Punchinello’s Chronicles

April 28, 2011

What Do We Do Right Now?

Month after month we hear the bad news. It really doesn’t matter anymore what particular story comes to light. We’ve passed the tipping point. It’s a bit pointless to discover more corruption, more regulations, more hypocrisy, more fraud and more of everything. The stage was set decades ago, and we’re in the end game now. Free-market capitalism, centered in the United States of America is under final assault. The bad guys are winning, but the US citizens are waking up. So what’s the next step? What do we actually do?

Let the investment banks and financial wizards all fail! Get Toto to pull back that curtain!

The first thing is education. Instead of watching “American Idol” and reading the so-called mainstream news reports, spend some time asking questions. Grow up, learn how to balance a budget, get rid of unsecured credit cards and loans, and move toward a cash-only basis. That’ll help you survive the collapse of paper money.

The next thing is to learn how to actually take care of yourself in an inconvenient world. Do you know how to shop for your basic, everyday necessities? Do you know how to cook some simple meals? Can you entertain yourself without the help of 10,000 TV channels?

But of all the things that we can do, the single most effective is quite simple: Let Them Fail!

There’s a good reason we have competition in the world. Survival of the fittest wasn’t invented by Charles Darwin, and it didn’t apply to the biological world. It’s an economic principle, and Darwin adapted it to biology. But that’s okay, let’s stick with biology and consider bacteria.

Bacteria have a simple and basic attribute that helps to understand evolution and natural selection: they breed exponentially, really fast! Start with a single cell, and within days you get millions of cells.

With millions upon millions of a particular bacteria, we invent some sort of antibacterial agent; penicillin, for example. It NEARLY wipes out that massive colony of bacteria. Even so, with hundreds of millions (if not billions) of cells, there’s a very high chance that at least 1 cell will survive. It’ll have some strange mutation or DNA variant that’ll allow it to survive the onslaught of penicillin.

With that one, single cell that’s immune to penicillin, the rapid breeding cycle of bacteria allows it to create hundreds of millions of replicas, ALL of which are now immune to penicillin. It’s basic natural selection, survival of the fittest, and leads to what we now call Super Bacteria.

We absolutely must have life based on survival capabilities, and death based on obsolete or insufficient survival attributes. Without death, there wouldn’t be enough parking places, for cryin’ out loud!

In today’s world, the single cause of just about everything we’re witnessing in the collapse of the American empire begins with government (state) support of dead, dying, or failed entities!

Fortunately, with the Internet and World Wide Web, people everywhere in the world have become more powerful as individuals. Knowledge is power, after all, and with that knowledge comes completely new and different survival skills. One of those new skills has to do with forcing the world banking system to adopt a metals-based money system. It doesn’t matter if it’s gold, silver, copper, palladium or platinum.

Paper money, simplistically speaking, is called fiat (fee-yott) money. The value of the money is set by declaration of some controlling authority. Such a declaration is a “fiat” declaration — an arbitrary decree or proclamation, such as a royal decree.

When any country first creates paper money, it typically sets a relationship of some amount of paper to some amount of physical “something.” Back in 1913, the Bretton Woods agreement defined the US dollar as having a value of 35 pieces of paper dollars being equal to 1 ounce of solid gold. That was known as the Gold Standard.

Although this is a proclamation of value, whomever is doing the decree can’t just make up some arbitrary number. They’re basing the value on a more solid foundation, such as gold.

In 1975, President Nixon took the United States off the gold standard. That means he unlinked the value of a dollar from anything other than some badly defined concept of the gross domestic product. Nobody but the government can figure out what’s the total amount of “stuff” the country produces, so the government effectively can call the value of a dollar whatever it wants.

Nowadays, we have a world economy where many nations bid for goods and services around the planet. Money from each country is constantly being converted back and forth. To accomplish that, we have “currency exchanges,” and each country sets the “exchange rate” for its money.

