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safe-deposit box in a major institution a banking institution in the United States would be the last place I would store my precious smells I would dig a hole in the backyard and become a midnight gardener before I would do that welcome to proven improbable where we deliver mining insights and boolean sales in the form of physical delivery offshore depositories and private blockchain distributed ledger technology [Music] welcome to proven improbable I'm your host Maurice Jackson joining us for a conversation is Andy Schekman the president of Miles Franklin precious metals investments mister Schekman welcome to the show sir thank you various always great to talk with you last week we discussed the prudence of implementing ratios as an effective strategy in identifying buy and sell signals and your precious metals portfolio today we're going to expand the narrative further on by signals and discuss the best values right now what to buy if we see a broken down system and a very important topic protecting your financial legacy before we begin mr. Schekman for first-time listeners who is Miles Franklin precious metals investments Joe Maurice well we this February we'll be celebrating our 30th year to business here in Minneapolis we're a family-owned company we have eclipsed six billion dollars in transactions without ever having a customer complaint ever we maintain an A+ rating with the Better Business Bureau we're one of less than 25 companies ever approved by the United States Mint as an authorized reseller of their product and in a federally non regulated industry Maurice we're very proud of that that reputation we really are and an association with people like yourself and Rick rule and other icons in the industry we're very proud of all of our accolades and of our reputation but the state of Minnesota where we're located care less about our reputation that's the only state in the industry in the United States that regulates precious metals industry we are licensed we are bonded and we are background checked everyone in the company from clerical staff to to sales people to principals like myself background checked every single year continuing education and compliance that's mandatory and a 30 bond that has made most of the competition throughout the United States boycott Minnesota what it means in essence Maurice is we have a great reputation but the state of Minnesota puts an exclamation point on that basically guaranteeing the safest transaction in the precious metals industry Andy before interview you made a valid point that really should be the theme for today's interview and that was the central banks are preparing and so should we you know that really resonated with me because all too often many of us focus on the Federal Reserve and what their next move is on interest rates in how the secondary market will respond just what exactly are central banks doing and why in the 90s all the central banks signed onto what was called the Washington agreement Maurice and I could never understand why they they all wanted to sell their gold and and so fast and and the central banks with the Washington agreement were limited to five hundred metric tons per year the amount that they could sell so as to not completely destabilize the the precious metals market I remember that's when Gordon Brown the Bank of England finished selling all of their gold as it approached $280 an ounce didn't make a whole lot of sense to me and to this day it still doesn't but there were four reasons that would have pushed them into doing that number one gold doesn't pay interest number two gold cost money to store number three the return is not predictable there's volatility but the biggest reason the fourth reason was the tier three asset status where the the amount calculated on a balance sheet was only equal to fifty percent of the value and so the the demography in ability to sell bonds and to transact international business by a factor of 50 percent would have made the central banks want to line up to sell their gold and as of April 1st of last year as you know the reclassification of gold through the Basel 3 Agreement - the only other Tier one asset on the planet next to US Dollars and Treasury's has made the central banks run from selling gold run to accumulating it and in 2018 they bought more gold than at any time in the previous 60 years last year that number was up almost 90 percent and this year every small central bank from from Central America to Eastern Europe is loading up on gold ard dollarized quietly D dollar rising and accumulating gold unlike any time I have ever seen in 30 years in this industry you know I think about the Federal Reserve one of their claims to fame is that they'd like to be transparent I I cannot recall the Federal Reserve sharing the information you just share with us with the citizens of the United States am i incorrect in that no they don't they don't absolutely not in fact when I am when I was a financial adviser a long time ago I was Series seven licensed which is the ability to sell stocks that's back when people who sold stocks were called stock brokers instead of financial advisors and that all changed with the internet and three trades or $9.00 trades by Scottrade everyone all of a sudden became a financial adviser instead of a trader because traders made their money per trade instead of money under management as an adviser but that's a topic for a different day but to this day one of the most impactful things I ever saw in 30 years in this industry was page 1 of the series 7 manual it's about a 300 page book page 1 you open it up and it says and then what this was the only writing on the page it said the little man rule and the little man rule is that the little man never wins because the big investor is always ahead of the curve so I believe that the central banks were alerted at probably 2017 and the meeting in in Basel Switzerland they probably were told that in 2019 this is going to go into effect and that's why they have been accumulating gold silver Asia