Tag Archives: mining stocks

A Matter Of Time Before Stocks Collapse And Gold Soars

“Look at the underlying fundamentals that are driving it [gold and silver prices]. The financial condition of the country that hosts the reserve currency deteriorates more everyday and the Central Bankers are trying to kick the can down the road on an inevitable financial system and monetary system reset by printing more money.”

The economy continues to show signs that the “sugar high” from the Fed’s and Government’s multi-trillion dollar money printing and stimulus spending is wearing off. The latest economic reports – notwithstanding the moronic homebuilders “sentiment” metric – reflect a renewed downturn in economic activity plus the numbers reported in July are being revised lower (see today’s retail sales report, for instance).

As long as the Fed continues to devalue the dollar by printing money and as long as Treasury debt continues to increase at an increasing rate, the fundamentals are in place for a monster move in gold, silver and mining stock.

Michelle Holiday of Portfolio Wealth Global invited me on to her podcast to discuss the factors that I believe will lead to a stock market avalanche and soaring values in 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 Mining Stock Journal Subscriber: “This is a lot of value for $20 a month. Thank you so much!” – Jorgen

Gold (And Silver) Are Extraordinarily Undervalued

Many subscribers ask me about taking profits on their physical gold and silver. While there’s nothing wrong with taking profits on your metal, it defeats the purpose of converting fiat currency into physical gold and silver.

The chart above from James Turk (Goldmoney.com) illustrates the power of gold’s (and silver’s) wealth preservation attributes. The chart shows the cost of oil measured in dollars (green line), euros (purple line), pounds (blue line) and goldgrams (red line). It uses 100 as the “base” price for oil.  A gram of gold buys the same amount of oil now as it did in 1950.  In contrast, takes a considerable amount more of dollars, euros or pounds to buy the same amount of oil now as each would have purchased in 1950.

If you have large profits in your physical gold/silver holdings and taking profits will make you feel more comfortable, by all means do so.  I’m holding all of my gold and silver for when the dollar collapses and there’s a monetary reset.  A reset that incorporates gold and silver into the currency system should incorporate a substantial upward revaluation of gold  (and silver) priced in all fiat currencies to a level that makes me indifferent between holding the metal or holding the new currency. Those who converted their metal into dollars before a reset occurs will be holding worthless paper.

Chris Marcus (Arcadia Economics) and I discuss several reasons why gold (and silver) is extraordinarily undervalued:

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A portion of the commentary above is from  the latest issue of the Mining Stock Journal. You can learn more about  this newsletter by following this link:  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 And Silver Are Set Up For A Huge Move

“There is a growing recognition that the much-heralded V-shaped recovery is not going to happen beyond a temporary recovery following lockdowns. That being the case, the Fed is committed to unlimited monetary inflation, which is already undermining the dollar, the trade weighted version of which continues to decline.” – Alasdair Macleod, Goldmoney.com

Institutional investors have maybe 0.5% of their assets invested in the precious metals sector. At the peak of the gold/silver in 1980 institutions had 5% invested in the precious metals sector. Since then that allocation has not been above 1%. Eventually a monster move is coming in silver and the mining stocks, though no one can say when it will occur.

The catalyst for the move will be large institutional and wealthy investors reallocating cash from the stock market in general into mining stocks. I believe Buffet was a harbinger of that even though he only bought a small amount of Barrick in relation to the size of Berkshire’s assets.

The overrbought condition that developed in July/early August is now neutral/oversold per the RSI and MACD indicators. Yesterday gold bounced off its 50 day moving average. Technically gold (and silver) is set up for a bullish move.

In addition, based on the data from India which reflects gold import activity (from John Brimelow’s Gold Jottings report), India started importing dore bars Monday and soon will be importing kilo bars. India has been absent for the last three weeks.

September through December is the seasonal period when India imports its most gold on an annual basis. This will have the  effect of exacerbating the already tight supply of gold available for delivery to buyers who demand actual physical delivery rather than leaving purchased gold in bank custodial vaults.  A groomsman in India dare not show up to a wedding with just a receipt for gold purchased to give to his bride.

