James Rickards | Stocks As Leveraged Bets on Gold Video – Sprott Media
James Rickards how gold stocks may fit into a speculative portfolio.
James Rickards | Stocks As Leveraged Bets on Gold Video – Sprott Media
James Rickards how gold stocks may fit into a speculative portfolio.
Craig Hemke & Eric Sprott: Sprott Money News Weekly Wrap-up – 5.19.17 Podcast – Sprott Money News
This week, Eric Sprott discusses the troubles in Washington and how this is impacting the prices of gold and silver.
– dollar going down
– Trump fighting the good fight but losing to the “witch hunt”
– overvalued stock market
A ‘Must-See’ Chart for Gold and Silver Aficionados – Peter Degraaf – Sprott Money
Every now and then a chart appears that provides us with a great opportunity.
The following chart fits that mold.
(Charts courtesy Stockcharts.com and Goldchartsrus.com). Featured is a chart that compares the EURO(DM) to the US dollar. When the trend is rising, it means the Euro is stronger than the US dollar and vice versa. History tells us that gold has a tail wind when the trend here is upward bound, and a head-wind when the trend in this index is falling. Please notice the upside breakout in 2002 from a multi-year triangle. It was at this time that gold began its rise from $260.00 to $1,925.00. Now notice a similar pattern (a falling wedge), developing on the right. Price is close to breaking out at the second blue arrow. The supporting indicators are giving off positive divergence (green arrows). A breakout could come at any day, and gold (and silver) stand to benefit. In the event of a repeat percentage performance in the price of gold, the long-term target (based on gold’s performance between 2002 and 2011), for this coming breakout, is $9,300.00.
Here is a close-up of the first chart. Price is breaking out at the blue arrow and a close above the green arrow will confirm the breakout. The supporting indicators are positive (rising).
Featured is the daily gold chart. The vertical green arrows point to ascending bottoms. The pattern is an Ascending Right Angled Triangle. A breakout at the blue arrow will set up a short-term target at $1480. The supporting indicators are turning positive.
This chart shows the combined demand for gold in India and China during March (281 tonnes), equaled the amount of gold that was mined worldwide (white line on chart). Conclusion: These two nations combined are soaking up virtually all of the gold that is being produced. Whenever demand exceeds supply, price must rise.
This chart compares dollar value of the (stated) US gold reserves to the US Monetary Base. The two are as far apart as they were in 1976, when a bull market in gold was just getting underway. In order for the value of the US gold reserves to match the comparison of 1940 and 1980, the gold price will have to rise 12 fold. Before we shrug that off, we must remember that it has happened before. 1940, 1980, – next 2020?
Please do your own due diligence. Investing involves taking risks. Peter Degraaf is not responsible for your trading decisions.
Precious Metals Fundamentals: The Numbers Don’t Lie by Jeff Nielson – Sprott Money
Recent commentaries which have discussed precious metals have focused on the precious metals “market” – meaning the paper-trading that the bankers and Corporate media call “a market”. Sophisticated readers understand that this fantasy world has almost nothing to do with the real market for gold and silver physical metal.
As we learned from Jeffrey Christian in 2010 (in an admission which he would love to take back), in this world of fraud, only 1% of “gold” and “silver” trading is actual metal. All the rest of this trading is paper.
Don’t look for real numbers on precious metals fundamentals from the World Gold Council or the Silver Institute either. These are banker-operated propaganda outlets , with the sycophantic senior gold and silver producers acting as their front-men. These sites get their crooked numbers from the same Corporate media which pretends that the bankers paper-trading represents the real gold and silver market.
Prices are once again being manipulated lower in this paper-trading. The blind, deaf and dumb Corporate media is once again pretending that there is nothing outrageous about this downward manipulation of prices. Readers require a reminder of the dominant fundamentals of the real, physical market for these metals:
In establishing that gold and silver are currently priced below the (full) cost of production, it’s easiest to start with the silver mining industry since the evidence is so obvious and extreme. We know that silver is artificially priced below the cost of production for one simple and unequivocal reason: actual silver mines (“primary” silver mines) produce only a small portion of the total amount of the world’s annual silver supply, and only the world’s very richest deposits of silver can be mined at a profit.
Silver mines currently produce only about 25% of the total amount of silver produced each year. All of the rest of the world’s supply is mined as a byproduct of other metals mining. Silver is the only major metal on the planet where the (vast) majority of supply comes as a byproduct .
This has never happened before in history. For well over 4,000 years, we have always gotten the vast majority of our supply of silver from primary silver mines . It is only in the last 30+ years (with the price of silver pushed to a 600-year low) that we have become dependent on silver byproduct production for the majority of our supply.
It is absolutely unsustainable to supply a metals market on byproduct production alone. More will be said about this later.
The silver market has been in a permanent supply deficit because of strong demand and anemic supply, for at least 30 years. This is unprecedented in the history of commodity markets. Why has there not already been a supply-default in the silver market?
The silver market has never emerged out of supply deficit, not even from 2009 – 11 when the price briefly surged above $40/oz. And even before the bankers pushed the price of silver back below $20/oz in the last half of 2016, the global supply of silver had already started to fall. This Bloomberg headline from April 2016is illuminating:
Silver Supply Trouble Shows Why Rally Momentum Is Building
That article warned that by April it was already obvious that mine production was going to fall for the first time year-over-year since 2011, with supply ultimately 2% lower on the year. We’re now seeing a forecast of mine supply falling by an additional 4% in 2017. This is cumulative with the 2% drop in 2016.
