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Ellis Martin: The following segment is sponsored by El Tigre Silver Corp., trading on the TSX
Venture Exchange under the symbol ELS.v and on the OTCQX as EGRTF. El Tigre Silver Corp.
is focused on silver exploration and development in prolific Sonora State, Mexico. Find them
on the web at ElTigreSilverCorp.com.
Join me for a conversation with a frequent guest of the show, David Morgan, the Silver
Guru, and expert on money, metals, and mining, also, a lecturer and an author. Mr. Morgan
has written Get the Skinny On Silver Investing, available on Amazon.com.
His website is TheMorganReport.com. David, welcome back to the program.
David Morgan: Ellis, it's great to be with you.
Ellis Martin: David, I'm not sleeping as well as I ordinarily do. I'm only getting eight
hours as opposed to the ten hours I ordinarily get. I think it's because I've made a run
on my local bank and stuffed my mattress with all the cash I had in there, and the mattress
is now very lumpy. Can you be any more on the mark than you were a month ago on The
Morgan Report?
I'm quoting you here: Not to belabor Banking 101, but a quote from Eric Sprott is correct
from a legal and financial accounting standpoint. The term deposit is used by the banking industry
in financial statements to describe the liability owed by the bank to its depositor and not
the funds that the bank holds as a result of the deposit, which are shown as an asset
of the bank. It is now the bank's money, not yours.
And, now, David, we have a bank run in Cyprus. Well, evidently, money deposited does not
belong to the depositors. The state is going to abscond with it, and you can't even get
it out of the bank right now, if you wanted to. Banks are closed there.
David Morgan: Yes, thank you for the introduction, Ellis. I know you read The Morgan Report and,
you know, going back to the quote, this came from Eric Sprott, and he said, quote, "You
have to be cognizant of the fact that when you have money in a bank, you have a risky
investment. Most people don't think of it that way, but I certainly do." End quote.
Again, Eric Sprott.
Yeah, that paragraph that you quoted of mine was basically alerting people that, you know,
you think you have a safe deposit, and I'm not trying to be an alarmist here, I mean,
but the facts are that for all practical purposes, when you deposit money, you, going to, you
know, the safety of the bank, and here in the United States there's the FDIC which is
going to, you know, be able to print money that they don't have to pay out depositors,
that type of thing.
Nonetheless, the facts are what they are, and I already, I went to great lengths to
point out to people in last month's issue before this Cyprus event, that what you think
is safe in reality isn't that safe, and that's why I've urged, for over fourteen years now
on the internet side of things, I mean, I've done it before that fourteen, and it was very
popular, that you must, in my view, have money outside of the system, outside of the matrix,
because everything that we consider to be financial is pretty much tied to counter party
risk. Be it a bank, be it a broker, be it a hedge fund manager, be it your Uncle Charlie,
I mean, you've got somebody on the other side of the equation that has to make good on that
promise, and, if you own physical metal, you don't have that problem. You own something
that you can go touch, and that in and of itself is wealth.
So, again, this thing with Cyprus is quite scary, especially for those that are there.
For us on the outside, I think it's a very good lesson that things are not always as
they appear, and, you now, with what's going on now, there's a very small time window to
get this thing sorted out.
And, of course, Russia's involved at a very big degree. The Putin contingency is sitting
there basically saying that, "No, you don't."
And the EU is saying, "Well, yes, we can."
That's a short summation. There's a lot more to it than that, of course, and it's TBD,
"to be determined," as we're doing this interview, Ellis, so, yeah, it's time to wake up. Again,
I don't want to go overboard, but, nonetheless, I think I want to take a balanced view here
and point out some facts that a lot of people are really unaware of, and you don't want
to be one of those people like in Cyprus that tried to wait in line to go to the ATM machine
to find out the thing's closed, or it's out of cash.
