Mining Stocks Look Ready To Explode Higher Again

The news that China has been to some degree crowded out this year by Western demand for gold is of minor importance compared to this further evidence that the mighty double-digit growth 15+ year surge in Chinese domestic gold production seems at last to have topped out. This means Chinese appetite for gold will increasingly have to be met from overseas.  – John Brimelow   JB’s Gold Jottings report  LINK

It was reported by Reuters Africa yesterday that Chinese gold production in the first half of 2016 was up slightly from the same period in 2015.  2015 production was down .4% from 2014.

If the amount of China’s domestically produced gold begins to decline, China’s enormous demand for gold will require a lot more gold imported from the rest of the world.  This will make things interesting – given the already enormous supply/demand deficit in deliverable physical gold  – because we know that, based on retail gold coin sales in the  U.S., Canada, England and Australia,  retail demand in the west is picking up quickly.

Let’s examine the phrase, “deliverable physical gold” for a moment.  It’s well understood that the amount of legal claims to deliverable gold written on pieces of paper – Comex futures, LBMA forwards, lease agreements, hypothecation agreements, OTC derivatives, etc – exceed the amount of available deliverable physical gold by an unaccountable amount.

For example, the total paper gold open interest on the Comex exceeds the amount of gold that has been made available for delivery by a multiple of 35.  But we can’t account for the amount of LBMA forwards, lease/hypothecation claims and OTC derivatives gold liabilities. Therefore,  the total physical gold supply deficit is unaccountable.

With gold in a state of scarcity and with the mining stocks historically undervalued in relation to the price of gold and silver, the mining stocks have the potential to make a move that will rival the move made by the internet stocks in from 1998 – 2000.  James Dines is the first to have made this prediction over 16 years ago. The only difference, of course, is that the revaluation in the mining stocks will be based on measurable intrinsic value whereas the move made by the internet stocks was a modern version of the Dutch Tulip bulb bubble.

All this is to suggest that mining stocks appear ready for another big upside move (click on graph to enlarge):

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At some point soon, the mining stocks are going to undergo another significant upward revaluation, which will reflect the increasing amount of stress that is going to be exerted on the market for deliverable physical gold. This “stress” will only be relieved by a much higher price for gold and silver.

While I’m not making an official price forecast, I would not be surprised to see $1500 gold and $25 silver by the end of October.

Click on the banner below to find out how you can take advantage of junior mining stock ideas that have significantly outperformed the market.

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Silver Refuses To Buckle – The News Doctors

Something interesting and unusual has been developing in the silver market for several months.  The Comex operators have been throwing a record amount  of Comex paper silver at the market in an attempt to control the price.   The last time the silver futures open interest was as high as it is now, silver was about to bust through $50.    Eric Dubin of The News Doctors published  a news brief today on the topic, reprinted below.

When we were laboring through the 2011-2015 bear market cycle, constant snap backs the likes of which silver is producing were never to be seen.

Last Thursday, I published, “Silver, Gold, Miners: Everyone, Back In The Pool.”  Mining shares witnessed a bit more pain than I had expected, but silver bottomed off the ~$19.20 level, as discussed. Even with Comex options expiration and central bank meetings this week, speculators taking on the bullion banks are buying every cartel smack-down, yesterday offering the latest example: Untitled

When we were laboring through the 2011-2015 bear market cycle, constant snap backs the likes of which silver is producing were never to be seen.

Today, the Japanese yen is appreciating relative to the US dollar as speculators – largely, algorithm-based trading – react to a Nikkei news report that fiscal stimulus plans will be smaller than expected.  The dollar fell as much as 1.4% in the early market session.  This is an ironic case where the short-term impact of the yen carry trade flow and long-term yen debasement from continued fiscal and monetary stimulus are Untitledboth positive catalysts for precious metals.

Taro Aso, Japan’s finance minister, talked down the report, saying that the government had not yet decided on the size of the package.  But the report was enough to send the FX algos into a frenzy, which spilled over into other markets.   Japanese policy makers flip-flop, ‘jawbone’ and massage the media just like the Federal Reserve.  The BOJ might announce smaller stimulus measures than expected, but Japan’s fate is sealed, and the helicopters are on the tarmac.

