March 25, 2019
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From The Desk Of David Schectman

By Remy Blaire Andy Schectman, president and owner, Miles Franklin, Ltd. GOLD-TO-SILVER RATIO: OPTIMISTIC BULLION OUTLOOK Gold prices hit 3-week highs in the aftermath of the March Federal Reserve meeting. Yet as the U.S. dollar climbed a day after the Fed announcement – gold pared gains but managed to settle at a one-week [...] 

Andy Schectman | Miles Franklin – Silver Is An Investment Opportunity Of A Generation

March 22, 2019

By Remy Blaire
David Schectman's Comments(in Blue)

Change is in the air.   The countdown begins on Monday
I will be on vacation this week but will take the time to write on Monday and Wednesday.  So much is happening.   Change is in the air.

My son Andy has been a busy boy lately.  Here is a picture that his wife Zhanna took of Andy last Friday, speaking to a room full of financial advisors in New Jersey.  He has six of these presentations lined up, and will be on the road again this week. And then check out Andy’s silver presentation at a recent Sprott conference.

Gold prices hit 3-week highs in the aftermath of the March Federal Reserve meeting. Yet as the U.S. dollar climbed a day after the Fed announcement – gold pared gains but managed to settle at a one-week high.

Andy Schectman, president of Miles Franklin, remarked on the fairly predictable price action in gold and silver leading up to a Federal Reserve meeting. He views it as an opportunity for investors to accumulate the “undervalued assets.”

Schectman says the central bank prefers “the appearance of a strong economy — but not too strong because an overly bullish forecast brings the Fed’s flip-flopping on rate hikes into question.”

Overall, the Federal Reserve’s accommodative stance and dovish position on the interest rate outlook provide positive momentum for the yellow metal. Only time will tell whether gold will challenge last year’s highs.

Rick Rule, president and CEO of Sprott U.S. Holdings Inc. spoke with Schectman about the precious metals landscape. Notably, the gold-to-silver ratio was explored in the brief but valuable discussion about the conditions in the bullion market. Schectman noted that the gold-to-silver ratio stands at approximately 84:1, an “inequity … screams to me of opportunity – akin to 4 feet of snow in the Florida Keys.”

The ratio is representative of the ounces of silver necessary to acquire an ounce of gold. While there is profit potential there are risks involved for investors. 

Schectman is excited about the outlook for precious metals and is particularly bullish on the ratio. He views it as an opportunity — especially considering that the average gold-silver ratio has been 50:1.


The latest Federal Reserve meeting concluded with the Fed Funds rate holding at steady and a forecast of no more rate hikes in 2019. The median forecast points to one more hike in 2020. The central bank announced the end to is balance sheet runoff by September 2018 and also cut its growth forecasts.

The broader market advance in the aftermath of the March Fed meeting speaks for itself. The central bank may be attempting to communicate that the U.S. economy is in good standing but its dovish shift has many scratching their heads and wondering: If “patience” isn’t enough, is staying on hold adequate for the rest of 2019?


It doesn’t take an ornithologist to tell the market that the Fed’s policy statement was a dovish one. It would take a rogue birdwatcher with defective binoculars to mistake Wednesday’s commentary as hawkish. This is quite a turnaround from the stance by the central bank at the end of 2018.

The Federal Reserve is not alone in its position as more central banks go the way of the dove amid slowing global growth. As concerns about price pressures linger, there are unresolved geopolitical issues that could affect many an investment portfolio: U.S.-China trade and tariff implications, Brexit risks.

Fed Chair Powell mentioned that low inflation is “one of the major challenges of our time” and that the central bank may need to get “more creative” in its commitment to the inflation target at 2%. Powell and Fed officials are keen to avoid a deflationary minefield akin to Japan.


While a dovish Fed is not synonymous with a bull market for the precious metal, Schectman is optimistic about the trajectory for gold prices — especially in light of the rising U.S. dollar. He also believes that silver is an “investment opportunity of a generation.”

