The Miles Franklin Newsletter
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From The Desk Of David Schectman
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David's Commentary (In Blue):
Is the glass half full or half empty?
That’s just another way of saying there are two different ways of looking at the same thing.
There are a lot of people who are frustrated with the gold and silver’s price action lately. I, for one, am not. If the cartel were able to bury the metals by now, they would have. But every time they mount an assault, it is immediately repelled and gold pops back up above $1,500 and silver moves above $17.
But that’s not good enough for a lot of you. You still don’t believe much has changed. I wonder why not?
12 months ago, when gold was priced at $1,174.70 and silver was as low as $13.90 would you have even dared to imagine that gold and silver would have moved up this much? That would have been a bold prediction, and one that none of the analysts at the money center banks were making. Even Goldman Sachs, formerly known as “the Vampire Squid”, and definitely not a friend of gold, calls for gold to hit $1,575 in 3 months, and $1,600 in 6 months. The banks and hedge funds are finally starting to take notice and the managed money longs are acting much bolder.
Gold and silver - especially gold – do not operated in a vacuum. If there is a change in the price of gold then I ask myself, “What has changed?”
For one,
risk appetite
. The stock market has not lived up to expectations lately. Using the DOW as a proxy for the stock market, as recently as July 12 the DOW closed at 27,349. Yesterday the DOW closed at 25,479 down a large 800.49.
Ed Steer says:
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All is certainly not well in the U.S. equity markets, as the biggest 'Everything Bubble' in world history is on the brink of imploding...with the U.S. bank stocks -- and Deutsche Bank...really taking it on the chin again yesterday. Here's the 5-year BKX/KBW Bank Index chart, so you can see this for yourself.
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Nothing can save it, along with the rest of the world, from the fate that was cast in stone ever since Nixon took the world off of what was left of the Bretton Woods gold standard. All we're waiting for now is the pin or black swan that marks the beginning of the end. The PPT in the U.S...along with the rest of the central banks of the world...will be helpless when the final implosion commences, if they want to stop it at all, that is.
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Meanwhile in March, April and May, gold was having a hard time breaking above $1,300. It was clear that as long as the stock market was rising, gold was not on anyone’s radar screen and there was little interest in buying gold as a risk hedge.
Then in a short period of time, Trump ignited a trade war with China, slapped on tariffs, and the Fed backtracked from its position of the economies cheerleader and proclaimed it was safe to go back into the water again, so they raised interest rates. The stock market gave the Fed “The Bird” and in no time the Fed was forced to reverse course and cut rates – and even indicated that they would do even more cutting by the end of the year.
There was more going on. The German economy is faltering and they are the strongest economy in Europe.
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In the latest sign that the economic powerhouse of Europe is teetering on the edge of recession thanks to the trade war between the US and China, Germany's export-heavy economy shrank by 0.1% in the three months through June, according to official data published Wednesday by Destatis, the country's federal statistics office.
The disappointing economic data - the second contraction in four quarters - comes one day after the ZEW Survey of financial market experts showed that German economic sentiment in August dropped to its lowest reading since 2011, which is stoking concerns that the German economy could slide into recession during Q3.
The industrial sector tipped the economy into contraction in 2Q, said BBG economic Jamie Rush, and there's risk of further weakness in the second half of the year.
"If there's any good news to take from this release, it's that services must have continued to expand, indicating patches of resilience persist."
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Economy Minister Peter Altmaier tried to put a positive spin on the numbers, telling Bild that Germany can avoid a recession if the government responds with the right policies. However, the Q2 data are a "a wake-up call and a warning sign," Altmaier said.
"We are in a phase of weak growth but not yet a recession," he said. "The simmering trade conflicts are taking their toll and Germany's export-orientated manufacturing sector is particularly affected" Germany needs "intelligent policies for growth," including easing the burden on small and mid-sized companies, cutting corporate tax and a "clear plan" for the complete withdrawal of the so-called "Solidarity Tax."
This
3-chart Zero Hedge
story appeared on their Internet site at 6:40 a.m. EDT on Wednesday morning -- and it's another contribution from Brad Robertson.
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Great Britain’s economy is a basket case. So is China’s. India and Pakistan are close to a war over Kashmir. Normally, here in the U.S. we would say, “So what!” But they are two nuclear powers, that’s what. And who can forget Iran high jacking a few oil containers in the Gulf.
These are just a few of the “What’s Changed” events that are waking up the
Risk Appetite
. But I think it goes beyond that. It looks like there is a new sheriff in town. The $64 Dollar Question is “WHO is the new Sheriff”? Damned if I know, but someone with very deep pockets has joined the party, and they are going
LONG
gold.
In the following 6-Month graph, you can see that the lows are higher and the highs are higher. And it all started around the same time that money was pouring out of the stock market.
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Looking at this chart, is it possible to predict where gold is headed? Yes, and No. It’s a good bet that gold is headed higher, but how high? Gold is moving up in spite of the fact that technically it is very “Oversold.” But it’s been oversold all the way up and it still refuses to “correct.” Maybe the real “correction” is UP and not down. The gold to DOW ratio is still almost 17 to one and the dean of the newsletter writers, Richard Russell, if he were still with us, would be pounding on the table and screaming the ratio is headed down to 2 to 1 or less. Maybe the trend we are watching unfold right before our eyes - stock market falling and gold inexplicably rising – is a “pre-echo” of what is to come - a move back to Russell’s 2 to 1 ratio?
