Andy Schectman: There is NO Investment Like Silver

we live in a fantasy world now reality has been destroyed this is the time that you really need to pay attention the probabilities are overwhelmingly on gold's side that is the best environment to see gold increase its value [Music] welcome to palisades gold radio i'm your host tom bogervicks joining me today again is andy schechman ceo of miles franklin thanks for joining me today andy it's super great to be here tom i'm a big fan of what you're doing and uh always happy to jump on board thanks very much so andy why don't we start about talking um you know about really about what you've seen for for demand i know you've been basically working 18 plus hours a day here for the last um basically year but why don't you contrast with us the the demand you've seen over the last year with the demand you've also seen over the last two months here maybe yeah i mean demand thomas is off the charts it it is an expansion of interest and recognition into the mainstream uh one of the things that i've talked about a lot really over the last year or two has been kind of a progression of demand and what it looked like going all the way back 40 years to 1980 the last time we saw gold at 800 bucks and the dow jones at 800 where they crossed a one-to-one relationship on the dow and gold last time we saw that uh 41 years ago in 1980 and and back then most people didn't want stocks or or equities they preferred gold coins and silver dollars and and in that environment if we look at the allocation of metals to the public in 1980 all the way from you know joe's six-pack all the way up to the harvard endowment fund it was an eight percent allocation to precious metals across the whole gambit of u.s investments and um as we progressed to 2020 right before kovitz started that number had whittled down all the way to one half of one percent so for literally my entire career which started in 1989 um to 2020 the average allocation to precious metals was less than one percent culminating at the end of 2020 um or the end of 2019 rather in um with one half of one percent very small amount of people owning any gold or silver at all uh the average the mean over that 40-year pyramid period is two and one-half percent um and if we look at what we've seen since 2020 february since covet started which i mean i would have told you for sure that 2020 that we'd never seen anything like it uh again uh january or february february march april were extraordinary and uh that's when you know we were doing uh a year's worth of business in six months we've already done a year's worth of business in three months this year we've done well over a hundred million dollars in sales in the first three months of the year in 2012 through 2019 that was pretty darn close to a whole year's worth of business we are seeing a regression to the mean we are seeing a regression to that two and a half percent uh portfolio uh allocation and but think about that i mean two and a half percent is nothing uh and that yet is a five-fold increase in anything this industry and myself has experienced in 40 years what happens if it's a five percent uh allocation or a ten percent allocation uh a ten percent allocation doesn't sound like much you know a lot of people will say well what should i have five or ten percent of my assets in gold and that's a common phrase i hear all the time what happens if everyone owned 10 now you're talking about a massive increase a 20-fold increase in demand the recency bias would suggest that this industry can't handle it and what we're seeing right now is uh you look at all the the companies that that are online you see nothing but out of stock out of stock out of stock contact me and the mints that are struggling to to keep up with demand as more and more people are waking up to what's going on with with fiat currencies and uh so i guess i would say to you simply this um i never thought demand would better 2020 and it's doubled it by at least or better it by at least a double right now and so um is it going to continue to get worse uh do does this demand ease up a bit i'd like to believe no it won't because um we're just seeing a greater expansion by you know by by mainstream by people who have never owned precious metals before and maybe it has something to do with the reddit group maybe it has something to do with alternative media sites like yourself maybe it has something to do with cryptocurrencies whatever it is the the recognition that um that you have to do something to to safeguard your money outside of what was considered traditional forever it's it's it's permeating and that has is having a major effect so um i don't know how else to put it to you other than to say it doesn't stop it's a blessing it truly is a blessing but we are working uh seven days a week 18 hours a day i've just hired four new brokers i've hired three new um operations staff and and that's just to keep up so like i said it's a blessing no one should feel sorry for us but it's it's um it's exhausting and it's unlike anything that i have ever been prepared for in 30 years in this industry uh andy i'd like to to talk a little bit about the the premiums that we've seen obviously when demand goes up we see premiums over spot really start to to go a lot higher so can you um kind of explain to us why those premiums get so high is it is it simply dealers be getting greedy or you know where those premiums really go to yeah and i'm glad you asked that question because it's not the dealers getting greedy so you have to understand in the ecosystem um there are five maybe six primary distributors in the united states and in canada let's call it in north america and these primary distributors deal directly with all the major sovereign mints and refineries these primary distributors have are very very well funded they have contracts with all of the major mints to give you an example i am a one of 27 authorized u.s mint resellers in the world one of only 27. the difference between an authorized reseller and an authorized participant the the main um the main players in the industry the five or six is about 50 million dollars where or more where you know typically per mint they're allocating 25 to 50 million dollars to each one of these mints on a guaranteed allocation basis where they're going to take whatever is that they give them but let's take a look at the landscape for a moment first let's go back to what i was saying earlier you're seeing a regression to the mean where more and more people are being becoming interested in precious metals number one number two through covet and social distancing and all of these things on top of more interest we've seen a a mitigated and limited output coming from the mints and so the mints are struggling to keep up with demand you hear about what's happening in perth you hear about it in the in the uk mint uh you you're the u.s and the canadian men have both been incredibly inefficient all year long uh in fact in fact the u.s mint ran out of or ran outs the wrong word went on an allocation basis and gold eagles and buffaloes in the second week in january i've never seen that in 31 years the canadian mint getting 20 21 gold eagles is like pulling teeth it's next to impossible so all of these mints are struggling with with supply so imagine you're one of the five or six primary distributors and you got uh you're really the center for all of the um uh the the supply and you're also the center for all of the demand all of us retailers go directly to the primary distributors to buy product well they have so much demand coming from all around the world not just north america all around the world and menstic that are incredibly inefficient and are not delivering so these these primary distributors who have gone through a horrendous nine-year bear market prior to covid where they weren't selling anything really i mean they were but premiums were super low and they were giving things away for a long time now go into the opposite environment where they're trying their