Liberty Coin & Precious Metals Radio Libertopia Series Feat. Richard Boddie

Liberty Radio Libertopia Series with Richard Boddie

Richard Boddie was born and raised in "upstate" New York. Mr. Boddie has partaken in both the Democratic and Republican parties, and is well known for his activism.

In 1984, he was a fund raiser and road manager for the 1984 Libertarian Party Presidential candidate, and he himself in 1991 ran for the same position for the 1992 presidential race.

Further, he also ran for the US Senate in 1992 and 1994 in California, and for Congress in the 46th district of CA in 2000. He served as Chair of the Orange County Libertarian Party 1996-1998, and served as the Press Secretary for the Steve Kubby for Governor campaign in CA in 1998.

Mr. Boddie is a graduate of Bucknell University in Lewisburg, Pennsylvania, and holds a law degree from Syrancuse University. He now lives in southern California.

Liberty Coin and Precious Metals would like to thank Mr. Boddie for taking time out of a busy day to have this chat with us, as well as Libertopia for making this all possible.

Increasing Hyper-Volatility Strengthens Case For Precious Metals

What the world is witnessing is an episode of increasing volatility or “hyper-volatility.” World markets and asset classes have entered into a period of steep appreciation and quick depreciation. This will increase in the years to come, undoubtedly, as central planners the world over stumble over policies which, instead of creating free market conditions for prosperity, put more restrictions on trade and growth.

Many people dislike when their savings of choice, or the assets of their choice, go on sale. For so many individuals who purchased silver, for the first time, in the forties—even as high as $49—the last six months have been a personal test. For many, I am sure, it has been difficult to trust themselves and the rationale which led them to purchase silver in the first place.

But, to be sure, what has happened to the silver market in the short-term, as it sits now in the low thirties, is a great opportunity to own an asset of choice for firesale prices. Same with gold: a metal that has, as recently as this Summer, climbed to around $1920 per oz, sits now in the mid $1600 range.

The way in which individuals make money on stocks, assets and other instruments is by owning them at low prices or by buying the dip. Gold, silver, platinum and palladium are long term holdings that, as fiat currencies the globe over race to the bottom, seem poised to certainly appreciate, whilst enabling people to feel comfortable in times of potential crisis and, most definitely, “hyper-volatility.”

European leaders met this weekend with the intention of rectifying the Euro Crisis. A follow-up meeting will be held on Wednesday of this week, portending possibly big movements in global markets, including gold and silver. Germany and France, the largest economies of Europe, have yet to agree on policy for the continent.

Whilst France insists that the European Central Bank begins printing money in order to bailout Europe, Germany declines the prospect, pointing towards the illegality under their constitution to embark upon such a policy. Berlin, furthermore, is not interested in such a stimulus.

What's likely, nonetheless, is that central planners in the US and Europe will not allow for free-market price discovery to reassert itself in markets, for, were this to happen, currencies like the dollar would depreciate quickly, and commodities, like gold and silver, would appreciate quickly.

Financial “experts” at the European Commission, the European Central Bank and the International Monetary Fund report that the Greek debt is spiraling faster than anticipated, and that, therefore, the Greek economy is shrinking faster than feared. Of course, it has become increasingly clear that Europe's problem is not Greece itself, but the entire Euro System.

The troika report, presented Saturday to the Brussels summit of European leaders and finance ministers, argued that the Greek bailout would cost as much as $611 billion by 2020. Thus, one small country would need all the funds available to the European Financial Stability Facility, leaving other nations like Portugal, Ireland and possibly Spain without funds (for better or worse). In the case of the Euro, it would increasingly be exposed to volatility.

For reasons such as these, many analysts foresee the price of gold, and silver, appreciating monumentally in the long-term. Recently, the gold has hit record highs not only in dollars, but also in sterling, the euro and South African Rand. Almost weekly the case for gold gets stronger; that is, everytime the Federal Reserve issues minutes from an open markets committee or a rating agency downgrades a country's debt to junk.

Not only are EU leaders slow to appear united behind a single agenda, but the Federal Reserve has consistently hinted at the possibility of a third quantitative easing

“Gold will keep rising for the next five years, even if it has some crests and troughs,” according to Michael Widmer, an analyst at Bank of America-Merrill Lynch, who, in this statement, makes a vague hinting at the aforementioned volatility sure to be experienced by world markets in the future. “Those holding gold should hold on to it, while others should probably get their hands on it as it is going to be on an upward trend,” he added.

Although focus in the news has been placed on Europe, and not the US economy, worrying trends still continue for us here domestically. For example, the Obama administration has approved the electric car company Fisker, which received a $529 million federal government loan guarantee, to begin assembling its first line of cars in Finland, for, according to the manufacturer, it could not find a facility in the United States with the capacity for the work.

