Latest / Financial Survival Network / Silver Shock: Buy Miners Now? - David Morgan #6427

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Silver Shock: Buy Miners Now? - David Morgan #6427 · Financial Survival Network

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• 0:27
  Speaker 2: Welcome. You are listening to and watching the Financial Survival Network.
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  Speaker 2: This is our second take. I was attempting to go
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  Speaker 2: online with David Morgan, and all of a sudden a
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  Speaker 2: lightning and thunderstorm here in Florida hit. And man, like
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  Speaker 2: everything went dark in the house. But we are back. David,
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  Speaker 2: it's great to have you back on. Been a while.
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  Speaker 2: We've been watching the silver roller coaster, as I call it.
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  Speaker 2: What's your take? What's going on here?
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  Speaker 3: Well, Kerry, we're no longer debating whether the monetary system
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  Speaker 3: is changing. Central banks have already voted with gold. The
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  Speaker 3: only question is whether the public recognizes what the official
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  Speaker 3: sector recognized several years ago. You're one of the leaders
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  Speaker 3: there now, have been for some time. Gold demand has
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  Speaker 3: reached 2,522 tons in the first half of this year,
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  Speaker 3: while dollar value on that demand had a record 380
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  Speaker 3: billion U.S. dollars. Even the World Gold Council expects investment,
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  Speaker 3: Asian demand, and central bank accumulation to remain important throughout
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  Speaker 3: the second half of this year. So I'd say that
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  Speaker 3: we're witnessing what we've always talked about, a new system.
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  Speaker 3: And will it be based on gold or not? I
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  Speaker 3: still have my doubts. I think eventually it may. But anyway,
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  Speaker 3: that's a side issue. But I just wanted to state
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  Speaker 3: that we're no longer, depending on the monetary system, changing.
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  Speaker 3: It is changing.
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  Speaker 2: Yeah, I always thought we would probably wind up with
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  Speaker 2: some type of gold backing eventually, but they would never
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  Speaker 2: do it voluntarily. It will only happen when that is
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  Speaker 2: the only option for investors. for global stability, if you will.
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  Speaker 2: And that's always been my theory, but we'll see who's right.
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  Speaker 2: You know, as Yogi Berra said, prediction is very difficult,
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  Speaker 2: especially when it's about the future.
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  Speaker 3: Exactly. Yeah, no Wilson. No, I'm with you. I mean,
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  Speaker 3: Jim Sinclair is the one that pointed it out. I mean,
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  Speaker 3: his thesis was they'll try everything they can do first
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  Speaker 3: and then they have to go to bowl. So I
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  Speaker 3: think that's more than likely then what we'll see. Yeah.
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  Speaker 2: So, so right now gold, uh, as we're speaking and it's,
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  Speaker 2: I should say the date and time. So everyone knows it's, uh, August, uh,
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  Speaker 2: 27th at, uh, right around noontime gold, just, uh, silver
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  Speaker 2: rather just broke, uh, 69 bucks, uh, gold's trading, uh,
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  Speaker 2: just over 4,600 again. So it seems like we're, we're
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  Speaker 2: finding new support levels for the.
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  Speaker 3: Metals, right? It looks like it to me. I mean,
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  Speaker 3: we saw a nice breakout. August is usually the seasonality
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  Speaker 3: low for gold and silver, but it's not this year.
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  Speaker 3: We've had a really strong couple of weeks, and right
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  Speaker 3: now 4,600 is the support until proven otherwise. So I'd
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  Speaker 3: say based on my really experience more than anything else,
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  Speaker 3: that 4,600 does definitely look like support. Could it get breached? Yes,
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  Speaker 3: it could. But the longer we go in days and weeks, months,
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  Speaker 3: Above that level, obviously, that's support. So whether we get
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  Speaker 3: a pullback, if we do, I think it's an opportunity.
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  Speaker 3: And let me just state this and give it back
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  Speaker 3: to you, Kerry. I doubt we're going to see, you know,
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  Speaker 3: that $ 3, 600 breakout kind of thing. Could we get down below,
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  Speaker 3: you know, into the $ 4, 000, $ 4, 200 level? Possibly. If that
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  Speaker 3: were to occur, and I say if, it's more and
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  Speaker 3: more doubtful it would, it would be a spike low.
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  Speaker 3: I don't see that getting into, like, you know, weeks
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  Speaker 3: and weeks at a low 4,000 trading range. It's just,
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  Speaker 3: I don't see that happening at all.
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  Speaker 2: Me neither, honestly, but you're more of an expert than
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  Speaker 2: I am. Oh, so I'm just going to say, when
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  Speaker 2: you're looking at the sector here, Where do you think
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  Speaker 2: the best opportunities are?
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  Speaker 3: There's no doubt in my mind that the best opportunities
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  Speaker 3: are in the mining sector. Most of these mining companies
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  Speaker 3: are getting into free cash flows that they haven't seen
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  Speaker 3: for decades. And what's interesting is the market has really
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  Speaker 3: not recognized it. Now, perhaps there's some computer programs, algorithms,
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  Speaker 3: some quants, and then, you know, in offices somewhere, and
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  Speaker 3: they see it, but they're not taking action. They aren't
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  Speaker 3: seeing anyone really pouring in, especially from the institutional side,
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  Speaker 3: with a couple of exceptions. So I think it's a
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  Speaker 3: kind of wait and see, and I don't believe it.
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  Speaker 3: To them, meaning the institutional side of mainstream investment classes,
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  Speaker 3: not metals heads, looking at this and saying, I don't
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  Speaker 3: believe it. It can't last. It's an anomaly. Gold's going
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  Speaker 3: to come back down. Well, gold did come back down.
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  Speaker 3: from 5,500 down to what, the 4,000-ish level. I think
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  Speaker 3: I might touch a bit under that very, very briefly.
