July 2021, Volume 27 Issue 7 Liberty Coin Service’s Monthly Review of Precious Metals and Numismatics June 29, 2021 In Reaction To Rising Consumer Prices And New Basel III Banking Regulations Taking Effect, US Government Suppresses Gold And Silver Prices! US Dollar Surges In Value Over 2021 Year To Date Results South Africa Rand -2.6% Past 34 Days Through June 28, 2021 Canada Dollar -3.3% Brazil Real -5.2% May 25, 2021-June 28, 2021 Precious Metals Palladium +9.9% U.S. Dollar Index 91.888 +2.22% Currency US $ Change vs Currency Platinum +4.2% US And World Stock Market Indices Sweden Krona +3.1% Silver -0.7% Russell 2000 +17.6% South Africa Rand +2.8% Gold -6.1% Standard & Poors 500 +14.2% New Zealand Dollar +2.7% Numismatics Frankfurt Xetra DAX +13.4% Euro +2.7% US MS-65 Morgan Dollar, Pre-1921 +32.3% NASDAQ +12.5% Denmark Krone +2.7% US MS-63 $20 St Gaudens +1.9% Dow Jones Industrial Average +12.0% US MS-63 $20 Liberty -1.6% Australia S&P/ASX 200 +10.9% Switzerland Franc +2.7% London FT 100 +9.5% Canada Dollar +2.5% US Dollar vs Foreign Currencies Dow Jones World (excluding US) +8.9% Australia Dollar +2.4% Argentina Peso +13.2% Sao Paulo Bovespa +7.1% Colombia Peso +8.2% Tokyo Nikkei 225 +5.8% India Rupee +2.0% Peru New Sol +7.3% Shanghai Composite ` +3.8% Great Britain Pound +1.9% Japan Yen +7.2% Thailand Baht +6.3% 10 Year US Treasury Note interest rate Thailand Baht +1.7% 1.49% +60.22% Switzerland Franc ` +4.0% Japan Yen +1.7% South Korea Won +3.9% Energy and Other Metals Peru New Sol +1.5% Sweden Krona +3.7% Molybdenum +94.8% Singapore Dollar +1.3% Chile Peso +3.5% Tin +58.0% Philippines Peso +1.0% Malaysia Ringgit +3.1% Crude oil, Brent +44.3% Indonesia Rupiah +3.0% Cobalt +42.2% Indonesia Rupiah +0.9% Euro +2.6% Natural Gas, Henry Hub +41.3% Argentina Peso +0.9% Denmark Krone +2.5% Aluminum +23.9% China Yuan +0.7% New Zealand Dollar +2.3% Copper +21.8% South Korea Won +0.7% Australia Dollar +1.8% Lead +13.1% India Rupee +1.8% Malaysia Ringgit +0.1% Nickel +12.5% Singapore Dollar +1.6% Zinc +5.6% Israel Shekel +1.4% Hong Kong Dollar +0.0% Metal Content Value Of U.S. Coins Taiwan Dollar +0.0% Philippines Peso +1.1% Hong Kong Dollar +0.1% Lincoln cent, 1959-1982 2.83¢ Chile Peso -0.1% Mexico Peso -0.3% Lincoln cent, 1982-date 0.76¢ Mexico Peso -0.4% Taiwan Dollar -0.7% Jefferson nickel, non-silver 5.86¢ Israel Shekel -0.5% China Yuan -1.1% Roosevelt dime, 1965-date 2.66¢ Great Britain Pound -1.6% Washington quarter, 1965-date 6.65¢ Colombia Peso -1.1% Russia Ruble -2.4% Kennedy half dollar, 1971-date 13.30¢ Russia Ruble -1.7% Brazil Real -8.3% and subsequent government reports have 2010! shredded that claim: • The Bureau of Labor Statistics reported Over the past five weeks, it looks • The Bureau of Labor Statistics report- on June 16, 2021 that the Import Price like the US government and the Feder- ed on June 10, 2021 that the Consumer Index for the 12 months ended May al Reserve Bank have managed to pull Price Index for the 12 months ended 2021 was up 11.3% That was the larg- off a miracle. May 2021 rose by 5.0%. That was the est 12-months surge since the year end- With soaring inflation of the money greatest 12-months increase since the ed September 2011! supply and major expansions in gov- year ending August 2008! • The Bureau of Labor Statistics reported ernment spending and budget deficits, • The Bureau of Labor Statistics report- on June 16, 2021 that the Export Price consumer price increases were des- ed on June 15, 2021 that the Producer Index for the 12 months ended May tined to accelerate. Price Index for the 12 months ended 2021 soared 17.4% That was the larg- Yet, as recently as the April 28, 2021 May 2021 increased 6.6%. That was est 12-months increase since this statis- announcement from the Federal Open the highest 12-months jump since this tic was first created in September 1983! Market Committee, the Fed was still statistic was created in November claiming that consumer price increases were running “persistently below” the Inside this issue: Has The World Turned Upside Down? page 2 Fed’s target of 2% annually. It most How Long Can This Go On? page 3 definitely was not true on April 28, Many Lower Premiums On Gold/Silver page 4 (Continued from page 1) 2nd paragraph conceded, “Inflation has ris- partners of the Federal Reserve Bank of • Finally, the Bureau of Economic en.” New