October 30, 2019
The Miles Franklin Newsletter
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New Century Planning Is Inviting You To "Two" Great Presentations With Andy Schectman!

In addition to being a much-needed diversification to your overall portfolio, silver (and gold) offer you potentially explosive upside from today’s depressed levels, and have proven to be excellent inflation hedges over time. With our national debt at $22 trillion and rising fast, and with record debt levels in the economy for autos, mortgages, student loans and credit cards, we think everybody needs at least a dose of precious metals. 100 years ago, one ounce of gold bought a man a good suit—today, at the $1510/oz. level, it still does! 50 years ago, one ounce of silver bought you 5 gallons of gasoline-today, at $17.77/oz. it still does! Your dollar buys less and less at the food store and elsewhere over time, but gold and silver preserve your purchasing power. 
As we did for the presentations we conducted this past spring, we are flying in Andy Schectman as our guest speaker. Andy is the president of Miles Franklin, which is a large precious metals dealer in Minnesota, now in their 30 th year. Andy is a sought-after speaker and expert on this subject, both here and internationally. 

Please let us know if you can attend one of these very compelling dinner presentations by calling us at 1-844-921-2400 or by emailing us at [email protected] .

( See the menu on the next page-seating is limited to the first 50 people)
“Why You Should Add Some Precious Metals to Your Portfolio”
This dinner will be held at the Bella Vista County Club

Friday November 1, 2019
6:30-9:00pm and
Saturday November 2, 2019
Tableside Starter  
Fresh Tomato Bruschetta
Cold Platter Gallery Salad Station
Fresh Seasonal House Salad
Antipasta Salad
Fresh Mozzarella & Tomato & Basil
Buffet Selection
Chicken Cordon Blue
Salmon Florentine
Beef Tips With Mushrooms Port Wine Demi
Penne With Peas & Italian Pancetta
Accompanied With
Fresh Roll, Herb Roasted Potatoes, Seasonal Vegetables
Coffee, Tea, Soft Drinks, Cookies And Brownie Display

This dinner will be held at Lili’s Bistro

Friday, November 8, 2019
7:00 - 9:00pm and
Saturday, November 9, 2019
6:00 - 8:00 pm
Lili's Bistro
251 Pascack Rd
Township of Washington, NJ 07676
(201) 664-5454
The Buffett menu
 Cold Appetizers Station
Mixed Greens Salad
Caesar Salad
   Tomato & Mozzarella
 Cold Appetizers
  Hot Appetizers Station
  Fried Calamari
  Eggplant Rollatini
  Stuffed Mushrooms
 Dinner Station
   Sliced Steak
   Grilled Salmon
    Chicken Francese
            Dinner Sides of Rice, Vegetables & Roasted Potatoes
      Assortment of Desserts Station
From The Desk Of David Schectman
The big shorts will either succeed in manipulating prices lower or they won’t, but if they do succeed I still believe it will be the last such rigged selloff. – Ted Butler

The Greater Depression will likely hurt consumption of base metals but it's going to help gold; I’m reasonably confident gold is going to be re-instituted as day-to-day money. I’ve touched on various factors on the base metals, but I’m generally much more bullish on gold.

All of the world’s governments are continuing to print up money by the bushel basket full. Not just the US, but all over the world. And as this goes on, it's going to evidence itself in retail inflation. At the same time both stocks and the bond markets, which are at all time highs, could collapse. People will panic out of securities. Where are they going to go? I think they are going to panic into gold. And gold mining stocks in general, and small explorers and developers in particular, should be huge beneficiaries. I’m a buyer. – Doug Casey

Investment markets will soon reflect the risks in the financial system. Stock markets are likely to fall heavily this autumn and the precarious month of October isn’t over yet. But potentially the fall might not happen until early next year. But the risk is there today.
The dollar is extremely weak. In spite of paying the highest interest of any major currency, the dollar is now weakening and is probably starting the final leg to ZERO.