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  Speaker 3: And silver, of course, moved from the 120 level, which
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  Speaker 3: was a temporary top as far as very, very small
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  Speaker 3: duration and hit about 50% retracement. But again, the free
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  Speaker 3: cash flows were phenomenal. So I think it's only a
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  Speaker 3: question of time where more and more of Wall Street
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  Speaker 3: wakes up to the true value investments, which are the miners.
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  Speaker 3: And one more thing, Kerry, and that's, you know, it's
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  Speaker 3: historic that in a very strong bull market, the miners
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  Speaker 3: actually start to pay off a lot of dividends. Now,
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  Speaker 3: with all that pre-cash flow, you're going to look at
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  Speaker 3: some of these majors, these producers, they're going to look
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  Speaker 3: at all that pile of cash and say, hey, we
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  Speaker 3: need to, you know, replenish our reserves. And they'll see
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  Speaker 3: a lot more M & A activity. We've already had
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  Speaker 3: a few of our members write to us and say, hey, David,
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  Speaker 3: and the rest of the team, what in your list
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  Speaker 3: looks like very strong candidates for merger and acquisition? And,
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  Speaker 3: of course, we don't have a crystal ball. We never
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  Speaker 3: pretended to have one. But we also know what some
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  Speaker 3: of the junior producers have, and they look pretty tasty.
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  Speaker 3: So let's see a lot of that going forward.
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  Speaker 1: Yeah.
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  Speaker 2: Yeah, and the junior producers are the most likely to
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  Speaker 2: get scooped up, right? Because generally, just their stock is
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  Speaker 2: going to be trading at a substantial discount to the majors.
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  Speaker 2: So the majors can scoop up that production. So let's
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  Speaker 2: say the junior conservatively is trading at 15 times earnings
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  Speaker 2: and the major is trading at 25. That's an arbitrage
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  Speaker 2: that no major can pass up, right?
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  Speaker 3: Yeah, and it's also efficient use of capital because they
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  Speaker 3: let the Vancouver guys that are instrumental to the whole
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  Speaker 3: industry to go out and do the whole exploration and
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  Speaker 3: not burn up a lot of cash looking for something
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  Speaker 3: because it's extremely difficult to look. It's extremely difficult to find.
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  Speaker 3: I mean, it's something like one out of 4,000 actually
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  Speaker 3: becomes a mine. So it's money well spent because you
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  Speaker 3: have a sure thing. And in most cases, not all.
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  Speaker 3: When you buy a junior producer, you know it's economic
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  Speaker 3: because you're making money on the ore. And again, most,
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  Speaker 3: not all cases, there's expansion possibilities on the property. So
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  Speaker 3: they're in, let's say, a zone where they've drilled out
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  Speaker 3: an ore body, gone through all the pain and agony
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  Speaker 3: of putting in a mine, maybe a small one, but
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  Speaker 3: they're producing. And now perhaps that land package has two
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  Speaker 3: other areas with potential, you know, more vineyards. or more
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  Speaker 3: economically graded mineralization that will produce a profit to the
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  Speaker 3: bottom line. So there's a lot of advantages for the
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  Speaker 3: majors to do it the way they do it. We'll
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  Speaker 3: let these guys take all the risk. We'll find the
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  Speaker 3: opportunity to buy them. And obviously, as you said, buy
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  Speaker 3: them at a discount in many, many cases. And right now,
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  Speaker 3: that opportunity is like a flashing yellow light on your
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  Speaker 3: traffic signal. It's there for everyone that's in this industry
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  Speaker 3: to see.
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  Speaker 2: So you have like your top 10 acquisition picks?
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  Speaker 3: Don't have that anywhere by the list. I'm sure. Sorry
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  Speaker 3: to interrupt you. We don't have, I don't like long lists.
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  Speaker 3: I mean, you know, God bless Don Durant, and he's,
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  Speaker 3: you know, like him, and he does a good job.
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  Speaker 3: I have nothing negative to say other than we have
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  Speaker 3: a different philosophy. I'm more of a rifle guy. He's
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  Speaker 3: more of a shotgun guy, although he does his homework.
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  Speaker 3: I'm not saying he doesn't, and he's more elite toward
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  Speaker 3: the juniors than I do. Point being, I don't have
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  Speaker 3: 10 on the list. I might have 10 total on
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  Speaker 3: the list, but of those, you know, it's like uranium companies, copper, uh,
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  Speaker 3: still had a rare earth. I think we took it off. Um,
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  Speaker 3: but yeah, but there are probably three on there, you know,
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  Speaker 3: and the way I sort through the way I do it,
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  Speaker 3: or should say my team and I do it is, um,
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  Speaker 3: the best of the best. Are we perfect? No, but we,
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  Speaker 3: and we don't, you know, you, there's, I don't care
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  Speaker 3: who you are in this industry, you're going to miss
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  Speaker 3: one or two, you know, but you don't have to
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  Speaker 3: get them all right to, you know, I mean, the
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  Speaker 3: Super Bowl teams don't have to win every game to
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  Speaker 3: get to the Super Bowl and win it. If you're
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  Speaker 3: winning 80% of them and losing 20%, you've still got
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  Speaker 3: a great track record. That's pretty much what we have
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  Speaker 3: in the top tier and the mid-tier. Our junior picks, honestly,
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  Speaker 3: have been pretty crap. but so has everyone else's, especially
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  Speaker 3: for the whole industry. Because it's been so hard up
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  Speaker 3: until the last year or so. Of course.
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  Speaker 2: Because in the world of high finance and manipulation, it
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  Speaker 2: isn't driving stuff down that counts. It's driving it up
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  Speaker 2: to unsustainable levels and then letting the market do its
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  Speaker 2: own work. If you believe in manipulation, you don't try
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  Speaker 2: to drive silver down to $ 50. You drive it up
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  Speaker 2: to $ 120 so fast that technically it can't support that
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  Speaker 2: level and it collapses on its own, right?
