Gold: Foreign Central Banks Versus The US Government

By Patrick A. Heller
Commentary on Precious Metals Prepared for CoinWeek.com

An important market shift has occurred, as I expected, that now pits a growing number of foreign central banks against the plans of the US government.

The US government, including its primary trading partners and a dwindling number of foreign allies, has a strong interest in holding down gold and silver prices.  The price of gold is an unofficial report card on the health of the US dollar, the US economy, and the US government.  As long as the US dollar appears strong, it can maintain its status as the effective world reserve currency.  This status generates a multi-trillion dollar interest-free subsidy of the US government by other nations.  Further, a strong dollar allows the US government to finance its huge deficits at lower interest rates.

All seeing eye Gold: Foreign Central Banks Versus The US GovernmentIn the past few years, some gold and silver price suppression tactics by the US government have become so flagrant that more foreign central banks have stopped turning a blind eye to the continuing decline in the value of the US dollar.

As a result, central banks are no longer net sellers of gold reserves.  In fact, the latest statistics of acknowledged official gold reserves shows central banks to be net buyers.  And not only are they buying, they are adding reserves at the fastest pace since 1965!  Most of the acquiring central banks are from the undeveloped and developing nations, which need a reserve currency that is safe from collapse.

As a perfect example of what is going on, the price of gold rose 4% on Friday, June 1 after the horrible monthly report for US civilian non-farm jobs was released.  Normally, US government officials who are aware of the contents of this release before it is made public have plans in place to knock down gold and silver prices as the data are released.  This has occurred almost every month for the past five years.

On June first, the results were different.  For whatever reason, the US government did not act to hold down gold and silver prices that day.  In response, gold had one of its highest daily percentage price increases of the past decade.

However, the US government couldn’t allow higher gold and silver prices to continue.  They were forced to wait for a counterattack until the following Wednesday, June 6.  The reason they had to wait is because the London market is the world’s largest gold and silver trading market.  It was closed on June 4 and 5 for the celebration of the Queen’s Jubilee.

The perfect opportunity on June 6 was when Federal Reserve Chair Ben Bernanke was to speak before Congress.  One hour before Bernanke appeared, there was virtually no physical gold available for purchase on the London market.  However, a flood of paper contracts for gold and silver began to be sold.  Within four hours, more than 16.5 million ounces of paper gold was sold.  My understanding is that almost of this gold, which represents more than 20% of recent annual worldwide gold mine output of about 76 million ounces, was purchased by foreign central banks.  Even though the reported purchases of central bank gold reserves are at their highest levels since 1965, central banks such as in China and Russia are aggressively purchasing gold and not reporting anything!

So, while the US government succeeded in knocking down gold and silver prices last Wednesday, all it did was provide another bargain opportunity for foreign central banks to add to their reserves at the ultimate expense of the American taxpayers.

In effect, the efforts of the US government to hold down gold and silver prices are now being actively, though on a low-key basis, opposed by a growing number of foreign central banks.

Last Wednesday, the mainstream media reported the gold and silver prices were down because of Bernanke’s remarks to Congress.  That was absolutely false as the price suppression started an hour before that.  That leaves it for people like me to tell you what really is going on.

And, what’s going on is that markets have shifted so that more foreign central banks are buying gold as part of their planning for the coming decline and possible collapse of the US dollar.  It they are doing so, shouldn’t you do the same?

pat heller Gold: Foreign Central Banks Versus The US GovernmentPatrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed athttp://www.libertycoinservice.com. Other commentaries are available at Numismaster (http://www.numismaster.com under “News & Articles). His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.

About the Author:

Patrick A. Heller was honored with the American Numismatic Association’s 2012 Harry J. Forman Numismatic Dealer of the Year Award. He owns Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com). He is also the financier and executive producer of the movie “Alongside Night”.

