A storm is brewing on the global level. In recent weeks the world has seen numerous nation-states plagued by economic turmoil. China, Greece, Puerto Rico, Venezuela and others have had a taste that the global crisis which shocked the world in 2008 was not in the past. Rather, it remained in the present, as well. The Chinese stock market crashed, and its the second largest stock market in the world. Pundits wondered – could the same happen in the US.
Contagion is a big concern for many economic analysts. Even mainstream pundits recognize the inherent volatility of the paper markets. That’s why Andrew Hoffman, known for his incisive analysis at Miles Franklin, has dedicated his life to making people aware of the economic misfortunes which lie ahead, teaching them about gold and silver. Miles Franklin has been in business for 26 years without a registered complaint. The business is doing everything in its power to educate the public about a largely mysterious and mis-understood industry. That’s why so many trust Miles Franklin. Andrew took time out of his busy schedule to answer some questions for GoldSilverBitcoin.
GSB: What does Europe on the verge of collapse mean for the global economy?
AH: Europe is, cumulatively, the world’s largest economy. Greece gets all the attention, but the finances of and economic activity in many of the other nations – from PIIGS like Portugal, Italy and Spain to supposedly “strong” nations like France, aren’t much better. And with China’s economy collapsing as well, the outlook for Europe couldn’t be worse.
GSB: Are China’s stock market woes and their immense demand for gold tied?
AH: Frankly, until the past year’s hideous, PBOC-fostered equity bubble, most Chinese could not care less about stocks – holding the majority of their wealth in the (PBOC-fostered bubble in) real estate, and the timeless wealth of Precious Metals. Declining Chinese stocks will only increase the upward pressure on gold and silver demand – as unlike Americans, the Chinese are well aware of PMs’ history of preserving value during times of crisis (and all other times, for that matter).
GSB: Is Puerto Rico America’s Greece?
AH: No, America is America’s Greece! The fact that our government has “quasi-guaranteed” Puerto Rico’s debt only adds one more thing requiring the Fed’s printing presses to bailout. That said, countless other States, municipalities, corporations – and the Federal government – have historic debt burdens that, one by one, will need to be bailed out with printed money.
GSB: What is on deck for the rest of southern Europe? How will these crises be different?
AH: More of the same. Likely, Greece will be in the same position – but with E86 billion more of debt – within a year, or sooner. And as for the rest of the PIIGS, they are barely better off. And with the European economy collapsing, they’ll all have their turn at the bailout trough soon enough.
GSB: Turning to precious metals, in particularly silver. Premiums are surging, Mint is running out of product – What does the coming year hold for silver?
AH: The lower prices go, and the more the global economic crisis expands, the greater demand will be. And with supply already short, and the mining industry (perhaps for years) imploding, shortages will likely dominate the headlines even without a financial crisis, especially in silver.
GSB: Any comments on consolidation in the miners that has been seen?
AH: I don’t think anyone on the planet has written of this more – as I again did last week. I was a Wall Street oil analyst during the 1999-2000 oil consolidation, but this will be many multiples more dramatic. Fifteen years of price suppression has all but destroyed PM mining, likely for a generation at least.
Curious to hear more from Andrew? Check out his daily blog at milesfranklin.com. If you want to learn about Miles Franklin’s Montreal Storage Program, click here. If you want to learn more about the state of the bullion industry, click here.