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  Speaker 3: Yeah, I went through that whole spirit. I don't know
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  Speaker 3: if we want to do it here again, but what
• 10:47
  Speaker 3: the pros do when they get those pair of ball
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  Speaker 3: at moves, is they stand aside, and they have a
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  Speaker 3: real advantage that way because now it's just real market conditions.
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  Speaker 3: It's the CTAs and speculators in there. And so they
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  Speaker 3: let it exhaust. So they're standing aside kind of like,
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  Speaker 3: I don't know, watching a horse race and waiting until,
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  Speaker 3: you know, it's the final leg and seeing the top
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  Speaker 3: three in front. So you've got a pretty big advantage
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  Speaker 3: because you can go to the betting window and bet
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  Speaker 3: during the race. Of course, that's illegal. It doesn't happen,
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  Speaker 3: but that's the metaphor for, For standing aside. Now, once
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  Speaker 3: it exhausts on, again, natural market forces, the banks aren't
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  Speaker 3: in there. They've been in there. None of them are
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  Speaker 3: standing aside. Now, when it exhausts, that's the real market.
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  Speaker 3: So then they come in and say, ha-ha. They pile.
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  Speaker 3: They just pile on the shorts. Pile. And that's why
• 11:34
  Speaker 3: you can get a 120 to 65 move in a
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  Speaker 3: day because of the volume. And let's face it. You
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  Speaker 3: think a bullion bank ever has a margin call? I mean,
• 11:44
  Speaker 3: come on. They've got infinite money they can print. And
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  Speaker 3: as a commercial, and this is true in the wheat
• 11:51
  Speaker 3: and soybean oil and cotton, any commercial has a 30% discount.
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  Speaker 3: Because they're commercials, they don't have to use all their
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  Speaker 3: cash for the same trading for a contract to get
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  Speaker 3: a discount because they're commercials. So the commission thinks, and
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  Speaker 3: it would be fair if you're a real if you're
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  Speaker 3: a producer of wheat and you're a farmer and you've
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  Speaker 3: got to hedge your wheat field, then yeah, get a
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  Speaker 3: discount because you're really producing the commodity and therefore it
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  Speaker 3: makes sense that you don't have to put up as
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  Speaker 3: much money because you're going to buy. But of course,
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  Speaker 3: does the bullion bank provide the commodity? No. Mine provides
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  Speaker 3: the commodity. They get extreme leverage. They've got infinite pockets
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  Speaker 3: and They have a lot of advantages that people may
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  Speaker 3: or may not think about.
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  Speaker 2: Well, they were definitely losing money on the way up.
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  Speaker 3: Yeah, I thought. For them to help boost it.
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  Speaker 2: And then at the critical moment, increasing the margin on
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  Speaker 2: the contracts, right?
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  Speaker 3: And that's tip. And then I warned everybody about that.
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  Speaker 3: Sorry if I, you know, I kind of get annoyed
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  Speaker 3: at times because You know, people, well, no one told us, or,
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  Speaker 3: you know, I mean, I've told, I don't know how
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  Speaker 3: many times I've said it, you know, but not everyone
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  Speaker 3: listens to me. There's people that don't know who I am,
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  Speaker 3: and that's fine. It's not about me. It's about the
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  Speaker 3: market itself, how it operates, what the mechanics are, and
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  Speaker 3: being aware of those. Because the more you know about
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  Speaker 3: how a market actually works, whether it's trading silver, anything
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  Speaker 3: in the futures market, in the stock market, in the
• 13:25
  Speaker 3: options market, markets in general, if you understand it, then
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  Speaker 3: you have an advantage knowing that Wait a minute, the
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  Speaker 3: raise of the margin requirements, I'm taking my profits now.
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  Speaker 3: Let it run. And, you know, if you got out
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  Speaker 3: at 80 and it goes to 120, holy crap, you know,
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  Speaker 3: that was another 50% move. What a dummy I am
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  Speaker 3: until it hits 65. And now you've pocketed the $ 80 profit. So, man,
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  Speaker 3: am I ever smart, you know?
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  Speaker 2: You can't get in at the bottom and you can't
• 13:54
  Speaker 2: get out at the top.
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  Speaker 3: That's it.
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  Speaker 2: Bernard Baruch said... I got rich letting the other guy
• 14:00
  Speaker 2: make the last 10%, right?
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  Speaker 3: Exactly. That's right. Yeah.
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  Speaker 2: So realistic expectations really is the key. I mean, it's
• 14:11
  Speaker 2: great every day when you look and you see it
• 14:14
  Speaker 2: going up five, 10 bucks and you've held onto your
• 14:18
  Speaker 2: silver for decades waiting for exactly this moment, but try
• 14:23
  Speaker 2: to sell your physical silver at melt.
• 14:26
  Speaker 3: You can't do it. That was very upsetting. You know,
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  Speaker 3: I mean, it has happened in the past, but it
• 14:32
  Speaker 3: was only for a couple of days or so. And,
• 14:36
  Speaker 3: you know, some of these retailers are not giving their
• 14:40
  Speaker 3: bids are so low that they're making money on any
• 14:43
  Speaker 3: sellbacks at those conditions because they're giving they're asking like
• 14:48
  Speaker 3: nine percent discount to spot market. But also there's only
• 14:52
  Speaker 3: three dollars under. So they're making six bucks at everything
• 14:55
  Speaker 3: you sell to them. But people don't know how to
• 14:57
  Speaker 3: sell to the wholesale market. I can actually help them
• 15:03
  Speaker 3: in that situation. But anyway, yeah, it's a bit of
• 15:06
  Speaker 3: a pain.
