Category Archives: Precious Metals

“Why Fed Bugs Really Hate Gold”

The media campaign against gold continues. With Congress ordering magical fiscal bailouts from the Treasury, Trump conjuring up continued $600 weekly unemployment payments by executive order, and the Fed adding assets of every dubious stripe to its swollen $7 trillion balance sheet, gold prices predictably spiked to over $2,000 per ounce last week. Right on schedule, Fed bug journalists respond with a litany of “Gold is foolish, don’t buy it!” articles. In fact they sound like real estate agents in reverse: there is never a good time to buy. Gold goes up relative to the dollar; it’s overpriced and poised for a big fall. Gold falls below $1,100, as it did in 2015? See, we told you this worthless shiny metal was headed down! (article link below)

Gold is the kryptonite of the fiat currency, fractional banking monetary system.  It is sunshine to the vampires who control the money supply and conjure up fairytales which purport an ability to be able to control  the natural laws of economics through the use of modern monetary policy tools.

When gold starts moving higher in price enough to get noticed by the general population who otherwise have been told ad infinitum that gold is nothing more than a useless barbarous relic, the mainstream anti-gold media swarms into the action:  Gold Is A Foolish Place To Put Your Money

The Mises Institute posted a must-read commentary on the mainstream media and financial world’s irrational hatred of gold:  Why Fed Bugs Really, Really Hate Gold.

 

Owning Gold And Silver Is Critical For The End Game

“…unprecedented monetary stimulus is fueling asset bubbles and corporate debt addiction — rendering interest-rate hikes impossible without an economic crash…gold could rise to $3,000 to $5,000 an ounce in the next three to five years” – Diego Parrilla, head of the $450 million Quadriga Igneo fund, which is up 47% YTD

My personal view is that Diego is low by several  multiples on his estimate for the eventual price of gold before the entire system is reset. And, based on the current gold/silver ratio, the price of silver is 4x undervalued in relation to gold.

Kenneth Ameduri invited me back on to his Crush The Street podcast to discuss the factors behind the precious metals raging bull market and what the end game might look like:

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Several of my junior and larger cap stock ideas have had huge moves higher. I will be discussing what to do with these stocks in the next few issues of my Mining Stock Journal plus presenting any new ideas I uncover that have yet to be widely discovered. You can learn more about Investment Research Dynamic’s newsletters by following these links (note: a minimum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

Note:  I do not receive any promotion or sponsor payments in any form from the mining stock companies I present in my newsletter. Furthermore, I invest in many of the ideas personally or in my fund.

“We Are In The Golden Age Of Fraud”

“Elon Musk has personified the hopes and dreams of this bull market; Tesla burnishes its results through aggressive accounting; it’s a culture of deception because it is selling self-driving, which doesn’t yet exist.” – Jim Chanos from “We Are In The Golden Age Of Fraud” (Financial Times)

Jim Chanos is perhaps the most well-known remaining short-seller in this market.  Don’t be fooled by his demure characterization of Elon Musk and Tesla.  It’s calculated diplomacy. The numbers are far more than just polished up to look good  – the accounting is not just “aggressive,” it’s fraudulent, and Chanos knows that as well as anyone.

Chanos describes the current environment as “a really fertile field for people to play fast and loose with the truth, and for corporate wrongdoers to get away with it for a long time”. He reels off why: a 10-year bull market driven by central bank intervention; a level of retail participation in the markets reminiscent of the end of the dotcom boom; Trumpian “post-truth in politics, where my facts are your fake news”; and Silicon Valley’s “fake it until you make it” culture, which is compounded by Fomo — the fear of missing out. All of this is exacerbated by lax oversight. Financial regulators and law enforcement, he says, “are the financial archaeologists — they will tell you after the company has collapsed what the problem was.” (Financial Times)

I have said many times that Tesla and Elon Musk embody and reflect the extreme degree to which the U.S. system has defined deviance downward into what is now a complete Banana Republic controlled by crony-capitalist elitists who are putting the screws to the middle class. The money printed by the Fed is nothing more than the thinly veiled bailout of the biggest banks – nothing more – effecting the greatest wealth transfer in history.

The fraud and corruption is blatant. And there’s nothing the masses can do about it at this point. The U.S. economic, financial, political and legal system is now amalgam of “1984” and “Atlas Shrugged.”  Eventual collapse is fait accompli.

Chanos himself burnishes the adjectives he uses to convey the degree to which the U.S. system has been engulfed in fraud, corruption and open theft.  In my opinion, Francisco D’Anconia in “Atlas Shrugged” describes the U.S. perfectly in this excerpt from the famous “Money Speech:”

Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed.