Will Americans Let Crime Pay? “Helen Keller Syndrome”

Everyday more evidence piles up against Hillary Clinton for illegal use of a personal Blackberry, personal computers and a computer server in her basement in Rye, NY to conduct official U.S. Government State Department business.  Business that should have been conducted using only super-secured State Department cellphones, computers and servers.

But of course, the director of the fbi, James Comey – long-time Clinton ally and a board Untitledmember of Hillary’s personal slush fund the Clinton Foundation, has given Hillary a get out of jail free card on that.

And now it’s revealed that Hillary and her gang at the DNC violated all kinds of laws and Democratic Party principles in order to rig the primaries.   Of course, Hillary has decided to deflect the truth by blaming the Russians for sabotaging her campaign by exposing the truth.   Of course that’s nonsense but does it really matter who exposes a crime as long as it’s exposed?  Isn’t the idea to impose Rule Of Law and justice on those who break the law?

It just gets worse for Hillary by hour.  Of course, slavish Hillary supporters all of a sudden have “Helen Keller Syndrome” when they are confronted with the facts and the truth.

But wait, it gets better:

The leaked emails have cost Debbie Wasserman Schultz her job as Chair of the DNC but other top DNC officials captured in devious plots against Sanders in the email exchanges still have their jobs – or at least no official firings have been announced. This makes the conspiracies seem more like a DNC business model…In addition to conjuring up ways to smear Clinton challenger Bernie Sanders during the primary battles, the leaked emails show a coordinated effort to cover up what the Sanders camp called “money laundering” between the Hillary Victory Fund and the DNC.

Hillary supporters need not bother reading this revealing article from Wall Street Parade, but for anyone interested in just the facts, this is a must-read piece:   Hillary Victory Fund Money Laundering

I guess if it’s not Isis then it must be the Russians, right?  At some point that shrew will start turning on Americans.

Make no mistake, I am not a Trump supporter.  I think he’s a human jock-strap.  In fact, I will continue my 24-year streak of not voting.   Most Trump supporters are supporting Trump because they hate Hillary and vice versa. The problem is, we know Trump is a jerk-off. But Hillary supporters – even the ones supporting her because they’d never vote Republican no matter what – refuse to recognize or for some reason can’t see the facts about her.   But she’s got a list full of crimes that makes Charles Manson look like a choir boy.

U.S.: Corrupt Money, Corrupt System

It looks like the Democratic Convention is getting off to a disastrous start after it was revealed that Democratic leaders, including DNC Chairman Debbie Wasserman-Schultz – along with, make no mistake about this, Hillary Clinton – conspired with the maUntitledinstream media to smear Bernie Sanders and perpetrated the civil unrest disruptions at Trump campaign rallies.

Can it get any more corrupt than this? In this episode of the Shadow of Truth, we connect systemic corruption to its root – a corrupt monetary system. We also explain why Hillary Clinton is probably the most corrupt public figure in history.

 

Buy Every Price Hit In The Metals And Miners

Eric Dubin (The News Doctors) and Doc or Silver Doctors, SD Bullion invited me on to their weekly Metals and Money Wrap last week.  We discussed signs that show the gold/silver manipulators are losing control of their ability to control prices, the record amount of paper being thrown at gold and silver on the Comex, the current seasonal “lull” in the precious metals market and the latest developments on Japan’s TOCOM futures exchange which could have a big effect on the price of gold and silver.  In short, we discussed why investors should be adding their positions on every price drop:

In fact, silver and gold were hit hard overnight last night (Sunday night, early Monday morning) and silver is now 40 cents off its low of the day and green vs its Friday close and gold is $8 dollar off its low of the day. Click on the link below to find underfollowed junior mining stock ideas with huge upside potential:

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Propaganda And Precious Metals

As gold reaches for higher prices and gains more attention, the propagandists are flooding the news outlets with articles on the virtues of investing in the stock market and the evils of precious metals – Silver/devil. The Ponzi must continue at all costs. The U.S. dollar, at present the worlds reserve currency, is a corrupt, blood-soaked instrument of debt. The privately owned Federal Reserve, who gets it’s marching orders from the Treasury Secretary, is working overtime to destroy the value of the dollar, enabling the elitists to use it as wealth confiscation tool. We find ourselves in the end game for this currency. How long can the end game continue? As long as it suits the corrupt banking cabal and corrupt politicians. Once these two groups of criminals have themselves positioned properly outside the U.S. dollar, the plug will be pulled. Until then, gather as much gold and silver as your budget will allow.