What price level would it take for primary mining to once again account for the majority of supply, making the silver market once again sustainable on the supply side?
In the 30+ years since the bankers nearly exterminated the silver mining industry by manipulating prices to a 600-year low, it has become impossible to provide a precise answer to that question. The minimum price needed to provide supply/demand equilibrium (through primary and byproduct mining) would be some number well above $50/oz . Of equal importance is that this price must be maintained for many years since the “mining cycle” (the time to put a deposit into production) can easily exceed ten years.
Perhaps a more relevant question for many readers is this: what is a rational, fair-market price for silver today? With the price manipulated to such an extreme degree for so many years, even here precise metrics are difficult. A previous commentary pegged a fair price for silver today at $1,000/oz , based upon the historic wages of workers, paid in silver.
Demonstrating that the price of gold is below the full cost of production is somewhat more complex, since readers who are less sophisticated about mining fundamentals will not completely understand what this means. When most readers think about the full cost of gold production they think of the “cash costs” of individual mining companies.
However, this is an elementary calculation which doesn’t even begin to account for the full cost of gold mining. It is only the incremental operating cost for producing an ounce of gold. It doesn’t account for the capital costs of constructing the mine. It doesn’t account for the capital expenditure of buying the project, since most “gold mining” companies don’t actually do their own exploration.
Many of these gold mining companies now produce a number which they call “the all-in cost of sustaining production”. It’s supposed to represent the full cost for that mining company to remain in existence over the long term. It doesn’t .
As mentioned earlier, the large mining companies who are responsible for the vast majority of annual mine supply no longer do their own exploration. If they had to do so, their “all-in costs” would be substantially higher because exploration is expensive.
Instead, mining exploration is farmed out to the junior exploration companies. These are the mining companies who find all of the world’s gold. Here the fundamentals become less murky. These companies suddenly saw their access to capital dry up in 2011, as soon as the price of gold sank below $1,800/oz (USD).
Since that time, these mining companies have experienced the most-severe depression since the price of gold was below $300/oz more than 15 years ago. Gold exploration companies experienced a minor revival in 2016, as the bankers (briefly) allowed prices to rise. That was only sufficient to allow mining companies to begin to resume exploration operations – and on a dramatically reduced scale.
Only the most-promising high grade gold deposits are presently able to attract the funding necessary for serious exploration. The catch here is that almost all of these deposits are too small to be of interest to the world’s senior gold miners. These lazy corporations only want to have to administer a relatively small number of gigantic mines.
With mining costs having risen substantially since 2011, the equation is simple. It would take a gold price in excess of $2,000/oz, sustained at that level for many years, just to bring real health back to the junior exploration sector – the backbone of the gold mining industry.
Without such a revival in the junior exploration companies, none of the world’s senior gold miners will still be in existence 20 years from now. There will be no gold left for them to mine.
This is only ½ of this equation: providing readers with unequivocal fundamentals from the supply side as to why gold and silver prices must rise dramatically. The fundamentals for precious metals on the demand side are even more dramatic since they demonstrate why gold and silver prices must rise dramatically in the near term. This will be the subject of the concluding installment of this series.
Craig Hemke & Eric Sprott – Weekly Wrap-Up 051217 Podcast – Sprott Money
This week, Eric Sprott discusses the recent selloff in the precious metals but also notes some “light at the end of the tunnel”.
– 16 Day decline in silver
– physical off take will catch up with price manipulation
The Traitors Abetting The Deep State’s Dirty, Dying War on Gold by Stewart Dougherty – Sprott Money
Evidence is mounting that the Deep State (DS) is starting to lose the dirtiest financial war in history: their War on Gold. More deeply, it is a war against something the Deep State profoundly loathes: personal financial liberty. The War on Gold, which has raged for 37+ years, has generated more than $1 trillion in criminal profits for the Deep State plunderers, while costing the worldwide owners of physical gold multiple trillions of dollars. All of this is coming to an end.
Due to its criminal hyper-manipulation, gold’s price has become a paradox: its weakness actually reflects its strength. With everything that has been thrown at it, it is astounding that its price is anything north of zero. The fact that it has been resilient at around $1,200.00 per ounce should concern the manipulators, because if this is as low as they can take it despite their full-spectrum, multi-billion dollar assault against it, then it is defeating them. Which is not surprising. By every conceivable, objective financial and monetary measure, gold is one of the most underpriced assets on earth. It is not going to stay that way. (Most of the dynamics we will discuss also apply to silver, but to streamline this article, we will focus on gold.)
The Deep State’s first strategic objective in the War on Gold has been to steal as much money as possible by conspiratorially rigging its price. They have perpetrated this crime in the full knowledge that it will never be investigated or prosecuted, because it is state sponsored. The Deep State is the state, and never prosecutes itself for its own crimes, no matter how flagrant and egregious they are.
The second, broader strategic objective has been to discredit gold as a monetary asset and safe financial haven throughout the west. The Deep State realized at the outset of the war that it would be impossible to achieve this in the east, which has a deep, cultural affinity for gold, so they have confined this gambit the west.