The problem is that if one country starts printing too much money, other countries won’t agree with the exchange rate. With computers and instant, world-wide trading and banking, we now have a “market” made up of many different countries. Those countries agree or disagree with the exchange rate set by a country’s central bank.

The world right now disagrees with the exchange rate being set by the US Federal Reserve. Therefore, the true value of the dollar is falling in relation to what “we” say it’s worth.

Much more importantly, common citizens and wealthy people all can buy precious metals. Those metals are the same everywhere, so silver is silver no matter what country calls it something in their own language. Silver is a metal, with chemical properties unique and specified on the Periodic Table of elements.

For years and years (decades, even) big banks have been playing a scam. They purchase 1 actual, physical ounce of silver and put it in their vault. They then “sell” 99 additional ounces of silver, claiming they have it, and giving the buyer a piece of paper that says the buyer can redeem that silver…whenever.

All this means that banks are using the fractional reserve system for physical metal exactly the same way they use it for paper money. And THAT means that NOTHING a bank owns is worth ANYthing! They own empty space in their vaults, and only the naive ignorance of their customers keeps the scam going!

In 2008, there was a run on the banks. Goldman-Sachs, in a stunningly stupid move demanded that AIG (insurance company) prove it actually had the money to actually insure all the mortgages and loans they said they could insure.

AIG didn’t have the money.

When the news leaked out, people began grabbing their money out of banks as fast as possible. Then came the gigantic money-market funds, with hundreds of millions of dollars being “managed” for safe-keeping by all the big banks, and by Goldman-Sachs. They instantly, electronically removed their money from their investment accounts, causing a “digital run” on the major banks.

Within hours, hundred and hundreds of millions of dollars were sucked out of the banks in New York City. Just like in the movie, “It’s a Wonderful Life,” massive accounts, managed by human beings came into question. Was the money “really” there? Or was it all just a mirage. Better to be safe than sorry, and they pulled their money.

At that point, ALL the banks that were party to this kind of “air storage” fiasco SHOULD HAVE FAILED! There should have been a catastrophic meltdown of every single bank — any and all of them — that had participated in this kind of fraud, theft and robbery!

It didn’t happen.

The Federal Reserve and US Treasury authorized hundreds of billions of paper dollars to be placed instantly into the many accounts. Congressed instantly passed a money-market insurance fund, similar to the FDIC. Everyone around the world was told not to panic, “We have the money! It’s all here! Nobody will lose their money.” Just like in the Jimmy Stewart movie.

To keep this fraud going, the Federal Reserve has since been printing billions of dollars through the US Treasury. They lend them to the big banks, hoping those banks will then lend them to you and me. We’ll create businesses, buy microwave ovens and color TVs, and take vacations. We’ll spend, spend, spend, thereby causing a demand for more stuff.

Instead, the banks have used the money to invest in the stock market, commodities markets, and hare-brained schemes around the world! They’re not failing, they’re thriving! It’s like a bacteria whose main food supply is penicillin!

To make matters worse, the Federal Reserve is also “buying” any bad loans or failed paper contracts owned by these same banks. The rationale is that those banks are Too BIG to fail! It would decimate the world economy!

No, it wouldn’t!

People around the world actually produce things. We actually grow food. We actually build machines. Additionally, people around the world are buying up gold and silver by the tonne! The reason is that people around the world don’t believe for a minute that paper money is worth a mosquito fart!

General Motors was about to fail, mostly because of the same kind of non-productive loans and investments made by banks. These banks are NOT “the producers” of the world! They produce NOTHING! All the do is produce debt, loans, interest payments and mortgages. Long ago, banks used to!…produce economic activity, by loaning money to startup businesses. That’s all finished with.

GM was not allowed to fail! It was Too Big to fail! So the government bailed them out with paper money. Not with taxpayer dollars — there isn’t a chance in Hell that you or I or our descendants will ever in all of time come up with enough money to equal the government’s bail-out. The result was that GM became part of the walking dead. A Zombie! Much like the zombie banks, GM is now a zombie corporation.

