1-800-822-8080 Contact Us

The Ecstasy and The Agony of Market Bubbles

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

At a glance:

  • Tesla stock, Bitcoin, and others have blasted higher into a bubble.
  • Bubbles implode. Watch out below following the top, whenever that occurs.
  • The crazy silver bubble of 1979—1980 was LESS OUTRAGEOUS than the Tesla stock price bubble of today. Oops!

BREAKING NEWS:

  • Gold fell $59 to $1,835 for the week ending January 8, 2021.
  • Silver fell $1.69 to $24.64 for the week.
  • The DOW exceeded 31,100. QE created $trillions, and The Fed injected fake money into the stock market.
  • Bitcoin almost reached $42,000. Bubble?
  • Tesla stock reached $884. Definitely a Bubble!

MARKET BUBBLES ARE AMAZING. 

  • They inspire feelings of ecstasy on the way up and agony on the way down, like PCP, meth, cocaine, and QE4ever.
  • Bubbles have occurred before and will happen again. 
  • Every bubble feels new, special, and exciting. After the peak, the hangover, the consequences, the agony, the “regression to the mean,” the balancing, the “chickens coming home to roost” … torment us.
  • The crash after the bubble peak can be devastating. The wealth that seemed real… disappears, like morning mist.
  • Bubbles appear believable, inevitable, and justified… like desert mirages, until they implode.
  • But this time is not different, bubbles will pop, implosions occur, the agony becomes real, tears flow, and life goes on.

Before we discuss current bubbles, look at historical examples.
SILVER – 1979 – 1980:
The silver bubble was amazing. In January 1979, silver sold for under $6.00. In January 1980, silver prices exceeded $50 for a few moments. The media blamed the Hunt brothers, but gold bubbled higher at the same time and the Hunts were not invested in gold. Silver retraced 100% of the bubble rally, and sold for $11 in May 1980, under $5 in June 1982, and $3.51 in 1991.

CISCO SYSTEMS IN 1999 – 2000:


Cisco rose during the Internet bubble, reached amazing prices, and crashed. Cisco stock sold for $15 in April 1997, $30 in 1998, and exceeded $230 in March 2000.


By October 2001 it had crashed back to $9.00, retracing 100% of its rise from 1995.

THE NASDAQ 100 BUBBLE OF 1996 – 2000:
The Dow peaked in January 2000, but the NASDAQ 100 rose until March 2000. The index was priced at 400 in January 1995, under 1,100 in October 1998, and peaked over 4,800 in March 2000.
The index fell to 1,100 in September 2001, and 810 in October 2002, a fall of over 80% from top to bottom. The index retraced to levels last seen in 1996.

CRUDE OIL BUBBLE OF 2008:
Crude oil sold under $11 in December 1998, and $51 in January 2007. It bubbled higher in 2008 and reached $147 in July 2008. The bubble imploded and prices fell to $36 five months later in December 2008. The implosion retraced to prices last seen in 2004.

MODERN BUBBLES – BITCOIN AND TESLA STOCK:
Bitcoin bubbled higher in 2017 and 2018, selling for $750 in January 2017, and peaking near $20,000 in December 2017. 
By December 2018, the bubble had burst, and Bitcoin fell to under $3,300.

In 2020 and 2021 Bitcoin did it again—another bubble. From $4,000 in March 2020, Bitcoin exceeded $41,900 in early January 2021. It may rise further.
Will Bitcoin reach $100,000 or fall under $5,000? Your call… My concerns are:
a) What is the intrinsic value of a Bitcoin?

b) What happens to Bitcoin prices if western countries and China make Bitcoin transactions illegal to promote central bank digital currencies?

If Bitcoin peaks at (say) $50,000 before it implodes, and then falls 83% as it did after the 2017 peak, it might trade again under $10,000. However, with fake money, central bank QE, bubbles everywhere, and an excess of political and economic craziness in the wind, it is difficult to predict highs or lows.


TESLA STOCK BUBBLE:


Tesla stock sold for under $75 in March 2020, and over $880 on January 8, 2021. Amazing rally…
Will Tesla reach $1,000? What about $2,000? It looked too high at $500. Such is the nature of bubbles… they can expand higher than anyone dreams and turn quickly into nightmares.

Comparison between bubbles. Remember:

  • Use weekly graphs with weekly closing prices. Examine the relative price change during the final year before the bubble peak.
  • A larger ratio shows more “bubblicious” behavior.
  • Few people predict tops.
  • The bigger than are, the harder they fall.
  • Bubbles always implode and retrace most of their rise.

ANALYSIS:
The silver bubble of 1979—1980 was an enormous bubble that expanded rapidly in its final year. Compare it to the Bitcoin bubble during 2020—2021.

The 1999—2000 tech stock bubble, shown by the NASDAQ 100 Index, devastated retirement and brokerage accounts. Compare the NASDAQ 100 bubble to the current Tesla bubble.

THE SHOCKING FACTS ARE:

  • Tesla stock has risen by over a factor of 8 in the past year, and it may not be finished. According to yahoo finance, Tesla market cap is approaching $1 trillion. Its PRICE TO EARNINGS RATIO is over 1,680, and PRICE TO SALES exceeds 29. Crazy!
  • Knowing that Tesla stock prices are in a bubble, and that bubbles always implode, do you want to be long this stock? After seeing its rapid rise, do you want to be short this stock? Danger Zone!
  • Gold will be valuable long after Tesla stock crashes to earth.
  • Note: The Tesla stock relative rise in the past year is LARGER than the crazy silver bubble blow-off in 1979 – 1980. Does that suggest a collapse is inevitable?

OTHER BUBBLES:
The stock market is overvalued. “Printing” dollars by the trillions levitated the market, but that rise is “living on borrowed time.”

From Alasdair Macleod “Don’t dismiss gold and silver.
“Even without an overt banking crisis, the Fed and the US Treasury will have to work together in their attempts to rescue the US economy from an inevitable slump. They cannot succeed, but they must try, sacrificing the dollar as a deliberate act of economic policy.”
WHAT HAPPENS NEXT?
1) Bubbles always pop. We don’t know when.
2) Congress and the new administration will spend trillions in payoffs to cronies, bailouts to cities and states, support for Big Pharma and the war machine, and they will distribute a few bucks to citizens. All those trillions will be newly created debt.
3) Debt will rise. Make that debt will BLAST MUCH HIGHER!
4) Read “The Bailout Binge Begins.
5) M1 and M2 will streak higher. Gold, silver, commodities, and food prices will follow. 
6) If tens of $trillions in stock market paper wealth evaporate, people will be scared and angry. They will seek something real that preserves value—like gold and silver.

CONCLUSIONS:

  • A Tesla stock price crash could happen anytime.
  • A stock market correction and/or crash are coming.
  • The bond market will fall if interest rates rise (they are) because the Fed’s “fire hose” (plus commercial banking) is squirting fake money by the $trillions into stocks and bonds.
  • Gold, silver, and food prices are going higher.

Miles Franklin will convert stock market profits into real money—gold and silver. Protect your savings and retirement!
Gary Christenson

Black Swans, Ordinary Swans, and Metals

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

AT A GLANCE:

Expect more of the same for 2021 – massive debt, central bank “printing,” and dollar devaluation, while consumer prices and inflation rise.

Gold and silver have been insurance and protection for thousands of years. They will shine in 2021.

Regression to the mean suggests lower prices for stocks and higher prices for commodities.

Breaking News:

  • Gold rose $12 to $1,895 for the week ended December 31, 2020.
  • Silver rose $0.51 to $26.33.
  • As usual, the DOW rose to another all-time high on December 31.
  • Tesla stock, already in the stratosphere, closed at $705 on Dec. 31. It sold for $71 in March 2020. What bubble?

Black swan events are, by definition, unpredictable. But “ordinary white swans” events are easy to see and predict.

CONSIDER “ORDINARY” OR “WHITE” SWANS.

DEBT: Official U.S. national debt ended the year at $27.5 trillion, up from $23.2 trillion one year ago. Our “print and devalue” central bankers enable our “borrow and spend” politicians, a union that thrives in a “fake money” world.

Prediction: National debt, which has doubled every 8 to 9 years for decades, will increase. Will it be up $3 trillion or $6 trillion in 2021?

DOLLAR DEVALUATION: The dollar has devalued from 1/40th of an ounce of gold in 1971 down to 1/1,900th ounce of gold in 2020.

Prediction: Dollar devaluation will accelerate, given the current recession/depression, massive unemployment, forthcoming bipartisan “stimulus,” and the usual graft and corruption. Another easy prediction!

ELECTION SHENANIGANS: Polls show that most republicans believe the election results included hundreds of thousands or millions of fraudulent and/or flipped votes. Democrats believe, according to polls, that the voting was mostly honest.

Prediction: Since elections have been “fudged” for decades, probably centuries, it’s an obvious prediction that more fraudulent elections will occur. Note: if the Powers-That-Be (PTB) wanted honest elections, they would create honest voting. Since it’s obvious that “fudging” has occurred for decades, one must conclude honest elections are undesirable.

INFLATION: Because the Fed devalues the dollar every year, our green pieces of fiat paper buy less, and consumers pay more for food, medical care, trucks, drugs, cigarettes, and most other items. The political and financial elite pay higher prices for donations, payoffs, access to politicians, bribes, and “speaking fees.”

Because pension payments, Social Security checks, and other expenses are often indexed to inflation, as “measured” by the CPI, the PTB adjust the CPI to show minimal inflation. Everyone who buys food, consumer goods, and vehicles knows the CPI is largely irrelevant. The CPI must show low inflation or huge government expenditures would be even larger. Que the statisticians to manage the official inflation rate lower…

Prediction: The dollar will continue devaluing and consumer prices will rise. A “tall coffee” may not cost $10 by the end of 2021, but most commodity prices will be higher. Houses, stocks, and bonds… maybe not.

Read: Stockman “David Stockman on Janet Yellen’s Return

CENTRAL BANK “PRINTING:” Call it QE, monetization, or free currency units. More “printing” will occur in 2021 – 2022, unless government cuts spending drastically, central banks exit the “fake money train,” and the PTB become responsible. (Not Happening!)

Prediction: More QE – an easy prediction. Why will the Fed stop at $7 trillion? If $7 trillion was good and/or necessary, why not $10 trillion, or $30 trillion? More is always better… UNTIL IT ISN’T!

FEAR AND DISTRACTIONS: Politicians understand they should never waste a crisis. Sometimes it’s necessary to make something into a crisis. Lockdowns come to mind…

Prediction: Fear and distractions help conceal crimes, corruption, scams, failed policies, poor management, and a plethora of other conditions that transfer wealth from the many to the few. Easy prediction—more fear and distractions are coming. The wealth transfer will continue.

QUESTIONS:

  • If grams of cocaine create a temporary feeling of euphoria, do kilograms create permanent happiness? If grams are good, and kilos are better, why do hard-core drug addicts look burned out and old?
  • If $billions of QE stimulate the economy and appear to create prosperity, will $trillions of QE create permanent prosperity and wealth? If $billions are good and $trillions are better, why are European and American economies so weak? Why is unemployment at all-time highs? Why are food banks necessary?
  • If central banks can create wealth and prosperity by “printing” currency units, why are “banana republics” poor? Who wants to become a Zimbabwe billionaire?

The answers are obvious, even though our politicians and central bankers may not want to see them.

a)“Printing” currency units increases wealth for only a few. The non-elite pay with higher prices, unemployment, fear, distractions, and a lower standard of living.

b) Cocaine, heroin, and “meth” may induce a short-term euphoria, but they create ugly long-term consequences. The same is true with “printing” fake currency units. Fake money creates fake prices and fake wealth. The world will rebalance during the coming years, and fake money and fake assets will suffer.

c) Debt can’t increase forever. Do you see a “black swan” on final approach?

d) When it’s time to “pay the piper,” the PTB will create another crisis, blame someone else, and extend and pretend to keep their wealth transfer working…

e) When stocks are too high (like now) they correct lower. That correction might occur soon, or maybe the “fake money train” can delay a collapse for years. My bet is soon…

f) When the dollar is devalued, when fake money is flooding out of central banks, when governments spend like there are no consequences… expect real money—gold and silver—to rise rapidly when measured in “fake money” prices.

g) Gold finished 2020 up 28% from its March low. Silver finished 2020 up 124% from its March low. Higher prices lie ahead. Read: “Overwhelming Demand for Silver.”

h) Stock indices and margin debt are too high.

WHAT ABOUT BLACK SWANS?

  1. Pandemics: They are unpredictable unless you participate in their creation. The COVID-19 virus was less destructive than the political and medical responses, fear, lockdowns, depression, abuse, and craziness.
  2. Currency crisis and inflation. Yes, a currency crisis is possible, and unexpected. It could become a “black swan event.”
  3. War. From Hemmingway: “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin.” A major war could be a “black swan event.”
  4. Fed losing control: Read “Will the Fed Lose Control in 2021?” Most people naively believe the Fed is in control, knows what they are doing, and will take care of the middle class. History suggests otherwise. Losing control would be a “black swan event.”
  5. A Derivative Crisis: It happened in 2007-08. If few are expecting a derivative crisis, it could become a “black swan event” this decade.
  6. Another unexpected, catastrophic event… Many possibilities exist. UFOs, solar flares that destroy satellites, global internet collapse, responsible government, self-terminating central banking…

THE WHITE SWAN EVENTS ARE EASY TO PREDICT:

  • Debt will blast higher.
  • The dollar will continue its multi-decade devaluation.
  • Elections will be compromised until the PTB want honest elections.
  • Inflation is “baked into the cake.” Consumer price inflation will replace stock and bond asset inflation.
  • Central banks will “print.” What else can they do?
  • Fears and distractions. Yup, more are coming.

WHAT CAN WE DO?

ANSWER: Protect your savings and retirement with silver and gold. They will rise as dollars are devalued, as inflation rises, as central banks print, and as people lose faith in the PTB.

Alternate answer: Predict the next Tesla bubble and climb aboard. If that seems risky or unlikely, go back to silver and gold.

