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From The Desk Of David Schectman

Our expectations are to see gold consolidate; the spike rally was not a total surprise with gold bouncing from support. There is a solid trading range between $1,380 and $1,450, which should continue for a week or two.



We are bullish and will buy the bottom end of the range as we prepare for gold to make a run at $1,500 and beyond. The fireworks are real, but don’t be surprised if there aren’t a few duds along the way and a couple of sell-offs to shake out the weak hands. – Todd ‘Bubba’ Horwitz

 

"The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations." -  Thomas Jefferson

 

“Gold was the enemy to me” Paul Volker

 

Gold is always an indicator of potential turmoil somewhere.

 

Then and now, the gold price is viewed as the inverse price of the confidence in the system

David's Commentary (In Blue):

It’s a weekly occurrence this summer. A rumor from the Fed, another jobs report, a new take on the trade war with China, Trump sends a tweet on tariffs – or you can fill in the blanks. What do they all have in common? They provide the cover, the excuse to sell off gold and silver. Traders need volatility. Traders control the price of gold and silver. Traders always view the market as a very immediate, short-term play. There is nothing “big picture” or long-term in their playbook. On the other hand, holders of physical gold and silver should be thinking strictly “big picture” and long-term. The day-to-day is nothing more than “noise”. 

 

My commentary focuses on the “big picture” and trends that are meaningful to our portfolios. It’s been unsettling for many of you – trying to weather a seven-year correction. But take a look at the “big picture” chart below. Gold has formed a giant base over the last six years. And now that gold has breached $1,400, there is virtually no meaningful resistance all the way up to at least $1,600. As you can see, I tend to think in “general” terms, like round numbers at $1,400 or $1,600. The trading newsletters are more specific, giving you precise stops, but that is not important to a “big picture” viewpoint. 

Gold closed on Friday just below the key $1,400 level and silver just a few cents below $15. More noise. Holding gold below $1,400 will be difficult, and short-term only and the same is true for silver at $15. Consider these as the new bottom.

 

Have you started watching The Loudest Voice In The Room on Showtime? You should. It follows Roger Ailes, who set up Fox News and gives you an inside view of how the media controls the hearts and minds of Americans. Think of gold and silver as one of the few avenues available to us that gives us independence from the press and Wall Street. 

 

If you listen to the media, the economy is great, the stock market is strong, the job market is robust, so we can all join in with Alfred E. Neuman and shout, “What Me Worry?”

The reality is very different from what we are told. It’s all lies and illusions. The economy is built on debt and the Fed’s low interest rates that feed trillions of dollars into the big banks and Fortune Five Hundred corporations. All of that money, and only the chosen few got their hands on it – and in the process they got filthy rich. If you’re part of the bottom third you lost ground. 

 

Unless you trade futures, the recent interest rate chatter doesn’t mean much. The boyz couldn’t keep the price below $15 and $1400. Silver is under-performing, but once gold nears $1,500 it should start to catch up. Silver is “gold on steroids.” That’s one of Jim Sinclair’s themes. But it all starts with gold. A quick glance at the chart below is very informative, and encouraging.

I have discussed this in the past, but every so often, it is a good idea to remind people how gold is supposed to work.

 

I like to think of gold as a form of financial insurance much in the same way as my Nationwide policies. My assets (cars, home, valuables) are protected in case of loss. Gold is supposed to take the same roll and protect my money, or – the buying power of the US dollar. Now there are a couple of key differences in this analogy. First, the protection gold offers in not a “constant”. It can pay back more or less than the loss (in buying power), but that all depends on timing. The longer we hold it the greater the protection becomes. And then there is the issue of the “premiums” we pay. The money I pay to Nationwide every quarter is gone forever. With gold, I should be able to recover everything I paid for it, and then some after a decade of two, assuming I never need to use it for its intended purpose. 

 

Here is an example I want you to think about, and then why don’t you run the same example for yourself, based on your circumstances.

 

We built a new house in 2005. After a down payment, the balance due was - in round numbers – one million dollars. At the time of our closing (Sept. 2005) gold was around $500/oz. At the time, I had a precious metals portfolio, mostly in gold, in excess of $2.5 million dollars. I had a decision to make. Should I sell my gold and own the house outright, no mortgage? Or should I keep my gold and take out a mortgage? I had to decide if I thought that my gold would continue to rise in price. I decided that it would. So I took out a 30-year mortgage. Had I paid cash for the house, it would have cost me around 2,000 ounces (2,000 ounces at $500/oz equals $1 million). Now here we are, 14 years later and how did my golden insurance policy perform? If I sold the gold today, it would be worth around $2.8 million dollars. To be fair, I paid around net (after the tax allowances for home mortgages) half a million dollars in interest over the last 14 years, so the $2.8 million becomes $2.3 million and then there are the taxes due on the appreciation of the gold, but, as you can see, I still came out ahead. And that is even after a seven-year bear market in the price of gold. Yes, gold did its job.

