The Miles Franklin Newsletter
|
|
From The Desk Of David Schectman
|
|
Last week, we saw how the fake-money system has created two very different countries.
To put it in its starkest form, in one of them, you get killed for passing a fake $20 bill. In the other, you get your mug on TIME Magazine's cover as a "hero" for passing trillions of them.
In one of them, you get 33 times more "stimulus" money than in the other.
In one of them, you can expect a good job with a rising income. In the other, you'll be lucky if you have a job at all.
These two Americas weren't the product of natural economic evolution. They're the sour fruit of a corrupt, fake-money system.
Last week, we saw how the fake-money system makes something as loony as reparations seem plausible. This week, we wonder about what else might be coming down the pike. -
Bill Bonner
|
|
David's Commentary (In Blue)
So, here’s the thing about writing a weekly newsletter in my industry. I can either discuss the day-to-day changes, which are nothing more than “noise,” or I can discuss the big picture, which is where I believe our focus needs to be.
Viewed from my perspective, the end game is already clear and all but assured. The best I can do for my readers is to keep reinforcing what you (should) already know. After all, what has changed in the last month or two? Nothing. I stand corrected, there is the recent issue of social unrest, black lives matter and riots in the big cities now (in addition to the pandemic, economic collapse, the stock market that just knows how to go up and the Fed that can’t stop the printing presses). Yes, it’s just more of the same, and that, in and of itself, says a lot. The issues are clear. And the solution that our politicians (all of them, on both sides of the aisle) have decided on is to throw more money at the problems; an incomprehensible amount of new money. As if there will be no consequences.
We are now adding a trillion a month in new debt, and there is no end in sight. It took over 200 years to reach one trillion and now we are doing it in a month. Let that sink in. Can you even begin to comprehend what that means? Our politicians and the Fed can’t.
Congress is trying to fix the economy and help the unemployed by extending benefits. Trump is considering giving a tax credit of up to $4,000 to Americans who go on a vacation. This is brilliant! I have a better idea. How about creating more new high wage jobs? How about helping out small businesses? How long can we get by, by extending unemployment benefits and throwing out more $600 bonus checks? Let me repeat myself; how about funneling the money toward creating manufacturing jobs that pay a decent wage? No, our “managers” are not up to the task. (I use that term instead of leaders, because there is no leadership on either side of the aisle). Our managers answer is to, as always, issue more tax breaks and loans to those who don’t need them in order to keep the big banks, and the stock market and Wall Street happy. Creating more money (debt) enables them to kick the can down the road, prop up the
financial markets,
instead of helping the ma and pa small businesses on main street. The politicians know who contributes to their re-election campaigns. There are no leaders or forward thinkers at the Fed or in DC. It’s all more of the same, another round of the same policies that created the economic catastrophe in the first place. It’s 2008-09 revisited.
What exactly have we gained in the last three months by creating trillions of dollars out of thin air and dumped on the problems? The stock market is up. Whoopie Do, if you are one of the top 10% who own a lot of stocks. In the last 13 weeks 47.5 million Americans have gone jobless, and I’m not even including all of the people who have stopped looking for work, or who have been unable to get through on the phones to file for unemployment benefits. Add those to the total and the number is probably more like 60 million Americans without a job. There are now more people unemployed than at any period in US history. Extending unemployment benefits is a temporary fix, at best, but does nothing to solve the problems. Teach a man to fish, don’t give him a fish. We need manufacturing jobs, not welfare checks.
Look around you. What do you see? Here’s what I see. The biggest housing collapse and the biggest commercial real estate collapse are unfolding and the greatest depression is already here, and this is just the beginning. It will get much, much worse. Are you surprised? Do you not believe me? The signs are all around us.
|
|
|
|
Fed to act “forcefully, aggressively” to fight war on bad economy
Federal Reserve chairman Jerome Powell said last week that the central bank will continue to act “forcefully, proactively and aggressively” to sustain the economy, and plans to keep rates near zero until 2022.