25 Comments on "Gold: Foreign Central Banks Versus The US Government"

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  1. V.Kurt Bellman says:

    What I object to, Patrick, is the essential conflict of interest of someone who makes a living selling bullion products, and simultaneously writing what is purported to be “analysis” of bullion markets. It’s nothing of the sort! It is plain and simple “shilling” analogous to carnival barkers with shills planted in the crowd. It’s blatantly self-serving and it’s unethical. There, I said it. I believe Patrick Heller is engaged in an unethical comingling of roles. Analyst analyze and marketers sell, and NEVER should the twain meet. Readers: you won’t find anaysis here, only shilling.

  2. V.Kurt Bellman says:

    I am a numismatist. I get calls asking me to evaluate collections all the time. I make it clear: if they want me to evaluate or appraise, I believe it is unethical for me to offer to buy. If thay want an offer, it is unethical for me to appraise. Patrick Heller wants both roles in bullion products, and it is fundamentally a breach of ethics. My opinion.

  3. V.Kurt Bellman says:

    Oh, by the way, it;s not just Patrick Heller. Writers for Kitco or APMEX or whomever are also comingling roles, and I believe it’s all unethical. Be a dealer or an evaluator. Never both at the same time.

  4. Kurt,
    You raise a valid point that there is a definite risk of conflict of interest of someone writing about a subject who could steer people into doing business with the writer’s/speaker’s company. This could definitely be happening if I were trying to hide the fact that I am a coin dealer or if the analysis I present contains material misstatements, omissions, or I express opinions that time demonstrates to have been ridiculous.

    You do not know my company or me, so I will cut you a little slack in saying that almost everything negative here that you accuse me of is factually incorrect.

    First, I don’t try to hide that I am a coin dealer. It is explicitly stated in the author’s block of each article.

    Second, the articles I write are for general consumption. If I recommend the purchase or sale of particular merchandise in which I deal, i do not advocate that readers deal only with me. There are thousands of fine coin dealers that can help people and they don’t owe me any commission for business they might do for any of my recommendations.

    Third, (which you would not know) I literally receive an average of 5-10 compliments every day on my writings from dealers and the public alike. Back in 1999, a customer bought from my company 1,300 ounces of gold when the spot price was $263. He was contemplating repositioning his assets in a transaction that would have generated a five-figure profit for my company. My recommendation to him was to do nothing, which he follwed, because in my judgment that was the best counsel I could give on his behalf. In my company’s weekly staff meetings, one constant theme that is brought up is that we are advocates for the benefit of our customers. We are not required to do this, but we have found that if you take care of your customers, your customers will take care of you.

    Fourth, all of my writing commitments outside of those for my company were initiated by the other party. I have requests to write or do a radio program for other venues where I simply don’t have the time to accept the offers. Why do these other venues seek my writings. One tells me that I am the most read of all their columnists. Another told me that as soon as I started writing for their website, traffic to the entire website doubled. These outside columns and programs were initiated by other parties who considered that my content was relevant to their audience and that they would appreciate it.

  5. Fifth, I take my role in writing and speaking as having a fiduciary responsibility to my audience, where I dig out what I consider to be important information or express opinions where I genuinely think that markets are headed. I am not and will never be 100% right because no one achieves that standard of accuracy. But I really believe it. Back last December when I forecast that i expected gold to exceed $2,000 and silver $60 by the end of May 2012, I also stated that I personally made significant purchases of silver for my own account. What I recommend matches my personal actions. In 39 years trading precious metals for my own account, I have made sizeable profits but not profits 100% of the time.

    Sixth, I also consider it important to support numismatics in different ways beyond financial support. I do volunteer work for the ANA, ICTA, and other numismatic organizations. I have a singificant public speaking schedule about numismatics which I do as a volunteer. My company has repeatedly done pro bono work for the Michigan Attorney General consumer fraud staff related to deceptive numsmatic marketing practices. Store custoemrs can read a letter from a former Attorney General thanking us for the research that enabled him to get a cease-and-desist order against one company in a case where the US Mint posted the information on its website.