• 15:08
  Speaker 2: Hey, I'd love to hear about it myself because I've
• 15:13
  Speaker 2: got access to a couple of people. But for a while,
• 15:18
  Speaker 2: the spreads were so high, 15%.
• 15:23
  Speaker 3: Yeah. I mean, I've been in this market, as people know,
• 15:26
  Speaker 3: that know me over 40 years. I mean, that first
• 15:30
  Speaker 3: silver dollars I collected at 11 years old. But regardless
• 15:34
  Speaker 3: of me, the point I'm making is in all of
• 15:37
  Speaker 3: those 50-something years, you are always able to sell back
• 15:41
  Speaker 3: at spot or very close to it. I mean, I
• 15:44
  Speaker 3: had the first 100-ounce bar I bought. It was probably
• 15:47
  Speaker 3: my 20s. I mean, to get $ 1, 400 together in those
• 15:50
  Speaker 3: days was a lot of money for me. You know,
• 15:53
  Speaker 3: I was making six bucks an hour, gross, not netting
• 15:56
  Speaker 3: that with taxes and Social Security, all that. Anyway, the
• 16:00
  Speaker 3: point is that it was an off-brand bar. It was 999.5 Silver,
• 16:04
  Speaker 3: was it? Ingo Hart, was it? JM, you know, Sunshine.
• 16:07
  Speaker 3: I don't know if they even existed back then. And
• 16:10
  Speaker 3: so when I did sell it, I did have to
• 16:11
  Speaker 3: take a bit under spot, but a little bit, you know,
• 16:15
  Speaker 3: like 10 cents or so. per ounce. And now, as
• 16:19
  Speaker 3: we're discussing, there's these huge spreads. And I think it
• 16:22
  Speaker 3: discourages the retail investor because they look at, well, if
• 16:26
  Speaker 3: I'm paying 10% over and I'm getting 12% under, that's
• 16:33
  Speaker 3: a huge spread I got to make up to break even.
• 16:36
  Speaker 3: Whereas if I was in the SLV, I'm in and
• 16:38
  Speaker 3: I'm out. And yeah, you're not getting silver, but you
• 16:41
  Speaker 3: are getting price exposure and you're not getting clipped on
• 16:44
  Speaker 3: both sides of the bid-ask spread. which I think some
• 16:48
  Speaker 3: of these dealers have actually hurt themselves. That's my opinion.
• 16:52
  Speaker 3: Because the spreads are so wide, people are looking for alternatives.
• 16:57
  Speaker 3: And there are alternatives. Of course, I'll just say it
• 17:01
  Speaker 3: because I think it's important. If you go to eBay,
• 17:06
  Speaker 3: you might see something closer to spot on the bid-ask brand.
• 17:10
  Speaker 3: Not always, but you could probably find it. The problem is,
• 17:13
  Speaker 3: is it real? And I bought some. Yeah. coins off
• 17:17
  Speaker 3: of ebay and uh i didn't buy a lot i
• 17:20
  Speaker 3: was you know pretty savvy i didn't check them immediately
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  Speaker 3: i kept them in my desk drawer and i went
• 17:27
  Speaker 3: to cash them out and they were fake so you
• 17:30
  Speaker 3: got to be careful gotta be kind of unfair but
• 17:33
  Speaker 3: well ebay.
• 17:33
  Speaker 2: Especially i just wrote an article about that so there
• 17:37
  Speaker 2: was one guy who's selling 50 percent under spot yeah
• 17:40
  Speaker 2: so that's well ebay's got their guarantee well There's another
• 17:46
  Speaker 2: scam they had, I don't even know about, where they'll
• 17:48
  Speaker 2: send a package to your zip code, but not to you.
• 17:53
  Speaker 2: And then eBay records it as having been delivered, even
• 17:57
  Speaker 2: though it's not. So I'm on my way literally to
• 18:01
  Speaker 2: the post office to get them to sign a statement
• 18:05
  Speaker 2: that it wasn't delivered to my address. So then I
• 18:09
  Speaker 2: can go back to eBay and get my buyer protection
• 18:12
  Speaker 2: and What I found is, you know, and I did
• 18:16
  Speaker 2: a detailed article about it. Weight is always crucial, right?
• 18:20
  Speaker 2: You got to have a digital scale accurate to like 0.1
• 18:27
  Speaker 2: of a gram, right? And then you got to have
• 18:31
  Speaker 2: a caliper so you can measure the things, right?
• 18:35
  Speaker 3: And then of course- Yeah, you could do water displacement.
• 18:38
  Speaker 3: You can, of course, the sound test is a little tricky,
• 18:41
  Speaker 3: but I've been around it so long. I was in
• 18:44
  Speaker 3: Mike Maloney's office when he was still in L.A. And
• 18:47
  Speaker 3: James Anderson, who's now with, I think, JM Bullion, brought
• 18:52
  Speaker 3: in a counterfeit eagle from China and a real eagle.
• 18:56
  Speaker 3: And he said, OK, big boy, tell me which one's real.
• 18:59
  Speaker 3: And I looked at him and I couldn't tell by looks.
• 19:01
  Speaker 3: So I spun him on the desk and said, that's it. Yeah,
• 19:05
  Speaker 3: you're pretty smart. Maybe, maybe not. But I knew what
• 19:08
  Speaker 3: silver sounds like. It's got a definite ring to it.
• 19:11
  Speaker 3: That was the only way. Without a scale, without a
• 19:15
  Speaker 3: water displacement. And now they've got these guns that aren't
• 19:18
  Speaker 3: that expensive. I mean, the local dealer does a lot.
