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11.20.2016 - Financial Intelligence Report Bookmark

Metal Armageddon
 
Not two weeks ago, Donald Trump was declared the President Elect. The instant that happened, all hell has broken lose in virtually every area of the markets. The Dollar has shot straight up, the stock market shot straight up, commodities shot straight up, Yields shot straight up.  But metals? They have fallen like the proverbial rock.
 
So let’s talk metals for a minute or ten. If you’re new to the Newsletter, let me lay it out for you. I became a gold bug way back in 2001. I started buying my first coins when Gold was under 300 dollars to the ounce. I was late to the Silver bug, not getting terribly interested until 2007. But I continued investing in both pretty heavily.  When Gold got over 1500 I stopped buying it and told my members why. I said that it had attracted too many people that were buying it for a quick rush, and it was getting ahead of itself.
Gold went on to 1900 which was fine, I had quite a bit of it. But I knew it wasn’t going to hold that level. Sure enough over the next few years it drifted back to the 1200 level. Silver hit its 49 dollar high in 2011 and has been as low as 13 dollars since. It’s popped and dropped many times, sometimes breaking back into the low 20’s.
 
Exactly a year ago, I laid out a play for my paying members. We called it the “Vegas” play and it was based on a play that was put in place during the 2010/2011 metal run up. The idea was that we were going to use call options on a specific company and “like putting it all on red” we were going to continue to double down as the play evolved. Well the play did evolve. For so many of my members it was the single biggest trade of their lives.  With a single investment of 19,000 dollars in November of 2015,and without adding one penny more.... by June of 2016 it was worth....244,000 dollars. Yes you read that right, not a misprint.  19K turned into 244K in 7 months.
 
But there’s an angle to that play that many didn’t understand. They figured we were just doing some form of technical chart play. Well there was a little of that, but only about 10%. 90% was because of the 2016 Election.  Our feeling was pretty simple. The metals and especially some of the metals companies would start to rise on the idea of a Hillary Clinton Presidency.  Now why would gold and silver rise if Clinton got the nod? Look at the Middle East folks. Look at the way they were moving NATO towards Russia’s borders. Look at the way they were pushing the media to call Russia the aggressor, and an expansionist.  Basically, if Hillary won the Presidency, some form of major league hot war was almost unavoidable.  Gold and silver would benefit.
 
So we put out the Vegas play and a lot of folks got rich. The people that heeded our warnings to sell or at least sell half the position in June,  took home the wins of a lifetime.  But then something very interesting happened. Because of, or in spite of the elites... Clinton didn’t win. Donald Trump did. In a matter of hours on the first day after, the stock market gained hundreds of points. But gold and silver got tossed in the trash. The metals market cooled off because the number one major threat, that of a truly epic war with Russia...was not going to happen.
 
Recently I’ve gotten a lot of Emails from people asking about the metals. I truly understand their concerns...people that had bought gold or silver, were watching both getting taken down almost daily. It is never any fun when you buy into something and it loses value.  This is ESPECIALLY true if indeed the number one reason gold and silver were moving higher, is now off the board. What’s to stop it from falling lower and lower?  Right now...nothing.
 
But here is where you need to really really ponder some of the things I’ve been writing about lately.  So let’s start with “happy scenario one”.  Trump gets in office. In 100 days he’s already done tremendous things. The optimism is at levels not seen in decades and there’s talk of a rebirth in manufacturing in the US.  By late 2017 more and more people see that somehow, some way, this man has engineered an amazing feat, and is literally bringing America back from the brink of economic disaster. 
 
In that scenario, there’s NO QUESTION that gold and silver could go much lower AT FIRST. Then we’re going to be looking at something straight out of the 1970’s. An unleash of inflation like we haven’t seen in ages.  I cannot in any way, find a path to increased debt, a soaring dollar, and not have unbridled inflation as all those dollars find their way home.  But that will be delayed. Even in this “dot com” world, I wouldn’t think we’d see the beginning of any really ugly inflation until way late in the year, maybe even into 2018.
 
But there’s Scenario two to contemplate. That’s a much darker and uglier scenario.  I said over a year ago that I didn’t think Trump just woke up one day and decided to run for office. I think he was “tapped” and persuaded to run, and seeing the way things ultimately went down, was probably guaranteed a win. Yes that’s conspiracy theory and opinion. But the fact is, the one man that virtually everyone on the planet said could not win...knocked off 17 contenders and won.
 
But why was he selected? Was there enough “good guy elites” that were tired of seeing the US circling the drain and picked Trump the “outsider” to come in an fix it all?  Maybe. But maybe more sinister is the idea of the “reset” I’ve mentioned so many times. Maybe an outsider was picked because he’s going to be sacrificed.  In other words, what if the globalists real plans were to put Trump in office, because a tsunami of economic ugliness is heading our way and they wanted a populist “make America Great” sort of guy in the seat when all hell breaks loose?
 
