August 28, 2019
The Miles Franklin Newsletter
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From The Desk Of David Schectman
Sunday night showed market intervention on a mammoth scale. Gregory Mannarino and Bill King were both disgusted...with both pointing out the huge reversals in U.S. stock futures in overnight and morning trading on Sunday/Monday...from down 300 points, to up 200 by the open in New York. Add to that to the obvious capping and engineered price declines in gold, silver and the usual 'gentle hands' in the dollar index -- and everything was all sweetness and light by the time trading ended on Monday afternoon...including closing the gold price at  precisely  unchanged on the day.
But that was only for this one day. And with interest rates zero-bound, or lower...they won't be able to keep up this charade forever. The powers-that-be know all too do you by now, dear reader...that they moment they stop intervening; the entire financial system would melt down in a New York minute. That being, as Johnny Carson once said, "...the interval between a Manhattan traffic light turning green -- and the guy behind you honking his horn."
Of course the longer they delay the inevitable, the worse the final denouement will be when it finally does manifest itself...either by [as I keep repeating] circumstance, or design . – Ed Steer
At $1,540, anyone who got out will probably jump back in, anticipating another move up above $1,600." - RJO Futures senior market strategist Phillip Streible

As the silver price rally continues, mine supply from three of the top producing countries fell significantly this year. Peru, Chile, and Mexico all reported declines in silver mine supply in the first half of the year, with Peru suffering the largest dropoff. With these three countries accounting for 45% of total global silver production, a reduction in mine supply can impact the overall market.

According to the mine supply data reported by each country, Peru’s silver production is down 10% in the first half of the year, while Chile fell 7% and Mexico was lower by 4% (Jan-May). The total decline in silver production from these three countries in just the first half of the year is 12 million oz (Moz). - SRSrocco
David's Commentary (In Blue):

I ask a simple question: Why would anyone go toe-to-toe with their banker? Is this not insane? This is a fight no one can win but what we seem to have here is a President whose hubris will not allow compromise - and a country with a long-standing tradition of always saving face. There will be no “Last Laugh.” There will be no winner. 

"China’s will to defend the core interests of the country and the fundamental interests of the people is indestructible, and will not fear any challenge. History will prove that the side on the path of fairness and justice will have the last laugh."
Every week it seems there is another threat to the dollar’s status as the world’s petro dollar and the world’s reserve currency. 
Everything the alternative media has warned about for years; all the outcomes other people have called "conspiracy theory", will soon be treated as "common knowledge"... 

Russia's Rosneft, one of the world's top oil producers and exporters, has notified customers that future tender contracts for oil products will be denominated in euros not dollars, five trading sources told Reuters.
The move, which could come as soon as this year is likely to be seen as an attempt to offset any potential negative impact of U.S. sanctions on Russia.
Rosneft, which accounts for over 40% of oil output in Russia, produced 45.8 million tonnes of oil products at home in the first six months of this year - from diesel and gasoline to fuel oil and petrochemicals.
Around half was exported to west and southeast Europe and to Asia, according to the company's own data.
It is my view that inflation is necessary and the Fed can never stop printing dollars. This is nothing new. Decades ago, Richard Russell coined the phrase, “Inflate or die.” Then Jim Sinclair followed it up ten years ago with his phrase, “QE to Infinity.” The stage is set for the dollar to tumble and lose a great deal of its purchasing power. He goes even further, pointing out that the debasement is in all currencies as we are now embroiled in a global currency war.