Miles Franklin is known for its unique storage program that allows clients to purchase precious metals and store their physical holdings in the Miles Franklin Vaults at Brink’s locations in Canada. The program is in directly held segregated storage at Brink’s facilities in Montreal, Toronto and Vancouver. Miles Franklin welcomes the storage of their own metals purchased from other sources and insures the contents of the safe deposit boxes.

Ahead of the 2019 Sprott Natural Resource Symposium, Rick Rule, president and CEO of Sprott US Holdings Inc. spoke with Andy Schectman, president of Miles Franklin to discuss the outlook for precious metals and his excitement for Tradewind Markets, Inc.’s blockchain application VaultChain™ Gold:
I’ve been talking to Bill Holter.  He and I both have a position in Tanzanian Royalty Export (TRX), Jim Sinclair’s property.  The stock is on the move and  if  their current drilling program provides the results that Jim and Bill anticipate, this will be big news throughout the industry.  

Here are some of Bill Holter’s recent thoughts on the markets.

Bill Holter’s Commentary
Our Dollar Is Going To Fall

Gold is higher in the early morning trade report with the price now at $1,315.20, up $13.50 from the Comex close, which happened before yesterday’s FOMC report with the high so far at $1,320.20 and the low at $1,312.50. Silver is up as well (not sure who is leading here Ag or Au) with the trade at $15.555, up 23.7 cents with the high at $15.65 and the low at $15.48. The US Dollar took a hit after the data release but has recovered (against Trumps weaker dollar demand) with the trade at 95.675, up 47.4 points inside a trading range between 95.705 and 95.295. Of course, all of this was done while we’re not trading and before the Comex sleepy time open. As expected, when Gold rises in the US Dollar, it rises even more in the secondary’s (emerging markets) with the Venezuelan Bolivar price at 13,135.56, gaining 99.87 Bolivar in a 24-hour period. Silver’s price gained 2.248 cents (HUGE!!!) with its price at 155.356 Bolivar. In Argentina, another country going into massive convulsions because of the exchange rate, Gold’s price before the FOMC was 53,322.03, now it’s priced at 53,730.56 gaining 408.53 Argentinian Pesos over night with Silver gaining 9.192 Argentinian Pesos at 635.484. These are very big gains brought on because of the swings caused by a major currency and not their own, wait till this hits under the US Dollar. No one’s seen anything yet!    
The March Silver deliveries had a major jump in demand BEFORE yesterday’s FOMC data release with the count now at 101 Demands for Physical as buyers came in with needs proving a gain of only 17 contracts. However, yesterday’s Volume in March Silver totaled 94 swaps with the last purchase made at 8:57 am pst. Did someone jump in and get their requirements ahead of those already in cue? Watch Harvey’s count here because there may be some EFPS being passed over to the city in chaos or the purchases got stopped here draining more from COMEX, as less is getting pulled out of the ground globally. The Overall Open Interest in Silver is still gaining with the count now at 190,624 Overnighters proving 1,314 more shorts had to be placed in trade to stay the price from the buyers but not stopping the demands for physical at all.      

Why The Fed Keeps Propping Up The Market

Authored by Jesse Colombo via,
The bull market of the past decade since the Great Recession has been an unusual one: despite all of the economic damage that occurred during the global financial crisis and rising risks (including global debt rising by $75 trillion), it has been the longest bull market in history. The explanation for this paradox is simple: it’s not an organic bull market because the Fed and other central banks keep stepping in to prop up the market every time it stumbles. Though the Fed has two official mandates (maintaining stable consumer prices and maximizing employment), it has taken on the unofficial third mandate of supporting and boosting the stock market since the Great Recession.

The chart below, which was inspired by market strategist Sven Henrich, shows how the Fed or other central banks have stepped in with more monetary stimulus (quantitative easing, promises to keep interest rates low, etc.) every time the S&P 500 has stumbled over the past decade:


We told listeners weeks ago, countries would do what was in their own best interests.

