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The Silver Institute has published the World Silver Survey since 1990. The purpose then, as now, is to provide market participants and observers a comprehensive look at the global silver market during the preceding year, with an in-depth look at the various components of silver demand and the areas that contribute to supplying the market with the white metal. Over the past 34 years, the World Silver Survey has been a trusted source of information about the broader silver market, widely quoted and referenced by industry, governments, media, and others.

From the Introduction:

For yet another year and the third in a row now, silver demand massively
exceeded supply in 2023. While the global market deficit fell by 30% y/y
from last year’s likely all-time-high, at 184.3Moz (5,732t) it was still one of the
largest figures on record. Crucially, last year’s deficit coincided with a year in
which we experienced sharp declines in bar and coin investment, jewelry and
silverware demand that meant global silver offtake fell overall year-on-year.
The silver market’s deficit conditions have so far been resilient to pressures
from the weaker price elastic elements of demand.

Underpinning silver’s fundamentals is robust demand from industrial
applications. These continued to push higher last year, reaching a new alltime
record, fueled by the remarkable rise in solar demand and in spite of
stagnation in some other sectors. Sluggish silver supply, owing to the slight
decline in global mine production, was another factor contributing to silver’s
deficit conditions last year.
Importantly, we remain confident that such deficit conditions will remain in
place for the foreseeable future. As we discuss in detail in Chapter 2, our
projections for 2024 see the gap between supply and demand grow by 17%,
thanks to ongoing growth in industrial demand, a recovery in jewelry and
silverware and still stagnant supply from both mine production and recycling.
With further gains in industrial demand likely in the medium term and no
obvious sources of supply growth, we believe the status quo will continue.
So far, silver’s strong physical market conditions have done little to support
its price. Although the average rose by 7% y/y in 2023, the price moved
sideways in general over the year. It has also been arguably disappointing
that silver has failed to outperform gold during the recent rallies in the latter
metal through to all-time highs. After all silver has often been seen as a high
beta version of gold. Yet as the yellow metal rallied by over 20% from its
October trough through to end-March, the gold:silver ratio in fact inched up
and was trading at a historically high level around 90:1.
In our view, the key challenge silver has been facing are still high aboveground
inventories. As the data in the last focus box of Chapter 3 shows,
stocks held in London and exchange-registered vaults amounted to nearly
15 months of global supply at end-2023 and there are bullion inventories also
held elsewhere. This has prevented a physical squeeze from emerging in the
market, in spite of the robust supply-demand conditions discussed above.
In turn, this has continued to place the fate of the silver price in the hands
of institutional investors. While the macroeconomic backdrop has turned

positive for precious metals, the focus has centered on gold, owing to its
clearer quasi-monetary attributes, wider acceptance as a safe haven and
central banks’ strong interest in the metal. Furthermore, even if silver’s actual
industrial demand is robust, investor enthusiasm in the broader industrial
metals complex has been cooled by a sputtering Chinese economy. Lastly,
rangebound silver prices have encouraged more speculative investors to
seek out buoyant alternatives, such as certain tech stocks and bitcoin.
Still, stocks for the time being may seem plentiful but inventories are by
definition finite. In time, the continued deficits will see them get drawn down
and eventually the market will tighten. Already this is starting to happen in
specific markets to an extent. This is most notable in China where in recent
years we have typically seen massive local oversupply, huge exports and
local silver prices trading at a deep discount to London. Since late 2023, we
have seen discounts ease and most recently turn into small premiums, and
exports come under pressure. While it may not happen immediately, silver
prices will thus sooner or later have their time to shine.

"Remember, the whale bank accounts were maintained for years. Those Fed asset purchases started in 2020. The crisis started in March of 2023. Those accounts were maintained for years at risk of total loss, complete loss. And they were losing interest payments the entire time because the bank pays way less interest rate than a treasury pays. So the only real question here is why these accounts were maintained like that. Umm...since they weren't maintained to make money. They lost in the form of lower interest payments compared to US Treasuries, and those accounts weren't maintained for safety since a bank account can suffer a total loss and a treasury can't. Why were those whale accounts left untouched for years if it wasn't to turn those accounts into killer whales when the time came? ...

