Gold & Precious Metals

“Inflate or Die,” Peak Silver & Golds Coming Breakout

Posted by Gary Christenson - The Deviant Investor

on Monday, 7 August 2017 13:55

Inflate or die” was Richard Russell’s characterization of our economic system and the central bank response to most problems during the past three decades.

INFLATE THE CURRENCY SUPPLY!  Examine the currency supply as measured by M3 and reported by the St. Louis Fed.

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Fiat currencies are created as debt.  Inflating currency supply means increasing total debt.  Global debt exceeds $200 trillion.  Per the St. Louis Federal Reserve, total debt securities in the U.S. exceed $40 trillion.

Official U.S. government debt is $20 trillion and has increased exponentially for over a century.  Unfunded liabilities are 5 – 10 times higher.

Debt and M3 rapidly increase, while the economy and population slowly increase. The currency supply is continually inflated. The result is much higher prices for most goods and services, including wages, food stamps, gold, cigarettes, cars, gasoline, medical care, college tuition and many more.

“Food Stamps” program costs have exponentially increased for 35 years.

This is an ad for clothing from the 1930s.  Prices are much higher today because the dollar has been devalued by more than 90% since the 1930s.

By contrast, consider this ad from a recent Costco flyer.

Premier beef from Japan is on sale at three pounds for $399.00.  Yes, over $100 per pound, but very special.  Ordinary grocery store meat is cheaper, but far more expensive than when President Nixon severed the last link between the dollar and gold in 1971, thereby escalating the inflation of the currency supply.  Dollars devalue and prices increase, regardless of official statistics that show practically no consumer price inflation.

OBSERVATIONS

  • The wars in Afghanistan and Iraq continue. It benefits the military-industrial complex, lobbyists, and congress-persons to prolong these wars for decades.  If a war is fought to be prolonged, not won, we usually dislike the results.  Vietnam, Iraq, Afghanistan, and Syria come to mind.

  • The U.S. may expand military adventures in Syria.

  • New wars with Russia, China, Iran, and North Korea are possible.

  • Wars are expensive. Since government expenses have exceeded revenues for decades, new and expanded wars will require larger increases in debt and currency in circulation.  Consumer prices will rise even more.

Option One – Reductions, Depression, Crashes And Dreams:

Reduce Federal government expenditures, reduce the number of Federal employees, cut military programs, cap expenditures for Medicare and Medicaid, and …DREAM ON!

Option Two – More of the Same:

Continue “borrow and spend” policies, maintain and expand wars, forget cut-backs in government programs, accept occasional market crashes and expect national debt to increase at 8 – 11% per year “forever.” Watch gold and silver prices increase!

Note:  Consumer prices for food, energy, clothing, housing and transportation will increase.  Are you prepared with an adequate quantity of gold and silver bullion?

QUESTIONS:       

National debt, currently $20 trillion, has doubled every 8 to 9 years for a century.  If it doubles as it has historically, national debt could reach $160 trillion in 24 – 27 years.

  • Can the U.S. economy support $160 trillion in debt?

  • How much dollar devaluation will be required to enable this level of debt?

  • What will a house, loaf of bread, or an ounce of gold cost when the national debt reaches $160 trillion? Ten times more than today? One hundred times more than today?

  • Do you believe that Social Security payments and private pension plan payments will increase as rapidly as your cost-of-living increases?

If interest rates average 3% and national debt grows to $160 trillion, then ANNUAL interest expense in the 2040 decade will be approximately $5 trillion.

  • Is this plausible?

  • At 6%, the annual interest expense will be $10 trillion.

  • Can interest rates ever be raised to “normal?”

  • What are the ugly consequences of rapidly rising debt along with rising interest rates?

If you are digging yourself into a dangerous hole, should you stop digging, or dig faster?

Does the “borrow and spend” policy appear sustainable?  New and expanded wars accelerate debt increases and dollar devaluations which increases consumer prices and economic instability. Is another “2008 Crisis” on the horizon?

Do the actions and policies of our central bankers and political leaders inspire you to consider self-protection, gold bullion and silver bullion?

