(Text on screen): Yahoo! Finance, The Daily
Ticker, Like Nobody’s Business Aaron Task: The resent tumble in gold prices
and its subsequent rebound has revived the conversation about gold as an alternative
currency. My guest today, David Morgan, who is the creator and publisher of The Morgan
Report and Silver-Investor.com. He actually says silver is a better alternative
currency than gold. We’ll get to that in a second. But first of all, David, why don’t
you give your thoughts on the short-term trading activity. We obviously had a huge rout in
all the commodities, particularly precious metals, a week or so ago. There’s been a rebound
but not as big a rebound in silver as in gold. What do you think is happening there in the
short term? David Morgan: Well, short-term, more volatility.
Obviously, we had a huge sell-off. In fact, record sell-off in both the precious metals
very recently. And it takes time to work that out, especially it starts compounding on itself.
You start getting margin calls, which means more falling. And until that stabilizes, and
it’s starting to stabilize now, but I see more of the same. I see kind of a broad trading
range at these low levels for awhile. We’ll find a bottom and we’ll start back up, in
my view. Aaron Task: And do you have a thought on why
silver hasn’t rebounded as much as gold has to this point? David Morgan: Yeah, it’s always a tough call.
One, it’s a smaller market. It’s easier to manage as far as the price for a short period
of time. Or, in some cases, intermediate time. I think also the demand side for both is extremely
robust, but silver is actually a much smaller market than gold and there isn’t much silver
availability in the Asian community. You see that most of the gold-buying is coming through
Asia and there’s lot of gold there. At least, much more gold available for that whole sector
than there is silver. Silver’s really kind of thought of not as much as the monetary
metal in the Asian countries as it is, let’s say, in some other parts of the world. Aaron Task: All right. So, let’s segue. Let’s
talk about why you think it is a better currency alternative than even gold. What is it about
silver that you think makes it; that we should be thinking about it as the alternative currency? David Morgan: Well, to try to be brief, when
I wrote The 10 Rules of Silver Investing, rule number one was: “No one wants to be a
prophet of doom.” But in absolute crisis, silver would be the monetary metal of choice,
and the reason being is that its value per unit is a lot less than gold. So, if you had
to go to a barter type of situation, it would be silver. Secondly, silver’s been used as money more
places and more times than gold ever has. Lastly, if you look at the word “silver” it
means money in almost every Latin-based language. I mean, if you go into the Torah, the word
for “money” is “silver.” In the Bible, silver’s talked about before gold as money. So, silver
really has a history of money much, much more than gold does. Gold is money, and gold is
used as settlement between nation state to nation state, king to king. But in everyday
commerce, it’s always been silver when we have been on precious metals or by metallic
standards. So, that’s a fact. No one can dispute that?
Will it come back to that? No one knows. But, again, since its unit value is less than gold,
it would be used more often. Aaron Task: Right. More people would probably
have silver quote-unquote “lying around the house” than they do gold, for sure. They probably
know where their gold is more than their silver. So, you’re involved with a movement in Utah
to have silver be adopted as a currency. Where do things stand with that, and, again, is
this realistic; that this could happen? Because obviously the United States of America is
pretty determined to maintain the dollar as the one currency that’s in use here. David Morgan: Right. Well, I have to jump
on that a little bit, Aaron. I mean, the dollar is a weight of silver is what it’s defined
as. But coming back on point, yes, the Utah situation currently there is a; Larry Hilton
that wrote the legislation that was passed and adopted has a mechanism where you can
pay bills. It’s a bill-pay service using gold only, and it has to be U.S.-minted gold. We
talked to him recently about silver. But I think it’s rather impractical. There
is a situation I’ll be writing about in The Morgan Report this month that uses a silver,
gold, platinum, or palladium; any of the precious metals-backed debit card. And I think this
is the only way to actually use metal in commerce, because it’s transparent to the purchase.
You just put your debit card in, they don’t know if it’s coming out in Federal Reserve
notes or if it’s coming out in some certain amount of silver, gold, platinum, palladium. So, this is the way to implement it is to
have a depository to put precious metals in there, issue a debit card against that, and
then go about your business. And I think this is the only way to really put precious metals
back into circulation. Aaron Task: That’s very interesting, that
sort of an electronic means of currency, a debit card, but using silver or other precious
metals to back it. Are there any financial institutions that have said that they might
adopt this or get behind it? David Morgan: Well, there has to be a financial
institution because, you know, the person that generated this has to obey all the, you
know, the Patriot Act and everything else. So there is a bank that’s FDIC-insured and
everything else that we are familiar with that was open-minded enough (and that’s my
words) to say, “Yeah, we’ll take a look at this. OK.” Aaron Task: What’s that bank? David Morgan: It’s a bank here in the Northwest,
I forget the name currently, but it is a member of the Federal Reserve system and they’ve
adopted this. It’s a startup. I mean, I’ll be honest, Aaron. I think there’s less than
30 people involved with it right now. But it has been going for about a year. No problem
so far. Accounting takes care of it. And there’s always the question, well, what about the
profit and loss. And, of course, with today’s computer technology, there’s nothing to it.
Whenever you swipe the card you either have a loss on your silver or a gain on your silver,
and that’s printed out for you. So it’s a very easy accounting methodology if you need
that for reporting purposes later on. Aaron Task: So, do you think Bitcoin is a
legitimate currency as well? Any thoughts on the recent wild ride that Bitcoin has been
on? David Morgan: Well, I’m not sure I wrote that.
One of my staff might have. And I don’t want to back out of it. Bitcoin is an alternative
digital currency and, of course, there’s lots of factors that people like it. I’m somewhat
favorable to it, but I’m on the side of specie money; something you can hold in your hand.
Or, in the case of the debit card, where it actually exists and you swipe your card and
it comes out of your account. Bitcoin, I think, is something that really
gets people thinking about alternative currencies. And I’m free market. Basically, you can put
10 different currencies out there and let the market decide which one is the best. And
I think that’s really an approach that we’re starting to see, like it or not, governments
worldwide or not. This is what we’re seeing in the real world. So, there is a demand,
let’s say, for alternative currencies in different forms, and the market will probably decide
at some point which one they like the best. (Text on screen): Yahoo! Finance, The Daily
Ticker, Like Nobody’s Business