The Miles Franklin Newsletter
|
|
From The Desk Of David Schectman
|
|
Crash conditions will likely inspire more and more people to demand physical delivery on precious metals over the course of 2020, as fears of paper market shutdowns due to the pandemic grow. Do not be surprised if demand for coins and bars spikes within the next six months while interest in the ETF market declines. Also, do not be surprised if certain banks start refusing to honor paper certificates and refusing to deliver physical gold to investors.
This will cause some confusion in terms of “real” price. Ultimately, real price will be determined by street price and physical supply.
If you can’t find physical for sale easily, then the street price will be very high when you do find it
– Brandon Smith
As Ted mentioned in his mid-week commentary on Wednesday..."Certainly the silver departing the SLV wasn't cast out on the streets of London, un-owned and unloved. Somebody now owns it and if I have to tell you who that new owner most likely is, then you haven't been paying close enough attention."
- Ed Steer
JPMorgan decided in 2011 to buy as much physical silver and gold that it could for as long as it could, since it knew prices were depressed by its short selling scheme. Over the next 9 years to the present, JPM accumulated at least 900 million oz of physical silver at an average cost of $18 and 25 million oz of gold at an average price of $1200.
– Ted Butler
The Dollar is down, and the Euro and Yen up.
And those un-surprising events should now begin to have wave impacts and upset factors in
other markets that might have depended upon further Dollar strength.
Gold should especially benefit.
Gold finally has Dollar weakness as a wind at its back.
– Momentum Structural Analysis
Gold, which—unlike people and our economies—is immune to the virus. It is the currency of last resort and avoids the concern that paper currencies could be a medium of transfer for the virus.
– Goldman’s Head of Commodities
|
|
David's Commentary (In Blue):
Are you confused with so many contradicting stories appearing about the Contra Virus? Is it a Pandemic as dangerous as the 1919 Spanish Flu? Is it just another flu and we are all over-reacting? Let me make it easy for you.
Prepare for the worst and hope for the best. There is no downside with that approach.
Here are two quotes that you should find very disturbing:
|
|
At the current rate of spread, conservative math calculates that by May, the current US covid-19 case count of 361 infected will jump to *4+ million*.
That is the power of exponential growth.
If that indeed happens, our hospitals and clinics will be utterly overwhelmed. Forget getting treatment for the coronavirus or ANY kind of health emergency.
It’s been said about covid-19: “Most of us are going to get it and all of us are going to know someone who dies from it.” That prediction is looking more and more accurate each day.
– Adam Taggart Peak Prosperity
An infectious diseases expert at the forefront of the search for a coronavirus vaccine said on Friday that it was the most
"frightening disease"
he's ever encountered, and that "
war is an appropriate analogy
" for what the country is facing, as
"50 - 70 percent of the global population"
may become infected.
Dr. Richard Hatchett, who sat on the White House Homeland Security Council in 2005 - 2006 and was a principal author of the
National Strategy
for Pandemic Influenza Implementation Plan, and currently heads the Coalition for Epidemic Preparedness Innovations, told the UK's Channel 4: "
This is the most frightening disease I've ever encountered in my career
, and that includes Ebola, it includes MERS, it includes SARS. And it's frightening because of the combination of infectiousness and a lethality that appears to be many fold higher than flu."
He feels this way "
because of the combination of infectiousness, and a lethality that appears to be many-fold higher than the flu.
"
He then said that coronavirus has the "potential to cause a global pandemic if we're not already there." –
Dr. Richard Hatchett
|
|
The more I think about the Coronavirus the more it concerns me. I will be 78 this week and Susan will be 75 this fall. Susan had double pneumonia two years ago and an infection in her chest cavity that nearly killed her. Only two weeks in intensive care with massive doses of anti-biotics saved her life. We are in the high-risk group. Most of our clients are over 60 and that is where the death rate is concentrated. I read that there is nothing to worry about – it will be just like a case of the flu and the death rate for younger people is only around 1%. I hate to be the bearer of bad tidings but the death rate for the flu is only 0.1%. For people over 60, especially if they have respiratory issues or diabetes, the rate climbs to 3.4%.