You want to prepare ahead of time, and I think the best way to prepare would be to have precious
metals, and the second best way would have physical currency, certainly. In both cases
there's some risk, meaning that depending on how secure you are, where you live, you
have to make a determination, but I wouldn't advocate taking all of your money out of the
bank or anything like that, but I would advocate that you have enough outside the system that
you're comfortable.
Ellis Martin: Isn't this the beginning of the predicted bank failure that Jim Sinclair
and others were talking about last year? That didn't happen at that time. Isn't this perhaps
the tip of the proverbial iceberg? And how can you possibly stop a potential bank run
in continental Europe?
For those of our listeners that live in Europe right now, what's to keep anyone from just
gradually pulling their money out of the bank and then that system collapses?
David Morgan: It's a great question, so let me answer it this way. I'm pretty studied
on this stuff. I certainly don't know all the answers, but I love to use history as
a way to look back and say, "This is the most likely scenario."
If you go back to Argentina in 2000, I sent out a movie clip or, actually, the whole movie,
called The Empty ATM, and it's a documentary of exactly what happened. So here's what happened
in Argentina, and this, I think it happened in the Euro zone. Your money is still in the
bank, and it's still yours, okay? That's the premise, yet, the banking institutions shut
down your ability to withdraw your funds except some designated amount.
So, let's say, for an example, that you have, for talking purposes, $5000 in your bank account,
or $50,000. The amount is the amount, but the problem is the bank says, "Well, yeah,
your $50,000 is still here," or, "Your $5000 is still here, so here, but you're only allowed
$200 a week withdrawal." Well, what good does that do you if your house payment's $1000
a month? Not really good, right?
And that's what took place in Argentina. This documentary, I would suggest that all the
listeners take a look. I don't know if it's still up on the web or not, but it was called
The Empty ATM. You can Google that and watch that and have your glass of Scotch handy.
I'm joking, of course, but it's an eye-opener. In fact, the interview on the documentary,
one that was quite interesting from my perspective was the Minister of the Economy, I forget
his exact name, was interviewed, and he said what surprised him wasn't so much the collapse,
it was kind of in the cards, was how civilized and calm the citizenry of Argentina maintained
while this took place.
That is a fact, I mean, you can watch the documentary and make your own judgment, but
that doesn't necessarily mean that that kind of civil behavior would carry off in Cyprus
or Spain or Italy or United States for that matter. These are trying times, I mean, this
is not a joke. I've been one of many, Jim Sinclair, obviously one of the better known
ones, talking about this kind of stuff for quite some time, and, you know, here it is,
and it's not, "I told you so." There is still time. That would be my message.
Ellis Martin: And then we've got states, such as Utah and now Arizona, which is getting
ready to legitimize using gold and silver as currency. We see a breakdown of the republic
here in the United States, don't we?
David Morgan: I think so. I mean, basically, I would prefer to call it, and I'm not playing
semantics, but I'd say a re-establishment of the republic, and this is because of my
very long study on the Founding Fathers and what their intent was, and, courtesy, primarily
of Edwin Vieira, one of my idols, one of my heroes, and, basically, intent was that D.C.
was just a district, and it just had very limited power. The states had most of the
power. The people had most of the power. And then some of that power was ceded to the states,
and then some of that was ceded to the federal government that had very limited power.
Of course, it's upside down now. In my perspective, it's more like reasserting the power of the
states. We've seen this more and more in the mainstream press, even, the states are saying,
"You know what? We're not going along with this measure that came out of the District,
you know? The District of Whatever, and we're going to stay with our state constitution,
which states this.
There's starting to be more and more information coming out that some of these states are basically
standing up for their state's rights and telling the Federalis that, "No, no. That's not the
way it works. This is how it works."
The problem being, it always seems to be, at least from my work, it's always the money,
you know, "Follow the money," and the problem is that this funny money gets printed up by
the private bank, the Federal Reserve, and that funny money is loaned to the federal
government that doles it out to the states, so they have that tie, that, "Well, if you
don't do what I say, then your money gets cut off."