hardest just to get product can't find any with any regularity and everyone is trying to buy from them and so it's it's starting up at the very top basically there's such little supply and so much demand and these primary distributors don't know where their lunch is coming from next where are they going to get product from give you another example and this is why prices rise i mean i had a call today from my operations and they said listen uh you know we have a bunch of stuff coming next week but we don't know what it is yet we haven't been told from the primary distributor that one of the ones out east that we deal with in new york city and they said the truck will be loaded up on monday but i don't have a uh i don't i don't have a a manifest of what we're getting yet so it's a situation where it's um these primary distributors are wondering how long they're going to continue to get supply in this environment as more and more people are asking for it so you have wicked demand with a fractured supply and and primary distributors who you know big big operations big money big operations not sure what tomorrow brings so is it justified for them to make a little bit more i do believe it is i mean this is an industry that has given stuff away most of my career where if you make one percent it's a lot in this industry we're not making appreciably more money than we ever did before but we are paying more money to buy this stuff another example in order to get i bought 75 000 kangaroos from the perth mint in february for delivery in april i had to pay upfront three months in advance at the biggest premiums i've ever paid for ever in in my entire career uh you know north of 250 000 i had to pay and that premium cost i can't hedge if i buy 75 000 ounces of silver i can hedge it on comex so i have no market risk to the to the fluctuations of the silver price but that premium i can't what if all of a sudden the us mint goes full bore and says we're dropping all of our prices the primary distributors drop all their prices and now the market's flooded with silver eagles and i have 75 000 kangaroos that i just paid over three dollar three and a half dollar premium four dollar premium for above spot and what do i do now i'm stuck with it i'm going to lose money so it goes both ways the dealers like myself aren't greedy in order to have product to sell not only do we have to buy it months in advance pay up 100 up front and pay the highest premiums that are not hedgeable ever that we've ever paid so it's just a situation really of the of the big big market makers saying you know what i don't know what tomorrow brings i need to get we need to make our nut and it filters on down to us so um it's also important to realize and the one thing that people don't talk about in this equation is well what about the bid side you know on the bid side the majority of what you're paying over the price of silver you're going to recapture or gold when you sell it our bid prices are the highest they've ever been right now ever i mean right now i'm paying five percent over spot to buy a gold eagle i've never sold them that high in the past 15 years so you know it goes both ways tom and the only thing of it is is that in in in the first three months of the year where we've well north of 100 if we did one million in buybacks one percent i'd eat my hat no one's selling us anything so it's easy to focus on the high premiums when only the only thing you see are people buying but for those that want to sell us call me i'm happy to take your stuff and i'll pay huge premiums you're not just getting spot you'll get big big big premiums more so than i've ever paid anyone in in 30 years and that's simply a function of the fact that you can't really get any supply right well that's just it so if you realize that the secondary market is pretty much turned off now all you have are 2021s and stuff new stuff from the refineries the bars and rounds so if the mints which have been the model of inefficiency aren't delivering and the public isn't selling well what do you expect the primary distributors to do they have to make their money somehow or they go out of business and that doesn't do any of us any good so then there is no market maker uh there is no uh line of supply directly to the to the mints and so it's a situation where they again they don't know what tomorrow may bring and that's right there's way more demand and not enough supply and virtually none in the form of secondary market selling in 2017 when gold was in the middle of a a bear market and a and a long one a protracted one and bitcoin took off six or seven out of every uh 10 sales we were doing were people selling and that was when the primary distributors were having to buy gold eagles let's say from the u.s mint at three and a quarter percent and millions and millions and millions of dollars worth but yet i could buy all day long gold eagles that were backdated for one percent and sell them to the public for two so the primary distributors were losing one and a half percent on every gold eagle they were buying that were brand new same thing would have been with the maple leaf in any of them so it goes both ways and back then no one was saying to me well why are you selling gold eagles for under the the price of uh what brand new ones are for well that's because the primary distributors were getting screwed and now they're making money because they don't know what tomorrow may bring back then in 2017 we didn't know if if gold was ever going to catch a bid ever again is this the end of the the gold run is our are you know are the millennials moving to crypto currencies and away from gold and you know on and on and on the thought you could go down that rabbit hole and wonder is this the end of it and you know what the reddit phenomenon has given me a whole new um it's renewed my optimism because these young people are very smart they are they are very coordinated and and they've done a hell of a job in bringing to focus um that not only our precious metals wealth in particular silver but that there's some funky stuff going on on the comex and with the commercial banks and with the central banks and they've alerted people and so um you know look i i think that uh the knife cuts both ways and as far as high premiums goes both ways and quite frankly if i had a gun to my head i will tell you that i think they're going to keep going higher the mints cannot keep up and there just isn't enough metal out there period to uh to suffice a a much much wider group of people and and again right now we're probably not even a two percent allocation i say to you again what happens if it goes to ten i mean there'll be nothing left overnight and that's how fast it happens you have five six primary mints tom us canada austria australia south africa united kingdom mexico just said they're not sending out any more um uh what are they called the um the uh the libertads the silver libertads they're not sending any more out so he crossed the mexican mint off and the chinese mint is they don't send hardly anything out they don't amount to anything those six mints when they shut down or there's a problem you're going to feel the the reverberations across the entire landscape and and they've been horribly inefficient and now you see puffs of smoke coming up from every single one of them about issues that that that are happening whether it be uk whether it be perth um you know there have been a few that have been all right south africa has been good uh the uk has been okay but now there's puffs of smoke coming up there too so the u.s and canada have been horrible so i you know this is a situation where there's just isn't enough supply and that's exactly something that i that i wanted to to touch on next with you andy is let's let's talk about the differences between these mints we've seen you know obviously with with john adams raising the issues that the perth mint is having delivering any type of product but um can we can we really apply the same um let's say lens of inefficiency or