Sunday, September 22, 2019

Keiser Report: Geopolitics & Cryptocurrencies (E1109)

by RT:

In this episode of the Keiser Report, Max and Stacy discuss the electric car boom driving a resource boom in Australia . . . and the biggest mines are now being acquired by Chinese companies. In the second half, Max interviews Gerald Celente of TrendsResearch.com about paradigm shifts: from cryptocurrencies to electric cars. 

We’re Moving Closer and Closer to a Major Buying Opportunity in Oil

by Marin Katusa, Katusa Research:

As we entered the summer months, many investors wanted to believe a terrible time for oil and gas stocks was nearing an end. Now that we’re six weeks into summer, we see that’s not the case.

During the first half of 2017, oil and gas stocks were among the market’s worst performers. The Dow Jones US Oil & Gas Index declined 17{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Some of the more highly levered oil and gas stocks fell twice that much. After such a big fall, value-hunting investors began buying. But last week, we saw that oil and gas stocks are still vulnerable to waves of selling that send them to 52- week lows.

Take Pioneer Natural Resources for example. In the mutual fund and hedge fund world, it’s considered one of the premier independent oil and gas companies… a “go to” stock for getting exposure to the oil sector. After reporting second quarter earnings and stating it would delay drilling projects, Pioneer stock was crushed 17{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in the following two days and hit its lowest level of the year. A true wipeout… in one of the sector’s best operators.

Pioneer is not an isolated case. Last week, a handful of other oil and gas stocks hit yearly lows, including Apache, Range Resources, Southwestern Energy, Parsley Energy, RSP Permian, Sanchez Energy, Carrizo Oil & Gas, and Noble Energy.

An especially notable loser last week was Canadian producer Seven Generations Energy. It’s a major player in one of my favorite areas for investment, Canada’s prolific Montney shale. It has exceptional assets. However, quality was no sanctuary last week. After reporting second quarter earnings, “Seven Gen” dropped as much as 18{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} and reached a fresh yearly low.

***Regular readers will recall my writings on the oil patch back in June. At the time, I stated that although the oil and gas sector had suffered massively in 2017, more pain was on the way. Last week’s declines show that my expectations are being met. They are also moving us closer to a significant bottom in the oil sector. I’m getting closer and closer to pulling the trigger on high-quality names marked down to discount prices. More on this to come.

How Index Funds Are Impacting the Gold Sector

Over the past seven years, index funds and exchange-traded funds (ETFs) have dominant forces in the market. Typically, these funds don’t try to beat the market. They are the market. They own broad indexes (like the S&P 500) or sector groups (like retail or energy). And they’ve become widely popular with investors.

Index funds are so popular that many investors are warning about the effects index funds are having on the overall stock market. Since index funds buy stocks based on an index – not good old fashioned fundamental analysis – they have the potential to make popular, overvalued stocks even more overvalued… and warp the market.

What you may not have heard however, is how ETFs are influencing returns in the gold stock sector. Since spring, the smaller mid-tiers (sub 400,000 ounces of gold production annually) have experienced significant selling which we will explain later.  This significant selling of the smaller mid-tiers has lowered the overall mid-tier index relative to its performance to the senior index in past years.

And still true today, as a group, the mid-tiers overall are cheaper than the senior gold producers.

The chart below is the Katusa Senior Gold Index which is made up of the 15 global publicly listed primary gold producers that produced over 1 million ounces of gold in 2016. The senior golds have outperformed the Katusa Mid-Tier Gold Producers which is made up of 25 publicly listed primary gold producers that produced between 250,000 and 1 million ounces of gold in 2016.

Read More @ KatusaResearch.com

A2A with Andy Hoffman of Miles Franklin

by Turd Ferguson, TF Metals:

All of the current global and market turbulence meant that it was an excellent time to check in again with the great Andy Hoffman of Miles Franklin. And Andy doesn’t disappoint with 45 minutes of true, must listen audio.

First of all, I want to warn everyone that this is going to be one of those threads where we freely and openly discuss Bitcoin in the comments section. One of the reason I wanted to have Andy in for A2A is that he is an advocate for both BTC and gold…and he sees them as complimentary tools to end the reign of The Bankers and NOT as competition for each other.

