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(text on screen): Keiser Report
Max Keiser: Welcome back to the Keiser Report. I am Max Keiser. With currencies in fluctuation,
capital controls in places and banks on the brink of yet another bailout; there is only
one person to turn to in these turbulent times: David Morgan of Silver-Investor.com. David
welcome back to the Keiser Report.
David Morgan: Max, it's great to be back.
Max Keiser: All right, David Morgan, what's happening with silver? What's happening? The
Silver Libration Army wants to know. What's going on?
David Morgan: Well, Max, we have had a very trying two-year consolidation period since
we hit the maximum price in this bull market, so far of around $48 in the end of April 2011.
I was looking at the long-term chart before the show and you know we got to the $21 level
in '08. Then we had the financial crisis of '08. We got under 10 and it took about two
years for silver to get back up to the $20 level again. I equate it to a similar process
here, we ran up from 19 all the way to 48. In a few months it was a very, very wonderful
time for silver investors, and then we peaked. We had margin increases about four or five
times. The market was finally broken down and we've been in consolidation ever since
and again it's been about two years. I am still very bullish, Max, and I think we are
also we are near the end of the bottoming process here. Obviously, when you make a risk
like that saying this is it, I could be right, I could be wrong but normally those kind of
consolidations; duration two years is about it, and I think we're there, especially with
what's in the background which is really the foreground, what's going on in the world currency
markets I meanů.
Max Keiser: Okay, let me let me cut in there for a second because you have a situation
there where we know the ceiling on silver is there in place by banks; banks on Wall
Street, JP Morgan for example. They don't want silver going above a certain level, they
want to support their derivatives market that requires quantitative easing, zero-percent
interest rates. If silver or gold were to go up it would look like inflation then they
couldn't get away with keeping interest rates near zero so they keep it down.
In that chasm, in that gap of free market you've got Bitcoin. Bitcoin emerged out of
nowhere, starts at a market cap of a billion dollars. Silver's got a market cap of about
$29 billion, that's what all the worth of silver above ground is worth about $29 billion.
That's, you know, Bitcoin's going to exceed silver in market cap, it's going to go 30,
40, 50 billion, silver's still going to be there sucking its thumb, I mean you've got
Eric Sprott in Canada. You've got the Silver Liberation Army. What's it going to take to
break the cartel, David Morgan? Is it just, is it we don't have the firepower? There's
not the will? People want to be enslaved? What's the problem?
David Morgan: The problem is the people. You're right and I think shows like yours, people
like myself, Jim Willie, all the others, guests that you have on, It's an educational process,
the process takes time and the psychology, the bankers are winning the psychology war
right now. I mean, if you look at that what the mainstream news is, there's lots of articles
about the gold going nowhere during the Cyprus crisis, so that's a psychological warfare
tact.
Max Keiser: Okay, I understand that, David Morgan, we are losing the psychological war,
but there is a new player who is making the silver bulls like, like Sprott, look like
a monkey. Because here you have a digital currency that's suddenly making all the silver
bulls out there look like monkeys. But let's talk about some other monkeys and those are
people who did not own silver and gold at all because they said it might be confiscated.
Meanwhile, the people with silver and gold still have their silver and gold and it was
the bank accounts that were confiscated. Your thoughts.
David Morgan: Well, that's a very touchy topic, obviously Max. We have; personally I don't
think it will be confiscated however, there's arguments both sides. I don't have time to
go into all the arguments for and against. If either one would be confiscated I think
it would be more gold than silver. Gold's certainly got a place in the monetary system
with the elite bankers. Silver hasn't for, you know, since, like, 1873 on an official
basis. So, if either one would be confiscated, gold is more likely. Again, I doubt either
one but again you could argue the other side and there are people that are adamant about
confiscation taking place, again, I doubt it.
Max Keiser: Yeah, but if what I am saying is that if there were an argument from peoples
who were concerned: "Oh, my God. My precious metals are going to be confiscated, I'm going
to keep my money in the bank instead." They now have had their money taken from them so
that they are the monkeys, they are the losers, they are the suckers at the poker game. But
let's talk about silver in terms of it currently in backwardation during a down market. This
is again highly irregular. Remind the audience what backwardation is and how unusual it is,
especially during a down market, David Morgan.