Extreme measures may be used to extend the “borrow and spend” paradigm as tax revenues stagnate, and confidence in fiat currencies sinks toward the current level of confidence in congress. How much time will the following buy?

  1. Negative interest rates

  2. Retirement funds appropriation

  3. War on Cash

  4. More QE and “printing”

  5. More wars and martial law

  6. Other “extreme measures” that may be used.

 GOLD AND SILVER!

Read:  Why have western vaults shipped 1,000 to 2,000 metric tons of gold bars each year to Asia?

Did the world reach “Peak Silver” in 2015?  Read “Chile’s Silver Production Down a Stunning 32%”

Gold 12 Year Wedge Pattern Will Soon Resolve – Probably Upward!  Expect higher prices.

Read:  Gold Erases Flash-Crash Losses As Dollar Slides

 Silver Eagle Sales in July were stronger than in 2016.

Huge sales of Eagles since the 2008 crisis!  Many people (not enough) sought protection via Silver Eagles.

CONCLUSIONS

  • Inflate or Die!

  • Bankers, politicians, Wall Street, lobbyists, government employees, corporations, and most people will choose inflation.

  • Consumer prices will increase as debt and currency in circulation rise.

  • Official statistics show almost no consumer price inflation. Believe the statistics at your own risk.

  • Wars will continue and expand, which will require additional inflation of currency in circulation and the devaluation of fiat dollars.

  • Change will eventually be necessary. Reset, a new currency, rise of the IMF Special Drawing Rights (SDR), horrible depression, responsible congress or …?

  • Governments and central bankers are digging us into a dangerous economic hole by massively increasing debt. They could stop making the debt hole deeper… but will they?

  • Gold and silver bullion and coins will protect purchasing power better than most other alternatives.

  • Gold and silver stocks and cryptocurrencies, though volatile, will expand your purchasing power if bought correctly.

We believe precious metals are bottoming and about to break out following the summer doldrums. August and September are typically two of the strongest months and we have 3 highly prospective junior gold stocks in our sights. 

Gary Christenson

The Deviant Investor

 

U.S. Dollar: This Crash Signals the End

Posted by Lior Gantz for Streetwise Reports

on Monday, 7 August 2017 13:38

As the Dow breaches 22,000 and the U.S. dollar slides, Lior Gantz, founder of Wealth Research Group, discusses portfolio positioning

Apple reported earnings this week and the stock surged, taking the Dow Jones above 22,000 points for the first time in history. 

Gantz8-4-17-1

This is our script playing out as Wealth Research Group laid out months ago—we called it the Blow-Off Top.

The future holds broad indexes like the S&P 500, Dow Jones and NASDAQ soaring into all-time highs until there are no buyers left—we are two to three quarters away from seeing this.

At this point, investors purchasing stocks are doing so at the highest valuations the stock market has ever experienced.

Most sophisticated investors are like us at this point: 

1. All our Wealth Stocks, in which we took positions in for fair valuations, are part of our long-term core portfolio, and we won’t sell unless they become incredibly overvalued, which is when we’ll consider taking profits.

Remember that in the long run, compounding will get you to financial independence—it never fails, and we are positioned in the highest-quality businesses in the world.

2. Cash allocation should be around 20%, as liquidity will allow us to seize opportunities quickly.

But the biggest news yesterday isn’t the Bitcoin fork, which didn’t damage the cryptocurrency in the least. In fact, Bitcoin Cash is up 50% in a day the last time I checked. It’s not Dow Jones at all-time highs, either—it is the USD index breaking down.

Our top cryptocurrencies are on fire.

U.S. Dollar Index

This isn’t normal for the world’s reserve currency—this is highly unusual, and I want us to be prepared.

The USD rose 40%+ from early 2011 to the end of 2016. It was a massive uptrend, with huge implications for the global economy, but 2017 has seen a strong reversal. 

The first six months of 2017 were the worst six-month stretch for the dollar since 2011. 

The dollar is down more than 10% total in 2017. On July 21, the U.S. dollar hit a new 52-week low. That’s the first 52-week low we’ve seen in the dollar in more than a year.

After new 52-week lows, the dollar has fallen 1.3% in six months, 2.9% over the next year, and 4.8% over the next two years. 