Guest(s): Gwen Preston Resource Maven

The ongoing trade war between the U.S. and China is a major factor in setting metals prices, said Gwen Preston of Resource Maven. 

“Gold does well if we get a trade deal. Base metals do well if we get a trade deal. If we don’t get a trade deal, base metals, unfortunately, despite these very strong supply-demand fundamentals, would get denied their chance,” Preston told Kitco News on the sidelines of the Metals Investor Forum.
Bill Holter’s Commentary

Do you remember the days when the sale of $1 billion worth of “precious paper” gold would cause a $25 or even $50 drop in gold’s price? Today they got a lousy 5 bucks for their troubles! The world she is a changin’!
Here are links to four articles that Ed Steer recently posted. These are some of the reasons that he believes, as do we, that things are already starting to unravel.

Ed Steer
The countdown begins on Monday
Well, it's now official, as the world's central banks have dropped all joined by the Federal Reserve on Wednesday...and have only one policy objective. That's to prevent the implosion of the biggest financial and economic bubble the world has ever known, that they themselves created.

It's a certainty that they've know this for years now, but would never publicly admit it. They have emasculated themselves -- and have no more aces to play, except for negative interest rates. Even that would not be enough -- and would most likely make matters far worse.

Allowing the free market to reign at this point would precipitate the biggest stock market crash in the history of Planet Earth, along with a concurrent meltdown of the world's financial system. Paper money of any kind would lose their purchasing power at blinding speed -- andin extremis would drive precious metal prices to the moon and the stars as the only safe haven left.

The central banks, the powers-that-be, the deep them what you will, will fight this outcome with all they have, but it won't be enough. The above outcome is inevitable in one form or another -- and the only thing unknown is the speed of this unstoppable cataclysm...and whether or not it will be by circumstance, or design.

This Basel III thingy that starts next weekend is of interest -- and as others besides myself have pointed out in the last few weeks, gold will become a Tier 1 asset, meaning it will be considered as good as cash or [gasp!] U.S. treasuries. There's no question in my mind that both gold and SDRs [Special Drawing Rights] are going to come to the fore at some point. But how soon the IMF, the world’s central banks and governments, will be able to act on this once this new agreement comes into effect, remains an unknown. However, that day is most certainly coming. When that happens, the U.S. dollar will no longer be the world's reserve currency, it will be the SDR -- and the greenback will become just another regional currency...such as the Mexican peso, or the Russian ruble.

Jim Rickards wrote an excellent commentary about Special Drawing Rights back in September of 2017. He was early in his prediction of course, but with Basel III coming into effect as the Monday trading day begins on April 1, 2019...all bets will be off, as the IMF table will be completely set for such an event. 

And in order for this new financial system to come into effect, it's my opinion that a crisis will have to be precipitated -- and none would be finer than an engineered melt-down of the "dead man walking" monetary, financial and economic system that currently exists today. Once that was well underway, the IMF would come riding to the rescue. Virtually overnight, probably on a weekend...with a few days worth of a world-wide bank 'holiday' thrown in for good measure, perhaps...the old world's financial system would be swept away -- and the new one would commence.

Then the world's 'reserve currency' would be printed by an organization not accountable to anyone or any country -- and that, in and of itself, is a scary thought. But that outcome will be the only one acceptable to the banking elite of the world.

I think there's very good reason why Russia and China, along with a handful of others have been accumulating gold within their own countries all these years. And as for the gold held for other countries either at the Bank of England or the Federal Reserve Bank of New York...possession will turn out to be nine-tenths of the law, as they will be forced to "donate" their gold held their to this New World Financial Order coming down the pipe, as their chances of getting it back will evaporate.

And as Mark Byrne over at the  Internet site stated, you have to become your own Central Bank. Because it's also my opinion that once this new financial system is unleashed on the world, gold will sport a much, much higher value than it does now -- and it will be priced out of reach to all except those with the deepest of pockets. At that point, silver will become the new gold.

And as I said a few paragraphs ago, the countdown for "all of the above" begins on Monday.

