Investment Research Products

Powered by Kranzler Research

Articles

Daniela Cambone’s Dishonest Journalism

“Back in the day, you remember when we started in the industry, the talk of gold manipulation was really…like, you couldn’t talk about it. It was like an underground thing. You were seen as a conspiracy person if you did speak about it, and now it’s really like it’s almost out in the open. Yes, banks were spoofing the prices.” – Daniela Cambone’s interview with Mark Yaxley of Strategic Wealth Preservation

Hmmmm…”couldn’t talk about [the gold market manipulation].”  Funny thing about that – GATA , along with many of us, – have been talking about the gold market manipulation until we’re blue in the face for over twenty years. Yes, Daniela, could have talked about it like a proper journalist, helping in the cause of providing awareness, facts and truth to her slavish audience. But Daniela defied her charge as a journalist and chose to look the other way. And worse, she enabled some of her highest profile interviewees to blatantly lie about a reality of which she was clearly aware. This is dishonest journalism. No, wait – it’s not even journalism. It’s fairy-tale media.

“Disinformation for many years has kept the lid on this tinderbox and since 2018 the Financial Stability Desks at the world’s central banks have followed the Bank of International Settlements’ instruction to hide the perception of inflation by rigging the gold market.” – Peter Hambro, founder of Petropavlovsk plc gold mining, (formerly Peter Hambro Mining)

Daniela has paraded several “experts” over the years who have denied that the gold market was manipulated. And based on her comment above she knew that the “experts” either were lying or had motivated interests in the adamancy of their assertions. Yet, she chose to look the other way, cowering from her masters at Kitco.

I’m echoing the sentiment (though chose to remove the velvet hammer-cover) of GATA’s Chris Powell, whose dispatch alerted me to Cambone’s follies: GATA/Cambone.  But in addition to Chris’ suggestions for Daniela, how about, now that she’s at Stansberry and apparently has shed her Kitco muzzle, she invite the likes of Rick Rule, Doug Casey and Pierre Lassonde and grill them on the blatant gold market interventions by Central Banks and bullion banks, holding their feet to the fire with irrefutable facts that Chris Powell will be happy to assist her in sourcing.  Start with the BIS’ slide show from a  June 2008 seminar and ask them to explain this:

The COT Report For Gold And Silver Is As Bullish As I’ve Ever Seen

The Treasury curve is imploding, which means interest rates have become more negative this week, especially today. The gold/silver action is strictly in the corrupt Comex arena. Also, the action in Treasuries is an ominous warning of a big problem in the financial markets lurking right around the corner. Hold on tight to your physical gold and silver. It would be a huge mistake to believe that any metal you might “own” in ANY custodian is safe…

******************************

The precious metals sector looks like it’s ready for a major move higher, especially the junior exploration stocks – you can learn about my Mining Stock Journal here: MSJ information; and my Short Seller Journal subscribers have made a small fortune on the ideas I present weekly in my short seller’s newsletter: SSJ information.

The Coming Collapse Will Be Worse than 2008 – Here’s Why…

The U.S. Government was hijacked by Wall Street in 2008 under Obama’s watch, likely with his complicity.  The rats in his Government were highly trained, corrupt lawyers who were inserted in key positions of enforcement because their biggest clients at their law firms were all of the Too Big To Fail Wall Street banks. Titus mentions Covington &&  Burling in his podcast. CB is the real life equivalent of Lambert & Lock in “The Firm.” Only Covington & Burling is a “cleaner” for the biggest Wall Street banks rather than the Chicago mafia. But is there any difference?

This video is a must-watch for anyone wondering why this country looks so much different that it did just 40-50 years ago (for those of us who were around and aware back then). For me the best part is the clip that shows Alan Greenspan spilling the beans on the truth about the financial system and the reaction to his statements by Ben Bernanke and the show’s moderator. If you listen carefully, you’ll understand why the financial system collapse coming at us will be much worse than the 2008 great financial crisis:

Systemic Instability And Gold & Silver

The MOVE index – which is basically the VIX indicator for the bond market – hit a high earlier this month not seen since the Great Financial Crisis. Similarly, the cost of credit default swaps – which is the cost to buy “insurance” on all forms of debt – has spiked up to its highest level since the March/April 2020 virus crisis. These are indicators of rapidly escalating instability in the credit markets domestically and worldwide.  In fact several indicators reflect a degree of risk and fear in the markets not seen since the summer of 2008.

