by Andy Hoffman, Miles Franklin: Yesterday, we learned that Donald Trump Jr. was allegedly involved in secret meetings with a Russian lawyer last year, in an alleged attempt to obtain anti-Hillary information. This, as Trump’s snot-nosed, silver spoon son-in-law, Jared Kushner – a mere 36 years old – was collaborating with Qatarian sheiks whilst Saudi Arabia “coincidentally” declared economic war on it – under the ultimate “pot calling the kettle black” insinuation that Qatar funds terrorism. To which, I can only say, how ridiculous is it that the President’s family is involved in such blatant conflict of interest activities; and doubly so, how screwed up has America’s increasingly Banana Republic political system become? Which I only state, to demonstrate how painstakingly obvious the need for portfolio insurance has become – at a time, no less, when historic market manipulation has not only produced “dotcom valuations in a Great Depression Era,” but the most undervalued Precious Metal prices – on an inflation-adjusted basis – ever.
Yes, the Trump Jr. “news” provided the catalyst for Precious Metals’ long overdue bottom. Likely, as the COMEX “commercials” were aggressively covering additional shorts – starting with what in hindsight can be viewed as “Operation July 4th week silver slam.” During which, gold and silver prices were mauled – starting on the painfully thin July 3rd half-day, amidst a veritable tsunami of PiMBEEB news, with no other market materially moving. To that end, I’m looking forward to Friday’s COMEX COT, or Commitment of Traders report, which will show us just how much more (naked) short covering was done amidst Monday’s paper carnage. Not to mention, Thursday night’s silver “flash crash”; Friday’s post-NFP PM bashing; and Monday morning’s ugly early action. When, following the 192nd “Sunday Night Sentiment” raid of the past 202 weekends, silver opened paper COMEX trading at a year-plus low of $15.20/oz. This, during a week of particularly bullish physical PM news, such as India’s massive May gold purchases; seven percent of the entire COMEX registered gold inventory being withdrawn in a single day; and the world’s second largest silver mine, Tahoe Resources Escobal Mine in Guatemala, being shut down indefinitely.
On a morning when Janet Yellen is scheduled to give her semi-annual “Humphrey-Hawkins” Congressional economic testimony – in which the only material “news” is the city of Hartford, Connecticut being downgraded to junk status (get ready Chicago and Trenton, you’re next!) – I wanted to revisit my December 2016 article, “silver fundamentals versus the base metal bubble.” The reason being, that if the dislocation between base metal and silver prices was egregious then, it’s far more so now. In fact, comparing the financial landscape then – just after the election, when the newly fabricated “Trump-flation” meme was driving “markets”; not to mention, the equally fallacious premise that higher inflation is bad for Precious Metals; silver has not only become significantly more undervalued relative to base metals, but EVERYTHING ELSE!
Yes, the entire Precious Metal space has become – care of historic manipulation, such as the “Operation July 4th Week Silver Slam” – as undervalued as at any time in memory, with only the (Cartel-promulgated) spike-bottom low as the 2008 Financial Crisis commenced being comparable. However, in silver’s case, the “historic valuation anomalies” I wrote of earlier this month are even more pronounced – given that they are not only relative to the broad markets, but other Precious Metals, too.