TRANSLATION: “Schwab is telegraphing that brokerages have begun permanently unwinding hundreds of billions if not trillions in money market-funds, and rotating it almost entirely into government securities”
“Schwab will consider a non-response to this notice as your authorization and instruction to change your cash feature.”
OFFICIAL STATEMENT “Charles Schwab has started informing some of its clients that “between June and October 2016, Schwab will update the cash feature on your account(s) from the current retail prime or municipal money market fund sweep to the Schwab Government Money Fund” or the SWGXX, which “will invest at least 99.5% of its total assets in cash, U.S. government securities and/or repurchase agreements that are collateralized fully by cash and/or U.S. government securities; under normal circumstances, at least 80% of the fund’s net assets will be invested solely in U.S. government securities including repurchase agreements. ”
While perhaps not quite as dramatic (or confusing) as last week’s announcement by Scottrade that the discount online broker would no longer allow Canadian citizens to hold accounts, in a new surprising development, another online broker, Charles Schwab has started informing some of its clients that “between June and October 2016, Schwab will update the cash feature on your account(s) from the current retail prime or municipal money market fund sweep to the Schwab Government Money Fund” or the SWGXX, which “will invest at least 99.5% of its total assets in cash, U.S. government securities and/or repurchase agreements that are collateralized fully by cash and/or U.S. government securities; under normal circumstances, at least 80% of the fund’s net assets will be invested solely in U.S. government securities including repurchase agreements. ”
In other words Schwab is telegraphing that brokerages have begun permanently unwinding hundreds of billions if not trillions in money market-funds, and rotating it almost entirely into government securities.
The stated reason for this quiet unwind is the following:
“the U.S. Securities and Exchange Commission (SEC) has made changes to the regulations that govern money market funds. These new rules are intended to increase fund liquidity and to protect investors. The changes include new restrictions related to who will be permitted to invest in “retail” money market funds, which are non-government money market funds that are allowed to maintain a constant net asset value (CNAV). As a result, beginning later this year Schwab Prime Money Market Funds and Municipal Money Market Funds will be required to limit shareholders to natural persons (i.e., individuals, as opposed to businesses, defined benefit plans, or endowments).”
United States Mint bullion products advanced on Monday with American Eagle gold coins gaining 4,000 ounces and American Eagle silver coins rising 852,500 ounces.
The U.S. Mint continues to restrict sales of American Silver Eagles. The agency has allocated 1,187,500 coins for this week, and there are now 335,000 left with Monday’s haul. Last week’s allocation of 1 million coins was claimed by Wednesday.
Year-to-date Silver Eagle sales stand at over 30 million. In 2014 when sales ended at a record 44,006,000, the coins by Aug. 17, 2014 reached sales of 27,283,500.
Below is a listing of U.S. Mint bullion products with the number of coins sold during varying periods. Products with an asterisk (*) are no longer available.US Mint Bullion Sales (# of coins) Monday Sales Last Week July Sales August Sales YTD Sales $50 American Eagle 1 Oz Gold Coins 2,500 7,500 144,500 14,000 357,000 $25 American Eagle 1/2 Oz Gold Coins 1,000 1,000 10,000 2,000 48,000 $10 American Eagle 1/4 Oz Gold Coins 0 4,000 28,000 6,000 104,000 $5 American Eagle 1/10 Oz Gold Coins 10,000 15,000 135,000 30,000 555,000 $50 American Buffalo 1 Oz Gold Coins 0 3,000 32,000 4,000 132,500 $1 American Eagle 1 Oz Silver Coins 852,500 1,000,000 5,529,000 3,032,500 30,347,500 2015 Homestead 5 Oz Silver Coins* – 35,000 2015 Kisatchie 5 Oz Silver Coins* – 42,000 2015 Blue Ridge Parkway 5 Oz Silver Coins* – 10,000 – 45,000
What Every Investor Needs to Know About Precious Metals
How owning gold and silver can protect you against unforeseen global financial crises “In the absence of the gold standard, there is no way to protect savings from ‘confiscation’ through inflation. . . . Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”
“Paper money eventually returns to its intrinsic value—zero.”
The Greek monetary crisis has been all over the news this past week, but as anyone who knows how to interpret the data can clearly see, Greece is just the tip of the iceberg. The fact is, there’s no predicting what’s in store for the global economy or how current and future financial upheavals will impact the U.S. dollar.
If you think your investments are immune to the impacts of an economic crisis happening in some other country, think again. We’re all just one unforeseen banking crisis away from having our assets frozen. Our own U.S. banks can freeze your cash just like the Greek banks have done.
In fact, just a few short years ago, we came closer to financial meltdown than most people realize when the housing bubble collapsed and the entire U.S. economy nearly tanked. Bottom line: Investors need to protect their assets, and currencies are inherently unsafe.
