American Banker - Gold Backed Digital Currency Ditches the Blockchain

This article falls in the category of interesting news note. It talks about a new gold backed digital currency. This is not a recommendation for or against this idea, just another example of how new technology is being used in the money and currency arena. Below are a few quotes from the article and then some added comments.

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"A new digital currency backed by gold is billing itself as a more compliant, liquid and ultimately reliable store of value than decentralized systems such as bitcoin.

CMO Inc., doing business as COEPTIS, has been beta testing its digital currency platform for two months and over the next two weeks will be expanding its membership to the invitation-only platform.

COEPTIS issues its own digital currency, calling it Global Standard Gold (AUG), which is backed by physical gold and held in a trust account. The digital currency is issued after a licensed financial institution, acting similarly to a primary dealer, acquires the gold on the open market and deposits it in the trust. The institution then notifies COEPTIS, which issues the proprietary currency.

The currency is meant to bridge the gap between physical and digital currencies. Because it is backed by gold and held in a trust, in theory it can be liquidated at market value at any time."

. . . . 

"Many cyptocurrencies such as bitcoin use a decentralized system, but COEPTIS uses a centralized one. While a decentralized currency avoids the potential for a single point of failure, Cunningham claims a centralized one makes it more efficient and cheaper to operate.

"We have looked at the cost of running the blockchain in terms of how much money is invested" and "we are at orders of magnitude less expensive" if COEPTIS eventually achieves the scale of bitcoin, Cunningham said."

"Cunningham added that using a centralized system allows for greater protections against money laundering because it is "very easy to monitor…unlike a cryptocurrency where you can leave a well regulated exchange and enter into the netherworld," Cunningham said."

Click here to read the full article in American Banker

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My added comments: Please note that the people who own this system rejected the blockchain technology as too expensive. They also mention the problem with complying with money laundering regulations. These are issues that have been noted here on the blog. A two part article on all this was written by an expert on this subject and published earlier this year here on the blog.

Jim Rickards on Fox Business

This is a fairly brief interview on Fox Business, but Jim does make several points very quickly in this one. Below is a brief summary of some of the key points:

- China is trying to manage 3 different agendas (open capital account, pegged exchange rate and independent monetary policy), but will find that impossible to achieve

- China is trying to keep massive capital from leaving the country (have already lost $1 Trillion)

- The result will be that China allows the Yuan to devalue much more 

- The US will not like this, but China won't care because it's their least bad option among several bad options

- Yes China is using market manipulation, but the US Fed does too

- The US dollar is likely to remain strong for awhile during all this

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We will keep an eye on this market situation here of course since we know that at any time a major crisis could arise due to the interconnected nature of the system and the massive derivative positions we know are out there. Jim said recently that he does NOT think this market drop is the start of the major financial crisis he is predicting will eventually happen. But, of course, none of us can know for sure and every time we get a big market drop we have to stay alert obviously. George Soros agrees.

James Turk - Gold and Silver Historical Charts

James Turk provides some perspective on how gold and silver really have performed much better since the year 2000 than most people would assume since they have been in a downtrend for the past several most recent years. You see his historical chart review in the King World News article.

James Turk:  “The results for 2015 are in, Eric, and as you can see from the tables below that it is a mixed outcome for gold and silver. It all depends on where you live and which currency you use to measure their price…

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Added note: Speaking of gold, here is Jim Rickards answer to a question I see asked over and over: Does the US still have its gold? Jim has  been very consistent in his answer to this question. He has told me by email that his sources indicate the physical gold is still on US soil and he believes his sourcer are reliable. He also says in a crisis it will not matter if the gold has been leased out on paper. All that matters is physical possession.

1. Randy Bocook ‏@RandyBocookTeam  8h8 hours agoPooler, GA

   @JamesGRickards Question: do you think the U.S. Has the gold reserves they say they have ?

   0 retweets0 likes

    

    

    

Jim Rickards‏@JamesGRickards

.@RandyBocookTeam Yes. And we have everyone else's too.

Markets Falter - Is it China's Fault?

We have just recently noted here on the blog that if things were to go south this year that the US Fed would find itself as a potential scapegoat. With the markets opening the year in a very volatile and unstable manner, the hunt for who to blame is already beginning. 