lack of supply to all of the other mints i know the u.s mint is gonna is supposed to be shutting down for what was called retooling um later this year so kind of walk us through if you can the differences between those mints and and where you think their situations are are different well the big problem with the perth mint has to do mostly with their own unallocated synthetic program and john adams has been talking an awful lot about this uh and i have to admit uh although i have no proof um i'm seeing uh supporting um emails from his claim left and right all day long i'm getting emails from people saying this is the case uh for the perth mint first of all let me say this as far as physical supply for miles franklin for the past two years the perth mint has been a godsend and i would be lying if i said otherwise and i bought over 150 000 gurus since the beginning of the year and i've done most of them um silver and last year they were the same thing last year when this was happening shay russell uh who works for agora in australia was telling me this was happening there in gold she was saying to me no one can get gold um but i'm i'm saying well shea i am i'm getting 20 20 gold kangaroos well no one in perth can she said uh and and that was being echoed all over the place and then all of a sudden perth delivers tons of gold to the comex back last year when the comex was running into problems and the price on comex was disjointed from the price on the london metal exchange and they were running into problems with supply where they had to actually uh take 400 ounce gold bars from london and and move it over to comex and and say well if you want to take delivery you get a a piece of a 400 ounce gold bar these are all real bad things right because this is this is all about uh re re-hypothecation there weren't enough hundred ounce bars there to suffice all the people that potentially wanted to take delivery so they had to go to the lbma and say uh you know uh i'll be at me and say hey send me your 400 ounce gold bars and we'll we'll do fractional allocation well anyways shea was saying this was happening back then and what we're seeing right now is the same thing but let's bear in mind that the perth mint program is free storage if it's unallocated free storage now i've run a storage program for a long time with brinks and there ain't nothing for free there's nothing for free uh what it basically says is that when times are great and you don't need to get your product quickly an unallocated free program probably will work just fine but when things get like this an unallocated program is is is not so great and basically what we're seeing out of perth is that people are going to per earth and saying i want to move to allocation well in order to do that you first have to fabricate which means you have to because the gold and silver held at perth is in working condition it could be a a dorae bark just came in from the from a mine it could be a giant spool of gold or silver that they cut into planchets could be a kangaroo or anything in between or a thousand ounce bar whatever people are saying left and right that they're being told months and months and months we're seeing the same thing at kitco right now by the way we've heard rumors of this not enough allocated but in not being able to get refined product very easily in the uk um canada if we look at uh getting 2021 gold maple leafs it's been incredibly hard they're producing them but nowhere near what they used to these are things that we would never see in the first quarter maybe the last quarter the u.s mint has been the absolute model of inefficiency as well gold eagles gold buffaloes were rationed starting week two january you never see that uh silver eagles 2021s if i sell them to the public right now at 9.79 i will be cheaper than anyone in the united states that's six dollars and 60 50 cents higher than i've ever sold them for on average really in 30 years so and that's i have to pay well north of eight bucks to buy the stuff from the primary distributors so you know when you talk about uh what's the difference the first difference is in allocated and unallocated accounts i guess my warning to everyone would be get the hell out of unallocated accounts you know stop being pennywise and pound foolish this is dumb already and you can see it if you want to own gold pay to have it stored or store it yourself there's nothing for free in life and there are ramifications for thinking otherwise and if you want to leave it in an unallocated program where storage is for free then you should accept the consequences when the rubber meets the road like we're seeing right now where people are told well you can get it but it's going to be six eight nine months before you get it is that really what you want to hear no it's not and that's why in the 30 plus years that i've done this i've met three people that are allocated at perth everyone else is unallocated the their allocated program is starts at like one percent they're expensive storage costs that would put it higher than any storage facility in north america so people choose the unallocated certificate and um you know here again when no one is buying it the way that they are voraciously or trying to um to fabricate all at once then it's fine but the minute that happens you can see how how dangerous that becomes and so first and foremost anyone who has unallocated programs should should switch and that would be the same thing with gld and slv uh you know any paper derivative synthetic program you should own the real thing and and i think you're seeing people wake up to this john adams the reddit group they're all waking people up to this and you're seeing that you're seeing them call and say hey i want my stuff well since that's happened tom i've had over a dozen emails at least people validating what mr adams is saying that this is true or this is what i've been told so while i have no proof i can tell you that where there's smoke there's often fire and there's an awful lot of smoke coming up under kitko and under perth right now less at the uk but canada and the us while not um uh while not doing anything nefarious they're just horribly inefficient as far as the um retooling comment with the u.s men i talked about this uh i have um as i mentioned i'm one of only 27 authorized u.s mint resellers i know lots of people in this circle and i was told on several occasions that that was going to happen i got lots of crap for this on on one particular youtube channel people accuse me of talking my book trying to talk up demand which i'd like to say first and foremost is a whole bunch of crap has nothing to do with anything the people that i'm talking to about this still believe it's going to happen and whether they publicly come out and admit that they're going to shut down i'll tell you getting product out of the u.s mint it's it's like i don't know i can't even explain how difficult it is it's not easy and um it's not straightforward and if you told me that they were going to shut down to change the the dies and to prepare for the new um enhanced uh counterfeiting measure that is going into the new eagles let alone the new design i believe it even though the mint has come out and said we're not going to do this the people that i talk to that know better say that's not true is it going to happen don't know but if you shut off the us even for a few weeks it's going to create a major problem with supply because the canadian mint isn't much better and they're not shut down and if you shut down or compromise the two major supply chains in north america you will feel reverberation and here again if it weren't for the perth mint in australia getting me as much product as they had this year it would have been really difficult one of the reasons that miles franklin has been able to stay on top of this tom i've been doing this for 31 years and we know a lot of people we don't just work with one or two of the big distributors we work with all of them we don't just work with one or two sovereign mints