That's a way better explanation for the crisis than the mainstream story, which is totally ridiculous and pretends that it's normal for people to keep billions of dollars in a checking account." - Titus

What's behind the recent, so-called "Regional Banking Crisis?" YouTube channel BestEvidence takes a deep dive into the timing, flow of money, and the unusual activity that killed these banks. While the media has been calling it a "Regional Banking Crisis", these were all among the largest 30 US banks in assets.

Where did all that money come from? Why was it just sitting in low-interest checking accounts for three years?

Were these accounts set up to intentionally destroy three large banks to benefit the biggest four banks that profited from their demise?

BestEvidence provides information from charts and graphs from the Federal Reserve and FDIC websites and makes it understandable. He also provides information on how you can "Red-Flag" test your own bank.

_{- Page 12 of the report}

This report from the Silver Institute outlines many factors that have governed the supply, demand and ultimately the price of silver. It also provides some insight into what to expect for the coming year(s). If you're interested in learning more about silver, this is an excellent read.

https://www.silverinstitute.org/wp-content/uploads/2023/04/World-Silver-Survey-2023.pdf

"We know where we are in the debt cycle; we know where we are with energy. And so then it comes down to the key points: when there is tension in the market, when there's volatility in treasuries - okay, we've come to a point: they either have to let the debt default, or they have to print. The chance that they're going to let it default is like zero" - Luke Gromen

Many of you know in addition to metals investing, and I am also very optimistic about investing in Bitcoin.

Not cryptocurrencies in general, just Bitcoin.

I've been a longtime listener to "What Bitcoin Did" with Peter McCormack. Lately, this show has been featuring many macroeconomic experts as guests. There's a lot less discussion of Bitcoin and more of an analysis of the current and future effects of the tremendous inflationary effect it will have on US Dollars. There are plenty of positive mentions of gold in this show.

As Peter might say, "This one's a real banger."

There is some upfront discussion of Bitcoin and mentions sprinkled throughout the podcast.

If you're not interested in Bitcoin, power through and see what the future could hold for the US Economy.

Precious Metals for Barter or Exchange

We frequently get asked by our customers what they should buy in case the dollar crashes or would no longer be welcome in the marketplace. Given current monetary policy, a US Dollar crash no longer seems as unlikely a scenario as it once was. Even if, by some miracle, the US Dollar makes it through the current reckless “printing” we’ve seen over the past decades, we’re sure to see an elimination of cash and a move to a Central Bank Digital Currency (CBDC). Few people I know are looking forward to that level of surveillance and control.

Gold is likely too valuable or expensive for day-to-day transactions such as food and fuel. The smallest coin available from the US Mint is the 1/10th ounce Gold Eagle coin, which currently sells in excess of $200, well beyond its gold value alone. Some national mints also produce 1/20^th ounce gold coins, still over $100 each. Smaller items like gram bars sell for $75 to $80 each, but it wouldn’t be helpful to buy something like, say, a dozen eggs or a gallon of milk. These smaller units of gold always carry high purchase premiums (the amount paid over the gold spot or market price) but may not return this premium in a barter exchange.

“But gold is divisible!” you say. Sure, a gram scale capable of accurately measuring a tenth of a gram will measure a few specks filed from your 1/10 Gold Eagle coin, but is the next guy going to believe it’s gold? It was a very credible coin starting out; now it’s been “clipped,” and the filings no longer carry the credibility and recognition provided by the intact coin. Good luck with that.

For thousands of years, the circulating currency in the general marketplace was silver. It served as the day-to-day cash system in much of the world. There is no better barter solution than silver.

But there are so many choices! What do I buy now to best guarantee and convenient, credible, and divisible option? Let’s take a look at some options:

1000-ounce silver bars are the cheapest way to acquire silver. If you find one to buy, it’ll be silver spot price plus any brokerage commission (1 to 3%). But at nearly 70 pounds and the size of a large loaf of bread, not exactly something you’re taking to the farmer’s market. Not at all practical.

