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Greed Driving Broader Markets Today, Fear To Spark Precious Metals Fireworks In The Future

Greed Driving Broader Markets Today, Fear To Spark Precious Metals Fireworks In The Future

With the Fed propping up the entire market and extreme greed driving the stock indexes to new highs, investors have lost interest in the precious metals, for the moment.  However, I am not surprised.  What is taking place in the overall markets is precisely what I forecasted back in September.

After gold and silver broke out of key resistance levels in the summer and then moved to new highs for 2019, a consolidation period would likely follow before the precious metals began the next leg up.  I mentioned this in my last Youtube precious metals update, Silver Price Update & End Of Mining Era, published on September 21st.

In that video update, I posted this daily chart on silver:

I stated that silver would probably correct back down to these price levels before setting up for the next phase higher. Today, silver fell to a low of $16.71 in the U.S. markets ($16.58 in overnight markets), so it seems to be heading down to the $16.20 level.  Here was the silver price on stockcharts as of Thursday, November 7th.

I believe silver will fall back to that $16.20 level, according to how traders are now anticipating the market.  Again, I am not saying that silver should go down to $16.20, especially with all the Fed money printing and Repo-madness, but this is how traders are viewing the silver market.  Why?  Because the Fed is now buying $60 billion a month in Treasuries, the same as the U.S. Military monthly spending budget, it has given the market another FALSE BUYING SIGNAL.  Thus, GREED in the market has gone back up to a record “Extreme Level.”

 …click on the above link to read the rest of the article…

Precious metals round-up

Precious metals round-up 

 By October 24, 2019 

Growing evidence of an economic downturn despite unprecedented monetary inflation since Lehman means a new credit and systemic crisis is becoming increasingly certain. In an attempt to prevent a new crisis developing, this time the scale of monetary inflation by the authorities will have to be even greater. The rise in the price of gold since December 2015 and its break-out from a three-year consolidation period earlier this year confirms that the risks of a credit and systemic crisis undermining fiat currencies have been increasing for some time. 

It is now likely that in future portfolio managers will increase their investment allocations in favour of gold and actively consider investing in silver and platinum as well. It is in this context that this article looks at the price relationships between the three precious metals and their relevant monetary and investment characteristics.

Introduction

Markets are playing a dangerous game of chicken with economic reality, which every passing day tells us that trade is slowing, and credit everywhere is maxed out. Key economies are beginning to reflect this in statistics, having for much of this year screamed the message at us through business surveys. Central banks know their monetary policies have failed. The ECB has already announced deeper negative deposit rates and is reviving its asset purchase programme (printing) from next month. The Fed is injecting liquidity (more printing) through repos in far larger quantities into its monetary system which, mysteriously, is short of money despite commercial banks having combined reserves of $1.44 trillion at the Fed.

We should not be surprised at its inability to join the dots between cause and effect, but warnings from the IMF about a $19 trillion corporate debt timebomb, coming from an organisation that is the deep-state of the economic system and has been consistently advocating monetary inflation, is tantamount to an official admission of global monetary failure. Where to now? Print, and print again. 

 …click on the above link to read the rest of the article…

The End Of Fiat In One Chart

The End Of Fiat In One Chart

For the first time in 21 years, Germany has openly bought gold into its reserve holdings.

Source: Bloomberg

German reserves climbed to 108.34m oz in September from 108.25m a month earlier.

Source: Bloomberg

With ECB mutiny and Deutsche Bank’s rapid demise, fears are rising of a looming financial crisis, and with that, Germany has shown a renewed interest in gold.

As a reminder, September’s outright purchase of the precious metal comes after Germany’s central bank, the Bundesbank, repatriated 583 tonnes, or $31 billion worth, of gold in 2017, years ahead of schedule.

Which came after Germany’s stunning announcement in January 2013 that the Bundesbank would repatriate 674 tons of gold from the NY Fed and the French Central Bank (which was initially abandoned in 2014).

Of course, while Germany is now the latest to turn to gold as a safe haven store of value in its reserves, it is not the first as the de-dollarization shift has been accelerating in recent months

Source: Bloomberg

Germany’s shift comes after China’s acceleration in gold-buying as Peter Schiff recently noted this a “global gold rush on the part of central banks” in preparation for a dollar crash.