The recession is just one significant stock market decline away. Here is an interesting fact that you won’t find in the MSM. The total of federal entitlements plus interest expense on the debt amounts to 103% of total tax receipts in official income. The US Government now runs a complete show of operations in deficit. The US consumer spending is paralleling the major stock market indexes. The stock market is the economy. Your focus should be on the US dollar. The dollar is about to be the odd man out and it is being readied for boycott and isolation. Citigroup, Bank of America and JPMorgan are the primary buyers of US Treasury Bonds. They are currently buying 25% of the budget deficit. There is no foreign bid on US Government debt due to concerns over the global boycott. The end result of this is QE to infinity (thank you Jim Sinclair). The result will be an upward explosion in the price of gold. Expect gold to reach $2,000 on its way to $5,000. This could happen by the summer of 2020 if the Fed caves in quickly and emphatically. 
According to Jim Willie:

Rapid changes to monetary policy based upon failure and desperation will result in accelerated gold price increases over the course of the next several months. The consensus will be the easing in monetary policy will not provide a solution, and systemic breakdown is occurring. Panic will increase, amidst lies, distortions, and assurances. The conclusion among pundits will be that the King Dollar era is to be phased out and the new gold standard era will be adoptee, implemented, and blessed as good.

European band and financial services stocks closed below their lows of 2011, 2012 and 2016. The Western systemic bank insolvency problem is very widespread. Andy big bank failures will cause a panic and result in sudden central bank action. The gold price would react in extreme favor.

According to Kyle Bass, the United States will follow the rest of the world to zero interest rates. It means the end of the road for their staggering debt and the end of the road for their paper money. Next comes the ascension of gold.

According to Jim Willie (Hat Trick Letter) we are in the third leg (an up leg) in bullish silver rally. He states that silver will continue to rise to about $19.50 in October and then consolidate back to $17 before it resumes its upward move to $21 in December or January. Silver will reach $34 in October 2020 and accelerate toward $55 from there.

Recently the gold to silver ratio was 93.44 to 1. We have been urging our clients since the first of the year that silver was too cheap and that they should consider swapping some of their gold for silver. Many followed our advice, but then, the ratio headed UP instead of DOWN and a few people wondered why we made the recommendation. Well, it’s now back where it was when we made the recommendation and it’s headed DOWN, as it must based on how undervalued silver really is. 
Silver just seems cheap relative to most everything else…

Consider the gold to silver ratio reached a high last seen only for moments during the 90s at about 100 ounces of silver per one ounce of gold. 

The ratio now stands near 84 to 1. It’s still at an extreme, especially when you consider the historic norm is closer to 67 to 1.
Ed steer says It’s still remains to be seen if JPMorgan et al. can pull off another round of engineered price declines in both silver and gold, especially considering the current financial and monetary environment that they're facing. However, the current structure of the COT Report may not matter any more. But the amount of physical silver [and gold] that's disappearing into all the world's ETFs and mutual funds at the moment shows that the walk towards physical precious metal ownership is quickly turning into a run. The panic into them is yet to come.

As the silver price rally continues, mine supply from three of the top producing countries fell significantly this year. Peru, Chile, and Mexico all reported declines in silver mine supply in the first half of the year, with Peru suffering the largest drop-off. With these three countries accounting for 45% of total global silver production, a reduction in mine supply can impact the overall market.
According to the mine supply data reported by each country, Peru's silver production is down 10% in the first half of the year, while Chile fell 7% and Mexico was lower by 4% (Jan-May). The total decline in silver production from these three countries in just the first half of the year is 12 million oz (Moz):

Another long-time JP Morgan precious metals trader busted by the U.S. Justice Department this week.
In the last three months, we have witnessed over 100+ million troy ounces of silver bullion flow into three significant silver amount of silver bullion nearly equivalent to both the 1980 Hunt Brothers and late pre-2000 Warren Buffett Berkshire Hathaway silver hoards.
This week, we speak with multi-decade silver analyst Ted Butler about these big silver news items and more.
We discuss who is possibly making a multi-billion dollar move into the physical silver investment market and what this kind of movement may portend for some of the precious metal derivative trading entities on the short side of silver moving ahead.
This  39-minute audio interview  with Ted begins at the 2:48 minute mark...with host James Anderson...and was posted on the  Internet site very late on Friday evening -- and it's a  must listen  in my opinion. Another link to it is  here .
Silver To Push To $22 An Ounce, Drive Gold Higher - Bloomberg Intelligence
( Kitco News ) - A rally in silver could be the next catalyst that drives gold prices higher, according to one market analyst.
In research notes released this week, Mike McGlone, Bloomberg Intelligence senior commodity strategist, voiced his bullish outlook for silver. He said that he sees potential for prices to push to $22 an ounce.