Craig Hemke of TF Metals Report fame invited me on to his entertaining and informative Thursday Conversation podcast to discuss the growing risk of a repeat of 2008/2009, only much worse this time, and how it might affect gold, silver and the mining stocks (click on the graphic below or you can download the MP3 below the pic) :

******************************

The precious metals sector looks like it’s ready for a major move higher, especially the junior exploration stocks – you can learn about my Mining Stock Journal here: MSJ information; and my Short Seller Journal subscribers have made a small fortune on the ideas I present weekly in my short seller’s newsletter: SSJ information. Home run short ideas include $ARKK $Z $OPEN $HOOD $DKNG etc.I have several more ideas lined up with substantial downside.

The Precious Metals Sector Is Percolating For A Monster Move Higher

I wrote the following commentary on the precious metals market for Kinesis Money:

With all of the factors in place to support a big move higher in the precious metals sector (raging inflation, escalating geopolitical tensions, recessionary economy, etc), the recent market action is frustrating to say the least. To be sure, a certain percentage of the poor performance in gold, silver and mining stocks is attributable to the ongoing decline in the general stock market. It’s a bear market.

When capital pulls out of the markets (stocks and bonds), it pulls out of everything. March 2008 to late October 2008 is a good parallel to the current market. At some point there will be a catalyst, or catalysts, which triggers a positive divergence of the precious sector from the rest of the stock market. The most likely event will be reversal by the Fed of its monetary policy.

That said, gold continues to move in a steady uptrend that extends back to March 2021:

There have been several successful tests of that uptrend/support line along way. Currently gold seems to be holding its 200 dma. While anything can happen over the short term (next couple of months), I expect a big move in the sector sometime between now and the end of October.

Also, keep in mind that the effort to prevent gold and silver from moving higher has been particularly aggressive since gold was turned back from $1975 in mid-April. But 85-90% of the time gold has been rising during the hours when the eastern hemisphere physical accumulators are trading and gets pushed lower once London and then NY open, which is primarily paper derivative gold trading. When gold shakes off the latest price control effort, it will shoot over $2000 and move higher from there. Similarly, silver is in a dog fight at $22. But once poor man’s gold prevails, it move higher toward $30 quickly.

The chart below shows the ratio of the S&P 500 to the Amex Gold Bugs Index (HUI) going back to 2001. I’m using the HUI instead of GDX because GDX did not exist until 2006. I wanted to take this chart back to the end of the 20-year bear market in gold that began in 1980.

The black line was drawn to show periods time when the mining stocks were incredibly cheap vs the rest of the stock market. The current relative value between the SPX and the mining stocks is back to where it was at the end of 2015 and the end of 2018. Big rallies in the sector followed. Prior to the end of 2015, the last time the mining stocks were as cheap vs the SPX as they are now was in late 2001. At that point, a 10-yr bull cycle – inside a longer secular bull market – was already under way.

Unless you believe that the secular bull market in the precious metals is ending, the chart above suggests that there is another substantial bull move coming. Obviously timing is unclear. What might be the catalyst?

The more I ponder the circumstances, the more I am convinced we’re watching the summer of 2008 repeat and unfold right now, only this time it will 10x worse than back then. First, the housing market is starting to head south quickly. In six to twelve months, most people will be shocked at how different the housing market looks like then compared to now.

Furthermore, the banks are in trouble. If you pull up a chart of Deutsche Bank, you’ll see that it is down nearly 50% since February 10th. DB is the most systemically dangerous bank in the world. Many of the other Too Big To Fail banks are down 25-35%. The Nasdaq, down 31% from its ATH in November 2021, is down less than the stocks of many of the worlds largest banks. We have no idea what their off-balance-sheet derivatives exposure looks like but I can guarantee it’s apocalyptic.