Chris Powell (GATA.org) also pointed out several more factors that indicate the potential for a monster move in the precious metals and mining stocks:

— the smashdowns don’t work as they used to, seldom more than a couple of days;

— volatility in the metals has exploded;

— the geopolitical situation is growing more strained, not less;

— The U.S. and European economies are wrecks – the massive money printing directed at the deferral of financial and economic collapse functions as rocket fuel for gold/silver.

Furthermore, Chris points to the obvious indications that the supply of physical gold that can be delivered to entitled buyers on the Comex and the LBMA is exceptionally tight:

— The mechanics of the market: the rise and fall of EFPs, the sudden conversion of the Comex to physical off-take, the panicked dance between the LBMA and the Comex, the huge expansion of the Comex’s approved bar list, the failure of the Comex open interest to contract on falling prices, all of which suggest big underlying changes and increasingly tight supplies – whether one disagree’s or not with Andrew Maguire, he has been shouting for months that it’s impossible to get prompt delivery of metal in the LBMA system and is consistent with the unusual behavior exhibited by the CME/Comex and LBMA since April;

Finally, per the research of GATA consultant, Robert Lambourne, BIS intervention in the gold market on behalf of its member Central Banks is at its highest level in years and perhaps its highest level in history for the second month in a row (July and August).  Historically BIS gold swap activity has been suspiciously correlate with visible bullion bank efforts to prevent the price of gold from rising.

While the gold price was unable to sustain its move over $2,000 – for now – the overt price intervention efforts over the last 4 weeks has had, at best, limited success.  At some point this effort will fail.

Though it can’t be proved without access to the BIS records – and the BIS refuses to comment on its gold swap activities (as does the Fed) – it is thought by many who have evaluated the swap activity that the BIS uses this operation to make physical gold bars available to Central Banks for market interventions and delivery obligations.  Likely it is not a coincidence that for most of August both the a.m. and p.m. London price fixings have featured heavy offerings almost daily  which result in downward pricing pressure on gold.

All of the above factors lead me to conclude that there’s a high probability that the precious metals sector will stage a big move between now and the end of the year.

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A portion of the commentary above is from  the latest issue of the Mining Stock Journal. You can learn more about  this newsletter by following this link:  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.

Jerome Powell Confirms Intent To Hyperinflate The Dollar Supply

“After thinking about it all day, I’m still not quite sure this isn’t a joke; a high-brow commitment of utterly brilliant performance art, the kind of Four-D masterpiece of hilarious deception that Andy Kaufman would’ve gone nuts over. I mean, it has to be, right?” – Jeffrey Snider, Alhambra Partners

No Jeffrey,  Powell’s speech was not a cruel joke.  But it certainly was loaded with “Fed speak.”  The bottom line is that “letting inflation run above the 2% target rate” is code for: “we have to print a helluva lot more money to keep the stock market and the big banks from collapsing.”

In our latest weekly update, Chris Marcus (Arcadia Economics) and I discuss the farce delivered by Jay Powell yesterday morning:

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In the latest issue of the Mining Stock Journal I discuss profit-taking in miners, use of options to leverage returns, the Auryn/Eastmain merger and a new idea. You can learn more about the Mining Stock Journal by following this link:   MSJ Subscription Info.

New subscriber comment:  “Hi Dave, this is a lot of value $20 per month – thanks!”

Why Is Warren Buffett Buying Gold Stocks?

Who cares why Buffet bought Barrick shares?  It’s an infinitesimal percentage of Berkshire Hathaway’s market cap.  Even if Barrick triples from here, it will have no affect on the investment performance of Berkshire.

However, I believe it’s a good bet that Buffet has a lot of physical gold that he keeps in his own private storage facilities around the world.