“The days that the dollar is a reserve currency are numbered and the smart central banks are trying to buy as much gold as they can before the number is up,” Schiff said. 

Remember, nothing lasts forever

And now that the always conservative Germans are back in the market buying gold, one wonders if the end of fiat is drawing closer.

Silver & Gold as Portfolio Core…But What Else? Mike Maloney and Chris Martenson (Part 2 of 3)

Silver & Gold as Portfolio Core…But What Else? Mike Maloney and Chris Martenson (Part 2 of 3)

In the second of this three video series, Mike Maloney and Chris Martenson reveal that there is one asset apart from gold and silver that they are both looking to accumulate. What could it be? At what valuation will they trade gold or silver for this most important and often overlooked asset?

Should Americans Hoard Cash?

Should Americans Hoard Cash? 

QUESTION: Martin, I appreciate all the information that you provide and just got done reading about money shortage and hoarding. Would it be good for US citizens to hoard also? Is there any difference in hoarding dollars or gold and silver coins? Thanks for your comments.
DM

ANSWER: In order for gold and silver to be a medium of exchange, it requires the general population to accept that. The older generations know what a silver quarter or a $20 gold coin might be. However, the younger generation does not. Paper dollars will still be best to hoard for every day use until about 2022. At that time, we will have to reassess the climate of the monetary system. There are those videos where people were offered a 10 oz bar of silver of a chocolate bar. They took the chocolate.

Gold and silver should be in coin form. Bars will not be easily used among the average person.

Gold’s long-term gains have even outperformed Warren Buffett…

Gold’s long-term gains have even outperformed Warren Buffett…

Warren Buffett, despite his extraordinary investment success, has a rather famous and long-standing love/hate relationship with precious metals.

Maybe it started with his dad– Congressman Howard Buffett of Nebraska– who, as a staunch advocate for the gold standard, argued to his colleagues on Capitol Hill that “paper money systems have always wound up with collapse and economic chaos.”

Warren himself acquired a record-setting 128 million ounces of silver back in the late 1990s… which he later sold at a profit in the early 2000s.

But to listen to him talk about precious metals these days, he’s always negative.

Buffett often quips that if you took the world’s entire supply of gold and melted it together, it would form a cube of about 68 feet (~21 meters) per side and be worth around $9 trillion.

With that same $9 trillion, you could buy every share of Apple, Disney, Google, Microsoft, JP Morgan, Exxon Mobil, all the farmland in the United States, all the developable land in Manhattan, and still have more than a trillion dollars left over.

This is Buffett’s central argument: gold doesn’t produce anything. So it’s much better to invest in a productive asset like a business, farmland, etc.

Sure, I’d rather own a profitable, productive asset than a pile of metal.

But Buffett is completely wrong to compare gold to productive assets… they’re apples and oranges.

Gold isn’t an ‘investment’. It’s an insurance policy against paper currencies will lose value over time. So a MUCH better comparison for gold is CASH.

Using Buffett’s same thought experiment, would an investor with $9 trillion rather have all that money sitting in a bank earning 0%? Or buy all the productive assets I mentioned above?

Clearly it’s more attractive to own productive assets than cash sitting in a bank.

 …click on the above link to read the rest of the article…

Peter Schiff: The Only Winners Will Be the People Who Bought Gold and Silver

Peter Schiff: The Only Winners Will Be the People Who Bought Gold and Silver

Gold has been on a three-day skid, but as Fox Business anchor Liz Claman put it, “So what? It’s been a breakout summer for bullion.”

Over the last three months, gold is up about 12% and has hit six-and-a-half year highs in recent weeks.

Peter Schiff joined Claman, along with, Frank Holmes and Imaru Cassanova on The Claman Countdown to talk about the yellow metal.

Holmes started out the segment saying that recession fears are driving central bank easy monetary policy and that’s good for gold.

Each month we’re seeing more and more governments offering you a negative real rate of return on your money and that automatically makes gold much more attractive. And I don’t think it’s ending yet.”

Cassanova said gold has come back in favor after being range-bound for nearly six years.

In June, it broke out … The driver there was the Fed. What is the Fed signaling when they are shifting, when they are going from tightening to cutting? They’re saying we too are worried about the US economy. And investors responded to that — to the higher risk of a recession in the US.”

