The Miles Franklin Newsletter
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From The Desk Of David Schectman
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David's Commentary (In Blue):
This is a must-see interview with Trend Research’s Gerald Celente. He is a street savvy hard-nosed New York Italian who does not mince his words. I love him. I’ve been following him for 15 years. When it comes to his comments on the Fed and economy and gold, we are 100% on the same page. I absolutely agree with him that the biggest impact from coronavirus will be to the global economy. Gerald stated that the World’s Greatest Depression would be upon us in 2021. Now he says, “It’s here.” That is what the hysteria over the virus had done. We are in a global recession and it getting worse by the day. There is no way out – the Fed has used up most of its interest rate ammo and spending trillions of new QE dollars will not fix the global economy or save the stock market. World GDP was already falling precipitously before the virus arrived on the scene. The virus was the needle that pricked the bubble. Watch out below.
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This is another topic I have addressed in the past. A huge boost to the rise in the stock market came from stock repurchases. Looks like that is a thing of the past. The hissing noise you hear is the air coming out of the stock market.
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The single biggest buyer of stock in the past decade is now indefinitely sidelined.
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Here is another video featuring Gerald Celente. Listen to what he has to say. You will love his style and in your face certainty. No one says it like Celente.
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Gerald Celente, sees $2,000 gold and onset of Greatest Depression by early 2021.
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The virus is not the cause – the cause is too much debt and reckless monetary policies courtesy of the Fed (and other central banks). The coronavirus just lit the fuse.
If you asked those who know me well, family and friends, they probably would describe me as someone who sees around corners and is usually right, but almost always early. Well, this time I am not early and I am right.
I have taken a lot of flack from my friends and some of my immediate family for being too negative (about the stock market and the coronavirus). I have been told “you amuse me” and “you are crazy.” This is not funny and it is not to be taken lightly.
Do you want to know what is in store for us? Look at Italy. Look at China. Look at Iran and South Korea. We are Italy – in a few weeks.
Make the time to watch this video by Chris Martenson. He is credible. Really, all you need to know is right here in the video below.
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"If the facts alarm you, the problem isn't with the facts"--Chris Martenson
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This is not a medical newsletter, it is a precious metals newsletter, so what does all of this have to do with gold and silver?
First of all, let me set you all straight on how gold and silver are performing in the midst of the crashing stock market. People keep asking me why gold and silver aren’t doing better with the stock market on the ropes? Just 3 weeks ago, the Dow was about 29,000 on February 21. Silver was 18,50 on February 21. Gold was 1,640 on February 21.
Well, at the close of the markets yesterday (on Wednesday) the DJIA closed at 23,553. Silver closed at 16.52 (highly manipulated price by JPMorgan) and gold closed at 1640.
Forget about silver for the moment, no one is selling physical silver in quantity to cause the price drop, which amounts to
-10.8%.
The DJIA is down
18.8%
and down another 1,000+ points already in the aftermarket coming into New York. Gold, well
gold is exactly the same price
as it was on February 21. It hasn’t gone up (actually it did, but the PPT couldn’t let that happen with the Dow crashing so it has been sold off a bit) but it has held its value. That is what gold is supposed to do in a crisis and this is a crisis, actually two crisis’ that are growing worse by the day. Even if gold would have dropped more, it would be a win. In a market crash or severe bear market the winner is the asset that LOSES THE LEAST.
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Here is what I expect will happen. The global economy is shutting down now. Stock markets around the world are tumbling. Oil is collapsing. Central banks will do what they do – print more money. The Fed will do the only thing it can do, lower interest rates (not much ammo left in their pouch) and ramp up Quantitative Easing in addition to REPO to help support the economy and the stock market. It won’t work. Once the Fed starts monetizing debt and flooding the market with more QE (they have already started with REPO) then gold will rocket up to new heights that will startle you. Why do I think that will happen? Because it happened before.
The Dow peaked at 17,671 in December, 1999. It crashed to 9,252 in March 2009 in the midst of the 2008-2009 financial crisis. Gold was around 750 when the Dow crashed and the Fed instituted QE. Look at the graph below and see how gold reacted to the money stimulus courtesy of the Fed. 45-degree rise that lasted for three years - and gold rose by over 250%. If gold reacts the same way this time, with a starting point of 1650, gold would hit 4,125.
