Precious Metals


From The Desk Of David Schectman
If one offered investors a fat tail put option that never decays or expires, costs about -1% pa to carry, has no counter party risk & no chance of ever becoming worthless, there would be a line out the door. But when one explains that this option is physical gold… no interest. – JSMineset
For a decade our stock market has gone up and up. All corrections were short-lived and a move to higher levels was always in the cards. In contrast, gold/silver have retreated from their 2011 all-time highs for 7 plus years … either retreating, going sideways, or failing to recover to any meaningful areas and holding them. In general exiting positions in our stock market to enter the precious metals arena has not paid off … with a few exceptions, of course. The point is that should our stock market go into an extended bear market, it is likely to send a wave of investors from the US into the dormant precious metals.
It is not Einstein insight. Should our stock market correct sharply and in a sustained manner, unlike these past many years, it will put a great deal of pressure on the Fed to rethink their interest rate posture. Should they backtrack, especially under pressure from President Trump, the dollar is likely to take a big hit, which will create a hefty tailwind for the precious metals prices. – Bill Murphy
David’s Commentary:
I’ve been around the block a few times. At my age, I have been through the cycles two or three times. It is a fact that history repeats itself, more or less, but checking on stories at Zero Hedge several times a day and reading the newspaper and tuning in on the TV I feel as though it’s been at least 10 years since things were this ominous.
Here are just a few of the headlines On Zero Hedge today: 2020 Presidential Election Will Be The Most Violent In American History; Why Is Every Asset Down in 2018; Nasdaq Plunges Into Red For 2018 – Worst Year In A Decade; Bear Markets Everywhere.` Over Half The World Is Now Down 20% Or More; Chinese Military Official – We Should Attack US Navy Vessels That Violate Chinese Waters; World Markets “In World Of Pain” As Nothing Can Stop Relentless Stock Selling; How To Avoid A New Are In Europe; Russian Stealth Jets To Be Armed With New Hypersonic Missiles; EU ARMY? France Riot Control Vehicles Bearing EU Flag Stoke Fear, Confusion; Japan GDP Tumbles After Biggest CapEx Collapse Since Financial Crisis…. That’s just from one day and it’s that way every day.
Ed Steer’s featured articles today included the following headlines: Dow 10,000 (Bill Bonner); U.S. Consumer Credit Hits All Time High as Credit Card Usage Soars; Credit “Death Spiral” Accelerates as Loan ETF Sees Record Outflow, Primary Market Freezes; Macron’s Defeat in Paris Sounds Alarm for Europe.
I can only imagine what “Ranting Andy Hoffman” would be writing on these pages in his “Horrible Headlines.” I’ve just highlighted a few.
There is an old adage: “Where there’s smoke, there’s fire.” President Trump and Wall Street keep telling us things are great and good times lie ahead. My pessimistic nature tells me, “I don’t think so.”
There is another trend that has been gaining strength in the last couple of years. My head is spinning from all of the offers to get rich I receive in my Email box every day. Every day I receive several recommendations of a stock to buy or a financial strategy that will make me rich. Twenty years ago, I used to try some of the strategies and recommendations.
After losing money on most of them, I no longer pay any attention to any of the recommendations. Sure, one or two may be a worthwhile tips, but most won’t and there is no way to separate the bad advice from the good. Even my daughter told me that she is not buying any stocks now (she is a traditional investor with a financial advisor managing her assets). I suggested that she use a stop-loss strategy on all of her stocks now. I hope she takes my advice.
I want to warn all of our readers that it’s risky to place orders on the Internet.
We don’t take orders from the Internet. Sure, it’s convenient to be able to buy your metals that way, but…. Today we were informed that one of the industries well-known firms, a firm that doesn’t have brokers and does all their business over the Internet, sent out an alert to all of their clients, warning them that they have been hacked. As they pointed out, “nearly all companies in America and around the world are under constant cyberattack and security incidents occur all too often.” They were hacked by a foreign-based entity who demanded an extortion payment, or they would release certain customer information obtained from their system. They determined that their clients name, email address, location and encrypted password were all compromised. Additionally, they learned that the attacker has emailed some customers with attempts to extort them directly through false threats to “wipe out your balance”. The best-case scenario here is that no harm will come to their clients, but they will have to change passwords and closely monitor their accounts. Since we are not on the Internet, we are not vulnerable to this kind of hacking.
How about some uplifting news? Of course, this is just one man’s opinion (guess), I’ll take it.
E.B. Tucker Director, Metalla Royalty & Streaming
2019 will see the start of a new bull cycle for gold and push the metal up to $1,500 an ounce, said E.B. Tucker, director of Metalla Royalty & Streaming.
“To make big money in this market, you have to see the cycles. Nothing changes. We’ve had three big cycles in gold since 2000 and we’re about to have another one,” Tucker told Kitco News.
Tucker said that the next cycle peak could reach $1,900 an ounce, but that won’t happen next year.