The Fed’s dovish stance will be bullish for gold in the long-term, said Frank Holmes, CEO of U.S. Global Investors, who noted that trillions more dollars will likely be printed before we see a full economic recovery.
|
|
The media rejoicing. The headlines announce in bold print that retail sales rose 17.7% in May. Is this really good news? The rise from what? Sales have gone from terminal to awful and the MSM rejoices. Although the latest consumer data came in better than expected, Andrew Grantham, senior economist at CIBC, tried to put the rise into perspective. He noted that last month’s historic decline pushed retail sales down 24% from January. He added that with today’s rise, sales are still down 8% from the start of the year. And the second wave of the pandemic is waiting in the wings. Whether or not the government resorts to another mandatory round of home quarantine, a large percentage of the population will, on their own, avoid going to restaurants, health clubs, doctor’s offices and retail malls.
Who really wants to take an unnecessary chance? Actually, a lot of people, especially healthy young people, but older people, the people with money to spend, are still cautious and rightfully so. They are the most likely to come down with a serious or terminal case of Covid-19. The economy may improve from the depths of Hell but it will not come back enough to make a difference. Only people who believe in the tooth fairy believe we will experience a V shape recovery. How can a business (retail, restaurants, concerts, ball games, etc.) survive if they have to cut back on the number of customers who will be allowed into their business, by 50% to 75% - assuming in the first place that people even want to eat out and shop; many won’t, Just wait a few weeks until, as the CDC warns, the new cases of the Coronavirus and deaths hit new highs. No vaccine is in sight so we will be living with Covid-19 for at least a couple more years. No economy can withstand that.
|
|
I want to talk about 6’ social distancing. As Gerald Celente loves to point out, “They’re making it up on the fly. There is no hard data or evidence to support the claim that 6’ is the magic number.” Why not 4.5’ or 8.2’? He is right. They are making this crap up and a majority of people (sheeple) go along with it. Last Friday Susan and I went out to dinner with three of my grandchildren. Our favorite burger and pizza joint had just re-opened and they had outdoor seating with a couple of dozen large round tables beneath a canopy set up outside the restaurant in the parking lot. It was a beautiful summer evening and we were thrilled to be back eating at one of our favorite restaurants for the first time in three months. We were sitting many feet away from any other people. We were following the 6’ social distancing rule. All of a sudden I felt a mist on my face and stinging in my eyes and when I looked up, I saw a waiter using a spray bottle to clean a table that was at least 20’ from where we were sitting. A sneeze or cough from someone infected with Covid-19 would propel aerosol droplets the same way. Good luck with the 6’ social distancing. Celente also says, “So you think you are safe by staying 6’ away from other people outside? Haven’t you ever heard of the wind?” Yes, they are making it up as they go. If you want to avoid getting the virus, avoid all people and do not leave the house. That’s not for me. But I do avoid large crowds and wear a mask when entering a grocery store or drug store or liquor store – not so much for my safety, but because it really pisses people off who are wearing masks and they give you The Stare, the evil eye if you aren’t. Remember, wearing a mask, according to the “experts,” does not keep YOU from getting the virus. It is meant to keep people who already are sick from spreading it. And since people can be contagious without showing any visible symptoms, I guess it makes sense.
David Stockman offers his two cents worth on Covid-19 and the economy.
|
|
|
|
David Stockman: It’s a devastating combo and originates in the most senseless, destructive act of the state in modern times—if ever.
We are referring to the sweeping quarantine and lockdown orders that caused instant economic heart attacks in vast sectors of the US economy after mid-March.
There is no precedent in history for activity levels in huge industries like airline travel to plunge by more than 95% virtually overnight, or the restaurant sector, where Open Table reservations dropped by 80% versus prior year in a matter of days.
Not surprisingly, there have been nearly 50 million unemployment claims (counting the new federal benefit) in just 11 weeks—a figure which amounts to nearly 32% of the 158 million employed Americans as of February 2020.
Indeed, not even the bubble-blowing, crack-up boom antics of the Fed have ever created the kind of depressionary collapse now underway.