we work with all of them we have a network of of small dealers and coin shops around north america that are is deep and rich and in this industry it's still kind of who you know and your reputation kind of like ebay in ebay if you never screw anyone you have a good rating if you screw someone no one ever wants to work with you again or buy from you or or or sell to you and the same thing is true in this industry and as i mentioned with perth in order to get 75 000 coins i had to pay three months in advance stare into the abyss pay three months in advance the highest premium ever at at you know and buy pay up front for a huge huge amount of a product that i'm not going to get for 90 plus days and you know here these are the things you have to do in 2021 to have supply and if you don't do that you're out of supply because the public's not selling you any andy i'd like to move a little bit to uh to kind of get your thoughts of course you mentioned the wall street silver group um and and you know they've done a great job getting attention to this space and and exposing let's say a new generation of precious metals investors and people that just really want to secure their their wealth for whatever is going to be coming um in the near future here but you know i've i've had a lot of different discussions uh let's say since the beginning of the year focused on people trying to let's say break the comex so what are your thoughts towards people um you know trying to stack let's say one ounce coins uh smaller denomination retail product or you know really trying to go after the bigger bars by buying pslv with whatever they can so that those thousand ounce bars are taken out of the market what are your thoughts towards that i think going after the comex is is a foolhardy uh endeavor i think it's not gonna happen trying to beat up on a hedge fund that was short gamestop and and amc movie theater uh is one thing with you know 50 70 80 100 000 uh investors that are all coordinated but going after a bullion bank and the comex is another first of all just blanketly the comex will change the rules like they did to the hunt brothers they'll wickedly raise margins or they'll just make it illegal to take possession or to be long over a certain number of contracts that's not the way to do it you start at the bottom and you know here again pslv the theory that people have on pslv is my same theory but you don't have to stop or start at the top instead if everyone were just to start draining like we're seeing right now anyway a greater expansion remember i said two and a half percent was the average eight percent was the high in 1980 what if we get to 10 or 15 or 20 percent of allocation uh or or or let's just change it instead of people having 20 of their assets what if just 20 of the people have some silver i mean right now it's minuscule one percent or whatever so if everyone were just to start taking possession of coins and bars little by little looking at it as wealth not as an investment it's been wealth for six thousand years it's the way i look at it you and i were talking offline i told you that for 31 years i've bought something every two weeks i have never missed a two-week period ever in 31 years that was my promise to my father when i was 19 years old when i started when he and i started the company together it was the only rule he said to me there's one rule or i'll fire you i said well heck i can deal with one rule what's the one rule he says you'll buy something every two weeks and i'll tell you it's the greatest gift my father's ever given me ever he's never given me anything but an opportunity and some really good advice and that was it and he's been retired for a long time he's not going to fire me anymore but i will honor my promise till the day i die and i will buy something every two weeks and i hope that i never need to use an ounce of it and if i do not just for an emergency but for an opportunity i'm damn glad i have it if not my kids get it but um you know i just i think that um i look i i don't know how how this is all gonna going to uh going to play out tom but i i just think that um i think that everyone should start small and buy a couple ounces whenever you can get on a on a allocation program buy a couple ounces every week you know but don't try to go and take on the comex it's it's not going to win what happens is my theory being is that if everyone drains all the physical supply across the globe you're seeing it already with the mints running into problem if everyone were to convert their unallocated synthetic programs into allocated physical product number one and number two just buy physical as often as you can yes it helps miles franklin i'm not talking my book i'm just simply saying this is how it's going to happen if there's no physical supply anywhere it's got to spill over into comex now you have legitimate refining needs legitimate minting needs and if if the comex says we have no silver to sell you refinery you can't make your rounds or bars and sorry us mint we have no silver to sell you and well the mints aren't you know delivering anything right now the supply is so tight you're out of doesn't the price just have to rise automatically if there is no supply anywhere doesn't the price have to rise which leads me to something i'd like to talk about tom because i think it's important to realize i think this is happening in in a different light you know one of the things that i talked about with you probably twice i'm guessing um because i've talked about it a lot in 2020 was the rise of this third group of reportables on the comex that has been draining the comex market now typically it's the commercial banks and the hedge funds they're called specs that you see on the commitment of trader report and as one goes along the other go short they're the ones that you see positioning on comex what is a family office i mean a family office is a hedge fund basically with less regulation it's a smaller hedge fund maybe but it doesn't have the regulations that a hedge fund does so a lot of hedge funds became family offices here again you have some of the wealthiest private investors in the world and sovereign wealth funds that comprise this new reportable class called the others and typically we would see one percent drained off the comex in terms of contracts that were issued not much now we're seeing as much taken off in a month as as we see in a year on the april gold contract just in the first two days of of the april gold contract i think we saw somewhere in the neighborhood of 20 000 contracts taken off of comex that's over two million ounces in the first two days in gold in silver in march we saw somewhere in the neighborhood of 50 or 55 000 um uh what was it 50 or 55 000 let's see if i can remember this right uh i want to say 55 million ounces of silver 55 million ounces of silver drained off of the comex backdoored out of uh exchange for physical and just taking delivery on the april contract in fact i think the exchange for physical was north of 30 million so between the exchange for physical trading contracts on comics to the london metals exchange and just taking delivery of the silver contracts just those two alone we were north of 80 million ounces there was over 90 million ounces taken out of slv over the last month by the big authorized participants and so when you put it all together you see metal coming out of out of india you see it coming off the shanghai gold exchange you see it coming out of the london metal exchange you see it coming off back dooring out of slv you see it now for a whole year plus coming out of of comex by taking large deliveries and now what you're seeing which is really illuminating is metal being pulled out of the building and that's what didn't happen last year and i would often think why are they taking these huge deliveries but not taking possession of it and i think those are the industrials that first and foremost aren't paying as close of attention the way that we are to what's going on uh the conspiratorial side