Our attention has been diverted for much of 2020. Everything from massive swings on the stock market to the select pearl-clutching of the mainstream media, the public failed to keep its eyes on the myriad other problems that were prevalent before the Coronavirus pandemic captured our energy. The corridors of power have used the opportunity to engage in a war on two traditional safe-haven assets: cash and gold. If you connect the dots among the Federal Reserve rationing coins, the U.S. Mint suspending metals production, and Americans hoarding cash, you witness a battle being waged against the best tactic to shield yourself from the Leviathan: physical money.
Insert Coins Here
In one of those blink-and-you-will-miss-it situations, the Federal Reserve revealed that the circulation of physical coinage has come to a screeching halt. Fed Chair Jerome Powell told Congress during his recent semiannual testimony that banks are receiving smaller-than-usual sums of coinage, and consumers are not spending the coins they do have. He believes the problem will be only temporary.
In a separate statement, the U.S. central bank confirmed that it would limit the number of quarters, dimes, nickels, and pennies sent to banks to facilitate the distribution of coin supplies. In other words, the Eccles Building is rationing the change in your pocket.
The Fed said in a statement:
“The Federal Reserve is working on several fronts to mitigate the effects of low coin inventories. This includes managing the allocation of existing Fed inventories, working with the Mint, as issuing authority, to minimize coin supply constraints and maximize coin production capacity, and encouraging depository institutions to order only the coin they need to meet near‐term customer demand.
“Consequently, effective Monday, June 15, Reserve Banks and Federal Reserve coin distribution locations began allocating coin inventories.”
Powell conceded that there had been a movement of coins as economies began to reopen. But that may be temporary, too, due to the higher adoption of digital payment tools.
Have a Mint
Gold and silver are in high demand right now amid the coronacrisis that has sparked tremendous volatility in global financial markets. Switzerland just exported a record amount of gold to the United States in May, while the ultra-wealthy crowd has been stockpiling the yellow metal all year long. So, what terrible timing it was when the U.S. Mint announced in April that would be suspending production of precious metals.
The U.S. Mint halted output at its West Point location in New York because of concerns over employees contracting COVID-19. The decision came soon after it sold out of American Eagle silver coins, and its gold coins were scooped up at a fast pace. Mint Director David J. Ryder said in a statement:
“My commitment to the health and safety of the Mint workforce is unwavering and continues to be my highest priority. These are challenging and unprecedented times, and decisions on Mint operations are made with the best interests of Mint employees first and foremost.”
It remains unclear as to when it would restart operations to produce investment-grade gold, silver, palladium, and platinum bullion coins. Until then, some of its silver production capacity will be transferred to its Philadelphia facility. With demand surging and supplies being limited, you can still anticipate spending 5% to 10% over spot value when you buy gold and silver.
According to new data from the Federal Reserve, U.S. bank deposits have skyrocketed $2 trillion since January, with more than $1.4 trillion occurring in April and May. In total, commercial bank deposits stood at $15.4 trillion. Additional Federal Deposit Insurance Corporation (FDIC) figures highlighted that two-thirds of the money was allocated to the nation’s largest banks, such as JPMorgan Chase, Citigroup, and Bank of America.
Due to the public health crisis, banks have more cash on hand than ever before. How did this happen? Well, there are a few reasons: Uncle Sam dishing out trillions of dollars in stimulus and relief, the Federal Reserve buying an unlimited amount of government and corporate bonds, and consumers hoarding their money out of fear.
If you thought interest rates were already depressing, wait a couple of months. Financial institutions have little incentive to offer depositors an appealing return on their savings accounts. With the Fed keeping rates at near-zero and the banks swimming in cash, the yield on your deposits will probably come down even more – if that is possible!
Coincidence or Nefarious Plot?
In life, only a few things are certain: the media’s hatred of President Donald Trump, Paul Krugman’s dubiously speculative writing, and the establishment’s disdain for cash and gold.
The Coronavirus pandemic presented a massive opportunity for the power players to pull the trigger on their latest central-planning schemes – socially and economically. The elites worldwide have been leading a war on cash for years, employing a series of odious methods, from eliminating high-denomination banknotes to pushing consumers to the digital system. Whether everything that has transpired is a nefarious plot or just dumb luck, these are consequential developments for statists who want to track and imprison the citizenry. Indeed, limiting gold supplies, scooping up fiat money, and soaring bank deposits could all be one giant coincidence. That does not dispute the idea that the globalists benefit from these events. Before the pandemic, these news stories could be found only in their dreams. They are now unfolding in real life.
As Humphrey Bogart says in The Maltese Falcon, “It’s the stuff dreams are made of.”
Read more from Andrew Moran.