David Morgan: Backwardation is where the spot or the current price being when you want it
right now, right here, today is at a greater or higher price than the price in the future.
The market is settled on the future's basis, meaning that all this paper that's flying
around that is not real is what sets the price for both gold and silver. In that domain you
have a price that means to get the real metal that costs you more than it would in the future
which is backwards. You usually get what's called contango, which is an interest rate
and it's the current interest rate which is near zero what you pay in the future for any
commodity, if it's wheat, it doesn't matter, wheat, corn, silver. So what normally would
cost less for today for some price in the future because the interest rate but when
it costs more it's usually an indication that the market is very tight. I know that the
physical is tight. I know that the bag market, which is a good leading indicator, is extremely
tight. Premiums on bag, which usually sell at discount to melt value, are at a premium
right now. So the physical market is starting to move away from the actual paper market,
so the paper bugs, as I call them, yet the market seems to really not be paying much
attention basis the price of silver current.
Max Keiser: All right David Morgan, one way to judge the value of silver is to look at
the overall above ground supply of silver and gold as compared to the money supply.
It could be the money supply in America. It could be the money supply in the world. Now,
since 2008, tell us about the relationship between the price of gold and silver and what's
happened to the global money supply and what this tells us.
David Morgan: Well, I would like to go back a little further than that just to make it
very clear, but if you, and Michael Maloney does a good job of this as well, but it you
take the basic M1, I'm just talking currency only, and cover that with gold; if you do
that in 1980 with all the currency that existed in the United States covered by the gold that
the United States purportedly had, you would come out with the dollar price of $400 an
ounce. Yet, the price of gold went over 800. If we did that again in 2000 the gold price
would be 2500. Remember, these are using government stats. This is not using what we really know
is out there but we'll use their numbers. So right now, from 2000 to now, there has
been an explosion in the amount of money-printing worldwide and gold is certainly moved up but
it has certainly not covered the gold clause. In other words, it hasn't covered one-to-one
the amount of money that has been printed. In order to do that, you're probably looking
at a price north of $5,000. Remember, I am talking M1 only, I'm not talking about M2
or all the debt that's out there to cover that.
So gold is very, very underpriced. There are certainly reasons why the banksters want to
make sure that the general public doesn't understand it. Max, just want to go one step
further. Right now, generally speaking, if you see CPM's latest study, they say about
1 percent of the world's asset is invested in gold. One percent is a very small amount,
as we know. It wouldn't take a lot to double that to 2 percent if there was another doubling
of the amount of people that are interested in the precious metals and bought physical
metal, the price would take off astronomically. It's that tight of market right now and I
think that's going to; go ahead.
Max Keiser: The problem is you've got a ceiling there because of the manipulations from JP
Morgan and other banks. Now, a judge in New York recently dismissed a lawsuit against
the Caligula of Wall Street, Jamie Dimon, and his corrupt organization, JP Morgan, for
silver price manipulation. In dismissing the case, the judge did not say that the litigants
had demonstrated that JP Morgan could manipulate prices or that they proved that they could
manipulate prices and they showed them quite clearly how they could manipulate prices.
But the judge was saying that they had no incentive to manipulate prices, so therefore,
they were innocent.
The judge was presented with evidence of JP Morgan manipulating prices. He saw their thumbprints
on the illegal activity. They had the knife in the back of the little old lady and they're
twisting it and blood was gushing out of her skull and the judge said, "Well, maybe so,
but I don't know why they would do it, so they're innocent." Your thoughts.
David Morgan: I'm not surprised Max. I maintained from the beginning of this debate about the
manipulation and all the effort that's been done by several in the, particularly, on the
silver side, GATA, as well. They've done excellent work and I support them. I've given them money.