• 19:22
  Speaker 3: He just hits the gun, and it tells him. And
• 19:26
  Speaker 3: I had a friend that had some gold, and he
• 19:29
  Speaker 3: was looking to cash out, and he got some bills
• 19:32
  Speaker 3: to pay. And so he gave it to me, and
• 19:35
  Speaker 3: it was pretty heavy. I couldn't tell. I didn't have
• 19:37
  Speaker 3: this stuff at home. And I went down, and I
• 19:39
  Speaker 3: filmed it with my camera. to show them, and it
• 19:44
  Speaker 3: looked gold, and it had every element in it except gold.
• 19:47
  Speaker 3: It was really funny. you know iron and i had
• 19:50
  Speaker 3: all kinds of metals none of it gold yeah yeah.
• 19:54
  Speaker 2: I've seen it myself you know it's weird like i'm
• 19:58
  Speaker 2: usually buying like quarters i'm not so much buying rounds
• 20:03
  Speaker 2: because i don't trust them although i bought them from
• 20:06
  Speaker 2: trusted sources yeah and quarters and Kennedy halves. The Franklins, evidently,
• 20:14
  Speaker 2: there's some problems with counterfeiters, but generally that chime. So
• 20:19
  Speaker 2: I went through and I actually found two Kennedys that
• 20:24
  Speaker 2: were fakes.
• 20:25
  Speaker 3: Wow.
• 20:26
  Speaker 2: And the first one, and this is out of hundreds,
• 20:30
  Speaker 2: and the first one I dropped. I dropped it and
• 20:34
  Speaker 2: it went clunk, like you call them Johnson slugs. The
• 20:40
  Speaker 2: way I got into this whole thing, I told you
• 20:42
  Speaker 2: this story years and years ago. I mean, this was
• 20:45
  Speaker 2: in 1964, 65, and my brother comes into the kitchen
• 20:51
  Speaker 2: and he takes like old quarters and drops them on
• 20:54
  Speaker 2: the floor and you hear the chime and then he
• 20:58
  Speaker 2: drops the slugs and it's clunk. And this was exactly
• 21:03
  Speaker 2: the same thing. It's hard for the chimes. Sometimes they
• 21:06
  Speaker 2: can duplicate it partly. but they can't, you know, it's
• 21:11
  Speaker 2: also a profit potential. How much money can you make
• 21:15
  Speaker 2: doing junk silver as opposed to, you know, one ounce
• 21:21
  Speaker 2: fake rounds.
• 21:22
  Speaker 3: Or silver eagles, right? Yeah, I mean, silver is so,
• 21:27
  Speaker 3: you know, undervalued that, you know, it doesn't really make
• 21:30
  Speaker 3: sense to counterfeit silver, although it's done and it is,
• 21:33
  Speaker 3: you know, somewhat profitable, but God, the profits in gold.
• 21:37
  Speaker 3: I mean, if you take a $ 20 gold piece, you
• 21:41
  Speaker 3: get it manufactured with silver, and then you gold plate
• 21:45
  Speaker 3: it five microns thick, and you sell that thing for
• 21:49
  Speaker 3: five grand because it's rare, and you slab it in
• 21:52
  Speaker 3: a piece of plastic, man, that's where the money's at.
• 21:55
  Speaker 3: And that doesn't happen like all the time, but it
• 21:58
  Speaker 3: does take place.
• 21:59
  Speaker 2: There's definitely fakes, and that's why you've got to weigh
• 22:03
  Speaker 2: and measure and use the water test. when you can
• 22:08
  Speaker 2: right it's not always practical uh it's only so i
• 22:11
  Speaker 2: should even do it.
• 22:13
  Speaker 3: Well i got high school chemistry like everybody and you
• 22:16
  Speaker 3: know i thought well one of my friends had a
• 22:19
  Speaker 3: a thousand ounce bar and he was count you know
• 22:22
  Speaker 3: cashing it out and again it was it was from
• 22:24
  Speaker 3: the comebacks but you know is it real or isn't
• 22:28
  Speaker 3: it it was funny because the dealer down in la
• 22:31
  Speaker 3: he had a backup And so all he did was
• 22:35
  Speaker 3: a water displacement. So he took the 1,000-ounce bar, put
• 22:38
  Speaker 3: it in the bathtub that was already calibrated. Yep. It's over. Okay.
• 22:42
  Speaker 3: Paid him. That one's infallible. Yeah. That one's infallible.
• 22:48
  Speaker 2: Yeah, it's hard when you have worn coins and you're
• 22:51
  Speaker 2: using the caliper on them.
• 22:52
  Speaker 3: Yeah. Well, I figured out what you said. We're on
• 22:55
  Speaker 3: an interesting discussion, but it needs to be heard, I think,
• 22:58
  Speaker 3: and people will decide. But, you know, if you make,
• 23:01
  Speaker 3: let's say, you know, four counterfeit Kennedys in a Kennedy bag, okay?
• 23:08
  Speaker 3: But if you do four times, you know, 100,000 bags,
• 23:11
  Speaker 3: you know, that adds up to a pretty good profit,
• 23:14
  Speaker 3: you know? But it's kind of a volume thing. I mean,
• 23:16
  Speaker 3: of course, if you sell them on eBay, right, you know, then,
• 23:20
  Speaker 3: you know, buyer beware. And, you know, I just, I mean,
• 23:24
  Speaker 3: I didn't get, you know, I got had. on those coins,
• 23:28
  Speaker 3: they were, I'll just be more specific, they were Chinese pandas.
• 23:33
  Speaker 3: And they were selling pretty much, they were selling at
• 23:35
  Speaker 3: the panda price. But I just bought a few of them,
• 23:40
  Speaker 3: and then when I brought them into my local coin
• 23:42
  Speaker 3: dealer here, and I put them on the counter, and
• 23:43
  Speaker 3: he looked at the dates, he goes, holy crap, man,
• 23:45
  Speaker 3: you know what these things are worth. I said, yeah, they're,
• 23:48
  Speaker 3: you know, and then he did the gun test, and
• 23:52
  Speaker 3: it was like, they're not worth it. Not with the
• 23:54
  Speaker 3: end of it.
