In Jim Cook's Archive


In 1973, when I first started in the gold and silver business, forecasters were making predictions of a coming steep sell-off in the dollar. Over the years, we’ve heard frequent prognostications that the dollar was doomed. A recent rally in the dollar reminded me of who was responsible for past gains in the dollar. Back then, news reports would invariably say that the U.S. Treasury had intervened in the currency market to buy dollars and support the market. In other words, the government was not going to stand by and let the currency decline. If they did it then it’s safe to conclude they are doing it now. The only difference is that today they do it secretively. This means the dollar is unlikely to experience the decline that many analysts predict.

Does that imply the U.S. government may also intercede in the precious metals market? I don’t think so. It’s possible they would put a clamp on gold if it went ballistic. But today’s tame market in gold isn’t ruffling any feathers. The monetary authorities certainly aren’t worried about silver if they pay any attention to it at all. In the scheme of things, silver is peanuts. It’s a tiny market dwarfed by much bigger assets. For example, cryptocurrencies now have a total value of $1½ trillion. That’s 30 times more than silver. Any number of individual stocks are worth more than silver. You could almost ask what stock isn’t worth more than silver? Suggestions that the silver market is manipulated by Uncle Sam don’t add up. Why would they bother? Yes, silver is a critical metal necessary for military and defense purposes. Its short supply may be of concern. However, there is a quick way to get a lot more silver. Let the prices rip to the upside and in a few years the miners will be extracting enough ore to satisfy everyone.

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