The U.S. went off the gold standard in 1971. Now, instead of having a real, gold-backed currency, we borrow money from China and other countries. Fact: As of April 2015, China owned more than $1 trillion in U.S. T-bills. China loans us the money we need to keep our economy afloat. The result? An astronomical national debt that threatens to wipe out the life savings of millions of Americans. And there’s no end in sight.
What hope do you have in protecting your hard-earned savings and investments in the event of a major economic collapse? According to former Federal Reserve Chairman Alan Greenspan, we cannot simply sit on our hands, hoping for the best and waiting for the next banking crisis to take us by surprise. Right now, the best way to protect yourself is to start accumulating actual gold and silver as a hedge against an increasingly likely worst-case currency scenario.
One of the great advantages of investing in gold and silver is that you don’t have to figure out how to purchase and store these precious metals. Now you can get your own private storage IRA. It’s like a regular IRA, only instead of owning shares of stock and bond funds, you own real gold and silver, with your own private storage space to safeguard it—beyond the banks’ grasp.
If you think the possibility of a currency collapse is just more “sky is falling” hysteria, some of the most knowledgeable experts agree that the threat is all too real. For example, according to Quantum Fund founder Jim Rogers, “We are destroying the people who save and invest for the future. They are being wiped out at the expense of the people who bought four or five houses with no money down and no job.”
Don’t wait for the next banking crisis. You can start accumulating gold and silver right now and store it in a private vault, beyond the reach of the banks. “When you destroy the investing and saving group, your society, economy, and country has problems. That is what we have been doing. Think of all those people who were saving for the future. They look like fools now, and feel like fools. Their friends who borrowed money are being saved at their expense.” —Jim Rogers
Diversify your investments and learn how to open your own precious metals IRA and physically store precious metals in your private storage IRA at home.
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Investors have continued feeding their voracious appetite for American Silver Eagles. According to the United States Mint, sales of the American Silver Eagle currently hold at 4,760,500 year to date. How does that affect the market?
So What’s in the price of a Silver American Eagle?
At Lexi Capital we receive numerous calls inquiring about Silver American Eagles and their purchase price. The biggest question, “If silver is $18 at the spot price, why are Silver American Eagles $21, $22 or even $23?” This is a great question for the first time investor to understand the basic nature of a precious metals investment. Consider a similar example of a baker. Did you know that if you were to purchase flour, eggs and sugar in bulk you could essentially buy your baked goods ingredients at “spot price”. However, as you are purchasing that pastry from the bakery, you are paying for a finished baked good. Think of the Silver American Eagle as a finished pastry. The wholesale “ingredient” costs of a Silver American Eagle includes the 1 ounce of silver ($18), the cost of turning the silver rock into a silver coin ($2), marketing, a supply/demand premium and a dealer profit. The only real variable in the equation is the dealer profit markup which even on the high end is only about 3-6%.
What is a supply/demand premium?
At Lexi Capital, we explain to perspective buyers that the cost of a coin can often spike beyond an average market price due to supply and demand. For instance, when demand for a Silver Eagle outstrips supply its not unusual to see a $1-$3 premium on that coin for both the ask/bid price. This represents a real opportunity in the market place for experienced precious metals investors. These types of spikes can last 1-2 weeks and generally occur a couple of times a year and without warning.
General Cost of a Silver American Eagle with spot Silver at $18:Spot Silver = $18 Coin Production = $1-2 Government Marketing & Profits = $1-$2 Dealer Markups = $1-2 TOTAL = $21-$24.
At Lexi Capital we offer a variety of silver products including Silver American Eagles. Please call today to hear about our silver product specials and incentives.
Silver bears with long shorts on the precious metal are clearly ignoring the retail market demand in the United States. With 2014 serving as one of the U.S. Mint’s all time highest sales tally of Silver American Eagles, the first day of silver trading in 2015 started off with nearly 3,000,000 coins sold.
First-day sales of 2015-dated American Silver Eagle bullion coins hit 2,958,000, figures from the U.S. Mint show. As was the case in December when its supply of 2014-dated Silver Eagles sold out, the Mint is rationing how many they sell to maintain an inventory. And similar to a week ago when the agency released its 2015-dated gold bullion coins, Silver Eagle starting sales are already higher than those from December. Introduced in 1986, the series monthly sales record happened in January 2013 at 7,498,000 coins. Sales in January 2014 ended at 4,775,000 coins. CoinNews.net
Will 2015 serve as another record year for sales? With silver trading at or near production costs retail buyers are snapping up large quantities of the silver metal in an effort to get ahead of the next market correction or for a long term buy and hold play. What are your thoughts on the silver market?