 

How about another example. In the mid 1970s I bought a new red Mercedes 280SL roadster for $10,000. Gold was now legal to own (the first time since 1932) and an ounce cost between $100 - $140/oz depending on when you bought it. Let’s call the average price in 1975 $120/oz.  The Mercedes roadster cost 83 ounces of gold. Currently a new Mercedes Benz SL 550 (a comparable car to my 280SL) sells for around $115,000. It costs about 82 ounces of gold to buy it. Give or take, gold has held its value for the last 45 years. 

 

Gold should not be purchased for profit. It is for capital preservation. I have just given you two real examples of expensive items I purchased in the last 45 years where gold at least held it’s PURCHASING POWER.

 

So what’s the big deal, you ask? The big deal is today, the US dollar is at increasing risk of losing it RESERVE CURRENCY status and it’s PETRODOLLAR status. When, not if, it does, the value of the dollar will plummet and gold, being denominated in dollars will rise inversely to the fall of the dollar. It will take more depreciating dollars to buy the same ounce of gold. Actually, when this happens, gold will rise considerably more than merely its gain vs. a falling dollar. Put another way, there probably hasn’t been a better time to trade dollars for gold than at any other time in my life. And silver should do much better, and yes, it does act as a form of financial insurance too, but it is more volatile, rising faster and further in bull markets and falling faster and harder in bear markets.

 

Timing is the key here and you have to ask yourself the question, “Where are we headed?” “What will happen to the dollar (the basis of all our investments in dollars) and the stock market?” Pay close attention to the following article written by my friend and former employee Bill Holter. It’s sums things up in a few paragraphs. It’s all about CONFIDENCE. And confidence is a fragile thing and can vanish at the drop of a hat (or the dollar or the stock market).

 

A decade ago or so, I read an article in LeMetropole Café that was written by Bill Holter. I was very impressed, and I hired him to write for Miles Franklin. He joined Andy Hoffman and myself in putting out quality information five times a week. Then, several years ago, he moved on, with our blessings, to form a joint venture with “Mr. Gold”, Jim Sinclair and they formed the Holter-Sinclair collaboration. Bill now oversees the JSMineset newsletter and we still have a very close relationship with Bill. I particularly liked his commentary on Monday. He touches on several of the points I brought up in today’s daily newsletter. We always have seen the world through the same “prism.”

We have tried for quite a few years to point out just how bogus the financial reporting was. Few listened to us as markets “proved us wrong”. But as time went on, the economic/financial reporting became more bogus and further from the truth to the point even young children had questions. At present, the lies have been stacked sky high but there is a difference, “actions” are now speaking louder than the MOPEY rhetoric. To the point, actions are finally speaking volumes louder than words!

For example, people are finally questioning if the economy is so good, then why does the Fed need to lower rates? Or why are individual companies confessing some very real individual problems? We went for years hearing the Fed would “normalize” rates and would have no problem doing it. We disagreed loudly and laughter ensued. Then, last fall the Fed raised rates three times which led to a near meltdown in Dec….until the Fed caved in and called a halt to rate hikes. Now, here we are again where the Fed is being forced into lowering rates or else the markets will rebel into a black hole. The Fed has it’s back to the wall facing their greatest fear, the dreaded liquidity trap!

Looking at several company/industry specific situations, does anyone really believe Deutsche Bank is less important or smaller than Lehman Brothers? Can you say $50 trillion +++ worth of derivatives? Or how about Apple, does a 42% drop in sales to India’s 1 billion population mean anything at all? Do the recent revelations of Facebook, Google/YouTube, Twitter gathering and selling data/taking political stances have any bearing at all? And Boeing…have they sold a single plane in recent months? Maybe we should also mention Greece selling new bonds at ALL TIME low yields? Whatever happened to risk versus return…is Greece all of a sudden a pristine credit? Or even one who can pay debt service alone…without borrowing more to make the payment?

The point I am trying to make is that our entire lives are surrounded and engulfed in nothing but lies. This is extremely dangerous when the entire system is held up by confidence alone. 50 years ago the global financial system had gold as its foundation even though “paper” was outstripping the amounts of gold held. Now, no foundation anywhere to any country’s financial system and paper galore to the point where 300 or more paper gold ounces have been sold…for every one ounce in existence. Is this twilight zone stuff or what?

And as for “confidence” and what might be the final straw? Can you imagine the coming body count when Jeffrey Epstein starts to talk? If there is any topic that snowflakes and conservatives can agree on, pedophilia is probably it. Can you imagine the reaction when representatives, senators, ambassadors, prime ministers, and even royals from all over the world are fingered?

