What the heck are those mysterious "exchange for physicals," the mechanisms by which contracts to buy gold on the New York Commodities Exchange are neither fulfilled by delivery on the Comex nor settled for cash there but transported for supposed delivery elsewhere? Full Story
The carnage in the silver miners’ stocks has been apocalyptic, fueled by the astounding COVID-19 stock panic. As terrified traders frantically dumped everything and ran for the hills, silver and its miners’ stocks crashed. That catastrophic anomaly has potentially created epic contrarian buying opportunities. The silver miners’ recently-reported Q4’19 results reveal whether their fundamentals support a massive rebound. Full Story
By: Steve St. Angelo, SRSrocco Report - 27 March, 2020
All the Central Banks can do at this point is to KEEP THE TERMINAL PATIENT ALIVE a bit longer. We have no idea what the world looks like when 20-25% of oil production is lost. This will totally destroy the U.S. Treasury Market that is based upon growing oil supplies to remain viable.
Have you have ever thought about how a 30 Year U.S. Treasury gets repaid??? You need 30 years of global growth to allow that 30-year U.S. Treasury to be paid back. These Treasuries aren’t just PAPER CERTIFICATES.. they are based on a business model of growth. And growth is based upon oil production growth. Thus, a 20-25% decline in global oil production will DESTROY the Stock and Bond Markets while Wall Street continues to regurgitate the V-SHAPED RECOVERY or a RETURN TO NORMALCY by next year.
Again, these poor slobs have no idea of what’s coming ahead. Full Story
By: Dave Kranzler, Mining Stock Journal - 27 March, 2020
The Government and the Federal Reserve are exploiting the virus crisis to implement another bailout – or attempted bailout of the “Too Big To Fail Banks.” The stimulus Bill approved 96-0 by the Senate gives the Fed a $454 billion taxpayer funded “slush fund” for Wall Street bailouts. Just as troubling, the Bill suspends the Freedom Of Information Act for the Fed until the earlier of the time at which Trump terminates the National Emergency declaration or December 31, 2020. Full Story
The soup lines hadn’t formed yet. Jobs had not even noticeably started to dry up, but they weren’t as easy to find anymore. You had to be angry to quit without having a better job firmly in hand. Stocks were climbing furiously above an economy that had been slowly ebbing away since summer. Sales were down for months, so revenues were down for months, and profits were down. Funding in the world’s easiest credit market — interbank repos — was extremely tight — so tight the Fed had to come to the rescue every single day for months, and the problem was only getting worse.
Such were the times before COVID-19 struck the world in 2020 like an asteroid from some far reach of the solar system crumbling the walls that already sat on cracked foundations, burying in ash a partying world that hadn’t yet figured out it was already slowly dying from its own internal decay. Full Story
The Fed's intention in backstopping global markets with an effective $4 trillion credit line, in addition to a $2 trillion consumer stimulus, was to avoid a run on financial markets. Instead, the banksters may be about to discover that they have stimulated infinite demand for U.S. dollars. I once wrote about this in the context of my experience as a floor trader. One might think that if, say, IBM shares were trading in 50,000-share blocks, that a million-share offer from out-of-the-blue would overwhelm bids and depress the stock. In fact the opposite held true: As soon as the huge offer was "advertised" on trading screens around the world, arbitrageurs would figure out ways to make use of it, often by shorting call options or buying puts as hedges. Like piranha, they would nibble at the offer at first, until the smell of blood attracted enough feeders to pick the carcass clean in a frenzy. Full Story
By: Peter Schiff, President and CEO Euro Pacific Capital - 25 March, 2020
This is where the problem really starts. If the Fed is going to monetize everything, the amount of inflation it will create will be enormous. In his videocast, he called it a “tsunami of inflation.”
With this major bid that the central bank has put in the market, the Federal Reserve is effectively saying, “We are going to overpay for bonds.”
The Fed has to overpay because it can’t let nominal interest rates rise to compensate the bondholder for the loss of inflation. It has to create artificial demand in order to prop up bond prices and push interest rates down. Full Story
By: Steve St. Angelo, SRSrocco Report - 25 March, 2020
Today, the global gold spot markets broke down as prices varied considerably from the different exchanges. Moreover, U.S. Mint sales of Gold and Silver Eagles surged again this week. Gold Eagle sales are so strong in March; they jumped 1,700% compared to February!! At one point, the gold price was up more than $100 during early trading.
I was busy earlier today on Twitter when I noticed the breakdown in the spot gold prices. I checked three different sources and found that Kitco.com’s gold price was much lower than the quotes on Investing.com and the CMEGroup. I then had a Twitter exchange with Peter Spina at Goldseek. Peter Spina published this article on GoldReview: Full Story
By: Richard (Rick) Mills, Ahead of the herd - 24 March, 2020
In the 1960s, French politician Valéry d'Estaing complained that the United States enjoyed an “exorbitant privilege” due to the dollar’s status as the world’s reserve currency. He had a point.
Because the dollar is the world’s currency, the US can borrow cheaper than it could otherwise (lower interest rates), US banks and companies can conveniently do cross-border business using their own currency, and when there is geopolitical tension, central banks and investors buy US Treasuries, keeping the dollar high and the United States insulated from the conflict. A government that borrows in a foreign currency can go bankrupt; not so when it borrows from abroad in its own currency ie. through foreign purchases of US Treasury bills. Full Story
The United States is currently reeling, as much of the nation shuts down in the attempt to prevent the spread of the coronavirus. We can only hope for the best when it comes to the containment of the medical crisis, and the lives of so many people in the U.S. and around the world.
