August 6, 2019
The Miles Franklin Newsletter
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From The Desk Of David Schectman
I would say that there is a 95% certainty that stock markets will crater this autumn and that gold and silver will reach substantially higher levels.
What we must remember is that wealth preservation means trying to protect your assets from total destruction rather than making high returns.

Physical gold and silver is the best insurance you can own. If they go to the levels that we expect, you are also likely to achieve major capital appreciation but that is not the primary reason for holding precious metals. – Egon von Greyerz
Washington’s policy of sanctions is making it even more difficult. To avoid the arbitrary and illegal sanctions, other countries are starting to abandon the US dollar as the currency of international transactions and arranging to settle their international accounts in their domestic currencies. China’s Silk Road encompasses Russia with much of Asia in a trade bloc independent of the Western financial system.  Other countries hoping to escape US control are turning to Russia and China to achieve sovereignty from Washington.  These developments will reduce the demand for dollars and impair US financial hegemony.  Alternatives to the World Bank will remove areas of the world from the reach of US plunder. – Paul Craig Roberts

Now watch what happens in the weeks and months ahead as stocks continue to fall. This will not merely color the news, but impel it. Specifically, it will force the hand of the Open Market Committee, which has tried to mask its spinelessness with faint protests of reluctance. This clumsy kabuki — a literal enactment of the old saw, "Whip me, beat me, make me write bad checks" — has fooled no one, least of all investors. They know the banksters will give in if stocks fall far enough. But with Europe and China sliding deeper into recession, monetary easing will have only a muted effect, not only on stocks, but on global GDP growth.
As for the trade war, it is already starting to suck the oxygen from the global economy. Shares will rally from time to time nonetheless, ostensibly because of progress on the tariff front. But the larger trend will be down. The still-unspeakable prospect is that the bull market’s death will scuttle Trump’s re-election chances. Comes the day when investors start visualizing the likes of Elizabeth Warren in the White House, there will be no bottom for the stock market, and no end to its bad days. In the meantime, enjoy whatever last-gasp rallies may remain before the selling turns ugly. It could begin with a shot across the bow such as occurred when  Babson’s break   sent stocks plummeting one memorable day in September 1929, seven weeks before Black Monday.  – Rick Ackerman
There may be readers who weren’t even born when the U.S. still had a gold-backed dollar. Since the gold standard was abolished in 1971, the value of the dollar has decreased annually by 3.96 percent. You would need over $600 today to purchase the same goods you purchased for $100 in 1973. Still, a dollar is a dollar, right? No, it is not. It is just a piece of paper. – Alex Deluce
David's Commentary (In Blue):