Don't believe us? Here is Larry Kudlow last summer explaining that everyone freaking out about the 2s/10s spread is silly, they focus on the 3-month to 10-year spread that has preceded every recession in the last 50 years (with few if any false positives))

As we noted below, on six occasions over the past 50 years when the three-month yield exceeded that of the 10-year, economic recession invariably followed, commencing an average of 311 days after the initial signal.

And here is Bloomberg showing how the yield curve inverted in 1989, in 2000 and in 2006, with recessions prompting starting in 1990, 2001 and 2008. This time won't be different. 
This chart-filled news item put in an appearance on the  Zero Hedge  website at 5:11 p.m. EDT on Friday afternoon at 5:11 p.m. EDT

Gold Tumbles Back Below $1300 As Someone Suddenly Dumps $1 Billion Of ‘Precious Paper’

March 29, 2019

As Europe closed, it seems someone decided now was a great opportunity to puke over $1 billion notional of paper gold into the futures market to send the precious metal back below the key $1300 level…

Huge volume spike…
Spot gold broke back below its 50DMA…

The Fed folded entirely to the market today, slashing its rate trajectory dramatically lower nearer the market's implied dovishness...

Bloomberg's Ye Xie noted that if we take the dot plot at face value (which, mind you, may not be a wise thing to do), then it seems the Fed will hold rates steady this year before raising one more time in 2020. If that pans out, it would be unprecedented. Since the 1970s, there have been three times when the Fed held rates steady for more than a year after raising them in the previous three months: 2006, 2000 and 1997. Invariably, the next move was a rate cut.

However, the market has shifted even more dovish, pricing in almost an entire rate-cut in 2019 now...

Stocks initially surged on the dovish surprise, dragging the Dow green, but as the last hour went on, traders wondered just how much fear The Fed must be feeling about growth to take such a machete to its rate forecasts and started to sell stocks...

Bank stocks did not like The Fed's dovish message, as the  BKX   got hammered.

10Y yields are now trading where the 2Y yield was just 15 days ago, pushing down to 2.52% handle - the lowest since Jan 2018...and 30Y yields tumbled back below the 3.00% level to the lowest since Jan 7th...

The Dollar Index crashed to its lowest since early Feb - perfectly back to the Jan FOMC meeting levels...

Gold was smacked lower on huge volume before the FOMC, breaking back below the $1300 level, but the über-dovishness prompted huge volume buying in precious metals, sending gold soaring...

This  chart-filled  commentary showed up on the  Zero Hedge  website at 4:01 p.m. on Wednesday afternoon EDT [And as Bill King said in his Thursday morning commentary: "CNBC's Pisani said the market believes that all major central banks "have the backs of traders". We concur; and it is disturbing and disgusting."]

"Slowing international macroeconomic conditions" is just a fancy way to say that the global economy is in big trouble.

For months, I have been warning that economic conditions are deteriorating, and we just keep getting more confirmation that we are facing the worst global downturn since the last financial crisis. For the second time in three months, FedEx has slashed its revenue forecast for this year. In an attempt to explain why revenue is declining, FedEx's chief financial officer placed the blame squarely on the faltering global economy. The following comes from CNBC...

The multinational package delivery service reported declining international revenue as a result of unfavorable exchange rates and the negative effects of trade battles.

"Slowing international macroeconomic conditions and weaker global trade growth trends continue, as seen in the year-over-year decline in our FedEx Express international revenue," Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer, said in statement.

The use of the word " trends " implies something that has been going on for an extended period of time, and obviously FedEx doesn't expect things to get better any time soon if they have cut profit projections twice in just the last three months.

And FedEx certainly has a lot of company when it comes to having a gloomy outlook for the global economy. In one recent article, Bloomberg boldly declared that the global economy is in the worst shape it has been "since the financial crisis a decade ago".

This  longish, but worthwhile  commentary by Michael Snyder, appeared on this Internet site very recently I would think, but there's no dateline. I found it embedded in a  Zero Hedge article that was posted on their website at 10:0 a.m. EDT on Wednesday morning. It comes to us courtesy of Brad Robertson.