(Pre-echo is a term I am familiar with in audio. When a recording is made, sound from the tape not yet played bleeds through in advance and at low sound levels you can hear it as an “echo” of what is coming before it happens.)
How do I know that most of you are still not believers? (God knows, you have plenty of reasons not to be, like seven years of disappointment.) I know because our phones are mostly silent. Few are calling in to order or talk about gold and silver. That said, our business is very strong but that’s because we outcall and our big clients are still placing large orders. In a bull market we write a LOT of small orders. In this market we write very few small orders, but the large orders are still there. Yes, we preach to the choir and in this case, “the choir” is made up of Gold and Silver Bugs who have a lot of money.
Money is being made right now in the mining shares. Those of you bold enough to take an early position are being rewarded. As a rule, the mining shares lead gold and silver on the way up and on the way down.
Here is an interesting chart, courtesy of Gary Christenson, Contributing Writer for Miles Franklin….
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It demonstrates how Gold holds its value against a depreciating currency, in this case, the U.S. Dollar. It is a good visual to prove that Gold Is Money. The way to look at gold is not by its “price.” It’s by how many dollars does it take to buy an ounce of gold. Gold is the standard. The price of gold didn’t go up by $338 in the last year, the dollar lost $338 of purchasing power to gold in the last 12 months. It takes $338 more dollars to buy the same ounce of gold. That’s what the above chart is showing you.
That’s the long-term view. That’s why we buy PHYSICAL gold and silver and holding onto it for the long haul. But the folks over at the COMEX think short-term only. What did Trump say in his last Tweet? What hint did one of the Fed Governors give us in a speech the other day? The thing is, the short-term thinking always gives way to the big picture. It just takes a while.
Circling back to a question I asked earlier in this chat, is gold going up or down? Here is what Ed Steer had to say about it, and I’m on board with Ed…
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But as
silver analyst Ted Butler
mentioned in his weekly review on Saturday..."The commercials have never, ever been overrun to the upside. Therefore, if gold prices get forced substantially lower in the future, no one should be surprised. All that said, there is nothing that guarantees that the commercials can't possibly get overrun. Just because something has always worked does it mean it always will work."
However, I'm expecting that any price decline at this juncture will be short lived, although potentially violent...an opinion that I stated in my Saturday missive as well.
But make no mistake about it...correction or not, precious metal prices in the medium and long term have a lot further to run to the upside -- and the powers-that-be will be powerless to stop it. The flight into gold and silver has already commenced -- and as I've continually pointed out...the economic, financial and monetary situation continues to become more dire with each passing day.
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Here are three articles I think you will find interesting. Check out the latest from Gerald Celente, SRSrocco and Egon von Greyerz.
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Gerald Celente (Trends Journal)
The Dow dove 800 points today.
Crude oil tumbled nearly 4 percent on weak global demand and rising crude stockpiles. In the U.S., the broad oil-and-gas index company shares fell to their lowest point since they were created in 2006... the early days of the shale boom.
China reported disappointing data for July, with industrial output down, falling to its lowest level in 17-years and retail sales, the juice that keeps the Chinese economy growing, came in at 7.6 percent, sharply down from 9.8 percent in June.
The UK is teetering on recession and its pound is plunging.
Germany, the Eurozone's economic powerhouse, saw its Gross Domestic Product shrink between April and June, adding fuel to the recession fears already spreading throughout Europe.
The Argentine stock market crashed nearly 40 percent this week and its peso plummeted some 25 percent.
From London to Sydney, from Singapore to Washington, D.C., commercial property prices in major cities around the world are falling.
In the U.S., mortgage debt hit a record high, eclipsing the Panic of '08 peak.
This is just three days of data, and the week has just begun!
It is much worse when we identify, analyze and forecast the myriad of Globalnomic
®
trends that have led me to forecast the Greatest Depression in the March edition of the Trends Journal.
The worst is yet to come!
That's why, as I had forecast in June, "The Gold Bull Run" is running. Gold prices are now up 20 percent! And of course, I do hope you are "Golden."
The current events forming future trends are unfolding at breakneck speed. Hong Kong protests close the city's airport for second day. India annexes Kashmir, which Pakistan also claims, ramping up military conflict between the two nuclear-armed nations.
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SRSrocco
The Precious Metals Are Setting Up For Big Moves Higher
After six long years, the precious metals are finally setting up for BIG MOVES higher. Even though the gold price has increased significantly over the past two months, we haven’t seen anything yet. Of course, gold has already enjoyed big moves in other currencies such as the British Pound where it has reached an all-time new high.
However, we have to be a bit more patient for gold to reach a new high in the U.S. Dollar as the Federal Reserve has a monopoly on the world’s printing press.
But, it is important to understand that gold has broken through a KEY LEVEL and is giving the green light to the market that a new bull market has begun.
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Egon von Greyerz
GOVERNMENT ACTION WILL PUSH GOLD EVER HIGHER
History is full of mad leaders from the Babylonian King Nebuchadnezzar, the Roman Emperor Caligula to many English and French kings as well as modern examples. But the question is if we have ever had such a mad world as today. Globally, ethical and moral values have vanished and decadence is rampant. And financially there is zero discipline as leaders are attempting to set aside the laws of nature. This is for example totally obvious in the manipulation of the world economy which is done on a greater scale than has ever been done in history.
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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.
We are rated A+ by the BBB with zero complaints on our record. We are recommended by many prominent newsletter writers including Doug Casey, Jim Sinclair, David Morgan, Future Money Trends and the SGT Report.
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