    Seventh, a number of my writing and speaking has to do with consumer protection issues in numismatics. For example, if a potential seller asks how they can be sure they are getting a fair offer on coins and paper money they own, my company’s standard response is that they seek a minimum of two offers. I also warn against purchasing products that are deceptive as to their real intrinsic value. I learned of a new deception today which will be part of my Numismaster.com article early next week. I do warn customers away from some industry fads, even though my own company will not make as much profits by doing so.

    This isn’t exhaustive, but I believe you should have a better idea of how my company serves customers and the public.

    Kurt, I don’t know you personally so I will not speculate on your personal attributes. However, you have made it clear that you consider yourself to be well-educated. From your writings I grasp that you are passionate about your ideas.

    So, I have a proposal. The host of this website has already told you that you are welcome to submit your own writings for possible publication. I urge you to do so, as long as you focus on facts and opinions.

    I suspect that you likely have enough education to understand that an often-practiced arguing technique is where one side is unable to counter the facts of the other side so the tactic changes to attack the parties on the other side. A short way of saying that is that if you don’t like the message, then shoot the messenger. Attacking me does not change the accuracy of the information I present or the validity of my opinions. I would appreciate if you could focus on the content in the future. Thank you for this consideration.

  6. V. Kurt Bellman says:

    I understand and appreciate, Mr. Heller, that the numismatic media does indeed seek out dealers with perhaps potential conflicts of interest to write analyses. They have column inches, or the digital equivalent, to fill. While I ALSO sympathize their their needs in this area, I believe the numismatic media is complicit in the complaint I state above. It’s not entirely you “fault”, if that’s the right word. They share some responsibilty as well. I feel it’s a very bad habit we’ve fallen into as a hobby, however. We have ethical egg on our faces as a hobby in its entirety, in my opinion. In our desire to not “interfere in the market”, we have allowed ourselves to become ethically sloppy, EXTREMELY so in my opinion.

    Whatever ethical warts the financial field has, and they are LEGION and publicly exposed lately, they largely do not suffer from this particular one to the extent our field does. Comingling roles leads to licenses being revoked and indictments, when politicans decide to not be willfully blind to them.

    I went through four years of undergrad work literally sitting in the same classrooms daily as the current SEC chairwoman, MAry Schapiro, and whatever criminal activity the Wall Street crowd still suffers from ISN’T because MAry tolerates ethical lapses. She’s as ethically driven as I am. Our respective elected bosses? Meh, maybe not as much.

    I wish to reiterate, Mr. Heller, my complaint is not uniquely with you. You are an example of an ethically casual attitude that unfortunately infects ALL of numismatics. I’d like to join Laura Sperber in a crusade to root it out and stamp it out throughout this field, in whatever manifestations we find it. We need to seek to be purer than Caeser’s wife.

    • CoinWeek says:

      Since “the media” and CoinWeek by implication, have been painted with the broad brush of being “complicit” and “ethically sloppy” by presenting commentary and opinion which “POTENTIAL conflicts of interest”, I think it only fair that we respond.

      Whereas the financial media outlets have both huge resources and a significant pool of analysts to draw from, the numismatic industry is tiny be comparison. The most knowledgeable people about numismatics and the numismatic markets are either dealers or dedicated collectors who specialize in specific areas of the hobby. It would be, from a practical standpoint, impossible to to publish market reports, commentary and analysis on the rare coin and bullion markets without using all of these resources.

      To make an argument that it is any way unethical for a coin dealer to present market analysis and commentary is absurd, at least in the real world.

      The issue is not one of ethics, it is rather a question of transparency.

      In the 1990s, during the dot com bubble, virtually every financial publication and news outlet paraded a series of “analysts” cross the TV and in print, shilling for the dot com’s, making all sort of fanciful predictions, and presenting themselves as “independent commentators” from the big banks and brokerage firms. It turned out, most had positions and direct financial interest in the dot com IPO’s and stocks that they were so shamelessly promoting.

