Golds Two Stories: Paper Markets Collapse While The Retail Public Buys At A Record PaceBy Mac Slavo Last weekend precious metals took a massive hit to the downside, sending shock waves throughout the industry. But was the move really representative of whats happening in precious metals markets around the world? Or, is there an effort by large financial institutions to keep prices suppressed? In an open letter to the Commodity Futures Trading CommissionFirst Mining Finance CEO Keith Neumeyer arguesthatreal producers and consumers dont appear to be represented by the purported billion dollar moves on paper trading exchanges. With China recently revealing that they have added some 600 tons of gold to their stockpiles and the U.S. mint having suspended sales of Silver Eagles due to extremely high demand in early July, how is it possible that prices are crashing? Asnoted in MikeGleasons Weekly Market Wrap at Money Metals Exchange, while it appears that gold is currently one of the worlds most hated assets, the retail public continues to buy at a record pace: The paper market is telling one story. But the actual physical bullion market is telling quite another. The U.S. Mint has sold over 100,000 ounces of American Eagle gold coins so far in July. Thats the highest monthly demand volume registered since April 2013. And thats just as of this week. Theres still another week left to go before the final sales tally for Gold Eagles comes in for the month of July. It could be one for the record books with 109,000 1-ounce Gold Eagles sold with bargain hunters purchasing 6% of the U.S. Mints production from Money Metals Exchange. As for Silver Eagles, the U.S. Mint has given up on trying to keep up with demand. After brisk sales during the first week of July, Mint officials suspended deliveries of Silver Eagles to dealers. Sales of the popular coins are set to resume next week. But we expect the Mint will be unable to get its act together and keep up with demand. Listen: Full Interview WithChris Powell Of The Gold Anti-Trust Committee (GATA) Its not clear exactlywho is suppressing precious metalsor why, but it is quite apparent that prices on paper exchanges are completely disconnected from reality, as retail buyers are taking this opportunity to scoop up gold and silver at prices that are 50% or more off their highs. But what happens next? That, of course, is anybodys guess, but considering current prices and movements within the context of a broader economic crisis, there is a precedent for what we have seen in recent years. We need only look back to the recession of the 1970s. As the crisis accelerated inseverity intothe late 1970s, complete with gas shortages, job losses and geopolitical tensions, we saw gold explode in value toa high of $850 by January of 1980. Were not necessarily suggesting that gold will follow the exact same pattern. But history does rhyme, and the world again finds itself in serious financial, economic, and monetary crisis. As weve noted before, gold is and always has been the historical asset of last resort for preserving wealth. Should the current crisis accelerate as we saw in the 1970s, the value of gold will likelyrise accordingly. We may not be looking at a 700% increase in price like we did from 1976 to 1980, but there is a distinct possibility that we will witness serious gains in real value as crisis and panic unfold. You cant eat gold and silver, of course. Ifcrisis is coming we have always urged our readers to prepare themselves for disruption to credit-dependent commerce systems with reserves of food, emergency cash and other supplies. But having a physical asset with real monetary and barterable value in your possession is certainly an important strategic consideration going forward. Its been said that an ounce of gold could buy 350 loaves of bread in Biblical times. Today, an ounce of gold still buys about 350 loaves of bread.However you slice it, whether the system falls into a deflationary depression like the 1930s or an inflationary recession like the 1970s, goldwill maintain its purchasing power. Though past performance is not necessarily an indicator of future results, we have over6,000 years of history backing golds legitimacy as a true mechanism of exchange. Also Read: You can read more from Mac Slavo at his site SHTFplan.com. They have a history of issuing gold certificates for gold they do not have PMs will prove the investment (I hope). 