Ten and 100-ounce bars are a better choice and carry a small maker’s premium plus a broker’s fee. Cheaper than one ouncers, but still too large to use in day-to-day commerce. Cutting or shaving them would result in a loss of credibility of the resulting pieces.

Privately minted one-ounce silver bars and rounds are starting to get more into the value territory but lack the credibility, recognition, and consistency of pattern provided by coins minted by recognized government mints. They carry a relatively low premium and are very popular with my clients that are stacking silver for the anticipated gains in the silver price. If something comes up and they need cash, they can bring a reasonably close to the amount required, and I’ll buy them. With ten and 100-ounce bars, you’re limited to the increments of, say, ten ounces and might not want to part with 20 ounces when you only need to sell 11 or 12 ounces.

Smaller privately minted bars and rounds exist, but premiums on these “fractional coins” tend to have higher premiums due to less availability. They tend to cost as much or more than the next item…

Government minted coins! Here we have a bunch of choices.

Silver American Eagles minted by the US Mint have been a mainstay of our business. Even though they are also the most expensive silver bullion coins, we sell. Americans are generally willing to pay the extra cost to have two main features – credibility and legal tender status (more on that later). Each coin is one full ounce of fine silver, has a consistent and attractive pattern full of liberty messaging and all the comforting national symbols.

Other countries also produce their own silver bullion coins, each denominated in their national or regional currency. Commonly available are Canadian Maple leaf coins, South African Krugerrands, Austrian Philharmonics, and Australian Kangaroos, to name our most popular.  These tend to have a lower premium cost than Silver American Eagle coins and benefit from a consistent pattern over a long period. With the tremendous additional cost of Silver American Eagle coins, I’d argue that our neighbor to the north, Canada has a much lower cost and are likely to be just as credible as an American Eagle in a typical silver transaction.

Saving the best for last, my strong recommendation for the best silver for barter is 90% silver US coinage, old dimes, quarters, and half-dollars. We are all familiar with these coins and the symbols on them. It’s easy to discern the silver coins from not silver – look at the date. If a dime, quarter, or half-dollar is dated 1964 or before, it’s 90% silver and 10% copper. If it’s a Liberty (Mercury) head dime or a Franklin half-dollar, it’s silver. No need to even look at the date. They never made them any other way.

These coins are sometimes referred to as “Junk Silver.” That name initially indicated that coin collectors have screened out anything that might have additional collector value above the coin’s weight in silver.

One drawback is that these coins aren’t convenient fractions of a Troy ounce. The unit of measure is Troy ounces when we talk about gold, silver, platinum, and palladium coins. Nearly every commodity, such as produce and meat or dry goods like flour and sugar, are measured in Avoirdupois ounces.  A Troy ounce is 31.1033 grams compared to the Avoirdupois ounce of 28.3495 grams. Just a quick note in case you want to check my upcoming math with your kitchen scale.

So an ounce of silver is heavier than an ounce of feathers.

So, how much silver is in a face value dollar worth of 90% US silver coins? Very early in my precious metals education, I assumed it had to be .9 ounces because of the 90% label. I was wrong! The 90% refers only to the composition of the coin. It’s 90% silver and 10% copper. The combination resulted in a more durable coin and less likely to wear out than pure silver.

One dollar’s worth of these coins contained .7234 ounces of silver when they were newly minted. Since most of what we now see has been well circulated, most honest dealers use .715 ounces to account for the average wear of the coins. Whether you have ten dimes, four quarters or two half-dollars, or any combination equal to one dollar, you have .715 ounces of silver. We disregard the value of the other 10% (.0715 ounces) of copper.