• 23:55
  Speaker 2: Yeah.
• 23:56
  Speaker 3: Yeah. Yeah.
• 23:57
  Speaker 2: So you got to be aware for sure. And yeah,
• 24:02
  Speaker 2: you just don't take it at face value. The good
• 24:04
  Speaker 2: thing about eBay is once you prove to them it's
• 24:06
  Speaker 2: fake or you just say it doesn't conform to the listing,
• 24:10
  Speaker 2: you send it back. My situation now is a little
• 24:12
  Speaker 2: bit different. I even sent out a newsletter. I bought
• 24:15
  Speaker 2: it for 50 cents below 50 percent of spot melt value.
• 24:20
  Speaker 2: And I said, this is too good to be true,
• 24:22
  Speaker 2: but I'm protected. I didn't expect to see the scam
• 24:27
  Speaker 2: where it appears to have been delivered to my house,
• 24:31
  Speaker 2: but really wasn't. But this guy was caught. I'm sure
• 24:36
  Speaker 2: that they froze his account. Four people complained that he
• 24:40
  Speaker 2: was selling fake coins. So, you know, we see this
• 24:44
  Speaker 2: over and over again. The moral of the story is,
• 24:48
  Speaker 2: If the deal seems too good to be true, it is. Sometimes,
• 24:53
  Speaker 2: you know, like when the real junk, the 40% junk
• 24:56
  Speaker 2: and the war nickels, you can get those really great deals.
• 25:00
  Speaker 2: And the thing is, it's not profitable really for counterfeiting
• 25:05
  Speaker 2: 40% silver Kennedys and 35% war nickels.
• 25:10
  Speaker 3: I've never heard of anybody doing it.
• 25:12
  Speaker 2: Kennedys, supposedly, they've gotten some fake ones, but I don't
• 25:17
  Speaker 2: believe it's widespread.
• 25:18
  Speaker 3: I doubt it. Like I said, there's just not enough
• 25:21
  Speaker 3: juice in a silver coin like there is in a
• 25:24
  Speaker 3: gold coin. Although, again, they are counterfeit. I'm not questioning
• 25:29
  Speaker 3: you at all. Normally, it's like the higher-end NUMI type,
• 25:34
  Speaker 3: like the Pandas. The most counterfeited coin is the Silver
• 25:38
  Speaker 3: Eagle for silver and all the silver products. There are
• 25:42
  Speaker 3: counterfeit silver bars. That was pretty popular. at the end
• 25:46
  Speaker 3: of the bull run, late 70s, a lot of Engelhards
• 25:50
  Speaker 3: were cored out and filled with lead or zinc. I
• 25:54
  Speaker 3: think it was lead, German recast.
• 25:58
  Speaker 2: Yeah, that's true. You know what else is interesting that
• 26:01
  Speaker 2: I found? Is that even on relatively unworn coins coming
• 26:06
  Speaker 2: from the U.S. mint, there is variance on the weight.
• 26:12
  Speaker 2: I just assume if it's minted, Every single coin is
• 26:16
  Speaker 2: exactly the same weight, the same circumference, or same diameter,
• 26:21
  Speaker 2: and the same thickness. But that's not true.
• 26:24
  Speaker 3: No. Well, what an interest. No one's ever asked me this,
• 26:28
  Speaker 3: and thanks for bringing it up. So I've probably been
• 26:31
  Speaker 3: to as many mines as anybody in the industry. But
• 26:34
  Speaker 3: I've probably also been to more depositories and mints than
• 26:38
  Speaker 3: probably anybody. I don't know for sure, but I've made
• 26:42
  Speaker 3: the rounds. So one particular, I won't name here, it
• 26:46
  Speaker 3: is in the U.S. There is, and so this is
• 26:50
  Speaker 3: in the U.S. You know, it's extruded. I won't go
• 26:52
  Speaker 3: through the whole process, but everything is cut, stamped, and
• 26:56
  Speaker 3: then edged, and then it's stamped with a government or independent,
• 27:01
  Speaker 3: meaning a round and not a government coin. So as
• 27:04
  Speaker 3: they're coming down the belt, Kerry, they're weighed and measured,
• 27:08
  Speaker 3: even though they look identical, but the computer... finds them
• 27:14
  Speaker 3: if they're not within the tolerance. It's amazing how many
• 27:17
  Speaker 3: come in from the exact same machine. Everything's done the
• 27:21
  Speaker 3: same that do not fit the tolerance and get pushed
• 27:24
  Speaker 3: off into another pile. And those things get melted down
• 27:28
  Speaker 3: and go through the whole process. It is shocking to me.
• 27:31
  Speaker 2: Like the variance could be like three tenths of a gram.
• 27:37
  Speaker 2: You could see a three tenths of a gram difference.
• 27:41
  Speaker 3: I forget what it is. I just interrupted you. Sorry.
• 27:44
  Speaker 3: But whatever the tolerance is, it's outside the tolerance. And
• 27:48
  Speaker 3: it wasn't 10%. But it might have been 5%. It
• 27:52
  Speaker 3: was amazing. How can it be like that? But, you know,
• 27:55
  Speaker 3: when you extrude it, you know, pressure. I mean, there's
• 27:58
  Speaker 3: a lot of variables when you stamp these things out.
• 28:01
  Speaker 3: And it was either tolerance or they're not. And so,
• 28:06
  Speaker 3: you know, that's just the deal. But I was like,
• 28:08
  Speaker 3: holy crap. Because... I hadn't seen it done for a while.
• 28:15
  Speaker 3: And then when I noted that, I'm like, holy, you know, yeah,
• 28:18
  Speaker 3: it's part of the cost of making a silver coin.
• 28:23
  Speaker 3: It's like, yeah, we got to recycle these.