Slee since 2018 and no one's talking about it until they have properly positioned themselves that it will become front and center news and so you know the old saying about it's less what you know and more who you know in life really is true a lot and I think they take care of themselves they being with central banks and the central bank's by their movements Rd dollar rising and they're taking this very seriously let me put it to you this way Maurice gold was up 18% last year that's one of the biggest movements that I can ever remember in a year and no one even notices it because the stock market was up even more and you know the the movement in gold I can tell you as someone who owns a precious metals company was not due to retail investment and we had a good year last year but our year was characterized much more by large orders by accredited and institutional size investors and less by the average person in 2011 we were getting 200 orders per day last year we were down to 10% of that but the volume we did was probably greater than 2011 all I can simply tell you is this is that the 18 percent movement in gold last year if I had a gun to my head I would say is 99 percent attributed to central bank's accumulating it on the quiet and they've been doing it since 2018 and they get it in 2019 and that trend continues unabated now at some point at some point when the central banks have properly D dollarized and reposition maybe it'll be more front and center news but until then that will crowd crowd them out of their own trade so they're you know it's you old saying don't do as I say do as I do well that's a prime example of it Andy I on behalf of all of our listeners the retail investor the little investor the little guy that you're referring to thank you for sharing your words of wisdom with us because again this is the narrative that we don't hear we see price movements but we don't understand why in the rationale behind it and here you have it ladies and gentlemen you know we're truly experiencing a financial system that is breaking down and we have bubbles surrounding us it's not a matter of if what everyone should consider is win in how to prepare can a single individual take the same actions as the central bank's are taking absolutely it doesn't matter how much it's just look the United States by its own admission is north of a hundred twenty one hundred and twenty trillion dollars in debt just between the national debt of twenty two trillion and the fifty three trillion shortfall in Social Security were seventy five trillion in the hole why is that not front and center news Maurice everywhere you know a trillion seconds ago was thirty one thousand six hundred eighty eight years ago so why the hell is that not front and center news just like the reclassification of gold the things that matter about the future of our country are being glossed over in favor of trying to impeach Donald Trump for for for trying to have Joe Biden's son investigated you know the the bottom line is it's it's a misappropriation of efforts and of energy and of money the things that really matter are being completely and totally glossed over but when you look at at a country that is just between those two things seventy five trillion in the whole north of a hundred trillion in the hole in unfunded liabilities and things like Medicare and Medicaid and government military pensions and entitlements were were broke you know and like we talked about before and I heard on your interview with Bob Moriarty he mentioned the same thing I did the largest single asset in the United States is student debt we have make trillion dollars in assets of which 1.8 trillion is in student debt of which yes as he eloquently said you know that people like Elizabeth Warren want the taxpayer to pay for it's it's the biggest issue is we are a country that's that's financially insolvent with nothing in the way of assets and so the most important thing is to ask yourself now how much gold and silver should I own but what exporter do you want in a currency that is effectively broke and the sophisticated well-funded and influential traders on the globe are quietly exited exiting Stage Left that's the most important thing so you do what you can you mitigate your exposure to the dollar one of the slides that I showed at the sprat show last year Maurice was a slide from JP Morgan Private Wealth this is the division of their company that works with the wealthiest investors in the world the centum millionaires and the billionaires and they sent a letter up to all their clients in this division that's created quite a stir in the industry and it basically said that we want you to mitigate your explosion of the US dollar to foreign currencies and precious metals because we believe it is inevitable that the dollar will be challenged at some point for singular world reserve status well there you go it's about mitigating your exposure to the dollar it's about trying to take something off of that dollar risk off the table in a non dollar denominated assets with no counterparty risk as Doug Casey so eloquently says gold is the only asset that does not simultaneously someone else's liability and when I say gold that means solar platinum palladium too but the bottom line is is that you remove counterparty risk when you take possession of it you remove the dollar risk and that as our friends at Morningstar through its in' have reminded us recently that because of the interest rates being so low the inverse relationship between stocks and bonds used to be called risk-on risk-off well that's gone because as interest rates rise it kills both markets and what they basically said was the only asset left on the planet that has an inverse correlation to the united states stock market or precious metals so you have inversely correlated assets to or an inversely correlated relationship between the US stock market and the US dollar and you see the most sophisticated traders on the globe doing this to not recognize this because of price and price alone is a huge mistake because that is the greatest tool of misdirection