Yet its propagators—Dr. Fauci and the Virus Patrol at the CDC, NIAID, WHO, Big Pharma and the Bill Gates camarilla of foundations, think tanks, NGOs, and vaccine lobbies—have been peddling a Big Lie from day one.
Namely, that COVID-19 is the modern equivalent of the Black Plague and spreads its deathly pathogens on a random basis to all segments of the population—the young, the old, the healthy, the sick, and all variations in between—with equal alacrity.
That’s not even remotely true.
There are 104 million young people in the USA under 25 years of age, and as of the end of May, the mortality rate with COVID was, well, 0.12 per 100,000 population.
That is, all the schools, bars, gyms, restaurants, movie theaters where they congregate were shut down by orders of the governors and mayors, but it would take a million of these young people to generate just one death attributable to the COVID.
And we emphasize the with COVID part because the CDC changed its coding criteria at the beginning of the pandemic, and now they are coding as “COVID deaths” virtually everyone who dies in a hospital—even cases where someone arrives DOA at the emergency room after a traffic accident and tests positive for the coronavirus on a post-mortem basis.
By contrast, there are 6.5 million Americans with an age of 85 or over—representing 2% of the population—but they accounted for 33% of the CDC reported deaths of May 30, and that represented a mortality rate of 450 per 100,000.
So, the risk of death with COVID for what we call the Great Grandparents Nation is 3,750 times greater than for America’s School Age Nation.
Yet the mass quarantine orders amount to a one-size-fits-all attack on everyday economic and social life when the obvious thing to do was to keep the schools open and isolate, protect, support, and treat the grandparents and great grandparents.
In fact, if you take the entire population of 52 million persons 65 years and older, they account for fully 81% of all COVID deaths—with upwards of 50% of these fatalities attributable to residents of nursing homes and other long-term care facilities. As a matter of reality, residents of the latter do not frequent bars, gyms, movie theaters, offices, bus stations, and factories, essential, nonessential, and otherwise.
The general population never should have been quarantined.
Even among the core of what we call the Parents and Workers Nation, the 83 million people between 35 and 54 years of age, the with COVID mortality rate is just 7.0 per 100,000. That is, for this group, the risk of death from contracting the coronavirus is not much higher than what is incurred in commuting to work and back, day in and day out.
In short, the whole Lockdown Nation fiasco was a mutant exercise in social engineering that will leave Main Street battered and bruised for years to come—long after the coronavirus completes its infection cycle and succumbs to the summertime sun in most parts of the nation.
And that gets us to the George Floyd uprising, which was overwhelmingly comprised of under-35-somethings breaking out of house arrest and mad as hell about their now dramatically reduced prospects in life—which weren’t all that compelling in the first place.
Just consider that the overwhelming share of leisure and hospitality industry workers are in the under-35 age cohort. Yet the 17 million jobs reported by the BLS in this sector as of February had plunged to hardly 8 million by the end of April.
Even worse, average hours declined, too, so what we had at the end of April was an industry which had shrunk back to October 1979 levels in terms of labor hours actually deployed and paychecks issued.
|
|
Are you aware that Americans have already missed their last payment on100,000,000 loans (home, auto and credit cards)? It will get worse since every week more jobs are lost – another million and a half just last week alone?
Moody’s chief economist said up to 30% with home loans, around 15 million households, may stop paying their mortgage payments unless the economy turns around. Don’t hold your breath. Who is going to buy all that real estate in this economy?
|
|
|
|
And delayed payments in one month are
a strong indicator for coming months
...
|
|
We are witnessing the worst economy we have ever seen, the highest unemployment we have ever seen and the most rigged and fake stock market we have ever seen. We are not coming out of the collapse; the collapse has just begun. For many Americans, it is already too late. For those of you with cash, you still have time to move to safety, away from the mother of all stock market bubbles and into very undervalued gold and silver. Get out of harm’s way. Remember the number one rule in investing; buy low, sell high. This is what I am talking about.