There are eight primary tactics in the War on Gold. Seven of them are generally known by those who study the gold market; one of them is little known or appreciated. The unknown tactic is actually the most important and effective tactic of all, while also being the Deep State’s Achilles’ heel.
The tactics in the War on Gold are:
1) Randomly and unpredictably attack the gold price in the futures markets, producing large price whipsaws, investor losses, and a generalized spirit of price uncertainty, danger and concern; over time, make existing and prospective investors view the market as a corrupt casino rigged against them, causing them to capitulate and leave the field;
2) Employ the most advanced, covert “Black Psychological Operations” (PsyOps) methods, customized for the financial sector by the CIA’s Division of Psychological Warfare, the Fed, the Treasury, the ECB and the BIS, to destroy gold sentiment in the west. As part of this campaign, use the Mainstream Financial Media (MFM) to conduct a continual propaganda campaign denigrating gold in every respect, destroying interest in it;
3) Fraudulently overstate official holdings to create the illusion of massive supply overhang;
4) Sterilize investment funds by steering them into non-auditable paper proxies (e.g., ETFs);
5) Weaken, then destroy the dealer network by killing product demand, spiking dealer costs (e.g., required hedging against relentless price volatility), causing large unhedged losses, demonizing dealers as money launderers and crooks, and wiping out profitability / business viability;
6) Financially weaken miners via crushed prices, making them dependent upon bullion bank (DS) financing and debt, and forcing them to comply with bullion bank orders;
7) Paint phony price charts that enable the “financial services industry” (stock brokers, investment advisers, bankers, etc.) to make gold investing appear stupid, and talk people out of buying gold, particularly in physical form; if this fails, sterilize investment funds by steering them into phony, paper gold;
8) Create a marketing blackout throughout the west (which is the Achilles’ heel).
Tactics #1 and 8 are the subject of this article, because they are inextricably linked. It would be impossible for the Deep State to employ Tactic #1 if it were not for their simultaneous use of Tactic #8.
As we know, Tactic #1 has been carried out by years’ worth of massive, unpredictably-timed, electronic, naked-short price attacks primarily conducted on the Comex, the Deep State’s captured and non-regulated Command and Control Center. GATA has long documented in exquisite and laudable detail the gold price-rigging scandal, and Deutsche Bank’s admission in late 2016 that they and numerous other major banks manipulated the gold market for years ended, once and for all, any possible doubt about gold market corruption.
As is typical in Deep State-sponsored financial crimes, none of the Deep State criminals ever goes to jail; instead, they simply pay fines to the Deep State itself. Deep State criminality is a closed system of plunder from which the profits never leave; they merely circulate from one Deep State pocket to another.
Tactic #8, the complete lack of industry-sponsored gold marketing throughout the west, is a crucial component of the War on Gold. Without
Tactic #8, the Deep State would be incapable of employing Tactic #1, because the criminalized, fractional reserve gold exchanges, primarily the Comex, would no longer exist. They would no longer exist because they would be unable to source even the minimal amount of physical gold required to create the false illusion of legitimacy, which would fully expose them as being nothing but the paper metal frauds they already are for all intents and purposes.
According to the Mainstream Financial Media, gold is a “commodity.” This deliberate mischaracterization of gold is intended to deflect attention away from its unparalleled monetary importance, and make it appear no different in nature from corn, natural gas or pork bellies. Rarely has a greater monetary lie ever been perpetuated.
Gold is not a commodity; it is the world’s only natural and universal money, and therefore its pre-eminent consumer product. From the time of its discovery over 6,000 years ago, human beings have instinctively realized that gold is incomparable as pure, honest, incorruptible, reliable, functional, lasting, valuable, and true money and wealth. This is precisely why the Deep State swindlers despise it. It is the antithesis of the immoral, baseless, corrupt, predatory, fraudulent fiat currencies they endlessly and parasitically counterfeit into oblivion at extraordinary profit to themselves and crushing expense to their victims, the people.
Providers of consumer products and services know that their offerings must be marketed. Not even the best of them sell themselves; they must be sold.
In 2016 alone, corporate managements worldwide spent over $1 trillion to advertise and promote their goods and services. They paid this astronomical sum because they know that marketing is indispensable to commercial success. Marketing is not an expense; it is an investment in profit.
We all recognize the phrases marketers have created to bring their products to life: “Just Do It,” “Don’t Leave Home without It,” “The Ultimate Driving Machine,” “Everywhere You Want to Be;” “Good to the Last Drop,” “Where’s the Beef?,” “Be All You Can Be,” “I Love New York,” “We Bring Good Things to Life,” “Think Different,” “Like a Good Neighbor, …;” “When it Absolutely, Positively Has to be There Overnight,” “We Try Harder,” “Diamonds are Forever,” among so many memorable others.
There is only one consumer product industry we can identify that does absolutely nothing to develop its market: gold mining. For decades, the miners have refused to lift a finger to promote gold. (Their appointment long ago of the World Gold Council as a marketing agent has been a complete disaster, and its dreary saga could be an article all its own.) This refusal constitutes a colossal rejection by them of the most important business function of all and a total abdication of their fiduciary obligation to shareholders. As a result of the miners’ persistent and indefensible refusal to market gold, western consumer demand for it is a fraction of what it could and should be.