So here’s the math:

If Silver is $25.00 spot price:

$1.00 of US 90% Silver coins is .715 ounces and has a silver value of $17.88 ($25 X .715 = $17.875)

A Dime, 1/10^th of a dollar has a silver value of $1.79 (.10 X $17.88 = $1.788)

A quarter, 1/4^th of a dollar, has a silver value of $4.47 (.25 X $17.88 = $4.46875)

A half-dollar, ½ of a dollar, has a silver value of $8.94 (.50 X 17.88 = $8.9375)

The magic conversion factor to remember is .715 X spot price = silver value of $1 face value

90% silver US coins used to be one of the cheapest ways to buy silver. Coins have gotten scarce in recent years as holders are less likely to want to let go of them. Silver stackers are looking for higher prices, and some want to keep it for potential barter or exchange. This has caused prices to climb to well over $20 per face value dollar in the wholesale market if you can find it.

But even at these higher prices, it is less expensive than Silver Eagles, which don’t provide the ability to barter in less than one-ounce increments. The recognition is easy, and the credibility is excellent. We’ve all seen dimes, quarters, and half-dollars. Is it silver? Check the date or symbols. It’s also very immune to fakes since you’d likely have to pay nearly a couple of dollars to make a fake dime, lousy ROI.

US 90% silver coins and Silver American Eagles are also legal tender – lawful money. What does that mean?

I’ll give a real-life example.

In early 2013, the political and social climate spurred a massive demand for firearms and ammunition. All of my local gun stores had virtually no guns and no ammunition. Amid all of this, I decided to shelve my 1911 and move to Heckler & Koch as my daily carry pistol. I was on the waiting list at a couple of shops for a long, long time. I remembered selling some metals to one local gun store owner a couple of years before and figured I’d give him a try. I sent him an email, and he quickly replied that he didn’t have that pistol available.

The next day he emailed me back, asking if I would be willing to pay in precious metals. I thought, why not? If it gets the job done…

After indicating a strong preference for silver, he magically found the exact firearm I wanted if I would pay the full list price in silver. Since most shops online were asking 125 to 150% over list, I figured it was a good deal. I loaded up some Silver American Eagles, some silver dimes, and quarters and headed to his shop.

When I walked in, the salespeople were having a conversation and largely ignored me. A quick scan of the shop showed empty shelves where the ammo used to be and largely empty gun display cases—just a couple of antique shotguns in the racks behind the counter that usually had scores of rifles. I introduced myself and asked for the owner. A few moments later was shown to his office.

He put the brand new H&K box on the desk and slid it over to me. He asked, “Whajya bring me?” pointing to the bag I was holding.

I pulled out two tubes of Silver American Eagles. We’d discussed $1200 for the gun, and with a slight reduction to my advertised price at the time, it would cover the basic retail price. He asked what was still in the bag, and I pulled out the bags of silver quarters and dimes, indicating I expected those to cover the taxes. I’d brought way more than necessary and expected to leave with the gun and some silver.

In an almost too serious way, he said, “You’re not leaving with any of that.” Not a hint of a smile on his face.

“Umm, what do you mean?” I replied with a gulp.

“Do you need some .45 ammo for that? He asked, pointing at the firearm.

I might have chuckled a bit and said, “I saw out front; you don’t appear to have any.”

He said, “I didn’t have any guns out there either, did I?”

“Good point,” I said

He went into a back room and returned with an unopened case of .45 FMJ. We finalized the price of everything, and he started writing it all up. He even used the pricing for the ammunition at the pre-mania cost.

When we got to the 7.5% sales tax, I stopped him. I pointed out that each of the coins I was using was assigned a US Dollar value and were legal tender, lawful money at face value. The Silver Eagles were $1.00; the rest were US dimes and quarters. So I was, in fact, only giving him $40 for the gun and 7.5% on that was a lot less than 7.5% on $1200.

He thought for a moment and said, “Huh, I paid a thousand dollars for that gun and hoped to make a couple hundred. Darned if I didn’t just lose $960.” Understanding that he had just reduced the apparent profit to his bottom line and thus the taxes he’d need to pay – a process we referred to as Wallet Voting.