Watch any zombie movie and the resulting events are inevitable. The zombies eat everyone’s brains and create more zombies. What’s the answer? Burn them until they’re really and truly, totally and incontrovertibly dead!

GM has to all intents and purposes, finally and at last failed. Their stock is worthless (even the government is trying to get out of it as fast as possible). Nobody give their cars the slightest bit of credibility anymore. If they’d been allowed to fail, there were many OTHER companies, much more organized and run in far better style that would have purchased the shattered remains of General Motors. That wasn’t allowed.

So too with the Too Big To Fail (TBTF) banks. They produce nothing, lend nothing, make nothing, fix nothing, buy nothing, risk nothing, and have nothing. They have no money. “Naked short selling” is basically a contract to sell something you don’t have to some idiot stupid enough to buy the piece of paper.

Right now, the TBTF banks are “short” massive amounts of silver. They’ve sold 99 ounces of silver “air” for every 1 ounce they own. At some point in the year, each month the bank has to either roll over those contracts by extending them, or they have to actually deliver on the silver.

Each bank only gets asked to deliver a small portion of their silver each month. Therefore, they can continue to “store in their vaults” 99 ounces of air for every dollar. And they charge a storage fee!

The world is waking up. People are buying silver. That means there isn’t enough silver for the TBTF banks to buy each month so they can meet their delivery obligations. They’re buying silver more and more desperately! And so the price is going up and up in paper money. In 1969, you could by a gallon of gas for 25-cents. Today, in silver at $48/oz., you can buy a gallon of gas for 13-cents.

Each piece of silver that YOU buy means the big banks canNOT buy it! And that means that as more and more people demand their silver, those banks won’t have it! At some point, they’ll have to declare the truth, in which case it won’t matter how much paper money the Federal Reserve pours into the bank: It will fail.

Do you care?

What actually would happen if all these banks failed? What actually would happen if the entire world economy collapsed? Would it? Or would only the Paper Economy collapse? Would nobody grow food suddenly? Would nobody buy oil suddenly? Would time stop, the seasons end and the sun explode?

Of course not! We’d very quickly move to a barter system, and within only months, NEW banks would be formed that worked with real money — paper money that actually was backed by something of value.

Only the financiers, politicians, and non-producers of fantasy “value” would disappear. Is that such a bad thing?

Don’t confuse real producers who use real capitalism to buy and sell real goods, with bankers and financial managers who only trade paper. We do NOT need to support those “producers” known as billionaires! They do NOT create jobs! They create NOTHING! They don’t even create paper dollars! All they create are promises of paper dollars in the form of certificates —- stock certificates, bonds, T-bills, silver futures, gold futures and so forth.

Before anything can possibly even begin to be fixed; before Americans can get back to living ordinary lives, we must reinstate basic competition! We must let failed companies and failed banks collapse. There’s no way we can fix anything without first getting rid of the pus and infection of the Zit banks.

Since these banks are stealing our houses and converting them to paper money, let’s paraphrase Marie Antoinette: “Let them eat fake!” THEN we can rally like the French peasants and say, “Off with their heads!”

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April 27, 2011

eBay, the Fed, and Shill Bidding

Let’s you and me start a small business, okay? We’ll pretend we’re in the same family, maybe. Or, you can imagine it’s you and your spouse, significant other, kids or someone otherwise sharing money and expenses. The key here is that the two of us have weekly expenses, and we make some money. The problem is, we’re not making enough money these days, to cover our expenses. So we figure we’ll start a business.

The first thing we do is come up with a product. We’ll call it The Widget, since that’s what lots of companies you hear about in books are making. It’s a really popular product, apparently, since I read about it all the time. It’s like that Parking family who has a monopoly on all those signs you see everywhere.