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Now that I’ve gotten that off my chest, I am going to present you with another one of my RIGHT BUT EARLY predictions. I fully expect to be right on this one too.
Use Italy or China as an example. We are them, just lagging behind by a few weeks or a month. What do you see over there? A virtual shut down of everything. Italy, in fact, just suspended mortgage payments (because people aren’t working and don’t have the money to pay the mortgage). Do you think people will be working at the Mint in West Point? Do you expect people to go to work at UPS warehouses or drive a truck to make deliveries? Do you expect US mail deliveries? I fully expect that, for a while, the precious metals industry and virtually all business, will shut down. You will not be able to buy or sell. Let that sink in.
This is the time to act. NOW. If you want or need more gold or silver buy it NOW while you can still get it. It will soon be much more expensive and then unavailable at any price. If you think you need cash now, to get you through the financial disruption, and need to sell gold or silver to get liquid, call us and sell it NOW while we still can handle the order – before the system shuts down. I love my gold and silver but I am prepared for a short period in which even me, a player in the industry, will not be able to buy or sell for my own needs.
I have never written an article like this. Andy and I talked for over an hour tonight and both came to the same conclusions. After 30 years, we both have a feel for our industry. Our instincts tell us this coronavirus is far worse than most now are willing to believe. Miles Franklin can survive a shutdown in our industry that could last for weeks or months. We will be fine and we will be here when life gets back to some semblance of normal. But I urge you to set aside enough cash, and top off your gold and silver now, before the prices go ballistic (more demand than supply) and supply dries up completely as the supply chain goes into cardiac arrest.
Do not take a chance. Take every precaution you can now. This is real, it is not a drill.
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Zero Hedge
The growing funding panic also meant that general collateral has continued to rise...
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“I wouldn’t be surprised to see the overall markets down 50% by summer”
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Ed Steer
Hiding behind the fig leaf of collapsing Far East and European stock indexes...a limit down U.S. futures market -- and a dollar index 'rally'...JPMorgan et al. went about their business with ruthless precision on Thursday. They took no prisoners.
As Ted Butler has been saying since last summer, the commercial traders were either going to get overrun as rising precious metal prices overwhelmed them...or they would have to engineer the Mother of All Price Declines in order to save their skins from the monstrous unrealized margin call hole that they'd got themselves into.
It turned out to be the latter...the same old, same old...all aided and abetted by the CFTC, the CME Group -- and the U.S. Justice Department, as they all did nothing.
All the precious metal commentary yesterday from the all so-called precious metal experts, talked about everything except the real reason. I was not impressed.
Ted has always said that the last spike down would be the scariest of all -- and, as always, he's turned out to be right about that too.
But I can guarantee you that once the bottom is in, whenever it arrives, the rally that's allowed to develop from there will be one for the record books. By that time, 'da boyz' will own the lion's share of everything precious metal-related -- and they will stand to benefit the most.
This too will pass -- and I'm still "all in".
Maybe the Fed's repo bazooka was just a water pistol?
Less than an hour after the Fed announced a massive expansion to its repo facilities, adding one $500 billion 3-month repo today, following by an identical repo tomorrow and subsequent weekly $500BN repos (in addition to officially expanding NOT QE to a coupon monetizing QE-5), many are asking if the Fed applied the wrong medicine for two reasons:
The first, and obvious one, is that you can't fix a viral pandemic with monetary easing... but let's pretend that's not an issue for now.
The less obvious, but just as important reason is that after the Fed announced the results of the first half a trillion-dollar repo today, the uptake was a tiny 15.7%.
Indeed, dealers only submitted $78.4 billion in securities for today's massively upsized 3-month repo operation...which it appears will not be the panacea the Fed may have expected it to be.
As a result, even though today's total liquidity injection between the two term and one overnight repos earlier, and the 3 month mega-repo just now, the Fed has injected a total of $276.5 billion in liquidity, and yet stocks have tumbled back to session lows as traders realize that what is ailing the market is not access to the Fed's balance sheet, but an overall recession that will collapse revenues, profits and cash flow, and which the Fed's liquidity injections are powerless to prevent.