The US mainstream media has decided that China is to blame. But former Dallas Fed President Richard Fisher says otherwise in a recent CNBC interview. Below are links to a variety of recent articles in search of who we need to blame if things do go bad in the markets and how unprepared most Americans are for a major financial crisis.

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CNBC - Richard Fisher - Don't Blame China for the market sell-off

"Recent volatility and downside slippage in the equity markets has been ascribed to China and the potential for slowing global economic growth. To be sure, these are factors worth watching but they are hardly newsworthy."       . . . . . 

I voted against QE3 but the majority of the committee embraced it. One could argue — as I did — that QE3 and its predecessor rounds front-loaded the equity market. Stated differently, I believe we engineered a version of the "Wimpy philosophy": We gave stock-market investors two hamburgers today in exchange for one or none tomorrow. We pulled forward the price-reaction function of markets."

CNBC - Faber - Stocks to Fall and it's not China's Fault

"China has become a scapegoat for U.S. stock weakness, but equities will struggle to rise this year because of the American economy, widely followed bear Marc Faber said Thursday."

Bill Fleckenstein - King World News - Market is finally reflecting reality

“What I’m particularly referring to there is how well and how long the stock market managed to levitate on the back of not much more than outright monetization."

CBS News - Most Americans cannot handle a $500 emergency

"Despite the stronger economy, a lack of emergency savings that would help them weather an unexpected expense such as a health crisis or car breakdown remains a serious handicap. In fact, about 63 percent of Americans say they're unable to handle a $500 car repair or a $1,000 emergency room bill, according to a new survey from Bankrate.com."

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My added comments: I will just cut right to the chase here. If we do get a big financial crisis you can be sure that there will be a massive effort to deflect blame elsewhere, especially by those who failed to prevent the crisis. This is what matters the most when a crisis does arise. Who will the public blame?

If they blame those running the present system (the government, the central banks, etc) we can expect that we will see major changes show up in the US elections. Candidates perceived to be outside the establishment will probably benefit greatly. We can expect the US Fed to come under intense scrutiny and pressure along with other central banks.

Here is what we should watch for:

What do the IMF and the BIS do? Do they join in piling on the US Fed and put the blame there? I see articles all the time like this one that seem to be setting the stage for the Fed to take the blame in the next crisis.

If the Fed does get the blame, will this lead to the IMF stepping in as Jim Rickards has predicted at the global level to "solve the crisis"?  This is what readers here need to watch for if we do get a major crisis. The next question that will surely arise will be if the crisis was a planned event in order to shift the solution to the global level and away from national central banks?  Skeptics will certainly make this claim.

We can  be sure that most people will be confused and have no idea who is to blame when the next financial crisis arises because the finger pointing will go in every direction. We are already seeing that now even though we don't yet have a major crisis (see added note below).

Readers here though will know what to look for: 

What do the IMF and the BIS do? Who do they blame? Do they propose solving the next major financial crisis at the global level?  Will the IMF issue massive new quantities of SDR's in the process?

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Added note: In this recent interview Jim Rickards was asked if we are seeing the start of a major financial crisis like 2008 as George Soros recently suggested. Jim replied that this is NOT the start of the kind of  major crisis he is forecasting. 

He said he now believes that the major crisis worse than 2008 he has been predicting is still "years from now."  This is an important statement on timing from Jim that I have not heard from him until this interview. It suggests he now feels that the powers that be will still be able to manage the present system for quite some time.

This is also consistent with the fact that Jim has altered his view on the Fed interest rate policy. Jim had predicted that the Fed would start easing again sometime in 2015 due to the economy starting to roll over. But as the year unfolded he acknowledged that he missed that forecast and now says the Fed will continue to raise rates until around mid 2016. He now feels it will be mid to late 2016 before the Fed changes course. 

What we can learn from this is something we have noted here on the blog repeatedly. Things tend to move more slowly than people expect (even the best analysts) and change tends to take place gradually unless a sudden major event triggers a major crisis.

Ben Bernanke Talks Currency Wars

Ben Bernanke writes this recent article published in Business Insider providing his take on currency wars. Below are some quotes from the article. Below is Jim Rickards Twitter comment on the article.