“BLACK SWAN” QUESTIONS:

  • The “black swan events” are difficult to anticipate. However, gold and silver have been money for thousands of years and will remain valuable long after our financial system resets because of excessive debt, “printing,” craziness, and “black swan events.”
  • Would you rather own ten ounces of gold in a non-bank storage facility, or $20,000 in cash, knowing you will hold them for five to ten years?
  • Do you trust your politicians and central bankers more than you trust your gold hoard?
  • Do you believe silver bullion prices will rise faster than the CPI?
  • Would you prefer to own gold and silver bullion or digital and paper assets when the next “black swan event” lays waste to the economy?

CONCLUSIONS:

  • Expect massive increases in debt, central bank “printing,” dollar devaluations, and consumer price inflation. How much they increase depends upon our politicians, central bankers, and their inflationary policies.
  • As 2021 begins, gold and silver are priced low (see previous articles) when compared to the S&P 500 Index, the NASDAQ 100 Index, M3, national debt, and GDP. Gold and silver will shine at least until 2025—2026. Stocks could regress to their mean (lower).
  • Gold and silver are not the best answer for all situations, but they have protected people for thousands of years. They are important in today’s environment.

Miles Franklin will convert digital and paper dollars into real money—silver and gold. Our politicians and central bankers will continue to devalue dollars. Convert “fake money” to real money before the stampede out of the fake stuff occurs.

Gary Christenson

Dr. Silver and the Prescription to Combat Craziness

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

STORY AT A GLANCE:

Dr. Silver says regular silver and gold purchases will diminish vulnerability to fiscal and monetary craziness. That craziness is increasing, so we need the insurance provided by silver and gold.

Breaking News:

  • Gold prices rose $3.60 to $1,843 for the week ending December 11, 2020.
  • Silver prices fell $0.17 to $24.04 for the week.
  • The DOW and S&P500 Indexes reached all-time highs… again.
  • Tesla stock exceeded $650, up from $70 one year ago. The bubble inflated further.
  • The global crazy index reached a new high. Sorry, no hard data is available to prove this statement.
  • Politicians spoke on many topics and said little.
  • As in past presidential elections, the political party that “fudged” better (when necessary) won first rights to suck up government currency units at the public trough. Counting votes is far more important than actual voting.

Global Craziness:

Negative “yielding” bonds exceeded $18 trillion. Portuguese and Spanish ten-year bonds “yield” less than zero percent interest for ten years.

Central banks have created over $28 trillion in currency units. As central banks create currency units, global billionaires become wealthier. The poor and middle classes… well, never mind.

The official U.S. DEFICIT for 2020 exceeded $3.2 trillion, or over ten times the value of gold supposedly stored in Fort Knox. Gold is underpriced.

Official U.S. national debt exceeds $27.4 trillion, up $22 trillion since 2000. We can’t borrow our way to prosperity.

News headlines confirm craziness is widespread and deep.

If the U.S. economy were a person, a psychiatrist might diagnose delusional tendencies, living in a fantasy world, paranoia, and bipolar economic disorder. The delusions are increasing and becoming more dangerous.

Dr. Silver’s Prescription for economic sanity:

  • Buy silver. Buy gold. Save with honest money.
  • Trust honest money that can’t be created by central bankers or politicians.
  • Demand the rule-of-law.
  • Demand personal accountability in government and central banking.

Buying silver and buying gold sounds simple. However, examine the following charts of silver and gold after the 1980 bubbles. The charts show that prices languish for years and then zoom higher. Huge gains occur in a few years, followed by a crash, followed by years of minimal price changes.

SCARY!

The prescription to succeed during erratic price action is:

a) Take a long-term view. Money supply, debt, and monetary madness increase every year.

b) The dollar devalues. Yes, devaluation occurs every year, so prices for silver and gold rise, on average, punctuated by short-term booms and busts.

c) Erratic Prices: Expect erratic price action to increase because national debt and government spending will rise to even crazier levels, regardless of who serves as President.

d) Make monthly purchases: Average purchase prices over time and don’t trade core holdings. Expand your stack of silver and gold every month.

e) Ignore short-term price volatility: Worries about short-term price changes distract from the long-term goal of protecting savings and retirement from the predations of central banks and politicians.

SILVER INVESTING TACTICS:

  1. Dollar cost averaging. Invest a fixed dollar amount every month in silver or gold. Example: $100 per month.
  2. Weighted dollar cost averaging: Invest a fixed dollar amount every month when the RSI (relative strength index—monthly) is neutral (40 to 60). Invest half as much when the RSI is high (over 60), and one and one-half times your fixed dollar amount when the RSI is low (under 40).
  3. Gold to silver ratio investing: Invest a fixed dollar amount every month into silver when the ratio is high – gold/silver more than 50. Invest a fixed dollar amount into gold when the ratio is low—less than 50.
  4. Constant Ounce Purchases: Purchase a fixed number of ounces of silver or gold every month. Because prices rise, the cost of monthly investments increases.
  5. Any plan that works for you and progresses toward your goal of financial security.

What Could Go Wrong?

  1. Like a New-Year’s resolution, we lose interest in purchases.
  2. It’s more fun to buy Tesla stock and get rich quick. (Works until it doesn’t…) Trading is exciting and more profitable if you are one of the rare individuals who is consistently successful at trading.
  3. The anti-gold propaganda is overwhelming, and you believe fiat dollars, backed by nothing, are somehow superior to real money—gold and silver. Those who become wealthy via “fake-money” will encourage fake money investments, and promote the propaganda, not gold and silver. Be wary.
  4. Monthly investing in gold and silver is boring. People like the action and chaos of stock market investing. However, few people, outside of Wall Street, succeed in the world of “fake money” and fast action.
  5. It takes time to realize that boring can be good.

SHOW ME THE RESULTS:

Option One: Dollar cost averaging over the long-term buys more ounces of silver or gold when prices are low. Commit to the plan for several decades. Over three to five decades, your silver value (at today’s prices) exceeds three times the total invested, assuming 10% in fees. The return is slightly less over the past two decades.

Option Two: Fixed ounce investing buys a set number of ounces every month (week, quarter, whatever). For example, buy one roll of silver eagles (20 coins) every month. In 21 years, you will have 5,000 ounces of silver worth about $150,000 today and $500,000 in a few years.

Variations: Buy more when prices are low as measured by the RSI. Buy less when prices are high. This slightly increases the number of ounces you own. Success comes from consistent purchases over a long time, not by optimizing purchase prices.

Buy gold OR silver every month, depending on whether the ratio is high or low. This will slightly improve your investment results.

The primary determinant for success is consistent purchases. Parallel example: the best exercise machine is the one you use, not the one that has the fanciest electronics.

CONCLUSIONS:

  • Read the headlines. Debt and QE4ever “printing” must increase because politicians spend too much using their fiat money scam.
  • More debt will not solve our excessive debt problem. But it will devalue the dollar and boost prices for hard money – gold and silver. Silver sold for under $5 from 1995 to 2003. It is five times higher today and will be five times higher again in a few years.
  • It is possible to time the market and trade your way to wealth, but few succeed. Embrace the easier solution—convert fiat dollars (fake money) every month into real money—gold and silver. Be patient while politicians force prices higher.
  • Craziness will increase. The prescription for fiscal and monetary craziness says we should take the long view, expect dollar devaluation, and make consistent purchases of real money—gold and silver.
  • Patience and consistent purchases will produce financial security.
  • The best method is the one you use consistently.
  • Gold and silver are insurance against fiscal and monetary craziness. Protect your savings!

Miles Franklin will convert your fiat dollars (debts of the Federal Reserve) into real money—gold and silver. Consistent purchases will help you sleep.

Gary Christenson

Gold in the Season of Santa, Milk, and Cookies

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

STORY AT A GLANCE – week ending November 27:

  • Gold prices made a significant low during November or December in 8 of the last ten years. Gold prices are low and over-sold as of Nov. 27.
  • The gold to S&P 500 ratio shows gold is inexpensive compared to the S&P over four decades of history.
  • Gold and silver price lows are due now—which means between mid-November and late December. Now, or soon.
  • The GDX to gold price ratio bottomed in 2016. Expect gold to rally and gold stocks to rise faster in the coming years.
  • Stocks are making new highs. Craziness in politics and monetary policy are “off the charts.” Beware the consequences of both.

‘Tis the season for:

  • Election fraud—every fourth year, regardless of who is mismanaging government and elections.
  • Stock market euphoria—the Dow hit 30,000.
  • Political nonsense – never ends.
  • Central bank “printing.” Their season runs from January 1 through December 31 of every year. Global CB creation of currency units exceeds $28 trillion.
  • Gold market selloffs. The gold market is crushed almost every year at this time.
  • It is a time for “Ho, Ho, Ho” by the fiat currency and massive debt advocates because, once again, they have beaten down gold prices.
  • Fiat currencies are celebrated. Gold is disparaged.

The events are predictable. Let’s explore:

Election fraud: It happens during every Presidential election. The people counting the votes are more important than the actual votes. Dead people have been voting for decades. If the Powers-That-Be wanted it different, then voting could be honest. As it is…

Stock Market Euphoria: Print many $trillions from “thin air” and shove it into the stock market. Bingo – the market makes new highs—a Santa Claus rally. No mystery here. Eventually those extra $trillions boost prices for gold, silver, crude oil, housing, and food. Then politicians and central bankers will blame speculators, Russians, Chinese, or the other political party for their mistakes and corruption.

Gold Market Selloffs: Examine the chart of weekly gold prices over a decade. Note the green ovals around significant lows near the end of each calendar year, except for 2012, which does not fit the pattern.

SO WHAT?

  1. Because gold prices show a reliable pattern of year-end lows, the recent weakness in gold prices (down $90+ this week) is consistent with the past ten years. Higher prices lie ahead, after the price crash is complete. It is a paper market, so deeper lows are always possible.
  2. The lows for the past ten years average 345 days into each calendar year – about December 10th.
  3. Gold and silver price lows are due now—which means between mid-November and late December.
  4. The recent year-end lows for 2018 and 2019 occurred in mid-November. Gold prices in 2020 have fallen hard since their all-time high in early August. Gold fell under $1,780 on November 27 and silver fell below $22.50. Maybe this week saw the low, maybe not.

THIS GUARANTEES NOTHING! Oh dear!

Why? The paper markets determine gold prices. It’s easy to sell a few $billion in paper gold, crush prices on COMEX, and buy paper contracts back for a huge paper profit. No real gold exchange occurs. Fake money creates fake prices.

Our managed news services are biased. The media do not appreciate gold. But we’ve suffered through this for decades.

As Richard Russell once said, “Where are cycles when you need them?” Cycles and patterns are helpful, but they do NOT guarantee price action.

Prices for metals are erratic in our crazy and manipulated global economy.

CRAZINESS: Global financial policies and political events are crazier than usual. Consider:

a) Portuguese 10-year bonds yield less than 0.0%. Why would an investor buy those bonds unless they expected the ECB to bail them out? Front running central banks can be profitable.

b) Two California churches are now “family friendly strip clubs” since California banned church services, but not strip clubs. COVID craziness struck many blows upon good sense and rational thinking.

c) The California Governor expects everyone to wear a mask. If eating, the Governor expects his subjects to wear a mask between bites. The rules may not apply to him.

d) New York state forced nursing homes to accept COVID patients, even though the highest risk people are old, such as those in nursing homes. Why?

e) Global central banks created over $28 trillion in “funny money.” Yes, it distorted stock and bond markets.

f) The Fed’s balance sheet exceeds $7 trillion in “printing press currency.” Wealth of billionaires increased during 2020 when over $3 trillion was “printed.” However, Chairman Powell claims Fed policies do NOT encourage wealth inequality.

g) Over $17 trillion in global bonds yield less than 0.0%. Crazy?

h) Nominated for Time Magazine’s person of the year: Dr. Fauci, Andrew Cuomo, and AOC. Strange!

i) Millions of American families may be evicted in January. Unemployment is high. The U.S. economy, small businesses, and millions of people are in deep financial trouble, but the DOW hit 30,000 and the S&P 500 Index reached a new all-time high in November. The stock market does NOT reflect economic conditions in middle-America.

j) COVID deaths are real, some of them. But: New Study Exposes Alleged Accounting Error Regarding COVID Deaths.

k) And the Emmy Goes To…

Line in Dallas for food handouts… while stocks hit all-time highs.

SO WHY BOTHER?

  • Because cycles are helpful. As the chart shows, gold prices often bottom in November or December.
  • Cycle lows are confirmed by other analysis, such as ratios.
  • Don’t expect guarantees and “sure things” in markets. The guarantees in life are death, taxes, government nonsense, and increasing debt.
  • Government nonsense and increasing debt assure rising gold prices. Fractional reserve banking, central bank monetization, helicopter money, MMT, insane debt levels, and “funny money” assure us that fiat currencies will devalue, and gold prices will rise.

SHOW ME THOSE RATIOS:

The DOW and S&P500 Index hit highs in late November. Gold reached a high months ago in August. Total market cap is too high. Financial conditions indicate a top. How high? What do the ratios show?

You can see:

  1. The ratio has been much higher than on November 27 (0.49). Gold prices could rise, and the ratio could triple.
  2. Surprise. Gold has been stronger than the S&P 500 Index for two years. Stocks receive the headlines, but gold rallied more.
  3. The trend for the ratio has been up for two years, since September 2018.
  4. Expect another rally in the ratio, like that of 2001 – 2011.

The GDX is a gold stock ETF. Examine the ratio of GDX to gold prices since 2006 – the beginning of data for GDX.

You can see:

  1. The ratio bottomed in December 2016 and has risen since then.
  2. The ratio broke ABOVE its downtrend line from 2006.
  3. Expect the ratio to rise for years. Gold stocks will rise more rapidly than the price of gold.

The XAU is an index of gold and silver stocks. CEF is a fund that buys gold and silver bullion. The ratio shows a longer-term view of gold and silver stocks versus the price of bullion.

