The link to precious metals became less concrete. As governments needed to buy votes or finance wars, they yielded to the temptation of printing more notes than there was gold or silver to back them, and inflation resulted.

The process of currency destruction has accelerated, particularly since 1971 when the US closed the gold window, and stopped exchanging dollars for gold. In the last 10 years, the Fed has printed trillions of dollars backed by nothing at all at the fastest pace in history, a move that has driven the prices of precious metals skyward.

Meanwhile, gold and silver are in short supply. Twenty-two years of low prices has resulted in a dearth of production and exploration, while industrial applications for silver have soared.

China and India are enjoying a burst of capitalist prosperity, and have historically turned to precious metals for wealth preservation.

COMEX futures positions in silver, much of which must be covered by deliveries or purchases, are estimated to be equal to or greater than all new productions.

Think of gold as large denomination money, and silver as small change: while a 1-ounce gold coin now costs about $650, a roll of 90% silver dimes is a mere $50. Ruff predicts that silver will eventually be more profitable than gold by at least 100%.

Read The Case for Buying Silver: A History of Paper Money by Howard Ruff

Apart from the debate over 90% silver coins vs. bullion silver, I thought it important to note he talks about the changes made in laws (Financial Regulatory Reform Bill and Healthcare Reform Bill) making coin dealers fall into the same category as banks and other financial institutions.

It would seem to me the government is preparing to close the doors on silver investors from accumulating government issued silver coins. If we’re going to accumulate silver eagles or other denominated 90% silver coins, it might be best to accumulate those coins before January 1, 2012 when coin dealers will then be required by law to report to the IRS your silver purchases.

Hello? Can you see the door closing?

After January 1, 2012, the federal government could very possibly implement price controls on what coin dealers were allowed to give you for your denominated silver coins. It seems to me this is a pretty good argument for not accumulating ONLY denominated silver coins, but to also own silver rounds and silver bars.

Of course, I don’t know what the federal government might do in the future. These ideas are just something else to think about.

Whistleblowers, and even some government officials, are now taking aim at “irregularities” in the precious-metals market being orchestrated by the banking cartel and its government allies.

An ex-Goldman Sachs employee and veteran metals trader in London shocked the world in April when he went public with startling allegations. “JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses [on their short positions] by the Fed and/or the US taxpayer,” Andrew Maguire told the New York Post. After sharing information with government investigators and accurately predicting events in the metals market, Maguire was supposed to testify before the U.S. Commodity Futures Trading Commission (CFTC). However, a few days after his identity was revealed, Maguire and his wife were struck and injured by a car in a hit-and-run accident. Details about any investigations into the event have not been made public yet, sparking a tornado of conspiracy theories.

The CFTC did hold a hearing on precious-metals market manipulation nevertheless, which included other speakers with similarly powerful accusations, including the Gold Anti-Trust Action (GATA) Committee’s Bill Murphy. He told The New American that GATA tried to find out what role the Fed was playing in the gold markets, but his FOIA request for information about the Fed’s “gold-swap” agreements was denied. The organization then filed a lawsuit against the central bank in federal court. “[The Fed] came back and said they didn’t have to tell us anything — that they were exempt from telling us and that it was secret information,” he said in a telephone interview. “So then, we filed a suit in District Court in Washington to compel them to give us the information.” The suit is in progress, and GATA has high hopes for it.

Murphy said his organization wants to find out exactly what the Fed and the Treasury have done with America’s gold. “It’s the people’s gold, not their gold,” he said. The manipulation of gold prices is very serious and is part of the U.S. “strong dollar policy,” Murphy explained, pointing to the relationship between gold and interest rates.

“By suppressing the gold price, they can keep the dollar stronger than it would be and keep interest rates less than they would have been,” he said, noting that this manipulation played a pivotal role in the current economic meltdown. “What happens is every time gold prices soar, what do you hear? Too much inflation? Crisis? It’s always bad for the Wall Street crowd and the incumbent politicians.… If the gold price had been allowed to trade freely, interest rates wouldn’t have been kept too low for too long,” and the natural warning system would have kicked in.

Jeff Christian, founder of CPM Group, a trading firm dealing mostly with commodities, also spoke at the CFTC meeting. In his testimony, he revealed that bullion banks had leveraged their physical metals by as much as 100 to 1, essentially selling 100 times the amount of actual bullion they possessed, a fraudulent process known as “naked short selling.” Morgan Stanley was sued for similarly fraudulent activities in 2007 by clients who were led to believe that the institution had purchased and stored bullion on their behalf. The clients even paid storage fees, only to discover later that their alleged bullion did not even exist. Morgan Stanley settled the multi-million dollar class-action suit “to avoid the cost and distraction of continued litigation,” it claimed in a statement.

The allegations of gold price suppression seem to have been confirmed by the Fed itself. “Central banks stand ready to lease gold in increasing quantities, should the price of gold rise,” then-Fed boss Alan Greenspan told the House Banking Committee in 1998. In other words, if gold prices go up, the central bank will make sure they come back down.