With the new calculations and reduced sales tax, he gave me two more 50-round boxes of ammo for the rest of my silver and helped me carry it to my truck.

My point is that we don’t have to wait for the US Dollar to crash or for economic disaster to “vote” with the money we use. It’s getting easier to find folks eager to accept something besides ever-declining dollars for their effort or products. Seek out your own opportunities to barter for things you have or skills you possess and ask those you deal with if they are interested in barter. I’ve bought everything from meat to concrete and electrician’s services with metals. I’ve sold my backyard chicken eggs for silver.

It doesn’t hurt to ask; you may get a deal or motivate a seller to take that extra effort for you.

Tim Frey – President

Roberts & Roberts Brokerage, Inc.

850-478-5270

800-874-9760

Over the past few years, banks have tightened the rules on cash deposits and businesses like ours have faced higher and higher fees. Legislation has been passed under the guise of cracking down on crime and requires reporting people to federal agencies if they withdraw too much cash or do it in a "suspicious" way. In the following podcast, historian Tom Woods interviews author Charles Hugh Smith who breaks down who and why government is trying to limit the ability of people to use cash.

Though they covered a lot in the interview, we want to add to some of the points they made. Another way cash was discouraged was by the elimination of bills larger than $100. This made cash harder to store and transport and bolstered the necessity of banks. Tom and Charles made a great point about the difference between digital cash and cash in hand and by making it more unwieldy to hold cash in hand; the digital cash game can stay afloat.

Also, while it’s true that the worth of our currency is being devalued by inflation and other factors, there are ways you can protect your wealth, retain custodial control of it independent from banks, and avoid the security risk of carrying around wads of cash. Of course we recommend precious metals as a store of value. Metals have a long track record of stability in times of currency crises and by using a safe to store them in a secure location you don’t have to worry about third parties limiting your access.

Another option is converting your cash to the digital currency bitcoin (the corresponding network the currency is transacted on is capitalized Bitcoin). No government or bank can stop transactions on the Bitcoin network because there is no centralized server to attack. Storing bitcoin is much more discreet than cash. In much the same way as you store your precious metals in a safe with a key that only you have access to you are also able to apply the same concept in a digital way. When you create a bitcoin wallet, it operates on public/private key encryption in which a strong password is the key that decrypts (or unlocks) the locked account. Bitcoin has the advantage of being easy to store and transport discreetly as they are stored on an app on your phone or on your computer. For an easy to use, secure bitcoin account app we recommend Airbitz.

You can listen to the full interview here.

In 1933, Franklin Delano Roosevelt issued Presidential Executive Order 6102 which demanded that those who were “hoarding” gold coins turn them over to a Federal Reserve Bank or branch as this hoarding was hurting the economic recovery. It was a claim that was false but effective. Hoarding in this case meant simply possessing gold coins by holding on to them and the government used the 1917 Trading with the Enemy Act as justification for this theft. The gold coins were to be taken to a Federal Reserve Bank and traded for paper currency. While Roosevelt used the excuse of the country being in a national state of emergency, the confiscation actually encouraged (by force) the use of banks as a place to store money—something many Americans were very skeptical of doing at the time. So, the goal of confiscation was two-fold: bail out the Federal Reserve and force people to use paper currency which they distrusted.

The penalties for disobeying the executive order were harsh: a $10,000 fine and/or imprisonment not to exceed 10 years. There’s disagreement over whether or not this penalty was enforced but you did see most people complying. People were left with no choice but to convert their gold into paper currency that they then had to store in banks as paper was far less durable than precious metals.

Harry S. Truman continued this prohibition on gold as a currency when he issued Proclamation No. 2725 which forbade banks from paying debts in gold. Roosevelt’s confiscation was one of the first instances of what is now known as civil asset forfeiture. For forty years afterwards, it was illegal to pay debts in gold, with that prohibition ending under the Nixon administration.

So we see a precedent set for confiscation and this has led to various conspiracy theories about the same thing happening under the current administration. While government overreach is a serious problem, we take a practical approach when it comes to educating our clients.