You can see:

  1. The ratio topped in mid-1996 and fell until 2016, a 20-year bear market in gold and silver stocks when compared to the underlying price of bullion.
  2. The ratio bottomed in November 2016 and has risen since then.
  3. Expect gold and silver stocks to rise faster than gold bullion for several years.

Read:

Alasdair Macleod: “Global Inflation Watch

This article posits that fiat currencies are on the path to hyperinflation…”

CONCLUSIONS:

  • In California, politicians apparently believe the COVID virus is communicable in churches, but not strip clubs or riots.
  • In Europe, many bonds yield less than 0.0% interest. If we lived in a world where currency devaluation and default risk were important, those bonds should yield more. Central banks distort markets.
  • Gold prices often reach important lows in November or December. Examples include 2011, 2013, 2014, 2015, 2016, 2017, 2019, and 2020. Silver prices often fall to lows at the same times.
  • Ratios show that gold and silver are undervalued. History suggests gold prices are inexpensive compared to the S&P 500 Index (above), total National Debt (not shown), and M2 (not shown).
  • Strange times, central bank distortions in the market, insane levels of debt, massive unemployment, small business bankruptcies, and political and monetary desperation do not bode well for the American economy. Stock prices sell at “nosebleed” levels, while the paper markets hammered gold and silver prices since August. Expect a huge rally in gold and silver prices, soon.
  • In 1971 a U.S. dollar was worth 1/40th ounce of gold. Today a dollar is worth 1/1800th ounce of gold. Given the borrow and spend mentality of our “leaders,” the value of the dollar could be 1/10000th ounce of gold in a few years.
  • Stay safe, don’t believe much of what our politicians and central bankers proclaim, and protect your assets and retirements with gold and silver.

Miles Franklin will convert paper and digital dollars into real money—gold and silver bullion. Call 1-800-822-8080 and protect your savings from the inevitable devaluations created by central bankers and politicians.

Gary Christenson

A Fantasy from Tomorrowland

Miles Franklin sponsored this fiction by Gary Christenson. The story is not a prediction or investment advice.

News from October 2024:

The Federal Reserve sold another $200 billion in perpetual bonds this week. These “Perps,” as the media refers to them, have no expiration date and pay interest forever, or until recalled.

Proceeds from the “Perps” sale will fund Fed-coins that are downloaded to digital wallets on government issued UBI-phones. Over 96% of adults have received UBI-phones that are loaded monthly with Fed-coin currency. The phones also track locations, movements, and spending. A second benefit is they enable contact-tracing for the COVID-19, 21, and 23 pandemics.

The official inflation rate for this week is 11.75% annualized. Prices may increase by that amount without requiring an exemption from the Bureau of Price Controls. Some consumer prices will rise much higher after nearly automatic exemptions.

The Federal Reserve reported that Fed-coins have replaced 99% of paper currency in the U.S. All paper currency has been recalled and will decrease to zero value as of January 1, 2025. You should convert paper dollars to Fed-coins immediately.

The Fed’s monthly distribution of digital currency units via the Universal Basic Income (UBI) legislation increased the importance of Fed-coins. They are popular among the more than 100 million unemployed Americans who need Fed-coins to survive.

The European version of Fed-coin, the ECB-coin, replaced paper euros last year. The Chinese outlawed all paper currencies and private crypto currencies several years ago when they digitized their economy. Their digital yuan is scheduled for gold backing in 2026.

The IRS reported that tax collections are down, because of the sluggish economy, but overall tax compliance is higher due to the increase in reportable Fed-coin taxable transactions.

The year is 2024…

Georgie Johnson checked the Fed-coin wallet on his UBI-phone. The wallet app showed his balance had dropped below 175 coins and suggested he should reduce expenditures to make his coins last until the next reload in 11 days. The app offered advice and information. “Buying beer and marijuana may not be a proper use of your Fed-coins. Consider healthier and less costly alternatives. Further, your contact tracing app shows no recent interaction with an infected person. We encourage a booster shot for your COVID vaccine within 90 days. Have a carefree day. Remember that your government cares about you and asks you to vote in the November election.”

Georgie told himself. “What I want is a new GMC pickup. Unfortunately, the cost for that model has risen to $157,500, with nine-year financing for qualified buyers. I’ll never be a qualified buyer, so I’m hosed while I’m unemployed and living on the UBI. Damn the crazy inflation and the unemployment disaster. I blame politicians because they created this mess.”

His UBI-phone announced, “Your vital signs show an increase in stress. Calm yourself to live longer. Your government has programs that teach you to reduce stress. Have a carefree day.”

Georgie sneered at his phone. “Yeah, I’ll have a carefree day when I get a job and I’ve paid my student loans. Take your suggestions and shove them where the sun doesn’t shine.”

His phone responded, “Anti-social and anti-government attitudes are unacceptable. If you persist with inappropriate behaviors, your monthly Fed-coin allocation may be reduced or cancelled. Have a carefree day.”

Georgie held his phone with his left hand and shook the middle finger of his right hand toward the phone. He thought, I’ll act calm, because I need Fed-coins, but I don’t have to like what you jerks are doing to me.

***

Samuel Herbert Maxwell III closed a silver trade on his home computer and watched his Fed-coin balance update from 592,170 to 741,375. “They aren’t dollars, but they spend like the ancient dollars we used in 2015, except it takes about ten of these Fed-coins to buy what a paper dollar bought back in the old days before the COVID lockdown nightmare.”

He smiled, knowing his Fed-coin balance and guaranteed government job would sustain him and his family. Samuel checked markets on his UBI-phone and read, “The DOW is up 495 to 51,388. Gold is priced at $12,733 per ounce. Silver sells for $371 per ounce. Press here for more quotes.”

Samuel inserted his UBI-phone into a double layer Faraday cage to avoid government monitoring. “I bought gold in 2020, which seems like a lifetime ago. Back then gold was two thousand bucks and gasoline cost less than three bucks. Now, after the inflation wars, COVID pandemics, massive QE, rise of digital coins, currency collapses, and unbelievable political insanity, almost all prices and assets have spiked higher. My cost of living has quadrupled. College at a state university for my eldest son now costs over a hundred grand per year, which he borrows. I doubt he’ll ever repay those debts. He’ll wait for the debt reset that politicians promise but don’t deliver.”

He continued, “I must spend my UBI allocation or lose it. That’s easy, given the outrageous prices for food, clothing and gasoline.”

He sipped coffee, feeling smug because he purchased gold in 2020 and silver in 2018. Samuel had done well financially during the monetary and pandemic insanity of the 2020—2024 era. Most people had not expected the drastic changes that occurred. They hoped 2019 conditions would return. Instead, suicides, alcoholism, violence, riots, terrible inflation, unemployment, and drug abuse surged as people lost hope their lives would improve.

“I could blame the politicians, the bankers, or the medical people, but that’s useless. I’m thankful I looked deeper than the news headlines, beyond the happy talk from the economists, and past the phony reassurances from the politicians and medical experts. I protected my assets and savings long ago.”

His phone beeped from inside the Faraday cage. “Your phone has been disconnected from monitoring services over ten minutes. Please press 111 to confirm that you remain in contact with life monitoring applications.”

Samuel clenched a fist and removed his UBI-phone from the Faraday cage. He tapped “111” and apologized, “Sorry, I was out of service range.”

His phone replied, “Data from your phone shows an inhibited transmission, not out of range. Please remember this phone monitors your activities, location, and contacts for your own good. If you are experiencing anxiety, a medical professional can ease the symptoms. Have a carefree day.”

From Jerome Powell, Chair of the Federal Reserve:

“We’re not going back to the same economy.”

No matter what happens on election day, count on Fed Chairman Jerome Powell…”

Listen to Andy Schectman on Silver:

From James Rickards: “Debunking the Bogus Case Against Gold”

“Gold is in the early stages of its third great bull run that will take it to record highs.”

“Regardless, my research has led me to one conclusion – we’re going to see the collapse of the international monetary system.”

“… I predict gold will reach $15,000 by 2026.”

From Alasdair Macleod: “The Monetary Logic for Gold and Silver”

“A considered reflection on current events leads to only one conclusion, and that is accelerating inflation of the dollar’s money supply is firmly on the path to destroying the dollar’s purchasing power – completely.”

CONCLUSIONS:

  • The year 2020 provided a hint for what is coming.
  • Universal Basic Income, QE4ever, and perpetual bonds are consistent with MMT (Modern Monetary Theory or Magic Money Tree) economic plans. That train is accelerating down the tracks toward monetary disaster, but who can stop it?
  • Digital currency units extract a price. Collect a UBI and submit to controls, location tracking, 24/7 monitoring, and no financial privacy. Many people will happily pay the price.
  • Never waste a crisis! The pandemic and lockdowns created a crisis. The destructive consequences of lockdowns aggravated it. The Powers-That-Be (PTB) are using this crisis.
  • Gold and silver bullion are private wealth, not tracked by the PTB.
  • The official national debt exceeds $27 trillion. It could surpass $30 trillion by December 2021, and $40-$50 trillion by December 2024. The Fed will “print” as needed via their QE4ever programs.
  • Watch gold and silver rally as the dollar falls.
  • Consumer prices and asset prices will rise. Gold and silver prices will spike higher, depending on monetary insanity, government programs, and QE4ever “printing.”

Buy silver and gold, regardless of the winners in the 2020 and 2024 elections.

Miles Franklin (Call 1-800-822-8080) will exchange paper and digital dollars for real money—gold and silver. Yes, gold and silver sell for more than several years ago. However, the financial world is crazier than several years ago. Worse, the controls, monitoring, QE, and monetary insanity will escalate.

Gary Christenson

Make America Great Again – the Other Version

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

Make America Great Again. It is a good idea, but there is more to the story. The U.S. has traveled far down the “fake money and government control” path. Any return trip will be traumatic.

But onward, to the MAGA story.

From Bill Bonner:

“If Americans wanted to Make America Great Again, they could simply go back to the things that made it great in the first place – honest money, smallish government, and a free-ish economy.”

Oops!

The U.S. does not want honest money, small government, or a free economy. Based on actions, not words, our government and most citizens want fake money, big government that continually expands, and a controlled economy.

But Why?

  • If honest money made America great, why want fake money? Because…
  • If government expenses are (in round numbers) $6 trillion per year and revenues are $3 trillion per year, fake money is necessary to close the revenue gap. If government collected and spent real money, limited by gold backing those real dollars, deficit spending would be difficult. But with fake money it is easy to spend deficit dollars—borrow and print, and repeat.
  • Way back, pre-Richard Nixon, we had modified real money. Foreigners, but not American citizens, could redeem dollars for gold. However, the political spending obsession and the Vietnam War forced President Nixon to make a choice – abandon real money or reduce spending.
  • He chose to “float” the dollar against other currencies, ignore fiscal restraint, and allow debt to grow to unbelievable numbers. He opened Pandora’s Box of fake money and released monetary misery upon the world.
  • Honest money would require balanced government budgets, interest rates that fairly represent risk and the time value of money, and politicians who spend a fraction of what they toss around today.
  • Honest money means The Federal Reserve would provide little value. Their employees would have to make a living providing a valuable good or service to willing buyers. Oops.
  • Wall Street would be constrained. Trillions of fake dollars that have inflated Wall Street importance, stocks, and bonds would disappear. Instead of indices selling for thousands of mini dollars, they might be down 90% from current “nosebleed” levels. Oops.
  • The political and financial elite do not want a stock market crash, honest money, or balanced budgets. The wealthy and elite will fight against honest money with every mini dollar at their disposal.
  • Honest money might encourage honest elections—a danger zone.

More indictments against what is needed for MAGA.

It takes a large government to manage and control the populace. But small government helped make American great – before the Deep State took firm control.

Small government and honest money will be popular with very few.

Consider the unpopular consequences:

  • If congress or the President wants war, raise taxes. Oops.
  • If congress wants a new Medicare benefit, raise taxes or cut something else in the budget. Unpopular.
  • If a hurricane devastates a city, use accumulated surplus funds to help the people. But we have no accumulated surplus. Problem!
  • If congress wants to give away phones, housing, military hardware, prescription drugs, food stamps, or foreign aid, then raise taxes.
  • If congress overspends the budget, then terminate congressional pensions. Oops, we do not demand accountability from congress.
  • If Social Security cannot afford their promised benefits, raise the payroll taxes or cut elsewhere in the budget. The so called “third rail” in politics—reduce Social Security—is a non-starter.
  • If the Military-Industrial-Complex wants a new weapons system, then… you know the drill.

The problem is obvious. People want giveaways, expanded military, more government benefits, free drugs, free food, free medical care, subsidized housing, a Universal Basic Income, free everything…

BUT PEOPLE ALSO WANT LOWER TAXES.

Bottom line: We cannot reduce the budget, we will not cut programs, we do not want to raise taxes, and congresspersons will not disappoint their owners nor the voters.

The answer is debt. Make that DEBT!!!

Yes, the U.S. has accumulated over $27 trillion in official national debt as of November 2020. For perspective, national debt reached $1 trillion in 1981.

To make America great again, we need honest money and smaller government, but almost nobody wants them. Remember the consequences of honest money—balanced budgets, limited spending, higher interest rates, minimal debt, no need for a Federal Reserve, reduced government, fewer social programs, limited giveaways, smaller military, less regulation, and stable purchasing power.

But the U.S. could create a robust economy after suffering the catastrophic consequences of returning to honest money. Unlikely!

In summary, the chances of returning to honest money remind me of:

  • A snowball’s chance for survival in the Mohave Desert in August.
  • Redirecting a hurricane with a living room fan,
  • The Federal Reserve apologizing for stealing from the middle class,
  • 535 representatives and senators refusing contributions from lobbyists,
  • Negotiating with a tornado, or
  • A 15-handicapper winning in head-to-head competition with Tiger Woods.

In short, we probably will not see honest money.

If MAGA requires honest money, small government and a less restricted economy, then it is not happening.

What Should We DO?

