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 hi this is Mike Maloney and I'm here with David Morgan of the Morgan report comm and Jeff Clark the senior precious metals analyst of gold silver calm and we haven't gotten together before for a discussion recently Jeff wrote a great article and Dave sent us an email about it so we decided we'd all get together on it so how are you doing David I'm doing good under the circumstances Mike thanks how are you pretty good and Jeff's how are you doing there in Sacramento California oh it's nice and

sunny and warm so all good so you wrote an article recently a potential looming catalyst for silver that no one sees coming the theme of this was about potential for governments to start accumulating again David you're the one that actually sort of spurred this whole conversation between us you read it and send an email to Jeff and to Dan about it so tell us about what your impressions were of the article well first of all I love the title so you know great honor your clip big there Jeff but seriously tunnels being a lot

it was a great one that it was very meaningful and so you know I read almost everything in the silver market no matter you know what the source but there's you know I have my discernment regardless it was a great article and it really got me thinking because one of the themes I've been doing for about the last year was what a civil retreated like gold and basically the crux of that issue is that silver was the the monetary standard for long time when the world's on a silver standard not a gold

standard in China was the last to come off a silver standard and the whole opium wars and everything else is rather complicated story won't go into but going back to the crime 1873 was supposed to be monetized I mean the political debates of days gone by were all about the monetary most of the major debates through a lot of our the United States's history was about money so when Jeff said governments that just like the light bulb went on Wow there's someone else out there in the silver space

thinking how important it is and then I did a video for an update that I do weekly and I think at least half of the time that allotted was all about your art and I stated you know one how much I liked it into the fact that the United States used to have a strategic stockpile of silver they felt it was so important that it was sacrosanct it was basically behind lock key and as a metaphor and they needed to hold on to it no matter what well that changed some of these more progressive types I'll

call I'm not trying to box anyone in politically I'd like to be a political but back on point silver sitting there collecting dust what do we do they started the silver liberty program commonly known as silver eagles in 1986 and started to just whittle down the stockpile when they started it the law said you could only use domestically mined silver which meant basically the silver Valley where I live what comes out in Nevada and a few other places in the continental United States and that

quickly was less of that required to meet the demand on silver eagles and so they changed the law and said they could source it from anywhere so I just thought that was the number-one point and we'll some governments come into the fore and use silver as a strategic holding potentially as a energy source a battery metal source a monetary source or any combination there in especially factoring in what you know one of my I call him a mentor really would be he goes through this price that's been at

the forefront of putting silver back alongside the peso as a monetary unit in Mexico so there's so many vectors that just went through my mind that I just had to write to you guys and say hey Bravo good for you and thanks for kind of reifying all the aspects that silver entails it's not just an industrial metal so Jeff what is your you know the article is mostly about potential of government demand tell me about your take on this one there's some great graphs in here you know the first graph was actually in

my book when I released my book in 2008 showing the government inventories but there's several graphs after that that I found very interesting if government has wanted to match prior levels for instance yeah so how this all came about for me was I've been thinking about this for several years I've been the back of my mind what governments really buy sober again because they used to hold it a lot of it and then increments report came out in gold we trust if you if you know that young for that just came out a

few weeks ago I worked my way through it it's very very big and I got to a section on this very topic and they were there was some conjecture could government's actually enter the silver market again like they have in the past I thought AHA David Morgan and I are not the only ones thinking about this possibility right and the more I looked at it the more I realize you know I have to write this because there's a lot of history with governments and silver either using it as currency they

don't quote it in any reserves or anything like that but they've inventoried it they've stockpiled it silver as David has pointed out many times has been used as currency more often than gold so there's obviously a historical tie between governments and silver so they really buy silver again because if they did the amount of silver that would be available to them would would not be sufficient to mean any kind of real monetary need for example if they just wanted to match what they were

going to buy back in 1970 what they held back then it would be more than one year's supply mine supply but that's not realistic that's like asking all of us that live offer a 1980 salary you have to you have to measure it according to today's you know values and capita is what yeah the number of ounces per capita because the population doubled right right populations doubled so just to get there now you need twice as much silver if you want to match what before and that's still not enough

because back in I think the peak was 1980 you I think you have the article in front of you Mike but I think it was 0.26 percent of assets that silver of all financial assets that's all you're talking about global financial assets that's the one that I think is really fascinating because right now silver is about one 176 of what it was in 1980 as a percent of global financial assets in other words to reach the same amount it would have to either go up 176 times in price like right away or the rest of the

global and financial assets would have to fall in value so or they have to buy a lot of silver you know just to match it so that's the comparison I was making is like look back in 1980 and the silver wasn't part of the monetary system then either but back in 1980 that's how much silver represented of all the global financial assets in the world so just to go back to that level they'd have to buy something like 8.1 billion ounces I believe it was Mike so it either went three one eight bill yeah yeah which is

a ridiculous amount that amount is obviously not available and the point of all this is that governments would represent a new buyer to the silver market we have a lot of industrial buyers we have investors we have jewelers you know all kind all kinds of buyers in the market this would represent a brand new buyer to the silver market and if they entered to make any meaningful difference to their balance sheets match their currency whatever they would need to buy a lot and so the amounts would be you know

overwhelming now I acknowledge it odds of this are probably pretty low but I don't discount it because if the monetary crisis gets as bad as you've outlined Mike and David's pointed out many times as well if it really gets that bad we have a transition away from the US dollars the reserve currency of the world that's going to cause some major monetary upheaval and I think all options get on the table at that point and silver would be an easy choice for governments to do they've done it in the

