Friday, February 28, 2014

Ten Reasons to Own Gold

David Morgan talks with SNN live about the ten reasons why he believes you should own gold.

Wednesday, February 26, 2014

This Debt Bomb Will Explode

David Morgan talks about the recent strength that gold and silver have been displayed so far in 2014. He states that the debt bomb will eventually explode.

Friday, February 21, 2014

The Gold and Silver Bull Market is NOT Over Yet

The bull market is not over and it's normal in these secular bull markets to shake off some bulls and reach the status that we are currently at where the sentiment is very low. There is a lot of distrust and a lot of people are questioning whether they should be in the sector. Those are signs that the bottom is in. Now is the time, for those not in the sector, to get in. For those already in, either hold what they have, add to their position or ride it out. A couple of years from now we're going to see much higher prices in the precious metals. Three or four years out, it may be overvalued in real terms, but that remains to be determined.

- Source, The AU Report:

Wednesday, February 19, 2014

Investors Follow a Herd Mentality

I was not that good in the markets early on because I was so logic based. You do your analysis and you determine what the true value of something is. be it a stock or a company I should say, and it’s partly true. I mean that’s part of analysis.

But, what’s greater is to learn the psychology. People really don’t like to be lone wolves. There aren’t a lot of us that are. There aren’t that many mavericks in the population.

So, people to be truly independent thinkers and really not care what others think of them and go out is unusual. Most people are, again, herd mentality. So, if John, Joe, my brother in law, and sister are doing it then I can join in and do it. In other words, it’s like a herd or pack mentality.

That’s why you get these moves as everyone’s jumping in. Because when the guy at the water cooler says yeah I just bought my gold, my broker this and that, yeah I got a good discount, and on and on. They’re babbling and babbling. So be it. I’m free market. Do what you want to do.

But, that kind of catches fire. John bought gold. John’s a smart guy. He’s driving this car. Hey, I’m going to buy gold, too. It kind of accelerates. Those things take acceleration phases. That’s what I call them.

Like right now, you haven’t asked me, but tell everybody for the record, we’re in a distribution phase of the general stock market. Not that it won’t go higher. It probably will. But, the professionals are distributing what they picked up much earlier when no one wanted it, their stocks. They’re distributing them to the retail investor, the unwary public. Because the public is being told by the mainstream media and others that the stock market’s the place to be, because all this funny money primarily has gone into that arena.

But, the pros are selling their stuff. Like I said earlier, selling the strength. Strength is still in the stock market. You’ve got to have somebody to sell it to. You want the market to continue to go up, so you distribute into somebody that’s willing to buy at these high prices. Letting it go somewhat higher, and then when the bottom falls out, caves in, you aren’t holding the bag. The public is.

- Source, David Morgan via Sprott Money:

Monday, February 17, 2014

The Long Term Picture for Silver

I don’t like to give a paper price although I can. I’m on record back in the early 2000′s saying silver would make it to $100 an ounce, and I think that’s very realistic.

Again, I think it’s the value. I’m along the lines of Mike Maloney and others that you don’t want to focus too much on the paper price, although that’s what everyone does and rightfully so. Because if you sell metals you’re only going to get it for currency. You’re going to take that currency, and it’s either going to be a greater amount or a lesser amount than the currency you put into the investment.

You really want to look at the value, what does an ounce of silver buy historically, and what does it buy today. That is the gauge you should use to determine whether or not it’s fair valued, undervalued, or overvalued.

If you look at gold, the old adage is, of course, a fine men’s suit. You want to look at an ounce of gold, does it still do that? Or, if it buys ten suits then you might consider the fact that it’s overvalued on a historical basis.

That’s the way I’ll be looking at it more than the paper price.

I think it’s going far higher. I think you’re going to see gold overvalued and silver overvalued, and I think in an extreme way. As I just outlined, I think you’ll see where an ounce of gold doesn’t buy one fine man’s suit, it buys 10 or 50 or some extreme metric. I really think that’s where we’re going.

I think we’ll get there before ten years. I think ten years from now… I’m an optimist really. I might not sound it after I’ve been painted with the doomer broad brush, and in some cases that’d be valid. But, I’m a realist is what I am. I’m in the reality of what’s going on in the financial system. And, things are getting worse, not better, in my very studied opinion.