We cannot find one senior gold mining corporation that includes in its top executive ranks a Chief Marketing Officer, or any role even resembling it. While we do find senior executives in: “Exploration,” “Operations,” “Investor Relations,” “Technology,” “Corporate Development,” “Regulatory Affairs,” Legal (“General Counsel,” “Compliance”), Finance (“Chief Financial Officer”), “Mergers and Acquisitions,” “Tax,” “Sustainability,” “Human Resources,” and “Strategy,” the marketing function is completely absent throughout senior miner top management. This is unprecedented in consumer commerce.
The miners’ refusal to market their product is so idiotic that it must be deliberate. It is impossible that such self-destructive commercial stupidity could come naturally to even one senior mining executive, let alone the entire set of executives in the senior gold mining industry, particularly given its extremely negative consequences.
This begs the questions: What is going on here? Why do the gold miners deliberately refuse to market gold, even though it is obvious that market demand and price for it have severely suffered as a result? Why do they deliberately destroy enterprise and shareholder value by ignoring the most important function in consumer commerce: marketing? Why do they willfully and knowingly repudiate their fiduciary obligations to shareholders, creating in the process potentially serious legal liabilities for themselves and their corporations? And why do all senior miners walk in such lunatic lock step when it comes to their refusal to market?
Executives at the senior mining companies have a long history of enriching themselves with lavish pay, benefits, pensions and stock options while at the same time stabbing their shareholders in the back. For example, their “forward hedging strategy,” conducted at the behest of and in full collaboration with the bullion banks during the brutal, 22 year gold bear market (1980 – 2001) savaged the prices of gold and mining shares. All the while, rich, no-lose compensation packages for mining executives were written around pre-arranged and hedged gold prices. The shareholders got screwed as the executives got rich. As we can see today, nothing has changed.
The miners’ excuse for their multi-decade failure to develop the gold market is that it is “just a commodity,” and no one markets those. Even if we agreed that gold is a commodity, which we adamantly do not for the reasons explained above, the excuse is not credible. In 1993, on a meager annual budget of only $23 million, one of the most successful advertising campaigns of all times was launched for a so-called commodity: “Got Milk?”
If creative advertising could make milk exciting, which it did, imagine what it could do to increase interest in and demand for gold. So what’s the problem here? Why is no one in the gold mining industry willing to give marketing a try? What, possibly, have they got to lose, other than the dismal gold price and multi-billions of corporate losses their marketing incompetence has produced over the past 37 years? More specifically, what is it about marketing gold’s incomparable monetary virtues that paralyzes them? It is obvious that the senior mining executives are not working for shareholders. So for whom are they working?
The only logical answer we can provide is that the senior miners are direct allies in the Deep State’s War on Gold. By employing Tactic #8, the traitorous miners have damaged gold demand as much as the criminals who use Tactic #1 have damaged its price.
The financial cost of the senior miners’ complicity in the War on Gold is astronomical. From 1980 through 2016, excluding China and Russia, approximately 79,000 metric tonnes, or 2.5 billion ounces of gold were mined. During the 1980 – 2001 bear market, gold was virtually given away by the miners for nothing, reaching dirt-cheap, double-bottomed prices of only $250 per ounce in 1999 and 2001. In the bear market that started in 2011 and continues to this day, gold has plunged from an inflation adjusted 2011 high of $2,081 to today’s price around $1,200, which is close to its average, all-in production cost. In other words, 37+ years into the War on Gold, miners continue to give away their shareholders’ gold for a pittance, when they could easily increase its price simply by doing what every other consumer company does: market it.
If we assume that the Deep State’s War on Gold has only shaved $100 per ounce off its price, the undervaluation of the gold mined from 1980 – 2016 is $250,000,000,000.00 ($250 billion). While this is an astounding sum, we believe the actual cost is much higher. According to our analysis, the underpricing of gold ranges between $1,000 and $3,000 per ounce, depending on the comparative metric we use (e.g., global money supply; global debt; global private savings; global GDP; global equities; inflation; and the like). By other metrics, it is even more, but we will be conservative.
Therefore, the total undervaluation of the gold mined during the War on Gold ranges between $2,500,000,000,000.00 and $7,500,000,000,000.00 ($2.5 to $7.5 TRILLION). This is tantamount to theft from the owners of the mined gold, namely, shareholders.
On a global basis, physical gold owned by individuals, businesses, religious organizations and sovereign institutions is currently undervalued by between $5.8 and $17.4 trillion dollars. This is the cost to the world, in gold undervaluation alone, of the Deep State’s criminality, corruption and avarice. Being the home and global headquarters of the Deep State, the United States is the only nation in the world whose #1 export, in currency value, is financial fraud.
The War on Gold is suffering from the effects of the Law of Diminishing Returns: it requires more and more Deep State price-rigging to move the gold price down less and less. This is because available supplies of physical gold are rapidly disappearing from west to east, where demand is unquenchable. Tactic #1 is in trouble.
In far greater trouble is Tactic #8. When Indian Prime Minister Modi announced his demonetization scheme at 8 PM on November 8, 2016, the social media network throughout India went supernova within minutes. Citizens who acted immediately were able to dump some or all of their “extinguished” rupee notes for food, medicine, gold and whatever else they could get their hands on from shops still open that evening. The next morning was too late, as the fangs of the scheme deeply sank into the nation’s flesh.