      The problem was not with the analysis, which in hindsight was mostly wrong, but in the lack of disclosure and transparency, that they had a direct financial interest in the crap they were promoting, often time knowing that what they were saying was all BS. THAT was unethical !

      By contrast, the writers and contributors to CoinWeek, particularly in the commentary , opinion and Market report sections are clearly identified as being dealers, and often times refer to coins thay have bought and sold and or the activity on the bourse floor as they see it from the major shows. This is not and never has been any attempt to hide who these people are or what they do for a living. Is that unethical…….I think not.

      Readers are free to draw whatever conclusions they choose from the market analysis and commentary presented, and CoinWeek as always worked to be 100% transparent in both our disclosure and presentation of the content on the site.

      We have sought out and invited dozens of dealers and collectors from all areas of numismatics to contribute content to CoinWeek, not with the expectation that we will agree with their opinions, but to present as broad a cross-section of opinion and perspective as possible in order to give our readers the knowledge they need to be successful collectors and enjoy the hobby.

  7. V. Kurt Bellman says:

    On the more accusatory side, Mr. Heller, I found your January FUN show prediction of $60 silver (I will carve that out from your gold prediction, which I found far more defensible, yet still wrong.) by the end of May not only “ridiculous”, the adjective you deny above,, but irrational, irresponsible, and unsupportable. I said so in writing then, nearly every few weeks since, and repeat it now again here. It exhibited what happens when people “think with their wannahappen”. $48.48 silver was an unsustainable irrational bubble on April 28, 2011. Predicting $60 any time soon approaches insanity. I’ve been INTIMATELY watching silver markets daily since the late 1970’s. I was in a field then that generated significant silver scrap for refining. IMO, silver is STILL grossly overpriced at the high 20’s today. I frankly don’t see any rational price above $18-$20, if that. Anything more is a remaining persistent speculative bubble.

  8. V. Kurt Bellman says:

    David (CoinWeek),

    You are right. I am an admitted “outlier” on the complaint I make here. Maybe I am in a unique position. My intimate knowledge of silver markets and silver’s commerical (as opposed to speculative)uses for over 40 years makes me PARTICULARLY intolerant of numismatic/bullion market “spinmeisters”, whether here or on Kitco’s or APMEX’s sites, or indeed in Krause or other publications. I claim only a casual knowledge of the gold market, so I reserve my special “venom” for silver “hucksters”.

    I look around at FUN shows, ANA shows, Whitman shows, regional shows, etc., and I can find NO ONE who thoroughly, or even moderately, understands the implications of the demise of traditional imaging (consumer photo plus medical imaging) on the supply and demand fundamentals of silver. Everyone touts elctronics as some great new source of demand. Horse hockey! Nothing has come within a counntry mile of replacing the demand for silver that used to come from Eastman Kodak and Fuji Photo Film ALONE! We lost an elephant sized chunk of industrial silver demand, and everyone wants to point to all the new pussycats. The ONLY demand sector preventing silver prices from tanking like rhodium did a few years back is the speculation/coins/medals/bars market. How much stuff are speculators supposed to keep putting back? What happens when they decide they have enough to suit them?

    And I say this in full appreciation of the upward bias that comes from some people’s currency devaluation expectations. Even with an uptick in monetary inflation, I find even these recently reduced current silver prices unsustainable, almost crazy.

    Don’t get me wrong. I own silver, a fair bit of it. But I own not one single piece of silver BECAUSE it is silver. I collect high end BU silver coins and those of other metals, whose prices are numismatic, not bullion related. I shed every piece of bullion related silver I owned last spring and summer. I also sold bullion gold last year at Chicago ANA and got $1890 an ounce. I’ve done okay.

    I’m sorry, but I feel I know silver myself better than anyone I could read on the internet.

  9. V. Kurt Bellman says:

    Also please note, David, that the publisher of THE monthly bible of the ancient coin market and hobby, carefully manages to avoid the type of conflict of interest I complain of above. And that market is far more tiny than the numismatic market in general is.