Millions of people who recently lost their jobs will not have a job to go back to. They will end up unemployed. Millions will lose their homes; millions will become homeless. It is going to happen even though many people refuse to believe it. Why do so many people deny the reality? Well, because many people, some of my family members included, think we must be optimistic. Being realistic doesn’t register on their radar screen. Only optimism is allowed. And they back up their Pollyanna view with statements like “It can’t happen here, because this is America” and “Things like that can’t happen in America”. But they are happening now, right before our eyes. And this is just the beginning.
The biggest farce, the biggest lie, is that everything is fine because the stock market is at record highs. NO! The stock market is NOT the economy. The stock market is totally detached from the economy. I don’t care how high the Dow or the NASDAQ go, the economy is already in a depression and there will not be a “V” recovery. The real world is the auto industry, the retail industry, the travel industry, the small mom and pop businesses, the strip malls and the restaurants and health clubs. That’s what’s important, not the daily highs on the stock market. This was all caused by the Fed and they are blowing more hot air into the balloon. When it pops, it won’t be pretty.
Who should take blame for the mess we find ourselves in? Greenspan, Bernanke, Yellen, and now, Trump’s boy, Jerome Powell, that’s who. Powell is outdoing all of his predecessors. Keep in mind that the Fed is not Federal. It is owned by a group of large mostly New York banks and it makes sure the banks survive and prosper and to Hell with the rest of us.
|
|
|
|
Stephen Roach
How the Coming Crash in the Dollar Will Unfold
Scorn has long been heaped on those daring to question the supremacy of the U.S. dollar as the world's dominant reserve currency. I certainly received more than my fair share in reaction to a column I recently wrote for Bloomberg Opinion on the likelihood of a sharp decline in the greenback. The counter-arguments were strong and highly political, basically boiling down to the so-called TINA defense - that when it comes to the dollar, "there is no alternative."
That argument is very important in one critical sense: The dollar, like any foreign-exchange rate, is a relative price. As such, it encapsulates a broad constellation of a nation's value proposition - economic, financial, social, and political - as viewed against comparable characterizations of other nations. It follows that shifts in foreign-exchange rates capture changes in these relative comparisons - the U.S. versus Europe, the U.S. versus Japan, the U.S. versus China, and so on.
My forecast that a 35% decline in the value of dollar could well be in the offing is couched in terms of the comparison between the U.S. and the currencies of a broad basket of America's trading partners. Individual components in this basket are weighted by country-specific trade shares with the U.S. and expressed in real terms to capture shifting inflation differentials. As an economist, I care most about currency-related shifts in international competitiveness. The real effective exchange rate, or REER as calculated monthly by the Bank for International Settlements, is particularly well suited for this task.
This
follow-up
commentary from Stephen showed up on the
Bloomberg
website at 3:00 p.m. PDT [Pacific Daylight Time] on Sunday afternoon -- Another link to it is
here
.
|
|
So far, I have focused on the economy and unemployment and the pain it will (is already) cause millions of Americans. But the casualties will ultimately be anyone who ignores the danger of playing musical chairs in the stock market and who keeps all of their wealth in dollar denominated assets. (Less than 2% of Americans own any gold) What has allowed us to live beyond our means is the willingness of Europeans and Asians to hold American dollars as the reserve currency and they continue to loan Americans trillions of dollars. This allows us to live in an economy where we don’t manufacture much of anything and we don’t produce and we don’t save. Once this comes to an end, the Fed will be forced to step in and buy the bonds and that will mark the end of the dollar as even a marginal store of value and inflation will devour everyone who is not prepared. Are we witnessing the end of an era? And if it is ending, and the dollar is about to lose reserve currency status, where will that leave YOU?
The Fed is single handedly holding up the stock market while feebly supporting the economy.
|
|
|
|
Fed to act “forcefully, aggressively” to fight war on bad economy
Federal Reserve chairman Jerome Powell said last week that the central bank will continue to act “forcefully, proactively and aggressively” to sustain the economy, and plans to keep rates near zero until 2022.
The Fed’s dovish stance will be bullish for gold in the long-term, said Frank Holmes, CEO of U.S. Global Investors, who noted that a trillion more dollars will likely be printed before we see a full economic recovery.
FOMC To Continue "Approximately" $120BN In QE, No Negative-Rates Or Rate Hikes Signaled, Slashes GDP Forecast
.