Social media saved the day for those on the vanguard. Similarly, when the people in large numbers sense that something has become rotten in the state of their money and that their savings and financial well-being are at extreme risk, they will take to Social Media in droves to both seek and give advice on how to protect themselves. When this happens, decades’ worth of Deep State fraud and senior miner traitorousness will be washed away in a matter of hours. We already see in Bitcoin how “electronic currency” can go viral even well before a full-blown financial panic. The current Bitcoin phenomenon demonstrates that the people sense something in the air, and are mobilizing. When the wall of propaganda against gold starts to fall, the people will mobilize into it, as well.
As pure money, gold simply has no true competitors. Increasingly, this will become self-evident to tens of millions of people in the west, who will create new demand for it. The physical gold market cannot accommodate such incremental demand at anywhere near the current price. At a certain point, the market will not be able to satisfy physical demand at all, as people realize there is no substitute for and hold on to it for dear life. Nothing on earth produces a price frenzy like a no-offer market.
In our view, people will be richly compensated for front running the coming monetary mass awakening, something we view as being absolutely inevitable. Given the world’s exponentially compounding risks and troubles, the fact that we continue to enjoy halcyon, actionable days can only be regarded as an extraordinary gift from God, to all of us.
Signs and Portents by Jeff Nielson – Sprott Money
There is going to be a massive economic cataclysm across (at least) the Western world, and it will include horrific crashes in a number of bubble markets. Not only has this been explained often to regular readers, but astute individuals will have easily drawn this conclusion on their own.
The fundamental reasons for this upcoming Crash are as numerous as they are troubling:
Along with the fundamental reasons why an economic Armageddon is both inevitable and imminent, we have the practical reasons for reaching this conclusion:
Above the obedient stooges in Western governments is the financial crime syndicate known as the One Bank . While the focus of its “business” are the criminal operations of Western Big Banks, some of its other more prominent tentacles include the Corporate Media, Big Oil, Big Pharma, and Big Agriculture. This is just a portion of the 40% of the global economy which it currently controls .
Why do we have bubble-and-crash cycles? With its manipulative Trading Algorithm (so-called “HFT trading”), the One Bank can now march all markets to ludicrous extremes beyond the imagination of most of us – at least temporarily. Why not keep pumping these bubble markets higher and higher?
The further that the One Bank pushes/pulls prices away from rational levels, the more financial and criminal energy that is required to both make that move and then maintain it. The Law of Diminishing Returns is clearly at play.
Far more profitable to march markets higher relatively quickly and relatively briefly, crash them back down, and then reset the cycle of crime. This is true because as the creator of these “cycles” the One Bank is always able to place its own (crooked) bets first.
It is therefore a simple matter of profit that dictates that the Next Crash must be an imminent event . However, readers have heard this before. The Next Crash was originally held out as an event likely to occur in the late spring of 2016 – as replicating the pattern of the previous two bubble-and-crash cycles.
Now here we are marching through the spring of 2017, and readers are once again hearing the word “imminent”. Why heed this warning? Signs and portents.
Different readers will attach differing degrees of importance to these factors, so they are presented in no particular order – except for the first.
What can we say about Donald Trump? He’s the least-qualified person to sit in the Oval Office in the modern history of the United States. He’s an egomaniac. He often speaks and acts without thinking. He’s a boorish, bigoted, opinionated bully.
He has spent roughly half of his first four months in office threatening trade wars with the U.S.’s “friends” (for lack of a better word), and the other half of the time threatening military conflict with rivaling nations. Syria, North Korea, even Russia and China: none have been spared the potential Wrath of The Donald.
Recent bubble-and-crash cycles have been timed to blame an outgoing U.S. regime as the principal culprit for the Crash, allowing the other half of the U.S.’s Two-Party Dictatorship to retain a Teflon coating in its first term in office. However, The Donald has just been elected, meaning the old pattern is no longer operative.
This suggests that (unlike the last two bubble-and-crash cycles) the Corporate Media will not have the excuse of calling this Crash an economic event. Three more years of Donald the Economy-Killer would not bode well for Trump, the Republican Party, or its Masters in the One Bank.
How about a war? Think that The Donald might be able to do a good job of creating a nice, big war, pushed and pulled by the “advisors” who guide all of his presidential actions? Assuming he doesn’t blow up the world first (literally), who better to blow up the U.S. economy – and much of the global economy along with it?
Anyone looking for “signs and portents” need look no further than U.S. equities markets. The Dow just broke 20,000. After crossing and re-crossing the 10,000 barrier on numerous occasions, the (much-substituted) Dow finally has its “double”.
The NASDAQ just broke 6,000. Finally, more than 15 years after the bursting of the dot-com bubble, the NASDAQ can actually boast of a higher milestone under its belt – temporarily. There is nothing left to accomplish in U.S. equity markets before the raping-and-pillaging begins.
The Oil Market
After crude oil prices rose for several weeks starting in the second half of March, prices have suddenly reversed lower, breaking through recent support to the downside.