The last time that the U.S. Dollar Index declined by 10% or more in a period of 151 trading days was back on April 29, 2011. At the time, gold was trading for $1,540.25, and over the following four months, it soared by $354.75 (a 23% gain) to a new record high of $1,895.

From today’s price of $1,270, a 23% move would take the price to $1,562, which would make 34% of the world’s undeveloped assets economic once again—certain high-quality mining shares will absolutely go parabolic.

This will be such a legendary run that you’ll probably be able to fund a decade of retirement from the profits you’ll bank.

Historically, from 1971 through today, when the U.S. Dollar Index declines by 10% or more during a period of 151 trading days, gold has gained by a median of 18.7% over the following 12 months. 

Gold Forward vs. Dollar Trailing

The way we’re going to get ahead of this trend is by holding our physical gold and silver coins and bullion—that’s our insurance for mismanagement of the fractional reserve banking system.

On top of that, we have been smart about partnering with the best management teams that can turn raw deposits into cash-flowing mines. And with the coming commodities bull market, these seed investments, which were made at times of severe pessimism, will be our biggest gainers.

Energy Index

Energy is the key to a commodities bull market.

When oil prices rise, the commodities sector, as a whole, becomes the focal point of the investment universe.

It’s either tech or commodities, and we get to benefit from both because we have been early to the cryptocurrencies sector, and we will be the pioneers of blockchain stocks as well.

Simultaneously, we have a foothold with the most solid mining companies out there.

The dollar is suffering a bear market, and while middle class America is losing purchasing power, our portfolio is completely hedged.

Lior Gantz, the founder of Wealth Research Group, has built and runs numerous successful businesses and has traveled to over 30 countries in the past decade in pursuit of thrills and opportunities, gaining valuable knowledge and experience. He is an advocate of meticulous risk management, balanced asset allocation and proper position sizing. As a deep-value investor, Gantz loves researching businesses that are off the radar and completely unknown to most financial publications.

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosures:
1) Statements and opinions expressed are the opinions of Lior Gantz and not of Streetwise Reports or its officers. Lior Gantz is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Lior Gantz was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. 
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Charts provided by Wealth Research Group

 

The Top 3 Articles of the Week

Posted by Money Talks Editor

on Saturday, 5 August 2017 13:57

Screen Shot 2017-08-05 at 6.22.02 AM1. Jim Rogers: Gold Prices Will Be ‘Explosive,’ Just Wait and See

Is it time for the market to crash? Legendary investor Jim Rogers discusses his predictions for the biggest financial crisis we’ll see in our lifetimes, and how he’ll be protecting himself. “Gold is going to be explosive in the next few years,” Rogers said, as he gave his insight on gold, the U.S. dollar, and the crypto-craze.

…read more HERE

2. What’s Feeding The Weakness In The Dollar

   by Martin Armstrong 

US President Donald Trump may be a good businessman, but in politics, he just does not get it. Politics is all about ego and back-stabbing. It is not about logic and the art of the deal. After just ten days in the office, Trump’s communications chief, Anthony Scaramucci has been forced to resign. It has been this downturn in Trump’s administration that feeds the weakness of the dollar.

….continue HERE

3. Eric Coffin: A Positive Period To Buy is Just Beginning

By Michael Campbell

Featured guest is Eric Coffin notes that there is usually a couple of periods a year when precious metals are positive and we are just beginning the stronger of the two that will run into this fall. Eric also notes that the committments of Traders (COT) was as bullish two weeks ago as it was in late 2015 just prior to the $329 rise in Gold thru the first half of 2016. Eric explains why he recommends San Marco Resources Inc. (SMN.V) and Vendetta Mining Corp. (VTT.V) 

….read it all HERE

Puplava: We’re in the Final Phase of Another Market Bubble

Posted by Jim Puplava - Financial Sense

on Friday, 4 August 2017 15:44

MONEY-BubbleOver the past two decades we’ve seen two major bubbles develop: the internet bubble, which burst in March 2000, followed by the real estate and mortgage bubble, which burst in 2007.

Now, we’re entering a stock market bubble in a manner we haven’t seen before, said Jim Puplava, founder of Financial Sense, in a recent podcast, Anatomy of a Bubble.

