SD Bullion

Billionaires Becoming BULLIONaires

This opening footage is from a room in the US Mint's New York West Point facility.

This camera pan shows off 20 wooden pallets with 50 American Silver Eagle Mint Cases strapped, stacked, and plastic wrapped for distribution warehouse shipments by truck.

Each green case is heavy, like 40 pounds each. Nicknamed monster boxes in our industry contain 500 ounces of silver bullion coins.

So we just garnered about 500,000 ounces of American Silver Eagle coins.

Could Your Purchasing Power Decrease by 50% In 4 Years?

Underreported consumer price inflation came at a new over 40-year high this past week as the US government's Bureau of Labor and Statistics admitted to a 9.1% loss in the fiat Federal Reserve notes or fiat US dollars year purchasing power.

Of course, the US government's statistics department has the motive to underreport price inflation constantly and seemingly forever more since the Federal Government makes payments to Social Security, pensions, and many other unfunded liabilities owed accordingly growing to the official inflation rate.

There are only a few developed economies in the world with worse price inflation than the United States is currently suffering.

Hide the Pain Harold inflation meme got an update. Unfortunately, his tiny raise at work won't come close to covering his loss in living standard. At the very least, he got tons of likes on Twitter.

Hopefully, Harold does not investigate the inflationary rip-off further, for if and when he finds out that real price inflation is more likely in the middle teens at the moment, it may be difficult to distract his ongoing pain with social media memes mocking the insanity of our fiat financialized world.

One thing you can take away from this week's SD Bullion Market Update is a simple mathematical formula you can use to understand how badly inflation ruins people's purchasing power. The RULE of 72 is simple to use. Simply divide 72 by the inflation rate to determine how quickly your power halves or loses 50% in real terms.

For instance, if we continue this 9.1% CPI official inflation rate, we'll halve our collective fiat US dollar purchasing power by half within eight years. Before this time of the year in 2030, whatever your income is, it buys half what it does today in summer 2022.

These Four Banks Control Gold and Silver Prices

On the heels of the United States' Office of the Comptroller of the Currency (OCC) publicly admitting at the end of the first quarter of 2022, that the major US precious metals trading markets are derivatives-dominated by only a few highly leveraged commercial bank players.

To be more precise, only about four counterparty-risk laden commercial banks often really run the price discovery show. The largest being JPMorgan Chase, then Citibank, Bank of America, and finally Goldman Sachs.

At the end of March 2022, they were then counterparty to +97.5% of all US derivative bets involving silver prices, platinum prices, palladium prices, and gold prices within complex derivatives like swaps, options, and futures contracts. The latter COMEX & NYMEX futures contracts hold huge sway over the prices quoted for precious metals around the world (gold, silver, platinum, palladium).

Stocks and Bonds Still Showing Record Losses

Precious metal spot prices are showing continued weakness. 

How far might the silver spot prices dip? Where might the spot gold-silver ratio climb to?

The first half of this calendar year, 2022, is now over.

And record-sized losses are becoming the norm in the world’s largest paper asset classes (e.g., bonds, stocks).

The numbers are extraordinary in sheer size and also in a historical financial market context. 

We also examine new data which illustrates it is already an economic recession in the USA this summer of 2022.

Silver and gold spot prices increasingly sold off throughout this week’s trading.

When Will Gold Replace Fiat? Eventually.

David Einhorn of Greenlight Capital made an elegant presentation on his gold bullishness earlier this month, making his case for why they are going into gold now and not later.

Increasingly you will see more famous hedge fund managers and financial whales making the base case for gold bullion as the fiat Fed and US Treasury have painted themselves into a coming gold bullion mania corner. David is perhaps a bit early but many more big-money investors are soon going to come to similar conclusions with increasing capital flows to gold as well.

Will Gold and Silver Bullion Outperform Stocks Again?

After now, a decade and a handful of years of reckless financial policies have brought about nominal price bubbles at still dangerous levels in various major asset classes. 

And after the fiat Federal Reserve’s leaders kicked off a secular price inflationary regime policy in August 2019.

They want you, me, and other financial market participants to somehow believe they can manage a soft landing of their fiat financialized asset bubble economy with a mere orderly decline in said bubbles.

We begin this week with a linear chart of the US stock market's S&P500 index over the past 100 years. Fiat financialization kicked off in the 1980s. But it was not until after the 2008 global financial crisis got papered over with more than $100 trillion in international debt levels that imaginary nominal paper wealth numbers in the US stock market blew through the roof.

Inflation Continues to Record Highs, Good for Gold?

Price inflation in the USA continues to come in at record high levels. 

The current head of the US Treasury's public policy on raging price inflation has now apparently been reduced to…

Hopium - (n) an irrational or unwarranted optimism that things might change sooner rather than later (in this case, regarding raging price inflation escalations to come).

Last week's +8.6% consumer price inflation year over year data point is still only underreporting price escalation facts of real-world costs rising. More often now legit journalists are finally beginning to expose how bad real price inflation has been underreported and compounding for decades. This brutal price inflation information becoming more common knowledge better clears runways for precious metals to eventually ramp manically in price and value ahead.

Even official price inflation is already at a level the nation has not seen since the last time gold manically revalued upwards to a spot price so big for some time (1980), the USA could have gone back on a more disciplined quasi-gold standard had it so chosen.

Price of Gold Remains Poised as Stocks May Double Their Losses

Economic recession fears have plunged U.S. stocks into a bear market, with the S&P 500′s decline now over 20% from it's all-time high to start January 2022.

The tech stock-driven Nasdaq is already deep in the bear market territory, trading down over 31% off its highs. These are a few names that surged during pandemic lockdowns that have been crushed this year.

Jeremy Grantham, the famed investor with a track record of identifying market bubbles, says today's bubble is worse than 2000, and he calls for US stocks to at least double their losses ahead.

Massive Paper Gold and Silver Selloff Continues

The strength that the fiat financial powers collectively built is price inflation indeed.

This week the government’s underreported inflation figure came in at 8.3%, higher than expected for April but slightly lower than the 8.5% y/y figure reported the month of March prior.

Of course, one of the crucial factors running within CPI data wrangling is found in underreported housing costs that they consistently, consciously misconstrue using wild data input guesses like owner’s equivalent rent figures. 

Clearly You Don’t Want to Own Stocks and Bonds?

The US stock market, still at historically high bubble valuation levels, is off to its worst start since 1939.

We also continue to see the worst bond market performance start a year throughout this fiat currency era of over five decades running.

Billionaire financial market trader Paul Tudor Jones went on CNBC to hammer home some of the worst financial asset classes when inflation cannot be bottled up nor quickly tamped down.