But wait, there's more: because as stocks sold off, a far more ominous development is that judging by the surge in the FRA/OIS, a closely followed indicator of inter-bank funding, following the Fed's repo operation the liquidity shortage had nothing to do with extra repo access, and is about to get much worse especially with the Fed having already fired its bazooka.
In other words, the Fed tried to fix whatever is causing the structural problem at the heart of the market's illiquidity, and has so far failed, which means that absent another emergency bailout attempt, we may very soon have a market - and bank - holiday.
Finally, for those asking just what kind of bailout attempt, recall that recently both Eric Rosengren and Janet Yellen said the Fed will have to buy stocks during the next crisis. Well, this is a crisis, and the market collapse will not relent until Powell finally turns Japanese and starts monetizing single names and/or ETFs.
This article appeared on the
Zero Hedge
Internet site at 3:22 p.m. EDT on Thursday afternoon -- and I thank Brad Robertson for sending it. Another link to it is
here
.
That's all I have for today -- and since today is Friday -- and Friday the 13th to boot...I'm ready for anything. These are "historic" times -- and we're in totally "uncharted territory"...as Gregory Mannarino correctly pointed out in his market rant further up. I'll be very interested in what the central banks of the world pull out of their collective hats over the weekend, especially considering the fact that the next FOMC meeting starts on Thursday. They've lost total control of the markets...all markets...except the precious metals, of course -- and they're desperate to get it back, so don't underestimate them.
We were right again.
On Jan 24, we wrote an article titled "The Debate Is Over: In Two Months "Not QE" Officially Becomes QE 4," in which we wrote that by the March 18 FOMC meeting, "the Fed will need to reduce its "demand burden" on the bill market, i.e., there won't be enough Bills available for the Fed to monetize without it distorting the market, and will extend the purchase program to include short coupons in the process officially ending any debate whether the Fed's manipulation of the market under the guise of saving repo, is "Not QE", because it is limited to Bills and thus no duration is taken out of the market, or is "QE 4", in which the Fed purchases at least some coupon securities in addition to Bills."
Not only were we right, but the transformation from Not QE to QE-4 (or QE-5, depending on how one counts), took place one week ahead of the FOMC meeting, when today as part of its massive, $1.5 trillion (with a maximum capacity of $5 trillion per month) bazooka in response to the bizarre moves in the Treasury market, the Fed announced that it would - as we predicted - expand its POMO from just Bills to all securities across the fixed income spectrum, including Treasury Inflation-Protected Securities, Floating Rate Notes and, you guessed it, nominal coupons.
And just like that Not QE has become QE-4, as even JPMorgan - which for the longest time was arguing to anyone who bothered to listen that Not QE is not QE 4 and would not become QE 4 - was forced to admit today.
Here is JPM's Michael Feroli admitting "since today's announcement moves those purchases further out the curve one could perhaps pedantically argue that this is QE."
"...it would be inaccurate to describe the $1.5 trillion in repo operations as "money pumped into the system" as it is a temporary swap of reserves for government securities which will be unwound in one or three months' time.
We may well be approaching the point when the Fed turns to genuine QE (or large-scale asset purchases), but that won't happen until the Fed sets the funds rate to zero, which should be next Wednesday at the latest
."
Translation - the head JPM economist was wrong again, but we will give him some credit: Feroli - whose firm was pushing his clients into stocks as recently as two days ago - is right about one thing: genuine QE, or whatever the "non-pedants" want to call it, is coming as soon as next week, and if Yellen has her way and she will, - it will also include stocks and ETFs.
This
very interesting
article showed up on the
Zero Hedge
website at 6:40 p.m. EDT on Thursday evening -- and another link to it is
here
.
Gregory Mannarino
's post market close rant for Thursday is linked
here
.
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SRSrocco
SALES EXPLODE: U.S. Mint Sells Another Million Silver Eagles Past Two Days
With the spread of the Global Contagion, the demand for physical precious metals has increased significantly. According to the U.S. Mint’s newest update, another million Silver Eagles were sold over the past two days. This brings to total Silver Eagle sales in March at 2.3 million, more than three times the previous month.