is price bottom line Maurice how do you do it you just simply buy what you can when you can add slowly D dollar IDEs do as the biggest and most in the know and sophisticated traders of mclamb Turk doing D dollarized best you can as often as you can you know you referenced some some household names there what I'd like to interject is Rick rule when he makes his reference to precious metals that they are payment in fool that's something we all should consider their precious metals don't have the word note on there if they're not an IOU they are payment in full let's switch the narrative from rhetoric to arithmetic and talk to the person listening right now and share some specific buying opportunities that you've identified that will maximize their precious metals portfolio because I find that all too often most buyers don't take advantage of the premium fluctuations within their metal of choice what are you and your most successful clients buying right now sure well first of all let's just talk about the pink elephant in the room and that is the silver price there's no question Murray said Silver's the in my opinion anyway that silver is the most undervalued commodity on the planet and while we're still able to get it there's very little that you can think of buying that is as undervalued as silver what commodity can you buy that's trading at a third of its peak 1980 peak I mean you can't think of anything that you can buy today any commodity from you know from food to energy to precious metals that trade at a fraction of what they were trading for in 1980 silver with with 86 to 1 ratio the relative relationship between blue and silver is screaming to buy silver so let's just say that silver is the best buy period with that being said you can also say the same thing about platinum I guess too because the relationship between platinum and gold is is is at its all-time high but I think silver has more utility not only as an industrial metal but also has money that platinum does Platinum doesn't have have the history as as money but it's a great value too but if I'm buying gold I'm buying the $20 gold pieces the numismatic gold coins are as inexpensive or on par with or only slightly higher than gold bullion coins and that is a price anomaly if I'm buying gold online low-grade certified mint state $20 gold pieces for basically the same price as a gold eagle that is in my career almost unheard of in terms of premium as you mentioned it's non-existent and in two thousand seven eight-nine those coins were trading at sixty plus seventy plus percent premium to a thousand dollar gold price you're talking that was the peak but even in the 90s when when gold was in the midst of a 25 year bear market those points traded at a twenty to twenty five percent premium to gold spot now they're four to five percent it's as good of a value of gold as I've ever seen if I'm buying silver I think it's very difficult to ignore the value that we find in junk silver bags ninety percent by weight dimes quarters and half dollars and right now as far as their price I remember when they were four or five six dollars an ounce over the price of silver and today you can get them for roughly 69 cents over it's an incredible value an incredible bargain bottom line is that when you're buying gold and silver Maurice it's just most important to focus on maximizing what you get but not crossing over the Pennywise pound-foolish stress threshold by buying too large of a piece you always want to maintain good liquidity and flexibility so typically I don't go any bigger than one ounce in anything I recommend typically because whether you're playing poker or driving on a crowded Highway or just investing you can never have too many exits or too many outs or too many options and so by by I guess you could easily say it by saying in this industry by going big by buying hundred ounce bars of silver or 10 ounce bars of gold it's in lieu of a 1 ounce piece that loss of flexing get is not commensurate with the loss of flexibility so bottom line if I buy and platinum I'm buying one ounce platinum M ple Leafs they're probably the best buy if I find silver right now my first choice is going to be 90% junk silver bags if I'm buying gold my number one choice is going to be ms 61 2 or 3 $20 gold pieces which are amongst the cheapest I've ever seen in 30 years in this industry switching gears let's discuss storage and protecting your financial legacy because I believe a number of precious metals investors make a critical error right here the biggest one in my experience is using safe deposit boxes at their banks for the person listening Andy why would storing your precious metals in a safe deposit box not be in their best interest well there have been a couple of banks I think Morgan Chase came out and said you're not allowed to store coins or cash in a safe deposit box they're not insured that's less Palsy right there most people were under the impression because it's at their bank that is FDIC insured please say that 1 more times regarding these storage boxes yeah safe deposit boxes are not insured the contents are not insure they have nothing to do with FDIC furthermore if you were to have a bank run into problems or there were a banking holiday they closed it down on a Friday night and you wouldn't get into that box until they reopened not a good idea also the banks have programs that scour the obituaries and if someone dies and it's in the obituary those boxes are sealed until they are opened under you know for probate and what-have-you so it would be the last place I would store my precious metals a safe deposit box in a major institution a banking institution United States would be the last place I would store my precious smells I would dig a hole in the backyard and become a midnight gardener before I would do that [Music] all right does Miles Franklin offer a more efficient safer storage alternative yes we do we offer several both domestic and international but I would like to talk about the international storage and we actually do have a safe deposit box program in Canada in