if you will whether it's true or not i don't think they were and maybe they are now because we saw 30 plus million ounces leave the building here last month that's unusual now they're actually taking it and walking with it before they were taking delivery of it and in even though they were leaving it in the building it belonged to those entities was no longer part of what could be played with on comex but the term rehypothecation is coming into play and i think these people are getting a little nervous so whether it whether it be elon musk taking possession of those 30 million ounces of silver or panasonic or or sony or samsung or apple all of these needs for silver are extraordinary so you're seeing this on the highest level and have been for over a year i go back to 2017 and we've talked about the central banks repatriating all of their gold um and you know if you go back to 2017 and see a linear progression starting with all of the central banks repatriating their gold the first one being the german bundesbank and most of the european central banks pulling their gold back from the bank of england in the new york fed that started everything then you see the others taking all the metal off of comex and now they're pulling it off the exchange so you're seeing the most well-funded and informed traders on the planet both private and uh the central banks and commercial banks they're all doing the same thing they're front running this deal so you know do what they do we can't do it on the same level but you just buy what you can and instead of being unallocated do what these big players are doing what are they doing they are taking possession they are moving counterparty risks they are going allocated instead of it being in a pooled form they are taking delivery which means it's now mine and the term re-hypothecation then you can throw out the window so to me the big money is doing this now they're able to do it on a higher level but for you and i and everyone else out there if it's two ounces so be it if everyone takes two ounces across the globe there'll be nothing left ever for anyone else and that is why that is how you win you don't start at the top you start at the bottom and bleed the shelves empty of of supplies so that all of the dealers all of the refineries all of the mints they have to go to the comex because there's nowhere else to get it or directly to the to the mines but they're not going to do it so you go to the comex and the comex says sorry guys there's no silver doesn't the price just have to rise then isn't that what supply and demand is because right now they've done a hell of a job at making price discovery next to impossible that's the key they're really good at hiding the truth through things like rehypothecation through things like synthetic programs give me one more example how do they keep the price where it is well february first and second time we had more demand than we've ever seen ever that was right when reddit hit and that was when you had hundreds of millions of ounces going into slv more than it's ever gone into it in a two-day period ever on that friday night i think it was the first all the big online companies shut down and people were calling me left and right do you see jm bullion shut down you see ad max is shut down you see this you see this and i would say yes i see it and it looks like they would say it looks like they're all out of product that they don't have anything and it did appear that way and in some cases it was that way but let me just explain what that really meant and the significance of all this trying to tie it all together the markets open 24 7 except on friday night here in minnesota it closes at around 4 30 or 5 o'clock central time and opens back up at five o'clock central time sunday those that's the only time it sleeps for that 48 hours and on a friday night all of our inventory is hedged but on a friday night we do business over the weekend so we will go long into the weekend typically my trader will ask me how how many contracts should i buy on comex to go long so that we can support any business done over the weekend that friday night he called me and said what should we do i'm i'm thinking 55 000 ounces i'll buy 11 contracts so he goes on comex buys 11 5 000 ounce futures contracts to support any business that we would do over the weekend that would be a lot of silver to sell 55 000 ounces um you know so i said fine that that should be good by saturday morning we had sold 90 000 ounces he called me and he said do you realize you're 35 000 ounces naked exposed into the open and oh by the way all of our competition is shut down for the same reason it wasn't because they were out of product they they may have had you know less product than they ever have but it's because they didn't want to sell more product over the weekend unhedged with the possibility of it opening gapping up much higher people were talking about it gapping up 10 bucks that that sunday it opened up four bucks or excuse me a buck or two and then quick jump to four cost us forty two thousand dollars we had to hedge it immediately but we had sold ninety thousand ounces we're only fifty five thousand hedged to cover those other thirty five thousand ounces we had to do it at over a dollar loss that's the risk you pay but so i digress anyways this is the environment that we saw back then all the online companies shut down because of demand we sell ninety thousand ounces from close on friday at five o'clock till saturday morning in eight ten hours we sell ninety thousand ounces could have sold more but we slept and we're not online so uh in that environment one would suspect that there's wicked demand not just for physical but the etfs too you have the reddit group going nuts and silver pops up to 30 bucks so what happens sunday night monday morning as as it goes from london and leaves london goes to the united states there's a little window the access market there where it's really not open but it's still tradable but it's not in any given location it's moving east or westward towards um towards new york in that environment someone dumps one and a half billion ounces of silver in the access market before they open in the greatest bull market environment i've ever seen in in three decades so in that in that example what happened was the price of silver dropped immediately by three dollars that's that's two years worth of global mine supply i mean at 30 bucks an ounce times 1.5 billion do the math that's 45 billion dollars worth of silver a who the hell has that and b why would they do it that way any trader in real life would be fired prosecuted and then shot lined up against the wall and shot for doing that you're guaranteeing the worst possible execution there's not any professional trader on the planet that wouldn't laugh at that and say holy what was this guy thinking well it was done as a drive-by shooting to freak out all the reddit people to freak out all the new people on board and it worked it drove the price down freaked out a lot of people and we're still clawing back from that i remember i said that you saw 90 million ounces backdoored out of slv think about that for a second on that friday night you had over 100 million go into slv the biggest i'd ever seen and then they at at high prices approaching 30. then the cartel goldman sachs you know you got this jeffrey curry saying the shorts are the etfs well they drive the price down in a very in a very orchestrated event in broad daylight so they don't even care anymore that it's ridiculous and then what do they do over the preceding few weeks backdoor 90 million ounces out of slv they're the only ones who can the authorized participants at subsidized prices they sell it up here and then they drive it down by three four bucks and pull it all out again so they basically sold them at high prices and pulled it all out at three to four dollars less 90 million ounces it was they covered the majority of what they shorted they screwed everyone and covered drove the price down and covered and