They’re Making It Easier To Buy Gold Cheap

To begin with, this statement by the Bank of Japan’s Kuroda validates my blog post yesterday about Japan’s monetary pivot to gold and to the east:  “no need and no possibility for helicopter money.”

My best guess is that the only productive activity for Bernanke on his last trip to Japan was eating blowfish sushi and hitting the teenage stripper establishments.

The manipulators are making it easier for us to accumulate gold at a cheap price.  I moved money from my fiat checking account into Bitgold every day this week and twice yesterday. I managed to catch what looks like the low of this latest manipulated pullback.  Every time they hit gold I buy.

I exchanged emails with Dr. Paul Craig Roberts yesterday about the  sell-off of the price of gold this week caused by the obvious “invisible” hand of the Fed.  Note this was a week in which Japan was supposedly going to drop $100 billion in helicopter money at Ben Bernanke’s behest – an announcement which should have sent gold soaring:

Me:   I agree this was a manipulated take-down of the price but,  you know as well anyone, markets never go straight up except the Dow/S&P 500 when the Fed wants to make those indices go straight up – like now.    Gold was overdue for a trading correction. I agree there’s some idiots out there who think the Fed is powerless now over gold – that’s ignorance or sensationalism.

Dr. Roberts:   Is there such a thing as a trading correction when the price is controlled and manipulated? Is it a trading correction when the bullion banks dump, as we have shown numerous times, massive paper shorts in the futures market?

Me:  I agree with your point there – but to be honest, I like to see any market pullback after it has the type of run that gold has had since early February. Should it be pulling back from a much higher price platform? Yes.  But gold was on the verge of going parabolic, which is never healthy in any market. The Fed is doing us a favor. I have been moving a lot of money from my checking account into my Bitgold account this week every morning. If gold was not being pushed down, I might not have added any.

The other interesting aspect of your point there is the amount of paper the Fed is needing to throw at gold to keep the price down. The open interest has been more or less at an all-time high on the Comex for a few weeks now. The last time the open interest was this high was when gold was pushing $1900.

In other words, it is requiring a much bigger relative effort for the Fed to prevent the price of gold from spinning out of its control now than it did when gold was about to launch over $2000.

They have not lost complete control yet, but they are much closer to that event now than they were in 2011.

On another note, the fact that the SPX spiked higher on the original Japan helicopter money announcement but has not sold off on the withdrawal of that threat underscores that fact that the Fed is pulling out all stops to push the market higher

But this is just the “marquee” indices – the Dow, SPX and Naz – as plenty of stocks have been and are heading lower because the core economy in the U.S. is falling apart.

 

MSFT: “I’m Rarely Left With Nothing To Say”

The stock market – specifically the S&P 500 and the Dow have become important propaganda tools of Fed/US Government.   After all, a rising stock market means that investors are “discounting” future economic and earnings growth, right?  As long as the stock market keeps hitting new records, any negative economic reports have to be invalid.

Of course, like everything else that hits the mainstream headlines these days, 90% of the time the opposite is the truth.  We can call this “Bernays’ Theorem.”   If you don’t know who Edward Bernays is, please use Google to look him up.

Corporate earnings have become mindblowingly fraudulent, which means that a fraudulent stock market is “discounting” fraudulent corporate earnings reports.

As an example, Microsoft reported earnings yesterday.  But companies can’t just report traditional GAAP earnings statements.   We get a highly unreliable version of GAAP that has been liberalized over the past 20 years to enable companies to distort the true earnings “snapshot,” enabling the presentation of reported net income that  exceeds actual net income.

But the policy deciders didn’t just stop with that bastardization of quarterly earnings reports.  They now permit companies to report “non-GAAP” numbers.   The literal translation of “non-GAAP” is, “if all this good stuff happened that didn’t really happen and might never happen, this what our earnings might look like.”   “Non-GAAP” is a complete fairy-tale.

So yesterday MSFT reports “GAAP” numbers, which we already know are distorted, in which its Fiscal Q4 operating income declined nearly 7% from FY Q4 2015.  Even worse, giving MSFT the benefit if using “non-GAAP” to compare against GAAP, MSFT’s net income plunged 38%.  The source of the decline in operating income was “revenue deferrals.”  Huh?  “Non-GAAP” allows MSFT to pretend the revenue deferrals never occurred.  This revenue that may or may not ever hit MSFT’s top line.