    Similarly, the gentleman in the Silican Valley who runs the “This Week in Tech” network of podcasts does not allow anyone who takes a personal investing position in tech stocks to ever be on his network, which discusses those companies. Even on Macbreak Weekly, the commentators are not allowed to own Apple stock.

  10. V. Kurt Bellman says:

    In short, David, while transparency is a good thing, and better than not having it, for me, it’s just not good enough.

  11. V. Kurt Bellman says:

    Let me take the example on step farther. A gentleman I consider a friend owns a very significant fraction of all matte proof Lincoln Cents ever made. He is the “mac daddy” of matte proof Lincoln guys. If he decided to start selling his collection, would it be right for CoinWeek to give him an Expert Column where he wrote weekly about how underpriced matte proof Lincolns are and they’re due to go parabolic in price any week now? Of course not. Yet he IS the prime expert in that sub-field. See the essential problem?

    Now Patrick will correctly point out that the bullion market is different, and he himself is but a tiny portion of the physical delivery bullion market. That’s all true, but for me an entirely too thin a distinction. Conflict of interest is conflict of interest, period! Even when it make one’s business model inconvenient, whether one is a writer or a publisher.

    • CoinWeek says:

      Using the limited scope and and specific assumptions in your crafted example, of course I see the essential problem you are concerned with. We deal with the issue daily in selecting what articles to post, or Press Releases to accept, and many do not see the light of day.

      But expand your example a bit. If your friend offered to provide a series of articles on Small cents and/or Lincoln Cents and share his knowledge of the series,which no doubt is extensive, do you really think that the fact that he has a collection and is selling some or all of it, automatically disqualifies him from talking about the subject in print or online?

      Given his extensive knowledge of both the markets and the participants, who could possible be a better person to write on the subject?

      Doug Winter is a frequent and generous contributor to CoinWeek, and one of the most knowledgeable numismatists on US gold and particularly Branch Mint gold in the industry. He regularly writes quite insightfull articles using examples of coins he has purchased and sold. Nobody has a better handle on this portion on the marketplace than he does.

      It has been my privilege to have known him for over 20 years and there is no one in this industry that has more professionalism and integrity that Doug. Using the terms of your argument, CoinWeek is doing a disservice to our readers and the industry by allowing Doug to post his articles. Really ???????

      Your example only works if you assume that the content of the article is solely being presented for the individual benefit of the writer, and has limited or no value beyond that. In that context, you would be fully justified to take us as the publisher, and the writer to the woodshed. But that is not the case.

      I think you give the readers far too little credit to be able to discern self serving hype in a commentary vs an individual expressing his/her opinion on a subject that they have been involved with for decades.

      That does not mean that the writers are correct in the conclusions they draw, but I’m not so cynical, yet, as to attribute ulterior motives when full disclosure is made as to who they are and what they do for a living. But that is just me.

      • V. Kurt Bellman says:

        Where my friend’s articles should be rejected is PRECISELY when he starts writing about the prospects for big price increases being imminent in the market that he is or plans to be selling into.

        In my opinion, that is presisely what Heller does weekly. As soon as a significant (the key adjective that causes this to be a problem) part of his business consists of wrapping up gold or silver eagles, and sending them out, accepting U.S. dollars in payment, and all the while writing of the imminent collapse of that same dollar he just accepted from a customer, he is in conflict position.

        If my assumption is incorrect that this is a significant part of Heller’s business, I apologize.

  12. Blade says:

    Just and FYI for those of you who have an issue with Mr. Heller regarding a conflict in providing analysis and being a coin dealer: David Hall runs PCGS (Collector’s Universe) and owns David Hall Rare Coins. Please tell me you don’t sell PCGS graded coins or submit coins to PCGS for grading because of this business arrangement!