The next step is that we’ll sell Widgets on eBay. Everyone likes doing that, and it doesn’t take a lot of know-how to get started. We’re buying our Widgets wholesale from China, probably, for around $4 each. So we’d “like to” sell them for around $10 apiece. On the other hand, we’ve heard that if you put something up for auction, you might even make more than your basic asking price. Cool beans, that’s the way to go!

Alright, we’re ready to go. We’ve listed a Widget and set the starting bid at $5 (to cover the listing fees and stuff). Nobody can actually see that starting bid, we just put in a reserve. We also have a “Buy it Now” price of $10 so people don’t have to be bothered with auction bidding. If they don’t want to.

Just one problem. Nobody’s ever heard of us! We’re a totally new company, no word-of-mouth, no online presence, and we’re selling a variation of the same Widget other people are selling.

Here’s what we can do, as long as we ignore all ethical standards, cancel any moral principles, blindfold our conscience, and generally act like Wall Street financiers or government officials. We create two different screen-names and eBay accounts. They’re different from our actual business name and account, under which we’re listing our product.

To get some action going, I’ll make a bid. Then you make a bid. Then I’ll make a bid really fast. You make another bid, and BAMMO!…suddenly we’ve got A Hot Item! Obviously it’s a hot item, otherwise “people” wouldn’t be bidding on it so rapidly, right? And man-oh-man is that price goin’ up! Woah…we’re already at $9.50! Just a few more bids and we’ll be selling it for more than our ten bucks!

Neat-O!

We’re Hot! We’re A Rising Star! Product activity is sky-rocketing! People are taking notice, what with all that activity goin’ on about Widgets! “Have you heard? Widgets are the hot new item! A gotta-have thing, dude, and people are bidding like crazy! Just go to eBay and you’ll see!”

Finally, only seconds before the auction closes, I make a bid for $10.75 and win! Hoo Hah! (Fist in the air, air-guitar, Injun war dance across the living room!) I won! I got it! It’s…MINE!! ALL MINE!!!

I send you the $10.75 via PayPal, who takes out their small percentage for the transaction. You get around ten bucks, and we decide to go out and celebrate! After all, we Sold Our First Item! We’re gonna be RICH! We suddenly have money!

Right?

Obviously, we don’t have SQUAT! I take the money out of our household checking expenses to pay YOU the money for the item WE sold! The result is a net zero! And actually, that’s not true either. The true result is that we took a loss. We had to pay a listing fee, a PayPal transaction fee, and a Final Value fee.

This is pretty much exactly how the Federal Reserve and the United States Treasury work with the bonds and other so-called securities.

Right now, each month the US Treasury lists somewhere around $75-billion in bonds and securities on the open auction markets, which might as well be eBay for all they’re worth.

“Bidders” then start placing their bids. US Treasuries and bonds are a good deal, see, because they’re safe. You can buy them with paper money and when you sell them again, you get the same amount of paper money back again. It used to be that you’d get some additional paper money, historically known as something called “interest.”

Nobody uses “interest” anymore. Probably because nobody’s interested.

The Treasury calls up folks in the family and let’s them know there’s a hot new Widget for auction. They’re calling it the 10-year bond, or maybe the 2-year bond. It’s hot! It’s cool! It’s massive! It’s The Cat’s Meow! (Does anyone say that, really?) “Ya gotta buy this new product, dude! It’s awesome! There’s all KINDS of activity goin’ on right now, with EVERYone wanting in on the action!”

The Federal Reserve puts in their bids, Bank of America puts in a bid, Citigroup, Wells Fargo, JP Morgan, HSB; they ALL put in bids! The Fed sees that the bid is going hot an heavy, and by gosh they sure don’t want to lose so they put in a higher bid!

At the last moment, just before the auction closes, the Fed sweeps in with a hyooooOOGE bid and wins! Fists in the air, happy feet, air guitar, and a whole lotta whoopin’ and hollerin’ over there at the office. They WON!