“We’re … (read more)
JPMorgan is at it again. Their greed has no limits.
Macron is now also trying to edge in on the gold trading market for France. This has been the prerogative of London since 1750, but now JP Morgan (who else) has joined up with Banque de France to offer gold swaps, leases and gold deposits for central banks.  Obviously, the purpose is to attack the UK further in relation to Brexit. If they succeed, there will be yet another country that will manipulate the gold market with Morgan’s help. So, more paper gold and more manipulation of the gold market until the whole artificial gold edifice collapses whilst the physical remains as the only money which has ever survived.
“Plus ça change, plus c’est la même chose”!
(The more things change, the more they stay the same.) -Egon von Greyerz
The 200-day moving average for gold sits at 1260.93. Keep an eye on that number. It changes daily, but it is a slow-moving average.
The 200-day number for silver is not on our radar – yet. It sits at 15.56
Here are some interesting comments from Ed Steer…
Nothing has changed out there. The main-stream media is still screaming that all is well, but that is far from the case everywhere one cares to look. The Potemkin village that they’ve been propping up, painting and pointing to for at least the last decade, is coming ever closer to collapsing. Yes, the various and sundry central banks and Plunge Protection Teams have been working overtime to keep up the facade, but it’s equally obvious that more and more people now see it for what it really is.
As I’ve said before — and I’ll repeat myself again here, if the powers-that-be weren’t propping up everything that wanted to crash and burn…equities, bonds and currencies…then the world’s economic, financial monetary systems would be a smoldering ruin by the close of trading next Friday, if not before. And the longer they try to stave off the inevitable, the worse the carnage will be when it finally does happen — and it will happen. It’s just a matter of when — and the day of reckoning gets closer with each passing day.
Now I, along with a lot of others, have been saying the same thing for several years now, but that changes nothing. All it proves is that these powers-that-be have been able to keep the old apple cart up and going around the track for a lot longer than any of us thought possible. The melt-down in all things paper is still coming, regardless.
I still haven’t sold a single share of any precious metal stock that I own, or one ounce of my precious metal holdings — and added to several of my stock positions earlier this year. All of them are now down from when I purchased them, but that doesn’t change my resolve one bit.
Here, once again, is the list of precious metal stocks that I own shares in.
As I’ve pointed out on numerous occasions over the last couple of weeks, including today’s missive, that there’s a buyer for every precious metal stock being sold at these price levels — and it’s a given that they’re now held by the strongest of hands. They won’t be selling them until they make big profits — and probably obscene profits in the process.
Then there’s the last FOMC meeting of the year coming up on December 18 and 19. If the markets melt down before then, or on whatever news comes out of that meeting — and they’re showing all the signs that they just might. Then the rest of December could prove to be historic in every sense of the world.
And finally — and as I mentioned further up in today’s column, unless it gets pushed back — and Ted said that it just might, the DoJ sentencing date for that JPMorgan trader that pleaded guilty to spoofing the precious metal market, is on December 19th as well.
You couldn’t make this stuff up if you tried.
Gold to increase by 22% in 2019. I believe that is a conservative estimate. Check out the indicator below….
Casey Daily Dispatch
The Best Indicator of a Coming Gold Rally
The No. 1 indicator of a coming rally in the gold market is the gold-silver ratio. It measures the number of silver ounces it would take to buy one ounce of gold.
The average reading for the gold-silver ratio back to 2002 is 64. Today, it sits at 85, a record high. Notice in the chart below the extreme highs in this ratio in 2003, 2009, and 2016… all of which signaled a major rally in gold and gold stocks within months.
From 2004-2006, gold rose 85% after this ratio hit 80. From 2008-2011, gold rallied 171%. And in 2016, it rose another 28%.
Gold stocks – as measured by the Philadelphia Stock Exchange Gold and Silver Index (XAU) – did even better… From 2004-2006, gold stocks rose 116%. They rose 256% from 2008-2011. And they jumped another 191% in 2016.
Greg Hunter
In September, money manager Michael Pento warned, “The massive bubble blown by global central banks is unraveling now.” Look at the upheaval in markets and he was clearly correct. Now, Pento sees, “Deflation, say it again, deflation . . . . We are heading for a deflationary/ inflationary depression. That’s what we have been modeled for. That’s why we went short in September. . . . We covered the short just before Thanksgiving, and we went short again last Monday just before the crash.”
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About Miles Franklin
Miles Franklin was founded in January, 1990 by David MILES Schectman. David’s son, Andy Schectman, our CEO, joined Miles Franklin in 1991. Miles Franklin’s primary focus from 1990 through 1998 was the Swiss Annuity and we were one of the two top firms in the industry. In November, 2000, we decided to de-emphasize our focus on off-shore investing and moved primarily into gold and silver, which we felt were about to enter into a long-term bull market cycle. Our timing and our new direction proved to be the right thing to do.
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