Confidence in all things financial has been paramount as it always is for Ponzi schemes. Laugh if you will and all you want, confidence in EVERYTHING will be shaken and broken. The world will find out the entire system is and has been a “bad bank” for most of our lifetimes. It will be understood that the fraud began shifting in to higher and higher gears ever since August 15, 1971…the day Richard Nixon defaulted the US dollar on the rest of the world!

To finish, confidence is THE only thing holding markets together as the “bones” to the system are either brittle or nonexistent. Jim has told you many times, go back to basics. When confidence breaks and the entire house burns down, rebuilding the house, any house begins with the foundation. Whether you believe it or governments do not want it, the global monetary system will need some sort of solid foundation to begin rebuilding from. History tells us this foundation will include gold in some form or fashion. Can you imagine how expensive “new foundations” will be when everyone worldwide needs a new (real) one?



Standing watch,

Bill Holter

Holter-Sinclair collaboration

David Brady is 100% correct in making this recommendation.

Sprott Money

 

If Gold is in a Bull Market, Buy Silver

 

Written by David Brady, Sprott Money News

 

The GOLD:SILVER RATIO or “GSR”

When Gold falls, the GSR typically rises as Silver falls even further than Gold. Call it a high beta play on Gold. The same happens in reverse, when Gold rises, the GSR typically falls as Silver outperforms Gold to the upside. 

FULL ARTICLE HERE

It’s been quite a while since I presented Jim Willie’s views on precious metals and the economy. Here are a few of his thoughts on gold and silver and where they are headed.

Jim Willie 

European bank stocks are suffering their worst decline in decades. Deutsche Bank leads them down. They match the hard fall of the US bank stocks. Negative interest rates in Europe are harming the entire group. The entire Italian debt situation is dragging down the continent. Bailouts and monetized assets will become the rule of the day. The gold price will respond very favorably.

 

The gold/silver ratio over 80 has reached absurd levels.

 

EuroRaj claims the extraordinary high gold/silver ratio means the system is broken. Observe the wrecked connector between monetary gold and industrial silver. The financial sector remains pumped to extraordinary levels by monetary authorities, namely the major central banks along with the aligned big banks. They are creating new money with utter abandon, no rules and spurious hopes of a good outcome. The business sector is struggling mightily, after several years of brutal vicious recession. The QE policy deployed by the US Fed has actually rendered tremendous harm to the main economies. It can be said that the silver price is being dragged down by weak industrial metal demand. It can be said that the gold price is being lifted by the astronomical monetary excesses. During and after the Global RESET, both prices of gold and silver will rise in great leaps, while the Gold/Silver Ratio is restored to a level under 30:1.

 

Rare Earth Metals are a potential Chinese weapon in the trade war. China controls the niche market. The metals are essential in numerous products. Dumping US. Treasurys is one nuclear option, along with blocks on rare earth supply.

 

The Chinese are rebuilding a silver stockpile, which they might double in size quickly, forcing a run on silver supply. They  own the largest private gold reserves on the planet, with giant vaults from the White Dragon Family. This gold might be monetized and linked to the RMB currency via the Gold Trade Note. They are dumping US Treasury Bonds, and using them as cash in large-scale deals and large-scale aid.

 

The firmly held belief is that as the economies slow further, thus making the ongoing recession more obvious, the central banks will reverse their course and resume extreme easing. Think hyper monetary inflation. The gold market will respond very favorably.

 

It is not just the ravaging economic recessions but the worsening bank sector insolvency. Then couple the failed icon companies like Boeing which the leadership crew cannot permit to fail for military justification.  Then add on the long list of deeply weakened icon stalwarts like General Electric, which have badly abused the bond issuance with stock buybacks. The result will be the US Fed abandoning their extremely destructive tightening procedure in place for at least a year, and continuing with full-blown high volume QE again. My name for it is Infinite QE Forever . Expect big banks to succumb finally to the low oil price, their shale sector loans to drag them down. My full expectation is for the New QE to include rescue of strategic companies, big icon name companies, and big banks, done in a vast monetization scheme for national security reasons. If not nationalized, some big important companies could be controlled by foreigners who hold amplified FOREX reserves. The gold market is just waiting for the official news to recognize the recession, with a powerful monetary policy response. The large group of channels will invest in Gold and Silver in response, such as managed funds of all types. So will be the herd. 

If you still have any doubts about where the dollar is headed, don’t. Trump is willing to “devalue” our dollar against our trading partners. Gold will love that.

Trump repeats call for U.S. to play 'currency manipulation game'

 

ROSS NORMAN : Gold Price Action Suggest Epic Events Close By

July 3, 2019



Love it or hate it … you just cannot ignore gold … it is after all a “bellwether”.