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"The financial crisis and its immediate aftermath saw close cooperation among the world’s policymakers, especially central bankers. For example, in October 2008, the Federal Reserve coordinated simultaneous interest-rate cuts with five other major central banks.

It also established currency swap arrangements—in which the Fed provided dollars in exchange for foreign currencies—with fourteen foreign central banks, including four from emerging markets. 

However, once the crisis had passed and recovery begun, national economic interests began to diverge. In particular, some foreign policymakers argued that the Fed’s aggressive monetary policies, undertaken to support the U.S. economic recovery, were damaging their own economies.

Two criticisms were prominent, and a third perennial issue also reared its head.    . . . . . .

Click here to read the full article on Business Insider

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Here is the twitter comment posted by Jim Rickards about this article. I won't be surprised if Jim writes a review of this article at some time in the future.

Jim Rickards‏@JamesGRickards

#Bernanke currency war essay contradicts his early research, and what he told me privately: http://read.bi/1O4oL6T 

Innovation Central Bank Style

Here is a link to a recent speech by Carolyn Wilkins. She is a Senior Deputy Governor of the Bank of Canada. This speech contains some technical lingo, but has some key points related to what we cover here in it. Below I have selected some key quotes to discuss.

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. . . . . . 

Considering alternative futures

"Innovation doesn't stop with simply adapting our theoretical frameworks and gathering information on the world as we see it today. We must also challenge our thinking by contemplating alternative futures.

The international monetary system could look completely different 20 years from now. China is increasingly opening its financial markets and liberalizing capital flows with the rest of world. While this is clearly positive for the global economy in the long run, this is a huge change and the transition could be bumpy at times. That means we need to think about how the world financial system will evolve and what Canada's place in it will be. Will the renminbi become a reserve currency? How would that affect the demand for other reserve currencies, including Canadian-dollar assets?

Global and domestic payment systems - the backbone of the financial system - could also look completely different. Technology is advancing and new players like PayPal and Apple Pay are competing with the traditional ones. The Bank will help lay the groundwork for the next generation of Canada's payment systems.12

Then there are disruptive technologies, such as the distributed ledger that's at the heart of Bitcoin, or peer-to-peer lending facilities like the Lending Club. These developments are pushing more and more financial activity outside the traditional financial sector. The sharing economy is upending entire industries. Here, I'm thinking about things like peer-to-peer home rental services such as VRBO and mediated services such as Uber.

These types of trends raise questions for the Bank. Consider a cashless society where everyone uses e-money, which is monetary value stored electronically and not linked to a bank account. If this money were denominated in Canadian dollars, who should issue it? Who should earn the seigniorage?13 The central bank, as it does today, or the private sector? What would the financial system look like in each case? The Bank needs to consider all these questions. Cash is a public good that many people still prefer, especially for smaller transactions.14

As we think about alternative futures, we have to envision a world in which people mostly use e-money, perhaps even one that's not denominated in a national currency, such as Bitcoin. This would create a new dynamic in the global monetary order, one in which central banks would struggle to implement monetary policy. And, central banks couldn't act as lenders of last resort as they do for their own currencies. This means that households and businesses could suffer important losses if such an e-money were to crash. We need to anticipate this and manage the risks and benefits that could arise from the broader adoption of e-money.

The Bank will explore these and many other trends over the course of our three-year corporate plan. To do this, we're expanding the range of techniques we use for analysis. For example, we've begun to capitalize on "big data" to do things that aren't possible with traditional economic statistics. Prices collected from retail websites can be used to study pricing behaviour. Social media used by people of all ages to express likes and dislikes may become a vital source of data to understand the perception and credibility of monetary policy. We're also drawing on techniques from behavioural economics to study such things as how people form expectations.

If we don't start now to find new approaches to handle these and other alternative futures, we won't be prepared for whatever comes our way.'

. . . . . .

Click here to view the full text of the speech

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My added comments: If you want to know what central bankers are thinking you need to read these kinds of speeches. This speech is chock full of concepts that could impact change in the global monetary system which is what we cover here.

