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7.29.2017 - Free Investing Newsletter Bookmark

Do I dare?
 
Having been a gold and silver bull for a long long time, sometimes you feel pretty good about things, and other times...well, you don’t.  When gold went from 295 to 1000 an ounce as we predicted, we sure felt good. When we did the first “Vegas” play and turned 30K into 1.2 million via silver miners, we felt good. Even when we did the second Vegas play and turned 19K into 244K (which like an idiot I didn’t take off the table) things were good.
  
 
But then there’s the bad side of metals. They are horribly manipulated at the very highest levels. When the “establishment” wants to beat down gold, silver and the miners, there’s nothing you can do. I’ve experienced it too many times to even get upset about it any more.  What could be more disturbing to you than knowing silver is the most undervalued commodity on earth, and yet when it starts to run closer to where it should be, they bash it back down? Not much.
 
But in the past two weeks I’ve noticed some pretty darned bullish comments from people that are pretty bright. So instead of “me” telling you why we might finally be looking at an upswing in the metals, let me post up an article that you might find interesting.
 
The Most Precious Metals Bullish I’ve Ever Been
 
by Andrew Hoffman  Of Miles Franklin
 
Today is a very big day for me - at least, in my mind.  As, at five years, nine months, my employment with Miles Franklin has officially tied the previous longest job of my career - at Salomon Smith Barney, from May 1999 through February 2005.  After which, I spent five years working for numerous mining companies - all of whom, either went bankrupt or otherwise failed.  Thus, when I was afforded the opportunity to “move up the totem pole” of stability in October 2011 - as Marketing Director of one of America’s oldest, most trusted bullion dealers - I jumped at the chance.  Since then, the partnership I formed with the firm’s owners, David and Andy Schectman; and brokerage and back office team - most of whom, have been with the firm for decades - has been, in my view, extremely successful.  To that end, I look forward to serving the Precious Metals community for “as long as it takes,” until the war we are fighting with the powers that be is inevitably - and hopefully, imminently - won.
 
That said, I intend to make significant waves on this day of extremely important personal achievement.  As, per today’s title, I am departing significantly from my “box” of industry commentator - with a more forceful statement of what I anticipate.  Sure, I could be wrong; but as the title of my July 18th SGT Report podcast states - taped when gold was $1,240/oz - I foresee “no more downside to Precious Metals.”  And no, I don’t mean they can’t go down at all; but instead, that the supply/demand fundamentals have become so positive on an absolute basis; and more so, relative to their historically suppressed prices; that I view their all-in risk/reward profiles as the most favorable in the 15 years I have been watching this sector, tick for tick.
 
Yes, I know four pieces of economic propaganda - I mean, “data” - are coming out an hour from now; and the “all-important” GDP report tomorrow, rivaled only by the CPI and NFP jobs report in the amount of politically-motivated accounting gimmickry they are subject to.  However, it’s starting to feel like gold and silver are becoming “immunized” to “bad news” like “better than expected” economic data.  And now that Janet Yellen “sealed the deal for no rate hikes until at least December (expectations fell to 0% for September and 48% for December) after yesterday’s uber-dovish FOMC policy statement; it’s difficult to envision the dollar demonstrating material strength any time soon, unless something really bad occurs in Europe.
 
Which of course, would be wildly PM-bullish.  As irrespective, per what I discussed in the five “if a nuclear bomb destroyed Europe” articles penned over the past three years, the “dollar index”; which is largely a proxy for the dollar/Euro exchange rate; is in reality, immaterial to the dollar-priced gold and silver.  To the contrary, they are determined by supply/demand factors in dollars; and given the accelerating tsunami of dollar-negative events coming our way; as PM prices trade at all-time inflation-adjusted lows; it’s difficult to envision an environment where prices do not, at the least, challenge last year’s post BrExit highs in the coming months, en route to much higher levels thereafter.
 
Amidst the historic price suppression, and most violently PiMBEEB - or Precious Metal bullish, everything-else-bearish” - environment in memory, PM sentiment has been driven to levels not experienced in my entire 15 years in the sector.  And yet, gold is, on average, no more than 15% below its all-time high in nearly all fiat currencies.  Not to mention, it - and silver - are up roughly 20% from their ultimate bottoms of December 2015; “coincidentally,” the week the Fed first raised rates.  This, as the most manic COMEX “commercial” short covering ever is ongoing - to the point that in both metals, their cumulative net short positions are at lows last seen in...drum roll please...December 2015 - when gold and silver prices were significantly lower than today.
 
Everywhere I look, lies, propaganda, and manipulation have caused chaos in the world of Precious Metal “analysis” - particularly from those incented to pretend markets are freely traded, who literally ignore “sixth sigma” price movements in their pursuit of remaining mainstream.  For instance, this “veteran trader” - who claims gold’s value will never be “allowed” to be realized.

 Or the top Bitcoin technical analyst - who is actually quite good in Bitcoin; who is constantly calling for sub-$1,000 gold due to the “weak technicals” the charts paint - despite his admission that he has always been wrong about this prediction; and that frankly, gold’s enigmatic price moves have him “puzzled.”  Or, best of all, “wrong way Harry” Dent - who a year ago, predicted “$700 gold by mid-2017.”  And then there’s Wall Street - which considers gold its mortal enemy; and the Precious Metal “newsletter writers” who pretend they have proprietary technical knowledge.  And of course, Central bankers, which view gold the way vampires view the light of day.
 
The problem is, that essentially everything their “research” is predicated on is either fatally flawed or purposely influenced.  As no matter what angle one takes, of how the world has “changed” or whatnot, Precious Metals always have, and always will be, effective stores of value; particularly when this, the most egregious price suppression scheme ever concocted, runs its course.  And in my view, per what I have been writing of endlessly in recent weeks, this scheme is nearing the end of its rope.
 