MSFT’s GAAP numbers missed the Street consensus expectations badly.  And yet through the magic of make-believe numbers, MSFT was able to smooth out any non-existing economic revenue and net income to that enables investors to act as if MSFT’s FY 4th quarter numbers were something they were not.

The Fed propaganda part:  MSFT is being attributed for driving the Dow and SPX to a new record close.   MSFT’s earings miss is now magically being reported as a “beat.”  Beat this.

Why was my colleague, Scott,” left speechless?  Because despite GAAP revenue and operating that declined measurably for its fiscal Q4 – AND revenues year over year declined nearly 9% – the stock  spiked up 5.3% today.   It’s inexplicable OTHER than the fact that the Fed is juicing the stock market  in  order to obscure the truth.  click to enlarge graphic

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Japan Is Signalling The End-Game For The U.S.

On a side-note, it’s important to know that late July/early August is seasonally the most quiet part of the year for the biggest eastern hemisphere gold accumulators. And we’re going into the “roll” period, when the bulk of the massive blob of August paper gold “rolls” into December, the next “front month” for Comex Paper gold. Having said that, China has actually slightly increased its gold imports this month. India has been in hibernation since March 1 but it’s biggest seasonal buying period starts in about four weeks. Unless smuggled gold into India is significantly greater in volume than anyone understands, India’s demand will be somewhat price inelastic and its elephantine appetite for gold will have a big impact on the price of gold.

This leads us to Japan. Curiously, Japan announced announced last week that its TOCOM Untitledcommodity exchange (Japan’s less corrupted CME-equivalent) would begin trading physical gold – like the Shanghai Gold Exchange – on July 25th – TOCOM Physical Gold.  It also announced that it would be introducing a delivery-at-settlement option for its current-month gold futures contract. That is, TOCOM gold futures buyers will now have the ability to take delivery of physical gold via TOCOM’s paper gold.

The news of this event was largely muted in the western financial media and even the alternative media blogosphere largely seems to have overlooked the news release. But this is a highly significant development because it signals a subtle shift in Japan’s economic and monetary focus from west to east.  It will also create an big upward price-readjustment in gold and silver.

The significance of Japan’s TOCOM exchange shifting from all fiat paper contracts to a physical gold trading and settlement operation is reinforced by the fact that two days ahead of the announcement it was reported that Tanaka Kikinzoku Group – Japan’s leading precious metals trader, refiner and manufacturer – acquired Swiss-based Metalor Group, one of the world’s largest refiners and supplier of precious metals-related products – Tanaka Buys Metalor.   Furthermore, in March 2015, Japan’s Asahi Holdings – a collector and refiner of precious metals – closed its acquisition of Johnson Matthey’s gold and silver refining business.  JM is one of the leading producers of refined precious metals products, including LBMA-quality 400 oz gold bars.

Now that Asia and Russia are no longer funding the U.S. Treasury debt printing press, the Fed will be forced to begin hyperinflating the money supply to keep the Government funded.  This fact is underscored by the Cleveland Fed President’s – Loretta Mester, a voting member of the FOMC –  recent comment about “helicopter money.”

While the Japanese continue to endorse the U.S. Government’s  use of the yen as a de facto printing press which enables the Fed to manipulate the U.S. stock market and to fund U.S. Treasury’s unrestricted  issuance of debt, they see the proverbial writing on the wall for the western monetary and financial system.  Japan has been quietly pivoting economically toward China for a couple years.

This abrupt transition into the physical precious metals market signals Japan’s move to integrate its financial markets and economic system into the developing eastern bloc monetary system, which appears as if it might eventually be seeded in gold.  It likely signals the end-game for the United States.

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GLD/SLV Ponzi Scheme – GET Physical Gold/Silver

A lot of investors have invested in GLD and SLV under the mistaken assumption that they are investing in “gold.”  In the latest episode of the Shadow of Truth, we discuss why GLD/SLV are Ponzi schemes created as a mechanism to control the price of gold/silver.  We also report the latest on China’s massive investment in the new Silk Road and why it will change the world – The Daily Coin published and extensive article on this topic:  Silk Road. Investment Research Dynamics explains why the Central Banks are losing control of their precious metals price control scheme:   LINK.