In 1967 Aretha Franklin released one of her more popular albums titled I Never Loved A Man the Way I Love You. One of her featured songs (also sung by Seal and The Nylons), A Change Is Gonna Come has the following lyrics:
And just like the river - I’ve been runnin’ ever since – He said it’s been a long time comin’
Yes, IT’S BEEN A LONG TIME COMIN’.  My “break-out” number for gold has been $1,465. It’s been seven long years since we’ve seen this number, and then it was on the way down, from $1,800.
Why now? Why is gold breaking out when Trump and the Fed tell us the economy and the stock market are strong? Maybe they’re lying? Well, as I am writing this down (6:30 P.M. on Monday evening) the Dow closed down 767.27, the dollar is down 0.20 to 97.31 and crude oil is down 0.1.42 at 54.19.
The markets are singing a different tune than The Donald and The Fed. It won’t be long before Trump is again tweeting that the Fed didn’t lower interest rates enough.
We are in the midst of a trade war AND a currency war and that does not bode well for the stock market or the economy. But it does wonders for gold and silver. The missing piece of the puzzle, necessary for gold to launch, is a falling stock market. Well dear readers, we have it now. The Dow peaked at 27,359 on July 15. It’s down 1,457 points in the last two weeks.
Just after 11:00 A.M. you could smell panic over at the PPT. They threw everything they had at gold and knocked it down $14 in a matter of minutes. God forbid gold should take off while the dollar and the stock market are plunging. 
But they can’t stop the rise. That would be as difficult as trying to hold back a sneeze. Of course, they capped the rise just below my break out point of $1,650. But all to no avail as gold closed up $23.40 to $1,463.40. The next target is $1,500. At this rate, it won’t be long.
The dollar index finished the Monday session at 97.52, down .55 from Friday’s close. It will be interesting to watch how the gold price reacts – or is allowed to react to any changes in the currency markets.
Here’s the 6-month U.S. dollar index chart
I can hardly wait for $1,650. Backwoods Jack still gives me crap because his wife purchased $50,000 worth of gold from me at $1,650. They are constantly reminding me, but he never brings up the fact that they made over $2 million on my recommendations and that I was selling them gold from $300/oz and silver from $5/oz all the way up. They would rather just pick one trade to judge me by. They have selective memory. And that’s why I have made the decision NOT to give investment advice to my friends in the future. If your advice doesn’t work out, they will always remind you. 
Gold just hit an all-time high in the Canadian Dollar, the Swedish Krona, the Russian Ruble and the Indian Rupee. It’s at a 7 year high in the Australian Dollar, the Chinese Yuan, the Japanese Yen, the Swiss franc and the Euro. It’s just below an all-time high in the British Pound. And, as mentioned above, it’s at a 6+ year high in US dollar terms as well. 
But that’s just the tip of the iceberg. 
Gold’s Price Rallies to Record Highs in 73 Currencies
By Paul Ebeling
Gold marked 6-year highs Friday as investors barged into the safe-haven metal on an escalating US-China trade dispute, and the prospects of a return to ultra-loose monetary policy by the Fed.
Gold for delivery in December, the most active futures contract trading in New York, touched a high of $1,461.90 oz before settling $25.10, or 1.8%, higher at $1,457.50 on the COMEX.
According to FactSet data that is the highest finish for the most-active contract since 9 May 2013.
Sharps Pixley, the Top bullion broker in London, points out that the gold price in GBPs hit an all time high Friday of £1,187.28, beating the previous record set on 11 September 2011.
GBP joins 72 other currencies, including the Canadian Dollar, The Australian Dollar and perhaps most significantly, the Indian Rupee on the Top gold price.
There has been a stealth Bull run in gold and by simply watching the USD gold price, some investors are missing out.
Interest rates around the globe are near zero or negative. The global stock markets, including here in the US are tumbling. Trade wars, tariffs and currency wars are sprouting up like weeds. Suddenly, gold and silver are more appealing - in all the currencies – as an island of safety. 
At the moment, gold is “marginally” outperforming silver, but that will change. They both move more or less in tandem on the way up, with gold often taking the lead and silver finishing much stronger. 
Trade wars often end up in shooting wars. A falling economy and a falling stock market are often the precursor to war, the necessary diversion to failed domestic policies. If the stock market continues to fall and takes the economy down with it (or is it the other way around?), Trump’s chances for re-election look bleak. Another war (Iran perhaps, or, God forbid, China?) will help his chances for a second term.
This headline really got me shaking my head. 
Gold To Still End 2019 At $1,400, Markets 'Pricing In Too Much Fed Easing': Capital Economics
Do they really believe the ONLY reason gold is rising is due to the Fed’s interest rate cuts? That’s the essence of their Kitco article. That’s just one of many reasons for gold’s rise. 
In the following article posted over at Zero Hedge, they point out that gold is rising in Yuan. Ya think that they have enough capital to put into gold to move the market?
Zero Hedge
Update 1   - China is firing all the big guns tonight, because just an hour after Beijing effectively devalued the yuan, when it launched the latest currency war with the US, Bloomberg reported that the Chinese government has asked its state-owned enterprises "to suspend imports of U.S. agricultural products after President Donald Trump ratcheted up trade tensions with the Asian nation last week."
Translation:   trade talks, even the fake kind, is now over, dead and buried, and the only question is how Trump will react.
China’s state-run agricultural firms have now stopped buying American farm goods, and are waiting to see how trade talks progress .
Gold in yuan is accelerating higher...
We suspect an angry tweet from President Trump is imminent as China 'weaponizes' its currency.
Meanwhile, expect even more actions by China, such as this one which confirms that any pretense of politeness is now gone.
As Mick Jagger sang, a U.S.-China war is “just a shot away.”
Paul Craig Roberts says, “ 
As we approach the end of the second decade of the 21st century, the long history of American capitalism fed by plunder seems to be coming to an end simultaneously with the ability of the US central bank to protect existing financial wealth by creating ever more money with which to support stock, bond, and real estate prices.  
This spells inflation in my book. An end to the dollar’s decades-long advantage as the world’s reserve currency. Next up, gold at $1,500.
Ed Steer
'Da boyz' are still out there going short against all comers -- and there are no signs that I can see that they're about to be overrun, at least not yet. And as I said in this space last week, it still remains to be seen if JPMorgan et al can pull off another round of engineered price declines in both silver and gold, considering the current financial and monetary environment that they're facing. But regardless of that, it appears that the gold and silver equities continue to be in accumulation mode, as it's pretty much a given that 'strong hands' are buying every one of those equities that were being sold this past week.
The Commercial net short position in silver is now up to 419.6 million troy ounces...a monstrous number.
As  Jim Rickards  said in a commentary on  Internet site on Wednesday...headlined " One Manipulation Leads to Another "...
"[T]he current expansion is already the longest on record. It can't be expected to last much longer. When it does strike, the next recession may be impossible to get out of. The central banks just don't have the "dry powder" to fight it with.
And that comes back to a deeper problem...
The problem with any kind of market manipulation (what central bankers call "policy") is that there's no way to end it without unintended and usually negative consequences. Once you start down the path of manipulation, it requires more and more manipulation to keep the game going.
Finally it no longer becomes possible to turn back without crashing the system.
...the central bankers ride to the rescue of corrupt or mismanaged banks. This saves the wrong people (incompetent and corrupt bank managers and investors) and hurts the everyday investor or worker who watches his portfolio implode while the incompetent bank managers get to keep their jobs and big bonuses.
All it does is set the stage for a bigger crisis down the road.
The bigger problem is there's no way out, as I said. One manipulation leads to another."
If there is one person whose views most closely parallel ours it’s Egon von Greyerz. He takes our views “to the extreme” but he may not be wrong. His take is – “It’s not about winning, it’s about survival.” Gold is about survival. 
Egon von Greyerz

The messages from the ECB and the Fed couldn’t be clearer. They are seeing major problems in the financial system and in the world economy and they will do whatever it takes to save the system. But they will fail.

The autumn of 2019 will see a major shift in sentiment as markets turn from a secular bull to a secular bear. We are likely to see major crashes in many global stock markets. Virtually no one is prepared for this so there will be both panic and despair.

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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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