So, in addition to a discussion of the value of cryptocurrencies in the fight against The Banks, Andy also addresses:

  • The recent PM flash crashes and how The Bankers are now brazenly rigging prices
  • How the market narrative (GAN2017) instantly changed the moment Trump was elected
  • His distrust of Trump, despite having voted for him
  • How declining silver miner production as a result of price manipulation is working against The Bankers
  • How and why the G-3 total market management system will eventually fail

Again, Andy has been a stalwart friend and ally in the fight against The Cartel for as long as I have known him. It was great to visit with him again and I’m confident you will gain a lot of perspective by listening to this podcast.

 

Click HERE to listen.

TF

Read More @ TFMetals.com

COT REPORT SHOWS BANKERS CAPITULATING IN SILVER/GOLD RISES $4.10 AND SILVER UP 4 CENTS

by Harvey Organ, Harvey Organ Blogspot:

GOLD AND SILVER WITHSTAND ANOTHER ATTACK BY BANKERS TODAY/RHETORIC INCREASES BETWEEN NORTH KOREA AND THE USA/CHINA REFUSES TO ADVANCE THE IDEA OF A REGIME CHANGE IN NORTH KOREA: NOT WHAT THE USA WANTED TO HEAR/CONSUMER PRICES AND WAGE INFLATION DISAPPOINT THE FED FOR THE 5TH CONSECUTIVE MONTH/GOLDMAN SACHS LOWERS THE CHANCES FOR ANOTHER RATE HIKE

GOLD: $1287.80  UP $4.10

Silver: $17.08  up 4 cent(s)

Closing access prices:

Gold $1289.50

silver: $17.11

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1288.86 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1284.30

PREMIUM FIRST FIX:  $4.56

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1291.86

NY GOLD PRICE AT THE EXACT SAME TIME: $1288.40

Premium of Shanghai 2nd fix/NY:$3.46

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1288.30

NY PRICING AT THE EXACT SAME TIME: $1288.40 

LONDON SECOND GOLD FIX  10 AM: $1286.10

NY PRICING AT THE EXACT SAME TIME. $1287.10 

For comex gold:

AUGUST/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 19 NOTICE(S) FOR  1900  OZ.

TOTAL NOTICES SO FAR: 4487 FOR 448700 OZ (13.956 TONNES) 

For silver:

AUGUST

 

 88 NOTICES FILED TODAY FOR

 

44,000  OZ/

Total number of notices filed so far this month: 810 for 4,050,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

end

 

Today, the bankers tried to raid both gold and silver.  They like Friday’s especially once London officially closes because they do not have to worry about physical demand for another 48 hrs starting on Monday. Once again their attack was rebuffed.  Also extremely encouraging is the COT for silver which saw bankers start to unload their massive shortfall

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest SURPRISINGLY FELL BY687 contracts from 195,132 DOWN TO 194,445 DESPITE THE HUGE RISE IN THE PRICE THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING (UP 21 CENT(S). SIMPLE EXPLANATION: THE BANKERS HAVE CAPITULATED..THEY ARE TRYING TO COVER THEIR SHORTFALL AT HIGHER AND HIGHER PRICES. THE BANKERS ARE LOATHER TO SUPPLY ADDITIONAL SHORT PAPER AND LONGS ARE COMING IN LIKE GANG BUSTERS.

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.972 BILLION TO BE EXACT or 139{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 88 NOTICE(S) FOR 440,000OZ OF SILVER

In gold, the open interest ROSE by A CONSIDERABLE 11,516 WITH the RISE in price of gold ($10.70 GAIN ON YESTERDAY.)  The new OI for the gold complex rests at 475,913.  IN COMPLETE CONTRAST TO SILVER, THE BANKERS SUPPLIED THE MASSIVE AMOUNT OF PAPER SHORT GOLD WHICH WAS GOBBLED UP BY THE LONGS.  THE NEWBIE SPEC SHORTS HAVE NO DOUBT COVERED THEIR POSITION. NO WONDER A RAID WAS CALLED UPON BY THE ELITE TO ROB THE NEWBIE LONGS.

we had: 19 notice(s) filed upon for 1900 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

GLD:

Today, no changes in gold inventory:

Inventory rests tonight: 786.87 tonnes

 

(from Tuesday through Thursday we lost .17 tonnes which paid for fees)

IN THE LAST 21 TRADING DAYS: GLD SHEDS 50.1 TONNES YET GOLD IS HIGHER BY $48.95 . 