• 28:25
  Speaker 2: And the older coins, they didn't have the computerized weight
• 28:31
  Speaker 2: so that variances were higher. So go back to the 60s.
• 28:34
  Speaker 2: That's 60 years ago. There wasn't any computerized metal working
• 28:39
  Speaker 2: tools back there. So they had sensitive scales, but not
• 28:45
  Speaker 2: in real-time production.
• 28:47
  Speaker 3: Well, they all came out as a process, just like
• 28:50
  Speaker 3: these coins I'm talking about. And so, you know, common
• 28:55
  Speaker 3: sense would say, well, it was all extruded from this
• 28:57
  Speaker 3: plate and stamped by that machine and pressed by that press,
• 29:01
  Speaker 3: and so they're all the same. But the truth is, no,
• 29:03
  Speaker 3: they're not. And they do vary. But, you know, they
• 29:07
  Speaker 3: all looked at it. And they're approximately. I mean, you know,
• 29:11
  Speaker 3: government's pretty strict on what the variances can be. But
• 29:18
  Speaker 3: it's interesting to note, no one's ever asked me that before,
• 29:21
  Speaker 3: but it's true.
• 29:22
  Speaker 2: I never, well, you're the, you are the silver guru
• 29:26
  Speaker 2: after all. You spent your whole life on this. So
• 29:29
  Speaker 2: if I'm going to talk to anybody about it, It's
• 29:31
  Speaker 2: going to be you. I mean, Andy Sheckman's always around.
• 29:34
  Speaker 2: We live near one another. But I was shocked for
• 29:39
  Speaker 2: me because... a whole thing happened with my son cashing
• 29:43
  Speaker 2: in some silver coins. They pulled a fast one on him.
• 29:46
  Speaker 2: They said they were, you know, these were coins that
• 29:49
  Speaker 2: came from First Majestic.
• 29:53
  Speaker 3: All right. And we know what mint they used. Mint them.
• 29:57
  Speaker 2: So the variances were huge. And they told him that
• 30:02
  Speaker 2: they had clay in it.
• 30:04
  Speaker 3: Well, then I'm like.
• 30:05
  Speaker 2: Freaking out because I have a lot of these. Wow.
• 30:09
  Speaker 2: This was in Uring. They took them. They cut one open.
• 30:12
  Speaker 2: They pretended to cut it open. But obviously, they did
• 30:15
  Speaker 2: a bait and switch. And he wound up selling it
• 30:18
  Speaker 2: for like half.
• 30:19
  Speaker 3: Of what it was worth. I was pissed.
• 30:21
  Speaker 2: But I said, there's your lesson. Don't trust people. You
• 30:26
  Speaker 2: go to a flea market. This is what happens. You know,
• 30:29
  Speaker 2: I have a flea market nearby, but the guy's got
• 30:31
  Speaker 2: the gun. So when I need to verify something, I
• 30:35
  Speaker 2: go to his booth. He shoots the gun at it.
• 30:37
  Speaker 2: And I said, would you buy these?
• 30:40
  Speaker 3: Yes. All right, good.
• 30:41
  Speaker 2: Then I don't want to sell them.
• 30:44
  Speaker 3: Yeah, I forget what those guns retail for now. They
• 30:46
  Speaker 3: used to be very expensive. Ten grand. Yeah. Ten grand.
• 30:50
  Speaker 3: You know, if you're doing a lot of business, like,
• 30:52
  Speaker 3: I mean, the guy, there's several coin dealers in Spokane.
• 30:56
  Speaker 3: But the main one, I've been here for, Not forever,
• 31:00
  Speaker 3: but for a very long time. I mean, of course,
• 31:02
  Speaker 3: they know me, whatever. It's not about me. But, I mean,
• 31:05
  Speaker 3: it's just so simple because all the guys got one.
• 31:07
  Speaker 3: In fact, I sold some jewelry around the $ 3, 600 silver.
• 31:14
  Speaker 3: And that was the new high at the time. And
• 31:17
  Speaker 3: I had three wedding rings. I had my old one,
• 31:19
  Speaker 3: my dad's wedding ring, and one from my first marriage
• 31:23
  Speaker 3: or something. And I go, man, I'm going to lose
• 31:26
  Speaker 3: these things. I'm going to cash them out. So I
• 31:29
  Speaker 3: went down there and he shot the gun. He goes,
• 31:30
  Speaker 3: this one's 14 karat. This one's 18 karat. This one's
• 31:33
  Speaker 3: 22 karat. Blah, blah, blah. Printed it out. Said the
• 31:37
  Speaker 3: melt value is this. We'll give you this. God, I forget.
• 31:41
  Speaker 3: I was expecting like 500 or 600 bucks. It's like $ 1, 350.
• 31:44
  Speaker 3: I'm like, God, $ 3, 000? Rand? Give me the money. I
• 31:49
  Speaker 3: had to do a fence bill. I mean, I didn't
• 31:51
  Speaker 3: need the money, but I was like, I don't want
• 31:53
  Speaker 3: to lose it. I don't want to lose these little
• 31:55
  Speaker 3: pieces of gold. I decided to screw it. I had
• 31:57
  Speaker 3: to cash them out, and I did. Totally. Very happy. Yeah.
• 32:02
  Speaker 3: All right.
• 32:02
  Speaker 2: TheMorganReport.com. Subscribe to it. You can get David's top picks there. Hey,
• 32:11
  Speaker 2: which sector are you liking the best right now as
• 32:15
  Speaker 2: far as mining companies?