David's Commentary:

Jim Cook is one of my closest friends.  We talk several times a week.  He was my mentor in the 80s and has been one of the leading proponents of silver for many years.  Ted Butler interviews Jim and by now you all know about Ted’s theory that JPMorgan controls the silver market – for now, but that may be coming to an end.

Q : A minor analyst recently remarked that he didn't believe any of the claims you make about market manipulation and called it conspiratorial stuff. What do you say about that?

A : That's the main reason my arguments have never caught on in a big way. Nobody wants to be associated with a conspiracy. However, I draw my conclusion from government data like the Commitment of Traders report and the Bank Participation report. There's nothing conspiratorial about the data and my conclusions are factual.

Q : You have cast JPMorgan as the main villain in a market manipulation of silver. Hundreds, maybe thousands of people have queried the main regulator, the CFTC, about this manipulation and they have never responded to anyone. Are they writing us all off as conspiracy nuts?

A : They would probably like to. The Justice Department just indicted a JPMorgan trader for spoofing and indicated their investigation of this highly manipulative tactic was ongoing. Normally this comes under the jurisdiction of the CFTC. Why did they miss or ignore this practice when I told them about it a hundred times? We need an explanation.

Q : JPMorgan would certainly claim they are doing nothing wrong.

A : For ten years they have held the largest short position on the COMEX and in collusion with other banks, they have acted to suppress the price. Meanwhile they have accumulated a vast hoard of physical silver in their own COMEX warehouse and elsewhere. I call this an illegal market manipulation on steroids. Somebody please tell me where I'm wrong.

With the latest release by the USGS, silver production in the U.S. is now the lowest in more than 70 years. We have to go all the way back until the year after World War II ended to see U.S. silver production less than it was in 2018. While many reasons can be attributed to the decline, the main factors are falling ore grades and mine economics.

Unfortunately, there just aren't too many economic silver deposits in the United States, especially with the high level of environmental and governmental regulations. Instead of dealing with all the bureaucracy, companies are looking to Mexico and South America to open new silver projects.

Regardless, U.S. silver production declined by more than 100 metric tons last year, or 10% in 2018, mainly due to the ongoing closure of the Lucky Friday Mine in Idaho. The Lucky Friday Mine has been shut down ever since the United Steelworkers went on strike on March 13, 2017. However, the drop off in silver mine supply can't all be blamed on the Lucky Friday Mine. Domestic silver production has been trending lower for the past two decades.

In 2000, the U.S. produced 63.7 million oz (1,980 metric tons) of silver compared to just 29.7 million oz (923 metric tons) last year. Thus, U.S. silver production has fallen by more than 50% in less than two decades. Silver production in the U.S. ramped up significantly during the 1990s due to the McCoy-Cove Silver Mine in Nevada. At its peak, the McCoy-Cove Mine supplied 20% of the total U.S. silver production.

This  chart-filled silver-related  article appeared on the  Internet site on Wednesday sometime -- and I thank Brad Woodward for pointing it out.

David's Commentary:

This is a very good reason to be long gold and silver NOW. As soon as the Fed announces it has no choice but to go back to printing money to buy bonds, gold will be off to the races.  That policy was the spark that ignited the huge gains in precious metals 10-years ago.

Zero Hedge
The Fed made a surprisingly dovish  announcement  on Wednesday, stating that aside from keeping rates unchanged this time around, it is also not planning on raising rates at all this year, which is a significant shift from precious expectations of at least two more rate hikes. 
The Fed cited slower global growth as well as risks, such as Brexit and the U.S.-China trade war.
Quote of the Day:

As all the various and sundry pundits have pointed out, the Fed has now totally prostituted itself to the equity and bond markets. And as Bill King said in this morning's edition of the  King Report  this morning..."CNBC's Pisani said the market believes that all major central banks "have the backs of traders". We concur; and it is disturbing and disgusting."
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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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