past and silver is a monetary metal already they don't have to look elsewhere well when new buyers do come in and the prices start to rise I think years ago David you wrote an article about some of these silver users in industry some of the big silver users that use a lot of ounces trying to front run price rises for instance I think you said if Apple wanted to buy enough silver to keep them in business to keep being able to make iPhones and computers and everything else for the next five years or

something like that that it would be an immense quantity of silver do you remember that article I vaguely do and I'd like to add on to that a bit first of all Samsung has a direct relationship with the Vino mines to buy all their silver so some of these electronic companies they're not gonna worry about what the Comex inventory is or what the smelters are producing they've got a direct line because they could see what's coming or they know how vital or essential this is their business model

they have to have silver there's no substance the other part that I outlined in my weekly perspective was that there's a gentleman I won't name because he didn't give me permission that has gone into all the South American countries Mexico South you know Chile Colombia Brazil Peru but primarily koru Chile and Mexico because they're the in Argentina I didn't want to leave out argentina little silver are very large silver producers and he asked them the question that what would be the benefit

to hold back some of your in-ground silver in refined form for essential services like electricity because there's so much of a push toward green energy and we all know that silver is a vital component and photovoltaics so he's just asking some of the legislators at the high level if they might consider why silver I'll call strategic not in a war effort but strategic for energy production you might want to rethink your silver position well I can threw that out because I'm aware of it I've talked to

them several times via Skype and you know I'm free-market I mean if you want to throw that idea out there why not because I think it's a valid idea I mean I could argue Silver's going up because the monetary demand and that's my the main horse I ride but I could get off that horse and get on the industrial demand only horse and still make a case that silver is gonna continue up because more and more demand all the time and what if one of these country or countries or let's say that

there was a match to the silver users Association which is in reference to the article that you're noting their country say you know we can band together too and we want to keep back forty percent of the silver supply because we see in the next five years we're going to need that much electrical power due to clean energy and we don't want to be you know taxed by the you know world government taxes Association if you're not producing clean it or something along those lines I just make that part up and

I'm just trying to get the idea that there could be forward-thinking countries that produce a lot of silver that might want to reconsider what they're selling it for paper dollars maybe that's not such a good idea right you know one of the things that worries me a little I mean the possibility of war is very low but we're seeing like saber-rattling and stuff from governments back and forth between the US the US Russia and China we're at levels of potential danger that we haven't been at it for years and what

happens to silver in war the strategic stockpiles are extremely low and you can't fight a war without it right right I'll take that up and hand it over to Jeff I mean this is one of things where I've been neglect in all of my analysis from day one and believe me it wasn't good and think about it but if you look at the two main silver studies and even the older ones that I'm familiar with like handy and Harmon others never ever ever do any of them speak to what the military demand for

silver is yet we know that almost everything that they use that's battery-powered uses silver batteries because of the efficiency and the ruggedness of that metric so you know when you look at any of the study CPM or the silver Institute and you see what the industrial demand is they never break out what the military uses and there's you know Charleston boy used to say in some of the early articles just one torpedo I forget the no manor houses astronomical amount of ounces in a cruise missile or a torpedo so that's at

use and so you know we do we believe the data that comes from those two studies and the answers I do it's the best we have how accurate it is I don't know I'm certain that's not a hundred percent accurate but there's a kind of an x-factor there Mike that you're bringing to the fore and thank you for doing so that you know things heat up around here there my deal much bigger the man on silver just for military purposes that no one's really factoring in other than maybe us at this discussion currently

well governments around the world the first graph in Jeff's article is government silver inventories so this is around the world right Jeff this isn't just the u.s. go that's total global silver ray and that yeah so I had this graph when I published my book although the graph ended in I think 2007 because the book was published in 2008 but and it's been pretty much static since then at around 48 million ounces globally and they used to carry they used to have many many times more than that and it

wasn't just because of the Treasuries there's a strategic supply that all governments have to have if they get involved in war they have to make sure that they've got constant access to silver during World War two we we used silver for the calutron in the wiring to refine uranium into plutonium when we were developing the Tomic bomb it's it's a strategic metal and if governments wanted to prepare for it they would start stockpiling ahead of time and that would spur another government to you know I don't want to

go too far down this road it's almost like a conspiracy theory road but I it's not conspiracy true in theory it's true and and I think that the big issue is that if they do want to come into the market they're a new buyer as I was pointing out but they would need a lot of metal because they don't have a lot of metal it's only Friday what is it forty eight point six million ounces that the entire all governments around the world hold today so yeah you know that's three years the planners and

fifty million ounces right that that's three weeks of mine supply it's it's a minuscule amount it's it's almost a meaningless number so again I think the odds of this are low and let's hope it doesn't happen because of war but if it did happen they would need a lot they would take supply away from other sources they you know for geopolitical reasons military reasons like David's pointing out they might want to keep production within their country and not distribute it so it could get ugly and

could get out of hand very easily so again I actually hope it doesn't happen but if it did it would have dramatic impacts on the price and on supply okay um you know we're all silver guys I tend to talk about gold a lot in a lot of my videos and I want to just remind all of the viewers that when I talk about gold I'm also talking about silver and I keep on forgetting to do that but I think we all three of us agree that silver is like gold on steroids right certainly has been in the past and this band you

know from my work and actually on the on the shoulders of giants as the expression goes I mean Roy is gesture improved in silver the Restless metal which is behind me in my bookcase that if you're in an inflationary depression the best place to be bar none as the silver mark yeah I agree I've been my personal holdings is the vast majority is silver as far as the dollar value I would think that my gold is probably only 20% of my holdings or even less because I just expect silver to explode which brings me to the gold

silver ratio Jeff do you have any plans to trade the gold silver ratio