Some precious metals ratios are out of whack, says Andy Schectman of Miles Franklin Precious Metals Investments in conversation with Maurice Jackson of Proven and Probable, and explains why he believes now is a good time to rebalance.
Maurice Jackson: Joining us for a conversation is Andy Schectman, the president of Miles Franklin Precious Metals Investments.
We have some important topics to address today regarding physical, precious metals. Before we begin, for first time listeners, who is Miles Franklin, and what type of services do we provide?
Andy Schectman: Miles Franklin is a precious metals company that’s been in business in Minneapolis since 1990. We’ve operated almost 29 years without a customer complaint, ever. We have an A Plus rating with the Better Business Bureau, and are one of fewer than 30 companies in America to ever be approved by United States Mint as an authorized reseller of its product. And more than anything, in a federally non-regulated industry, Maurice, that stands for something.
We’ve seen so much fraud in this industry, typically centered around the low-priced online retailers. In fact, we’ve never had a customer complaint is something we’re very proud of. But the state of Minnesota takes it one step further. We’re the only state in America that regulates the precious metals industry. We are beholden to the Commissioner of Commerce with the surety and background checks annually of every single one of our employees.
“Silver is probably one of, if not the buying opportunity of a generation.”
That continuing education, compliance, surety bond is enough to make the majority of our competitors throughout the country boycott the state of Minnesota, as they too would be subservient to the same set of regulations that we are. And what it basically means is anyone buying precious metals from a company domiciled in Minnesota would have arguably the safest, most secure transaction in the country, because the state regulations all but guarantee it.
Maurice Jackson: You and I had an offline discussion regarding the opportunity of a lifetime that you see in silver. Let’s discuss the value proposition before us regarding silver. Please share, what has your attention at the moment, and why.
Andy Schectman: When I look back over the years and try to identify the moments or the trends that have shaped our success, and the calls that we have made as a company that have panned out, they typically center around anomalies or distortions in the price market. We can take a look at the position of the most sophisticated, well-funded, well-informed traders in the globe, the commercial banks, and in particular JP Morgan, and see something very illuminating.
First off, JP Morgan has amassed over 800 million ounces of physical silver in its house account. That is eight times what the Hunt Brothers tried to accumulate in 1980. It is, in fact, the largest physical position the world has ever seen at one time. And more significantly, it has used the suppressed paper price to accumulate the physical. Since it inherited Bear Stearns’ short position in 2008, JP Morgan has been net short. And the largest short position on the COMEX market. And believe it or not, have never had one losing day. Not one losing trade, ever, in its short book since 2008. It’s almost mathematically impossible.
A lot of investors wonder about this short position, and think that this could go on forever. JP Morgan has proven, with the success of it shorting the paper market, that it does not need to accumulate 800 million ounces of physical silver in order to manipulate the price. Quite to the contrary. I think it manipulated the paper price in order to accumulate 800 million ounces of physical silver.
And what has really gotten my attention is that for the first time since JP Morgan inherited Bear Stearns short position in 2008, and for only the third time in the last 45 years, the commercial banks have gone long in the futures market. Including JP Morgan. It has reversed course, and has gone long on the COMEX markets. So the combination of reverse course in the most sophisticated, well-influenced, well-funded traders on the globe, going long on paper, you see the world’s largest ever accumulation of physical silver in its house account.
I think the two combined are really very, very intriguing to me. If nothing else, people should stand up and take notice of what the big boys are doing right now.
Maurice Jackson: Andy, just to clarify, because sometimes there’s a lot of ambiguity regarding the actions of JP Morgan. Talk to us, is the relationship between the proxy SLV (iShares Silver Trust) and JP Morgan?
Andy Schectman: Yes, it is. JP Morgan has the ability to pull silver out of SLV, and take possession of it. But by doing so, it allows it to take possession of silver without it being recorded. So Ted Butler would tell you that’s one of the ways that it has accumulated vast amounts of physical silver, sort of off the books. So yes, I think the ability for JP Morgan to take possession of silver out of SLV is one of the vehicles that it has used to accumulate vast amounts of silver without it being recorded through the normal channels of taking metal off the COMEX Exchange.
Maurice Jackson: Now for the individual investor, Mr. Schectman, let’s talk about what actions they can and should do regarding silver prices currently.
Andy Schectman: I think you don’t have to look any further than the ratio between gold and silver right now. If you go back literally 45 years, there’s been but one brief moment, and that was in 1993, where trading your gold and silver would’ve netted you more silver. In fact, what’s interesting now, Maurice, if you look at the last 50-years worth of price action, pretty much the average ratio …read more
From:: The Gold Report