The fundamental case for precious metals has never stronger. Earlier in the year the technical case became overwhelming and we saw major price increases in gold and silver.
Now the market is taking a breather, but we could well see the traditional Q4 rally could take prices much higher.
There have been persistent rumors about a coming silver shortage, but David is unconvinced. But that doesn't mean there's not one looming, especially if investment demand picks up.
With High-Frequency Trading (HFT) and Plunge Protection Team (PPT) intervention in markets destroying both fundamental and technical investing.
With Zero and Negative Interest Rate Policies (ZIRP & NIRP) forcing fund managers, pension managers, and even safety-seeking investors into reckless speculation in the casino of our sinking ship of state.
With each passing day, our dystopic financial Titanic lists further into the deep, and our risk exposure breaches formerly unthinkable crisis levels…
What is a person to do, to retain their bearings, to regain solid footing, and to secure a lifeboat for their loves ones?
From Zuckerberg's testimony today before the House Financial Services Committee regarding Facebook's cryptocurrency "Libra", to the bartering of cigarettes, rice and beans for gasoline in Venezuela, let's make some sense of all the latest market, economic, gold & silver news!
The U.S. government & it's monopoly money-printer known as The Federal Reserve have painted themselves into a bankruptcy corner.
Not only are more and more foreign nations rejecting America's aggressive and militant foreign policy, but they're also ripping themselves away from the The Fed's dollar.
Foreign central banks are increasingly gravitating to sound money like gold. The Fed is on its last legs.
A third of banks around the world are too weak to survive a severe economic recession, a management consulting firm McKinsey & Co. said in a Monday report.
Contrary to popular belief, junior miners are not the companies most sensitive to a gold price rally; rather, it is the producers that will benefit most, this according to Kevin Murphy, lead analyst of S&P Global Market Intelligence.
“It’s the producers, because they’re getting more money for the products they produce. They really see the benefit, and it’s much, much more muted on the juniors. They’re really results drivenand if they’re not doing the exploration, they’re not getting results,” Murphy told Kitco News on the sidelines of the 121 Mining Conference in New York.
Is there an imminent financial crash near? Financial writer and precious metals expert Craig Hemke says, “Yes, right, exactly. I think this explains the near panic move, not only by the European Central Bank (ECB), but by Powell and the Fed when everything was fine in September to all these emergency measures now.
So, there is some pretty nasty stuff brewing out there. There is some real liquidity monetary tightness that is pushing things to the verge of collapse, really.
They are doing everything they can to stave it off. The curtain is being pulled back on central bankers, and it reveals them to be charlatans.
They are not these all-knowing masters of the universe looking out for the world. No, they don’t know what they are doing. They are just trying to maintain this illusion.
The demand for all the massive amount of money from the central banks and the Fed leads to a crisis of confidence in their ability to keep things going.
Why would you not want gold and silver? There is a global awakening to that, and that is why prices have hit new all-time highs in 70 currencies around the globe, and we will see new all-time highs in dollar terms, too, next year.”
With gold prices having climbed higher this year, investors have flocked to senior producers instead of the juniors, favoring steady cash flow over speculation and this trend may shape miners’ priorities going forward, this according to Joe Mazumdar, co-editor, Exploration Insights.
“I think the majors have changed mindset thinking that it’s not about production profile, it’s about generating free cash flow and maintaining dividends,” Mazumdar told Kitco News on the sidelines of the 121 Mining Investment Conference in New York.
Like other forms of faith, those who believe in gold will not apostatize, and most who do not believe cannot be convinced. That is the generational fallout from some 50 years throughout which the majority of the global population believed that fiat currency was the only legitimate store of value.
On that score, I would hope that gold will eventually be judged on the quality of its track record — its massive liquidity, strong price performance versus fiat currencies, and eventual use as a digital savings asset and payments medium (see The Rebirth of Gold as Money).
My career has involved interacting with many of the most notable investors in the gold sector. Although these gold aficionados all share a similar long-term belief in the advantages of gold, it has never ceased to amaze me how different their macro-economic outlooks are, especially as it relates to the potential for harmful inflation or deflation. Few strategists or economists go into depth about what extreme scenarios could play out for either of these possibilities. Let’s consider both in the context of gold’s utility as an asset.
Gold has successfully been used by savers as a store of value during periods of high inflation and corresponding currency devaluation. Deflation, on the other hand, triggers debilitating solvency and liquidity issues which usually lead to severe market corrections, again leaving gold as a better asset to own outside of those correlated with credit and equity markets. The reason why gold supporters do not debate their differentiated macro forecasts is that gold is a chameleon that can benefit from both outcomes, and thereby provides insurance from negative market developments stemming from polarized monetary outcomes, as shown in Figure 1.
This chart measures the performance of Spot Gold versus the S&P 500 Index versus during 11 crisis periods since 1985. Gold returned an average +6.4% compared to -21.7% for the S&P 500 for these 11 crisis periods. Click here to view a larger version of this chart.
Okay, lots of people are smart enough to get in this stuff, BitCon, three bucks, or five bucks, or fifty bucks. They were smart enough to get in, but damn, it goes up to $20,000 and they’re too fucking dumb to bail out. If you refuse to take a profit, you are going to have to take a loss.
Strange thing is, my book, Nobody Knows Anything, should be a New York Times best seller. It is that fucking good. It is simple. Buy things when they’re cheap and sell them when they’re dear. Nobody wants to do that.
If they’re smart enough to buy cheap, they want to wait until it’s gone up 100 fold and then it’s, “Well, if it goes up a little bit more, then I’ll sell.” Investing has nothing to do with management, has nothing to do with commodity. It has nothing to do with the country risks. It has nothing to do with any of that.
It has to do with human behavior. There is no rush like a gold rush. You use the correct term, there is this little tiny door and everybody’s going to try to squeeze through the door at the same time.
Look at WeWork. There’s a company that’s absolutely classic. It’s fraud. There is absolutely nothing of substance there. It’s the dumbest idea that I’ve ever seen. It had a 50 billion dollar market cap in theory a month ago, and now it’s got a 10 billion dollar market cap, and JP Morgan’s about to dump 5 billion dollars into it.
Boy, if they get a cent of that back, I would be amazed.
China could restrict the supply the rare earth battery metals to retaliate against U.S. tariffs, this according to Chris Berry, president of House Mountain Partners.
“Rare earths are somewhat unique in the sense that China effectively owns the entire supply chain.
I think that in light of the trade war rhetoric going back and forth, which I don’t see any end to any time soon, you’re looking at weaponization of rare earths on the part of China,” Berry told Kitco News on the sidelines of the 121 Mining Conference in New York.
