even beyond the normal inflation and the normal taxation on inflated value it is just one more variable working against you.

Now before everybody gets too depressed about all of this, let me just say that once you understand how the system works you are free from future exploitation. And at that point you have two choices. One is just to try and save money and the other is to actually try to make gains and earn a living or earn a partial living as a speculator.

So first let me talk about earning partial living as a speculator as this is what everybody is trying to do. I think that very few people will succeed at this and I have said that a number of times. Let’s use me as an example. As I said before I can systematically earn about 20% of return. Now once you take out true inflation which I believe now is about 10% these days and then you take out taxes that leaves me a true rate of return of about four percent. If I am speculating with let’s say half a million dollars, I will earn 20 thousand dollars per year and this is my true value gained. So, I am sorry to be the bearer of bad news, because I know that everybody likes to imagine that they can earn lots of free money by speculating or gambling on the markets, but even if you are unusually successful and even if you have an unusually large amount of money to speculate with, it is hardly worth the trouble.

The good news though is that it is much easier to save money than to profit or break even as a speculator. Not many americans do succeed in saving money but once you know what you are doing it is not that difficult. You basically save money by owning something of value. And if you own something like land or real estate or precios metals you can usually find some legal method of protecting the inflated value from taxation, whereas when you speculate you will probably get stuck paying taxes.

So my recommendation to the average american is to save money by investing in something that has value. That is what humans have been doing for thousands of years and that is what is proven to work. Stocks always go broke and paper currencies always end up worthless but things like precious metals and real estate generally retain their value. It is just not that complicated. I know a lot of people that worry that the price of real estate and precious metals constantly fluctuates – yes the price of everything is fluctuating in inflating currencies in particular.

The point however is that if you own something that has true value it is never going to fluctuate down to zero, whereas the paper currency and stocks will eventually fluctuate down to zero. So by owning something of value you are on a leveled playing field. When you invest in stocks and interest bearing certificates you are not – you are in a system that is working constantly against you. It is very hard to overcome that.

So sure housing is in a bubble right now, so don’t invest in it, invest in something else. You are speculating, but at least you are speculating in a system where not all is against you and with things that actually have value. If you do not want to speculate, just buy anything of value – buy a house – it might go down in value a lot, but it will not go down in value to zero like your stock might. Once you learn to save and retain value and protect your savings from confiscation by taxation on the inflated value. And then you won’t have to go to debt for anything, you are no longer slave to your mortgage and therefore a slave to your job. You can then really appreciate the freedom our ancestor just took for granted.

Wish you all success!

Every year this currency gets inflated and this means that if you had a pool of euros, a certain pool of money, every year they print more and more of these. So this means that the purchasing power of this is declining with an alarming ratio. I use paper money of course. Nobody can survive without them in today’s environment, but a good percentage of my income goes to silver just for investment and I am going to show you why.

Let’s start from the history. For more than six thousand years silver and gold of course have been used as money. This is honest money – you have to get some guys, give them tools and have them dig it up from the mines for you. That means that there is purchasing power behind it, there is energy and time that went to it to make it. Contrary to paper money that has been printed on a press and it has no value whatsoever.
Silver is an excellent conductor for electricity. Just think about the screen on which you are reading this, maybe it’s an LCD screen and it has silver in it. It has also lots of applications in medicine. Your cell phone also contains silver, your keyboard, your television etc. It is in huge industrial demand.

Silver is also very common and for now it is very cheap. That means that in contrary to gold. Gold has always been scarce and that means that it can be manipulated very easily by very small number of people. Silver on the other side is quite common, it is quite useful, it is very good for making basically everything. It is always in demand.
I expect to put about 50% of my income into silver or less depending on how I spend. The most important reason why I am investing in silver is that nobody knows how much I own – the government, the banks – only I do.

Also in cases of crisis paper money become worthless. Let me give you an example – when World War One passed in Germany, Zimbabve, Mexico, Brazil and many others experienced hyper inflation. All sorts of fiat currencies that have been around failed. Silver on the other hand is real. You can hold it in your hand or you can give it as a gift, it has a lot of applications and purposes. In times of economic crisis you cannot trust all kinds of investment that simply rely on your paper money and pay you some interest rate. Put your trust in silver as I do and you will not be sorry.

Wish you all success!

Gold is something that used to be the base of our monetary system. Silver also to some extent, but you cannot really compare how gold and silver had worked over the years. Gold is the monetary foundation really and silver is something that has been used almost as a substitute during certain times and certain economies. This is the fundamental difference between silver and gold. And there is no relationship between silver and gold necessarily.

If you have a boom in one, sometimes you have a boom in the other, but there is no relationship – institutional or phycological or metalurgical for that matter. These are two very different markets, two very different metals that are used for very different reasons. Now gold is primarily considered as storage of value where silver is also an industrial commodity that is used for a lot of different purposes, so silver is more inclined to rise and fall in recessions and booms based on how the economy is going. While gold is more inclined to change value according to the financial policy and the monetary policy that is followed by different countries.

Now if you will be looking at silver historically you will see that silver will rise and fall much more dramatically than gold and silver has the tendency to follow gold. That’s true. It has tendency to follow gold but there is no necessity in this relationship and that is the important thing to realize. Silver could potentially go the other way around and they could part their ways, because there is no relationship by necessity here. And also one of the things that are holding up the price of gold is that central banks are holding it. Central banks are interested in gold, it is something that is essential to their holdings and silver is not.