“Powell is making these very strong statements so that means they’re going to print, and I think you’re going to see another couple of trillion dollars in the summer. I’ve said this from day one, I think it’s going to take $10 trillion in the U.S. alone and that’s forgetting what Europe is spending, they’re also on a huge binge of spending. Japan and China, and this is what makes gold a super attractive asset,” Holmes told Kitco News.
On risk assets, Holmes said that although near-term volatility is expected, the longer-term trend is still up.
“The President is focused on the stock market, and I think that’s what’s really important,” he said.
|
|
All of your dollar denominated assets will come under assault. You must diversify into precious metals to preserve your wealth. Doing nothing will guaranty your demise.
We are on our own. Be your own bank.
No comment necessary on Egon von Greyerz’s essays. They are all great.
|
|
|
|
Egon von Greyerz
History Tells Us To Own Gold When Central Banks Run Out Of Control
“Extraordinary Popular Delusions and the Madness of Crowds” happen with regular intervals as Charles Mackay wrote about. It seems that the world experiences more delusions and madness than truth and sanity.
The pattern is always the same. The economy is never in equilibrium but moves in cycles of boom and bust. If these cycles were allowed to take their natural course, they would move up and down in a steady rhythm without reaching extremes at the top or bottom.
GOVERNMENTS’ PRIME OBJECTIVE IS TO BE REELECTED BY BUYING VOTES
But human psychology and hunger for power prevent these natural cycles from taking place. Most leaders, whether they are kings or presidents, all have fear of failure combined with illusions of grandeur. As the economy peaks and the good times come to an end, they know that the best chance of not being ejected is for the good times to continue. Today’s leaders’ primary objective is to hang on to power by buying votes.
And how can they buy votes when the economy is turning down and the coffers are empty? Easy! You just print money out of thin air, as I discussed in
my article a couple of weeks ago
. The Romans did it, and so did the French, the Brits, Germans, Argentinians, and everyone else.
PRICES DON’T GO UP – VALUE OF MONEY GOES DOWN
Initially, when a country prints money to extend the prosperity, nobody notices that it is fake. After all, they are still called dollars or pounds. But gradually things become more expensive. The popular interpretation of increasing prices is calling it inflation. Nobody actually notices or understands that it is not prices going up but the value of the money going down as more and more which has zero value is issued.
THE LATEST PANIC STARTED IN AUGUST 2019
The current crisis started its acute phase back in August 2019. That’s when the Fed and the ECB started to panic.
Since then they have flooded markets with trillions of dollars and euros and still, the problems are not going away. But how can you solve a debt problem with more debt? I considered the Central Banks panic statements and actions back in August as an extremely critical moment and as important as Nixon closing the gold window in Aug 1971. I wrote back then that the “
world is now standing before a seminal moment and virtually nobody can see it.
”
THE END GAME IS STARTING
The US and the world are now entering the end of the end of 50 years’ destruction of the world economy and the financial system. So, it has taken half a century to reach the end game but this is like a blink of an eyelid in the history of the world.
The US is now leading the world economy into a total breakdown of not just the financial system but also of trade and social structures. And still nobody can see it. Stock markets are near the all-time highs and the high-end residential property market is booming in and around several capital cities.
The US has all the ingredients that lead to the destruction of an empire: Deficits, debts, excessive military spending, debasement of the currency, breakdown of trade, plague, the collapse of law and order and riots. Two things are missing to complete the picture namely wars, and hyperinflation. Sadly, both these factors are likely to occur in the coming years.
1971 marked the beginning of the end of the US Empire
Since 1971 the dollar has collapsed, deficits and debts exploded and social structures including law and order are breaking down. Like all empires, the US had the seeds of its own destruction within it.
This is how they achieved it:
1. Spend more than you earn and PRINT, PRINT, PRINT
The US has skillfully done this since the early 1960s. Every single year since that time, US Federal debt has increased. Few people realize that the surpluses in the Clinton years were fake since debt continued to go up.