“The elevated gold-silver ratio and its potential for reversion favors advancing silver,” he said. “With gold unchanged near $1,500 an ounce, revisiting the mean would imply a silver price near $22 an ounce.”

However, it won’t be an easy ride higher. McGlone noted that silver, currently at above $17 an ounce, is trading at an important pivot level. “If prices don't sustain above $17, the indication would be failure,” he said.

Greg Hunter
Trump Fights Fed, Buy Gold, More MSM Propaganda
If you think the latest stumbles in the U.S. economy were caused by the so-called trade war with China – think again. The reason why the economy is sputtering is the Federal Reserve. It raised rates only 2 times during the 8 years of the Obama Administration. In the first 2-½ years of the Trump Administration, it raised interest rates 7 times. On top of that, the Fed started what it calls “quantitative tightening” (QT) during Trump’s first few months in office. QT takes liquidity out of the economy. At its peak, the Fed was burning $50 billion a month that businesses and consumers could no longer have access to. So, when you hear the President blame the Fed for economic troubles, rest assured he is correct.

Gold, according to the 10-year Gold Chart, has little resistance all the way up to $1,600. At the beginning of the year, who would have bet that gold was moving in on the $1,600 level? It was bouncing around $1,300 for five months – and then….. But that’s the way things happen. Things are until they aren’t. The gold market is full of surprises, and it looks like the surprises from now on will be mostly UPLIFTING. We’re up around 20% YTD as of today. Not bad. A good start.
Casey Daily Dispatch
Gold just struck a fresh 52-week high.
It’s now up 19% in the past three months alone.
Take a look…
As I’ve been telling you in the Dispatch… I believe this is just the beginning of what I’m calling “ the mother lode of all gold rallies .”

In a recent issue of my Strategic Investor newsletter (which subscribers can access  here ), we said we expected a huge rally. We pointed out that we couldn’t find one fund manager positive on gold. Now, we can’t find one who thinks the recent run in the gold price is real. That tells us there’s more to come.

You see, at the beginning of a new bull market, even the most loyal industry veterans don’t trust higher prices. At the end of a bull market, every fool tells you there’s more to come.

There’s more to this new bull market in gold than lines on a chart, though.

Last week, President Trump took the U.S.-China trade war to a new level, tweeting that he wanted American companies to pull out of China. Tensions are higher than ever, and gold spiked on the news.

But that’s certainly not the only reason we’re bullish today.

Political dysfunction and ballooning deficits also set the stage for gold today. The three largest central banks in the developed world recently declared they’ll do anything to stimulate their economies. That’s central bank lingo for “create more money.”

Keep in mind; the Federal Reserve’s balance sheet was $800 billion before the 2008 crisis. It rose more than five-fold to $4.5 trillion by the end of 2014.

The Fed promised to “normalize” its involvement in the U.S. economy. After reducing its bloated balance sheet by a mere 15%, it cried uncle, promising to reverse course.

Gold sniffed that in advance of the announcement. As plans for the Fed’s next monetary ruse formalize, we expect gold to know first.

Back in December,  I said gold would hit $1,500 an ounce . My call was spot on. Gold’s currently at $1,533 an ounce as of this writing. And I see bigger things ahead… Everything looks to be in place for a massive gold rally from here.

If you missed out on the first boom, this is your second chance…

If you don’t own any gold, start with buying physical ounces (more on that below).
After owning physical gold, you should consider speculating on select mining stocks, which can provide leverage to a rising gold price.

Let me explain…
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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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