Please notice the concern being expressed that central banks can move too slowly and fall behind the innovation curve. Also, please notice how the ideas for potential change talked about tend to evolve over many years. This is how most central bankers look at things. They see potential changes as happening gradually over long time frames. They acknowledge a risk for a sudden crisis, but don't really believe we will have one.

The emphasis on new payments systems and the decreasing use of cash should be noted here. This is a topic we have covered here extensively. It is clear that the expectation is that society will gradually move towards less reliance on cash and that technology will move people towards new payment systems (and even possible new currencies to be used globally). We have covered all this here extensively, but this article shows that the idea is taken seriously in central bank circles.

The one factor that you don't see mentioned much is what happens if some kind of major crisis takes down the current global financial and monetary system. Everyone admits that there are legitimate risks to this happening, but I rarely see any discussion (at least in public articles) about how the authorities would deal with that. A totally cashless society would be a complete disaster if anything took down the existing grid infrastructure an electronic system must have to operate. Again, everyone admits there is at least some risk of this happening. Anything from a solar flare to global conflict using EMP weapons to coordinated cyber attacks by major powers could trigger a grid failure. It's impossible to eliminate this risk.

This is why we will never see a completely cashless society in my view. People have to have some kind of emergency currency available in the event of a systemic failure. We will probably see the kinds of changes talked about in this article, but forms of currency/money that people can use in an emergency situation (cash, coins, precious metals, etc) will always serve a needed purpose no matter how much technology changes the current system.

Desmond Lachman: Fault Lines in the Global Economy

We can add Desmond Lachman to the list of those concerned about how the US Fed handles interest rates as we head into 2016. As we have noted here on the blog, the US Fed is really out on a limb on this and in position to be a potential scapegoat if things go bad either in the US or globally (or both). Below are some quotes from this article by Desmond Lachman on the American Enterprise Institute web site.

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"Global economic policymakers should approach 2016 with more than the usual degree of caution. Not only do there appear to be an unusually large number of identifiable fault lines in the global economy, but those fault lines also appear to be both interconnected and of systemic consequence. This is all too likely to result in yet further slowing in the global economic recovery next year that would argue against any premature additional tightening in Federal Reserve interest rate policy."

. . . . . .

"A further strengthening of the U.S. dollar (my added note - this is a by product of the Fed raising rates) is likely to highly complicate China’s efforts to rebalance its distorted economy from one which relies excessively on investment and export-led growth to one that has domestic consumption play a larger role. This is especially the case since it is occurring at a time when China’s economy is already slowing and there has been more than S$800 billion in Chinese capital outflows over the past year. It is also occurring at a time when the Chinese economy is characterized by massive excessive manufacturing capacity as well as by over-investment in its property sector."

. . . . . 

"At the same time, a strengthening of the U.S. dollar and a return of capital flows to the United States is bound to exert considerable pressure on emerging market corporates. According to the Bank for International Settlements, since 2009, those corporates have increased their U.S. dollar-denominated borrowing by more than $3.25 trillion. This has to be a major threat to the global financial system, since it must be only a matter of time before these corporates start defaulting on these loans."

Click here to read the full article by Desmond Lachman

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My added comments: Please not how vulnerable the US Fed is here is things go south. Everyone will blame them for raising interest rates too soon including both US political parties, the IMF, the BIS and and majority of well known economic analysts. Again, expect the Fed to do just about anything in its power to avoid this if possible.

If things do go south and the Fed does become the scapegoat, we then need to watch for Jim Rickard's prediction that the IMF will try and step forward in a more prominent role using the SDR.

OT: People Tend to Pull Together in a Crisis

Earlier this year we did this off topic article in an effort to point out that most people want to try and help out when a crisis situation unfolds. We are glad to report that in this case the latest news is encouraging and Luke was able to leave the hospital and come back home to his family.

Here in our area we got to see another example of how most people will try and help their neighbor during a crisis. We mentioned that in late Decmeber this area was hit with an EF4 (160mph+ winds) tornado. The destruction was massive and without question many in this area are living through an ongoing crisis. 