Thank God “we” sold all those securities and bonds! If we hadn’t, we wouldn’t have any money! And if we didn’t have any money, we couldn’t afford to pay the monthly interest on our credit cards and loans! China would get really mad! So would Japan, England, Brazil, India, Russia and so forth. The Financial Markets would get mad! Everyone would get really really mad!

But not to worry: We sold out of all our Widgets — those whatchamacallits…the bond thingie! So now we’ve got Moh’ Money! At least enough to play around for a month, until we can list some more stuff!

Good deal, dude! We’re gonna get totally rich! All’s we gotta do is keep sellin’ those Widgets and bonds! There’s obviously a huge amount of excitement about them, ’cause, like, dude!…whenever we list them for auction they get, like, totally sold OUT!

Right?

Okay, so somewhere along the line here, you probably figured out that this is ridiculous! Nobody would be fooled by something as idiotic as this kind of scheme (or is it a scam?), right?

WRONG!

There’s an entire whole Group of people who are Totally Fooled! That group is called The United States Congress! Yup, the best government money can buy! They’re, like, totally fooled, dude!

Each month, Our Esteemed Members of the August Body of American Leadership (except for a few new members here and there) go out and party it up! They’re totally excited, because The Treasury just sold out of all it’s debt issues! Obviously, America is still The Home of the Great, Land of the Rich!

Otherwise, why would everyone be so excited about buying our bonds and securities? Heck, all’s ya gotta do is look at the stock market, for cryin’ out loud. It’s going up pretty much all the time! Sure, there are a few times when it goes down, but not for long!

There’s no question we can afford a higher debt ceiling. There’s no question we can afford to keep ALL the fabulous programs and benefits! There’s no question we can continue building up more debt. After all, according to Leading Economists and pretty much everyone in California, “Debt equals Wealth!” Right? Right!

Let’s just keep voting in those Esteemed Members of our August Leadership. They sure know what’s what! They understand business! They know how to make stuff! In fact, let’s just give them control over all the business activity in the country, maybe even the world! They’re experienced, right? They’ve got the background, the know-how, and they surely know a lot more than anyone else.

Right?

April 26, 2011

Imagine a Run on the COMEX

Okay, so what’s the COMEX you ask? It’s short for the Commodities Exchange. And what’s that? Ah…that’s an interesting question, and brings in the concepts of “real” (physical metal or PM) gold and silver, versus “paper” contracts for gold and silver. These paper contracts are traded back and forth through various companies (funds), and can be called Exchange Traded Funds (ETFs). But what’s all this commodities exchange stuff?

Most of us know Craig’s List, right? Well, in many ways, Craig’s List is a sort of commodities exchange. A commodity is a material thing like food, metal, oil, wheat, corn, pork bellies and so forth. A material thing is different from a virtual representation of something. Stocks and bonds are pieces of paper that represent your share in a company or organization of some sort. Basically, you can drop a commodity on your foot and it’ll make you swear.

Let’s say you have a set of audio speakers. They’re commodities because anyone can buy stereo speakers just about anywhere for varying prices. You could use them or you could throw them in the garbage. On the other hand, you might want to sell them and make some money. One way is to sell them directly to a buyer, but how do you find that buyer? If he or she is a friend or part of your family, it’s not a problem.

Craig’s List is an “exchange.” It’s a central location that brings together buyers and sellers. In most cases, what people are buying or selling are real things: lawn mowers, fur hats, necklaces, audio equipment, sofas, and all sorts of things. In some instances, people are selling their services or skills, like an actress or handyman. Either way, the “exchange” is that place where people come together to exchange “stuff” they have (commodities) for money, or in barter trading.

We don’t actually call Craig’s List an exchange because the financial world tends to reserve that word for a special kind of buying and selling. That being said, a key point with Craig’s List is that if you “list” an item you want to sell, then you actually have possession of that item. You own it, you store it, you control it, and it’s yours to sell. If it’s a car, you have a piece of paper giving you the title of ownership to that car. Remember: you actually possess and own the item, and you have the legal right to dispose of it in some way, particularly in exchange for money.