• 32:17
  Speaker 3: Yeah, we're doing a new one. I'm going to be
• 32:19
  Speaker 3: publishing this weekend. And we got a floor spar. mine
• 32:27
  Speaker 3: that is quite a unique story. We wrote it up
• 32:30
  Speaker 3: once before. It went up about six-fold. It's still a
• 32:34
  Speaker 3: double for when we first wrote it up. It's for
• 32:36
  Speaker 3: aggressive accounts only. It is a speculation. But this is
• 32:40
  Speaker 3: a product that no one really knows about. We've got
• 32:43
  Speaker 3: kind of the inside track on it again. So that's
• 32:46
  Speaker 3: what we'll be writing about this weekend. It's already done.
• 32:49
  Speaker 3: I'm going to be publishing this weekend. And then just
• 32:52
  Speaker 3: as a reminder, because, you know, believe it or not,
• 32:54
  Speaker 3: business has been slow. A lot more competition, a lot
• 32:58
  Speaker 3: of free stuff on the web. And I'm all for competition. Oh,
• 33:00
  Speaker 3: tell me about it. But when you signed up as
• 33:03
  Speaker 3: a new member of the paid edition of the Mortgage Report,
• 33:07
  Speaker 3: we do a one-on-one. And say we. It's not one
• 33:10
  Speaker 3: of my staff. It's not one of my junior guys.
• 33:12
  Speaker 3: It's me. So we go through everything for a half
• 33:15
  Speaker 3: an hour. And it's on a Zoom call if you want.
• 33:18
  Speaker 3: If you want a phone call, that's fine. Some people do.
• 33:21
  Speaker 3: most want a Zoom call. I can share my screen,
• 33:25
  Speaker 3: show you what we're doing, make sure you've read a
• 33:27
  Speaker 3: couple of the back issues. And that's all part of
• 33:32
  Speaker 3: being a paid member. But the way I set it
• 33:35
  Speaker 3: up is that there's still a 60-day money-back guarantee. So
• 33:39
  Speaker 3: you could go through everything with me, have the one
• 33:42
  Speaker 3: half-hour consultation one-on-one, and decide it's not for you and
• 33:46
  Speaker 3: still not be charged. So That has happened a couple times,
• 33:50
  Speaker 3: and that's fine. I mean, I really trust these people.
• 33:52
  Speaker 3: Some people are better off, and I've told this to
• 33:56
  Speaker 3: many people over the years. They called up or got
• 33:59
  Speaker 3: a hold of me by email. They think they want
• 34:01
  Speaker 3: to join, and this is guidelines. This is for aggressive do-it-yourselfers.
• 34:09
  Speaker 3: This is not a money manager type of situation. And
• 34:12
  Speaker 3: for those people that are better served by that, I
• 34:15
  Speaker 3: say find a good gold mutual fund and buy it. Now,
• 34:18
  Speaker 3: I beat every mutual fund almost every year in a
• 34:22
  Speaker 3: bull market. In a negative market, I'm equal to maybe
• 34:26
  Speaker 3: a slightly worse than. But, you know, it's just by
• 34:29
  Speaker 3: the mutual fund. And yeah, they get a small fee,
• 34:32
  Speaker 3: but it's, you know, sleep well at night. It's a
• 34:34
  Speaker 3: good jerk of top tier, mid tiers, and some juniors,
• 34:37
  Speaker 3: which is basically what the Morgan Report does. And it's
• 34:40
  Speaker 3: hands off. You got to send them a check and
• 34:42
  Speaker 3: then you can add to your you know, your position is,
• 34:45
  Speaker 3: you know, you got better income or get a windfall
• 34:47
  Speaker 3: or whatever. So I've done that a lot. Well, you're,
• 34:50
  Speaker 3: you know, God, you're different. You're not like wanting my
• 34:53
  Speaker 3: money and go, no, I'm here to serve others. And
• 34:56
  Speaker 3: that serves you best rather than, you know, I have
• 34:59
  Speaker 3: a brokerage account. I've never traded stocks before. The mortgage
• 35:01
  Speaker 3: report is in for you, you know, and really, I go, no, really.
• 35:05
  Speaker 3: And so anyway, I just, I've never threw that out
• 35:07
  Speaker 3: before in the public, but I say it privately, obviously. But, Terry,
• 35:11
  Speaker 3: it's just been good to be a friend of yours
• 35:13
  Speaker 3: and get on your show from time to time. High class.
• 35:15
  Speaker 3: I'm certainly glad we got to cover some of these
• 35:18
  Speaker 3: kind of off-the-wall topics that no one's talked about, but
• 35:21
  Speaker 3: they are important to know. Yeah, well, they are, because
• 35:24
  Speaker 3: one thing I want to emphasize is you can get
• 35:27
  Speaker 3: great deals on eBay, because especially when the metal prices
• 35:31
  Speaker 3: are going up, somebody lists an item on on a
• 35:35
  Speaker 3: 30-day sale or a 10-day sale, and the price of
• 35:40
  Speaker 3: silver has gone.
• 35:41
  Speaker 2: Up $ 5 an ounce, 10% when they first listed it,
• 35:45
  Speaker 2: and they listed it under spot anyway, and this is
• 35:48
  Speaker 2: a legitimate deal.
• 35:49
  Speaker 3: That's a real deal.
• 35:51
  Speaker 2: I teach people. I actually have a list, and people
• 35:56
  Speaker 2: can hit me up for it anytime. Just questions about
• 36:00
  Speaker 2: this interview, anything.
• 36:01
  Speaker 3: Else, kl.carylutz.com.
• 36:04
  Speaker 2: The MorganReport.com links in the show notes. David, always a pleasure.
• 36:09
  Speaker 2: And thanks for being a good friend.
• 36:12
  Speaker 3: My pleasure. Thank you, Kerry.
• 36:13
  Speaker 1: Thanks for listening to Kerry Lutz's Financial Survival Network, your
• 36:18
  Speaker 1: solution to today's trying times. For the latest, go to FinancialSurvivalNetwork.com.
• 36:24
  Speaker 1: Financial Survival Network, now more than ever.