At the same time, the economic future of the nation - and financial futures of the savers, investors and retirees of the nation - is rapidly changing in multiple ways. One aspect is that a recession has almost certainly already started. How bad it gets depends on what path the nation follows with CORVID-19 over the coming weeks and potentially months. While that path can't be known yet, there is a good chance that the shutdowns will produce a particularly severe recession.
Yes, there is ongoing carnage in the global equities and oil markets as a part of what is happening, but if we step back the daily chaos - major and long term changes are occurring, even if there is a reversal of course for the shutdowns in the coming weeks. Once a national or global recession gets started and much of the economy shuts down - history shows us it takes time to get things going again. We also know that aggressive governmental efforts will be used to aid the process. Full Story
In times of expansion, it is to the hare the prizes go. Quick, risk taking, and bold, his qualities are exactly suited to the times. In periods of contraction, the tortoise is favored. Slow and conservative, quick only to retract his vulnerable head and neck, his is the wisest bet when the slow and sure is preferable to the quick and easy.
Every so often, however, there comes a time when neither the hare nor the tortoise is the victor. This is when both the bear and the bull have been vanquished, when the pastures upon which the bull once grazed are long gone and the bear's lair itself lies buried deep beneath the rubble of economic collapse. This is the time of the vulture. – DRS, 1991 Full Story
Taxpayers would be getting a much better value for their $2 Tr than sending checks/debit cards out to every household.
This would be a huge political winner for the President, but also for America. Everyone has talked about rebuilding America’s infrastructure, but this would be an unbeatable opportunity to actually do it. Full Story
By: Keith Weiner, Monetary Metals - 23 March, 2020
In extraordinary conditions, it is possible to sell physical gold and buy a gold future. This is called decarrying, and the profit one makes if quoted in annualized terms is the cobasis. When the cobasis is positive, that is called gold backwardation. Backwardation should never happen in gold, ever. But it does, because the monetary system is breaking down.
These two trades, carry and decarry, keep the price of gold in the futures market very close to the price of gold in the spot market.
The price of small bars and coins, which are retail products, can vary considerably from the price of gold in the spot market. This is because manufacturing capacity, especially for minted bars and coins, is finite. Mints are reluctant to buy expensive machines (with debt financing, of course) to expand capacity for a boom that they know from prior experience can be fleeting. Full Story
The biggest bill of sale sold to the public after the great financial crisis was that the legislation enacted forced the banks to maintain a higher level of integrity in their business dealings. But nothing could be further from the truth. The various pieces of legislation enacted after the 2008 de facto banking system collapse ultimately made it easier for the TBTF banks to move their fiat currency-based Ponzi scheme off-balance-sheet. Full Story
A huge spike in demand for physical precious metals has decimated available dealer inventories. The vast majority of gold and silver coins, rounds, and bars are either out of stock or come with extended shipping delays.
Premiums are spiking higher. Dealers have raised bid premiums – the amount offered above the spot metal price – dramatically along with ask premiums. Full Story
I specifically looked at three periods that seem to most resemble what’s happening today: the Great Recession, the 1970s, and the Great Depression. This study excludes bear markets or declines after major bull markets, since in my opinion that’s not really our current context.
So let’s take a look at the severity, duration, and recoveries of these three major crashes and see what we can learn… Full Story
By: Richard (Rick) Mills, Ahead of the herd - 22 March, 2020
The only way to break this dependence is for funding to return to junior resource companies that can go out and do boots-on-the-ground exploration. Major mining companies play a key role in assessing upcoming projects and purchasing the properties and/ or the companies that will bring them closer to their goal of replacing depleting reserves and growing production.
The coronavirus is the perfect opportunity to reset the global monetary system through a Debt Jubilee, setting the stage for a massive increase in consumer spending and government investment in infrastructure projects that will ensure the development of the next generation of great mines. Full Story
Yet they now want the Fed to have expanded powers to buy corporate debt and who knows what else:
The Fed could ask Congress for the authority to buy limited amounts of investment-grade corporate debt. Most central banks already have this power, and the European Central Bank and the Bank of England regularly use it. The Fed’s intervention could help restart that part of the corporate debt market, which is under significant stress. Such a programme would have to be carefully calibrated to minimise the credit risk taken by the Fed while still providing needed liquidity to an essential market.
The bolded part is a risible lie. There is absolutely nothing wrong with the corporate debt market that even a modicum of honest interest rates could not handle. Full Story
With the Dow ignoring the Fed’s kitchen-sink solutions again today and ending down more than an unlucky 1300 (at 1,3338, having touched again on 2,000 down intraday), it looks like we’ll enter the market’s old hang out in the rectangular safety zone sometime this week.
When the US stock market crashes down into the safety zone, the entire Trump Rally going back to its first inkling since the day after he was elected will have been destroyed — so fundamentally “strong” was the economy that supported it all. (Be careful what you believe from the lips of politicians. I don’t care who they are or even if I voted for them, as I have been known to loudly criticize ones I voted, for, too — like George Bush II. I’ll own my foolishness, but I won’t repeat it.) Full Story
By: John Mauldin, Thoughts from the Frontline - 22 March, 2020
It’s Happening Going to War We Are Facing a Depression, Not a Recession What Will It Take? How Things Are Going to Change and What We Should Do We Can Do This Personal Thoughts Full Story
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