Can Gold Confiscation Happen Again?

The simple answer is yes and no. If you read other precious metals blogs you may find them suggesting that you buy specific coins that they claim cannot be confiscated by the Federal Government. These coins often have numismatic value and are often sold at prices significantly higher than their gold content. The reasons for buying numismatic coins are tenuous at best and we’ve dissected the myths before. The bottom line is that if the government decides to confiscate property, no special coin will stop them from doing it. The sheer power of the state can’t be stopped by magic words or coins, unfortunately, and if a gold dealer is telling you otherwise they don’t have an understanding of history or power (or may be trying to unload coins that are steadily decreasing in value). But, how likely is it that the government will forcibly take your gold coins and would it even be practical? The truth is that it is highly unlikely they would because 1. There’s no good reason to and 2. It would be quite difficult to find all the gold people possess even with the means the government has.

The reasons given that gold will be confiscated by the government don’t hold up to scrutiny, but we’ll cover the most commonly used one: the dollar collapses and they need your gold for economic stability. In the event of a dollar collapse there will be much more to worry about than whether the government is coming to get your gold and since there’s so little of it, it would be pointless to take it for any form of debt payment. The amount of gold individuals possess in the U.S. is actually very small and much of it is held in larger depositories. Let’s crunch some numbers.

The U.S. is currently 18.2 trillion dollars in debt; the latest data from the Treasury shows that they alone hold 261,498,926.230 fine troy ounces which at the time it was recorded was worth around 11 billion dollars.

The population of the U.S. is 319 million and even if we assume that 10% of the population (a generous estimate) is informed about investing in gold, we’re still several trillion dollars short of any meaningful impact on the debt.

Then there’s the difficulty of finding who owns the gold the government would want to confiscate. You can buy gold with cash at most places including here and most of the time there’s no record kept of this transaction. It would take a massive effort of the military going door to door diligently searching for this gold during a time where there would be massive civil unrest. Do you really think they would go through this effort to collect something that wouldn’t even come close to fixing the problem of a dollar collapse? The problem of the national debt is a real one but saying the government will confiscate gold to fix it is fantastical.

When you look at the numbers and think rationally about the motivations for gold confiscation, the fear melts away. Don’t fall for fear mongering gimmicks to sell you over-valued gold. While it has happened in the past, given current circumstances it is highly unlikely gold confiscation will happen and just doesn’t even make sense to do considering the arguments given. You’re in more danger of getting caught up in a suspicious activity report than government goons breaking down your door looking for gold. Gold is a solid investment for many reasons and there’s no need to make up fantasy-based scenarios in deceitful attempts to sell more.

When investing in precious metals, a common source of confusion is reporting requirements for various forms of payment. The Anti-Money Laundering legislation is, like most legislation, boring to read and can be tricky to understand. It was introduced as a part of the Patriot Act as a way to catch more money launderers. Few people have the time to peruse it and others claim they understand the laws yet use counterproductive schemes trying to avoid getting reported to the government.

People ask us all the time about whether we report their purchases to any government agencies and the answer is no, but there are activities that can draw government attention to you. We often have to explain to clients that trying to avoid mostly benign reports results in greater attention to them, so here’s a breakdown of why we have certain policies and advice on how to protect yourself.

Cash Transaction Reports

Cash is a more private way to buy products so many clients opt for this method. This behavior can sometimes qualify you for reporting under the FinCEN requirements. Most simply, whenever you withdraw or deposit $10,000 cash or more at your bank, they are required to file a Cash Transaction Report (CTR) with the Financial Crimes Enforcement Network (FinCEN). Now FinCEN sounds scary and it is because it is the agency that goes after people who violate the Anti-Money Laundering regulation. Most people have in mind drug traffickers and other unsavory types when they think of money laundering, but common law abiding citizens and even banks often get caught in their snares.

According to FinCEN’s latest available numbers (2011), banks and others filed over 57,000 CTRs a day or nearly 15 million that year. It’s likely much higher each year since then, but when our office tried to retrieve more up to date data the calls to FinCEN went unreturned.

