Why Andy Schectman Believes in Silver Despite Manipulated Market

On the latest Pinnacle Digest pod, Aaron Hoddinott chats with Andy Schectman, a renowned expert in the precious metals market. Schectman has sold over $10 billion worth of silver and gold through his company, Miles Franklin Precious Metals Investments. He understands the silver investment market in a way that few people in the industry do…

Schectman shares his theory on how and why leading commercial banks are suppressing the price of silver. He ties the importance of gold and silver into China’s ultimate plan with the BRICS to create their own currency, moving away from a dollar-backed global reserve.

Why Andy Schectman Buys Gold or Silver Every Two Weeks

As a 19-year-old, Andy joined his father’s business under one condition: Andy had to buy a little gold or silver every two weeks. Out of every paycheque, the young Schectman was expected to pay himself first by investing in hard assets, because governments could not devalue precious metals…

This taught Andy two lessons: discipline through positive routines, and the power of compounding. Today, that is still the best advice Andy has ever received, and he shares this philosophy with all his employees and listeners.

Silver: The Best Investment Andy Schectman Has Ever Seen

Andy’s logic surrounding this thesis is the ongoing supply deficit, and he argues a structural imbalance exists between supply and demand for silver. Historically, the geological ratio of silver to gold found in the earth is 16:1. But, things have changed, as Andy explains,

“And we get to the industrial revolution, largely because of logistics where you can have a million dollars worth of gold in a backpack and run, a million bucks worth of silver is going to weigh 2,000 pounds or whatever and so, gold’s role as money, gold’s role in logistics and silver’s role as an industrial application… that ratio had been skewed to about 42 to 1, that’s man’s ratio.”

Andy continues,

“At an 88.2 to 1 ratio [today’s price ratio of silver to gold], you are talking roughly one-half of one percent of the time over the last 5,000 years we’ve been in this high ratio, which is manipulated to all hell. In every sense of the word, this is an anomaly.”

Andy references his friend Keith Neumeyer, who, according to Andy, says silver is being mined at a ratio of 7:1.

“That ratio geologically, God’s ratio, is now 7 to 1; it’s coming out of the ground at a ratio of 7 ounces of silver to every 1 ounce of gold…”

Silver’s Lesser-Known Industrial Application

Andy believes the Silver Institute is understating the military demand for silver. If 500 ounces of silver are in the tip of a tomahawk cruise missile (as Andy states), the actual demand for silver, specifically as it relates to defence applications, may be much higher than what’s reported.

There Is A Massive Short Position In Silver

According to Schectman, the military industry complex needs relatively cheap silver to build its various armaments. Andy argues that 8 of the world’s largest commercial banks have a massive short position on silver, which is suppressing the price.

Dethroning King Dollar?

Schectman reveals that Jared Berstein wrote Dethrone’ King Dollar’ in 2014. While controversial, this is bordering on absurd when one considers he is the chair of the United States Council of Economic Advisers. Regardless, Andy delves into the mindset of some of America’s most powerful economists and advisors.

From weaponizing the Dollar to going green, Andy wonders aloud,

“Is this bizarro world we’re living in? Or is it too stupid to be stupid? Could all of this be planned so that the world dumps dollars and that we reset the system? And instead of blaming the Fed and the fiscal irresponsibility of the Treasury Department for destroying the American dream, we can blame Xi Jinping, Putin, and OPEC for dumping the Dollar.”

The Future of the Dollar

As the Dollar loses demand from some of its previous key buyers (e.g. China), it may only be a matter of time before commodities surge in value. Schectman talks about the Saudis, the rest of the Middle East and the BRICS and why the Dollar as the reserve currency may be on borrowed time.

So, from the almost countless number of countries applying to join the BRICS, to the fading influence of the U.S. abroad, everything points to the Dollar’s use in global trade dwindling in the near future.

In conclusion, Andy Schectman discusses some actionable insights for investors. He starts with three words: pay yourself first — stating,

“Pay yourself first. You will never get out of the rat race if you don’t. The power of compounding doesn’t need to be compounding of interest. Compounding of time works the same way.”

He reminds investors that to save effectively and become wealthy, one must practice good habits daily, not just occasionally. Despite what he believes to be historic market manipulation, Andy Schectman has been a precious metals dealer for roughly three decades and believes investors will continue to trust in gold and silver.

Finally, Schectman recommends setting aside something every two weeks, no matter what… not surprisingly, for him that means adding to his gold and/or silver stash.