    • V. Kurt Bellman says:

      Blade,
      Not that it’s quite the same thing, but since you asked, no I do not “sell” PCGS graded coins, and no, I do not submit coins to PCGS. I do occasionally buy, or add PCGS coins to my collection. You see, I’m not a dealer in any way shape or form, not even vest pocket. I am a collector, writer, and presentation giver in coins strictly as a hobby, and by profession I am a economic and legislative analyst for my state legislature. I am subject to the most stringent conflict of interest and ethics laws I’ve ever encountered anywhere. I believe thia is because the “generation” of legislative staff the preceeded me in my state was decimated by indictments and convictions for rampant unethical behavior and conflict of interest.

    • V. Kurt Bellman says:

      Blade,

      The formula is simple: if you make a decent sized chunk of your living selling Item A and accepting US dollars for it, while you are trashing US dollars weekly in print, and constantly predicting the price of Item A will forever keep increasing ad infinitum, no matter what else is going on in the economy, you’re shilling your product and you’re in an unethical conflict of interest position. It could not be simpler.

      Whether you truly believe what you write, or whether you put in fine italicized print at the bottom (hey, how about a 14 point bold disclaimer at the top?) that your are a dealer matters not a whit. You’re shilling and ethically shady.

  13. Paul E says:

    SHEESH! Lighten up, Mr. Bellman. NOBODY is forcing you to read Mr. Heller’s columns nor to act upon any of the information he relates. If you don’t like it, don’t read it, but please stop attempting to squelch free speech.

    In point of fact, in a past exchange along similar lines which I had with Mr. Bellman related to a previous column of Mr. Heller’s, Mr. Bellman avowed his belief in Keynesian economic theory–a theory which I, and many others reject outright as incorrect in basis and a proven failure in practice. I believe you (Mr. Bellman) told me that it is a legitimate use of government power to devalue the savings of individuals to compel them to “invest” elsewhere and get their money off the sidelines. Needless to say, those of us who believe in limited government would vehemently disagree that any such imposition of force is in any way legitimate.

    In short, Keynesian economic theory denies that gold and silver are REAL money. As Mr. Heller appears to be a follower of the Austrian school of economics, which holds that gold and silver are the only REAL basis FOR money and the preservation of wealth, I believe that Mr. Bellman’s ACTUAL problem with Mr. Heller’s columns in NOT about the “conflict of interest” bur rather with the economic ideology presented. As Mr. Bellman NEVER offers any factual information to dispute the purported facts offered by Mr. Heller, I can only conclude that he has none to offer and is merely trying to silence someone who dares to utter and publish information which contradicts Keynesian philosophy.

    Mr. Bellman has every right to his opinion and every right to blather on about it and the virtues of fiat money systems and centrally planned economies, but Mr. Bellman HAS NO RIGHT TO ASK THAT SOMEONE ELSE (Mr. Heller) BE PROHIBITED FROM DOING THE SAME. That is called censorship and it’ll be a sad day when the Mr. Bellmans of the world manage to override the First Amendment or browbeat sources like COINWEEK into submission.

    I sincerly hope COINWEEK continues to allow Mr. Heller to publish his articles on their website. As I said before, NOBODY is forcing anybody to read it. If YOU don’t like it, stop reading it! It’s that simple. But PLEASE leave those of us who find it relevant AND interesting in peace. I don’t need Mr. Bellman to protect me from Mr. Heller’s opinion.

    And, quite frankly, calling Mr. Heller “ethically shady” and a “shill”, while probably not actionable, meets the definition of libel. THAT is something that doesn’t belong on COINWEEK.

  14. V.Kurt Bellman says:

    Paul E,

    Still hunting down heretics, I see. FWIW, my views on Mr. Heller’s work are umm, “legendary” at my home coin club, the host club of the upcoming ANA show in Philly, where I am the President-Elect. I find more concurrence there than dissent, despite the fact that the club is smack dab in the middle of PA’s Amish country, maybe the most politically conservative county in the whole U.S.A.