The Precious Metals Bull Market Is Beginning To Rage

The precious metals and mining stocks have a long way to go before this secular bull market is over. My view is that it will culminate with a global monetary reset that will re-incorporate gold/silver into the monetary system. The dollar-based price of gold and silver will end up at multiples of their current prices.

Silver Doctor’s Paul Eberhart invited me back on to his podcast to discuss the big move in the precious metals market, including whether or not the current investor sentiment is overly euphoric, the degree to which the mainstream media spits out anti-gold propaganda, the U.S. dollar and the general economy/stock market/Tesla (Silver Doctors):

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Several of my junior and larger cap stock ideas have had huge moves higher. I will be discussing what to do with these stocks in the next few issues of my Mining Stock Journal plus presenting any new ideas I uncover that have yet to be widely discovered. You can learn more about Investment Research Dynamic’s newsletters by following these links (note: a minimum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

Note:  I do not receive any promotion or sponsor payments in any form from the mining stock companies I present in my newsletter. Furthermore, I invest in many of the ideas personally or in my fund.

What’s Going On With Silver?

Chris Marcus wanted my opinion about whether or not a silver “smash” was coming:  “I would never want to be as dogmatic as saying ‘never’ because anything can happen with a banking [and financial markets] system as corrupt as the one in the U.S.”

But silver is historically cheap as an asset in relation to the universe of dollar-based financial assets and relative to the dollar-value of gold.  Until the global monetary system is reset, gold and silver are going much higher price in ALL fiat currencies. As silver moves higher, there will be even more aggressive attempts to control its rise and this will entail higher volatility – both up and down but mostly up.

Chris (Arcadia Economics) and I examine this topic in our latest podcast and I draw from 20 years of experience in the precious metals sector including a 4-year span in the early 2000’s when I traded silver futures almost around the clock:

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a minimum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

Note:  I do not receive any promotion or sponsor payments in any form from the mining stock companies I present in my newsletter. Furthermore, I invest in many of the ideas personally or in my fund.

Gold / Silver: Brief Pullback Then Higher

The market will always from time-to-time remind us that nothing goes straight up in the stock market. The mining stocks, especially the riskiest juniors, have had huge run since mid-March. The HGNSI (Hulbert Gold Newsletter Sentiment Index) has been a remarkably reliable contrarian signal for mining stocks over the years. Sell/take profits when it moves above 60 and buy with both hands when it goes below 20.

The HGNSI has pushed up to 86% last week (86% of gold newsletters have buy recommendations). Mark Hulbert commented that “the HGNSI jumped today in concert with gold, and now stands at the 99.8th percentile of the distribution since 2000; the HGNSI’s current level represents extreme bullishness.” The latest reading (July 15th) is 76 – still too high to be aggressive with positioning.

A red flag for me is when a bullion bank like Goldman Sachs sticks a $2,000 price target on gold. Why $2,000? Why not $2,500? For me, the HGNSI and bullish price targets for gold from Wall Street banks after a big move has occurred already is a signal to take some profits or hedge my mining stock portfolio.

With the massive scale of fiat currency devaluation – aka money printing or “QE” – there’s an “invisible hand” of economics that seems to have, for now anyway, put a floor under the gold price. Add to that the enormous appetite for physical gold imports from India, which was the equivalent of waking up a starving elephant when quarantine restrictions were lifted, and any pullback for which I’m looking could be shallow and short-lived.

Chris Marcus (Arcadia Economics) and I discuss the gold market technicals. And I’ll go one up on Goldman and call for $2,000 gold before Labor Day:

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a minimum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

Note:  I do not receive any promotion or sponsor payments in any form from the mining stock companies I present in my newsletter. Furthermore, I invest in many of the ideas personally or in my fund.

H.R. 2559: The Gold Transparency Act Of 2019

House Rep, Alexander Mooney, introduced a Bill that would the first true audit of gold owned by the United States in more than 65 years. The Bill, if passed, would require a full assay, inventory and audit of the U.S.  gold every 5 years. Currently the gold is being “safe-kept” by the Fed.

The last time a Bill was introduced to audit the Fed, specifically the gold and gold swaps activity, the Fed spent millions in lobbying fees to have the legislation drafted by then House Rep, Ron Paul, buried.  Then Chairman of the House Financial Services Committee, Barney Frank, made sure the Bill never left Committee.

What exactly does the Fed have to fear with respect an audit of the U.S. citizens’ gold held at the Fed?