Finally, the precious metals have merely just started to reflect the risks in the financial system. The small correction that we have just seen is finishing. But no use worrying about these small movements in the metals. Physical gold and silver will soon start their journey to multiples of today’s prices. But more importantly, they will be life savers as the financial system crumbles. – Egon von Greyerz

According to MarketWatch, (the) “Fed says it will start to buy treasury bills next week to ease money market pressure”. Currently the FOMC has approved purchases at an initial pace of 60 billion per month. The Fed will also extend its deadline for an “overnight and longer-term repurchasing agreements to ensure that the supply of reserves remain ample and to mitigate the risk of money market pressures.” 

There is dissension amongst analysts with some including myself arguing that these purchases are simply a mild form of quantitative easing, while others except the definition of this action by the Federal Reserve in which they state emphatically that they have not begun another round of monetary, or quantitative easing. 

Lastly market participants will focus more long-term on the upcoming meeting in Chile where the leaders of both China and the United States will meet face to face and hopefully sign the agreement which was hammered out in Washington DC earlier this month. 
These three upcoming fundamentals of events will profoundly influence and shape the future market sentiment for both risk on and safe haven assets. – Gary Wagner

“We are on the cusp of the most historic gold and silver price rallies in our lifetime. Don’t pay attention to the short-term volatility. In the next 12 months we are going into one of the most historic silver markets and gold markets that we will ever see… based on several macro events,” - Ivan Bebek, executive chairman of Auryn Resources
David's Commentary (In Blue)

Gold has to close above $1,525. If we can close the month of November anywhere near $1,550, those expectations of the $1,600 year-end target have a chance. Or, it will come early next year. There is an old saying; you climb the stairs on the way up and take the elevator down. In other words, moving up is a slow process and the way down is rapid. Gold and silver are in the early stages of climbing the stairs on the way back up. $1,525 then $1,550 then $1,600 gold and for silver the next steps up are $19, then $20.

We are in store for some historic changes. I believe that odds are great that the stock market won’t merely correct - it will crash. The economy won’t slip into a recession - it likely will sink into another Great Depression. Gold and silver won’t just move up - they will rapidly ascend to record highs. There is simply too much debt for the system to absorb.  Debt is always paid - either by default or by inflating it away. Peter Shiff says….
Most people were in denial, just like they are today and the economic collapse that is going to follow the bursting of this bubble is going to be far more dramatic.”
The reason it will be worse is because in addition to dropping interest rates to zero and keeping them there for a whopping seven years after the ’08 crisis, the Fed also employed quantitative easing, or QE. It was a bold, drastic monetary policy at the time, running three rounds of bond buying (known as QE1, QE2 and QE3) to pump cash into the economy.
The Fed said it would eventually be able to normalize rates and shrink its balance sheet, but as we’ve seen the past few months, it has stopped shrinking its balance sheet, is again lowering rates and once again employing a form of  “stealth QE”  that the Fed refuses to call … QE.
And since the Fed has encouraged all of this debt, it can’t allow rates to rise to normal levels. So, I kept warning that these policies were going to be never-ending, that it would be QE infinity, that it would never stop.

But the difference this time is it won’t work because we’ve never been able to properly normalize.

The belief that the policy worked was completely predicated on the fact that it was temporary and that it was reversible, that the Fed was going to be able to normalize interest rates and shrink its balance sheet back down to pre-crisis levels,” he said. “Well, when the balance sheet is $5 trillion, $6 trillion, $7 trillion, when we’re back at zero (interest rates), when we’re back in a recession … nobody is going to believe it is temporary.