SLV

Today: : WE NO CHANGES IN SILVER INVENTORY TONIGHT:

INVENTORY RESTS AT 335.825 MILLION OZ BUT WE LOST 3.781 MILLION OZ FROM TUESDAY THROUGH TO THURSDAY.

 

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FALL BY  687 contracts from 195,132 UP TO 194,445 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787). THE FALL IN OPEN INTEREST WAS ACCOMPANIED BY A HUGE RISE IN PRICE AND FOR THE FIRST TIME WE ARE WITNESSING BANKER CAPITULATION.  BANKERS ARE LOATHE TO SUPPLY NEW SHORT PAPER AND THE LONGS CONTINUE TO ENTER THE ARENA PURCHASING WHATEVER SILVER THEY CAN. 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 53.21 POINTS OR 1.63{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}   / /Hang Sang CLOSED DOWN 560.49 POINTS OR 2.04{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} The Nikkei closed DOWN 8.97 POINTS OR .05{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Australia’s all ordinaires CLOSED DOWN 1.15{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Chinese yuan (ONSHORE) closed UP at 6.6651/Oil DOWN to 48.36 dollars per barrel for WTI and 51.68 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED , Offshore yuan trades  6.6784 yuan to the dollar vs 6.7201 for onshore yuan. NOW THE OFFSHORE IS WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS  HAPPY TODAY

Read More @ HarveyOrganBlog.com

Cryptocurrency – its status as money

by Alasdair Macleod, GoldMoney:

The cryptocurrency craze is fascinating to an economist, or at least a student of catallactics, because it is a test of the theory of exchange ratios and prices, which is what catallactics is about.

For this reason, the outcome of the cryptocurrency craze is of great theoretical interest. It is also of interest to students of the psychology of speculation.

Supporters of cryptocurrencies claim they are money. If they are unable to substantiate this claim, then we must conclude that cryptocurrencies are only a medium for speculation, drawing on increasing numbers of the public to maintain their value. For this reason, their validity as money is fundamental to their future. Supporters of cryptocurrencies are certainly very sensitive to accusations that they are not money, presumably for this reason.

Mere opinions do not matter. A critical, detached analysis is needed. The purpose of this article is to test the proposition, that cryptocurrencies are money, from a sound theoretical perspective.

The basis of money

Before cryptocurrencies, there was government money, and before that metallic money, which was gold and silver. Government money evolved out of metallic money, drawing upon it for its credibility, before abandoning all pretence at convertibility when the US Treasury finally abandoned the dollar peg in 1971. The difference between the two is gold and silver are chosen by people exchanging goods in free markets, while government money is imposed on people by their governments.

Catallactics, as a theoretical discipline, investigates the exchange of goods in a free society, and is the basis of classical economics from Cantillon, Hume, Ricardo, Jevons/Menger through to the Austrian school. Government money does not stand up to catallactic examination, because its issuance always subverts free markets by interposing influence from the state into transactions between ordinary people.

The modern justification for government money has its origins in the German historical school of economists, when Georg Knapp declared, on what appeared to be little more than a point of principal derived from the supremacy of the not-long formed federal German state, that the state has the sole right to issue its citizen’s currency.

Knapp’s one book was titled The State Theory of Money, published in 1905. In it, he argued that state money may be recognised by the fact that it is accepted in payment by the state. Money exists according to state regulation and creditors must accept it without being legally entitled to other forms of money in exchange for it.

In his preface to the first edition, Knapp made it clear that he regarded money as a matter for political science. In other words, its existence, in accordance with the tenets of the German historical school, was a matter for the executive setting the law instead of free markets. The first sentence of Chapter One leaves us in no doubt on this matter: “Money is a creature of law”.