US federal debt in 1971 was $400B and today it is $26 trillion a 65x explosion.
I produced the debt chart below the first time at the end of 2017 when Trump was elected president. I forecast then that US debt would reach $28 trillion by 2021 and double by 2025 to $40 trillion. These massive debt increases seemed incredible at the time. But very few people study history and learn from the past.
|
|
|
|
Since 1981 US Federal debt has on average doubled every 8 years, without fail. Obama doubled debt during his reign from $10 to $20 trillion. Thus, it was totally in line with the history that the US debt would be $40 trillion 8 years later, in 2025.
When I made this forecast I assumed that we would see a breakdown of the financial system starting in the 2020s. So, history teaches us a lot more about the world than any economist or other forecaster ever understands.
The US debt is now at $26T and is very likely to reach more than $28T by the end of the calendar year and $40T by 2025. The projections of the Congressional Budget Office (CRB) and the Committee for a Responsible Federal Budget (CRFB) also confirm that these debt levels are not unlikely.
If we get a real crisis in the economy and the financial system, we could be looking at much higher figures.
2. Import more than you export
Since 1974, the US has had a balance of trade deficit every year. As the graph below shows, the deficit has grown exponentially. In this century it has been running between $20B and $65B monthly and is currently running at $50B.
|
|
|
|
Half a century of every year importing more than you export is only possible with the assistance of the printing press combined with constant credit expansion.
3. Make the currency worthless
No fiat currency has survived in history. There have been periods when various currencies were backed by gold or silver. This stops governments from spending what they haven’t got. That was the dilemma Nixon had. After many years of the costly Vietnam war in the 1960s, President de Gaulle saw where America was heading and asked the US for payment of their debts to France in gold.
Gold backing of the currency prevents countries from spending money they haven’t got. Every time a nation has dropped the gold or silver standard, it has led to a destruction of the currency.
With deficits and debts rising fast, the US would have run out of gold and Nixon had no intention to balance the budget by cutting expenses. Much easier than to close the gold window and open the printing press which he did on 15 August 1971. And that was the beginning of the end of the US empire and the global currency system.
After Nixon’s fatal decision, The People’s Daily in China wrote:
“These unpopular measures reflect the seriousness of the US economic crisis and the decay and decline of the entire capitalist system.”
The paper went on:
“mark the collapse of the capitalist monetary system with the US dollar as its prop”…. “Nixon’s new economic policy cannot extricate the US from financial and economic crisis.”
The Chinese saw the consequences of the US actions already 50 years ago and the whilst the rest of the world is about to find out soon.
Since 1971, the dollar and all major currencies have fallen 97-99% in real terms.
Real terms means measured in gold which is the only stable currency in history.
|
|
|
|
4. Manipulate all markets
It is not possible to have chronic debts and deficits for half a century without total manipulation of all markets. The US government and the Fed have skillfully intervened in all financial markets be it stocks, bonds, interest rates currencies, derivatives or gold and silver.
The result of this is that there are no real markets today and no real prices. It is a casino in which the government with the assistance of the Fed and their banker friends control virtually all trading and prices.
If we just look at interest rates, it is a perfect example of false markets.
|
|
|
|
In a market governed by supply and demand, the gap between interest and debt in the chart above would not exist. High demand for debt would automatically push the cost of debt up. But the laws of nature have temporarily been suspended by the Fed and the US government.
Since they can create an unlimited supply of fake money, they can simultaneously set the cost of this money at zero. And as the money is worth nothing, it is self-evident that it should cost nothing to borrow.
But what most people don’t understand is that most assets they buy with the fake money has very little intrinsic value, whether it is stocks, bonds or property.
In the coming collapse of the Everything Bubble investors will have a very rude awakening as all these bubble assets decline 90-100% in real terms.
MARKETS
Stocks
are showing the normal high volatility before the next crash which is imminent. The coming secular bear market will shock the world.
Gold & Silver
The only point I would raise regarding his forecast is if it will really take 10 years to reach that level. I doubt it myself.
In the next few years, the world will learn that the printing of money can never create prosperity. That is the time when the masses will turn to gold and silver. At that point, there will be virtually no physical precious metals to buy at any price.