While a CTR is a notice to FinCEN that you transacted a large amount of money, it doesn’t draw specific attention because that activity is perfectly legal. It is an aggravating invasion of privacy, but not particularly harmful as some media sources would have you believe. The report is there should you become interesting for some other reason. Our policy for cash payments is that we do not allow cash transactions of $10,000 or more because we do not want to have to file a CTR. We promote client privacy this way and wish to keep FinCEN out of our business with our clients.

One of the ways individuals become interesting to FinCEN is by making multiple transactions below the $10,000 limit, appearing to intentionally avoid the CTR. When you do this, it is called structuring. Structuring is not a way to avoid the hammer of the state and in fact will get you more notice than just transacting $10,000 or more at one time. You know what it looks like to FinCEN when you structure? Suspicious; very, very suspicious like you are trying to hide something and they don’t like that. Don’t like the CTR report – tough! You are not allowed to duck! Since we are as much under the thumb of FinCEN as banks, we are also required to report any suspicious activity, such as if a client proposes a series of related cash purchases under the $10,000 limit in order to avoid reporting. Don’t ask.

Suspicious Activity Reports

When people engage in activity that looks like structuring it is classified as suspicious activity and the bank is compelled by FinCEN to file a Suspicious Activity Report (SAR). They have no choice to do this, by the way, because FinCEN also goes after banks that do not report CTRs or SARs and hits them with huge fines. We fall under the same requirements as banks and are subject to the same scary annual compliance training course that banks undergo.

A SAR is much more serious than a CTR and people get caught up because of the mistaken notion that the CTR is a more serious threat to their privacy. Many people know about CTRs but maybe not SARs and the kicker is that by trying to avoid a CTR, you will likely get hit with an SAR.

Ways to appear suspicious include withdrawing multiple amounts from a single bank under the $10,000 reporting threshold over a short period of time or withdrawing these smaller amounts from multiple locations and accounts. You are not notified by your bank if they file an SAR but you may find out in an unpleasant way.

What happens when FinCEN follows up on a SAR? You may come home to government vehicles parked outside your residence and agents from FinCEN ready to ask you many very invasive questions. You might get a phone call instead. Both of these things have happened to our clients. If you think a CTR is invasive, what happens when they investigate a SAR is intrusive on a much deeper level. They will ask you to provide evidence of what you spent that cash on or ask to see the cash if you claim it was not spent which means disclosing your privately held assets (like precious metals if that is what it was spent on) to a government agency. Basically, you’ll wind up having to disclose a lot more personal financial information if you conduct activities in order to avoid the more benign Cash Transaction Report.

Ways to Protect Yourself

Because we believe in client privacy, we feel compelled to warn our clients about these reports as it is a frequent mistake people make and not just with investing. We are so serious about this that we strictly enforce the less than $10,000 limit on cash transactions and have refused business from potential clients who even mention wanting to engage in suspicious activity.

The good news is that the more destructive SARs are easy to avoid. There are no gimmicks or ways to outsmart an agency like FinCEN and though people have tried, they have found themselves under the boot side of the state. Make no mistake—you should never attempt to structure in order to avoid a CTR. You are better off withdrawing the amount of money you need for your specific transaction from a single account or multiple ones if needed but do not establish a pattern that makes it appear you are trying to duck. You’re not allowed to duck and we’re not allowed to assist you in ducking. Simply paying by check, bank check or wire transfer never requires any sort of reporting for any amount so long as the check is from you and made out to the end party.

So the honest and direct answer is to just follow the regulations for your own personal protection. Don’t be fooled by people saying CTRs are more draconian than they actually are and that they can be avoided by what amounts to structuring. Furthermore, don’t trust sources that talk about FinCEN regulations if they are not in the financial industry and actually familiar with the policies. There’s no magic words you can say to avoid investigation if FinCEN wants to take it that far but you can avoid that scenario entirely by simply following the (in our opinion invasive and unjust) law.