got all of that silver basically at three dollars less or more than they sold it to the public for an slv so when you talk about concerted effort to keep the price down it's it's never been stronger the the big banks are freaking out they're afraid and and that's why the way to beat them is just by getting rid of all of the silver because you know you can see what the big money is doing they're taking possession of it they're pulling it out of the exchanges and the cartel the people that are shorting the price for a reason not just for the hell of it their their their efforts are not having the same effect that they used to they have to expend more energy spend more money 45 billion dollars to short a market and it's not having as much effect because the physical demand is off the chart and i would submit that whether it's the big money draining the comex and the etfs and the london metals exchange and all of the big exchanges or us on the street draining the coffers of one ounce coins in the end it has the same result if there is no silver for the public price will go higher you cannot be uh thrown off the the bull by price the price is a tool of misdirection they are misdirecting the hell out of the public by knocking the price down but the fundamentals behind it they are as skewed or more skewed than the stock market in the us is with an economy that's been eviscerated stock market at all-time highs yet you know the economy is hanging on by a thread in many cases it's it's the tail wagging the dog same thing here so i know i'm kind of being long-winded here tom but i'm trying to draw an analogy and it's all it's just simply that the biggest money in the world is doing what you're asking they're doing it at the top but we can't do that we will end up getting stopped out or they'll change the rules we start by taking all the silver we can find and everyone who's got a synthetic program gld slv pooled program with kitko pooled program with perth any of these pooled unallocated programs get the hell out of them and go to allocate it go to physical take the real thing and you'll see real quick how that will affect really the greater landscape that's a wonderful point andy is is really trying to watch what the big players are doing and and have that inform you know what your steps are watching them make the moves before let's say the general public really catches on to it right absolutely and that's exactly what always happens and uh you know the little guy on the street never wins because they make their move after it has been identified all right it's it's it's to be a lone wolf and to make a move based upon your gut your intuition when everyone else is doing something other than that they laugh at you for doing these things it's a lonely existence but that's why so few people ever succeed in investing and the herd mentality is not a friend of investing actually you're supposed to do what the herd isn't doing you're supposed to buy low and sell high and when the herd is buying you sell when the herd is selling you buy that's how truly successful investors like rick rule made their fortunes and uh and that is the way to do it you you um you you do opposite what the herd is doing and uh in this case uh you know even though we're seeing a massive expansion into the mainstream we're still the pimple on the elephant even if we're at one or one and a half or two percent that means you know 98 or 99 the public still think you're a fool for doing what you're doing well so be it i guess we'll see in the end but uh yeah that that is the way to do it and that is the way to win andy something you and i have talked about in the past is the the basel iii regulations that are coming into effect uh supposed to be um coming into this summer here so there has been some confusion as of late and i thought you had a great way of explaining it and i'd like to get your uh your your viewpoint on that yeah you know andrew mcguire got beat up pretty badly and and it wasn't right i think the gentleman who called him out on it really it wasn't cool in my opinion andrew mcguire has done a wonderful job in researching and and talked about the reclassification of gold as a tier one asset well uh and that's just because the the imf um is or not the imf the um uh in basel the uh bank for international so yeah bank of international settlements bis they they did a real poor job at classifying it and even though gold is an asset technically it's not called a tier one asset it is a tier one reserve so big deal so instead of calling it an asset it's a reserve in essence what has happened it's the same exact thing they have levied gold to a tier one status the highest possible status on par with cash it has never been that it's always been a tier three reserve where only fifty percent was calculated on the balance sheet not one hundred percent it is a tier one reserve so you know i'm glad you brought that up because to me it's the most significant event of my career you go back to 2017 and you see the german bundesbank repatriate their gold from the new york fed and it was uncharacteristic and out of the blue and then shortly thereafter the bank of uh the dutch national bank the bank of hungary the bank of austria the bank of turkey the bank of poland they all started bringing back their gold and then the following year the imf reclassify gold as a tier one reserve okay instead of a tier one asset it's semantics it's the exact same thing and there was one youtuber i don't remember his name but he called andrew out on this and i've been talking about it i was guilty of it too in fact i just saw mike maloney who is as smart as anyone in this industry as an economist called it a tier one asset two nights ago on one of his videos so semantics asset reserve doesn't matter the tier one status on par with cash so you see all the big banks pull their metal home front run it because in 2017 they were net sellers of gold so they're pulling their their metal home while they're net sellers didn't make sense 2018 all of a sudden they do a flip-flop all of the central banks bought more gold as a group than they did in the 60 years previously combined think about that 60 years worth of metals purchases they did in one year as a group uh 2019 those numbers were up 90 and then you saw the reclassification of gold as a tier one reserve after almost 18 months of front running by the central banks and repatriating by the central banks and then of course we see last year 2020 the imf asked for a new bretton woods which is what anointed the dollar world reserve so you have the central banks repatriating their gold you have the imf calling it as good as cash you have the or the bis calling it as good as cash you have the imf saying we want a new bretton woods that's 190 countries from around the world you have the the others the sovereign wealth funds which probably are the people who know the people making the rules and the family offices which are in essence hedge funds very very wealthy people who private investors who create this environment huge money all doing the same thing repatriating metal off of the exchanges buying it and repatriating it and that's highly unusual because we never saw that before on comex and you know last year there was over 300 million ounces taken off a comics by this group you put it all together the only confusion coming out of out of the basel iii reclassification is that it's not an asset it's a reserve but it is an asset but the semantics of it they call it a reserve so it's the same thing altogether just a different wording but the the the point to take away from it is you have the most influential well-funded well-informed traders on the globe who front ran a decision and then reclassified as good as cash so you know what does that say to you and then all of their private uh cohorts are draining the comex and the lbma and and uh draining all of the centers and pulling it off of the etfs and taking it off the shanghai exchange all pulling metal away they're all doing the same thing all around the