Supply-wise, gold and silver production - platinum, too - are expected to plunge in the coming decade, have decidedly peaked in 2015.  This, as the malignant, terminal stage of history’s largest, most destructive fiat Ponzi scheme causes Central bank money printing - already, at record-high levels - to go parabolic.  Not to mention, as the inventories of above-ground, available-for-sale metal have been taken down to mere fumes by Central banks and governments - most notably, the United States - in misguided, unwinnable efforts to prolong the dying status quo.
 
And then there’s the actual news flow; starting with the ugliest global economic environment of our lifetimes, save a few “deer in headlights” moments post-9/11, and at the height of the 2008 Financial Crisis - featuring all-time high, parabolically rising debt that can only be serviced with record low; in many cases, negative; interest rates. Next, the historic wealth inequality a decade of historic money printing and market manipulation has caused - which in turn, has catalyzed social upheaval the world round; even in the U.S., where Donald Trump was elected President.
 
Care of the collapsing economy - and consequent migration crises - geopolitical tensions have not been this high in the post-War era.  And here in America, political chaos - and social, as today’s milestone achievement of the “CalExit” movement depicts - has never been this powerful.  Throw in the upcoming debt ceiling crisis; the certain death of any remaining “Trump-flation” hopes; and the ongoing “soft coup” that could cause a significant re-rating of the “reserve currency” dollar; and we’re talking about some serious reasons for Precious Metal prices to rise significantly, in the very near-term.
 
  Not to mention, the rise of Bitcoin - which, per last week’s “Bitcoin SegWit Activation - the Gold Cartel’s worst nightmare,” may well catalyze chaos in the Central banking ranks in the coming weeks and months; in turn, weakening the Cartel’s grip on Precious Metals - whose inevitable break from the forces of “paper evil” could, as a result, become far more imminent.
 
Keep in mind, I am not “predicting” anything about Precious Metals’ near-term price movements.  That said, I am unequivocally “upgrading” my view of their risk/reward profiles to easily, their move favorable rating of my 15 years in the sector.  I guess you can say I’m “putting it all on the line” - in that, if the Cartel is successful in pushing prices back down, I’ll look “stupid.”  However, the decade-plus of hard, honest work I’ve put into this sector tells me this is extremely unlikely to occur; and that the historic PM valuation anomalies I last month suggested as indicative of the bottom - like record low silver/gold, platinum/gold, and numismatic premiums - won’t last long.
 
Frankly, I believe the historic dislocation between unprecedently rigged financial markets and economic reality will be dramatically minimized in the coming months - but particularly in Precious Metals, whose valuations must inevitably return, at levels many multiples higher, to something modestly representing their economic value.  Every variable I observe screams so much - and consequently, this is “the most Precious Metal bullish I’ve ever been.”
 *****************************

So there you have it folks. An opinion other than mine to chew on. Do I agree with him? Let me put it like this; I have never wavered. I think gold goes to 3500 and silver north of 70.  I think it’s tried to get to those levels several times and got beaten down. One day, I suggest they won’t or can’t. I’m willing to be patient and see.
 
The Market:
 
On Thursday things were going along swimmingly. The  DOW, S&P and NASDAQ were all at new “all-time’ highs and everyone was high fiving again. But at around 12:30 pm, I started to see large blocks of sales coming through. Soon enough it turned into an almost panic selling spree.
 
The NASDAQ had been up 50 points. In under 40 minutes it was RED by 80. The S&P had been up 5, and soon it was down 15. The DOW which had been strongest all day went from up 85 to red by 15.   The question was... would they once again buy this dip? History said they always do, why would this be different?
 
Sure enough the selling stopped and things started inching back up. The DOW went green an hour later and heading into the close was GREEN by 85. The NASDAQ that was at 1:30 red by 80, was only down 40 . The S&P shook off that 15 point red drop and ended the day down..... 2.
 
So once again they had rescued even the slightest of dips. However, it wasn’t totally painless for me. I had been in the SPY  and the QQQ’s, and trailing them higher with stops. Well that wicked mid day dip, torched off both my stops. Okay, no big deal. I still took 6 dollars per share out of the Q’s and 4 dollars out of the SPY. So I can’t be too sad.
 
Thursday night Amazon released their earnings that missed by over a buck per share. But according to some nut on CNBC, profits aren’t important, you buy Amazon for growth.  Oh. Okay.  Moving along however, Intel reported and they actually did well and hiked their guidance. Nice.
 
Friday? Most of the day was basically flat and meandering.  We spent a lot of time in the red, but as we got to the final hour, the DOW pushed into the green, and when the final bell rang, we had gained 33 DOW points, lost 3 S&P’s and were statistically unchanged on the NASDAQ.
 
Like usual we have the same old question. What next?  I don’t think it’s a secret that we believe the market is way overbought, stretched and as unrealistic as it gets. But we also know that if Central banks keep printing, the lions share winds up NOT in the little hands, but in the stock market. That’s just a fact. So, while we SHOULD head lower, it can’t unless the CB’s allow it.
 
How’s that for price discovery? How’s that for a fair and balanced market? How’s that for the supposed “random walk” theory that says markets are the results of tens of millions of investors making bull or bear bets.?
 
So logic says we roll over. Momentum and “QE” says we go higher. We’ll probably continue higher. Logic loses to money printed out of thin air every time. Yes it’s wrong, and yes we hate it. But what can we do? Nothing.
 
On that big dip Thursday, my SPY and QQQ positions hit their trailing stops. So, they were sold out with gains of 4 dollars per share and 6 dollars per share. It will be interesting to see if my next position is long...or short.   Let’s see what they do out there and we’ll chat again on Wednesday. 

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