Toronto and in Vancouver we have been given North American exclusive on this program were the only ones who have access to it these are brand new state-of-the-art safe deposit boxes where there's only one key you as the depositor hold the 1 key and the only spare most of these most people who have used a safe deposit box before will have will remember the experience of going into the facility opening up the box with a key at the same time the bank administrator will put a key in you put them in together that's the master key and then you'll and then the Box opens with these they're just one key one key you hold the only key and the only spare our safe-deposit box program is fully insured but what's unique about it there are a few things unique about it number one if you google basic questions and answers form 8938 you go right to the IRS website and they will say on that website the precious metals held outside the United States in a directly held fashion in a non financial institution are not reportable well the only example the IRS has ever given as to what they mean by directly held is a safe deposit box in a non financial institution so what differentiates our program number one state of the art one key box is instead of two the bank does not or Brinks in this case does not pull the master key number two it's held in a non financial institution like Brinks is not a financial institution like a bank number three it's fully insured where as stuff helmets safe pots bak box in a bank is not insured and lastly the way that we build for this is by the outs were the only one in the industry that I know of that builds by the pounds instead of by the value in other words if you believe gold can only go higher from here you have a fixed rate with our storage program so it's not reportable to the federal government in both facta and F bar because of the fact that it's directly held in a non financial institution the client holds the only key and the only spare it is fully insured and you know I think the maybe the biggest reason to consider owning metal outside the United States Maurice is look at what the central banks are doing we started out this conversation by saying the central banks are preparing so should we but what are they preparing for they appear to be preparing for a dollar that runs into trouble if the dollar runs into trouble the first thing that the US government will do in my opinion is create or impose currency controls because the inclination of the wealthy if the dollar starts to slide let's just say as we've talked about before OPEC says we're gonna accept payment for oil in yuan and ruble or let's say the the BRICS nation yet the BRICS nations issue a new currency backed by gold or maybe comes right out of China or whatever it is that creates panic selling in the dollar the very first thing that the US would do would be to close the window of getting money out of the country because the first inclination of wealthiest people in the United States would be to buy something other than that from another currency they would buy Swiss denominated bonds or real estate in another currency but in order to do that you have to first sell dollars to buy Swiss bond or to buy a condo in Vancouver by doing that you exacerbate the inflation you increase the velocity at which things happen so currency controls if things get bad with a dollar will be the first thing that will happen having money outside the country not reportable fully insured in a fixed rate structure my opinion makes our storage program the envy of the industry and non comparable there is nothing like it to be able to have money outside the country that fully is legal and no one knows about you it is I won't go higher in terms of its value no matter how high the dollar fall or how high got gold goes based upon falling dollar to me is is more much more than just storing your gold outside of the country Andy for the person listening that wants to get more information regarding the safe deposit boxes what's the website address private safe deposit boxes dotnet that's private safe deposit boxes dotnet last question what did I forget to ask I don't think you forgot really to ask anything Maurice you're you're you're thorough as can be you know the bottom line is simply this that I think if people are concerned about things going upside down in this country and you want to buy some metal to protect at home to me jump silver dimes and quarters are the best choice in silver and one ten-thousandth gold American Eagles are the best in gold they're the size of a dime they're clearly marked one-tenth of an ounce from a barter standpoint if people are concerned about that those are the two things to own but for me my main consideration when I am either buying gold and silver for myself or recommending it to others is to maximize what we're getting without decreasing my flexibility never ever compromising my liquidity the things that we've talked about today junk silver 1/10 ounce eagles low-grade certified $20 gold pieces 1 ounce platinum coins these are all as liquid and vanilla as anything you could ever buy they will maximize your liquidity and your flexibility never compromising them and I think that if you follow that rule you'll never go wrong in this industry whatever you're doing so as always Maurice it's great to be here with you I hope to do it again next week and we'll continue navigating this this sea of uncharted waters together mister scheck man thank you as always for sharing your valuable insights today for someone listening that wants to speak with you please share your contact details my direct dial is 1-866-376-8255 or antifa Niek I'm including warranties of accuracy completeness or fitness for any particular purpose the information is not intended to be and does not constitute financial investment or trading advice or any other advice you should not make any financial investment or trading decision based on any of the information presented out first undertaking independent due diligence and consultation with a professional broker or competent financial advisor