Claman noted China has added about 100 tons of gold to its reserves over the last nine months. She asked Peter if China’s stockpiling of gold plays into the picture. He said he expects China to keep adding gold, along with other central banks because they recognize the weakness of the US dollar.

The dollar is actually very weak. People have been looking at the dollar versus other fiat currencies. But if you look at the dollar’s decline against gold, that really tells you that we have a weak dollar, not a strong dollar, and I think it’s going to get a lot weaker.

 …click on the above link to read the rest of the article…

These Are Not Signs of a Healthy Market

These Are Not Signs of a Healthy Market

If these three charts reflect a “normal” “healthy” Bull market, then why are they so uncommon? 

The implicit narrative of the latest rally in stocks is that this is just another normal rally in the ongoing 10-year long Bull market. Nice, but do these three charts look “normal” to you? Let’s take a quick glance at a daily chart of the S&P 500 (SPX), a weekly chart of TLT, the exchange-traded fund of the US Treasury 20-year bond, and silver.

In other words, let’s look at three different assets: stocks, bonds and one of the precious metals.

Even the most cursory glance reveals there is nothing normal about any of these charts. The recent action in the SPX is anything but normal: yet another announcement of yet another (low-level nothing-burger) trade meeting opens a gap big enough for a semi to drive through, punching through the upper Bollinger Band, and on the heels of a previous big gap up, also on no fundamental news.

Look at August: if a month of nearly daily open gaps and manic swings is “normal,” why are such periods so uncommon in “normal” rallies? Looking at August’s wild schizophrenia, does this strike you as “normal” market action in an ongoing Bull market? If so, perhaps you should dial back your Ibogaine consumption.

Next up, TLT, the US Treasury long bond. You know, the “safe” long bond, which moves glacially compared to risk-on stocks. 

If we dare to be honest (risky in a world terrified of honesty), this looks like the blow-off topping move of risk-on bitcoin in December 2017. There is nothing “normal” about this parabolic move in Treasury bonds.

 …click on the above link to read the rest of the article…

Negative interest rates and gold

Negative interest rates and gold 

The reason for persistent strength in the price of gold can be found in the changing relationship between time preference for monetary gold, and a new round of interest rate suppression for the dollar. Evidence mounts that the forthcoming recession is likely to be significant, even turning into a deep slump. Bullion bank traders are waking up to the possibility that dollar interest rates are going to zero and that pressure is likely to be put on the Fed to introduce negative rates. The laws of time preference tell us bullion banks must urgently cover their short bullion positions in anticipation of a dollar rate-induced permanent backwardation for gold, silver and across all commodities.

This article dissects the moving parts in this fascinating story.

Introduction

For some time now, I have maintained the wheels are likely to fall off the global economic wagon by the year-end. Furthermore, for many of my interlocutors, the recent rise in the gold price is just evidence of an impending cyclical crisis, anticipating and discounting the certain inflationary response by central banks. But in this, we are describing only surface evidence, not the underlying market reality.

In the combination of trade protectionism and an emerging credit crisis we face a problem upon which almost no formal research has been done, so it is not something that even far-thinking analysts have considered. To my knowledge, no mainstream economist has pointed out the lethal mix these two dynamics together present. Very few even recognise the existence of a credit cycle, traditionally called a trade or business cycle. Not even the great von Mises called it a cycle of credit, having identified and described it with great accuracy in his The Theory of Money and Credit, first published in 1912. But a spade must be called a spade: it is in its fundament a credit cycle.

 …click on the above link to read the rest of the article…

Why Silver Is Better Than Gold

Why Silver Is Better Than Gold

While the surging gold price has received most of the spotlight in the market, silver will outperform the king monetary metal over the longer term.  Key fundamental factors make silver the more attractive asset and investment to own versus gold when we look closely at the data.  However, that doesn’t mean precious metals investors shouldn’t own gold.  Investors need to own both precious metals, but I believe silver will provide better returns than gold in the future.

Now, there is this notion put forth by many precious metals analysts that central banks will be forced, at some point, to back their currencies by gold.  Thus, the idea is that gold will reset at a much higher price.  While that is a possibility, backing debt-based currencies with gold will not solve our coming energy crisis.  And, let me tell you, it’s an energy predicament that we have no real solution.

You see, it doesn’t really matter if we back fiat money with gold.  The REAL ISSUE has always been ENERGY. The massive increase in debt and derivatives are a symptom of the Falling EROI (Energy Returned On Investment) of oil.  Basically, while gold may solve certain issues in regards to “Confidence” in money, it doesn’t fix our energy problems.