Finally, the stock market is in a crash cycle that is still in low gear. When the wheels were flying off the financial system and the economy in 2008, the Central Banks – led by the Fed – flooded the banking system with printed liquidity. They did the same in 2020, though the Fed began in September 2019. It is unknown is whether or not the Fed and other Central Banks will quadruple down on their money printing at some point or if they’ll let everything collapse this time. But in either scenario, at some point there will be a stampede into physical gold and silver that will translate into a large, sustained move higher in the mining stocks.

******************************

The precious metals sector looks like it’s ready for a major move higher, especially the junior exploration stocks – you can learn about my Mining Stock Journal here: MSJ information; and my Short Seller Journal subscribers have made a small fortune on the ideas I present weekly in my short seller’s newsletter: SSJ information.

Toilet-flushing the U.S. in Three Exciting Fed Colors

“The Fed is lying about the causes of inflation. When asked about its role in causing inflation, in terms of buying assets, it says “oh no, that’s not the problem – we only create reserves and reserves – you silly rube – do not leak out into the real economy.”

John Titus has hit another grand slam home run in his Best Evidence podcast series. This time he annihilates the idea that the Fed does not print money but rather simply creates bank reserves. Using data from the Fed’s website, Titus explains the process by which the creation of bank reserves is transmitted as the equivalent of printed money into the real economy. This process causes currency devaluation that manifests as rising prices.

Titus shows how the Fed’s recent actions have caused banking system liquidity to recede, which in turn has caused the stock and housing markets tip over and has pushed the U.S. economy into recession. Unless the Fed reverses its policy, pronto, there will be a serious stock market crash and an economic depression. In this scenario, physical gold and silver will be the proverbial “last man standing.” However, more likely, sometime this fall the Fed will make every effort to reflated the financial system. This will require an unprecedented amount of new money printing, which will send gold, silver and mining stocks into a bull move that will quickly become parabolic.

Raging Inflation, A Collapsing Economy/Stock Market And Gold In Uganda

The idea that Vladimir Putin is responsible for the raging price inflation in the U.S. – as “Joe Biden” first claimed in a speech a couple of months ago, calling it “Putinflation” – is patently absurd. The Fed, along with several of the largest Central Banks around the world are directly and indirectly the cause of price inflation. Supply chain disruptions and the U.S./EU sanctions on Russia are secondary exogenous variables that have exacerbated the problem created by bankers.

With all of the factors in place to support a big move higher in the precious metals sector (raging inflation, escalating geopolitical tensions, recessionary economy, etc), the recent market action is frustrating to say the least. To be sure, a certain percentage of the poor performance in gold, silver and mining stocks is attributable to the ongoing decline in the general stock market. It’s a bear market. As I’ve discussed previously, when capital pulls out of the markets (stocks and bonds), it pulls out of everything. March 2008 to late October 2008 is a good parallel to the current market.

Rob Kienz of GoldSilverPros.com invited me on to his podcast to discuss the Fed, inflation, the precious metals sector (gold, silver, mining stocks), Cathie Wood/ARKK and the Uganda gold claim.

******************************

The precious metals sector looks like it’s ready for a major move higher, especially the junior exploration stocks – you can learn about my Mining Stock Journal here: MSJ information; and my Short Seller Journal subscribers have made a small fortune on the ideas I present weekly in my short seller’s newsletter: SSJ information. Home run short ideas include $ARKK $Z $OPEN $HOOD $DKNG etc.I have several more ideas lined up with substantial downside.

Will Raging Inflation Ignite Gold, Silver and Mining Stocks?

Inflation is something that happens to balloons. In this context it is an increase in the combined quantity of money, currency, and credit, which will tend to increase prices all else being equal. – Alasdair Macleod, Inflation Defined

NOTE: The commentary below is from my latest issue of the Mining Stock Journal.  I present several micro-cap junior ideas that I believe have home run potential as well as a discussion of how I’m playing the Gold Fields takeover of Yamana. You can learn more about my newsletter here:  Mining Stock Journal information.

With all of the factors in place to support a big move higher in the precious metals sector (raging inflation, escalating geopolitical tensions, recessionary economy, etc), the recent market action is frustrating to say the least. To be sure, a certain percentage of the poor performance in gold, silver and mining stocks is attributable to the ongoing decline in the general stock market. It’s a bear market.