    I gave an hour long presentation on monetary policy and the Fed there, and got rave reviews. Most coin guys with pot bellies, grey beards and bolo ties have never heard mainstream thought on monetary policy and the Fed’s role. Now they have at Red Rose CC. Some eyes were opened. To me, Austrian School is a completely discredited paradigm. It is nigh onto impossible to find Austrian School taught as accurate at mainstream university settings. It is the subject of on-line “covens” mostly.

  15. V.Kurt Bellman says:

    “I believe you (Mr. Bellman) told me that it is a legitimate use of government power to devalue the savings of individuals to compel them to “invest” elsewhere and get their money off the sidelines.”

    Yes, and you need only look to the Fed’s statutory guidance to find that precise role. Now, you may advocate that such should NOT be within their mandate, but it clearly is. Almost uniquely among the world’s central banks, the Fed DOES HAVE a statutory mandate to maximize employment levels. Most central banks have a singular mission, avoid inflation. We do not. Since we don’t have the national guts to maximize employment by pure industry sector protectionism, like virtually every other country on the planet uses, we do it by INTENTIONALLY affecting investment decisions by manipulating interest rates and even overt currency devaluation, in order to make our laborers more globally competitive.

    That is the tide you’re rowing against. What you decry is in law, not my advocacy. The Fed is to maximize aggregate employment BY STATUTE, not just protect wealth.

  16. Paul E says:

    EGAD, is this even worth the effort to type?

    Probably NOT. But here goes:

    Mr. Bellman, as the Fed itself is unconstitutional, anything they DO is unconstitutional. That’s a FACT. There is no power for Congress to create a “super entity” that operates above the government and outside the law. The fact that they did it and a statute exists to justify it, means NOTHING. Period. End of story.

    Enough time wasted.

    The only thing Mr. Bellman needs to do is STOP READING MR. HELLER’S columns. They clearly upset you, Mr. B. so do yourself a favor, eliminate stress from your life and leave those of us who LIKE to read Mr. Heller’s columns in peace. Best wishes to you. For your sake, I hope you’re right. No need to respond.

    • V. Kurt Bellman says:

      I see now. Marbury v. Madison was a waste of time in 1803. The Supreme Court isn’t needed to declare legislation unconstitutional. All we need in Paul E’s, or Patrick Heller’s or Ron Paul’s word on these matters. What a relief! So what do we do now with that cool building behind the Capitol? Seems a waste to leave it empty.

      Paul, you’ve exhibited why NO ONE in “polite society” takes economic neocons seriously. You claim to be able to declare whatever annoys you to be unconstitutional, despite the fact that only the 9 black robes have had that power for 209 years now.

      IF the Federal Reserve WERE unconstitutional, which it is not (every modern economy has a central bank; at least one, sometimes two [Euro zone]), SOMEONE would have tried the case and won. They haven’t, so you’re demonstrably incorrect … and silly.

  17. V.Kurt Bellman says:

    FWIW, Mr. Heller, we agree on one key point … mostly. We both have 10% in our recomendation level for hard assets in one’s portfolio. I have it at the high end of mine, and it’s at the low end of yours. You express urgency. I believe patience will be rewarded by lower prices over the near term. You’d include silver, I wouldn’t. I am “shorting” silver.

    • V.Kurt Bellman says:

      It’s time to call April 28, 2011 a “market top”. A “dip” on which to buy more as a “buying opportunity” usually doesn’t last 14 months. David Lisot of CoinWeek can confirm this next piece. I accurately called the market top in silver, although not the “top top” and literally called the gold “top top” of last August TO THE DAY. David was there and videoed it.

      My technique is repeatable. When markets act irrationally (the higher an asset goes, the more people want to buy RIGHT NOW) and 180 out of phase with core industry supply and demand fundamentals, an ugly correction is imminent. The coin collecting community is “market top blind” in metals because they so desperately WANT the top to not be in sight. They think with their “wannahappen”, instead of their intellect.

      How else do you explain 1995-1996 silver eagle mintage/sales versus 2010-2011?

      Coin people are seemingly INCAPABLE of doing “buy low / sell high”, instead opting for “buy high / sell at your estate sale after you’re dead”.

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