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While public officials may be ignoring the continued
deterioration of our economy, job losses to the tune of hundreds of thousands
of people weekly, and the unprecedented demand for government emergency
support services like unemployment insurance and food assistance, Americans
who sense uncertainty in the air are flocking to the safety of physical
resources.
Our first point of interest is a recent report from
the Federal Reserve that indicates some $114 billion dollars in cash was withdrawn
from the nation’s largest banks in the last thirty days. Those holding their money
at bailed out financial institutions are understandably concerned because the
government’s $250,000 deposit insurance guarantee program, originally
implemented to restore confidence in the wake of the 2008 financial crisis, expired at
the end of 2012. That and
the US fiscal
situation has never been worse, with one Obama official recently having said the
solution to the country’s woes is to simply kill the
dollar.
This suggests investors and cash savers are no
longer confident in the purported
safety of the
country’s “too-big-to-fail” institutions.
The next obvious question then is, “where did
this money go?”
Part of the mystery may have been unraveled when the
US Mint released its latest sales
and inventory report.
According to the mint, investors purchased nearly
half a billion dollars in gold and silver in the last 30 days. There was,
in fact, so much money shifting into physical precious metals in January that
the mint was actually forced to cease operations because they couldn’t
meet demand.
A massive 7.4 million Silver Eagles were
purchased from the U.S. Mint in
January, considerably higher than the previous record from early 2011.
After halting
Silver coin production/sales for over a week, the Mint re-opened yesterday and demand once again
surged.
Having almost
doubled from the first week in January, there remains two more days before the book is
closed on January’s sales.
At 140,000 ounces, the Mint has also sold the most
ounces of gold in January in almost three years, suggesting the rising
‘currency wars’ are stoking people’s ongoing rotation from
paper-to-physical assets as their ‘wealth’ slowing loses its
value.
With a Silver Eagle trading at around $31 per ounce
and the gold spot price at near all time highs of
$1650, the US Mint saw some $460 million dollars shift into precious metals
in the month of January alone.
What’s equally as interesting, and perhaps a
harbinger of the coming chaos, is that the People’s Republic of China
is also shifting a large amount of its cash reserves into physical resource based
investments that include agriculture, energy, and precious metals, a move
that has caused
confusion among experts at the United Nations.
With the political situation in this country rapidly
dwindling because of government interference on all levels, a recession for
2013 already baked into
the cake, and a global
economy on the brink of collapse, there is one primary motivating factor driving
money into gold and silver.
Uncertainty.
As we’ve seen recently with shortages in emergency
food rations and
supplies, firearms
and magazines, and now
gold and silver, Americans are no longer confident in the stability of the
system as a whole, and they are diversifying their assets into physical
resources that will retain value should the global financial, economic, monetary,
and geo-political systems come unhinged.
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