As I’ve discussed previously, when capital pulls out of the markets (stocks and bonds), it pulls out of everything. March 2008 to late October 2008 is a good parallel to the current market. At some point there will be a catalyst, or catalysts, which triggers a positive divergence of the precious sector from the rest of the stock market. Again, look at a chart of GDX from November 2008 to March 2009. The most likely event will be the reversal by the Fed of its monetary policy. But that may not be necessary if price inflation continues to escalate – this would trigger a rush into physical gold and silver, something that seems to have started already at the retail level in the form of a big jump in sales at the U.S. Mint.

That said, gold continues to move in a steady uptrend that extends back to March 2021:

There have been several successful tests of that uptrend/support line along way. Currently gold seems to be holding its 200 dma. While anything can happen over the short term (next couple of months), I expect a big move in the sector sometime between now and Halloween. Also, keep in mind that the effort to prevent gold and silver from moving higher has been particularly aggressive since gold was turned back from $1975 in mid-April. But 85-90% of the time gold has been rising during the hours when the eastern hemisphere physical accumulators are trading and gets pushed lower once London and then NY open, which is primarily paper derivative gold trading. When gold shakes off the latest price control effort, it will shoot over $2000 and move higher from there. Similarly, silver is in a dog fight at $22. But once poor man’s gold prevails, it move higher toward $30 quickly.

I make the case for why the Fed likely will be forced to reverse its monetary policy eventually in this podcast produced for Arcadia Economics:

Housing Market Is Starting To Implode – Short $BLDR

NOTE:  The analysis below is from the May 22nd issue of my Short Seller’s Journal. In conjunction with this, my good friend and colleague, Greg from Silver Liberties has prepared a technical analysis video of the Builders FirstSource stock chart:  BLDR Technical Analysis.  You can access Greg’s work at his Patreon site, to which I subscribe.

BLDR is a supplier of building materials (lumber and manufactured components) to homebuilders, sub-contractors, remodelers and consumers. Examples of its products include lumber & lumber sheet goods, wood floor and roof trusses, wall panels, windows, doors, wallboard, exterior trim etc.

My rationale for shorting BLDR is that it is a “leveraged” play on the housing market and new construction. As with homebuilders, when the market is hot BLDR’s revenues and margins soar. But when the pendulum swings back the other way, as it is now, revenues and margins dry up quickly. BLDR’s numbers have benefited both from price inflation and several “roll-up” acquisitions which exaggerated revenue growth and doubled its debt load.

BLDR’s revenues actually declined from 2018 and 2019. Then in 2020 revenues increased 17.5% YoY due to the renewed new home construction boom and commodity price inflation, both products of the Fed’s monetary policy. From 2020 to 2021, BLDR’s revenues more than doubled from acquiring BMC West. Of course, its long term debt load also nearly doubled. Revenues in Q1 2022 rose 36.1% YoY. But 58% of that gain is attributable to the BMC acquisition and to price inflation.

The Company acknowledges that demand for single-family homes drives its top-line growth. But, as we’re seeing with new home sales, home sales have started to head south. Because of this, I believe that over the course of 2022, BLDR will experience a rapid slow-down in sales growth and profitability. Compounding this problem, BLDR’s debt load increased by another 15.9% during Q1 2022. Furthermore, the Company burned $1.7 billion of cash repurchasing stock in 2021 and another $354 million on repurchases in Q1 2022 (rather than paying down debt).

There’s also some financial red flags on its balance sheet:

First, inventories rose 34.6% in Q1 from the end of 2021. BLDR has been a big beneficiary of price inflation. Over the last couple of years it has been able to sell its inventory at prices well above the cost of building its inventory. But as new home demand declines, accompanied by falling single-family housing starts, BLDR will be exposed to considerable pricing risk. Recall the massive inventory write-downs taken by homebuilders in 2008 and 2009. That same dynamic applies to BLDR.

Another red flag is the rather plump asset value assigned to goodwill and intangible assets, which represents nearly 40% of BLDR’s assets. That $3.39 billion number assigned to goodwill is particularly troublesome. Goodwill is the amount paid for an acquisition over and above the fair value of the assets acquired. 76% of that goodwill number is a result of the BMC acquisition.