  1. Face facts. Multi-trillion-dollar deficits are the new normal. Larger deficits are inevitable, regardless of which political party is mismanaging the national economy.
  2. The Fed will monetize to keep stock markets levitated and politicians funded.
  3. Expect QE4ever, debt and more debt.
  4. Plan for a devalued dollar as measured against commodities and necessities.
  5. Another election in 2024 will be the most important ever, or so they will say.
  6. Pick five or more: Recession, depression, market crash, markets levitated, inflation, stagflation, hyper-inflation, MMT, Universal Basic Income, debt forgiveness, and bailouts to individuals, cities, states, and corporations.

The Results of refusing to use honest money will be:

  1. More of the same mismanagement, only worse.
  2. Dollars will buy less.
  3. The rich will get richer and the poor will get scraps.
  4. Volatility in prices for stocks, gold and silver.
  5. Gold and silver prices will rise much higher during the next five years.

Official national debt will increase from $27 trillion to $40 trillion and then $50 trillion. The world will realize the dollar is worth far less. Gold prices will rise, then spike higher as panic overwhelms economists, citizens, politicians, and bankers.

Slowly at first, then rapidly… Like bankruptcy, this applies to:

  • “Printing” fake money,
  • Hyper-inflation,
  • Dollar devaluations,
  • Disenchantment with the political and financial elite,
  • Increase in social unrest,
  • Market corrections from high valuations, and
  • Rising gold and silver prices.

CONCLUSIONS:

  • Make America Great Again—The Other Version—requires policy changes that will upset everyone.
  • Do not plan on the return of honest money or small government.
  • Expect larger deficits and more debt, MUCH MORE DEBT.
  • Gold prices will rise as they devalue the dollar via deficits and “printing.”
  • Silver prices will rise more rapidly than gold prices.
  • Buy gold. Buy silver.

Miles Franklin will exchange digital dollars for real money—gold and silver. Act before another catastrophic change occurs.

Gary Christenson

Announcing the Winner of the U.S. Election!

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

After consulting tea leaves, a crystal ball, the NY Times, several polls, voters in the Chicago Cemetery, CNN, 101 Uber drivers, and three unnamed sources, we know with high accuracy the winner is…

My apologies, I misled you. The winner of the Presidential election is unknown. However, the other “winners” in 2020 are clear. To name a few…

DEBT: The official national debt on January 1, 2020 was $23 trillion. It passed $27 trillion, on its way to $30 trillion and then $40 trillion in a few years. Add another $100 – $200 trillion in unfunded commitments. Congress promised funding for Social Security, Medicare, Medicaid, government pensions, student loan defaults, and others. Congress could hyper-inflate or default on those promises.

Regardless of how you count total debt, and how economists rationalize, DEBT is an obvious “winner” in this race toward self-destruction.

THE DEEP STATE: President Trump or President Biden (Harris) will pretend they are in charge. However, the Deep State will make the major decisions. How they control most of the U.S. is above my paygrade, but expect distractions from figureheads in public while the Deep State manages, for their own benefit, the government, banking cartel, military-industrial-security complex, big pharma, big ag, and the media.

Regardless of who is declared President, the Deep State is a winner.

THE FEDERAL RESERVE: Congress passed legislation over a century ago that created this monster. The result has been increasing influence by the banking cartel, massive wealth created for Wall Street and the elite, higher prices for everyone, debt-based currency (Federal Reserve Notes), loss of gold and silver as circulating money, never-ending debt creation (so far), and the Eccles Building.

Regardless of which party controls congress, the Fed and the banks that own it are winners in 2020.

THE PANDEMIC: Live in fear, arrest anyone not wearing a mask, obey the medical mafia, and destroy the economy. Blame President Trump, blame liberal politicians, blame Dr. Fauci, blame everyone, but live with anger and fear. Trash the economy for yet-to-be-determined reasons and squash everything fun, inspirational, or enjoyable. Restrict football games, Broadway productions, restaurants, bars, movie theaters, nail salons, church services, basketball, massages, baseball, dinner parties, casino gambling, concerts, walks in the park, and so much more. But don’t restrict riots, property destruction, drug abuse, murders, and craziness.

Yes, the pandemic, fear, anger, frustration, and nonsense are winners.

VACCINATIONS AND BIG PHARMA: COVID-19 vaccinations are the “nail” for Big Pharma’s “hammer.” Pound the message home—this vaccination will save you (maybe) and make $billions for Big Pharma (for sure).

Widespread vaccinations and profits for Big Pharma are winners.

RIOTS, CHAOS, POLITICAL NONSENSE, MONETARY CRAZINESS, AND BI-PARTISAN STUPIDITY: They will be big winners. Both political parties may reject election results. Post-election chaos, riots, and property destruction are likely. Pro-Trump and anti-Trump supporters are certain they have the correct viewpoint.

Chaos, craziness, and stupidity will be winners.

STIMULUS: Expect more “stimulus.” That includes legislation (paid with borrowed funds), QE from the Fed, pension fund bailouts, direct payments to individuals, corporate bailouts, a Universal Basic Income, payouts to cities and states, and many promises from politicians. Government revenues can’t pay for the “stimulus” so government will borrow funds. The solution to an excessive debt problem is NOT more debt, but that is the only plan. The discussion is only about who gets how much.

Yes, stimulus is an obvious winner.

GOLD AND SILVER: Debt is skyrocketing. Those extra dollars in circulation drive up prices for food, medical care, and S&P 500 stocks. People realize government and Fed policies are trashing the purchasing power of the dollar. Sensibly, people seek unprintable assets that preserve value, protect purchasing power, and have no counter-party risk in a world where counter-party risk and debt defaults will become important. The answer is assets that have intrinsic value, not debt. Gold and silver have been money for thousands of years, have never defaulted, will stay valuable beyond the next several financial resets, and will rise in price as Fed and government policies devalue dollars.

Yes, gold and silver will be clear winners in the coming years. Charles Nenner says gold will rise much higher in a bull market until 2026. I believe him.

COMMENTS FROM OTHERS:

Donald Trump:

“We like stimulus, we want stimulus. We think we should have stimulus.”

SUMMARY:

A president will be selected, but the “for-sure” winners will be:

  • Debt
  • The Deep State
  • The Federal Reserve
  • The Pandemic
  • Vaccinations and Big Pharma
  • Stimulus
  • Gold and silver

WHAT AFFECTS GOLD AND SILVER PRICES?

  • Debt increases. $30 and $40 trillion in national debt are coming. That excessive debt devalues dollars. Prices rise. Gold and silver prices increase.
  • The Deep State will rake in profits, boost debt, escalate military spending, increase surveillance, expand control over the population, and push up gold and silver prices.
  • The Federal Reserve increased its balance sheet (from “thin air”) by over $3 trillion in the past year. More $trillions are coming. Gold and silver protect us from central bank devaluations and “printing.”
  • The response to the pandemic has been to “lockdown” the economy, destroy jobs, devastate small businesses, and pray for a vaccine even though viral vaccines have been minimally successful. Expect more spending, panic, fear, anger, riots, suicides, and debt. The newly created fake dollars won’t fix real problems, but they will boost gold and silver prices.
  • “Stimulus” includes boondoggles, payoffs, giveaways, “shovel ready projects,” currency “printing,” more debt, financial craziness, and monetary nonsense. Maybe it helps, but at what price? Those extra stimulus dollars flow into Wall Street, stocks, and boost gold and silver prices, which should rise for many years.
  • Gold and silver prices: Going up! Corrections will occur, but the trend is higher because debt is increasing, the Fed is mismanaging the dollar, politicians spend more than revenues, and the needs of the Deep State are deemed important.

GOLD AND SILVER PRICES ARE INEXPENSIVE! PROVE IT!

Examine five Decades of gold prices compared to national debt, M2, and the S&P 500 Index. Gold is low compared to debt, M2 and the S&P.

From: Alasdair Macleod:Hyperinflation is here.”

“Definition: Hyperinflation is the condition whereby monetary authorities accelerate the expansion of the quantity of money to the point where it proves impossible for them to regain control.”

“… most, if not all governments have already committed their unbacked currencies to destruction by hyperinflation.”

From Howard Buffett in 1948:

“I warn you that politicians of both parties will oppose the restoration of gold, although they may outwardly seemingly favor it. Unless you are willing to surrender your children and your country to galloping inflation, war, and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money.”

From John Rubino: The Least Important Election of Our Lifetimes?”

From John Mauldin: “Caught in a Debt Trap

“Our political process can’t reduce spending and/or reduce taxes enough to balance the budget, so the debt grows and grows. As it does, paying the interest plus the accumulated debt load pulls more capital away from more productive uses. This depresses economic growth, thereby generating even more spending and debt.”

CONCLUSIONS:

  • An election will occur. A winner will be decided. Many people will be angered by the result. Expect chaos and riots.
  • Perhaps the winner will be determined by the Supreme Court. Or maybe someone will win because his political party was more successful at cheating, counting the votes, and working the system.
  • Regardless of the outcome, debt, the Deep State, the Federal Reserve, the pandemic, big pharma, stimulus, gold, and silver will be “for sure” winners.
  • Those “for sure” winners will boost gold and silver prices.
  • A financial reset is possible in several years.
  • Compared to national debt, M2, and the S&P 500 Index, gold (and silver—not shown) is inexpensive.
  • Expect much higher prices for gold and silver.

Miles Franklin sells gold and silver. Take advantage of this correction in prices. There will be another correction, and another rally and other corrections, but the trend is up, and demand is strong and growing.

Protect the purchasing power of your savings and retirement with gold and silver – especially silver.

Gary Christenson

Those Masked Men, Craziness, and Silver

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

The U.S. Presidential election occurs in less than a month. This silly season is crazier than usual. Politicians, central bankers, athletes, employees, and many people are wearing masks, often mandated my local edicts. Others are rioting and destroying property. People are fleeing large cities.

Half (or more) of the U.S. believes masks protect the wearer and others from the pandemic. The other half believes masks are largely useless, an invasion of personal freedoms, and mandated by politics, instead of intelligent and objective science.

That debate is above my paygrade. Regardless, the “Powers-That-Be” (PTB) will do what their political agendas require, even if their actions trash local economies. Let’s explore a few mask wearers and some consequences of their decisions.

But first, for the week ending October 8, 2020:

Gold (COMEX) rose $18 to $1,926.

Silver rose $1.08 to $25.11

The DOW rose 904 to 28,586.

10-year interest rate rose to 0.77%, from a March low of 0.4%.

Political nonsense increased to an unmeasurable level.

Politicians wear masks (in public), and demand that people “mask up” even though their mandates boost unemployment, destroy businesses, eliminate jobs, and MIGHT reduce infection and death rates. The media ignore “false positives,” medical authorities (including CDC and WHO) that doubt mask effectiveness, unnecessary deaths, and abuse resulting from “lockdowns.” Poor planning and not thinking extract a price.

WHAT WE KNOW FOR CERTAIN:

  • Politicians and medical authorities have devastated portions of the global economy via “lockdowns.”
  • Politicians and central bankers reacted to their destructive policies by creating dollars, euros, yen, pounds, and francs.
  • Politicians forget that fake money can’t solve real problems. Fake money, those newly created dollars, can temporarily mask the consequences of bad policies, but “the piper must be paid.”
  • Debt skyrockets higher. The U.S. official national debt surpassed $27 trillion. Total U.S. debt of $80 trillion cannot be paid with dollars of current value. Pick your poison—default (don’t pay, sorry, just kidding when we called it a loan) or massive inflation (repay with mini-dollars).
  • Savers and pension plans earn nearly nothing on their money. Ugly consequences are coming.
  • Elect Trump as President, and the debt rises rapidly. Elect Biden (Harris) as President, and the debt rises rapidly.
  • Chairman Powell will “print” as needed. There will be harsh consequences.

President Trump:

National debt increased by $7 trillion since his inauguration in January 2017. Think more debt, no problem, make the stock market look good…

Speaker Pelosi:

National debt increased by $25 trillion while she has served (since 1987) in congress, which supposedly manages the budget. Think ever-increasing debt and no management.

Chairman Powell:

National debt increased by $6 trillion while he has been Chairman, and The Fed balance sheet (from “thin air”) increased by over $3 trillion. Think QE4ever, funny money, damn the consequences, bail out Wall Street, and Inflate or Die!

Dr. Fauci:

His policies have been partially responsible for “lockdowns,” over 50,000,000 Americans filing for unemployment, mask mandates, suicides, bankruptcies, and increased abuse of drugs and alcohol. Was he helping “Big Pharma,” himself, or the American public?

The Lone Ranger (fictional):

He lived with a strict moral code. “That sooner or later… somewhere… somehow… we must settle with the world and make payment for what we have taken.”

He used silver bullets! Think honesty, integrity, and concern for consequences.

QUESTION: Did President Trump, Speaker Pelosi, Chairman Powell, and Dr. Fauci watch The Lone Ranger? Did they fail to understand the simplicity, logic, and honesty of The Lone Ranger’s moral code?

QUESTION: Will President Trump, Speaker Pelosi, Chairman Powell, and Dr. Fauci “make payment for what we have taken?” Will that payment be acceptable to anyone outside the political and financial elite?

QUESTION: If debt cannot increase forever (it can’t!), what happens when the U.S. economy crashes into the debt-wall? Default of debt? Hyper-inflation of mini-dollars? A new gold standard that backs “novo-dollars” to restore confidence after the economic crash? Peace and prosperity for all? The Federal Reserve apologizes to the world for making a mess of our monetary systems? Congress refuses donations and payoffs?

QUESTION: Are President Trump, Speaker Pelosi, Chairman Powell, and Dr. Fauci aware that previous unbacked fiat currencies crashed because they were “over-printed,” as the dollar, euro (etc.) are over-printed today?

QUESTION: If a reset, crash, recession and/or depression are inevitable, what have YOU done to protect your assets?

QUESTION: Did gold and silver come to mind? If not, why not?

CRAZINESS:

Many observers have noted the world is crazier than usual. The craziness exceeds typical silly season nonsense. The craziness is more than ultra-right-wing madness. The craziness is beyond ultra-left-wing lunacy. The craziness surpasses the normal lies told by the usual suspects.  Consider:

Woman pepper-sprayed man for not wearing face mask.”