Even before Greenspan’s infamous admission, a “confidential” Fed document dated April 5, 1961, available in the Federal Reserve Bank of St. Louis’ archives, revealed the central bank’s hand in the metals market. “Monetary authorities in the United States … have maintained the stability (and primacy) of the dollar in the international currency structure by standing ready to buy gold from, and sell it to, foreign monetary authorities who either need or acquire dollars for exchange purposes,” reads the paper, entitled “U.S. Foreign Exchange Operations: Needs and Methods.” The minutes from Fed “Open Market Committee” meetings showed the central bankers jubilantly admitting that even mentioning a possible gold sale would drive the price down.

The manipulation process today works something like this: When gold goes up in value relative to Federal Reserve Notes (what Americans today call “dollars”) and other fiat currencies, the central bank “leases” out some of its holdings to other institutions at a relatively low interest rate. These firms then sell the borrowed gold, driving down the price of the metal relative to fiat money. The companies then invest the cash into other assets with a higher rate of return, allowing the Fed to keep gold prices down while providing banks with an opportunity to earn more money.

The scheme involves a number of other players too. “It’s not only bullion banks like Goldman Sachs and JP Morgan Chase and HSBC, but also — we call it a gold cartel — it’s also the Fed, the Treasury, the U.S. government, and the [central] Bank of England,” Murphy explained, adding that some of the conspirators had likely broken laws and probably belonged in jail. The suspicions have also been recently confirmed by whistleblowers within the system.

But despite the deliberate suppression of gold and precious-metals prices, their value continues to rise as the Fed adds trillions of new dollars to the money supply. “Gold measures the value of currencies. And right now gold is telling us, in spite of the fact that the gold price is rigged by central banks and various entities, gold is telling us that the dollar is in danger — great danger,” explained Fed foe Representative Ron Paul during a recent interview with CNBC. “We’re in worse shape than we were in the 70s, and it was rather chaotic then. So we’re moving into a very dangerous era according to what the gold price is telling us.”

The manipulative system remains intact. But there are signs that some minimal government action is finally being taken regarding manipulation of metals and commodities markets. The CFTC recently slapped multi-million-dollar fines on Morgan Stanley and a large hedge fund for just such activities. Various news reports also claim the Department of Justice’s anti-trust division is investigating alleged silver price manipulation by JP Morgan Chase.

A good price for a 1 oz silver coin like an American Eagle or Canadian Maple Leaf is 12% over spot, and a good price for a 1 oz silver bar is 6% over spot.

For gold, a good price for a 1 oz gold coin like an American Eagle or Canadian Maple Leaf is 4% over spot, and a good price for a 1 oz gold bar is 2% over spot.

The larger premium for silver compared to gold indicates a shortage in the physical silver market.

Now that GATA has blown the doors off the LBMA ponzi scheme, and we know there is only 1 oz of silver for every 100 oz represented on paper, why hasn’t there been a panic to dump paper and go into physical? What will it take to trigger a short squeeze?

We don’t believe there is only 1 oz of physical silver for every 100 oz represented on paper. Most likely, there is 1 to 3 times more paper silver than physical silver. This is still a major problem that will ultimately result in a major silver shortage and short squeeze, once a large number of COMEX holders begin to demand physical delivery of silver. This is a topic that we will be covering extensively in our new documentary coming out next month.

If the silver market is controlled by JP Morgan and others, how does the little guy stand a chance of making money?

The manipulation by JP Morgan through naked short selling is providing an opportunity for normal everyday investors to purchase silver at dirt-cheap prices. Without JP Morgan’s naked short selling, it’s possible silver would already be well above $30 per ounce right now.

Remember, JP Morgan is not manipulating silver up, they are manipulating it down and the manipulation can’t last forever. When investors around the globe call for physical delivery of their silver, there will be a shortage of physical silver and JP Morgan will be forced to cover their naked short position, causing silver prices to explode to the upside.

NIA believes silver will eventually see the biggest short squeeze in the history of all commodities.

http://www.inflation.us/

Largest Fraud in History

This could very well send silver flying.

This information is based on forecasts by James Turk.
See Silver Looks Ready to Soar

Michael Maloney is a precious metals investment expert and historian and the founder and principal of Gold & Silver, Inc. He serves as an advisor on Robert Kiyosaki’s Rich Dad team and speaks frequently on commodities investing.

Rich Dad’s Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future
by Michael Maloney
“Throughout the ages, many things have been used as currency: livestock, grains, spices, shells, beads, and now paper. But only two things have ever been money: gold and silver. When paper money becomes too abundant, and thus loses its value, man always turns back to precious metals. During these times there is always an enormous wealth transfer, and it is within your power to transfer that wealth away from you or toward you.”

The premiums for ungraded Silver Eagles hovered just above the current market price of silver. A 40 day sampling of data from some 4700+ completed listings shows premiums of between $3.00 and $4.90 above the London Fix price of silver.