Regardless, I think ten years from now we could definitely be on the upswing. There are a lot of things out there, like the nanotech world, what’s going on in the energy frontier as far as being able to perhaps upgrade the system as a whole and use energy sources that are worthwhile.

I’m not talking about solar and wind. I’m not against them, but they’re really not very efficient. But other areas that might deem higher energy flex density where people have more energy available on a per capita basis, the better that is the higher living standard you have. That’s pretty easily proven.

Ten years out I’m pretty optimistic. But, I think getting to ten years out is going to be very trying over the next few. I’m looking for round numbers, if you want them.

I think $5,000 an ounce gold is probably realistic. Depending on your view of silver, if you’re super optimistic like me and you think it could follow a ten to one ratio you could use that number. Or, you think the current 50 to 1 or 60 to 1 ratio is more appropriate you could use that number.

I think we’re probably going to get to a minimum of the classic monetary ratio of 16 to 1 and as high as 10 to 1. I’ll be consistent here. I wrote about that many years ago. So, if you saw $5,000 an ounce gold then that would imply one tenth would be $500 silver.

But, let’s get past $50 again. I want to be very practical. People ask me all the time what’s the ultimate price. I say let’s be practical. Let’s see it above $26. Let’s see how it trades. Let’s get it back above $30 and see how much interest are in the metals.

I’ll go on the record as saying this. I know markets fairly well. You’re not going to see too much buying by the nonsophisticated money at these levels, unfortunately. But, what you will see once you see silver and gold work their ways higher, once you get the gold above, I don’t know, pick a level, $1,500; $1,600; $1,700, there’ll be a lot more interest in it.

And there’ll be a lot of money spent on the metals once they break to new highs. You’ll see a lot of money come into gold above the $1,900 level, and you’ll see a lot of money come into silver above the $48 level.

Unfortunately, that’s really… It’s not too late, because I think they’re going far higher than that. It’s not nearly as advantageous as buying today. But, the interest in the market today is at a low, and that’s how lows are made.

- Source, David Morgan via Sprott Money:

Saturday, February 15, 2014

Gold Plays an Extremely Important Role in Monetary History

If you go back about a decade and you look at the BIS, the Bank of International Settlements, that’s the bankers’ bank. They accounted in one thing and one thing only, and that was gold. That’s the only thing they accounted for, gold.

Now, if you’re talking about the central bankers’ bank, you’re talking about basically the monetary powerhouse of the entire globe. The only thing that they care about is how much gold you have in a nation state. I would certainly say that that somewhat carries merit. The problem is that we really don’t know who owns what because of all these swaps, interconnections, hypothecations, and rehypothecations.

I’m going to go off on a tangent here, but it’s on point somewhat. I’ve always thought what would be the event. No one knows. But, if it ever came to light that there is no real gold in Fort Knox, and of course there’s a lot of conjecture about that.

If somehow there was a Senate investigation or whatever, pick your idea, and it came to light internationally that “oh no! we opened up the curtain and we saw the wizard, and the wizard is naked. There’s no gold at Fort Knox. The US has no gold reserve at all.”

If that were ever to come to light I would think that the US dollar could take a huge plunge. Because the perception, maybe not the reality, maybe the reality, is that the US still has a large gold hold, around 265,000,000 ounces of fine gold.

I doubt it, but again, the market’s perception, I think, is that yeah. So, you could look at different currencies through history and basically, like it or not, gold bug or not, gold plays an extremely important part in monetary history.

- Source, David Morgan via Sprott Money:

Thursday, February 13, 2014

I Suggest Very Few Junior Miners

That's a good question, but I'm probably not the best to ask because we focus mostly on top-tier and mid-tier companies, companies that are producers or near producers. We do study a great deal of the junior exploration sector, but suggest very few. If I would venture a guess, of the micro-cap companies—$0.5–3 million—probably half will survive, maybe fewer than that.

It has been very difficult in the precious metals sector over the last couple of years. Even some of the best companies—I am thinking of one recently that has one of the richest gold mines in the world—can be mismanaged. That is why with some of these companies I tell people to only risk money they can lose because the payoff can be great, but they can lose it all, too. And some of my readers thank me for it later. That happened just this morning.