The law is horribly deficient. It does not even recognise that the purchasing power of money can change. The law does not compensate those robbed by currency debasement. The law makes no distinction between fiat money and credit money. The law will tax you if you benefit from the wisdom of holding catallactic money instead of state money. The law denies the logic of catallactics entirely, and rules only on state money, irrespective of whether it is backed or convertible into gold. It does not recognise the money chosen by free markets. The law is not equipped to decide on monetary matters.

Therefore, by no stretch of the imagination was Knapp’s treatment of money catallactic. Money issued by the state cannot last beyond the ability of a government to impose it on its people. Knapp died in 1926, three years after his own government’s money had collapsed both predictably and dramatically, disproving his state theory of money.

Today’s state-issued currencies are no different in concept from the currencies that collapsed in the wake of the First World War. With no convertibility into gold or silver, they depend for their purchasing power and validity as money on no more than the rule of law and public faith in the state. Since the Bretton Woods Agreement began to collapse, the dollar lost over 97{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of its value measured in gold. These are relative purchasing powers set in the markets between sound money, still accepted as such by most of the world’s population (even though it is not usually used for day to day purchases), and the reserve state-issued currency.

Supporters of cryptocurrencies appear to be more aware than most of the weaknesses of state currencies, particularly when the issuing central banks have stated that their objective is to continually reduce their purchasing power every year as a matter of policy. The collapse in purchasing power seen so far has destroyed nearly all the value of money-based savings such as bank deposits and bonds, a government policy set to continue. Furthermore, there may be an understanding among some cryptocurrency enthusiasts that credit money, issued by the commercial banks, undermines the purchasing power of state money as much, if not more, than the issue of money by central banks.

Is it not better, they argue, for ordinary people to take back control of money from their governments? In their utopian world, we can escape the hidden tax of monetary inflation, and we can keep our ownership of money private. Bitcoin’s founder came up with a formula that would restrict its inflation by making it progressively difficult to “mine”. By introducing new block-chain technology, he created a self-auditing digital version of bearer paper money. Not only is the concept extremely clever, addressing the weaknesses of state money head on, but bitcoin was introduced at a time when central banks have been openly discussing their intention to eliminate physical cash.

Bitcoin has certainly caught the imagination, spawning by the time of writing over 900 other imitations, according to Wikipedia’s List of Cryptocurrencies. Instead of Bitcoin and its imitators being used as money, they have become vehicles for outright speculation. Presumably, supporters of cryptocurrencies hope that at some stage, their monetary characteristics will come to the fore, once the speculation has subsided. However, we can see that cryptocurrencies exist despite the law, and the law barely recognises their validity, even banning them in some jurisdictions. They are not Knapp’s creatures of the law. For cryptocurrencies to be money, they must therefore conform to the characteristics of money demanded by catallactic theory.

Cryptocurrencies fail the regression test

In an exchange of goods for money, both buyer and seller will subjectively value the goods side of the transaction. To do that, both must assume that there is no subjectivity in the value of the money being exchanged. So, while the good, or service, is valued subjectively, the value of money must be regarded as wholly objective, otherwise the transaction descends into the realms of barter.

The regression theorem demonstrates that money in a transaction has its objective exchange value determined by reference to recent experience. We know without question the value of money in a transaction, because of what it bought yesterday. And yesterday, we knew its value from our experience of the day before. By a process of regressus in infinitum, the value of money is traced back to its original subjective value for non-monetary use, before it became adopted as money. In other words, for money to become money, it must have had and must still possess a subjective value as a good.

This is not to say the value of money is based on its use as a good. The purchasing power will be determined by its demand as money, and its value in terms of its purchasing power will fluctuate. When silver was dropped as money in favour of gold in the late nineteenth century, its price fell back towards its use-value as a good.