York, international agencies such Analysis reported on June 25, In the 4th paragraph, it stated, “The Com- as the Bank for International Settle- 2021 that the Personal Consump- mittee seeks to achieve maximum employ- ments and International Monetary Fund, tion Expenditures Index for the 12 ment and inflation at the rate of 2 percent and allied central banks essentially have months ended May 2021 was up over the longer run. With inflation having run “all the money in the world” to be able 3.9%. This may be the most ex- persistently below this longer-run goal, the to manipulate financial markets. treme one-year increase in this In- Committee will aim to achieve inflation mod- In the past few weeks, the US govern- dex going back more than 50 erately above 2 percent for some time so that ment has been able to admit that the years! inflation averages 2 percent over time and purchasing power of the US dollar is Rising consumer prices is just an- longer‑term inflation expectations remain falling faster than previously acknowl- other way of saying that the purchas- well anchored at 2 percent.” edged without sparking a public flurry ing power of the currency is falling. Further in the same paragraph it reads, to scoop up bullion-priced physical gold That means that the value of the US “inflation has risen to 2 percent and is on and silver. dollar in absolute terms should be track to moderately exceed 2 percent for some The financial markets have seen the declining. time.“ beginning of new Basel III regulations But, when the value of the US dol- When the one-year price increases on some banks that makes it more diffi- lar should be falling, creditors would through May 2021 in the various govern- cult to suppress gold and silver prices, want to increase the interest rate they ment indices are up by 5.0%, 6.6%, 11.3%, yet prices were knocked down despite receive to offset the loss in purchas- 17.4%, and 3.9%, how can the US govern- that. (Note: British banks become sub- ing power over the term of the loan. ment and the Federal Reserve still try to ject to the new Basel III regulations at Rising interest rates, in turn, would pretend that these numbers only the beginning of 2022, while US and mean that the US government would “moderately exceed 2%?” other world banks become subject to have to pay a higher interest rate on To compound the pressure on the US dollar, them at the beginning of 2023.) its $28.5 trillion of debt, which the new Basel III regulations (discussed in the In fact, right now uninformed inves- would further add to spending and last issue of Liberty’s Outlook) affecting bank tors are likely to think that staying in budget deficits. Every 0.10% in- reserves against their precious metals liabili- paper assets such as stocks, bonds, and crease in the interest rate would cost ties took effect yesterday for non-British Eu- US dollars is the safer place to be than the federal government another ropean banks. This makes it far more expen- in bullion-priced gold and silver coins. $28.5 billion in annual costs. sive for major banks and brokerage firms to The response of the federal govern- Rising interest rates would also re- conduct paper transactions in precious metals. ment and its allies to the negative devel- As a consequence, markets will see a shift duce business profits. As business (Continued on page 3) profits stall or even decline, job crea- away from paper precious metals trading and higher demand for physical precious metals. tion would slow down or even de- The Rise In The US M2 Money cline. This would lead to lower Between the expected fall in the value of stock prices. the US dollar and the increase in demand Supply And Federal Reserve for physical gold and silver, how is it that Even worse, from the perspective Bank Balance Sheet the almost exact opposite reaction has oc- of the US government, lower busi- Data sources: curred over the 34 days ended yesterday? ness profits and fewer jobs would re- https://fred.stlouisfed.org/series/M2 From May 25, 2021 to June 28: sult in a decline in tax collections. and https://fred.stlouisfed.org/series/ • US Dollar Index rose 2.52% WALCL This would also increase budget def- icits—almost certainly leading to an • US dollar was strong against most foreign M2 Money Supply even greater inflation of the money currencies (see table on page 1) Chg from 9/16/2019 supply.