Now let’s consider gold and silver. They’re commodities, just like oil, wheat and corn. But there are millions of people around the world who want to trade gold and silver back and forth. Not everyone wants to go to a coin shop and by a single collectible coin. Some people want to buy and sell hundreds of thousands of dollars worth of commodities.

To buy or sell on a typical commodities exchange you generally have to have a license. Companies with a license then can act as your broker — someone who actually places an order for you under their license, and assists you in buying or selling something.

With me so far?

When you’re playing around on the COMEX (again, commodities exchange, and there are many exchanges), you generally work with contracts. These contracts start with some sort of minimum item or dollar amount, 5,000 ounces of silver being a typical basic contract. You can imagine that you need a pretty hefty amount of money to play around in the commodities market. True, you can gain a lot of profits, but you also can lose a tremendous amount of money as the prices go up and down.

One last thing to know is about futures and options. Suppose you know that your uncle is going to be cleaning out his basement next month. In that basement, he happens to have two nice audio speakers. If Craig’s List worked like a financial exchange, then you could list a “speaker option” based on the future price of those two speakers.

The problems are several. First, you don’t actually possess those speakers, you just “think” you will next month, if and when your uncle gives them to you or sells them to you. Secondly, you’re not totally sure what price you’ll have to pay for the speakers if or when your uncle sells them to you. Additionally, you’re not necessarily sure what people might pay for those speakers in the future. A month isn’t so hard to figure, but a year? What if there’s a speaker shortage? What if the government passes new laws regulating speakers?

Alright, so we have a market — the exchange. We have gold and silver. It costs a boatload of money to get involved with these exchanges. You have to use a broker, someone who’s licensed to trade on the exchange. The product you’re dealing with exists, but you’re mostly dealing with “title” to that stuff in the form of contracts. You say that on such-and-such a day, you’ll actually take possession of what you contract to buy.

Conversely, you might sell the item you have on contract to someone else. They can take possession or sell it again. Hundreds of millions of dollars worth of contracts move around, bought and sold, every day around the world in many exchanges.

All and all, the key thing here is that the person actually owns the commodity! In the case of gold and silver, the exchange itself will store the commodity in its own vaults! They claim.

Now let’s go back to the Great Depression. Banks were speculating with money deposited by all sorts of people; regular citizens and farmers who put their paychecks into the banks. Many people had savings accounts with their entire life’s savings in the banks. And the banks were investing that money on Wall street and in various other kinds of financial speculation.

One day, people got worried about their money and went to get it out of the banks. Lots of people got worried, all at once, and they ALL went to the local banks to get their money. That’s called a “run on the bank.” Since banks only had to keep a percentage of the actual money on hand, when all their customers demanded their money at the same time, there wasn’t enough. The banks closed.

To prevent the closure of banks, which in turn wiped out hundreds of thousands of people and eliminated their entire life savings, The Government created the Federal Deposit Insurance Corporation (FDIC). Banks would pay ongoing insurance premiums to the FDIC, and if there was a catastrophic failure, the customers for that bank would get their money. The bank management would be fired, the bank would be closed or taken over, but the moms and pops who had their money in the bank would get their money.

During the Great Depression, the very wealthy people lost a lot of money, but they still had a lot of money left. It was mostly the middle- and lower-class people who were wiped out.

Today, we’re facing what I would call a historical mirror reflection of the Great Depression. All the same events are taking place. All the same circumstances are in place. All the same mentalities, ideas, principles and rules are taking place. Corruption is rampant, justice doesn’t exist in the financial world, and the gap between the very wealthy and the average working person is wider than at any time since the Depression.