Here’s the crux of the proposed legislation:

(a) GAO Assay, Inventory, And Audit.—The Comptroller General of the United States shall conduct and complete, not later than nine months after the date of enactment of this Act, and every 5 years thereafter—

(1) a full assay, inventory, and audit of all gold reserves, including any gold in “deep storage”, of the United States at the place or places where such reserves are kept;

(2) an analysis of the sufficiency of the measures taken to ensure the physical security of such reserves;

(3) a full accounting of any and all encumbrances, including those due to lease, swap, or similar transactions presently in existence or entered into at any time during the past 15 years with respect to the gold reserves;

(4) a full accounting of any and all sales, purchases, disbursements, or receipts at any time during the past 15 years—whether directly or indirectly undertaken—with respect to the gold reserves, including the specific terms and parties involved in such transactions; and

(5) a full accounting of all gold in which the U.S. Government (including the Board of Governors of the Federal Reserve System or any other Federal agency) presently has a direct or indirect interest, including gold that may be held by third parties, including, for example, the Bank for International Settlements, the International Monetary Fund, the Exchange Stabilization Fund, any foreign central bank, or any other party, public or private.

Though this proposed Bill should be enacted in this form by both the House and the Senate, I would bet my last nickel that the Fed will make sure this legislation never sees the light of day.  The only question is my mind is whether or not Rep. Mooney will end up being found in his shower some morning dead by “suicide.”

The Historical Stock Bubble, Idiot Stocks And Gold

The Fed has blown the current stock bubble to an unprecedented magnitude. While the most outrageous overvaluations are concentrated in the tech sector, the valuation insanity has engulfed the entire stock market. Bubble chasers ran Hertz, a bankrupt company that will either liquidate or restructure, up to a valuation close to $1 billion after the Company filed for bankruptcy.

Perhaps the poster-child for this historic stock market Hindenburg is Tesla. Its valuation makes a mockery of our markets and shows what a complete farce the regulatory, legal and judicial systems have become in our country. It is the perfect reflection of the Banana Republic into which the U.S. has transformed over the last 10 years.

The precious metals sector is just getting warmed up. Since late March, when the Fed opened up the floodgates of its digital money printing press, gold is up 21%, the SPX is up 37%, silver is up 54% and the mining stocks are up 86%. Expect the large cap gold/silver producers to produce another round of big earnings beats for Q2 and Q3, which will drive the mining stocks even higher.

Lior Ganz invited me onto his Wealth Research Group podcast to discuss the current stock market insanity and what’s ahead for the precious metals sector:

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a minimum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

Note:  I do not receive any promotion or sponsor payments in any form from the mining stock companies I present in my newsletter. Furthermore, I invest in many of the ideas personally or in my fund.

“New subscriber here. Thank you for the Great newsletter with a very professional analysis.”

The Precious Metals Bull Market Is Just Revving Up

The monetary “gods” at the Federal Reserve have created the perfect monetary policy recipe to fuel gold, silver and mining stocks to new all-time highs and beyond. While the bubbleheads in the financial media have been garishly cheerleading the general stock market as it heads to an extreme overvaluation that will not end well, the mining stocks have outperformed the big three stock indices by a considerable margin.  As an example, since the March bottom, GDX is up over 100%, while the Nasdaq Composite is up 51.6% and the SPX is up 40%. And the mining stocks are just getting warmed up.

Relative to the prices of gold and silver, the mining stocks are still extraordinarily undervalued. In 2011 when gold peaked at $1900, the HUI index was trading over 600. It just recently crossed over 300.

Bill Powers of Mining Stock Education and I discuss the bullish set-up for the precious metals sector, including the gold/silver ratio, specific junior mining stocks and a couple other timely topics:

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You can learn more about the Mining Stock Journal by following this link:   MSJ Subscription Info.  In the next issue released July 9th I discuss several of the stocks I follow, recommend and in which I invest, capital management strategies and I present a junior exploration “venture capital” idea that has the potential to be a 5-bagger from its current level.

Comex Data Shows The Potential For A Run On Gold And Silver

The last few delivery periods for gold and silver on the Comex have experienced a record number of longs standing for delivery. For gold, April’s record was topped by June’s record. Sandwiched in between these to “front month” contracts was a record amount of gold “delivered” in May (May is a non-front month contract). July silver appears right now to be headed for a record number of “deliveries.”

I put “deliveries” in quotes because a large majority of the entities which stand for “delivery” never remove their bars from the Comex vaults. For all we know the banks are using unallocated bars, or even bars that don’t exist, to satisfy the terms of the “deliveries.” That said, if the stoppers (the entities that take “delivery”) begin in large numbers to remove their bars from Comex vault custody and move the bars to alternative safekeeping, the potential exists to cause a run and eventual default on the Comex.

Chris Marcus and I discuss this topic in our latest weekly podcast:

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a minimum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

Note:  I do not receive any promotion or sponsor payments in any form from the mining stock companies I present in my newsletter. Furthermore, I invest in many of the ideas personally or in my fund.