The money is getting questionable. More and more every day, and, therefore, some of these
states are saying, "Well, look, we're going to implement gold and silver as an alternative
payment system."
So, Ellis, I'm not sure where it's going. It certainly looks like the interesting times
are becoming more interesting almost by the minute. I think things are accelerating, and
I think people that are kind of looking at this as entertainment had better wake up and
take some positive action. Again, I want to take a balanced view here. That doesn't mean
you cash out everything or go to the bank and take everything out or anything to do
with that, but just, basically, stand solid, and ask yourself, "What level of money outside
the system would I need to feel comfortable"
My suggestion would be two, three months' worth. I'd put most of that into physical
metal and then just sleep at night. No one knows the future exactly, but we do know from
history, and especially just watching the current news in the mainstream. Things are
getting tenuous, to put it politely.
Ellis Martin: So, really, we're not talking about putting anything into paper right now.
As a subscriber to The Morgan Report, I receive your email alerts, etc. You mentioned in one
I received the other night that you believe the bond market is crashing almost now. So,
there's really nowhere to go more or less, just physical silver and physical gold and
maybe some cash.
David Morgan: Well, let me restate that slightly. You know, everyone's got their perception
when I sound out an alert, but, basically, that alert was all about what The Wall Street
Journal had said about the bond market. I was very taken aback by that article. I thought
it was so important that I wanted to comment on it, and what I basically said was, "The
Journal, something that's as conservative as The Journal and as established as The Wall
Street Journal, was saying that the bond market is ready to fold soon."
I mean, I read that thing twice before I decided to do the alert. I said, "This is actually
what it says." I mean, the article was called Bond Crash Dead Ahead: Tick, TickůBoom! I
mean, that is the title, and then it said a warning. Investment news wants to make damn
sure that its readers, the 90,000 professional financial advisors who rely on timeliness
and accuracy of every eye news forecast understand, quote, "What your clients' portfolios look
like when the bond bomb goes off." End quote.
The Journal is saying the bond market is a bomb ready to explode. That's not me saying
that. I've said, you know, "Watch the bond market for years." I said, "As much as watching
the metals markets is extremely important, and they still are, and that's the best place
I know of to protect yourself, watch the bond market. That's the keys to the kingdom. When
the bond market goes, all bets are off. It'll be obvious to everybody, but it'll be too
late for most."
And here's The Journal coming out with this article, so, again, I'm probably belaboring
the point, but it was, you know, my heart skipped a beat when I read that thing. I go,
"Wait a minute. Somebody wrote that like one of us in the precious metals sector or the
alternative media or something."
And there are articles out there like this one, in that domain and the alternative media,
but this from the mainstream was, like, wow. Somebody's warning somebody. Pay attention,
please. Pay attention.
Ellis Martin: We'll be right back.
The Ellis Martin Report is sponsored by El Tigre Silver Corp., trading on the TSX Venture
Exchange under the symbol ELS.v and on the OTCQX as EGRTF. Silver has been considered
a precious metal for 6,000 years and currency since 600 B.C. It's been commercially mined
in Mexico since 1530 in mineral prolific and mining-friendly Sonora State, where El Tigre
Silver Corp 5000 meter drill program is now underway. El Tigre's properties with gold
and silver mining concessions stand approximately 267 square miles.
With an attractive share structure and a strong, proven management team, El Tigre Silver Corp.
is poised to identify a resource in an area that from 1903-1938 produced 75 million ounces
of silver and 380,000 ounces of gold. Additionally, their tilling stockpile is currently progressing
to production. Learn more about El Tigre Silver Corp. by visiting their website ElTigreSilverCorp.com
or click through El Tigre's logo on the home page of our website EllisMartinReport.com.
We offer expert opinions only. Find them on our website EllisMartinReport.com. That's
EllisMartinReport.com.
And we're back.
At what point do these public companies that produce silver or gold, at what point do their
assets in the ground and the mill become much more interesting than their stock?
