PART II
QUESTION: Is he breaking the London metals dealers’ hold to suppress the gold price?
FD
ANSWER: I am tired hearing the same constant bullshit about gold is suppress intentionally by dealers and that is why it is not $10,000. I have traded against these people for years. Here is a clip from the Forecast with Barclay, who used to work for me years ago, talking about how he checked me out before taking the job with Goldman Sachs.
Every manipulation that these dealers ever pull off was to the upside – not to suppress gold. They sell 10x more when people think gold is rising, not declining. This BS claim was explained that they were suppressing gold to help the government keep inflation in check. This is total BS!!!!!
Back in the 1970s when I was one of the largest market-makers in gold, I was buying the scrap gold from stores in the country that people were selling to back then and refining it at Engelhard into 100-ounce bars for delivery into COMEX. PhiBro was who you would call to sell to Engelhard, locking in the prices. PhiBro made so much money that they bought Solomon Brothers, the bond house on Wall Street, and took the manipulation tactics to Wall Street, and then that blew up. That is when Warren Buffett stepped in to save the company, and that is how he got pulled into silver manipulation scams of the day.
Nelson was one of my customers. In the early days, we bought silver certificates and redeemed them at the Treasury for 1,000-ounce bars. They generally had a permanent marker applied, often with two numbers, 102.6 and 120. The first implied it was 102.3 oz., and the second may have been the number of silver certificates it represented. Nelson was buying them when silver was $1.29. The U.S. Treasury primarily used 1,000-troy-ounce silver bars for the redemption of silver certificates. These bars were standardized for commercial and governmental use, aligning with industry practices for efficient storage and handling.
- Historical Context: During the redemption period (late 1800s–1968), the Treasury managed large silver stockpiles, often stored in bulk. The 1,000-ounce size was practical for large-scale transactions and storage.
- Commercial Standards: The 1,000-troy-ounce bar was (and remains) a common “good delivery” standard in precious metals markets, ensuring consistency in domestic and international trade.
- Legislation and Practices: Acts like the Pittman Act (1918) and the Silver Purchase Act (1934) involved melting silver coins or purchasing bullion, likely using standardized bar sizes. The Treasury’s silver reserves, including those backing certificates, were held in forms compatible with industrial and monetary needs.
Thus, 1,000-troy-ounce bars were almost certainly the standard, though smaller denominations (e.g., coins) were also available for individual redemptions.
A funny story, I had $1 million credit line by the time I was 21 with the bank. It was funny because you did not have to deal with age or things like that. I had a business with employees and inventory, as well as sales. They granted you credit based on those things. They would assume I was older and just say, “You look good for your age.” I would just reply: “Thank you.”
I went to my local bank and wanted to borrow $2 million to buy silver. I told them I had a client, Nelson, who was going to take silver up dramatically. I may have even said $50 – I don’t recall. I told the bank they could hold the silver, which I thought made sense. I was turned down, and my banker called me in and explained that I should have just said it was for inventory, and I would have been approved. It was illegal for them to lend for speculation. For years, he told people that if he had bought silver himself, he could have retired by 1980.
By February 1979, Hunt’s name was being thrown around all over the place, and they were saying silver was going to $100. That lured people in to buy, and they took silver up to test the $50 between February 1979 and January 1980. All the manipulations I have witnessed in the metals have been to lure people to buy, not sell, and suppress the prices. That is just stupid. Do they not make money by suppressing silver or gold to help the government? Come on.
Nelson was also an avid ancient coin collector. Sotheby’s sold his collection, and it remains a significant sale often referred to. His collection ranked up there with J.P. Morgan and King Faruk.
I have said countless times, gold rises NOT with inflation, but with geopolitical issues. Here was the National Debt Q2 1980 at $877.614bn. As of Q2 2024, it stood at $36,218bn. The debt has risen 40.29% since 1980. Gold hit $875 on January 21, 1980, in the cash market. If gold rose because of inflation or the debt level, then it should be $35,260 per ounce. The gold dealer could buy all of Wall Street with that price.
These people who make up these excuses are unbelievable. Gold pays no interest, which is why they lease it out. Otherwise, it is a dead asset that brings in no income. It is a hedge against the government in times of uncertainty—that’s it. It is not a hedge against inflation or the size of the debt. That has been a great sales pitch, but that is it.