The chances that our kids and grandchildren will be exposed to it, and if they get it, it will be three weeks before the symptoms appear. Does that mean for the next several months we dare not be around our family? Even if we avoid crowds and restaurants and semi-isolate ourselves in our homes, do we also avoid our family too? Have you thought this through?
One of the articles I read said up to 70% of the population will get the virus – and even if the death rate is low for young and healthy Americans, what about us older folks? Like you and me.
There are several articles that point out how once it starts to really spread, in the next few weeks, the health system will be overwhelmed and if we do catch it, will we be able to get the special care in an intensive care unit that could be the difference between life and death? I can’t tell you how many people I know tell me, “I’m not going to worry about this and I’m not going to change my life because of it.” Well, I AM. I’ve waited too damn long for this gold bull market to arrive to let a virus spoil the party for me.
They finally figured out the origin of the Coronavirus. It didn’t start in a Chinese exotic food market. How foolish of me not to have figured this out myself.
|
|
|
|
It's perhaps unsurprising that in their desperation, the regime is appealing to the people's most base impulses.
|
|
The world we live in – it has become so political. I sent the Zero Hedge article,
All Hospital Beds in the US Will Be Filled With Patients By About May 8
th
Due to Coronavirus
to my best friend through high school and college and here is his reply.
|
|
|
|
“Hi Dave, Zero Hedge doesn't seem to have a very good reputation for credibility – considered far right by some/many and other stuff including being a Trump supporter.”
|
|
How do I reply to something like that? I kept it simple. “Jim, there is nothing political about Coronavirus. It could care less whether you are Liberal or Conservative.”
This is what we have come to! Liberals (most) refuse to consider any information from a conservative publication like Zero Hedge and conservatives (most) won’t consider any information from the New York Times or Washington Post or CNBC? All of the Liberals I know, even those with a lot of money, would vote for Bernie before voting for Trump. They would vote for a socialist before voting for Trump in spite of the fact that their stock portfolio, under Trump, has never been higher. I am not political. It’s not unusual for me not to vote at all. I voted for Obama the first time, and I voted for Trump. Actually, I didn’t vote for Trump, I voted against Hillary. Most Democrats will vote for anyone but Trump. That is common – people vote for the least objectionable alternative. Looking back, the mess we’re in today is the result of bad choices from both parties and frankly, I don’t have much faith in either of them. And that is one of the reasons I own gold.
If you follow technical analysis, here is what is in store for silver. if silver touches
$18.82
again, it is unlikely to stop there. Just reaching that level for a third time will yield the breakout to 19.63 this month or $19.60 for April. That would be nice.
At 10:00 P.M. on Sunday gold has just hit $1700.
|
|
Well, they didn’t let that last for long – it’s now 12:25 and gold is $1,671, down $10. The PPT is at it again. They are petrified that gold will continue to rise while the stock market, dollar, oil are getting slaughtered.
|
|
|
|
Stock futures tumbled in overnight trading Sunday as investors continued to brace for the economic fallout from the spreading coronavirus, while a shocking all-out oil price war added to the anxiety.
Futures on the
Dow Jones Industrial Average
plunged 1,198 points, implying an opening loss of 1,246.78 points at Monday’s open. The
S&P 500
futures and Nasdaq-100 futures also indicated significant losses at Monday’s open. The sharp declines in the futures market signaled more turbulence ahead after a roller-coaster week that saw the S&P 500 swing up or down more than 2.5% for four days straight.
|
|
Oil is down over $13 to $27.96 and the dollar has dropped .85 to 95.25. It was just a short while ago when the dollar was knocking on 100. And then there’s silver. They never miss an opportunity to hammer silver, which as of this moment is down to $16.82. What an incredible buy at this price. I continue to pound the table that silver is headed to $50 and above. Silver is the buy of the century now.
|
|
|
|
Money and Markets
Gold spikes to a nearly 7-year high as investors flee to safety amid coronavirus worries" — Business Insider
If you make the right move today, you could protect — and grow — your wealth many times over.
Just take a look at one of the most recent pandemics: SARS.
In 2001, gold was just $272 an ounce.
By 2011, it had charged all the way up $1,896...
What kickstarted this decade-long rally? SARS.
|
|
|
|
Imagine how high gold could soar if we see similar price action today...