globe after it was reclassified as tier one so it's a it's a it's a it's a fair point the the actual term was wrong wasn't um a an asset but a reserve but in the end it's the exact same thing it was levied up to the same level as cash and uh doesn't get any higher than that so from a standpoint of what it means to the central banks it just simply means that uh it is levied to a whole new level and to me it tells me that it will be part of whatever comes next there's no reason to repatriate to bring it home to accumulate to front run to do it so quietly if not for it to be very vital about what is coming next and and that's why i say don't listen to what they're saying look at what they're doing and you can see it very clearly if you take a step back whether it be the commercial or central banks or whether it be the sovereign wealth funds and family offices they're all doing the same thing tom and i think that is what you know realizing that these things don't happen overnight will wake up and it will happen overnight but they will have spent two three four five years repositioning themselves uh in a very covert manner and i think that is what is happening the most successful investors in the world are repositioning and they're de-dollarizing and they're front-running the rest of us and we'll all wake up one morning and say oh my god there's no gold and silver to be found oh my god look at how high the price has gone oh did you see they just reclassified there's a new digital dollar and it's pegged to gold or a new digital chinese yuan and it's pegged to gold and one other point i'd like to raise and i don't mean to jump all over the place but since i just said the digital you want uh you know not enough people i saw george gammon talking about it not enough um not enough people are you have this whole new chinese belt road and rail initiative that is now underway this portrays very poorly for the dollar and very big for silver you have 65 percent of the world's population almost 70 between asia and africa this new infrastructure project is the most ambitious in the history of the world it's connecting uh 45 of gdp connecting almost 70 percent of the world's population between asia and africa and it doesn't just do so with roads and maritime channels and bridges and it does so digitally also and so the need for silver is extraordinary not just in in the green new deal for biden and the tesla batteries and the iphones but you're talking the biggest infrastructure project in human history which needs to be connected digitally but not only that you have all of this infrastructure these contracts that are connecting seven out of ten people in the world that are being done so and settled outside the dollar on a chinese digital yuan you have 70 of the populace of the world moving away from the dollar little by little and being um anointed into or or indoctrinated into a new system that being a chinese digital d1 what does that say for the future of the dollar what does that say for the price of silver could that be why all these people are front running do they do the central banks know what's coming before the rest of us and reposition accordingly and i'd say hell yeah they do so maybe this is why jp morgan came out a few years ago their private wealth group and said we want all of our depositors and they work with the wealthiest people in the world to send the millionaires and the billionaires we want you all to to mitigate exposure to the dollar through foreign currencies and precious metals because we believe the dollar will be challenged for singular world reserve status singular and when you see 65 to 70 percent of the world now settling contracts and this new program in a chinese digital e1 and not in dollars i would say to you this is the beginning of the end for the dollar these are the reasons why you do what you do independent of price you see the handwriting on the wall and that's what the big money is doing in a very private manner they don't want to be crowded out trade and they're doing this while the rest of us are being misdirected into dow jones at over 30 000 when the fundamentals behind it do not support that so anyways i i think it's going to get interesting tom and and all of these pieces that we talk about all all go together and and it's just simply all of these pieces to me signal the wealthiest most influential players on the planet are de-dollarizing ahead of the rest of us and we'll wake up one morning to a new reality and it'll be too late and that's you can see it and how difficult it is to get product and all of these synthetic programs blowing up it's just the very beginning of what i think is going to be a scary time a transitional time and one where the big money is transitioning before the rest of us have an opportunity to do it ourselves well that's a very great point andy and and you know i'm very grateful for guests like you that can help help all of us put those pieces together and give us that perspective to to really see what's coming and and see how those big players are positioning themselves and and take clues from that uh one of the last questions i'd like to ask you andy is to get your thoughts on having platinum as as an investment um do you try to look at the platinum to gold ratio or take any time to try and and put some platinum coins away once in a while yeah the platinum gold ratio is almost as convincing as the silver to gold ratio platinum also has a pretty big concentrated short position by the commercial banks the way silver does um it's an it's an interesting argument you know i mean you look platinum is always a head of gold in like memberships to a gym you get the gold membership the silver membership or the platinum membership same thing is true in like delta airlines it's silver gold platinum diamond uh platinum is always higher yet you know most of my last most of the last 50 years it's it's been higher than gold it's it's 30 40 50 times more rare than gold um it is undervalued as can be but it's not wealth it's not money um i take it back it is wealth but it's not money it doesn't have the the rich monetary history that gold and silver do so for me when i think about preservation wealth i think of gold and silver i do own some platinum it's a very tertiary amount maybe five percent 10 percent of my actual holdings the mints have done a horrible job at producing them i do have decent supply of it right now actually um we have eagles we have kangaroos we have philharmonics we have some silver or some platinum bars um not a lot but we do have some premiums are relatively high yeah i think people should own it based upon the math of it and ultimately it should go much higher but to me tom there is no investment like silver platinum similar to it in its demand feature in the respect that i can't think of another asset like silver that a is wickedly undervalued you could say platinum is especially in its relation to to gold but one that has massive demand bracketing each side of it both on and industrially now you could say well platinum is using industry in um catalytic converters for diesel fuel but you know how much longer are diesel trucks going to be on the road i don't know i mean it seems like we're moving away from that dieselgate certainly put a hamper on the demand for diesel engines at volkswagen but um you know yeah i think the argument is there but but for me uh when i think of preservation of capital i look i look to gold and silver and not as much to to platinum and um i understand where you're going with it but silver to me has a it is massively undervalued so is platinum but it has way more demand from history of being monetary wealth uh it's it's the the people's wealth you know where you can afford it it's it's not expensive but by the same token it has a massive expansion in industry and it's found in nature in a form called epithermal very close to the surface the big deposits were found long time ago i don't know if you've ever interviewed keith neumeier he's a heck of an interview if you haven't you