Woman arrested, tased for not wearing mask at Ohio football game.”

Three people killed in clash with police over face masks.”

Supporters of Senate Bill 1287 says Pennsylvanians who don’t wear face masks are recklessly endangering other people.”

Other headlines:

WHO Flip-Flops: Urges World Leaders to Stop Using Lockdowns”

Sweden’s disease expert says just wearing face masks could be very dangerous.”

“50 Richest Americans Now Worth More Than Poorest 165 Million”

Two examples of face mask craziness… (French Open and California)

WHAT ABOUT SILVER?

Countries used silver for thousands of years as money. It worked as money, kept its value, and individuals trusted silver.

Silver prices increased 26% in 2020Q3.

Federal Reserve Notes (debts of the Fed, NOT real money) have circulated since 1971 when President Nixon severed the last link between the U.S. dollar and gold. Since 1971 the dollar has declined in value from about 1/40th of an ounce to about 1/2000th of an ounce of gold. Prices for the S&P 500 Index, food, prescription drugs, cigarettes, wars, payoffs, and hundreds of other items have also increased.

Federal Reserve Notes do not maintain their purchasing power. Their devaluation is intentional and executed by the PTB. Plan accordingly unless you have senators and “K-Street” lobbyists on speed-dial.

As spending and debt increase, Fed Notes decline in value. As Fed Notes devalue, silver prices rise.

Silver prices are erratic, like pandemics and politicians. But as debt increases (a proxy for currency in circulation), so do silver prices. Examine the following linear and log-scale graphs of silver prices (based on annual average of daily prices from Kitco) and official national debt. I included estimates for debt and silver prices out to 2024.

National debt increases exponentially, a straight line on a log chart. Silver prices approximately follow that exponential increase. Note that the average silver price for 1980 was $16.39, but prices exceeded $50 for a short time in January. Another silver bubble is coming…

Make a five-period moving average of annual silver prices. The statistical correlation for 1970—2020 between national debt and the smoothed silver price is 0.80. As debt increases, silver prices increase.

The graphs above assume national debt increases to about $40 trillion in 2024. They assume silver prices average $115 in 2024. Silver might exceed $115 by a large margin, depending upon the actions of the above masked men, monetary craziness, and how rapidly the Fed and U.S. government devalue dollars.

From Bill Bonner: “Politicians Ignore Ballooning National Debt

“The federal government now owes $27 trillion that it can’t pay. The country as a whole, including the private sector, owes $80 trillion… that it can’t pay.

“And the government has promised America’s 76 million baby boomers (and others) $210 trillion in unfunded “entitlements” – pension, medical, and Social Security benefits – that can’t be paid, either.

“Rather than man-up… and cut back on spending, both parties are committed to covering these unpayable debts by printing money – a policy that always leads to bankruptcy, poverty, depression, and inflation, as well as social and political chaos.”

From Alasdair Macleod: “Monetary Distortions of GDP in 2021

“And despite the wealth destruction being wrought by currency debasement, in the coming months we will see monetary expansion deployed more aggressively. An inflationary solution cannot succeed…”

CONCLUSIONS:

  • Our politicians and central bankers like debt, irresponsible spending, and ignoring consequences. But debt inevitably rises, and prices increase.
  • The Fed has created (from nothing) over $3 trillion in the past year to support Wall Street and government spending. A TINY portion of that $3 trillion trickled down to the lower 90% of Americans.
  • Government and medical mandates trashed the U. S. economy for many businesses and people. The Fed and government have “printed” dollars to support the economy. They have not been successful.
  • Fake money does not solve real problems, including unemployment, bankrupt businesses, homelessness, higher food prices, supply chain disruptions, lack of demand, and economic craziness.
  • Silver prices track the increasing national debt, with wide deviations. Compared to (shown in other articles) total debt, the S&P 500 Index, national debt, and many others measures, silver prices remain low.
  • Debt will increase. Silver prices will rise much further. How high and how fast will depend upon dollar weakness, Fed devaluation of the dollar, economic craziness, monetary stupidity, and QE4ever.
  • Buy silver! There may be downside risk for a month or two, but prices will be far higher in 2021 than today. Silver sold for $4.01 in 2001. It is six times higher today. It will be six times higher again, probably well before the end of this decade.

Miles Franklin sells silver. Supplies are tight. Demand is strong because many people see the craziness, massive debt, and inevitable dollar devaluation. Silver protects the purchasing power of assets in the long term.

Gary Christenson

The F.E.D. Index and Price Increases

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

For the week ending October 2, 2020:

Gold rose $50 to $1,907.

Silver rose $0.93 to $24.03

The NASDAQ 100 Index rose 104 to 11,255.

Politicians… yada yada yada.

The Federal Reserve has two mandates: a stable dollar and low unemployment. They are doing a miserable job with both.

a). The dollar is not stable. Look at price changes between 1970 and 2020. Trucks are up from $3,000 to $60,000. Postage changed from 6 cents to 55 cents, silver (COMEX) rose from $1.63 to $24 (and soon much higher), food prices are up substantially… and the list continues.

b). Nearly one million people applied for unemployment last week. Many millions are out of work. Even more will be laid off in coming months. Employment is weak. Jobs are disappearing. Desperation… Fed dollars won’t fix these problems.

But Fed employees are doing an outstanding job devaluing the dollar, transferring wealth from the many to the few, and paying themselves large salaries.

From Peak Prosperity:

“Under this regime, the rich benefit disproportionately at the expense of everyone else AND it creates a hyperinflation in the cost of retirement. This accelerating war on the 99% cannot stand much longer without serious consequences and repercussions.”

Ask any congressperson if he/she thinks the Fed will stabilize the dollar’s purchasing power, support a balanced budget, cease monetizing debt, prudently manage the supply of currency… and so on. Obviously not.

From Sven Henrich:

“Do you really think it’s an accident that the only people placed in charge of the country’s monetary policies are doves? People of the perma intervention kind. It is after all the same Congress comprised of these very two parties that approves all the nominations. Bernanke was a dove. Yellen was a dove, Powell now the perma-dove with interest rates at zero forever and ever amen.

Ask any congressperson if he/she thinks the U.S. government will balance its budget, reduce the national debt, and wisely manage the economy.  Obviously not.

The debt-based currency system will persist until it collapses, which might be years or decades. National debt will increase because politicians spend dollars… forever, or until something breaks.

From Alasdair Macleod:

“… the purchasing power of the dollar is hostage to foreign sellers, and that if the Fed continues with current monetary policies the dollar will follow the same fate as John Law’s livre in 1720.”

The Consumer Price Index (CPI) supposedly measures the declining purchasing power of the dollar. We pretend it’s real because it’s official, even though every shopper knows it under-reports consumer price inflation and dollar devaluation.

In short, the CIP is good for slowing the increase in Social Security Payments (CPI indexed) and making government policies look better than they are.

LET’S CREATE A NEW INDEX TO MEASURE DEVALUATION OF THE DOLLAR:

  • Keep it simple.
  • Make it easy to calculate.
  • Base it on 50 years of history.

We’ll call it the F.E.D. Index where “F.E.D.” stands for Fiat Enduring Devaluation. Alternates are Fiat’s Embarrassing Devaluation, and Fiat Endorsed Devaluation.

You see the idea. The Fed and banking cartel create dollars and make existing dollars less valuable. The government creates an agency to track price increases, but often modifies the methodology to pretend consumer price inflation is less nasty, particularly in election years.

Another viewpoint is the F.E.D. Index:

Track the monthly closing prices for the S&P 500 Index and the monthly closing prices for gold bullion on the COMEX. Weigh gold at 1.5 times the S&P (historical average) and add them together. That sum creates an index.

OBSERVATIONS:

The F.E.D. Index rises exponentially and peaks when either the S&P or gold peaks.

The F.E.D. Index has stayed within a log trend channel since the mid-1980s – about 35 years.

The log-scale graph shows that the F.E.D. Index rises logarithmically at about 5.6% per year since the mid-1970s. The Index burst through the trend channel in 1980 when gold bubbled higher. It could happen again.

Approximate Index values are:

Date                    Index     Ratio to 1970

1970                       150         1.0

2000                    1,500         10.0

2010                    3,000         20.0

2020                    6,500         43.0

Example Price Increases – Estimates:

  • A new truck costs about 20 times as much in 2020 as in 1970.
  • A McDonald’s burger increased in price from $0.55 to $4.00, up a factor of 7, but it’s smaller.
  • Cigarettes cost $0.35 per pack in 1970. Today they cost $8.00 per pack, depending on the state. They are up a factor of 22 since 1970.
  • A silver dollar from 1921 cost about $1.50 in 1970. Today it costs about $38, up a factor of 25. Higher silver prices lie ahead.
  • College Tuition for an expensive college was $3,500 per year. Today it is at least $70,000, up a factor of 20 or more.
  • The DOW was 750 in 1970. Today it is 27,600, up a factor of 37.
  • U.S. government expenses in 1970 were less than $200 billion. In 2020 they exceeded $6,000 billion (in 11 months), up by a factor of about 35.
  • Medical care, prescription drugs, and hospitalization expenses are up an estimated factor of 50 to 150 compared to 1970.
  • However, the CPI estimates that prices are only 6.9 times higher than in 1970. The CPI underestimates actual costs for food, utilities, housing, medical care, and many other expenses.

SUMMARY:

Don’t trust the CPI, which understates the real price inflation most families experience, and use the F.E.D. Index or Chapwood Index to determine the increase in prices.

THIS BEGS THE QUESTION. Is gold inexpensive compared to the S&P 500 Index?

Examine the chart of gold (multiplied by 1.5) compared to the total F.E.D. index over the past 50 years. You can see:

  1. Gold (and commodities) was too expensive in 1980.
  2. Gold (and commodities) was inexpensive in 2000.
  3. Gold (and commodities) remains underpriced in 2020.

Gold (and commodities) prices will rise more rapidly than the S&P 500 Index. The S&P is too high in October 2020 (election year politics and Fed “printing”) and will fall, probably after the election. Don’t expect the “Powers-That-Be” to encourage gold purchases.

Read: Hemke: “Bullion Bank Criminal Corruption

Based on the reduction in the dollar’s purchasing power by the Fed and the government, and rapidly rising debt, the price of gold must increase in the next several years.

Assume: The index rises 5.6% per year or more. Gold will rise while the S&P will fall. What is not speculation is that the dollar will devalue, debt is rising uncontrollably, and the Fed is desperate to appear in control while they continue to pump money from the many to the few.

The following is speculation. Assume the S&P corrects lower for several years and gold and other commodities surge higher as they did in the 1970s.

Gold Conservative Case

Year                     Gold         S&P 500    Index (1.5 gold + S&P)

2020                    2,000         3,500         6,500

2021                    2,900         2,500         6,864

2022                    3,500         2,000         7,248

2023                    3,400         2,500         7,654

2024                    3,600         2,700         8,083

2025                    3,600         3,200         8,536

Gold Less-Conservative Case (Speculation)

Year                     Gold         S&P 500    Index

2020                    2,000         3,500         6,500

2021                    3,070         2,500         7,100

2022                    4,270         1,500         7,900

2023                    4,530         2,000         8,800

2024                    4,870         2,500         9,800

2025                    5,300         3,000         11,000

CONCLUSIONS:

  • The CPI does not represent the actual cost-of-living increases for most families. It does slow the rise of Social Security and pension plan “cost-of-living” adjustments.
  • The F.E.D. (Fiat Enduring Devaluation) Index is a calculation over 50 years that shows the increased costs for financial assets and many consumer items. A few were listed above.
  • The Federal Reserve is desperate, as is the government. Keep those bubbles inflated and the liquidity flowing. Inflate or die. Monetize that debt, damn the consequences, and “full steam ahead” until after the election. But fake money cannot fix real problems!
  • What pandemic? People are unemployed, and businesses are closing, but the Fed is printing and will make it all better! Nonsense!
  • Gold prices will rise more rapidly for several years than the S&P 500 Index.
  • Gold prices spiked higher in 1980. Now, 40+ years later, gold prices could bubble higher again, as people lose confidence in the dollar, as the Fed desperately “prints” dollars, as congress pushes for more spending, social programs, payoffs, and wars.
  • Be wary of high-flying stocks that have risen too high, too fast.
  • If gold spikes higher by 100% (for example) then silver prices could rise by 200% or 300%.
  • Buy gold. Buy silver.

Miles Franklin sells gold and silver. The dollar was worth 1/40th of an ounce of gold fifty years ago. What will a dollar be worth, measured in gold, in another 50 years? Call 1-800-822-8080.

Gary Christenson

The Sky Is Falling – Gold and Silver Are Following!

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

For the week ending September 25, 2020:

  • Gold (COMEX) was down $95 to $1,858.
  • Silver was down $4.03 to $23.09. Yikes!
  • The DOW was down 483 to 27,174.
  • Tesla stock was down $34 to $407. Its all-time high was $502.
  • John Mauldin expects $50 trillion in national debt by 2030.

The Fed assured us interest rates will stay low for years and they’ll continue QE4ever – printing dollars from nothing.

Rioters are doing their thing in many cities. Some are paid to riot and destroy. Is this a healthy sign?

Social unrest, riots, income equality, unemployment, and bipartisan stupidity will persist.

The Presidential race is interesting. Both candidates make promises and collect donations, as usual.

If Trump wins, debt will accelerate higher, government spending will rise, and gold prices will increase.

If Biden wins, debt will accelerate higher, government spending will rise, and gold prices will increase.

BUT WHAT ABOUT GOLD AND SILVER?

Gold (COMEX) closed on August 6 at $2,058. Silver closed at $29.26 on August 10. As of September 25, gold has lost 10% from its high and silver is down 21%. 

What happens Next?

Option One – Bear Case:  Gold hit a new all-time high in August, as it did in January 1980 and August 2011. Gold prices fell for years afterward. Prices could fall for years after this all-time high.