But amidst all that we see how people will step up to try and lend a hand. My daughter was home from college for the holidays so she was able to write several articles on this topic for our local paper. Below are links to three recent articles that illustrate what we are talking about. Hopefully, we won't have to endure another major financial crisis. If we do however, it is encouraging to know that there is a hidden asset out there (most people want to help) that could rise to meet the challenge.

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Disaster relief efforts include supplies, day camp, pet services, health clinic

Rowlett veterinary clinic helps pets get their people back after tornado

Hundreds of volunteers from Eastridge Church of Christ offer hope, help in crisis

Meanwhile, Back in the Ukraine

The Ukraine has pretty much died down as any kind of major story in terms of impact on the global financial system, but that does not mean nothing is happening there. Below are links to some recent news articles which point out that things could heat up again there. As usual, the IMF is right in the middle of a difficult situation.

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Reuters - Ukraine has doubts IMF will approve its 2016 budget

"Ukraine said on Wednesday it had doubts that the International Monetary Fund would approve all changes adopted by parliament in the 2016 state budget, a condition to secure the next tranche of financial aid. "I'm not entirely sure that all these changes will be agreed", Finance Minister Natalia Yaresko told a news conference."   . . . . .

Bloomberg - Ukraine Expects IMF to rule next month on new aid

"The International Monetary Fund will decide whether to resume lending to Ukraine at the end of next month, after the country’s parliament approved the 2016 state budget, Central Bank Governor Valeriya Gontareva said.

The former Soviet state hopes the Washington-based lender will extend two tranches of its $17.5 billion bailout worth a combined $3.4 billion, Gontareva told reporters in Kiev on Tuesday. The funds, originally slated for this year, were delayed by months of wrangling over the budget and a new tax code." . . . . . 

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Now, here is a Russian media take on the situation. Russia is upset that the IMF changed its rules making it easier for the Ukraine to default on a debt it owes to Russia.

Sputnik International - IMF Tricks Did not Save Ukraine from Collapse

"Ukraine may face complete economic failure as inflation progresses and foreign loans are unable to save the country's economy. Kiev should admit that its plans to join the EU were unsuccessful, German newspaper Deutsche Wirtschafts Nachrichten (DWN) reported."  . . . . . . 

How Will the US Election Impact Monetary System Change?

As we head into 2016 everyone is aware that the US will hold its election for President this year. While this blog tries to avoid politics as much as possible, it would be naive to think that the upcoming elections will have no impact on the financial system or potential change in the monetary system. Below we will try to list in bullet point form the various ways the election could have an impact.

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- the most obvious is Fed policy. Normally in a presidential election year the US Fed tries to avoid looking as if they are playing a favorite leading up to the election. On the other hand, the Fed normally gets some pressure from incumbents to create an easy money atmosphere in hopes the economy will show solid performance ahead of the election. This year will be interesting with the Fed trying to convince markets it can raise interest rates into what could be the teeth of a economic downturn. If that does happen, most analysts believe it will hurt the Democratic nominee for President as most voters tend to blame the President if the economy is faltering. So this will be the #1 thing to watch in the coming election year. Will the Fed keep trying to raise rates or will they reverse course quickly due to pressure from poltical incumbents?

- The recent new government spending bill is already evidence of how an election year impacts things financially. An enormous spending bill that everyone admits will sharply increase the US deficit sailed through Congress and was quickly signed by the President. No one wants to be blamed for a downturn in the economy so both parties did what they could to try and keep money flowing even though a lot of it has to be borrowed.

- If the economy holds up, we can expect that the status quo of divided government is likely to continue. The Republicans most likely retain the House of Representatives while the Senate could go either way (but probably slight advantage to Republicans holding it). The Democrats will be the favorites to hold the White House because voters won't have a reason to turn against them if the economy holds up. Incumbents always have a huge political advantage if things remain fairly stable.

- If the economy heads south things could get interesting. A number of questions will arise. Will the Fed try to step in once again to reverse the trend? If they do, will it work or will they lose all credibility in the markets? Who will voters blame if things go south? Normally they blame the President and are more of mind to throw out incumbents. But with the US government divided now for so many years, it's hard to say how voters would react this time. They might just decide to throw everyone out and start over depending on how bad the economy was performing.Donald Trump will likely benefit from any significant downturn because he has been very vocal in saying the US is "in a bubble" lately and that it could get ugly if that bubble bursts.