On my last update, the U.S. Mint sold a total of 1,345,000 Silver Eagles as of March 9th.
Over the next two days, another 975,000 Silver Eagles were sold for a total of 2,320,000.
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We haven’t seen this type of buying for quite some time. The U.S. Mint doesn’t sell Silver Eagles directly to the public, but rather to Authorized Purchasers who sell to the public. So, these sales figures represent purchases by the Authorized Dealers. Regardless, if the Authorized Dealers are buying a great deal more Silver Eagles in March, they are doing so because they are experiencing much higher demand from the public.
However, there may be a problem shortly for the Authorized Dealers if the U.S. Mint runs out of stocks of Silver Eagles. Why? Because, the U.S. Mint has cut back on monthly production runs of Silver Eagles due to the decreased demand for the past few years. I doubt the U.S. Mint will be able to supply another 1-2 million Silver Eagles in a short period of time.
Thus, we may see the U.S. Mint suspend sales of Silver Eagles shortly until they can increase stocks.
If you do not own any physical precious metals, it may be a good idea to start DIVERSIFYING some assets into Gold and Silver. With the continued spread of the Global Contagion and coming disruptions in the Just-In-Time Inventory Supply Chain, it’s highly likely that demand for precious metals will only increase going forward.
With rising demand and constrained supply, we may start to see much higher prices for gold and silver.
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LeMetropole Café
Fed Injects $198 Billion Via Repos To Unfreeze Paralyzed Funding Markets
S&P Extends Losses After Re-Opening, Down 8.5%; Europe Crashes By Most Ever
Zero logic to the gold/silver selloffs, and zero reporters willing to lift a finger to find out WHY this is happening.
The derivatives market has totally blown up, and the only solution is trillions of CTRL-P hyperinflation.
Gold should be $3,000 with no offer.
JMc
The gold open interest fell 3,872 contracts to 629,598. The silver open interest fell 3,820 contracts to 183,240, one of the few positives of the day. JPM continues to cover shorts as tired spec longs quit. Once JPM covers its shorts, silver can trade to the upside like a real market. Let’s hear it for "the criminal enterprise."
Gold has now been bombed to $1560. Until this latest drop the gold chart was still very constructive. This drop has changed the picture as its formidable uptrend was being taken out. That said gold has a good deal of technical support at $1550.
James Mc just checked back in…
Only $21m of "forced margin liquidation."
The price of gold dropped $18 yesterday, while the open interest only fell a paltry 3,807 contracts. That’s hardly any significant "forced margin liquidation" as MSM would like you to believe. In fact, that’s less than $21m of margins that got reduced. Today’s $70 plunge should by all rights liquidate a boatload of contracts. The gold cartel is erasing much of their paper losses in gold in (literally) short order. Never waste a good crisis to make an opportunity.
I stand by the fact that the biggest banks on the planet, who are also the biggest short sellers of gold derivatives, are crashing, and in HUGE trouble. Any "forced margin liquidation" should be favoring LONGS, not shorts. Physical gold has to be hugely desired right now. How much longer they can keep up the derivatives scam is the only question.
JMc
CARTEL CAPITULATION WATCH
One of the worst days imaginable for our stock market indexes as a huge injection of money by the Fed had them soaring off their lows, only TO FALL APART and make new lows on the close. The DOW lost 2,352 points to 21,200. The DOG fell 750 to 7,202. Such a failure to respond to the Fed reveals just how BAD things are.
Off the charts
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Coronavirus and the economy: U.S., world braced for shockwaves, threat of recession
By Jeffry Bartash
MarketWatch
The global economy is slowing sharply and the worst isn't over
How badly is the coronavirus epidemic damaging the global economy? How much is the resulting COVID-19 illness hurting U.S. businesses and consumers? Here’s an ongoing MarketWatch update on what the economic VIPs are saying.
•Severe restrictions to slow the spread of the coronavirus are taking a big toll on the global economy and it’s going to get worse before it gets better, economists say. Italy is already in lockdown, for example, and the U.S. has now banned flights from Europe.