Option Two – Bull Case:  Gold entered a long-term bull market after its low in December 2015. The current pullback is a healthy correction for gold’s ride higher from $1,182 in September 2018. The bull market will continue.

Option Three – Delusional Case:  Gold prices will fall toward $1,000 as congress and the administration announce they will balance the budget, the Fed apologizes for creating a disaster in global economies, Democrats and Republicans make nice, and most rioters find jobs in California. Hot-button issues such as COVID-19, global warming, racism, and unemployment are solved, and CNN encourages a joint session of congress where all members sing Kumbaya and hold hands.

Option three is less likely. Let’s explore options one and two.

Option One Bear – prices fall for years. What SUPPORTS that option?

  • The RSI (relative strength index) for the monthly chart of gold shows only two occurrences of an RSI > 70 (very high) after 2011. They occurred at short-term highs in August 2019 and August 2020.
  • Other indicators suggest that the August 2020 high was an intermediate high. It could be months or years before gold exceeds $2,050 again.
  • The dollar has bottomed (maybe).
  • The Fed supports stock prices, not gold prices. JPMorgan and others have suppressed gold prices for years, as indicated by a $1,000,000,000 fine. Why change now?

Option One Bear – prices fall for years. What argues AGAINST that option?

  • The Fed is “printing” dollars – trillions per year. Some of those newly created dollars are pumped into the gold market. The Fed will not stop printing. Individuals, pension plans, and central banks will buy gold to protect their purchasing power.
  • The Fed will keep low or zero interest rates for as long as possible. Those low rates enrich the political and financial elite and boost the prices for gold and silver.
  • The S&P 500 Index was 0.64 of gold’s price at the gold peak in August 2011. At the August peak in 2020, the S&P was 1.70 times gold’s price. Gold prices are not expensive – yet.
  • Official national debt (in billions) was 7.8 times as large as the price of gold in 2011. At the August peak in 2020, the ratio of national debt to gold was 13. Gold is inexpensive compared to our outrageous national debt.
  • The monthly RSI for gold reached over-bought conditions in 2006 and 2008. Prices corrected and powered higher for three more years. As in 2008, gold prices could rise from current over-bought conditions for several years.

Option Two Bull – prices will rise for several more years. What argues IN FAVOR OF that option?

  • National debt has risen almost 9% per year since 1913. There is no political will to reduce debt, balance the budget, or adopt sensible economic policies. Instead, politicians push for Universal Basic Income, Modern Monetary Theory (the Magic Money Tree of government finance), free tuition, health care for all, infrastructure build-out, more social programs, and many other unaffordable ideas. National debt will rise at 8% to 9% per year, or faster, and gold prices will, on average, keep pace with that rise in debt. (Statistical correlation is 0.92 for annual data over five decades.)
  • Gold prices hit an all-time high in August 2020 at over-bought levels as measured by many technical indicators. The current correction is healthy. Prices can rise to much higher levels. Over-bought can mean multi-year peaks or pauses on the way to new highs. Examples: Amazon stock, Tesla stock, Facebook stock, and many stock indices have been strongly over-bought in the past, corrected, and then rallied to new highs.
  • Ratios for gold prices to national debt, the S&P 500 Index, M2, Fed balance sheet, and others suggest that the August peak was only an intermediate peak. Expect higher prices in the years ahead.
  • A dollar bought 1/40th of an ounce of gold five decades ago. Today it buys about 1/2000th of an ounce. The Fed is devaluing the dollar and will not stop until something breaks. Gold prices will rise higher. Think $5,000 to $10,000 per ounce, or more.
  • Our politicians and bankers want inflation, a devalued dollar, and higher stock prices. They are likely to get all three. Gold prices will rise more rapidly than stock prices.
  • The dollar bottomed on August 31, 2020. It might strengthen for weeks or months. However, it is difficult to understand how insane deficits, crazy debt levels, zero interest rates, riots in the streets, unemployment, plunging GDP, and U.S. politics will inspire dollar strength for long. We shall see…

Option Two Bull – prices will rise for several more years. What argues AGAINST that option?

Gold prices hit an all-time high in August 2020. The other times (1980 and 2011) gold fell for years thereafter. (Doubtful gold prices will fall much, but it could happen.)

The Fed wants higher stock prices, inflation, lower gold prices and more power. Don’t bet against the Fed. (However, markets, fear, and greed are larger than the Fed.)

A runaway gold price suggests the Fed and U.S. government are mismanaging the dollar. They want stable or falling gold prices. Sometimes governments can’t get what they want because other priorities are more important. Some important priorities are: re-election, buying votes, loss of confidence in the dollar, low interest rates, escalating wars, bipartisan stupidity, payoffs for businesses and unions, expanded social welfare programs, the MMT monster rising from the swamp, and another pandemic lockdown.

SUMMARY:

One can argue that gold and silver prices should fall for years and bottom much lower. These arguments make little sense and defy history.

One can argue that gold and silver prices are correcting, the sky is NOT falling for gold and silver investors, and much higher prices lie ahead as the dollar is devalued further. I believe this scenario.

If your perspective is focused upon the next week or two, gold and silver prices look weak and could go lower.

If your perspective is focused upon 2021 – 2024, gold prices are correcting on their way to much higher prices.

In the short term, gold and silver prices could fall further. In the long term, they are going higher.

Read: Graceland Updates on a gold bottom at $1,788.

Read: Alasdair Macleod “Lessons on Inflation from the Past

“There is hardly an economist today who does not condemn the Reichsbank for its inflationary policies. Yet they are supportive of similar monetary policies by the Fed, the European Central Bank, the Bank of Japan and the Bank of England.”

“The final collapse of a currency is always a flight out of government fiat currency into goods. That can be the only outcome from the continuation of current macroeconomic policies. But above all, it would be a mistake to think it cannot happen, nor that it will be a long process giving us all plenty of time to plan. The final flight out of paper marks took approximately six months.”

WHEN WILL GOLD PRICES BOTTOM?

Cycle analysis can provide insights, or as others suggest, wishful thinking. Take these cycle thoughts for whatever they are worth.

The last ten significant bottoms (green ovals) in gold prices, over the past 15 years, have occurred near bottoms in the 52-week (blue) and/or 80-week (red) cycles. Cycles guarantee nothing, but the 52-week cycle is due to bottom about December 2020 and the 80 week is due to bottom in October 2021. Shorter cycles suggest a bottom this October.

Prices could bottom in October, rise for several months, fall to another short-term low in December, and rise for most of 2021, with a correction low around October 2021. Or maybe not…

Another gold cycle chart to consider:

The daily gold RSI is already over-sold, so a bottom could occur any time.

Maybe!

CONCLUSIONS:

  • Gold and silver prices peaked in August at monthly and weekly over-bought levels.
  • A three-month correction is reasonable and could indicate a price low in October. Another gold cycle low is due in December.
  • Gold prices could fall for many months. But the current crises in politics, social unrest, pandemic worries, riots, Fed “printing,” unemployment, plunging GDP, revenue shortfalls at all levels of government, and so much more, suggest a rally in gold prices during the coming months and years.
  • I see continued social, economic, and political trauma well into 2021. Higher gold prices will result.
  • Charles Nenner expects a gold bull market until 2026. Why not?
  • Gold and silver have been real money for several thousand years. Current dollars are debts of the Federal Reserve and are backed by nothing tangible. This is reason to worry about the value of dollars.
  • The Fed is NOT all-powerful. If they were all-powerful, why do the economy and stock market crash about every ten years?

Miles Franklin will convert digital and electronic dollars into real money – gold and silver. Take advantage of lower prices. Call 1-800-822-8080.

Gary Christenson

Real Royalty and Pretend Royalty

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

GLOBAL ROYAL FAMILIES:

  • Royal families have ruled Great Britain for centuries. They control massive wealth and exercise considerable influence in global affairs.
  • The Dutch royal family is less visible.
  • King Donald and Queen Melania are influential, but not royals.
  • Prince William of Gates, Prince Jeffery of Amazonia, and Prince Elon of Teslovakia are new members of pretend royal families – “Tech Royalty.”
  • Queen Hillary and King William of Clintonia are pretend royalty, but we aren’t going there…
  • Other pretend royalty are Prince Barack and Princess Michelle from Obamanoya, and several Prince Georges from the Duchy of Bushington. Their days as pretend royalty are fading.

Royals come and go. We celebrate their lives, observe their departure from public life, and move on to another distraction.

The life cycles of Chairpersons of the Federal Reserve resemble royals. For a few years they are closely watched, every word is analyzed, and they are treated as royalty—because they control the flow of fiat currency units. But after they have implemented destructive monetary policies, make a mess of the global economy, loaned $trillions to Wall Street, and crushed retirees and “Main Street” businesses, they give $100,000 speeches, write books for $millions, and fade into oblivion.

But there is no point discussing the occasional successes and many failures of our political and monetary pretend royalty. Nor are we interested in American “Royalty” or the billionaires of “Tech Royalty.”

The true financial royalty—King Gold and Queen Silver—are far more important, even though they create fewer headlines in the controlled media.

  • Gold and silver have been financial royalty for millennia, unlike royal families.
  • Gold can be cast into a crown that lasts for centuries. In contrast, real and pretend royalty may persist for decades, but most come and go quickly.
  • Gold retains its beauty forever. The appeal of royalty fades, is defaced by scandals, diminished by corruption, and is quickly degraded.
  • Gold retains its value, is universally recognized, and appreciated everywhere. Central banks buy gold but seldom discuss its value. The Fed is adamant its currency is valuable, even though they create dollars by the trillions, and each dollar is backed by nothing tangible. Most of our pretend royalty are praised in the media but will fade into oblivion long before gold loses its shine.
  • Presidents come and go. Central bankers rise and fall. Pretend royalty, like comets, shine briefly, and disappear. Gold keeps its beauty and value. Silver retains its purchasing power and has thousands of industrial uses. Former Presidents and government leaders, especially corrupt ones, fade into oblivion.
  • Gold persists. Silver lasts. Dollars devalue. All fiat currencies revert to their intrinsic value—zero. The only royals that survive the test of time are gold and silver.

THOUGHT EXPERIMENT:

  • Fifty years ago, a dollar purchased 1/40th of an ounce of gold.
  • Today, a dollar purchases 1/2000th of an ounce of gold.
  • The devaluation of the dollar has accelerated since 2008. Assume it takes thirty years, not fifty, to similarly devalue. In that case a dollar in 2050 will purchase 1/100,000th of an ounce of gold.
  • That means the price of gold in 2050 would be $100,000 per ounce.
  • Crazy, right?

But the Fed created over $3 trillion of new fiat dollars (from nothing) in the last year. Was that crazy? Is a national debt of $27 trillion crazy? Are financially supported riots crazy? How can COVID-19 be spread by Trump rallies but not by BLM demonstrations and riots (per CNN)? Crazy?

The economic shutdown devastated middle America, destroyed over 100,000 businesses, forced 50,000,000 workers to file for unemployment, and yet three “Princes” of “Tech Royalty” gained hundreds of billions in wealth. Crazy?

BACK TO BASICS:

  1. Dollars are created with few restrictions, because of fractional reserve banking and central banking.

2. Dollar creation will persist because it benefits the political and financial elite.

3. Extra dollars (debts of the Fed) in circulation, as indicated by rapidly increasing debt, devalue existing dollars. Hence prices for stocks, commodities, medical care, political payoffs, gold, and silver rise.

4. Prices can rise too far, too fast, and then crash. Remember silver in 1979-80, Japanese real estate in 1990, Internet stocks in 2000, real estate in 2007, crude oil in 2008, and FAANG stocks in 2019-2020.

5. Prices rise as dollars are devalued, because too many dollars have been created. A dollar crisis is coming.

6. This process gradually transfers wealth from the many to the few. That’s why the Fed and banking cartel support it.

7. Symptoms of a dollar crisis: Near zero interest rates, interest rates set by the Fed but not the market, deficit spending, national debt rapidly increasing, useless wars that primarily benefit military contractors, medical care costs so high they create bankruptcies, income inequality, riots in the streets, and so many more.

8. IF IT CAN’T CONTINUE FOREVER, IT WILL STOP.

9. We don’t know when the system will collapse, so prepare with gold and silver.

NATIONAL DEBT:

  • From 1913 to 2020, national debt increased from $2.7 billion to $27,000 billion at a compound rate of 8.9% per year, every year. Debt doubled, on average, every eight years.
  • From 1971 to 2020, national debt increased from $398 billion to $27,000 billion at a compound rate of 8.6% per year. Debt for the past fifty years also doubled almost every eight years…
  • Assume similar debt nonsense continues for another 40 years.

Year                             National Debt

2020                            $27 trillion

2028                            $54 trillion

2036                            $108 trillion

2044                            $216 trillion

2052                            $432 trillion

2060                            $864 trillion

                                    Crazy!

IF IT CAN’T CONTINUE FOREVER, IT WILL STOP.

As the national debt increases, prices for gold, silver and stocks will rise. Examine these graphs of annual gold prices and national debt for the last 50 years. The graphs assume $3,000 gold in late 2022, $3,500 gold in 2023, and $4,000 gold in 2024. They assume national debt of $31 trillion in late 2022, $34 trillion in 2023, and $38 trillion in 2024.

OBSERVATIONS:

  • The charts show that gold prices track total national debt. The correlation over 50 years is about 0.92 from only one variable—debt. Impressive! Excessive debt raises prices.
  • INFLATE OR DIE!
  • There is no political will to reduce debt. Huge incentives exist to increase debt. Hence national debt will increase.
  • Gold and silver prices will also increase.
  • The debt can’t be repaid with dollars of current value. The debt must be defaulted or inflated. In either case, gold and silver will preserve purchasing power.
  • Royalty and pretend royalty will fade into oblivion. Gold will not.
  • The economic shutdown destroyed businesses and tax revenues. More dollars will be created to compensate. Think massive debts and “printing press” currency – like a “banana republic.”

Read:

Christenson        Who Was That Masked Man?

Christenson        We Tested Positive!

