In Jim Cook's Archive


Here’s a New York Times article from October 5, 1983. “Some $60 million worth of gold, silver and platinum sold to thousands of individuals and then supposedly stored in Rocky Mountain vaults may never have existed, an investigation suggested yesterday. The possibility emerged in an audit conducted by the accounting firm of Touche Ross & Company in connection with the suicide last Wednesday of Alan David Saxon, 39-year-old chairman of Bullion Reserve of North America, a gold dealer with offices in Los Angeles, Dallas and Hong Kong.”

That was 1983. We haven’t had one of these sorry episodes for awhile. Unfortunately, we’re long overdue. We urge everyone to be careful. If you listen to our advice you won’t get caught.

Many silver storage arrangements hold no silver. They may even bill you for storing silver bars that don’t exist. Never store gold or silver with a dealer. Be careful sending your money across the country to a small dealer or unknown Internet company. Most pool accounts for silver or gold are Ponzi schemes. That’s right. Some of the largest firms in the world hold no gold or silver and use their client’s money for their own purposes. Furthermore, most advertising you see for gold and silver is a come-on for high mark-up rare coins, over-priced junk or a risky leveraged deal that invariably wipes out the customer.

There are other concerns. Here’s a quote from newsletter advisor James West. “United States citizens should bear in mind, however, that should the banking system be brought down completely by the collapse of the futures market, proxies for gold such as ETF’s and bullion funds could theoretically be targeted by a government desperate for possession of value.”

Suppose a country suffers hyperinflation. They will require a new currency. Before this replacement currency is accepted, it will have to have some metal backing. If a new pound sterling came about in Britain, would they look at the bullion in the silver ETF stored at Barclays in London? Would a desperate government confiscate hundreds of millions of ounces of high value silver it if would save them? It’s a possibility.

These are times of financial peril. It’s harder to see into the future than ever before. We don’t know what’s going to happen in this volatile period. One thing we do know. If you have silver and gold in your possession, you are on solid ground.

Years ago, a company in Fort Lauderdale sold gold for 10% under the spot price. You had to agree to let them keep it for six months after you paid for it. Their customers lost hundreds of millions. It seems like an obvious scam, yet many intelligent investors sent them money. We warned about this time and again. However, that company had salesmen who talked a good game. It someone’s telling your something contrary to our advice, run the other way. That’s our best advice.


By James R. Cook

Government spokesmen and their pals in the media never mention inflation these days. Nor do we hear about the looming crisis in financing our debt. However, it’s a problem that won’t go away. The Weldon Newsletter writes, “Indeed, troubling for the US fixed-income market is the sizable, single-month net sale of Treasury Bonds by China and Japan during November. The Chinese dumped (-) $9.16 billion of T-Bonds and T-Notes, a glaring reversal relative to net purchases of $46 billion over the previous four months … while the Japanese sold another (-) $7.7 billion of Treasuries in November, to mark the fourth consecutive monthly net sale, and a cumulative liquidation of (-) $38.5 billion since the beginning of August. It’s a nightmare for the Fed … as Asia and Europe begin to puke up their Treasury debt holdings amid a deepening deflation in export revenue, an accelerating contraction in output and capacity utilization, increased job loss, and intensifying disinflation in ‘local’ income.”

Newsletter editor James West advises, “The U.S. Federal Reserve suggested last week that it was going to step up its treasury-buying activity, and the mainstream media interprets this as a form of market support. What it actually is evidence of is growing anxiety and desperation on the part of the Fed as the realization dawns that demand for treasuries is progressively evaporating.” He goes on to say, “The prospect of the United States defaulting on its debt is not just likely. It’s inevitable, and imminent.”

Commenting on the activities of the Federal Reserve, money manager Mark MacQueen says, “When the Fed gets finished here they will have an inflation nightmare on their hands. “Author Eric de Carbonnel goes further. “There is simply no rational reason to believe the dollar will retain an ounce of value by the end of 2009.” Newsletter editor, Eric Hommelberg agrees. “I’ve stated many times that hyperinflation will be the tune of the day in coming years. The deflationists can argue what they want but the simple truth is that the U.S. government will default sooner or later on its inability to service its ballooning debt which makes the U.S. dollar worthless overnight. This happened to the Reichsmark, this happened to the Zimbabwe dollar and this could happen to the U.S. dollar. Once confidence gets into a steep decline foreign investors will dump their worthless dollar holdings which will translate itself into the death of the dollar.”

Going forward, newsletter personality Jim Sinclair suggests, “The Greatest Destabilization Is Yet To Come.” Money manager and author, Peter Schiff echoes those thoughts, “This week President Obama claimed that failure to pass his economic stimulus bill will have catastrophic consequences for the U.S. economy. The reality is the catastrophe will be far greater with his plan than without it. If the trends of January and early February of 2009 continue, the rug will be completely pulled out from beneath the U.S. economy, and the full cost of the President’s ‘economic depressant package’ will be apparent to all. If foreign capital does not continue to pour into Treasuries, interest rates and consumer prices in the U.S. will soar…. When the day of reckoning arrives our policy response will be critical. If we continue on the course our new President has mapped out, the catastrophe will far exceed the scope of any he hoped to avoid.”

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