should and uh i did an interview with him not too long ago and he said to me andy it's coming out of the ground at eight to one that is silver globally eight to one and if it's coming out of the ground at eight to one but but priced at seventy to one and at the time i did the interview was eighty to one i said how long do you think he can stay this way keith and he said well andy you tell me how long can we mine it at eighty to one and sell it at um or mine it at eight to one and sell it at eighty one you can't it has to regress to its natural mean and so platinum doesn't have this type of fundamental where you have a depleted asset massive demand that is expanding um and on both sides now platinum does have some industrial demand it does have some monetary demand it it is much more rare than gold um it has similar uh characteristics to to silver but for my money no i uh i think that it in order it would go silver then gold and then platinum on a very very small mitigated exposure to my portfolio anyway excellent yeah that was just something i wanted to touch on simply because it doesn't get a lot of uh coverage and you know it's it's good to kind of think about uh a different metal once in a while here and there uh yeah i like it i do like it tom and i get why you'd say the the question so if you know someone wants to add a little bit to it i have no problem the argument is convincing but i just think that silver is the opportunity of a generation i don't think gold is i don't think platinum is i think they're both great and everyone should own it but truthfully i think silver is a pathway into getting more gold and ultimately more platinum when that ratio snaps you'll end up being able to switch into gold or platinum i think and get a whole lot more for your dollar because silver is just wickedly undervalued yep andy any final thoughts as we wrap up here you know i guess the only thing i would simply say there there are two little buzz words or phrases that i use and i mean them number one is trust your gut and number two is um you know uh i i i think you trust your gut first and foremost that that's that's certainly number one buy the dips trust your gut and uh don't look at price as anything other than a tool of misdirection the big money is using price to throw everyone off the trail tom and i think that's why you have to trust your gut buy on the dips set up an allocation program and look at it as wealth it's not an investment look at it as wealth that you hope you never need to use if you do you're damn glad you have it if not give it to your children or your grandchildren or your nieces or your nephews or a church or a charity whatever but these are very very frightening times with what's happening to the us dollar it's being destroyed right out from underneath us at the lowest interest rates in human history heaven forbid interest rates rise we're in big trouble um and some people think they will i don't think they will ultimately they have to but uh if we do if interest rates arrive a rise above three percent we're going to be paying more on the interest on the debt than we take in in all of our tax revenues combined we are 100 insolvent and um that is why we want to do what the big money is doing tom by mitigating exposure to the dollar by uh by de-dollarizing by adding pure wealth to our portfolios and doing so um as often as we can not as an investment but as wealth and so when i say trust your gut i mean it because the big money is going to make it difficult and they're going to keep trying to knock us off the bull they're going to hit the price counter intuitively look at it as wealth not as an investment the biggest money in the world is positioning into it so it has a bright future andy excellent uh info as always i really appreciate your time and you sharing all your thoughts with us uh share with our audience where we can find more about you and about miles franklin please uh milesfranklin.com is our website uh just a couple seconds on that i'll let you run we are building a new website that will have some online capability uh we have for the past 13 months sold silver i believe less expensive than any major retailer in the united states i've made a concerted effort on that if your listeners would like to send us an email and put palisades radio or gold palisades gold radio in the subject line i personally will make sure they get the lowest price in north america on silver we can have that sent to info at miles franklin info at milesfranklin.com and we will email you back we do things old school we've never had a customer complaint in 31 years we have an a plus rating with the better business bureau we're one of only 27 u.s mint retailers but we're licensed and bonded in a federally non-regulated industry that's really where we separate ourselves from our peers we have i guess you could say we're held to a higher standard the licensing and bonding in minnesota is the only state in america whereby you have to be licensed and bonded and and therefore almost 100 of my peers throughout the industry have boycotted minnesota they won't sell into the state or they would have to be licensed and bonded the bonding and licensing and continuing education alone makes everyone say forget it um i guess it is kind of a pain as a business owner but it does hold us to a much higher standard and makes in an industry that isn't regulated makes doing business with us the safest so on top of being the safest um for the inconvenience at this point of doing things old school and i for one believe that precious metals long old school i believe presidents belong offline that when you talk about privacy in a world of decreasing privacy having a little bit of it isn't a bad thing give us a call uh we have 12 brokers just hired some more myself and and the other 12 guys and gals will speak with you we'll answer your questions they are all well-versed in economics in global affairs in in geopolitical affairs what's happening and and we'll make sure you get the best price in the country too and it'll be the safest transaction so send that email to info miles franklin either put your name tom in the padrwick in the subject line or palisades gold radio in the subject line and we will personally make sure you get the best price on silver and gold in north america just out of great appreciation for what you're doing and being able to be just a very small part of it thank you very much andy for extending that offer to our listeners and uh you know all of your all of your kind words towards our show we we couldn't do it without without guys like you and all the other great guests that i get to get to speak with on here andy thanks so much for your time today you stay well tom and i'll look forward to hopefully circling back with you somewhere down the road and always just a phone call away if anything crazy happens and then in this world it's since 2020 nothing has been more crystallizing than uh crazy things seem to happen all the time so always just a phone call away should you need me but thanks for having me tom absolutely thanks andy this podcast is for general informational purposes only nothing on this podcast should be taken as investment advice guests on this show are not compensated for their appearance listeners are urged to educate themselves and make their own decisions do not base any investment decisions on the information contained to view our full disclaimer please visit our website

Channel: Palisades Gold Radio

Views: 52,076

Rating: 4.9042554 out of 5

Keywords: Palisade Radio, Collin Kettell, buy, sell, invest, gold, silver, precious metals investment, QE, QE4, QE5, Stock, Market Crash, low, high, best, worst, trump, central, banks, freedom, bitcoin, blockchain, uranium, potash, expert, alpha, beta, fortune, billionaire, ounce, pound, mining, energy, independence, freefall, rise, fall, outlook, private placement, warrant, decline, increase, value, price, Monthly Report, Update, millionaire

Id: hrry4Im2iFU

Length: 68min 30sec (4110 seconds)

Published: Thu Apr 08 2021