History tells us that it is imperative to own gold when central banks run out of control.
The few who will be lucky enough to find some gold and silver then will need to pay multiples of current prices.
“The desire of gold is not for gold. It is for the means of freedom and benefit.”
― Ralph Waldo Emerson
|
|
|
|
Bill Holter
(on silver)
Supply and demand? Mother Nature will not be denied when all is said and done…
MAJOR FACTOR TO INVEST IN SILVER: Five Billion Ounces Of Mine Supply Economically Lost In Past Decade
Silver will likely turn out to be one heck of a better investment than gold due to the rarity of the metal and lack of available supply in the future. While gold has stolen the show recently, I’ll bet my bottom Silver Dollar that silver will outperform gold during the next financial-currency crisis.
But, before I provide my analysis, I wanted to make a few comments about the analysts who say that “SILVER ISN’T A REAL INVESTMENT” like gold. I follow many websites and newsletters, and there seems to be this notion that silver is just an industrial metal, and its lousy price performance so far this year, versus gold, proves it isn’t worth of investing.
Yes, it’s true that silver has underperformed gold and may likely experience a paper price selloff once the broader stock markets begin to crash once again. However, at that time, I imagine acquiring silver retail bullion products will even more difficult than it was during March-April.
Regardless, the reason I believe silver will be one of the few KEY INVESTMENTS to own going forward has to do with the dire energy predicament we face… which I label as the ENERGY CLIFF. Unfortunately, most analysts that look at silver as more of an industrial metal do not understand the Falling EROI – Energy Returned On Investment and how it’s impacting the global economy and financial system.
So, they continue to criticize the “Silver Pumpers” or “Silver Hypers” as mere charlatans. I find this simply hilarious when the Federal Reserve just purchased $3 trillion worth of assets in just the past three months. Furthermore, total U.S. public debt increased $25 billion per day in 2020, more than five times the average daily rate over the past decade.
|
|
I am frequently asked what mining stocks do I invest my own money into? I want to state that I am not giving investment advice here, just telling you what I do. I have invested six figures into
American Creek
, and have owned it for several years. Yes, patience is a virtue in gold and silver. My motto: Better early than late. I am not even thinking about selling it until it is priced at multiples of its current price of $0.11 US. This is not a “pump and dump” ploy.
You may wonder why I am heavily invested in a stock that pays out in dollars, when I avoid dollar-based assets? The answer is because when
American Creek
reaches the price I have set to sell it at, I will unload it and use the proceeds to buy physical gold and silver, and they will be “free” metals for me, from the profit I make on
AMK
. That is precisely what I did 15 years ago with Western Silver. I purchased six figures worth between $0.60 and $0.90 and sold it all at $14. Nice huh? Not exactly. The stock (renamed American Copper) kept on rising and eventually hit $30+ but as the old saying goes, Pigs get fat and Hogs get slaughtered. Never regret taking a profit.
Note in the first photo below,
American Creek’s
property is located in between Pretium and Seabridge. It is the same geology. Check out those two stocks and see what the potential is for American Creek. For those of you who are not familiar with mining properties like these, one gram per ton is considered excellent.
American Creek
(OTCMKTS: ACKRF) is my number one choice.
Here is some news that is very encouraging. On Monday I received a couple of Emails from Kalvin Burton, CEO of American Creek. Andy and I both have a strong position in this stock. My other large holding is Jim Sinclair’s TRX. Both stocks have tremendous potential. Both are exploration stocks and there is more risk in this category than in the juniors and senior mining shares, but the payoff is much greater too. If you are interested in purchasing them, do not mortgage the farm. They are speculative stocks and should
not
be viewed the way you do physical gold and silver.
|
|
|
|
David and Andy,
You may have seen the press release put out today that the third drill has been added to the program. I expect a fourth drill to be not too far behind. Given Eric Sprott’s additional $9.2 million investment going towards Tudor in a couple of weeks I think there will be more than 4 drills going at some point on Treaty.