And even that may be conservative.
Because as you'll see, the coronavirus isn't the only force driving gold higher
|
|
|
|
LeMetropole Café
Egon von Greyerz
THIS IS IT!
This is it! The party is over. The world is now facing the gravest economic and social downturn in Modern Times (18th century). We are now entering a period of global crisis that will change the world for a very long time to come. This should come as no surprise to the people who have studied history and also read my articles for the last few years. Many others have also warned about the same thing. But since MSM never talks about the excesses in the world or the risks, 99.9% of people are totally unprepared for what is coming next.
THE 4,000 POINT FALL IN THE DOW IS THE MERE BEGINNING
The 14% fall in the Dow last week and similar in many markets around the world is the mere beginning. I warned investors about this stock collapse in recent weeks.
In my article on Jan 26
, I wrote “Stock Collapse and Gold Surge Imminent” and again
on Feb 9, I said
“The Crisis will Propel Gold and Sink Stocks”. We have last week seen the beginning of the stock collapse with a 4,000-point fall in the Dow. The gold surge is still to come. We are likely to see further strong falls in stocks very soon.
Fundamentally, it has been clear for quite some time that stocks and the world economy are at the end of a secular bull market. The falls in the last week have confirmed that the party is over and that we are now starting a secular bear market that will affect the world for years and maybe decades.
THE DOW UP 40X IN 40 YEARS
The era of printed money and unlimited credit driving asset prices to ever dizzier heights is now over. If we take the Dow as one example, it has gone up 40x in the last 40 years. The average annual return has been 11.53% including reinvested dividends. This means that
an investor in the Dow has doubled his money every 6 years, on average, over a 40-year period! So, $25,000 invested in 1980 would be $2 million today.
The coming downturn will not take 40 years. When bubbles burst, everything unravels very quickly. It could take say 3-7 years for the Dow to come down 90% or more. In 1929-32 it took less than 3 years for the Dow to fall 90%. And the situation today is much more serious when it comes to overvaluations, debts, deficits etc.
STOCKS BONDS AND PROPERTY DOWN >90%
So, the coming economic downturn will see all bubble assets like stocks, bonds and property decline at least 90% in real terms. But although markets might bottom within say the next 5 years, the world economy might go along the bottom for a very long time, which could be decades. As always, historians will let the world know afterwards the extent of the coming downturn.
The chart below shows potential targets for the Dow. In my view the 1970-80 level is more likely than the 2003-9 one.
|
|
|
|
CORONAVIRUS IS NOT THE CAUSE BUT THE CATALYST
Investors are obviously linking the stock market crashes to the Coronavirus but we must remember that the virus is not the cause of the falls but only the catalyst. Stocks around the world have been overvalued on many criteria for quite some time.
The majority of people today are not worried about stocks but instead about the Coronavirus. Most of us don’t understand it since authorities around the world suppress the truth when it comes to numbers of infected and fatalities. China seems never to have told the truth about the virus and many countries have followed suit.
The pandemic is spreading exponentially and it can take 3-4 weeks before it breaks out from the time you are infected. In that time every infected person can meet many hundreds of people. In Italy for example, there were no cases a few days ago and it jumped to 150 in a couple of days and now 2,500 are reported to have caught the disease with 80 deaths.
In Switzerland only 12 cases are reported but that will multiply quickly. All public events in Switzerland with more than 1,000 people have been banned. The Geneva International Motor Show due to start on Monday has been cancelled.
I am certainly no expert but it seems to me that it will be impossible to stop the spread of Coronavirus. Closing all factories, offices, schools, shops, railways, cinemas etc. will paralyze the countries and the world economy. I would not be surprised if in the end governments tell people to continue as normal rather than to quarantine everyone. If the mortality rate is on average not more than 2%, this is a calculated risk that the authorities are likely to take.
To totally close down countries and production, leading to shortages of food and medicine, will probably kill more people over time than the virus itself.
FOR INVESTORS BAD NEWS IS GOOD NEWS – UNTIL NOW
So, whilst ordinary people around the world are concerned with the Coronavirus, investors are focusing on crashing stock markets. Most people are blissfully unaware of the Dow’s biggest point fall ever last week of 4,000 points (14%) or similar falls in other world markets.