When Richard Nixon took the US off of the gold standard, he told the nation this was a decision that would protect the US economy from the speculators. He argued that the US economy is the strongest economy in the world, and off the gold standard, this strongest economy in the world could then back the US Dollar. Today, as much of US industry has been outsourced, one would be hardpressed to make an argument for the US economy as a formidable backing to a world reserve currency.

This week Citigroup, Inc. rased its outlook for gold and silver in both 2012 and 2013. According to the bank, there is a “high probability” that the macroeconomic picture which has led to price increases in the metals over the past decade will continue for the next 12 to 18 months. The bank anticipates an average gold price of $1,950 a troy ounce in 2012.

"Increased global risk, US dollar weakness, growing inflationary fears, the US debt downgrade and continuing sovereign debt risks in Europe have increased investor appetite for gold," Citi's Jon H Bergtheil recently commented.

"This has been supported by central banks reversing activities from being sellers for most of the past 15 years to net buyers more recently and is supported by the Fed's stated desire to keep interest rates at super-low levels in the medium term," he reasoned.

Bank Failures in Europe, Unrest in US, and Depletion of Physical Supply

As rebellion spreads to the United States, financial markets remain volatile. In Europe, the bailouts have, yet again, begun, as the French/Belgian banking giant Dexia has “failed.” Both governments have pledged to take part in the rescue plan, which will entail printing of Euros, and perhaps even US monies dedicated to the cause of European stability. Dexia is the first public victim of the new European credit crunch, and there are sure to be more such banks, all across Europe.

The French government has pledged to lend Dexia “as much as it needs.” Predictably, the philosophy of “too big to fail” is alive-and-well in Europe, as Dexia was bailed out once before in 2008. Earlier this year, European regulators deemed Dexia healthy during a bank “stress test.” So, it is safe to assume—from here on out—that whenever a bank is determined “healthy” by regulators, that this is likely not true. The truth is that many of the largest banks in the world have bad debts on their books. As Michael Hudson reminds folks over and over: those debts that cannot be repaid, will not be repaid.

The IMF, which has taken an increasingly strong tone on Europe, will probably eventually step-in, and lend Europe capital. Much of it will probably stem from the Federal Reserve System in the United States, just as US taxpayer money has already gone to Europe. This took place during the 2008 banking crisis, as many European banks, such as Deutsche Bank, received US taxpayer money.

In the US, young people are taking to the streets to protest corporate policy, which is sure to put stress on the financial system. Should this movement continue to grow, international investors will lose confidence in the US Dollar as a safehaven. This movement could accelerate interest in silver, leading more young people to the metal as a store of value, i.e. a savings account, thus representing more long-term upward pressure for the metal. Instead of the famous bull on Wall Street being touched for good luck, it is now being guarded by NYPD. Interesting to note, JP Morgan—target of the “buy silver crash JP Morgan” campaign, and infamous silver manipulators—made, at the onset of the demonstrations, a donation of more than 4 million dollars to the NYPD foundation.

Expect that, as social dislocation becomes more intense, markets will become more violent. Large swings will transpire, and we will see more of what happened in the late summer, as the market had huge down days, followed by rather stable days.

That the precious metals markets having huge up days followed by huge down days could mean great buying opportunities, does not necessarily mean waiting for the perfect dip is the best choice of action. These physical markets are controlled by paper-bugs, who put trillions of fiat into play in order to oppress true price discovery. JP Morgan, for example, owns 78% of the silver derivatives. HSBC owns 20%. That means there is a paper-silver duopoly. This renders the $ price of the metals somewhat random, and does not actually represent the true value of the physical metals. There are only about 1 billion ounces of investment grade silver above ground—that is around six ounces of silver per individual on the planet! Actually getting physical “investment grade” silver (99.9% fine and above) should be considered when buying gold and silver, not simply timing the dip.

The economic policies being espoused by our leaders have no realistic foundation. That a nation can cut deficits and promote growth is "a very hopeful way of looking at the world, but unfortunately, it's not based on anything ever seen in economic history," says economic forecaster Peter Berezin, managing editor of the Bank Credit Analyst, in the Montreal Gazette article titled “Austerity obsession kneecaps Europe.”

Irregardless, the Bank of England has launched a new quantitative easing program, pumping 75 billion pounds of new money into the economy, claiming that “the worst financial crisis in modern history demanded it.”

Sir Mervyn King has warned against the obvious, arguing this program could force more inflation and promotes no confidence among savers. Regardless, King said he would not
push Britain into a recession” for the mere sake of helping savers. This is sure to send gold well over the 1,000 pound psychological price point.