- Source, The AU Report:

Tuesday, February 11, 2014

More People Will Wake up to the Need of Precious Metals

There is no change fundamentally in why investors would buy gold in 2001 compared to why they would buy gold in 2013 or 2014. The fundamental fact is that there isn't a nation state on earth that has a handle on the debt problem. Because of that, we're going to see more people wake up to the need for precious metals, because precious metals are true money outside the framework of the current system.

The correction we had in silver and gold isn't that abnormal in a major bull market. I've been through one bull market already in my lifetime. I watched gold go from the fixed price of $42.22/oz up to $200/oz, then to sell off to around the $100/oz level. It later advanced all the way back to the peak of $850/oz in January 1980. I have seen the damage a big shakeout in a major bull market can have. That experience makes me a little bit more hardened to weather the storm we just experienced.

However, I think that the worst is over. I think silver has bottomed. Gold probably has as well. This year, 2014, will be a rebuilding year. Depending on what happens in the global economic system, it's possible that we could even see a very good year for the metals, but I don't anticipate that. I'm anticipating a rebuild year where silver climbs back over $30/oz and gold travels up well over $1,600/oz, probably to the $1,700/oz level or higher depending on how the economy unfolds.

- Source, The AU Report:

Sunday, February 9, 2014

The Resource Wars Have Begun

The resource wars have already started. Look at Mexico. It has a resource that it covets very much, and that's energy. That is why the government levied a new tax designed primarily as energy, but subsequently adds a 7.5% royalty on mining profits. Is it a war? Not per se, but it is detrimental to companies that operate in Mexico today and in the future. I think we will see even more of this kind of thing in 2014.

- Source, The AU Report:

Friday, February 7, 2014

Wednesday, February 5, 2014

How and Where to Store Gold and Silver

In this video, David Morgan advises on how and where to store your physical silver and gold. Diversify and have several places to store gold and silver is his advice.

- Source, Gold Money:

Monday, February 3, 2014

James Turk and David Morgan Talk Silver and the CFTC

David Morgan of and James Turk discuss current high silver prices and the CFTC's investigation. This video was recorded in 2010. Note the accurate predictions.

Saturday, February 1, 2014

Will China Replace the US as the Reserve Currency of the World?

I’ve said the big push would be from west to east. I did talk about the gold backed Yuan, and I did that very early. I was one of the earliest writers to write about that. I don’t believe, this is again my opinion, that actually China wants the responsibility of the reserve currency of the world. That’s my opinion. I think that they’re very happy to accumulate a great deal of gold, maybe tie the Yuan to gold. But, I’m not certain that they, again, want the responsibility. This is again my take.

They see the problem with being the reserve currency the United States is currently under. So, I think they are more apt to say look, we want to use our currency as a sovereign nation to trade with other nations and circumvent the dollar. Of course, they’ve done that very eloquently over the last few years and continue to do so.

They keep distancing themselves from the US dollar. So, I think that it could be where currencies are as they are now, floating against each other. The Yuan continues to gain strength because they’ve cut the tie to the dollar. There isn’t really a reserve.

The other part of the question is do I think possibly that we’d be in another system like a hard back – gold or silver backed, currency or some tie to it. The answer to that is yes. I doubt silver will be tied to the monetary system, although it really would be very, very good if it were. Because the best system, at least historically, is a bimetallic system where you have gold and silver without a fixed ratio. But, that’s topic for another time.

I think you’ll see some kind of gold cover clause with the new currency. There’s probably still a push by the Anglo-American axis to have a one world currency, but the contra to that is basically the BRICS countries. Again, as I said, I think the Yuan could be a stand alone currency as an alternative but not necessarily a reserve currency.

Really, the reserve currency of the world that’s worked the best is gold as the reserve. It’s basically similar to the Bretton Woods system. The reason the dollar was as good as gold and sound as a dollar, those archaic sayings, was that you could exchange US dollars for gold at one time up until August 15, 1971.

But, the US did what it’s still doing which is printing more pieces of paper versus the amount of gold they held. Of course, now it’s exempt because of closing the gold window. Nonetheless, too much of anything decreases its value, and certainly there are enough US dollars in the system to decrease the value.

We’re not seeing that take place because the amount that’s been printed under the QE one, two, and three is sitting on banks’ balance sheets. It’s not going out into the general populace to cause any price inflation.

- Source, David Morgan via Sprott Money: