PMBug's Vault

Sounds crazy, right? Maybe it is. Maybe it isn't. I'll explain my thinking and you decide... Four Years of Structural Deficit Draining Vault Inventories Silver has been in a structural deficit for the last four years. Demand (mostly industrial, investment demand is fairly insignificant in comparison) has outpaced supply (mining and scrap recycling). This deficit has been running in the neighborhood of 180 to 200 million troy ounces per year. The structural deficit is draining the LBMA + COMEX of their vaulted stocks. The run rate for the remaining vaulted stock appears to be somewhere between 2-10 years depending upon what numbers you look at and what assumptions you make about mining production (fairly fixed - ramping up...

Chatter about CBDCs has grown in the last few years. Central banks around the world are engaged in various projects to design, test and integrate CBDCs for future replacements of their national paper/coin currencies. In the absence of any compelling justifications, pundits proclaim CBDCs as a solution in search of a problem. However, CBDCs are being developed for important reasons. Central banks just can't openly tell the public about it. If the public really understood the issue, they would rebel. And they should rebel. Central banks are looking to CBDCs to effect a new world order with a medium that is a bastardization of money. The USA shot their wad with the weaponization of the SWIFT system in effecting economic sanctions...

The Six Characteristics of Money We are roughly a century into the grand experiment with a central bank fiat monetary world order (half a century on a pure fiat system). For many people, pure fiat money is all that they have ever known. The lessons of history with respect to money have been ignored, but not forgotten. Over thousands of years of civilization, people have used many different mediums for money. The accumulated wisdom of those years are often distilled into these simple truths: https://www.dallasfed.org/~/media/documents/educate/everyday/money.pdf These functions and characteristics of money used to be well understood, but do not seem to be taught in schools any more. Fiat money has failed to fulfill it's...

I recently posted a comment on X that I thought was rather self evident: However, it generated a lot of responses which indicated otherwise. The responses to the post got to be a bit much to respond to individually and X really isn't a good medium for long form discussion with many participants, so I'm attempting to provide more clarity on my comment here. Lummis/Saylor advocating sell gold to buy Bitcoin Back in July, Senator Cynthia Lummis introduced the Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act in the U.S. Senate. It is a bill that calls for selling the US Treasury's gold reserves and using the resulting funds to acquire Bitcoin instead. Michael Saylor recently...

The crypto industry recently held a Consensus 2023 industry event in Austin, Texas. It was a 3 day event featuring numerous panels/sessions with speakers/representatives from both crypto and non-crypto companies/industries as well as representatives from various government regulators. The event covered many topics including: efforts by large, mainstream companies like PepsiCo that are looking for opportunities in the crypto space a merger of traditional finance with blockchain governance plans by large banks to innovate in tokenizing traditional-financial assets Crypto isn't just the wild west purview of money launderers and dark web ne'er do wells. There is serious financial/corporate activity happening in the crypto world now...

SAULT and GAULT - What are they? I have written about GAULT - Gold as Unpegged Legal Tender previously. Similarly, SAULT is Silver as Unpegged Legal Tender. Essentially, the idea is to establish the precious metals as a parallel currency (at market value) to the Federal Reserve's fiat dollar by removing tax disincentives and establishing modern payment rails. The Constitution provides instruction (Article I, Section 10, Clause 1) for individual States to make gold and silver coin (and ONLY gold and silver coin) legal tender. Federalist paper 44, authored by James Madison under the pseudonym Publius, makes clear the Founding Father's intent was to prohibit the use of paper currency. I'm aware of several groups that are (and have...

America is losing its petrodollar partner and will be watching her dance with others. Recent news about the Kingdom of Saudi Arabia (KSA) entering into a defense pact with nuclear armed Pakistan got me musing about the past this morning. They say that hindsight is 20/20 and looking back at the past, it's somewhat obvious to identify the milestones that marked the road we have traveled. I don't want to delve into them in great detail here, but some of the more significant ones related to the issue at hand here are:The Federal Reserve was created in December 1913. Their fiat dollar was convertable into physical gold and silver. World War I breaks out in 1914. America joins in 1917. The war expands the Federal Reserve's growth and...

I have posited for years that our modern day monetary system is insane. Aside from the obvious problems with moral hazards, the inflation tax and oh so many bubbles, lately events have conspired to illuminate a glaring example of the immorality of the system. First, let's consider the devastating effects of inflation on the less than top 25% (percentile of wealth). Following the fiscal and monetary policy responses to the Covid 19 pandemic, we are currently experiencing a period of high global inflation. Central banks around the world have been reversing course from expanding balance sheets (QE) and Zero Interest Rate Policies (ZIRP) and are now contracting balance sheets (QT) and raising interest rates in efforts to fight inflation...

At the beginning of the year, the Exchange For Physical (EFP) spread for silver (calculated as COMEX futures minus LBMA spot) rose dramatically from near zero to almost $1. This was largely attributed to fears or confusion over USA tariff policy and the potential impact of same on moving physical silver from London to New York eating into the profit of the arbitrage trading that bullion banks have long enjoyed. The bullion banks started moving physical silver en masse to New York - COMEX vaults saw massive inflows and the LBMA saw heavy outflows. As tariff fears subsided around February and March, The COMEX continued to see massive inflows while the LBMA claimed the outflows had stopped. In April I wrote Silver Presents the...

By all accounts, silver has been in a structural deficit, with global demand exceeding global production, for over four years now: Above ground supply has made up the difference with inventory draining from major vaults in the COMEX and LBMA systems since early 2020. COMEX silver vault inventory: LBMA silver vault inventory: Tariffs, EFP Spreads and Monkey Wrenches In late November, 2024, President Trump announced 25% blanket tariffs were to be imposed on goods from Canada and Mexico, and 10% (additional) on goods from China. There was no clarification on whether precious metals (or anything else) would be exempt from the tariffs. Additionally, President Trump signalled that further tariffs were likely for Europe and other...

Last night, I participated in an impromptu, late night Spaces on X hosted by SilverDegen and (at various times) 20-40 members of the X #silversqueeze community. At the start of the session, some folks were asking some very basic questions and it occurred to me that there are a lot of people that haven't been following this silver story as closely as I have for the last few months or years. There seems to be some confusion on the mechanics of what is happening in the silver markets as well as the goals and potential impact of a retail #silversqueeze effort. I'm going to explain everything as clearly as I can with limited jargon and technical details. Feel free to add a comment if I missed an important detail or didn't explain...

Every year on April 7, silver advocates and sound money supporters around the world will come together to celebrate International Silver Day, a newly launched global initiative that honors silver’s historic role, modern relevance, and future potential. Why April 7? The date was chosen for its symbolic tie to silver’s atomic number: 47 on the periodic table. Known by the symbol Ag, silver has been part of civilization for over 5,000 years, used as money, adornment, technology, and a cornerstone of trade. Recognizing it with an official day was long overdue. A Vital Metal, Long Overlooked Silver is unique: it’s both a monetary metal and an industrial powerhouse. It was used in coinage for centuries, trusted by empires from the Greeks to...

Ripple (XRP) has been a steadfast warrior against the State in America's War on Crypto for many years. In July of 2023, they won an important victory in court against the SEC: https://www.reuters.com/legal/us-judge-says-sec-lawsuit-vs-ripple-labs-can-proceed-trial-some-claims-2023-07-13/ This victory established a legal precedent that paves the way for the broader crypto market that also faces SEC threats. For this, Ripple deserves some appreciation. Unfortunately, that's about where my good will for Ripple ends. In the wake of that court ruling and the ongoing wrap up of the case, Ripple fans (or early investers / bagholders) have taken to social media (X, Youtube, etc.) to pump, pump, pump Ripple to infinity and beyond. Claims...

Gold As Unpegged Legal Tender We need to level the currency playing field to enforce a practical, market based boundary on irresponsible monetary and fiscal policy. Poor System Design Our Founding Fathers understood the problems with fiat money and monetary debasement. They attempted to prescribe guardrails in the Constitution to prevent these issues from plaguing the United States of America. Sound money lasted for a hundred years or so. But maintaining strict fiscal discipline is difficult. Eventually, our government removed it's sound money shackles and adopted a pure fiat currency to allow great flexibility with fiscal policy. The prudence with which that has been effected has deteriorated over the years to the point where...

This article was written in response to @Casey Jones 's post in the crypto market discussion thread. I figured that my response might serve as a decent reference for folks and should not get buried in a many paged discussion. First, a couple of basic concepts:What is crypto? - When you buy crypto, you don't actually take possession of a physical (or digital/abstract for that matter) object. Crypto tokens are unique mathematical objects that exist on a blockchain. To own crypto is to own a wallet (address) that the blockchain has recorded as the owner of a collection of crypto tokens. You own the wallet (address). The wallet (address) owns the crypto. Securing the password to your wallet is how you safeguard your crypto.What is a...

Since the inception of the Federal Reserve System, our fractional reserve banking system has steadily degraded reserve ratio requirements until they finally just did away with them altogether and ushered in our brave new era of zero reserve banking. Banks are not tasked with maintaining any specific thresholds of reserves and now manage liquidity by buying and selling debt instruments as necessary. It works great - until it doesn't. As the Federal Reserve embarked on QE and lowered interest rates towards zero several years ago, banks loaded up their balance sheets with low interest bearing debt. When the Fed reversed course with QT and raising rates to combat inflation, many banks were caught with balance sheets full of upside down...

In Crypto 101, I talked about the basic information you need to get started with buying some crypto and the type of wallet you want to keep it in. Hopefully, you have already taken the first step of opening an account with an exchange and/or acquiring a wallet. You have mastered the *how*. Now you might be pondering the *what*. What should I buy? There is an overwhelming choice in crypto tokens out there. What makes one better than another? I'll share how I see it. As always, your mileage may vary (YMMV). There are a few key characteristics and features that differentiate different decentralized crypto platforms. Understanding these differences helps you understand their unique selling point (USP) [if they have one!{*}]...

I am a gold bug, a silver bug, a precious metals bug. I am also interested in the development of cryptocurrencies. I have dabbled with them mostly as an exercise in curiosity. There is still a lot that I do not know about crypto. However, I have sufficient experience to share a bit of what I've learned over the years. Sidelines of Regret Over a decade ago, @DoChenRollingBearing took an interest in learning about Bitcoin when it still very new. So new that figuring out how to acquire some was not straightforward. Bitcoin had a lot of vocal detractors back then - especially from locales inhabited by goldbugs. But DCRB was persistent and he got me to download and install a windows program that created and managed Bitcoin Wallets...