Read More @ GoldMoney.com

It’s All Going Wrong For A Gold Cartel On The Precipice

by Andy Hoffman, Miles Franklin:

I wasn’t planning to write another article this week – as tomorrow morning (Friday), I’m taping a MUST LISTEN interview with one of the smartest investors in the Precious Metals/Cryptocurrency space; Edward Blake, the Renegade Investor.  Not to mention, it’s the middle of August, and I have yet to take a day off from publishing all year.  However, as we are living through what may well be a major inflection point in history – monetary and otherwise – I figured I’d pen a few thoughts.  What the heck?  Diana and Sylvie are visiting relatives in New York, so who’s going to stop me?

Anyhow, the trading day just concluded – with the “market” finally allowed to have a real down day.  But don’t worry, the “Dow Jones Propaganda Average” was down just 0.93{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, whilst gold’s gains were capped by the equally time-honored “1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} rule” for the second straight day.  I mean, how could stocks possibly go down more than 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}; or gold up more than 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}; when we’re on the cusp of nuclear war – causing bond yields, oil prices, and the dollar to plunge, amidst unprecedentedly manipulated markets yielding “dotcom valuations in a Great Depression Era,” and the “lowest inflation-adjusted gold and silver prices in modern times?”

Boilerplate manipulation commentary notwithstanding, it’s not where we are now that matters, but where we are going – likely, much sooner than most can imagine.  Which is, a time when – at least, in real terms – these “roles” will be reversed, as capital floods out of historically overvalued financial assets into “scarcity assets” like Precious Metals and Bitcoin; i.e., the “twin destroyers of the fiat regime.”  As in my view, the “ultimate monetary death cross” – when the majority of the world’s population realizes crypto is destined to replace fiat currency – is coming soon.  And when it does, no adjectives have yet been created to describe the mad rush of tens of trillions of fiat toilet paper into the handful of tiny scarcity asset markets.  Even Ray Dalio says “buy gold before it’s too late” – as I assure you, someday soon, it will be.

Care of said “monetary death cross,” I have recently updated my longstanding view that the gold Cartel will be overwhelmed by physical demand when “the Big One” finally hits.  This is still a viable possibility, of course – particularly if a crisis is triggered by a shocking political, economic, or military event; such as, a U.S. invasion of North Korea, particularly if Kim Jung-Un’s “response” is what I think it will be.  That said, I now believe the more likely scenario is one where the Cartel voluntarily disbands, not that they would ever admit it.  The reason being, that when the crypto-currency revolution sweeps across the globe, “they” will realize there’s no point trying to hold PM prices down anymore – particularly because so little “manipulation ammunition” remains after two decades of relentless suppression, amidst an environment of surging global demand.  Thus, when PMs rise to five, ten, or even 20x their current levels, no one will care except the handful of investors wise enough to have bought them at today’s bargain basement prices.  And the best part is, governments will be so busy flailing at the “windmills” known as decentralized crypto-currencies, they won’t bother to vilify PM investors; let alone, enact windfall taxes or attempt to restrict your ownership.  In other words, the best-case scenario for a group of die-hard investors, who deserve good fortune more than any others.

I couldn’t have been blunter about how near I believe that time is, in taking the bold step to pen the “most Precious Metal bullish I’ve ever been” two weeks ago.  And per today’s title, it couldn’t be clearer that the winds of change are blowing our way.  Yes, the potential war with North Korea overshadows all else, but man are things going the wrong way for the Cartel, on all fronts.

From plummeting bond yields, oil prices, and the dollar (wow, has “Trump-flation” died); to rising market volatility; plunging “inflation” data – yielding an increased imminence of QE4; historically ugly demographics; the expanding “retail Apocalypse”; the upcoming “debt ceiling” bloodbath; parabolically rising debt – of all kinds; Bitcoin’s SegWit activation; escalating military tensions between China and India; and what’s this, for the first time in three years, positive gold money flow; the odds of the long-awaited “commercial signal failure” haven’t been this high since the height of the 2008 Financial Crisis.  Only this time around, “history’s most overdue crisis” will not only be far worse, but irreversible – as now that Central banks’ ammunition and credibility have been destroyed, their only remaining “tool” will be the blatant, massive hyperinflation that will buy them but a few months at most; before first, the weakest currencies collapse; and ultimately, the world’s “reserve currency” as well.

Read More @ MilesFranklin.com