Nobody is going to believe that the Fed has this under control, that they can reverse this policy. And the dollar is going to crash. And when the dollar crashes, it’s going to take the bond market with it and we’re going to have stagflation. We’re going to have a deep recession with rising interest rates and this whole thing is going to come imploding down.
I have had discussions with people I know in commercial real estate, in retail and in the precious metals businesses. Business is very slow with everyone I talked with. Not much is happening in the economy, in spite of Trump’s optimism. The dollar, oil, the stock market, gold and silver, wherever you look, nothing much is happening. All the markets are in a holding pattern. With the daily headlines talking about the impeachment of President Trump, the uncertainty of Brexit and global tariffs its very unsettling. People know something bad is brewing. If the economy is strong then why is the Fed cutting interest rates and dumping a hundred billion at a time into the Repo market? Everyone is waiting to see how this sorts itself out. Deep down, people sense that something isn’t right and they are not spending money until they see how it all plays out. My guess is it won’t play out well at all. I have my belief on how this is going to end. Last week I purchased another 6 silver mint boxes. My physical silver holdings are at a record high. I store my silver in our storage program with Brinks in Canada. I don’t need to wait to find out how this ends up. For me, the fat lady has already entered the stage. 
Greg Hunter
By Greg Hunter’s   USAWatchdog.com   (Early Sunday Release)
Economist and money manager Michael Pento says the recent Federal Reserve about face in policy with cutting rates and new QE (money printing) means only one thing. Pento explains, “So, the Fed changed their mind, panicked, the Fed panicked. They not only stopped raising rates, they now cut rates twice, and they are going to cut rates again at the end of this month. They are also fully back in a massive QE. They have a $130 billion revolving repo facility shoving $130 billion every night, rolling it over, trying to re-liquefy the banking system and back into QE–$60 billion per month. At the peak, it was $85 billion. So, they are almost back to the peak of QE (during the Great Recession). They did not scale in, the Fed went to $60 billion right away.”

Why the sudden burst of money printing when we are being told the economy is fine? Pento says the Fed is panicking to stop a “depression.” That’s right, a depression. Pento contends, “I am on record saying given the extent of the asset bubbles that we have today . . . household debt is at a record high. Corporate debt is at a record high, up 60%. The national debt was $9 trillion prior to the Great Recession and is now $23 trillion. Total non-financial debt is now $53 trillion, and it was $33 trillion prior to the Great Recession. . . . Given all these imbalances and deformations, the Fed knows we are not going to have some mild recession. If they don’t re-liquefy the money markets, the same thing that happened back in 2008 would happen today, only the stock market was only a 100% of GDP and today it is 150% or one and a half times the economy. So, the plunge in the stock market would be huge and from a much higher level. Back in the Great Recession, unemployment claims spiked. We had millions of people laid off, and the same thing would happen today only it would be much worse.”

Peter Schiff: "Gold Is Going To Be Money Again" Because Of Gigantic Global Debt Time Bomb
Greg Hunter’s  USAWatchdog.com,
Money manager Peter Schiff says the Federal Reserve has already started a new money printing program that continues to expand the debt bubble and keep global markets propped up. This started abruptly last month in what is called the “repo market,” where the Fed provides liquidity for traders of short-term money or overnight funding.

Ed Steer
It’s print or die
An "engineered charade" is what Gregory Mannarino calls the financial system and markets.
The die is now cast...it's "Print...or Die" until the entire financial system crashes and burns...like it would have yesterday without the PPT around. This will continue as long as they can keep the wheels on everything -- and the investors believing that everything is still OK. The lies will continue to come from the White House, the Fed and Wall Street until what's left of their credibility is totally destroyed.
As the famous quote goes "If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension the truth becomes the greatest enemy of the State."

Ted Butler
The Return of the Silver Whale?
I’d like to follow up on an issue I first raised with subscribers last week, namely, the possible reemergence of the silver whale in COMEX silver futures. I want to preface this by openly acknowledging I may be premature in concluding a big buyer has begun to accumulate large quantities of silver futures contracts, but the matter is important enough, in my opinion, to warrant attention now. This can be a complicated issue, so please don’t hesitate to contact me with any questions you may have.

Le Metropole Café
Daan Joubert
US Dollar Index Last = 97.599

The reversal lower off the top of bear channel ABC could have made one think that the bullishness in the dollar – against the opinion held by so many commentators that the dollar is due for a major correction, if not a hyper one – might finally end, to have the bearish opinion proved correct. Based on last week’s performance, the end of the dollar, like Mark Twain’s death report, is “greatly exaggerated”; at least for the time being. 