Goodwill is basically the value assigned to the various intangible “assets” of an acquisition, like brand names, customer relationships, any proprietary technology etc. That’s great when stock values are rising and the economy is robust. But goodwill can also be looked at as the amount that an acquiring company may have overpaid for the company acquired. At some point as the economics of BLDR’s business model deteriorate, that big goodwill plug will become a source of write-downs and income statement charges.

The same holds true for “intangibles.” BLDR’s intangibles are listed in the 10-K as value assigned to customer relationships, trade names, subcontractor relationships, non-compete agreements and developed technology. While goodwill is not amortized, the amortization expense of intangibles is run through the income statement. But when the housing market and economy goes bad, those “intangibles” will diminish considerably in value and will be another source of write-downs.

BLDR’s book value (stockholder equity) is $5.1 billion. But $4.8 billion of that book value is comprised of goodwill and intangible assets. As such, BLDR’s tangible book value is just $300 million. With a $3.4 billion debt load, BLDR has debt to tangible book value ratio of 10x. While this gives the Company earnings leverage in good times, when the cycle turns it will be a source of considerable financial stress.

Furthermore, BLDR does not have much room to incur inventory, goodwill and intangible write-downs (believe me, that’s coming eventually) before its book value goes negative. There will also be accounts receivable write-downs when the smaller, custom homebuilders go bust and BLDR becomes an unsecured bankruptcy court creditor.

The more I dig into BLDR’s 10-Q/K, the more I like it as a short idea. On the assumption that I’m correct about the housing market, and I believe my thesis is already starting to unfold, BLDR’s stock price will quickly deflate.

BLDR’s stock price a little more than doubled between mid-July 2021 and the end of 2021. Since then, it has already lost 29.4% of its value through Friday. In the chart above I plotted BLDR vs the Dow Jones Home Construction Index (DJUSHB) over the last five years. BLDR was tightly correlated with DJUSHB until July 2020.

I believe over the course of the rest of 2022, BLDR will, at the minimum, partially to substantially “catch down” to DJUSHB. Based on the current level of DJUSHB, this implies a price target of $30 for BLDR. But between now and the end of 2022, DJUSHB will continue to decline. I can see BLDR dropping to $20 by year-end. Keep in mind it was at $10 in March 2020.

My Short Seller’s Journal newsletter has features several ideas that have been huge home runs if not grand slams over the last 12 months, including CVNA, ARKK, HOOD, Z (Zillow), NFLS, DKNG among several others. You can learn more about SSJ here: Short Seller’s Journal information.

The U.S. Economy Is In A Recession Now – Gold, Silver Set To Soar

“We’ve seen a downturn in the price as expressed in the paper derivatives precious metals’ price. There hasn’t been any large scale physical selling of gold or silver. Coin dealers sell gold and silver on a daily basis to retail buyers and the bullion banks broker bullion from major gold bullion producers into the countries that are buying – India, Russia, China, etc – but I have not heard of any entity that owns a large amount of gold say ‘we have to sell 100 tonnes gold, bid wanted in comp…”

The economic and corporate earnings data continue to reflect an economy that is heading into a recession – a bad one, I suspect. 85% of the S&P 500 companies have reported their first quarter. The S&P 500 GAAP earnings are down 14% versus Q4 2021 and up only 1% year-over-year. If earnings were adjusted by just the highly massaged YoY CPI inflation rate of 8.3%, real YoY SPX earnings are down 7.5%. The general economic data, which I scrutinize weekly for my Short Seller’s Journal newsletter, began showing economic weakness last summer, after the round two stimmies were largely spent. The one area that continued to show robust activity was the housing market. But both home sales (new and existing) and retail sales (nominal) have been in sharp downtrend since the beginning of 2022.

Elijah Johnson invited on to his Liberty and Finance podcast to discuss the economy and, of course, gold and silver:

******************************

The precious metals sector looks like it’s ready for a major move higher, especially the junior exploration stocks – you can learn about my Mining Stock Journal here: MSJ information; and my Short Seller Journal subscribers have made a small fortune on the ideas I present weekly in my short seller’s newsletter: SSJ information.