Investors love bad news like lower earnings or poor economic figures since this leads to more economic stimulus. So, until a week ago, markets loved the fact that central banks around the world have embarked on what will be the biggest money printing exercise in history. Investors are not concerned about the reasons for the massive liquidity injections which are due to problems in the world’s financial system. Instead, more money printing means more credit and more cash availability for stock market investors. So bad news for the economy has created ever higher stocks reaching the sky.
Clearly, central banks will soon accelerate money printing and the ones that can, like the US, will lower rates. The 1/2% rate cut by the Fed on Tuesday seems like panic action. Since the effects in the US of the Coronavirus have so far been minor, the problems are clearly in the financial system. Lower rates, more repos, more QE etc. There are clearly major problems in the system.
The rate cut combined with money printing might create quick bounces in stocks, sucking everyone in. But this time money printing will only have a very brief effect. Because any correction up will be short lived and the subsequent big fall will be devastating. So, this is definitely not the time to buy the dips. For anyone in the stock market, much better to get out on the bounces.
GOLD AT ALL TIME HIGHS IN MANY CURRENCIES
Precious metal investors are nervous because we are seeing a small setback. This is similar to 2008 when precious metals and the miners initially sold off strongly before they continued the rally. It is possible that the metals will correct further before they resume their uptrend. But the correction will be much smaller than in 2008.
In many currencies like pounds, Australian and Canadian dollars, gold is at the all-time highs. It won’t be long before gold in US dollars will also reach a new high.
There should be no doubt that gold and silver will reflect the coming problems in the world economy and especially the guaranteed currency debasement that will take place due to unlimited money printing.
SELL THE DOW AND BUY GOLD
The Dow/Gold ratio tells the story.
Since 1999, the Dow is down 65% against gold. Almost no stock market investor is aware of this fact. The Dow is down 30% against gold since Oct 2018 and has already fallen 15% in 2020.
|
|
|
|
I expect the ratio to initially each the 1980 level of 1 for 1. What the levels would be is hard to predict but let’s say Dow 10,000 and gold $10,000. Eventually I see the ratio falling below 1 to 1/2 or lower which would be in line with the long-term trend line (not shown).
But even if the ratio fell to 1 only, it would involve stocks losing 94% against gold.
So quite a simple decision. Get out of all stocks as well as other bubble assets and buy physical gold as the best form of wealth preservation and insurance against the worst economic downturn in Modern Times (since the 18th century).
Founder and Managing Partner
Matterhorn Asset Management
|
|
|
|
U.S. Mint Silver Eagle Sales Surge First Three Days In March Due To Global Contagion
When investors become increasingly concerned about the financial system, they rush into physical precious metals. And, this is precisely what we see taking place at the U.S. Mint as sales of Silver Eagles surged in the first three days of March versus the entire month of February. The U.S. Mint hasn’t seen this type of buying for several years.
For the past three years, annual Silver Eagle sales fell below 20 million, reaching a low in 2019. However, that may all change this year as the global contagion spreads, motivating investors to shed paper assets and move into physical precious metals.
For sure, investors should be worried when the Fed starts to do “LIQUIDITY BOMBS” via its Repo Operations as stated by Sven Heinrich, the Northman Trader
:
|
|
|
|
Money and Markets
Sean Brodrick
Strap on Your Silver Spurs to Ride this Precious Metal
Rising fear of COVID-19 has sent the stock markets skidding lower … and gold soaring higher.
The best is yet to come for gold. But buddy, you better start paying attention to silver. I’ll tell you why.
Here’s a chart of gold, silver and the S&P 500 since Feb. 19.
|
|
|
|
Zero Hedge
"War is an appropriate analogy."
...we are
witnessing something that has not been seen in several generations
. It is an event far more destructive than the Great Depression with
market implications beyond what happened in 2008
...
"I think Jay Powell understands that
negative rates are fatal to global financial system.
If we go to negative rates, there will be
capital destruction en masse
..."
The
Fed blew three economic bubbles
in succession. A
deflationary bust
has started...
|
|
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.
|
|
|
|
|
|
|