I touched on this briefly in my newest video, Why Silver Is Better Than Gold.  However, most of the video explains new charts that show fundamental factors on why silver is a better investment than gold as well as some key price levels for the short term.

One of the more important charts in the video shows the amount of “Identifiable” physical gold and silver investment stocks.  Interestingly, according to the data from the World Gold Council and the World Silver Surveys, there is just about the same amount of physical gold investment as there is silver.

 …click on the above link to read the rest of the article…

“Pet Rock” Indeed: Bank of America Says Buy Gold As Central Banks Lose Control

“Pet Rock” Indeed: Bank of America Says Buy Gold As Central Banks Lose Control

What a difference a few years makes. Back in the summer of 2015, a WSJ op-ed writer,  who somehow was unaware of the past 6,000 years of human history, infamously and embarrassingly said “Let’s Be Honest About Gold: It’s a Pet Rock.” Fast forward to today, when with every central bank once again rushing to debase its currency in what increasingly appears to be the final race to the debasement bottom, when even BOE head Mark Carney recommends that it is time to retire the dollar as the world’s reserve currencypet rock gold has emerged as the second best performing asset of the year… and at the rate it is going –4th in 2017, 3rd in 2018, 2nd in 2019 – gold will be the standout asset class of 2020.

Which naturally has sparked comparisons for gold’s performance in 2019 with 2008+, when gold exploded higher as the financial system nearly collapsed and central banks started injecting trillions in liquidity into the system to keep it afloat.

Are such comparisons appropriate?

Deutsche Bank Mulled Investment Banking Alliance With UBS: Dow Jones

As Bank of America writes in “anatomy of two gold bull markets”, in comparing the gold bull markets in 2008 and 2018, real rates remain key price drivers, while a critical difference in market dynamics – this time around  – is that central banks have been unable to reflate global economies and even as metrics like the value and proportion of negative yielding assets has been increasing, further easing is on the cards. Linked to that, Bank of America makes a stunning admissions: “the risk of quantitative failure, which was not a concern in 2008, makes gold an attractive asset.”

 …click on the above link to read the rest of the article…

Silver prices with explosive upside

Silver prices with explosive upside 

Silver prices have lagged gold prices since 2017 which has pushed the gold-to-silver ratio close to the all-time high. Silver prices are also significantly below what is predicted by our pricing model. We think that the reasons for this subdued performance are transitory and that silver will outperform gold again as the next precious metals cycle continues to rapidly unfold. 

In spring 2017, we introduced a framework for understanding the formation of silver prices (Silver price framework: Both money and a commodity, March 9, 2017). In this report we are going to use this framework to analyze the recent performance of silver and give an outlook for where we think silver is heading over the coming months. In our framework piece, we concluded that silver is both money (store of value) and an input commodity and thus the impact of both industrial and monetary demand needs to be taken into consideration:

  • On the one hand, silver is a counterparty-risk-free form of money where replacement costs set the lower boundary for prices – the same energy proof of value that underlies gold prices. Thus, silver should be impacted by the same drivers as gold prices: Real-interest rate expectations, central bank policy, and longer-dated energy prices.
  • On the other hand, silver is a commodity with extensive industrial applications. Hence, changes in industrial activity should impact the price of silver as well.

In our framework note, we also discussed the two main reasons why we think that silver tends to outperform gold in bull markets and underperform in bear markets:

  • Because the value of global silver stocks is much smaller than that of global gold stocks – which is the result of silver being used in industrial applications – a rise in monetary demand for silver has a disproportionally large effect. In other words, when demand for metals increases as an alternative to fiat currency, there is simply less silver around to change hands.

 …click on the above link to read the rest of the article…

Peter Schiff: The World Will Drown in an Ocean of Inflation; Gold Is Going Ballistic

Peter Schiff: The World Will Drown in an Ocean of Inflation; Gold Is Going Ballistic

The gold market took a one-two punch on Tuesday as Trump made some concessions in the trade war and inflation numbers came in a bit higher than expected. Peter Schiff talked about it in his latest podcast, saying gold traders still don’t understand the gold rally.