From David Schectman:

“Since the banks aren’t lending and Americans aren’t spending, the government will have to work overtime to force money into the economy, which also increases the already unsustainable deficits.”

“The Fed is not in charge; the banks are in charge. They’re not lending because they know what’s going to happen.”

“… neither [political] party will solve the problems, and neither is capable of steering us through the pandemic and Great Depression. You think it’s bad now? Wait until after the elections.”

From Ed Steer:

“The decline in the U.S. dollar is now unstoppable…”

CONCLUSIONS:

  • Debt will increase—doubling every eight years.
  • Gold prices will rise along with debt as devalued dollars buy less. A panic out of the dollar, hyper-inflation, and loss of reserve currency status will accelerate gold’s price rise.
  • Royals and members of pretend royal families come and go. Gold and silver remain.

Miles Franklin will convert devaluing dollars into gold and silver. Call 1-800-822-8080.

Gary Christenson

Bubbles, Booms, Busts, and Bummers

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

For the week ending September 11, 2020:

  • Gold rose $13 to $1939.
  • Silver rose $0.14 to $26.86.
  • Tesla stock fell $45 to $372, down 26% since early last week.

Bubbles are a fact of life. They occur, like hurricanes, when conditions are right. Like hurricanes, they can be deadly. In the financial world, for a bubble to expand, we need a great story, an excess of credit, mass appeal, and suspension of critical thinking while individuals embrace greed and fear.

EXAMPLES:

  • The South Sea Bubble in England in the 1700s.
  • The stock market bubble in the late 1920s.
  • The silver bubble in 1978 – 1980.
  • Japanese real estate bubble during the late 1980s.
  • The NASDAQ 100 tech bubble in 1998 – 2000.
  • The housing bubble in 2004 – 2007.
  • Bitcoin in 2017.
  • Tesla stock prices in 2018 – 2020.

GREAT STORIES:

  • Everyone is getting rich in the stock market in 1928 – 1929. Don’t miss out…
  • Silver is going to the moon. Inflation is out of control. Buy hard assets.
  • Tech stocks and the internet will change everything. Get into those stocks now.
  • House prices always rise. They aren’t making any more land. Mortgage money is available and easy to get. No assets, no job, no income, no problem. Buy the biggest house you can finance.
  • Bitcoin will rise to $100,000. The quantity is limited, while dollars are created with no limit. Buy, buy, buy.
  • Tesla is a great company and … whatever.

Each bubble is different, but they depend upon easy credit, inexpensive debt, and a “perfect storm” of conditions that boost prices beyond any reasonable level. What goes up must come down, and after the bubbles implode, prices often crash to pre-bubble levels. Suicides, foreclosures, bankruptcies, and lost savings result. The post-crash “hangover” is hard on individuals, businesses, and economies.

Consider the charts of several bubbles.

Silver sold for $5 in 1978. But in January 1980 it rose to $50 for a few minutes. People stood in long lines to exchange their fiat dollars to buy ounces of silver because consumer price inflation raged out of control and silver looked safe. The Hunt brothers wanted silver to hedge other investments, and people blamed them for the bubble. However, gold prices rose almost as much, and the Hunts were not buying gold. COMEX changed the rules, forced sales, and crashed the silver market. Protect the insiders…

Silver sold for $5 in 1978, over $50 in 1980, and for $4.78 in June 1982. Silver prices rose too far, too fast, crashed, and returned to pre-bubble levels. After the 1980 metals mania, investment dollars flowed into the stock market, real estate, Japanese stocks, and Japanese real estate.

Silver prices fell to $3.51 in early 1991 and $4.01 in November 2001. It took two decades to correct the silver bubble.

The tech heavy NASDAQ 100 index sold for under 1,000 in early 1998. It peaked at 4,800 in March 2000 and fell to 795 in October 2002. The NASDAQ rose to unsustainable levels, based on a good story and credit, and crashed back to pre-bubble levels in two years.

Tesla stock sold for under $40 in June 2019 (split-adjusted) and for $502 in September 2020. Prices rose too far, too fast, like the silver market in early 1979-1980. Tesla stock prices have fallen 26% from all-time highs as of September 11, with more downside ahead.

COMPARISONS:

Take silver prices, the NASDAQ, and Tesla prices, normalize them to their two-year lows before the bubbles, and compare. Each graph of their weekly ratio prices starts near one, rises rapidly, and falls hard (Tesla – not yet).

Tesla stock prices rose more rapidly than 1979-80 silver prices (weekly data) and created many millionaires. Hopefully, the big winners will convert stock profits from fiat dollars into real money—gold and silver. Tesla prices may collapse and fall to much lower levels. We shall see.

Option traders are boosting the stock price bubble. Expect a correction. Examine the following chart showing call option activity.

SO WHAT?

Despite the shutdown, FAANG stocks and other high-flyers made new highs in August and September. The weighted indices were boosted by Apple and a few others. The Fed provided $trillions of newly created debts to boost the market and make credit (for Wall Street) easily available. Bubbles resulted.

Silver and gold prices have risen 128% and 31% since their March lows as the Fed devalued dollars and supported stock and bond markets at the expense of the dollar’s purchasing power.

From Michael Pento:

“… Fed policies that are coming soon on inflation and interest rate suppression will be rocket fuel for gold and silver…

“And gold and silver are just getting started… If bitcoin is $10,000 per unit, why can’t gold be $5,000, $10,000, or $15,000 per ounce? With the amount of dollars out there, it could easily be $5,000 or $8,000 per ounce, and that is where it is headed.”

From Alasdair Macleod:

“There can be little doubt that macroeconomic policies are failing around the world.”

LOOKING AHEAD:

  • The NASDAQ to S&P 500 ratio shows that the NASDAQ is as high in comparison as it was in 2000. Expect the NASDAQ to fall hard again.
  • The Fed will pump dollars into the market and economy. Government will spend and increase debt. Current national debt of nearly $27 trillion will soon exceed $30 trillion. Is $40 trillion far away? Does it matter? Yes, it matters when the consequences will devastate the economic landscape like a category 5 hurricane.
  • The dollar may rally from a current over-sold condition or maybe not, but in the long term we know it will decline in purchasing power. Today a dollar buys 1/2000th of an ounce of gold. In a few years it will purchase less than 1/5000th of an ounce of gold. How soon that occurs depends on fiscal and monetary stupidity, failed Fed policies, and how long it takes the public to realize they need to protect their savings with hard assets.
  • A global currency crisis could propel gold and silver into another bubble later this decade.
  • Hard assets maintain their value. Tesla and Apple stock prices are likely to fall, perhaps hard, along with many other stocks.
  • Consequences of the economic shutdown are wide and deep and continuing. Expect more trauma, especially around election day and thereafter.
  • A new financial system may be needed to restore confidence after massive debt defaults. That could occur in 2023 – 2026. It will probably meet the needs of the political and financial elite. The rest of us should exit bubbles, protect assets with gold and silver, and be suspicious regarding government, pandemics, and The Fed.

Miles Franklin will convert fiat dollars that devalue every year into gold and silver. Call them at 1-800-822-8080.

Gary Christenson

We Tested Positive!

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

BUT FIRST… FOR THE WEEK ENDING SEPTEMBER 4:

  • Apple market cap exceeded the entire Russell 2000 market cap. Think Apple stock bubble!
  • Apple and Tesla stock split. (signs of a top)
  • Apple stock fell 20% (high to low) during this week.
  • Tesla stock fell 26% (high to low) during this week. (How could this happen?)
  • Tesla exceeded $500 for a short time – or $2,500 pre-split.

YES, WE TESTED POSITIVE…

Not for COVID-19.

Not for any Coronavirus.

Not for HIV.

Not for plague.

But we, as a nation, tested positive for stupidity and ignoring history. Consequences will torment most people for years.

THE SHUTDOWN:

  • Did anyone consider the economic consequences of a shutdown before they crashed the economy? One might think “they” intended to crash the economy, create depression level unemployment, millions of foreclosures, bankruptcies and more. Was it as simple as ignoring consequences? Was the shutdown inspired by political gamesmanship? Or was there a darker motive?
  • Maybe the shutdown saved lives. Was it worth the horrible trauma? How many lives were lost because of drug and alcohol abuse, suicide, and spouse abuse?
  • There is no back button. There is no reset. The Fed can’t print jobs, wealth, or business demand. We must live with current catastrophes in the economy, employment, supply, and demand. Stimulus and free dollars to individuals, businesses, cities, and states will help only in the short term.
  • We tested positive for stupidity and ignoring consequences.

DEBT:

  • History shows that too much unproductive debt is dangerous. Economists know that excessive debt relative to GDP is counterproductive. The United States is “hitting the wall” now.
  • But congress and the administration ignore the consequences of debt, create it by the trillions, and argue not about excessive debt, but who gets first shot at collecting the swag.
  • We tested positive for ignoring history, greed, debt, and election year payoffs.

FIAT CURRENCY:

  • History shows that fiat currencies die, and hard money currencies survive. Gold coins from a thousand years ago are valuable. Silver from the Roman era retains its purchasing power. Dollars, euros, yen, pounds, and other paper currencies are on a one-way trip to extinction.

Just my opinion:  The official BLS inflation rate is accurate for those individuals and families that don’t pay rent or utilities, buy food, smoke cigarettes, pay college tuition, buy books, prescription drugs, or medical care.

  • YES, WE TESTED POSITIVE FOR IGNORING THE HISTORY OF FIAT CURRENCIES.

MARKET BUBBLES:

  • Someone announces, “this time is different” and provides convincing reasons. But history shows all bubbles implode.
  • Bubbles are exciting before they pop. People crave the thrill of easy money. We love the “going up” and hate the “coming down.” Market bubbles are comparable to cocaine highs and debilitating hangovers.
  • Maybe this time will be different, but don’t bet the farm on that outcome.
  • Bubbles pop, end of story. Consider silver in 1980, the NASDAQ in 2000, crude oil in 2008, and Tesla (coming) in 2020.

TESTING POSITIVE FOR STUPIDITY AND IGNORANCE IS A PROBLEM. INSTEAD…

  • Ride the bubble up and get out early. Leave some profits on the table. Easy to say, difficult to do.
  • Remember history. Bubbles implode, fiat currencies never last, politicians are not trustworthy, fractional reserve banking adds to the currency in circulation and creates excess dollars chasing the same quantity of goods. Hence, we pay higher prices. Inflate or die.
  • Back in ancient times, when Nixon was President, the dollar was worth 1/40th of an ounce of gold. Today it is worth 1/2000th ounce of gold. Consumer price inflation sucked the value from the dollar. Worse, wages for the lower 90% did not keep pace with the higher cost of living.

WHAT SHOULD WE DO?

  • Invest is something safe, like 10-year Treasury Notes? Oops, excessive debt forced the Fed to lower rates so the U.S. government, corporations, and consumers could afford debt service. Your savings earn next to nothing, thanks to The Fed and excessive debt.
  • Invest in Apple, Microsoft, or Tesla and hope they rocket higher instead of “doing an Enron.” Then exit at the top and smile. It’s easy to say in retrospect, but hard to do in real time.
  • Invest in real estate. This works until renters stop paying rent, mortgages default, and tenants leave.
  • Start a central bank. Create currency units from nothing, payoff congress to support your policies, buy Apple stock (or whatever) with newly created units (think Swiss Central Bank), and smile. This works for a limited time for very few people…
  • Buy insurance to protect your savings from the actions of politicians, and central bankers, and from the consequences of excessive debt, consumer price inflation, bad policies, stupidity, and ignorance of history. That’s correct – buy gold and silver. They survived for thousands of years and, regardless of what CNN and CNBC say, precious metals protect your assets and savings.

Examine a log-scale chart of weekly gold prices, smoothed with a 40-week moving average. The trend on the log chart is upward for the past 50 years. Will gold continue to rise?

Ask yourself:

  • Will politicians spend more than their revenues? (Yes!)
  • Will total debt increase? (If so, expect higher gold prices.)
  • Will spending skyrocket higher if either Biden or Trump is President?
  • Will central bankers support the wealthy and continue their transfer of assets from the many to the few? (Of course.)
  • Will real interest rates (nominal rates minus inflation) go more negative? (Yes.)
  • Will the value of the dollar, relative to goods and services, decline further? (As certain as death and taxes.)
  • Will the banking cartel continue using fractional reserve banking?
  • Will a repeat of the 2008 crash (coming) cause more deficit spending and increased bond monetization? (Yes.)
  • Will QE4ever… never mind. You see the problems.

Yes, we tested positive for fiscal and monetary stupidity, ignorance of monetary history, and elite greed that damaged a vibrant economy, healthy people, full employment, and a debt-free existence.

And we shall pay the price.

Read:

David Schectman: Patience. Prices Are Headed to the Moon.

Christenson: Who Was That Masked Man?

Do you own enough gold that you sleep well knowing that Bernanke, Yellen, or Powell are running the Fed, that Democrats and Republicans are running government, and our military-industrial-security complex is more profitable during wartimes?

I thought not. Call Miles Franklin at 1-800-822-8080.

Gary Christenson

Gold and Silver Prices: Over-Bought, But So What?

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

News for the week ending August 21, 2020:

a) Tesla stock closed at $2,050, up $399. P/E > 1,000!!!!!

b) Apple market cap exceeded $2,000,000,000,000.

c) Gold closed at $1,938, down $4 for the week.

d) Silver closed at $26.73, up $0.64 for the week.

WHAT HAPPENS NEXT?

  • Will Tesla stock bubble up to $3,000 per share?
  • Will gold rally toward $3,000?
  • Will silver exceed $50.00?

ANSWERS:

  • Tesla: Don’t know, don’t care. But bubbles always pop, and Tesla stock prices look ready to implode. Caveat: This has been true for several months, but Tesla stock prices have surged higher, along with other tech stocks that central banks support.
  • Gold and Silver: Wrong questions! Yes, they will trade much higher than current prices. But what is your investing time horizon? Do you expect to trade in and out in a few weeks, a few months, several years, or perhaps in decades? Your time expectations affect what the next major move means to you.
  • Gold and silver are “over-bought,” but are they likely to correct before continuing their rally?