Moody’s Analytics cuts its growth forecast for the world economy to 1.9% from 2.6%. IHS Markit slashed its estimate to 1.7% from 2.5%.
How bad is that? The global economy has been expanding an average of 3.5% annually in recent years. So that would be a big hit.
Wall Street already seems to be anticipating the worst. The Dow Jones Industrial Average DJIA, -8.661% has shed 8,000 points in the past week and triggered a bear market.
•The U.S. could post its first decline in growth in six years. Credit Suisse, for example, chopped its second- quarter GDP forecast to -0.9% from 2.8%.
Economists are split on whether the first recession since 2007-2009 is inevitable. Some say the economy was strong enough before the viral outbreak to withstand a recession if the crisis passes in the next few months. But if it drags on the likelihood of a downturn rises sharply.
•Three-quarters of U.S. businesses say their supply chains have been disrupted by the coronavirus, a new survey shows. And more expect to face problems soon.
Companies say it’s taking twice as long to obtain supplies and it’s also gotten harder to get materials shipped to the United States, according to the Institute for Supply Management. Some firms have trimmed their sales forecasts and others may follow suit soon.
"The story the data tells is that companies are faced with a lengthy recovery to normal operations in the wake of the viral outbreak," said Thomas W. Derry, the ISM’s chief executive.
• Companies all over the world have become alarmed by the rapid spread of the coronavirus and the damage it’s caused. A weekly survey by Moody’s found that business confidence has fallen sharply to the lowest level since the 2008 financial crisis. Only 6% of businesses said conditions are improving.
"The virus has slammed business confidence,’ said Mark Zandi, chief economist at Moody’s Analytics.
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Chris Marcus
Jim Willie: Corona Virus and Global Reset Updates
In the interview he also gives an update on what’s happening with the global reset. So, to discover the latest from the desk of Jim Willie, click to watch the interview now!
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This is what happens. When the price of silver gets too cheap and/or the silver to gold ratio get too high (currently nearly 100 to 1 which screams “buy silver not gold”) then the sale of physical Silver Eagles, and all other popular forms of silver explode. So much so now that the Silver Eagles are sold out.
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Kitco
Demand for physical silver is surging and the U.S. Mint can’t keep up
(
Kitco News
) - The U.S. Mint announced Thursday that it has temporarily sold out of American Eagle Silver Eagle Bullion coins.
“Our rate of sale in just the first part of March exceeds 300% of what was sold last month,” the Mint said in a press release Thursday. “West Point is working diligently to produce additional inventory and once additional inventory is produced, we will again begin allocations.”
Data from the U.S. Mint shows that it has sold 2.32 million one-ounce silver coins so far this month, up significantly from February sales of 650,000 coins.
Year to date, the U.S. Mint has sold 6.816 million ounces of coins, down about 1% compared to sales in the first three months of 2019. However, March is seeing its best sales pace since 2016.
Some analysts have noted that silver is becoming more attractive to investors as its significantly undervalued compared to gold. Thursday,
the gold/silver ratio
hit its highest level in history at 101, meaning it takes more than 100 ounces of silver to equal one ounce in gold.
Analysts have noted that the ratio has only hit 100 a few times in history and prices are due to fall back to historical average ratio around 50 or 60 points.
For many analysts silver ’s price drop has been a major buying opportunity. Silver has seen significant selling pressure as market volatility has risen.
May silver futures
last traded at $15.72 an ounce, down more than 6% on the day.
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Andy Schectman: Silver Sales Rise As Stock Market Collapses
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While the prices of
gold
and
silver
have been hammered in recent weeks, what’s interesting is that the bullion dealers have been reporting a surge in sales. Especially in silver. Fortunately Andy Schectman of precious metals dealer
MilesFranklin
joined me on the show to share what he’s seeing in terms of customer order flow. And whether people are buying or selling
physical gold
and silver, even on the days when the
Comex
prices are down. So to discover what’s happening, click to watch the interview now!
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Private Safe Deposit Boxes
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Unencumbered / Segregated Storage
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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.
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.
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Miles Franklin
801 Twelve Oaks Center Drive
Suite 834
Wayzata, MN 55391
1-800-822-8080
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