Stock markets surged as gold and silver dropped after US trade representatives said they would delay some of the additional tariffs recently announced by President Trump. The Dow closed 372 points higher. Meanwhile, the price of gold dropped below $1,500 briefly before rallying back above that key number.

Gold actually began selling off before the trade war news when the Consumer Price Index number came in hotter than expected. Peter said he knew that would happen.

That is the way the lemmings trade, because according to the conventional wisdom, if inflation is higher, then the Fed will be less likely to cut rates. After all, they’re cutting rates because inflation is too low and if inflation comes in hotter, well, then there’s less of a reason for the Fed to cut rates. So paradoxically, higher inflation is seen as being bad for gold. And the reason I’m saying paradoxically is because gold is an inflation hedge. Normally, the more inflation the more you want to buy gold.”

Peter said investors are banking on the Fed fighting inflation, but they’re wrong.

There is no way the Fed is going to fight inflation. I don’t care how high it is … One of these days the traders have to realize that these numbers don’t matter. I mean, maybe they matter to the public who has to live with a rising cost of living. But they don’t matter to the Fed. The Fed is going to take rates back to zero no matter what these numbers are, because the economy is going into recession even as inflation rises.”


 …click on the above link to read the rest of the article…

Big Signals from Gold and Silver

Big Signals from Gold and Silver

After nearly eight years of torment, gold and silver are back.  The global political picture is spinning out of control quickly.  And the precious metals are here to tell us just how quickly.

Before I get to the charts, however, I think it’s important we review everything that happened this week just to get some context.

Last weekend two gruesome murder sprees were committed in El Paso, Texas and Dayton, Ohio.  Both shooters apparently radicalized by the current political climate. The usual suspects used these events to call for gun control, pre-crime prevention straight out of a Philip K. Dick novel while blaming them on the tyranny of white people and Donald Trump’s racism.

Then on Monday morning to the news India revoked Article 370 of their constitution, reorganizing Kashmir & Jammu and putting the entire area on a lockdown so complete many there don’t know what happened.

Protests in Hong Kong continued into their third week as the U.S. is caught openly working with protest organizers and castigates by China.

Later that same day Donald Trump finally fulfills a Republican dream of labeling China a ‘currency manipulator’ because investors properly responded to his installing tariffs on the rest of China’s imports to the U.S.
Markets flopped all week.  On by Wednesday morning, oil had broken below its near-term term to break its bull market run.

By Wednesday Italian Interior Minister and leader of Lega, Matteo Salvini called for the end of the coalition government, just thirteen months old, with Five Star Movement.  The ramifications of this are immense.

The Italian Deep State whom Salvini is fighting at every turn, along with the European Union, has control over the government which he supposedly leads. 

 …click on the above link to read the rest of the article…

Currency Wars Have Entered the Next Phase, Gold and Silver Will Move Higher

Currency Wars Have Entered the Next Phase, Gold and Silver Will Move Higher

Currency Wars Have Entered the Next Phase, Gold and Silver Will Move Higher - Nathan McDonald (09/08/2019)

Gold is trading solidly above the $1500 mark at the time of writing, and I believe we are only just getting started. The currency wars are back in full swing, and they will be more intense than ever.

The United States government, ironically, labeled China a currency manipulator for the first time since 1994, marking a severe uptick in their rhetoric against the Chinese government, as the trade wars continue to spiral out of control with seemingly no end in sight.

Many simply waved this move off as nothing more than what it initially appeared to be: jawboning with no true ramifications behind it. However, others see it as a blatant threat by the U.S. administration against China, as the last time this language was used twenty-five years ago was when China was placed on a currency blacklist.

Some were surprised by this move, as they see it as an overreaction, fearing that we have now moved into another phase of the ongoing currency wars that have bubbled behind the scenes for years—currency wars that are now in plain sight for all to see.

Unfortunately, this should come as no surprise to anyone, as President Trump stated back in 2016 that he fully intended to label China a “currency manipulator”, a statement that was laughed off until now.

This move comes on the heels of a Fed interest rate cut in which the Fed Chief, Jerome Powell, lowered rates by 0.25%, citing fears of a weakening global economy and ongoing trade wars.

Of course, China is far from the only currency manipulator in the world, as countries are constantly “racing to the bottom” in an attempt to lower the value of their currencies. This increases their competitiveness on the international markets by artificially making the prices of their goods lower.

 …click on the above link to read the rest of the article…

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