What Do They Know?

December 10, 2021

It has been no secret that Russia and China have been preparing for a post-US dollar dominated world for some time now. They have been doing this by setting up their own version of the SWIFT system which is what allows all participants worldwide to transfer funds to each other for trade settlement. Of course, our threat of cutting those off who don’t toe the USA line is likely leading to a faster decline than might have normally taken place.

In addition Russia, in particular, has been actively selling US dollar assets and purchasing massive amounts of gold. I believe the amount of gold China has would dwarf what anyone else holds. They are the world’s largest miners of gold and not one ounce can legally leave China. Many, who have been watching import numbers for over a decade, like Stephen Leeb and others, believe China may have as much as 40,000 TONS of gold. They admit to only having a fraction of that.

To compare, the USA says it has 8000 tons of gold but there has not been an audit of that gold for decades. I hope it is there for all of our sakes.

Another reason I believe that we are now getting very close to a sea-change in our economies is that most of the major central banks are adding large amounts of gold to their balance sheets. This could possibly be because of the Basel 3 rules changing the landscape in a few weeks time where the naked shorting of the gold market will likely not be unlimited anymore as the short positions have to be balanced with an asset starting January 1, 2022. In other words, there will now be a cost involved for those who are artificially suppressing the price. It will likely curtail their actions initially and hopefully end those actions in the near future. When the suppression ends it is likely that when there is true price discovery the level of fraud will be revealed and most will be stunned to see how undervalued gold is and even more so- silver.

Just this week there were two reports that illustrate what I am talking about. The Irish Central Bank raised their gold reserves 33% but won’t comment saying “gold buying transactions are commercially sensitive”. My opinion is that they, like all other central banks, want to create the illusion that gold is risky. This keeps the regular folks from driving the price up while they are buying. Keep in mind that there are two assets they can list on their balance sheet as “riskless” US Treasuries and GOLD.

Thailand added 90 TONS of gold between April and May. Of course, they wanted to do that quietly so the price remains low- again as they buy with both hands.

There are other reports that say that major banks and hedge funds are buying a major gold etf and are cashing out the gold so it won’t have to be reported.

What is it that these people (many who can conjure up just about any amount of “money” they want at any time) know that is compelling them to load up on gold and other hard assets at this time?

Could those “in the know” already know when the “great reset” is ready to take place?

Has China let the insiders know that a gold-backed digital Yuan is on the way shortly?

There are a lot of things that just don’t feel right like “markets” that keep moving higher as insider selling is massive. In addition, last Friday (Dec. 3rd) the Nasdaq had 12 stocks hitting a new 52- week high while 585 stocks hit a new 52 week LOW. That was with the “market” down 1.9%. On Monday when the “market” rose there were still 137 new 52 week lows and 53 new 52 week highs.

Generally, I have observed over decades, that when there are major moves in both directions like this, it is more likely a bearish sign than a bullish sign.

I believe that caution is warranted for all of the assets being artificially propped up at this time like stocks, bonds and real estate in particular.

Of course, there are still plenty of companies out there that warrant our attention but most of them are not on most people’s radar screens.  

Too many people are complacent. They believe that the “Fed has their backs”. The Fed has their own and their buddies backs but not ours.

Answer me this. If the Fed’s #1 mission is s stable currency why have we lost 98% of our purchasing power since they took charge? If stable prices are a mandate why are they targeting ANY inflation?

If they were really trying to improve the economy why are we in an economic freefall?

If full employment is a mandate why are we losing jobs month after month and the labor participation rate is lower now than in the 1970s when many women had yet to enter the workforce. Remember those days when a meager salary could support a family? Remember- hard assets remain the same. It is the currency that is fluctuating (LOSING) value.

Many think that because the central banks have gotten away with “printing” hundreds of trillions of currency units without MAJOR consequences that they will never come. I’ll bet those in Weimar Germany, Venezuela, Brazil, Argentina, Turkey and many other places thought the same thing.

I really believe that many of the hiring problems are because of the fact that we are providing our labor to be paid in a rapidly declining currency. I also believe we haven’t seen anything yet.

Be Prepared!

Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

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The word ‘silver’ originates from the Old English Anglo-Saxon word 'seolfor'

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