David Morgan: Great question. I think it depends on management. I think some management already
realizes that they're, for all practical purposes, mining money. I think, if you have an asset
like that, that if you own it, meaning you're a shareholder or stakeholder in any given
company that's a producer, I think you're still in good shape. I wouldn't go to sell
my mining shares to get into physical metal only. I think a balance is what is the best
approach. Yeah, they'll be a point where a lot can happen. There are so many possibilities.
Maybe we should leave it for another show, but, as we've seen already, the negative is
you can see nationalization. You can see a given country that had a contract with a mining
entity, such as a Canadian mining entity, in a foreign country with all kinds of legal
contracts that are agreed upon, the Is are dotted, the Ts are crossed, and then only
later to say, "You know what, we're going to, we don't abide by that anymore. Here's
what we're going to do."
So there's that risk, but, on the other hand, some of these situations are just so lucrative
and spread out. This is what I really like about what we do. We pick a lot of our stuff
that has a lot less risk. I like to balance risk with reward and a lot of these companies
that we recommend have multiple jurisdictions. The example I just gave could happen, certainly,
in one of the jurisdictions, but the other six, seven, eight, or nine that this entity
holds properties in would be unaffected, but it's tough.
I mean, these are trying times. You really have to use your head. Even in the sector
of the gold, silver, space that I've done so much work on and am so passionate about,
you have to be smart, and you have to not attach yourself to just one horse. You've
got to have diversification, and you also have to spread out.
I think, in a sector where you've got big money and big companies, medium money and
medium companies, and speculative money and speculative companies, I'll see all too often
people put big money in small companies, and that's usually a way to lose money, and it's
nothing more disheartening, because I've been there when I was young. I mean, quite young,
and putting too much money in some penny mining stock, knowing that you're going to get rich,
and it never happens, only to see the sector take off, and all of these big tier companies
just go up and up and up and up, and your little penny stock is sitting there doing
nothing. That is one of the reasons I started The Morgan Report. I don't want any of my
readers to see that happen to them.
Ellis Martin: Speaking of The Morgan Report, tell us more about it.
David Morgan: Well, just go to TheMorganReport.com or Silver-Investor.com, home of The Morgan
Report. Either URL will get you there. Scroll down to the bottom of the page. You can get
on our Twitter feed. You can get on our free e-list, which I recommend. It's got the Ten
Rules Of Silver Investing you get for free. You get the updates on the weekend.
You also get access to all the videos and all the interviews I do, like this one. That's,
basically, a public service. If you're really serious about the sector, and, you know, you
get the insights that we talked about on today's show, about what I wrote about last month
before this Cyprus thing, again, I didn't have any ESP, but I just feel that it was
inevitable. Sooner or later you're going to see some type of bank run, and I don't think
they're over, and I was kind of warning my readers that, "Here's the facts, folks. You
think you've got all this safety in the banking system. Eric Sprott doesn't think so, and
I don't, either, and here's whyů"
So, you know, those kind of insights are provided every month in The Morgan Report. We have
three levels of service. You can determine what those are on the website, but we have
a pretty good staff, and we do our best to provide service to others to make sure that
they balance the risks with reward and diversify properly in the precious metals arena.
Ellis Martin: Well, David, as always an extremely insightful broadcast. I look forward to more
of the same in the coming weeks. Thanks for joining me today on the program.
David Morgan: All right, Ellis, thank you.
Ellis Martin: I've been speaking with money, metals, and mining expert David Morgan. His
website is themorganreport.com. Listen to this segment again on the podcast page of
our website, ellismartinreport.com or download the entire program on iTunes.
This segment has been sponsored by El Tigre Silver Corp., trading on the TSX Venture Exchange
under the symbol ELS.v and on the OTCQX as EGRTF. El Tigre Silver Corp. is focused on
silver exploration and development in prolific Sonora State, Mexico. Find them on the web
at ElTigreSilverCorp.com.