Bubble Stage One

It all begins with an attention-grabbing idea, Puplava stated.

“For bubbles to take place, what you usually see throughout history is suddenly the whole community becomes fixated on one object and they go mad in pursuit,” he said. “Millions of people become simultaneously impressed with one illusion, which develops into a delusion.”

We’ve seen this play out throughout history, with the Tulip Mania in the 1600s or, more recently, with internet stocks and real estate.

As the bubble forms, what fuels it is the prospect of imaginary wealth. The public becomes infatuated with the idea that promises fast, easy money, Puplava stated.

Next, the idea becomes widely publicized, and this publicity reinforces the idea, which begins to transform into an illusion. Next, cheap money and credit fuel its rise.

“When the prospect of great riches and fast and very easy money is made, what are investors tempted to do?” Puplava asked. “They go out … and borrow money.”

Leverage comes in, and the banking system gets involved because there is a spread between low interest rates and the cost of borrowing money, which encourages banks to lend money, Puplava noted.

Bubble Stage Two

This is the euphoria phase, where an investment concept that likely had merit originally, shifts into the illusory phase of speculation.

“What was once rational becomes irrational, with everyone seeking to become rich,” Puplava said, “because there’s nothing more disturbing to one’s psyche, well-being, and judgement, as to see a friend get rich.”

When whole institutions begin to get rich, the exuberance catches a large swath of the population’s imagination. Then speculation moves away from what is normal and becomes irrational behavior, and that’s when the bubble begins to inflate with rapid speed.

There’s no fundamental analysis. People just buy the underlying asset without thinking. After the public swarms in, and everybody thinks nothing can go wrong, we turn to the final phase of the bubble.

Bubble Phase Three

In the final phase, as we watch the bubble’s speculative mania continue, we see a number of things.

First, interest rates begin to rise, which is what we’re seeing now, Puplava noted. Next, money velocity starts to increase, and prices continue to mount to the point where unease and financial duress begin to take hold.

At this point, the smart money — those closest to the exits — begin to gradually move out of the asset and into cash to get liquid. As this trend builds, it results in severe consequences for asset prices.

Eventually, there’s a realization that the bubble isn’t sustainable. From here, what was a gradual exit transforms into a selling stampede. There is usually an event — an overleveraged player that goes belly up — that takes place toward the end that precipitates a crisis.

“That’s the thing about the bear market,” Puplava said. “A bull market climbs a gradual step. … Bear markets happen rapidly, and the declines are swift. All of sudden, greed turns to panic, which turns to revulsion.”

Where Are We Now?

These are the conditions we’re seeing develop in the index funds and index ETFs right now, Puplava stated, and this is the epicenter of the current bubble. He thinks we’ll enter into the final stages at the end of this year or the beginning of next year.

This move toward passive investing in the form of an index ETF or an index mutual fund is generating the same behavior we’ve see in past bubbles.

“It’s being driven by computers,” Puplava said. “No thought is given to what is bought or sold. It’s the downfall of human psychology.”

Right now, it is estimated that $800 billion will flow into index ETFs this year, up 60 percent from the previous year, and next year it’s estimated we will top over $1 trillion.

As we’ve seen in every crisis, the implosion of margin debt eventually brings this to an end. As this happens, it accelerates the stampede out of the bubble asset. That’s how every cycle always ends.

Echoing Ray Dalio’s recent comments, Puplava, who has been managing money for over 30 years, ended by saying, “Right now, we’re still dancing.” However, as we move into the final phase of the bubble, Puplava intends to take profits, raise cash, and take advantage of potentially cheaper prices once the tide turns.

Read next: Leading Indicators Still Not Suggesting Imminent Market Peak, Recession

Tactics For Volatile Resource Stocks

Posted by Morris Hubbartt - Super Force Signals

on Friday, 4 August 2017 14:28

Here are today’s videos and charts (double click to enlarge):
 

SFS Key Tactics & Video Update

q1


SF60 Key Tactics & Video Update


SF Juniors Key Tactics & Video Analysis


SF Trader Time Key Tactics & Video Analysis


Thanks,

Morris