Chart courtesy of Infomine.com
If The Donald has been instructed by his Masters (and advisors) to start a big, new war, then certainly his Masters will want the price of crude to be sitting near/at some rock-bottom level. Wars are expensive. War machines guzzle vast quantities of petroleum – especially modern war machines.
If The Donald envisions some glorious military triumph attached to his name, like some modern day, lesser Napoleon, he’s not going to get it by pressing The Button. Russia and China have plenty of nukes of their own, and despite all of the U.S.’s much-hyped (and ultra-expensive) “missile defense” technology, the U.S. has no defense against several weapons in Russia’s nuclear arsenal.
If there is a war coming (and the odds don’t look good), it must be another conventional war, or the Next War will be humanity’s Last War. Fighting that war requires (among other things) keeping the price of oil as cheap as possible for as long as possible.
Real Estate Markets
Analysis of other real estate markets in the Western world requires someone with more regional expertise. However, with respect to North America’s real estate market (i.e. Canada and the U.S.), this market is ripe for implosion.
In the U.S., after enormous hyping and pumping, the U.S. real estate market has climbed all the way back to an average level as measured by historical standards. This means it’s now high enough that crashing those real estate prices would lead to lots of the bankers’ favorite hobby: foreclosures.
In Canada; the housing bubbles in our major urban centers (Toronto and Vancouver) are not merely “ripe”, they are thoroughly rancid. Prices have spiraled well beyond any sane metrics, with Toronto now catching up to Vancouver in the insanity derby after the West Coast’s early lead.
Ontario and B.C. have now taken steps to prick their own housing bubbles. It’s not possible to “prick” bubbles this unstable and this bloated. Unless the bankers choose to flood significant quantities of their own capital into these markets to overcome the regulatory drags, then only one word is in order. Ka-boom!
The U.S. Economy
Referring to the U.S. economy as a train-wreck does not fully do justice to the hollowing-out and crippling of one of history’s great economic engines. There are so many “signs and portents” indicating that this train-wreck must soon be acknowledged that no comprehensive list is possible.
However, for what is now a self-declared “consumer economy” this headline certainly qualifies as an ominous sign:
Retailer Are Going Bankrupt at a Record Pace
The liars-and-shills in the Corporate Media continue with their happy-talk about “the strong U.S. economy”. But strong consumer economies don’t see retailers going bankrupt at a record rate. Soon even the blind/deaf/dumb Sheep who consume the Corporate Media’s lies are going to notice this inconsistency. D-Day (detonation day) must occur before that realization broadly penetrates.
Precious Metals Markets
A commentary published on May 1 warned readers that “gold and silver must go down before they can go up (much higher).” That commentary now appears somewhat prophetic given that gold and silver prices have suddenly fallen sharply.
In the Crash of ’08, the bankers actually began pushing gold and silver markets lower just before staging their broader crashes in markets and our economies. U.S. markets, the U.S. economy, and real estate markets are now shrieking “the End is near.”
The price of oil is now being primed for a potential war. The United States has a Berserker in the White House capable of laying waste to all around him with a moment’s notice.
Gold and silver prices should be going straight up right now. Instead they have gone almost straight down for the past week.
Want one more sign? Eighty-six-year-old Warren Buffett is now sitting on a mountain of vampire dollarswhich totals at least $85 billion. What are you waiting for, Warren?
Craig Hemke & Eric Sprott – Weekly Wrap Up 050517 Podcast – Sprott Money News
Hear Eric Sprott discuss the current selloff in gold and silver prices while adding perspective with an eye toward the future
Xi Sizes Up Trump: Investment Implications by Peter Diekmeyer – Sprott Money News
China is the world’s largest gold producer and buyer. So President Xi Jinping’s takeaways in the wake of his recent meeting with Donald Trump, his U.S. counterpart, have huge market implications.
China, steeped in a 5,000-year history, tends to think in longer time frames than Western countries. Their leaders are thus less likely to act impulsively.
That’s a good thing for Trump. Because in Xi’s eyes, the U.S. President almost certainly came off as a vacillating showman who acts tough, but lacks an internal core.
To many Americans, whose opinions about negotiating strategies were formed while watching The Apprentice, the reality show Trump starred in, first impressions matter.
The President’s decision to launch missile attacks on Syria during a dinner with Xi, and to announce it over dessert, thus came off as clever signal that the United States is not to be messed with.
Trump caves on currency, trade and Taiwan
Xi, who, however, likely missed many episodes of The Apprentice, was less impressed by this brazen insult. His reaction was interesting: Xi smiled, kept his cool and said nothing (the Chinese condemned the attack after the summit was over).
Worse for Trump’s image was the fact that during the weeks after his meeting with Xi, he appears to have caved on his entire China policy.
The U.S. President started by backing away from his election promise to label China a “currency manipulator.”
Trump also failed to use the momentum during his “first 100 days” to enact the trade measures that he had promised against the Chinese.
Finally and most important, Trump retreated from his initial “tough-guy” challenge to the “One China,” policy by ruling out further phone calls with Tsai Ing-wen, Taiwan’s President.
On the surface, all of this is good news for China. However, at this point, Xi can’t even be sure if a weak and vacillating Trump won’t reverse his positions again.
Chinese strategist: the US will go to war to back the dollar
That said, in a sense it really does not matter. Because (as economist Alasdair Mcleod recently reminded us) Chinese policy regarding the U.S. dollar was spelled out two years ago, in a paper that Qiao Liang, a general, delivered to the University of Defence, China’s top military academy.
