All Eyes on the FED 

Today the Federal Reserve is doing their first ever press conference. We have one question we would like to contribute, if anyone has a media contact please forward them this email.

Question: Mr. Bernanke, despite everything going up in price you continue to show a lot of concern for deflation, not inflation. Can you please review the chart below and explain how this inflation chart is deflationary?

The Illusion has mentioned on several occasions that our recovery and economy is like an illusion. With that said, it shouldn’t surprise us anymore when we see just how deep the fraud goes, but once again, we come across a statistic that really shows us how screwed we are. USA Today recently did a report that shows from using Census Bureau data that 18.3% of all income in the U.S. comes from government handouts. That’s right, food stamps, unemployment, and other benefits account for 18.3% of ALL income in this country. It gets scarier though, only 50.5%of personal income comes from wages, the lowest since (wait for it) 1929! Government revenue was recently reported at 2.2 trillion, government benefits (wait for it) 2.3 trillion.

Comex Manipulation

The CME has announced three margin increases for silver in the past week. We find this to be absolutely ridiculous and an open attack on the silver market. An increase in margins mean investors will have to put larger sums to hold positions, which of course will inevitably force many investors to liquidate positions causing a sell off and downward pressure on the silver price. Doing three margin increases in such a short time period is unheard of! Once again, short term volatility is not from market fundamentals, but from outside groups changing the rules in the middle of the game. believes this manipulation by the CME Group has created a physical buying opportunity. Even though silver could still go down from outside market forces, we believe in the end the price suppression works in our favor since holding silver down is like trying to swim to the bottom of the ocean with a very large beach ball between your hands. Eventually, we are going to see the silver market explode to the upside.

Junior Mining

Yesterday, it was reported Sprott Asset Management sold $35 million worth of their silver ETF PSLV. Most assumed this was bearish for silver, but this couldn’t be further from the truth. When asked about the sale, Sprott said, “every dollar of my money that was raised by selling shares of PSLV was reinvested in silver or silver equities[su_quote].With silver more than doubling in the past year, Sprott made note of the fact that “silver shares have not done as well, which is almost shocking in a way.[/su_quote]

Obviously, the staff at couldn’t agree more. However, we believe silver mining shares should only be considered after you have a comfortable position in physical precious metals. What is a comfortable amount? To each his own. That number may be 100 oz for some, while for others it may be 10,000 oz. But, either way we always say physical first, and if you don’t understand the stock market, just stick with what you do know.