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Money Metals News Alert
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Feburary 3, 2025
– Gold and silver prices rallied again last week as premiums for deliverable
gold and silver bars located at COMEX vaults once again moved higher.
The speculation over tariffs on
imported metal became reality on Saturday, when the Trump administration announced
sweeping 25% tariffs on both Mexico and Canada, set to take effect on Tuesday.
The U.S. stock market is sinking this
morning on the news, but gold and silver are up. There is a reasonable likelihood
that gold and silver prices will head higher still – along with premiums on
coins, bars, and rounds.
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The silver market may see
the largest impacts. Recent data shows that about 44% of U.S. silver supply comes
from Mexico. Imports from Canada constitute 18%.
The cost of nearly two
thirds of the U.S. silver supply just rose by 25% – more likely, however, is
that Mexican silver will be sent to refineries located outside the U.S.
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Meanwhile, tariffs on imports from
Europe may be coming. It is difficult enough to imagine the U.S. market being able
to source enough non-tariffed metal to replace lost imports from Mexico and
Canada.
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Gold : Silver Ratio (as of
Friday's closing prices) – 88.9 to
1
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Will the Fed???s Waste & Abuse Finally Get
Attention Too?
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Americans got an eyeful of the waste
and fraud which has been rampant in federal spending last week. A barrage of
announcements by the Trump administration included putting the brakes on a $50
million dollar program to buy and supply condoms to people in Gaza.
While the headlines scroll by and the
reform effort enters full swing, there is one quasi federal institution which has
somehow dodged pretty much all accountability for more than a century.
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There may be no
organization which can compete with the Federal Reserve bank when it comes to
waste, fraud, and abuse. While the nation is focused on making reforms, the Fed
cannot be overlooked.
Let???s review...
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The Fed principally serves the
interests of its formal owners, i.e. Wall Street banks. The central bank also
facilitates taxpayer-funded bail-outs for undeserving banks.
The infamous Trouble Asset Relief
Program (TARP) provided about $650 billion to the shady banks behind the 2008
Financial Crisis. The bankers responsible wrote and then resold NINJA (No Income
No Job) loans and were richly rewarded, even as Americans at large suffered
through the worst economic crisis since the Great Depression.
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Courtesy of the Fed, Wall
Street enjoys a sort of immunity which is greater than that of the vaccine
manufacturers. A pharmaceutical company which sells an experimental vaccine often
cannot be sued, but they can still fail for other reasons. The largest banks
– designated as Globally Systemically Important – aren???t allowed to
fail for any reason.
Direct handouts to banks
are by no means the only charity that Wall Street receives from the Fed.
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There are lots of hidden giveaways.
For example, when the Fed monetizes U.S. debt (a travesty in its own right), it
doesn???t just print money and send it directly to the Treasury Department in return
for Treasury bonds. It lets bankers skim a commission by letting them act as
middlemen.
Through that monetization mechanism
along the setting of short-term interest rates below the true market price, the
Federal Reserve is also responsible for the catastrophic decline in the purchasing
power of the U.S. dollar.
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Prior to the creation of
the Fed in 1913, Americans enjoyed stable, even falling, prices. Today the dollar
buys less every year – and sometimes a lot less. Adding insult to injury,
Fed officials try to convince citizens that it is normal and healthy for their
currency to perpetually fall in purchasing power.
The Fed is the chief
regulator for U.S. banks, and it has failed utterly when it comes to keeping them
honest.
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No CEO of a major bank was criminally
prosecuted for the fraud which came to light after the 2008 financial crisis.
The lack of oversight must have been
encouraging to bankers who seem only to have grown more brazen.
Wells Fargo was found guilty of
creating phony new accounts for clients and sticking them with extra fees. Traders
at JPMorgan Chase and other banks were convicted of rigging the silver markets.
The rap sheet is long and terrible, yet the Fed never suspends a major banks???
trading privileges or access.
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The ???revolving door??? form
of regulatory capture is as much a problem at the Fed as it is at the SEC and
other agencies. Fed staffers responsible for oversight regularly take high-paid
positions with one of the banks they used to ???watch.???
The economic distortions
created by our central bank have been more devastating in terms of cost than
anything else.
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The American dream itself is almost
out of reach for most young people. Housing prices have been massively inflated by
nearly two decades of artificially low interest rates. Wages have not kept pace
with inflation. And the Fed has been instrumental as the buyer of last resort for
federal debt – supporting perpetual deficits.
The awful truth is these offenses are
just what we know about. Not once in its 112-year history has the Fed undergone a
complete audit of its activities and expenditures.
America???s central bank is even less
accountable than the CIA. It does not provide a comprehensive report of activities
to the president or to Congress, and its officials fight vigorously to avoid
oversight whenever it comes up.
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This week's Market Update was
authored by Money Metals Director Clint Siegner.
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