From the Great Depression, SILVER is the Great Exception

  • Posted November 13, 2012

Great Depression —> Great Exception | SILVER

by SILVER FOR BEGINNERS

History DOES often repeat itself. Presently, we can see some correlation between the financial environment today and that of the period before the Great Depression. Not to get into too many specifics, we will explore a correlation and understand why Silver is the Great Exception.

This post was spurned by a recent conversation in which the point was made that when everybody and their brother begins talking about and acquiring silver, that will be the time to sell. That point was quickly retracted upon a bit more consideration. Though there is some validity to the sentiment, the physical fundamentals in silver make it exempt to the ‘shoeshiner’ law.

world war 1 celebration | great depression great depression | silver | www.silverforbeginners.comSHOESHINER SET-UP

World War I had ended and the Great Depression had not yet taken hold. Farming was being supplanted as the ‘go-to’ profession for Americans and city dwelling began to increase. In addition to that, assembly line production ramped up and inexpensive products were mass produced. It was the “Roaring Twenties.” Things were great….

Everybody and their brother started getting into stocks. But naturally, as you had the ‘commoner’ joining the ‘tycoon’ in the stock market, the jig was soon to be up. As you know, no matter the age, the powers that be really won’t allow for EVERYONE get a fortune. Inevitably, the crash would come and the unexpectant commoner would see their entire wealth wiped out.

Like today, in the mid 1920’s, the top on real estate acted as one of the ‘canaries in the mine shaft’ for impending collapse. Though that collapse would still be several years after.

Looking then to now, we can see that while the vehicle of this theft changes, the narrative stays the same.

shoe shine | great depression great depression | silver | www.silverforbeginners.com

THE SHOESHINER LAW

Two documented examples of those who saw the writing on the wall are Joseph Kennedy and Bernard Baruch. They saw regular people taking their life savings and putting everything in stocks. Then those same people would actually predict the market with accuracy. These tycoons had massive amounts of wealth in stocks, so the prospect of a commoner calling it right was cause for much concern.

One account involves Baruch and his shoeshiner. It is said that Baruch had his shoes shined daily, but when his shoeshiner started giving him stock tips, that was the trigger to get out. He was quoted,

“Sell it all! When shoe shine boys are giving out stock tips, its time to get out.”

That is right, when taxi drivers, barbers, cooks can give a financial schooling, run for the woods.

This is nothing new. When everyone scurries to join the latest craze, a bubble is the result, and that bubble inevitably pops. The smart guys, the power players, are the ones who know just the right time to get out. And you can bet that CNBC and FOX Business is not privy to the intel. You really think the ‘too big to fail’ gang would let everyone in on the action? No, how else would they rake in their obscene profits? They are always a step ahead.

“Taxi drivers told you what to buy. The shoeshine boy could give you a summary of the day’s financial news as he worked with rag and polish. An old beggar who regularly patrolled the street in front of my office now gave me tips and, I suppose, spent the money I and others gave him in the market. My cook had a brokerage account and followed the ticker closely. Her paper profits were quickly blown away in the gale of 1929.” – Bernard Baruch

SILVER

Baruch also believed in the legitimacy of precious metals, once stating,

“Gold has worked down from Alexander’s time… When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory.”

silver | great depression great depression | silver | www.silverforbeginners.comAt some point people will talk about silver, right? What makes Silver the Great Exception?

My original thought in the conversation was that when the waitress, barber, and construction worker are getting into silver….that will be the time to sell. The other person in the conversation simply said, ‘”But isn’t that what you want, everybody to know about silver?”

Hmmm. Yeah, the whole reason Procinctu and Silver For Beginners exists is to arm the public with knowledge. In this case, escaping the current corrupt paradigm and getting back to the time tested FACT that silver IS money. The fact that REAL physical silver can’t be substituted with paper, is proof that a bubble isn’t really a probability. Yes, there can be a bubble in SLV or GLD shares, but those are not in the real thing. In that sense, my original thought is INCORRECT!

Sure, bartering an allotment of silver may make sense during a ‘certain time’ for a ‘certain undervalued asset’. But because of the sheer fundamentals of physical silver, there won’t be a bubble. They can manipulate the paper price all they want, but it’s not like they can just go print silver or anything…

We have seen a remarkable decline in the above ground surplus of physical silver. Though exacts can’t really be known, since World War II, the supply has been steadily reduced. Could we now be looking at only years or months worth of surplus? That is important when looking at the questionable numbers from the Silver Institute. They have shown the demand and supply to be the EXACT same number for the last 10 years!

silver supply demand | great depression great depression | silver | www.silverforbeginners.comThat is a statistical impossibility. Stepping back and analyzing the situation, demand will only continue to grow. Solar panels, cell phones, computers, and on and on…….consumption will only increase. As people become disenchanted with their fiat currency debasement, investment demand will also rise. From where are these magical silver mines going to sprout? Where will the added supply come from? Anyone who takes a reasonable look at it can see where the physical silver market is heading……straight for a shortage.