The bond market saw yields spike higher during October, but not nearly enough to signal a crisis. The yield on the 10-year Treasury on Friday closed at the top of its bull channel, as if waiting to see what comes out of this week’s FOMC meeting to set a signpost for a new direction – a reversal lower to remain within the steep bull channel, or will it be a break out of the channel to extend the recent spike to even higher yields. What happens will be a pointer to how the battle between Trump and the Fed is going and this should set the stage for how the bond market ought to develop during the early part of 2020. 

The trade war is blowing hot and cold with no real end in sight. At least it looks as if Trump has learnt an important lesson from WWII, to avoid repeating the mistake Germany had made by starting a war on a second major front (at least so far). On the surface it looks as if a shooting war with Iran is on a back burner for the time being while the trade war fills the front pages in the media. Or could it be that the hawks in favor of a war with Iran have been kicked out of the nest to where they cannot dictate policy on a possible new war. 

Interesting times. Also in the ongoing war against gold and silver. The attack on the metals that ended the steep rally in their prices early in September must have been a panic reaction when the light selling into demand – as is evident from the table below - did not stop the rally. Then the resilient market refused to fall any further and the Cartel had to rely on holding the prices in a narrow range to try and entice the hedge fund algos to anticipate a new bear trend to emerge. 

Last week it was discussed here at the hand of the open interest and commercial net short position that this tactic was beginning to have success. Unfortunately for the Cartel, a look at what has happened during October made the conclusion last week a bit moot. The change over only two weeks is not sufficient to tell the story. The full picture only emerges when the changes since the high in the rally, with data from the August 30 CoT report included, are explored.
Table of CoT and Comex data and estimates
The table above provides data on changes in the gold and silver open interest since the end of August, as well as the net short position of the Commercials in the CoT since that date. From this data, which are offset by three days as the CoT report is as at Tuesday August 27, the Commercials’ approximate total short positions in gold and silver can be calculated. It is assumed as an approximation the difference between the net short position of the Commercials and total OI short position in gold and silver is split about evenly between the hedge funds and the Commercials. While this is not necessarily accurate, the relative changes in the Commercial total short positions over time are illustrative.

The rather low open interest in both gold and silver at the end of August relative to the more recent figures causes one to speculate that the usual effort to contain or reverse the bull trend by heavy selling had not been made or sustained during the rally. Then, a month later, the gold OI had jumped by about 150 000 contracts or 30%, while the silver OI hardly changed. 

This supports earlier conclusions that the Cartel is wary of selling more silver short and is trying to influence the price of silver by hammering away at gold. Because the timing between the open interest and the Commercial net short positions in gold and silver is off by three days, the net short values do not properly reflect what happened from Wednesday to Friday last week, including the large jump in prices on Friday, before slipping back again.

On the estimated figures in the final two columns, the Commercial are maintaining their short position in silver with a stable to gradual rising trend. The picture for gold looks dramatically different. At the end of August gold’s OI was 467 000 and, after the initial jump of about 150 000 contracts to the end of September and the heavy buying last week, the OI now shows an increase since August that is just short of 200 000 contracts. 

However, while the overall OI jumped, the Commercials managed to reduce their net short position in gold by almost 40 000 contracts since late in August and their net short position in silver by almost 10 000 contracts. 

Nevertheless, an interesting change last week that must come as a bit of a surprise to the Cartel, is that the hedge funds have increased their short positions in silver by 1905 contracts according to the new CoT report, last week, but increased their long positions by 4659 contracts. In gold they added 3547 contracts to their long positions, while decreasing their short positions by 2558 contracts, for a swing of more than 4000 contracts. They are not falling for the trap to go much shorter at these elevated prices for gold and silver. 

Nevertheless, probably the bulk of the OI changes during last week happened only during the last two days and will only be reflected in next weeks CoT report. It will be interesting to see whether the Commercials continued to stand mostly on the sidelines or whether they were called upon to intervene as a reflex reaction to the increasing metal prices.
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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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