BETTER QUESTIONS:

a) Do I trust central banks and corrupt governments to drive debt higher every year?

b) Do I trust The Fed to devalue the dollar’s purchasing power?

c) Do I trust almost all markets to rise, fall, and rise again?

d) Are gold and silver real money, not debt-based counterfeits issued by central banks?

e) It is an election year. Each party will create problems, but both groups will print, borrow, spend more than revenues, and devalue the dollar.

f) Gold reached an all-time high. Silver spiked up to a multi-year high. Will their next big moves be corrections or continued upward rallies?

Regarding “mania,” think Tesla stock prices.

Gold and Silver Are Over-bought. So What? Examine the chart of monthly silver prices.

The monthly silver RSI (a timing indicator that moves between 0 and 100) has exceeded 70 (red line) six times in the past 20 years. Points 1, 2, 3, and 5 marked significant silver price tops. Point 4 indicated a pause in the huge rally of 2010-2011. Point 6 is the August 2020 reading of 74.01.

Do you think point six is like point 4 (continuing rally) or an intermediate term peak like points 1, 2, 3, and 5? Good question—we don’t know yet.

The weekly chart looks like the monthly chart—price moves “too far, too fast.” The weekly RSI shows an over-bought condition that suggests a peak because it has rolled over. The MACD has not turned lower but could at any time.

The daily silver chart indicates an important peak occurred on August 7, and prices have fallen since then. The RSI and MACD will fall further if prices correct back to the $18 – $22 region.

WHAT WILL IT BE? Higher or lower?

a) The RSI (and other indicators) suggest lower prices ahead based on the correction of a strongly “over-bought” condition.

b) Markets correct rallies that have moved “too far, too fast.” The correction could occur here, or from higher prices.

c) The Elliott Wave folks (some of them) expect much lower silver prices. Maybe! Perma-silver-bulls expect higher prices.

d) Silver prices, based on the RSI, are/were over-bought on the monthly, weekly, and daily charts. There is no guarantee, but it suggests the next big move is more likely down.

WHAT COULD GO WRONG?

  • The silver train rolls out of the station and you are standing on the platform, waiting for one more correction. Think early 2009 when silver sold for $12 on its way to $48.
  • While you wait for the correction, silver prices explode higher, because of a new war, cyber-attack, bank collapse, market crash, derivative failure, or other shock to the financial system. 
  • If your investment horizon is several years, ignoring a possible correction will make little difference. If your horizon is several weeks, the correction concern is important.
  • If you stack silver or dollar cost average, buy the dips.
  • Buy now at $26, watch the price fall to $20, become afraid the price will fall to $15 or lower, and sell out a week before prices explode toward $35. This sounds silly but happens often. WHY are you stacking silver? Maybe you should buy and sell Tesla stock instead.

“OVER-BOUGHT” CONDITIONS:

  • Level one over-bought: Monthly RSI > 70, weekly RSI > 74, and daily RSI > 78. Define this as a level one condition.
  • Silver prices were at level one over-bought on August 7. That was a danger zone and prices corrected. Is the correction over?

Over the past 50 years:

  • Silver prices have reached a level one condition 7 times, and every time they fell 23% to 35%% in about 1.5 months.
  • Gold prices fell about 15% in 1.5 months, under similar conditions.
  • Silver prices can surprise us, but history indicates a correction is more likely than continued rally. Will this time be different?

AN EXAMPLE OF OVER-BOUGHT DOES NOT MEAN A TOP:

Tesla stock bubbled higher to over $2,000 per share, like the tech stock rally in 1999—2000. The stock is “over-bought.” However, over-bought does not guarantee peaking. Tesla stock was over-bought in July at $1,795, fell back to $1,365, and then rallied again.

Examine the monthly chart. Tesla stock reached level one over-bought in July, corrected lower by 24%, and then rallied further. It has reached level one over-bought again in late August.

  • Tesla stock climbs higher. Five waves up may extend, but they suggest extreme caution.
  • Silver prices hit a low of $4.84 in April 1976, and 21 months later they hit $50.00, up a factor of 10.
  • Tesla stock prices hit a low of $177 in June 2019, and fourteen months later they hit $2,048, up a factor of 11.5.
  • Silver rallied into a bubble in 1979—1980. Is Tesla stock different? Tesla’s rally has been faster in time and price appreciation than silver’s rally in 1979-80. Hmmmm!

From Sven Henrich: Reality Check

“The larger market is struggling, correcting even as the rotation trade once again was left in the dust of another vertical chase into key tech stocks which are now historically overvalued, technically extremely stretched and at even higher risk of a violent technical reversion.”

CONCLUSIONS:

  • Silver prices and gold prices (not shown) reached level one over-bought conditions in early August – be careful. They could rally higher or correct from here.
  • Tesla stock is over-bought as measured by the monthly, weekly, and daily RSI. It is showing a level one over-bought condition. Caution is warranted.
  • Debt is exploding higher. Government spending is accelerating. The Fed is “printing” banana-republic style and buying Treasuries, to keep interest rates low and fund government deficits. Expect more “printing.” This fiscal and monetary nonsense is good for gold and silver prices.
  • The dollar has been weak for months. It is moderately over-sold but dollar fundamentals are lousy. A short and sharp dollar rally might correct gold and silver before they rally higher.
  • What is your investment horizon and your desire to accumulate silver? That determines the importance of the “over-bought” conditions that exist in gold and silver.
  • MY CONCLUSION: Silver and gold are going much higher. They may correct 10—25% first. In the long term, gold at $5,000 – $10,000 and silver at $100 – $200 are not unlikely.
  • Tesla stock is in a bubble. Watch out below. Buy gold and silver!

Miles Franklin will convert digital and paper dollars into real money – gold and silver bullion. They do not trade Tesla stock. People trust Miles Franklin to sell valuable products at good prices. People trust the Fed to devalue dollars, which will extend the five-decade gold rally from $40 in 1971 to $2,040 in 2020. The next decade could see gold priced at $10,000.

Gary Christenson

Who Was That Masked Man?

“Return with us now to those thrilling days of yesteryear! From out of the past come the thundering hoofbeats of the great horse Silver! The Lone Ranger rides again.”

Miles Franklin sponsored this article by Gary Christenson. The opinions are his and are not investment advice.

During the 1950s, the Lone Ranger thrilled television audiences. Gold sold for $35 per ounce, silver sold for $0.90, a milkshake cost $0.20, and the dollar was exchangeable (by foreign countries) for U.S. gold.

Who was that masked man? The Lone Ranger fought for truth and justice. He followed a strict moral code that included (per Wikipedia):

“That God put the firewood there, but that every man must gather and light it himself.”

“That sooner or later… somewhere… somehow… we must settle with the world and make payment for what we have taken.”

The Lone Ranger wore a mask over his eyes to conceal his identity as a surviving Texas Ranger and crime fighter.

Many of the criminals he fought wore masks over their nose and mouth to hide their identity as thieves, bank robbers, cattle rustlers, counterfeiters, and killers.

Today, gold sells for about $2,000 per ounce, silver sells for $25 per ounce, the Lone Ranger no longer rides the trails in the old west, and the dollar is not backed by gold. In 2020 people wear masks because political and medical authorities demand it. Meanwhile, back in D.C. the Fed attempts to solve an excess debt problem by creating more debt.

WHO ARE THESE MASKED MEN?

Dr. Fauci is considered a medical authority. He advocated required mask wearing and an economic shutdown. He hopes to force a mandatory vaccine (huge revenue to Big Pharma) upon Americans when (if) it becomes available. People claim he has close ties to “Big Pharma,” the Wuhan lab, and Bill Gates.

Jerome Powell is Chairman of The Federal Reserve, the central bank of the United States. The Fed has created $7 trillion dollars from nothing to support the stock market, bond market, and government spending.

The Lone Ranger would not “print” dollars because that was illegal counterfeiting. However, counterfeiting is legal for a central bank, so expect much more printing, often called QE4ever and stimulus.

Wearing a mask, trusting central banks, stimulating the economy, printing dollars, and supporting the stock and bond markets are considered normal in today’s strange world. Few argue with those policies, but alternatives exist.

Dr. Fauci claimed a “shutdown” was necessary, and masks were essential. In contrast, Sweden had no lockdowns, low deaths, and minimal economic damage, per this article. Masks were not required, and business continued as usual. Perhaps Sweden did not need to crash their economy for political purposes, or to conceal the destructive consequences of excessive spending, bad monetary policies, and massive debt.

Mr. Powell claims QE4ever and near zero interest rates for an extended time are essential. Federal Reserve policies supported Wall Street and the wealthy, but hurt the lower 90%, pension plans, savers, and small businesses. Many people think their policies that enrich the wealthy are intentional. The data support this conclusion.

History shows that central bank “printing” ruins economies, encourages excessive debt, and often leads to hyper-inflation. Many currencies have been hyper-inflated into worthlessness. Wall street, central banks, and the media ignore those long-term consequences and focus on short-term profits and supposed benefits.

But, “sooner or later… somewhere… somehow… we must settle with the world and make payment for what we have taken.”

Consequences occur from actions which are often ignored by our “leaders.” Consider the consequences of:

a) An economic shutdown caused by official reaction to the pandemic. We have seen, so far, over 30,000,000 unemployed, hundreds of thousands of small businesses closed, widespread bankruptcies, and devastation for professional sports, air travel, health care, bars, restaurants, retail stores, small businesses, fast food, and higher education.

b) The U.S. government has $26.5 trillion in official national debt (growing rapidly) and more in contingent liabilities. At normal interest rates, the government cannot service this debt. Hence interest rates can NEVER rise from near zero. Really? A hundred years of controlled interest rates? I doubt it.

c) The Fed can levitate the stock and bond markets, or support the dollar, but not both. Expect the dollar’s purchasing power to fall, as it has for ten decades.

A milkshake cost $0.20 in the 1950s. In 2020 it costs $5.19. The dollar has lost purchasing power every decade.

WHAT ABOUT OTHER MASKED MEN?

Politicians make promises during an election year to “buy” votes. Skepticism is appropriate…

But history shows we should expect during the next four years:

a) Wall Street, “Big Pharma,” the military-industrial-security-surveillance complex, and “Big Ag” will influence the presidential and congressional winners with their agendas.

b) Increasing deficit spending.

c) Much higher official national debt.

d) More “stimulus.”

e) The dollar will lose purchasing power.

f) Counter-party risk will again become important.

g) Lots of political “hot air” and partial truths will saturate the media.

h) Gold and silver will rise as the dollar falls in value.

But, “sooner or later… somewhere… somehow… we must settle with the world and make payment for what we have taken.”

When the “bill comes due,” the dollar will buy much less than in 2020, gold and silver will have preserved purchasing power, and wearing a mask will not protect citizens from the predations of central banks or politicians.

Bill Bonner: The Federal Reserve Helps the Rich Get Richer.

“… tell them the truth: that printing money does not bring them [Americans] wealth; it merely shifts it from those who earned it to those who didn’t… and that every penny of real wealth that comes their way from the federal government must sooner or later come from them.”

“The solution, as we pointed out yesterday, is very simple: Just say ‘no’ to the fakery and the larceny. No more stimulus. No more deficits. No more Federal Reserve support for Wall Street. No more counterfeiting.”

But everyone knows “Just say no” to fake money, deficit spending, Wall Street, and Federal Reserve counterfeiting will not happen.

And that is why wise people who understand history protect their savings and retirements with gold and silver.

From Charles Hugh Smith: “The ‘New Normal’ is De-Normalization

“What few seem to understand is all the Old Normal systems can’t restabilize at some modestly lower level of diminishing returns; their only possible future is collapse. Just as fine-dining restaurants cannot survive at 50% capacity because their cost structure is so astronomical, the same is true of sports, airports, airlines, cruise lines, fast food, movie theaters, healthcare, higher education, local government services and all the rest of the incredibly fragile and unaffordable Old Normal.”

Read:

David Schectman: Patience

Berkshire Buys Barrick Gold

Brady: Big Picture Remains Up

The Lone Ranger yells, “Hi-yo, Silver! Away!” Silver, the horse, carried the Lone Ranger into the sunset to ride again, fighting for truth and justice. He used SILVER bullets to fight criminals…

Silver coins have been and remain real money. Enron stock, black and white televisions, and medical doctors promoting the benefits of smoking (from the 1950s) have faded into history, but silver keeps its value.

Consider the chart of log-scale monthly silver (in cents) for five decades. The trend channel, as drawn, contains most prices. Three-digit prices for silver are likely during this decade. When depends upon how many new dollars are created, and how quickly people realize the U.S. is traveling (per bill Bonner) “down this long, dark road to inflation, bankruptcy, and social suicide.”

CONCLUSIONS:

  • “Sooner or later… somewhere… somehow… we must settle with the world and make payment for what we have taken.”
  • Know them by their actions, not the masks they wear.
  • The “old normal” will not return for many sectors of the economy.
  • It is an election year. Expect pandemic fears, shutdowns, economic trauma, more debt, and promises, lots of promises.
  • Total market cap for stocks, divided by GDP, is registering an all-time (bubble) high. Expect a correction in the stock market, even when supported by QE4ever “printing” by the Fed.
  • The Fed will sacrifice the dollar to “save” the bond and stock markets. It wants inflation, and a weaker dollar will push prices higher.
  • Silver prices have doubled in a few months, fallen hard, rebounded, and corrected. Expect a deeper correction and new highs in a few months.
  • Regardless of who is declared the election winner, plan on larger debt. Choose either: bailout Wall Street and the states, or bailout the states and Wall Street.
  • Silver prices may correct in the short term, but long-term, they are going far higher, unless politicians, central bankers, and Fed employees reverse decades of policies.
  • Buy silver and gold coins and bullion.

Miles Franklin sells gold and silver. Call them at 1-800-822-8080. Tell them you want to buy silver bullets to fight monetary crimes.

Gary Christenson