One thing for certain, the above ground gold to silver ratio is NOT 53:1. According to the manipulated silver market, it would take 53 ounces of silver to buy one ounce of gold. But the above ground supplies of both just don’t reflect that number.

From Ryan Jordan at Financial Sense:

In short, if you are going to use gold/silver ratios, you may want to think about the possible relevance of other ratios:

  • 9:1 is the ratio of silver to gold annual mine production
  • 6:1 is the estimated ratio of economic gold to silver in the ground (USGS)
  • 5:1 is the estimated physical ratio of all silverware, silver/gold jewelry and other stocks above ground (according to CPM Group)
  • 1:1 is the year-to-date ratio of investment dollar demand.
  • 1:3 (more silver than gold) is the physical ratio of gold and silver coins/bullion

CON GAMES

con woman | great depression great depression | silver | www.silverforbeginners.comThere are still ways to bilk the shoeshiner and the taxi driver through silver. SLV, GLD, and COMEX trading set up a paper market where people ‘buy’ futures contracts. They have a contract, but they don’t actually hold the metal. They only have a ‘promise’ for future delivery. That can work for now, but without warning, the game will be over and you will be left with paper saying you own silver. But there will be NO silver to back it up.

Also, look at the latest press over ‘Wynter Benton.’ They/he/she/it   are/is   allegedly a former J.P. Morgan commodity trader(s). They claimed that as a group, they would demonstrate their ability to move the price of silver between Oct. 16 to Oct. 23, 2012. They also claimed the spot price of silver would be over $50 by years end. We don’t KNOW if they are legit or not, or if silver does finish the year over $50. Frankly, we shouldn’t care.

The game is so rigged that if you try to play the market by waiting for the right time to buy and the right time to sell, you end up getting burnt. You aren’t going to know when exactly the spot price will rise or fall. The big players still have the COMEX and paper market to mask the REAL physical market. Until an actual physical shortage takes place, they will be able to steer the paper market.

Back to Bernard Baruch. He also said, “Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.” You can plan to acquire more physical silver on the dips, but you aren’t going to win by waiting for the perfect time to execute transactions.  Just acquire the physical ounces.

Like Kennedy and Baruch then, you have Peter Schiff and Doug Casey types now. They aren’t the actual players, but they are able to read the situation and profit from it.

CONCLUSION

“So long as they (the Proles) continued to work and breed, their other activities were without importance. Left to themselves, like cattle turned loose upon the plains of Argentina, they had reverted to a style of life that appeared to be natural to them, a sort of ancestral pattern…Heavy physical work, the care of home and children, petty quarrels with neighbors, films, football, beer and above all, gambling filled up the horizon of their minds. To keep them in control was not difficult.” -George Orwell, 1984

 

There IS a bubble of which you should be aware. The US dollar and bond market is the fools game. The US Dollar crash has the makings to be worse than the 1929 stock market crash. Yet, almost EVERYBODY has their wealth tied up in the US dollar. Its fundamentals are beyond bad. It is actually the ultimate bubble and it is unjustly propped up on a massive scale.

Silver, on the other hand, is the Great Exception. Just think how many people you know who are accumulating silver. How about gold? As you can see from Google GLOBAL search stats, gold is 3 times more popular than silver. With all of the uses of silver, only 37 million people search for it? To add a little more perspective, 124 million people search for the term ‘football.’ Is the NFL in a bubble?

We have NO concern of a PHYSICAL silver bubble. Not only is the shoeshiner not recommending silver, they are actually totally ignorant of it. There won’t be any left by the time today’s shoeshiner figures it out.

So yes, full steam ahead. Tell as many shoeshiners, waitresses, cooks, and welders as you can.

“Until they became conscious they will never rebel, and until after they have rebelled they cannot become conscious.”
― George Orwell, 1984

Unfortunately, the game will play out the same as before. The elites running the game will be fine. Those of us who are aware will profit to the best of our ability. But the majority of the people will be wiped out of their savings. They are too distracted to even care. With football, Dancing with the Stars, and American Idol, there is no time for a trivial thing like ‘losing everything.’

Do you have your physical silver? Do you want to be with the ones who were aware and able rebuild? Or do you want to be with those who were too busy to care and lost everything?

 

“Truth is Treason in the Empire of Lies.” -Ron Paul

Disclaimer: As always, think for yourself. Whether you like fiat paper currency or real tangible time tested money, only you can decide what’s right for you. Whether you find it worthwhile to hold bullion, or feel it’s a better deal to hold paper dollars backed by nothing but word, the ball is in your court. Procinctu can not be held responsible for whatever you decide.


Music | Gene Austin | Five Foot Two, Eyes of Blue