I was also very pleased to hear that Tudor will be drilling an area ½ way between Goldstorm and Seabridge’s Iron Cap. They are calling it “The Perfect Structural Storm”. It’s not just a good name, but it really is the perfect structural storm. Here are some of the characteristics of it:
·
The string of deposits within the Sulphurets Hydrothermal System are have a “rhythm” or “sequence” to them. They are all about 2.5km apart from each other, starting in the south with the Kerr, Sulphurets, Mitchell, Iron Cap, and then 5km north is the Goldstorm. Half way between the Iron Cap and the Goldstorm is where The Perfect Structural Storm is located (2.5km from the Iron Cap to the south and Goldstorm on the north). It’s located just SE of where the word “RED” is on the map below.
|
|
|
|
·
It’s located along the Sulphurets Fault – which is responsible for every other deposit in this system
·
It’s located along the Kyba line of discovery – which is where most all major deposits in the Golden Triangle are located
·
It has a huge Magnetotelluric (MT) anomaly and a huge magnetic anomaly which indicate mineralization
·
It has all the geological and geophysical indicators of being another mega deposit.
I think Tudors goal this year is not to do any kind of resource calc on it, but to drill it deep
with a few holes just to see what potential it has.
It’s also worth noting that Seabridge’s KSM deposits constitute the largest undeveloped
gold deposit in the world (by reserves). Pretty amazing!
Here are the geophysics showing a side shot (looking west) of the Sulphurets Hydrothermal
System (taken from our website):
Please note that the squares on the left (Seabridge) are 2km x 2km while the squares on
the right are 1km x 1km. The images are to scale.
|
|
|
|
In the image above there is a red dotted line indicating where Seabridge wants to put twin tunnels.
In the image below the area marked “B” is location of the Goldstorm zone which (if you follow the yellow dotted line going through circle B) extends to the right (north) for quite some distance that hasn’t been drilled yet. The area marked “A” is what Tudor is referring to as “The Perfect Structural Storm.” The yellow area in the image above is where the MT survey shows potential for mineralization and the red overlapping it in the image below is showing the magnetic anomaly. Both geophysical surveys indicate something that could be far larger than the Goldstorm which is amazing as Eric Sprott recently said (after talking to Ken Konkin – the head geologist) that he’s hoping to find 10’s of millions of ounces on the Goldstorm alone! This is all in British Columbia and only 20km from the highway which has high power transmission lines and is only 90 minutes from a bulk tonnage shipping port.
|
|
|
|
One other point is that Eric Sprott is doing a placement with Tudor (operator and JV partner) and Teuton (JV partner) and therefore has been discussing them on his weekly roundups for the last month. This has caused both their stocks to soar. Sprott has invested in American Creek twice previously but because AMK hasn’t been mentioned the last few weeks it has lagged behind creating a perfect buying opportunity for those wanting to get into the play. Tudor owns 3/5 of Treaty and American Creek and Tudor each own 1/5 creating at 3:1 ratio between Tudor and American Creek. However, American Creek’s market cap is currently roughly 20% of Tudors market cap opposed to 33% of it, so there is a great opportunity given it will rebound as it always has . In addition to that American Creek has a fully carried interest meaning that Tudor pays all exploration costs until a production notice is given. Therefore American Creek gets a “free ride” through the development process! Teutons market cap is closer to what it should be in relation to TUD. The very obvious value play here is AMK as it will catch back up and be paid 1/3 of what TUD is paid when the whole thing is sold.
If you have any questions please let me know how I can help,
Regards,
Kelvin Burton
92, 2 Ave West, Box 70
Cardston, Alberta, Canada T0K 0K0
Tel: (403) 752-4040
|
|
Private Safe Deposit Boxes
|
|
Unencumbered / Segregated Storage
|
|
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.
For your protection, regardless of where you live, we are licensed, regulated, bonded and background checked per Minnesota State law.
|
|
Miles Franklin
801 Twelve Oaks Center Drive
Suite 834
Wayzata, MN 55391
1-800-822-8080
|
|
Copyright © 2020. All Rights Reserved.
|
|
|
|
|
|
|