As news breaks that certain large banks are under investigation for rigging metals markets, I’m reminded of an incident that took place years ago which opened my eyes to how metals prices are manipulated--specifically through paper contracts. We advocate taking possession of physical precious metals as the best way to secure your wealth and while the representatives of the companies involved in the probe stay silent we’re going to spill the beans on what’s really going on with futures contract delivery.

It was 2008, just before the market crises that would jump start the recession, and I received a phone call from an individual looking for assistance in taking physical delivery of their two 5000 ounce silver contracts. The broker on the client’s account had no idea how to deliver the metals promised by the contract because almost no one asks for the physical metals—they usually roll over the contract or bank any gains made. Even when the participant does decide to take delivery, they generally pay a fee and leave them in the custody of the vault.

Each silver contract represents five unique bars, each approximately 1000 ounces. Each individual bar has the “Hallmark” identifying the manufacturer, the actual weight and the purity of the bar. A single 1000 ounce bar is the size of a large loaf of bread and weighs about 70 pounds which is hardly easy to move or store if you did decide to take delivery outside of custody. But that’s not the function of futures contracts anyway; they are set up to be used for hedging or trading like other financial instruments. A contract gives you the ability to buy at a specific price at a set point in the future or the option to not execute the contract if the market price is lower.

When people trade paper contracts, they also affect the market price of metals. If these contracts can be manipulated by traders or other sources by short selling it distorts the price across the board and can be lucrative for those in the game but disastrous for others.

We were looking at moving a significantly large amount of silver – over 700 pounds - and had everything set up to make the trade but found that the process was being delayed. After some searching, I was finally able to get in touch with an HSBC worker in charge of managing the physical metals. When I asked why it was taking so long the trader casually remarked, “Oh we have to assign new bars to release these bars from other contracts.” Not believing what I had heard, I asked him to repeat it and he said the same thing; that the silver bars for my client’s contract were also promised to other clients and they had to be released from those obligations.

The HSBC worker had assumed I knew how the game works because I was a broker but then realized I was a broker who dealt with physical precious metals not futures contracts. Realizing the significance of his admission, I tried to get him to repeat it again so I could record it, but he had realized the gaffe and curtly told me, “It will all be taken care of this afternoon.” And the call promptly ended.

I think this is direct evidence of fraud. If someone promised you that you own a specific item and told that to multiple other people--it would be fraud. Not only do multiple people think they own the same unique item, it provides the illusion of higher availability of above ground silver. There’s less physical metal than is represented by paper yet the market price does not reflect this disparity. More implied supply would effectively result in lower silver prices.

By asking for actual physical delivery, we interrupted HSBC Bank’s fraudulent scheme. Now, HSBC is not new to controversy and when they’re not fraudulently promising multiple people the same metals, they’re laundering money to Mexican drug cartels. But I digress.

The trade was taken care of that afternoon and it’s a story I tell clients regularly. It’s why we don’t recommend paper contracts as a method of investing—mainly because you’re not in possession of the metals, but it’s also unethical how traders game the system and manipulate prices. We’re not sure how often this happens because it’s very rare that anyone tries to take delivery of any commodities contract and in this case it was likely due to a misunderstanding by the client of how paper contracts work. But the ramifications of the trader’s admission are seen every day. While manipulation of metals markets can occur in a variety of ways; that multiple paper contracts are backed by the same pile of metal is disturbing and highly unscrupulous.

Despite price manipulation in metals markets, we still believe they are a good way to diversify your investments as long as you make sure you are in physical possession of them. The price can only be suppressed for so long, so now is a good time to take advantage of these low prices.

Dr. Patrick Byrne, CEO of Overstock.com and investigative journalist, sat down with Roberts & Roberts office manager M.K. Lords to discuss bitcoin, stocks, and the current economic situation. They took questions from the live audience and some of Byrne's comments may surprise you. Watch the whole interview in the video below and catch M.K.'s show Crypto Convos twice a month on Youtube.