Summary: Unless we get another full blown financial crisis in 2016, we can assume that the election year will not have a major impact on the pace of change in the global monetary system. Things will probably just plod along at a slow pace. 

However, if we were to get another major financial crisis like Jim Rickards predicts, all bets are off. We could see the potential for all kinds of change and see the pace speed up quite a bit. It's a complete unknown (at least to me) how the public would react to all this if it did happen. The research I have done for this blog suggests to me things could get pretty messy. I would expect a lot of finger pointing of blame and a massive battle to gain the confidence of a majority of the public as to how to deal with the crisis. 

Those in charge of the current system would probably try to shift the solution more to the global level at the IMF as Jim Rickards has forecasted. Those who are skeptical of the present debt based monetary system will no doubt be pushing the idea that those running the system failed the public and only a complete end to a debt based fiat system will regain the confidence of the public in general. They will insist on some kind of real asset backing to whatever new currency might rise from the ashes. Where Russia and China might come down on this debate is unknown at this time although both have been building up huge gold reserves. Some believe that Russia and China would support a fiat based SDR currency system while others think they would insist on a gold backed currency system of some kind.

In the complex system we now have, I have no idea how that battle might turn out. I will just continue to follow events and report as best I can what actually does happen here on the blog. The elections in 2016 may or may not end up having much impact on things.

Reuters: IMF's Lagarde warns about Global Growth in 2016

Even before we get to 2016, IMF Director Christine Lagarde is warning about dim prospects for global growth. She cites rising interest rates in the US as a concern along with a slowdown in China. Below are some quotes from her in this recent Reuters article.

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"Global economic growth will be disappointing next year and the outlook for the medium-term has also deteriorated, the head of the International Monetary Fund said in a guest article for German newspaper Handelsblatt published on Wednesday.

IMF Managing Director Christine Lagarde said the prospect of rising interest rates in the United States and an economic slowdown in China were contributing to uncertainty and a higher risk of economic vulnerability worldwide.

Added to that, growth in global trade has slowed considerably and a decline in raw material prices is posing problems for economies based on these, while the financial sector in many countries still has weaknesses and financial risks are rising in emerging markets, she said.

"All of that means global growth will be disappointing and uneven in 2016," Lagarde said, noting that mid-term prospects had also weakened as low productivity, ageing populations and the effects of the global financial crisis dampened growth."

. . . . . . 

Click here to read the full article on Reuters

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My added comments: If you were to ask me what are a couple of keys to watch for in 2016 I would say to watch how the election year in 2016 impacts things and watch to see if the US Fed becomes a scapegoat if the global economy does head south.

There will be enormous pressure on the Fed this year to keep the economy afloat. If it turns down it will clearly impact the US elections (Democrats will probably turn on the Fed and blame them for raising interest rates). Both the IMF and the BIS have issued warnings about the Fed raising interest rates as well. 

In my view the US Fed has the most to lose if things head south in 2016 so we can assume they will do anything in their power to prevent it if possible.

US Mint Will Increase Silver Content of Collector Coins

One of the most misunderstood topics I see while doing research for this blog is the use of silver by the US Mint in producing coins. Because the US took all silver out of most of its circulating coins way back in 1965, many Americans have now grown up never having seen a US coin made with silver in it. While collectors are pretty well informed on the silver coins that the US Mint does make, most people are not. So I will use this article to try and provide some background on this topic.

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Until 1965 US circulating dimes, quarters and half dollars contained actual silver. The silver content was known as "coin silver" which was an alloy of 90% silver and 10% other base metals. The reason for the 10% base metals was to increase the durability of the coins so they would not wear out as quickly.

In 1965 the US made the decision to remove silver from its circulating coins. From that year forward silver was removed from US coins except for some silver that remained in the Kennedy half dollar until 1970 (those coins were 40% silver). After that, no more circulating coins containging silver were made. 