Chris (Arcadia Economics) and I discuss the Buffet news as well as some other topics related to Buffet, gold and silver:

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In the latest issue of the Mining Stock Journal I discuss profit-taking in miners, use of options to leverage returns, the Auryn/Eastmain merger and a new idea. You can learn more about the Mining Stock Journal by following this link:   MSJ Subscription Info.

New subscriber comment:  “Hi Dave, this is a lot of value $20 per month – thanks!”

Gold, Silver And Mining Stocks Are Just Getting Started

Eventually – and I want to emphasize “eventually” – the precious metals sector will do what the tech sector/Nasdaq is doing right now. That is to say will undergo a blow-off top that will take gold, silver and mining stocks to all-time highs.  The precious metals sector is far from this attribute of a blow-off top.  Any MSM financial media commentator who proclaims that the sector is in a bubble is either tragically ignorant or regurgitating official propaganda – probably a combination of both in every instance.

Bill Powers of Mining Stock Education and I chatted about the precious metals sector and why it’s still extraordinarily undervalued. I also suggest a couple of stocks that I particularly like right now:

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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 Mining Stock Journal Subscriber: “This is a lot of value for $20 a month. Thank you so much!” – Jorgen

Housing boom or housing stock bubble? Got Gold? Silver?

The DJUSHB (Dow Jones Home Construction Index) hit an all-time high on Thursday. The previous ATH was in July 2005. The current SAAR (seasonally adjusted annualized rate) for existing home sales as of the June report is 4.2 million. It’s the lowest sales rate since July 2010. The last time the DJUSHB was trading over 1,100 (July 2005) , the single family existing home sales rate was over 7 million.

Similarly, new home sales peaked in 2005 at a 1.4 million SAAR. The current annualized run-rate per the June new home sales report is just 776,000. The average price per home for new and existing homes back in 2005 was roughly equivalent to the current prices for each category. On an inflation-adjusted basis, homes were selling at higher prices 15 years ago. I’ll let you decide if the homebuilder stocks overvalued right now based on those statistics.

Two more points of note about the potential for an accident in the homebuilder stocks. A new survey by Apartmentlist.com released August 6th showed that 33% of households (renters and mortgagees) entered August with unpaid housing bills for the fourth straight month. As of the first week of August, 11% of all households had made a partial payment of their monthly rent or mortgage bill and while 22% had yet to make any payment.

Furthermore, “early stage” delinquency rates on mortgages are starting to accelerate. Per a Corelogic report for data available through the end of May, 7.3% of mortgages were at least 30+ days delinquent. This is compared to a 3.6% delinquency rate in May 2019. Barring additional additional intervention from the Federal Government, Corelogic expects delinquency rates to further spike.

Eventually unpaid housing bills and mortgage delinquencies will pull the rug out from under the housing market and homebuilder stocks. This also explains why, despite the propagandist housing market hype plastered all over the media, private residential construction spending is contracting rapidly.

Phil Kennedy (Kennedy Financial) hosted a discussion about the housing market that included myself, Aaron Layman and Karl Krentzel. We also discussed the precious market and why, contrary to mainstream belief, gold is not even remotely in an investment bubble:

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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 And Mining Stocks Smell The Demise Of The Dollar

The news that Warren Buffet took a stake in Barrick Gold stimulated animal spirits in the precious sector on Monday. To be sure, this was a factor in the move on Monday. However the precious metals are starting to price in the next round of money printing by the Fed and the coming avalanche of new Treasury bonds, both of which will be considerable in quantity and serve to further devalue the U.S. dollar. On that note, the US dollar index tumbled below 93 on Monday. In addition, per the TIC report which shows the flow of international capital into and out of U.S. securities, foreign entities led by China dumped $20.6 billion worth of Treasury securities in June.

The message is clear: the Fed will need to be a large buyer of the upcoming Treasury bond issuance and the precious metals sector loves the smell of this.

Chris (Arcadia Economics) and I discuss last week’s one-day price pullback in the precious metals sector and factors that will drive gold, silver and the mining stocks up to levels that may even surprise jaded goldbugs:

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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.

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.

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.