Originally a bellwether was a bell tied around the neck of a castrated ram (a wether) who would lead the other sheep and give the shepherd a ready reckoner on the movements of the flock. In financial markets it just refers to a leading indicator.

 

Gold is currently suggesting that dark things may be afoot on the economic front.

After six years of relatively tame ‘sheepish’ price performance, gold has suddenly become a turbocharged ram on a motorbike, without a helmet.

 

Trump Says US Should Join “Great Currency Manipulation Game” By Devaluing Dollar

 

President Trump has never been a fan of the strong dollar. And after beating around the bush for months by demanding a 50 bp rate cut and more QE from the Fed, it seems the president is now explicitly calling on the US to artificially weaken the greenback by any means necessary.

 

In a tweet, Trump blasted China and Europe for playing a ‘big currency manipulation game’ and recommended that the US “MATCH” or risk being “the dummies who sit back and politely watch as other countries continue to play their games.”

All of the big players are devaluing their currencies in a race to the bottom. As they go down, the price of gold will rise in each of the currencies.

Gold right at the all time highs versus a basket of 27 currencies, excluding the USD. Gold does a great job of protecting purchasing power on a globalized basis, which is how it should be viewed as a pure expression money/store of wealth. – Raoul Pal

Here is another reason why now is a good time to own gold. The war in the Middle East that Ed Steer is talking about will lead to oil at several hundred dollars a barrel. Gold will rocket up if that happens. 

Ed Steer

 

Just when one thought that the U.S. et al had pulled back from their adventures in the Middle East...both in Syria and Iran...along comes MI-6 and pulls off their caper in the Straits of Gibraltar the other day, with U.S. [and Israeli?] knowledge, encouragement -- and approval, no doubt. Some of the main stream media in the Arab world were calling it "piracy" -- and that is true. But as I pointed out in yesterday's missive, it's also an act of war.

 

Now the Iranian government is threatening to take over a U.K. oil tanker in reprisal. Two wrongs don't make a right, of course...but it's a dream scenario that these three aforesaid governments would love to see happen, as that would give them the casus belli that they so desperately want.

 

And if the Iranian's don't actually carry through with their threat, then I'm sure that a suitable 'false flag' situation has already been dreamed up to ensure that they will be blamed...even if they didn't do it. I'm certainly old enough to remember the Gulf of Tonkin 'incident' of 1964 -- and there are still big question marks hanging over the sinking of the Lusitania in 1917.

 

Don't underestimate the sociopathic/psychopathic minds in the U.S./U.K. deep state -- and their associated security apparatuses.  Now we wait and see what happens, if anything.

 

Despite all the happy-looking job numbers yesterday, that doesn't change the fact that the U.S. -- and most of the rest of the world are continuing to slide into recession...if they're not already there. There was terrible  new order data  out of Germany yesterday -- and then there's the meat cleaver hanging over  Deutsche Bank . The first blow will be struck tomorrow. And don't even get me started on that Ponzi scheme masquerading as a country...China.

 

Of course when we stand back and look at the whole world -- and not just China...everything and every country has become a Ponzi scheme...except for Russia and a tiny handful of others. It's only massive amounts of made-up-out-of-thin-air paper/electronic money that's keeping this world-wide insanity afloat. This can't and won't last.

 

Back in 1918, or thereabouts, Randoph Stillman Bourne coined the phrase " War is the health of the state " -- and with the world's economic, financial and monetary systems in dire peril of collapsing under its own weight, a war would be the opportunity that the deep state has been planning for, for decades. At some point they will not be denied -- and this opportunity looks tailor-made...literally and figuratively.

 

"The impact of war on 'society' is even more dramatic. Bourne writes, "...in general, the nation in war-time attains a uniformity of feeling, a hierarchy of values culminating at the undisputed apex of the State ideal, which could not possibly be produced through any other agency than war." Instead of embodying its peace time principle of functioning -- 'live and let live,' society adopts the State's principle of "a group" acting "in its aggressive aspects."

 

This is the theoretical meaning of 'War is the Health of the State.' In times of peace, people are largely defined by their society -- and they interact with Government, giving little thought to the State. In times of war, the hierarchy and the power of these concepts is inverted. The Government virtually becomes the State, and society is subordinated to both."

 

Physical gold and silver, closely held...along with a current passport...would be a very good idea under these circumstances.

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7/2 Gold Rose To Far Too Fast

7/1 Gold Prices-The Next Five Years

6/26 It Really Looks Like...

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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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Create a great offer by adding words like "free" "personalized" "complimentary" or "customized." A sense of urgency often helps readers take an action, so think about inserting phrases like "for a limited time only" or "only 7 remaining!"