Liang posited that America’s key foreign policy objective is to enforce the U.S. dollar’s role as the global reserve currency, which it can then print at will whenever it needs to buy stuff.
The U.S. will even go to war to maintain the dollar’s dominance, he concludes.
“America has become an “empty” state,” Liang writes. “Today’s U.S. Gross Domestic Product (2015) has reached U.S. $18 trillion, but only $5 trillion is from the real economy. America’s real opponent is itself. America has shown a surprising slowness in realizing this point.”
Solid backing for gold
Liang also provides broad hints about where China comes out on the monetary policy front, suggesting that “the most important thing in the 20th century was not World War I, World War II, or the disintegration of the USSR, but rather the August 15, 1971 disconnection between the U.S. dollar and gold.”
That is some statement.
While Liang is just one of many People’s Liberation Army generals, for his paper to be published, it would have had to have been approved by the highest levels of leadership.
Xi will thus almost-certainly follow Sun Tsu’s advice regarding unnecessary conflicts: he will avoid direct confrontation and let America continue fighting itself.
Will China’s strategy be correct?
Investors who want to understand China would do well to remember Chou En-lai, the former communist leader, who when asked in the 1970s about the Paris Commune’s impact (which had taken place 100 years earlier), said it was “too soon to tell.”
The same applies to Xi’s assessment of Trump. While we have clues, it’s really too soon to tell.
However Donald Trump and The Apprentice’s wisdom contrast poorly with that of Xi Jinping and Sun Tsu.
Shrewd investors might thus consider hedging their bets.
Precious Metals in 2017 by Jeff Nielson – Sprott Money
What can be said about precious metals markets in 2017? Gold and silver prices slid through most of the final four months of 2016, virtually wiping out all of the gains of the year.
Regular readers were told that this was going to happen. It was “the Fake Rally” which was the subject of several 2016 commentaries. Readers were also told to expect a “crash”, both in the broader markets as well as precious metals.
This is the agenda of the banking crime syndicate known as the One Bank . This crime syndicate encompasses virtually all of the Big Banks of the Western world, as laid out in the computer model of a trio of Swiss academics, first presented in an article in Forbes magazine .
Via manipulative, computerized trading algorithms (so-called “HFT trading”) the One Bank is able to march markets higher and lower just as easily as a puppet master maneuvers a marionette. So where is the crash in precious metals? Where is the crash in the broader markets?
It’s coming. The fact that equity markets (mostly U.S. equity markets) have been marched higher to even more absurd valuations does not mean there will be no crash. Rather, it simply means that when the bubbles are detonated, the ensuing crash will be even deeper and more violent. This must be true, for several reasons.
In the simplest terms, there is very little profit for the banking crime syndicate in continuing to prop up these bubble markets, let alone push them even higher. It takes an increasingly greater percentage of the One Bank’s time and energy just to maintain these perverted valuations in (Western) equities and (Western) bond markets.
This leaves a proportionately smaller share of time and resources to devote to the One Bank’s favorite activities: scamming and stealing. It would (will) be much easier for the banking crime syndicate to profit from staging yet another crash than to expand the bubbles to even more obscene proportions.
There are three hugely important reasons why down must be the principal direction for our markets going forward.
This is why we have these regular bubble-and-crash cycles. In a normal world, with legitimate markets, those markets would tend to mostly drift sideways, only occasionally surging up or down in response to some temporary or permanent change in the economy at the macro level. But there is very little profit for criminals to make in such markets.
It doesn’t matter if you get to place your (crooked) bets first in markets which go sideways. You can’t scam people for much when prices don’t change dramatically. Legitimate markets are simply “bad for business”.
The Next Crash will arrive, sooner rather than later, because it must arrive. Gold and silver must go downbefore they can go up (much higher). For precious metals bulls who refuse to accept this logic, ask yourselves this: what is going to drive these markets higher if they are not first pushed down to utterly ridiculous levels?
Precious metals markets are manipulated, ruthlessly and without interruption. Presumably, anyone reading to this point is already fully aware of that reality. Evidence exists all around us, presented in various formsin numerous previous commentaries.
For the few Skeptics, perhaps a direct confession from one of the One Bank’s senior henchmen is in order:
…central banks stand ready to lease gold in increasing quantities should the price rise.
– Testimony of Federal Reserve Chairman Alan Greenspan, July 24 th 1998
For readers who do not understand bullion “leasing”, this is a fraudulent transaction in which (central) banks engage for the purpose of dumping bullion onto the market (to depress prices) without officially selling it off of their balance sheets.
This form of fraud was first exposed by the esteemed James Turk, in an article from September 20, 1999(A Fraud, By Any Other Name Would Still Smell):
A bullion bank leases Gold from a central bank, but the bullion bank does not let this Gold sit in its vault. With the full knowledge – and usually even with the full cooperation – of the central bank that owns the metal, the leased Gold is sold into the market by the bullion bank. Are you shocked? Well, it is very understandable that you might be because the lessee is selling the asset of the lessor. It is a fraud, but the lessor condones this practice because the deception serves his purpose. As Alan Greenspan so clearly stated in testimony before Congress last year: “Central banks stand ready to lease gold in increasing quantities should the price rise.”