But I'm not surprised that the judicial system has acted in this way. We are at the end of
an empire. I mean, you were in the Four Horsemen with me. You know that things have gotten
so corrupted throughout the entire system. Not only the monetary system, the food chain,
the water supply, the air we breathe; everything was corrupted to a point beyond belief and
so to be surprised that the authorities didn't do the right thing, I'm not shocked at all.
I'm disappointed. I'd like to believe that there is somebody out there that speaks for
truth, justice, and the American way, but no, no that's a myth. It doesn't happen anymore.
Max Keiser: All right. You mentioned the Four Horsemen, that of course, is a film that came
out last year; an excellent film, available on DVD. There's another film coming out called
Bailout 2 starring Max Keiser, which is now seeking crowd funding on the internet, which
you might be interested in, David Morgan and everyone else watching this show.
Now, you were also involved and have been involved, David Morgan, in various initiatives
including Utah to allow silver to be adopted as money. What's happening there?
David Morgan: It stalled out, Max, really. Unfortunately, the only way to really implement
it in today's society is to put it in a depository. Put the gold and silver in a depository, issue
a debit card, and then allow the debit card to be used in everyday transactions. It's
a very simply implemented system, but it stalled out. I do have some friends that have actually
started a system that does that exact thing and I got a hold of Larry Hilton, who was
instrumental in writing the bill with Mr. Gonzalez, and we're going to probably fly
them out here or vice versa and discuss how they could implement a debit card-backed system
with real gold and silver in a depository. And that, again, is, I think, the only way
to really implement it and get it off the ground.
Max Keiser: All right now, I saw some videos recently from folks on the internet who walked
up to strangers, essentially, and they hold out a silver Eagle, a one-ounce silver coin
that trades for 29, 30 bucks, and they say it's a silver dollar and they say would you
buy this for one dollar? In other words, would you buy 30 dollars' worth of silver for one
dollar? And almost everybody declined that offer. Everyone said, no, they wouldn't. They
either had no idea what silver was worth. They had no idea what a silver dollar is.
They had no idea what silver is. In other words, the level of ignorance in this market
is enormous. You talk about the educational effort. It hasn't made a dent. People are
still brain dead when it comes to money and precious metals and the value of the folding
paper in their pockets. Is it because they are incapable of ever becoming educated and
have they been dumbed down by the other things in the Four Horsemen we talked about: the
drugs, the environment catastrophe, the political corruption. In other words, this is a whole
generation that we can write off as brain dead or will there be hope? Is there any hope
that people in America and around the world will escape the imprisonment of their own
stupidity? David Morgan.
David Morgan: Well said, Max. Yes there is. The Internet's doing a great job, shows like
yours are doing a fantastic job. You have something special, Max, with your ability
to bring humor to a very dire situation. As I said earlier, we've got 1 percent in the
gold market, it would only take 2 percent to blow the doors off this thing. I think
that is going to happen. It is going to take some time, but I think the younger generation
is really, really seeking the truth and they are like when I was younger, one time in my,
before I turned 30. Don't trust anyone over 30 or 40; I think that's very true of today's
younger generation and I think they'll find it. I do think that there is nothing in the
mainstream media that's pro gold or silver, it's always negative, you know, events taking
place. Look, gold's been down three days in a row, and on and on it goes. But the internet's
free market, at least so far, and you can get real news like yours. I do think that
you will see an exodus out of currencies and in the metals, probably a lot in to the Bitcoin
situation or similar products, and people are seeking a way to protect themselves and
escape the, the basically the banksters' slavery mechanism of a debt-based currency.
Max Keiser: All right David Morgan we have to leave it there. We are out of time. Thanks
for being on the Keiser Report.
David Morgan: My pleasure, Max. Thank you.
Max Keiser: All right. That's going to do it for this edition of the Keiser Report with
me, Max Keiser, and the gorgeous Stacy Herbert and I want to thank my guest, David Morgan,
of Silver-Investor.com.
If you would like to send us an email, please do so at KeiserReport at RTTV dot RU. Are
you ready for the truth? Until next time, Max Keiser saying, "Bye, y'all!"
(text on screen): Keiser Report