The US Mint did continue to make silver coins however. The Mint produces a special collector version of coins knows as proof coins. They produce a non silver proof set each year as well as a silver proof set. The coins in the silver proof set contain 90% "coin silver" just as the old circulating coins used to. In addition to the silver proof set coins, the US Mint also has produced one ounce silver eagle coins since 1986 which are 99% pure silver. The Mint also produces a variety of other silver commemorative type coins as well.

Recently, President Obama signed new legislation which will increase the amount of silver used in the silver proof coins to 99% from 90%. The reason for this change was that the US Mint learned from a study that the cost of making 99% silver coins is actually less than making 90% silver coins because the dies used to make the coins last longer if 99% silver is used. This recent article explains the new law very well.

In recent years the US Mint has had to suspend sales at times for its one ounce silver eagle coins because demand for those coins has exceeded their ability to make the coins. That was true again this year as the Mint sold an all time record of 48 million silver eagles this year. When this happens, some are quick to assume that because the Mint temporarily suspends sales at times, it means there is a shortage of silver.

While it is possible that this could indicate a shortage of available silver, that is not what usually causes the Mint to suspend sales. The silver blanks used to make the coins are made to very exact standards. There are only a handful of firms that can produce these blanks. When demand for the coins jumps up in a short time frame, the company making the blanks simply cannot keep up with the short term demand. So the Mint has to suspend sales until they can catch up. Usually the Mint is able to continue making its other silver coins (the proof silver coins and commemorative coins) because the demand for those is usually much lower and they can keep sufficient inventory on hand.

Some day it could well happen that an announcement by the US Mint that they are suspending sales of silver eagles really does mean they cannot acquire actual silver to make the coins. So far that has not been the case, but actual physical silver supplies are fairly tight. Anything that caused a sudden upsurge in demand for silver could eat up the available global inventories of silver pretty quickly so it is worthwhile to keep an eye on demand for US silver eagles (and Canadian silver maples etc). 

If demand were to suddenly explode higher for those coins, it could be an indicator that there is a financial crisis emerging and those in the know are positioning themselves ahead of such a crisis. Of course if such a crisis did really emerge, the demand for both gold and silver coins would go off the charts upwardly, but by that time it would probably be hard to get them at any price. Absent a crisis, most Americans will probably continue on blissfully ignorant that such coins even exist.

The Most Popular Blog Articles from 2015

Below is a list of links to some of the most popular articles that were published on the blog in 2015. Our list of warnings about systemic risk to the global financial system from the IMF and BIS was extremely popular and viewed by many thousands around the world. Our page of links to articles about SDR's used at the IMF was also very popular.

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Here is a list of links to some of the most popular articles in 2015:

Is Bitcoin a Technology that will change the world for the average person - Part I and Part II

This article was written primarily by one of the leading experts in the world on this topic who knows the major players involved and warned them years ago about the technical problems that would arise over time with Bitcoin and Blockchain technology. It's a must read if you want to be well informed on this issue.

2015 - A Year of Quiet Steps Forward on the Path to Change

CBS 60 Minutes - The Future of Money

Nomi Prins - The Present System will Come to an End

Willem Middlekoop - Update on the Status of a Reset

Jim Rickards vs. the BIS on a Global Central Bank - Are they in Conflict?

Claudio Borio (BIS Chief Economist) Says a Global Central Bank is "Out of the Question"


Roadblocks to the SDR Becoming a Global Currency

Mid Summer Review @ July 2015

Nomi Prins Presentation to the Federal Reserve

Dan Popescu on the SDR, Gold and China

BIS - Time to Think about New Global "Rules of the Game"

In Person Review of Jim Rickards Speech given in Dallas Texas in April (I had the pleasure of meeting Jim in person at this speech):

Part I

Part II

Jim Rickards - Why the US is Letting China Accumulate Gold

January 2015 - IMF Set for Lively Debate on Adding Yuan to SDR Basket

Other items of interest regarding the blog:

- Now viewed by well over 205,000 visitors from over 70 countries around the world

- Over 900 blog articles have been published since the blog started in January 2014

- Several readers here contributed both links to articles presented here and also contributed to some articles published here

- Our little dog Bean has grown up now from being a puppy. He loves people (especially kids) , loves to go on walks in the park, and generally enjoys life whatever comes his way. He wishes everyone a Happy New Year in 2016!