These very wealthy people have seen their net worth increase by nearly 23% in the last few years, here in America. At the same time, the typical middle-class net worth has decreased by about 25%. Oddly enough, the two numbers are very close. Ergo, “wealth” has been transferred from the lower segments of the economy to the highest portion, and in particular to the financial sector — bankers and investment corporations.

What do you do with your money if you earn $2-million per year? What if you get $500,000 annual bonuses? Money comes pouring in, year after year, and you have to put it somewhere, right? More importantly, you want that money to make you more money, growing as an investment year after year. How do you do that?

You could put it into real estate, but that’s not going so well nowadays. You could put it into the stock market, but that’s not going so well these days. You could put it into a savings account, or even under you mattress, but we’re talking millions of dollars. You could buy gold and silver, diamonds and jewels, but you’d have to put them into a vault somewhere.

The answer is the COMEX and other exchange funds. You can buy a million dollars of silver as “contracts.” Remember that: You’re buying a contract that says on paper that you’ll (eventually) own some silver or gold.

Oddly enough, there’s been some strange news coming out of the financial world lately, having to do with the commodities exchanges. Remember, they’re supposed to be keeping actual, physical bars of gold and silver in their vaults. In fact, if you buy a 5,000-ounce contract for silver, then by all rules and rights you should be able to go down to the COMEX warehouse and take physical delivery of that silver!

You should be able to take physical delivery of any of the commodities listed in contracts.

Lately, it seems people aren’t able to get that silver!

Now imagine this: Suppose a few people get worried that there actually might not be any real silver or gold in the exchange warehouses. What if they “run” downtown to the warehouse to take possession and find out they can’t? What if they’re told, “Delivery is not possible at this time.”

Wouldn’t that be EXACTLY what “the little people” were told, back in 1929 when they went to get their physical money out of their local bank?

We have the FDIC now, to insure “the little people” and their bank accounts, up to maybe $250,000 (or more for non-interest-bearing accounts). There isn’t any FDIC-like company to insure investors and speculators on the commodities markets!

This time, instead of “the little people” who can’t afford to play around in the COMEX, it’s “the big people” — the elite of our society who are in jeopardy. Couldn’t happen to a nicer bunch of people, I’m thinking!

What if all these Very Wealthy Individuals who’ve been playing with commodities, speculating on mortgages, and generally ripping off billions (not just millions) of dollars from We, The Taxpayers get worried about the actual existence of their physical commodities? What if there’s a run, and all those people run to the COMEX to take physical possession of their silver and gold?

What if there isn’t any silver or gold!?

Apmex Starts Reverse Inquiry: Seeks To Buy “Any Quantity” Of Silver From Clients At $3 Over Spot

posted at – ZeroHedge

Over the past hour Zero Hedge has been inundated with reader comments notifying us that Ampex has, validating the earlier post speculating about a possible silver shortage at the metals distributor, launched a “reverse ïnquiry” in which it will pay “you $3.00 over the current spot price of Silver for your Silver American Eagles. ANY year, ANY quantity!” and “We will pay you $38.00 over the current spot price of Gold for your Gold American Eagles. ANY year, ANY quantity!”

Note that APMEX is the American Precious Metals Exchange. Why do you suppose they’re trying to buy silver from us folks? Don’t they HAVE all that silver and gold to cover their outstanding contracts? That’s not possible. Is it?

If they DON’T have all that actual silver and gold, then what will The Rich People do if they try to take possession of their millions of dollars worth of paper contracts?

Riddle me this: What will you and I — The Little People” — do when we try to redeem OUR paper dollars for sugar and gasoline? With the Federal Reserve cutting the value of our paper dollars every day, what can we do?

Wouldn’t it be just the best poetic justice if all those billions of dollars worth of “personal and private investments” made by the Wall Street financiers and bankers turned out to be just…paper? And wouldn’t it be absolutely the most delicious irony if The Government (bought and paid for by the Very Wealthy) bailed out all those failed accounts…with paper dollars?

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