The most powerful people on the planet are not the generals. It’s the central bankers. And as I’ve said to you a thousand times, a Central bankers “job one” is not to fix the economy. It’s not to help employment. Job one is to remain in power.  Consider how well they’ve done that for the last 103 years. The Federal Reserve is NOT Federal. They whip up money out of thin air, and “sell it” to the US Government at a Fixed interest rate guarantee. Why do we need them? In our Constitution, it says that only the Treasury has the power to make money. The Federal Reserve is unconstitutional. Yet there they sit at the seat of power and every two months we have to sit like children and listen to their latest blather about policy and interest rates.
 
If the Central banks decide to yank the rug out from under Trump, there’s NOTHING he could do about it. If they remove the liquidity, the house of cards comes crashing down. I’m not talking about a little shaking here and there like a 3.0 earthquake. I’m talking 9.0 on the Richter scale. I’m talking total economic implosion. In 2008 the Central banks rushed in to save everything. They didn’t FIX ANYTHING. All the ills are still there, simmering.  The CB’s are the only thing standing between meltdown and some form of normalcy. If they remove themselves, the simmering stew of debt, derivatives, and cross party obligations collateralized and rehypothecated a hundred times.... Blows up.
 
Now why on earth would they do something like that? Well, because the globalists view is that there should be a one world government, and the hell with sovereign nations. They believe in an open border society, run by bureaucrats at the top. Thus you see the migrant/refugee nightmare in France, Germany, Sweden, etc. You see why Hillary and the gang want open borders, more illegals, more refugees. If the Central banks ( elitists) decide that it is finally time to make their move...having a Trump Presidency, with the house and the Senate makes a lot of sense.
 
Before I wrap this up, let me reach out to all the rolling eyeballs out there. All the people suggesting that I’m off my rocker that somehow Trump might have been picked to be the fall guy. Yes it sounds like the plot of a very bad dime store novel. I get it.  It seems so “out there” that it can’t be possible. Well, it didn’t seem like a junior Senator from Chicago, who was a community organizer, who had sealed college records, could possibly beat Hillary Clinton in an election. But guess what? He was tapped to do a job, and boy has he done it. Race problems, cop shootings, more illegals, more debt, the rise of the social justice warrior, the loss of more full time jobs than any time since the great depression, the imposition of Obama Care, etc. etc.
 
We don’t have very far to fall from where we are. We’re in debt to our eyeballs, our nation is torn by racism, our economy creaks and groans daily. It is NOT beyond the scope of imagination that the “big one” hits on Trumps watch. He might fight it tooth and nail, but he’ll be opposed at every turn. So let’s go full circle here.
 
I will probably be a BUYER of gold and silver. Yes that includes stocks. To pull off his miracle, there’s going to be inflation, lots of it and gold/silver wins. If the Congress doesn’t go along with his bazooka style of fiscal stimulus, then we’ll drown in deflationary disaster and gold/silver wins.  If the globalists yank the plug on the poor guy and we spiral into a depression, gold and silver wins. The ONLY way gold and silver don’t win is if everything goes right, like some form of story book tale. Hey, I’m all for it. I’d take the hit on my gold and silver holdings and smile because my sons would have a wonderful world to continue to grow up in and enjoy.  But fairy tales are rare.  My position hasn’t changed. I’m holding and buying gold. ( silver too)
 
The Market....

Pause, or end? That’s the question before us right now. After the blistering run up following the election, the market has stopped soaring and is running in place. So the question is, is this just a pause to catch its breath, or has the rally ended? 
 
I hate being wishy-washy about things, but I will be the first to say that I can make a case for either. Let’s start with why we could see them jam us higher....  It’s the season. We’re in the strongest market months right now. The market usually rises in Nov. and Dec.  Next, they got all sorts of giddy on the idea that Trump’s going to spend his way to glory, and damned be the debt. So if he’s going to somehow unleash a trillion dollars in stimulus spending, “someone’s” going to be making money. Finally...with the S&P just 9 points away from an all time closing high.... That seems like a trophy they’d like to have.
 
On the other hand... The Fed’s are going to hike rates in December. The market usually doesn’t like that idea. Next, while all this talk about making America Great has got a lot of people optimistic, the fact is there’s no guarantee he’ll get even half of what he’s trying to do. Then there’s the idea that we’ve gone up too fast too far, and getting through all time highs is tough business. Sure they did it with the DOW, but that’s just 30 stocks. It’s considerably harder with the 500 of the S&P.
 
So I can indeed make the case for either plot. My sense is that they’re going to get their all time highs, just so they can say they did it, but that it won’t last terribly long. If the December rate hike doesn’t derail it, I’m thinking that all the noise surrounding the inauguration will put a damper on things. The left says they’re going to march a million people  to Washington and disrupt things.
 
I think we get the new highs, it sounds great, but fades off in the not too distant future. But hey... again... I could easily see this running out of gas right here too.  So play accordingly.

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