Price of silver could go down pretty much and reach zero and it had fell very very dramatically historically, while gold still held up quite well. Gold is the real thing and I would advise anyone to hold their assets in gold and only a small fraction in silver. Silver seems to be merely a substitute in my opinion.

- You don’t think there is anything wrong with the federal reserve printing money? Do you understand that this is what Quantitative Easing is?

- I watched Ben Bernanke on 60 minutes and he said clearly that he is not printing money. He is trying to help us by keeping interest down.

- And do you know how that has worked so far? It hasn’t worked at all! Interest rates accross the board have gone higher.

- Ben Bernanke says he is in control, who are you to say he is not? In addition my economics professor says inbalances are normal in this period and similar to the 1970s, when inbalances have worked their way out of the system.

- I am sure that your economics professor has a model that tells him exactly what will happen!?

- In fact he does! He says that everything will be fine. He also says people should quit being so doom and gloom.

- I am sure your economics professor has run his computer model. Can you ask him what effect would the Quantitative Easing have on his model? I am sure he says that it would barely have any effect?

- You are right, my econ professor says countries don’t have to worry about debt the same way people do, because it will never be paid back – it just passes down generations. Nobody has to pay it.

- Some people think these policies will be inflationary, perhaps even hyper inflationary. Zimbabve, Argentina, Mexico? Certainly your professor has done some research on hyper inflation?

- I am not sure really.. Besides my econ professor’s computer models will tell him when things will go wrong. I am told that his phD makes him an expert in finance!

- I am not getting anywhere here! People are beginning to chat about Quantitative Easing 3 as more money to bail out bankrupt cities and states.

- Who told you a state or a city was bankrupt? I doubt it.

- The bond market is beginning to tell us this. I do know that bond prices are falling in spite of the Federal Reserve’s efforts. Nothing magic about reading the newspapers and paying attention.

- If cities or states are bankrupt, of course they should be bailed out! We need to buy their bonds! We don’t want lay offs. Ben Bernanke is mandated to keep employment high. If buying municipal and state bonds helps I am all for it!

- Aren’t you afraid that people will begin losing confidence in the system. IF everyone gets a bailout from newly printed money?

- It would be better if everyone got a bailout, rather than just the big Wall Steet banks. It is about time Main Street gets some help. It sounds like QE3 is for the people.

- But what if investors holding our bonds don’t like the policy and decide to sell? There is enough opposition around the world to Quantitative Easing that at some point we will upset everyone with this scheme. This seems like a game of confidence, and I don’t want to be around when confidence is lost.

- Do you know what my econ professor says?

- No, I don’t know! People who think that the US are going to lose their position of dominance in the world are crazy. He says the USA is number one. His model says everything is fine and the world needs a strong United States.

- Does your econ professor has anything else to say?

- He says the US dollar will never go to 0.52 on the US dollar index.

- Is that all?

- No, he also says that people should stop listening and reading that God damn nonsense.

- Because he fills our heads with a different prospective, a different mindset if you wish?

- People are to listen to econ professors and think less for themselves. The average person that is doom and gloom has no clue what’s happening in the world. Everything is fine – the Federal Reserve has always saved the day! Ben Bernanke is a hero.

- I wonder what your econ professor says about owning silver and gold?

- I can answer that one – gold is a bubble, the ultimate bubble, why would you like to own the ultimate bubble? Don’t you watch CNBC? The safe bet would always be in bonds, US treasuries and municipal bonds. You said it yourself – with the QE3 there will always be a buyer for them. Get your story straight. Bond prices will remain high. QE3 will create jobs. Ben Bernanke knows what he is doing and is in control.

- I will stick to gold and precious metals.

- Why do you want it? Why don’t you hide in a bunker and store some food while you are waiting for the end of days! Are you nuts? Gold is a relic, gold pays no income like I said buy some bonds and quit listening to that nonsense!

- If I quit listening to that nonsense. These people do not have a phD and I’d rather stick with my econ professor. You read lots of books and papers. Good luck with your goal.

- Good luck with your Quantitative Easing and your bonds!

Well, first of all there are marks usually on the bottom of it and it is going to say something like sterling or abreviation of sterling – ster.- or have a number value from anywhere about 800 to 950. If it is 800 this means that it is 80% silver and if it is 95, it is 95% silver. Most of the silver in the United States is sterling, that is 92,5% silver. Very rarely you will see it say coins, which means that a bunch of coins were melted down.

Can you fake those markings – absolutely. Testing the silver would take nitro acid and please DO NOT do this at home.

The reason for that are the structural problems within the world global economy based upon a debt structure. It is so vast that it will have replications that will be felt for quite some time. So, silver and gold are both monetary metals. Now in North America, silver perceived to be money is really a token issue. Most people think it is an industrial metal or a base metal only. However most of the world that speaks Latin based languages has the word money and silver as synonymous words. Even in Asia, silver is more respected as a money metal. I think that most people now in North America are waking up to the fact that silver is a monetary metal.

I think that a psychological shit took place at the time when silver passed $20 per ounce for the second time. So right now silver is a better buy than gold, it is undervalued relatively to gold and a lot of people think that gold is too expensive and start to take a second look at silver. So all those combined forces are acting to push silver prices higher. Now, why am I still bullish? Well it is hard to say that I knew this would happen, but basically that’s it. I saw the long term trend and I thought that this long term trend for silver started back in September 2003 when it reached the bottom of the market and since then it has been basically going up with the exception of 2008 financial turmoil. Even at that point of time silver did not break the main uptrend line, which supports the fact that it is still in an uptrend.

I believe that within the next few years it has substantially further way to go in terms of whatever paper currency you wish to name.