A partial history of economic standards for the past 100 years. Prior to 1933, arguments over precious metal were primarily over which metal should be the primary backer of paper currency. In 1933 the tone of discussions changed due the US confiscation of gold in 1933, which started a 40 year period of increasing disconnection between precious metals and the US currency. The World War II-inspired 1944 Bretton Woods agreement, where US federal reserve notes (FRNs) became the guarantee of stability for the bulk of the post-war economic world (backed by US gold as well as other giant foreign deposits of gold stored within the US), caused the entire economic world to have to rely on the US Dollar. That put the US in a dominant position, and the US eventually and incrementally failed in that trust. in the 1960s the US began using it's power to run up huge deficits (effectively printing money that could not be supported by physical gold) at the expense of the rest of the world. Phasing out of circulating silver coin started in 1965, and then (when other countries became suspicious that the US was dealing in bad faith and started to accelerate their withdrawal of physical gold from the US system) in 1971, when President Richard Nixon realized that a "bank run" on US gold was in process, he dictated a total disconnection between gold and the US dollar and broke the promise and the process that US dollars were redeemable by other countries in physical gold. Paper currency then became simply an instrument of government debt. Approximately coincident with the end of the US gold standard, in the 1970s the US negotiated a backdoor economic agreement with Saudi Arabia, agreeing to use the US military to provide physical protection to that kingdom (and eventually other OPEC countries) in exchange for a requirement that they (and OPEC) would require that business for oil be conducted in US Dollars. That led many observers to call this period the change from the gold-backed dollar to the "petro-dollar", which is dollars essentially backed by oil and the might of the US military.
For more: always take what you read on wikipedia with a grain of salt, but so far, in regards to these subjects, the information remains informative:
https://en.wikipedia.org/wiki/Executive_Order_6102
https://en.wikipedia.org/wiki/Nixon_shock
So PM supporters have been beating the drum of gold and silver for decades, and that includes most of the people on this forum. Richard Russell (now deceased) is well known for coining the term "QE to Infinity!", meaning that he believed that the US had backed itself into a financial corner, and had already reached a point of no return, where there was no further option for the US Treasury but to continue to print ever increasing amounts of US dollars until such point as the US dollar collapses. So people have been predicting the collapse of the US dollar for at least 20 years, if not longer. Does beating that drum, then failing to seeing the economic collapse come to pass, make that view wrong? Absolutely not. Timing predictions - in fine terms - are notoriously fickle.
Andy Schectman has recently been accused of being a doomsayer for the inferred purpose of lining his pockets with profits from the sale of gold and silver through his company, Miles Franklin. I have transacted with Miles Franklin off and on since 2008, and I disagree with that assessment of Andy, and his company, but you all are free to do your own due diligence and to form your own opinion. I believe Andy, and his father before him, David, are simply reporting what they see and believe. Below is a recent piece by his father, David, who started Miles Franklin and, for many years, wrote a column on the state of the economy and gold and silver. David is back to writing with this warning, which I quote below in its entirety. At this point Miles Franklin doesn't need more sales - they can't sell any more than they are already selling. So this is not a sales pitch, it is a warning from David - an elder statesman of gold and silver - which if it doesn't come true soon, will - I believe - certainly come true eventually.
APRIL 3, 2023
FROM DAVID SCHECTMAN
Many of you do not know me. I, along with Andy Schectman, founded Miles Franklin in 1990. For years, I wrote a newsletter that we sent out on a weekly and often daily basis. Though I retired from Miles Franklin many years ago, since 1983, I have continued to follow the market and possess a broad understanding of what is happening and where it's all headed.
I am deeply concerned about what I see going on now. The speed with which things are changing is alarming. The increase in interest rates isn't about how much things have changed, but rather the speed at which they are changing. It's difficult to process and make sense of it all.
This is why I am sending out this email. I want you to be fully aware of what's happening, and it's crucial to your financial well-being that you not only understand it but also factor in the speed at which these things are happening. There is a time to think about what you see happening, and there is a time to act. I'm suggesting that the time to act is now.
Here is what you should know. The world is de-dollarizing and at an alarming and accelerating pace. Brazil, the second-largest exporter of corn in the world and China have just struck a deal to ditch the U.S. dollar in favor of their own currencies in trade transactions. All of the BRICS nations along with the ever expanding list of countries that comprise the BRICS+ nations, either already have or soon will trade outside of the dollar.
Andy has been warning about this for the last three years, and now it's a reality.
The Saudis have applied to join the BRICS and will soon accept any major currency for their oil. The dollar's days as the sole world reserve currency are over! What does this mean for you? Much higher inflation (the dollar will be worth less) and rapidly rising prices. The word is spreading fast. Miles Franklin's business has never been this strong. We have never seen anything like the demand in the past two weeks. The demand is based on FEAR, not GREED. Fear is the strongest motivator. The banking crisis, which is just getting started, has motivated tens of thousands of people to convert their dollars into gold and silver. This demand leads to two things: higher premiums and shortages. Let me repeat: higher premiums and shortages. And delays. And it will only get worse.
Andy told me that the Austrian Mint and the Canadian Royal Mint have informed us that they are cutting back on allocations, all of the mints will soon follow suit. And this time, the fundamentals are so strong that the rush into gold and silver will not abate; it will only increase.
We are witnessing a new class of buyers who are coming to us, in a panic, to buy gold and silver. They are very wealthy. We are processing multiple seven-figure orders on a daily basis. Not long ago, we had two separate orders that were over $50 million each. And it's only just beginning.
Please believe me when I tell you, premiums are rising, and supply is fast disappearing. This is not the time to sit back and think about what to do. This is not the time to wait for the you-know-what to hit the fan. It already has, if you are paying attention.
Only one half of one percent of all financial assets in the US are invested in gold or silver. The historical "mean" is two and one half percent. That means just to reach the "mean," our business will increase by at least five times what it is today, and before that happens, there will be no gold or silver available at any price.
Andy and I are of the same mind when it comes to the concept of wealth. We do not measure our wealth in mere dollars, but rather in ounces of hard assets. This philosophy was imparted to me by my esteemed mentor, Jesse Cornish, all the way back in 1984. He taught me that there comes a time when one must focus on the return of their capital, rather than the return on their capital. And that time is now.
It is becoming increasingly clear that the banking system is in a state of disarray and is at risk of implosion. You would also be wise to avoid denominating your wealth in paper dollar-based investments, such as stocks, bonds, and ETFs. Even investing in gold and silver through an ETF would be unwise, as these will only pay you back in dollars, which is precisely what you should be trying to avoid at all costs.
The time to act is now, before prices skyrocket and availability disappears altogether. History has shown us that the average return on investment is around 5%. But before demand increases by a factor of ten just to reach that mean, the supply of these hard assets will have run dry, and you will be left with nothing to show for your investment.
The reason I have decided to emerge from the shadows and speak out. Drawing on my four decades of experience in this industry, I implore you to take action now and convert as many of your dollars as possible into tangible assets.
Andy’s team at Miles Franklin is currently overwhelmed with the sheer volume of incoming calls we receive on a daily basis. Our brokers are so busy trying to keep up that they do not have the time to reach out to their extensive client base.
If you want to act now, simply reach out to your broker or email us at info@milesfranklin.com. The more information you include in your email, the better equipped we will be to expedite your request. Rest assured, we are doing everything we can to respond to all correspondence as quickly as possible, despite some delays we are currently experiencing.