But that is such a 20 th century way to manipulate a market. In the 21st century, it’s much easier to do it the new-fashioned way, with trading algorithms. The same algorithm which pushes equity markets up and down also functions equally well in commodity markets and even bond markets.
The principal fuel for this algorithm is propaganda. As explained in the computer model previously referenced; the One Bank controls 40% of the global economy. One of its many tentacles is the Corporate media.
The media oligopoly is fed its script each day (all publishing identical propaganda), that propaganda is fed into the algorithm and processed, and the result is price movement in any/all markets in the desired direction. It is only when the bankers choose to push markets against strong short- or long-term fundamentals that additional “pressure” is required.
Today, such pressure is not only being exerted on precious metals markets, it is being exerted on all markets to maintain low prices in precious metals and (simultaneously) maintain high prices in other markets. Just as equity/bond markets can soar so high that it becomes totally impractical to push them higher, the reverse is true when markets (such as gold and silver) are pushed too low.
The longest/strongest rally in precious metals markets in roughly 40 years occurred immediately after the Crash of ’08 – where gold and silver prices were ruthlessly taken down to utterly absurd levels. The same boomerang effect will take place following the Next Crash.
Gold and silver prices must be taken down with the broader markets because the One Bank is permanently obsessed with concealing one of the primary virtues of precious metals: they are the ultimate Safe Havenasset.
Why is this an obsession with the banking crime syndicate? Because if people still knew that gold and silver protected their wealth (primarily from the bankers), then they would continue to maintain a significant gold/silver component in their portfolios as people have always done throughout the history of markets.
Typically, gold and silver represented a 5% – 10% component in every portfolio. In times of uncertainty (as befitting a Safe Haven) that percentage would rise significantly. Today, we live in more “economic uncertainty” than at any time in the history of our nations, as explained in a four-part series , When the Tidal Wave Hits.
We have historically unprecedented levels of debt . That is a house of cards waiting to collapse. We have historically unprecedented asset bubbles in terms of both their number and their magnitude. That is another house of cards waiting to collapse. But it gets much, much worse.
The currencies of our nations are worthless. The authority for this is none other than former Federal Reserve Chairman, B.S. Bernanke :
U.S. dollars have value only to the extent that they are strictly limited in supply.
But Bernanke did not “strictly limit” the supply of U.S. dollars. He engaged in the Bernanke Helicopter Drop, the most-reckless dilution of a major currency in history. In four years, he quintupled the supply of U.S. dollars – quintupling a supply accumulated over the previous 80 years, combined.
Despite this unprecedented economic uncertainty today and the extreme “risk” (certainty) of an economic cataclysm tomorrow, average holdings of precious metals amongst the Western population is less than 1%. Not the 20%, or 30%, or 50% needed to provide genuine financial security – less than 1%.
Real estate does not represent security. Western real estate markets are the biggest bubble of all, with many of these markets having been pumped up for well over a decade. Only one secure asset class is not presently at a bubble valuation: precious metals.
Our broader markets must go lower, because that is absolutely essential for the “business” of the One Bank: financial crime. Precious metals markets must go lower over the short term (as previously explained) because this is also an integral component of the One Bank’s “business”.
Then gold and silver markets will go much, much higher. They will do so not because the banking crime syndicate wants it to happen, but because the costs in trying to prevent such a rise would do even more damage to its crime empire.
Our markets are much more perverted today (to the upside) than in 2008. Gold and silver prices are already more perverted (to the downside) than in 2008. The rally which will ensue in these markets following the Next Crash will dwarf the gold and silver rally from 2009 – 2011.
Do not try to “time” these criminalized markets. Never sell your (physical) gold and silver bullion. When precious metals prices are pushed down to even more absurd prices there will likely be no supply.
This was true for the silver market during the Crash of ’08, it will likely be true with the gold and silver market during the Crash of ‘17(?). The way for readers to “prepare” for the short term decline in gold and silver prices (and the rally which lies ahead) is to do their final buying now.
Craig Hemke & Eric Sprott – Sprott Money News Weekly Wrap-up 042817 Podcast
Jayant Bhandari: Emerging Markets, Buyer Beware – Maurice Jackson Video – Sprott Money
Jayant Bhandari, the host of the highly acclaimed Capitalism and Morality and world renowned adviser to institutional investors, sits down with Maurice Jackson of Proven and Probable to discuss a neglected topic in the financial world, which is Emerging Markets.
Mr. Bhandari addresses the Emerging Markets by geographical region to provide investors the best value propositions. Also, included in this discusses are Mr. Bhandari’s views on the stewardship of precious metals, which metals have his attention and why. In addition, Jayant shares how junior mining companies should be utilized in ones portfolio. In closing, Mr. Bhandari discusses the upcoming annual Capitalism and Morality conveying this years all-star series of speakers and how listeners can participate.
Craig Hemke & Eric Sprott – Sprott Money News Weekly Wrap-up 042117 Podcast
The endless ponzi schemes like QE, ZIRP and the US dollar itself. The world reserve currency is the US dollar and this has allowed the US Treasury, in conjunction with the Federal Reserve, to export our inflation to other countries around the world. Now is the time to either redouble your prepping efforts or make a serious dedication to getting your preps in order.