Sunday, June 16, 2019

Ron Rosen: The Dollar And Equities Will Plunge Together – While Gold Spikes

by John Rubino, Dollar Collapse:

The dollar has been falling lately, which isn’t what a lot of people expected with the Fed being the only major central bank that’s raising interest rates. Higher yields on dollar balances should, according to basic economics, have attracted foreign capital to Treasury paper, thus putting upward pressure on the dollar. Didn’t happen though. The dollar is down about 10{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} since the Fed started tightening.

Stocks, meanwhile, might reasonably have been expected to fall, as their dividend yields become less attractive relative to rising risk-free fixed income returns. Also didn’t happen. US equities are now at record levels.

As for what happens next, Ron Rosen of the Rosen Market Timing newsletter has just published some dramatic predictions. Here’s an excerpt:

This REPORT attempts to demonstrate that the day the Dollar Index crosses beneath the 91.88 level will probably be the beginning of a collapse in the stock averages and a massive rise in the precious metals complex.

The completion of the 9 year Zig-Zag correction in the Dollar Index is telling us that D-Day will take place the day that the Dollar Index crosses beneath the 91.88 low. The following is an explanation of a Zig-Zag correction.

Excerpts from the NASDQ description of a Zig–Zag correction: “Zig zags look like a lightning bolt on the chart. There are 2 rules for zig zags: 1. The sub waves of an A-B-C zig zag appear as 5-3-5 2. Wave B of the zig zag cannot retrace 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of Wave A – most of the time wave B retraces 38-78{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of wave A The 3 waves of the zig zag (A-B-C) subdivide as a 5-3-5 meaning the ‘A’ leg has 5 sub waves in it, the ‘B’ leg has 3 sub waves in it, and the ‘C’ leg has 5 sub waves in it. As a result of the ‘A’ and ‘C’ legs both containing 5 sub waves each, the impact of the whole zig zag structure is to be a deep retracement and recover a lot of price from the previous trend. Also, the zig zag was designed to make progress against the trend. Therefore, wave B of a zig zag can be any 3 wave pattern (including another zig zag), but wave B cannot retrace 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of wave A. A retracement of 99{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} is acceptable, though unlikely and progress needs to be made.”

It is as obvious as anything can be that the Dollar Index underwent a 9 year zig-zag correction that began in the June quarter of 2008. The zig-zag correction was complete at the high of 103.815.

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US Interest Rate Tsunami Waves Spotted Just Offshore


by Michael Pento, Market Oracle:

We should all be familiar with the aphorism, “as real estate goes so goes the economy.” Anyone ignoring that economic axiom was completely blindsided by the Great Recession of 2008. Well, the collapse of the Everything Bubble most certainly includes the real estate market…and this time around will definitely not be different.

The plain and simple fact is that home ownership is getting further out of reach for the average consumer as mortgage rates rise. This is especially true for the first-time home buyer. The 30-year fixed rate mortgage is now the highest level since January 2014, 4.64%

If Stock Market Investors Panic, What Could Happen To The Price Of Silver?

by Chris Marcus, Miles Franklin:

While it’s becoming more well known by the day that gold and silver are being manipulated lower due to paper short-selling, many still wonder what will be the spark to change current market dynamics. Today let’s consider the stock market, and how even a small reallocation into silver could send the price soaring.

Recently reported that, “Bloomberg’s World Exchange Market Capitalization index pegs global equity values at a record $76.3 trillion, a tally that tops the $75.3 trillion figure the International Monetary Fund uses to value the global economy.”

Of course that’s just a drop in the bucket compared to the bond and currency markets. And when derivatives are factored in, some analysts estimate the amount is actually in the quadrilions! That’s a lot of money, especially when compared to the size of the silver market.

According to silver expert Ted Butler, “today less than 1.5 billion oz remain in the form of 1000 oz bars (and less than 1 billion oz of that can be documented).”

At current silver prices of approximately $16 per ounce, 1.5 billion ounces comes out to $24 billion. Not a big market that could seemingly handle large investment inflows without moving higher.

Certainly with the way the stock market has soared while silver has languished in recent years it can be easy to lose track of how fast the silver price can move. But go back to the end of 2010 when Ben Bernanke launched his second quantitative easing program and silver rose to $49 in a relatively short period of time.

So what happens if even a small percentage of stock market investors panic based on the continued monetary, fiscal, and political dysfunction that seems to grow by the day? During the last crisis in 2008 the metals initially traded lower. But as time went by and more money was created, a new generation of investors began learning about monetary policy and buying silver.

The never ending paper selling that seems to accompany so many of the mysterious spikes down in price has quelled silver interest in recent years. But while the popping of the mainstream asset bubbles has taken longer to manifest than many precious metals owners might prefer, nothing has changed regarding the underlying fundamentals.

The Federal Reserve is still backed into that corner where it either continues to print in order to support equity, bond, and real estate prices, or raises rates and watches those markets crash. Fed officials including Janet YellenSan Francisco Fed President John Williams, and Chicago Fed President Charles Evans are already talking about how inflation is too low and rates might need to be lowered again, and ultimately more money printing is likely on the way.

Of course in past years we’ve all been reminded that just because the fundamentals dictate a certain outcome doesn’t mean the rest of the crowd is going to jump in at the same time. However after watching how the price action in the cryptos has created a public mania that brings more attention into the sector, it’s interesting to imagine a similar effect in the silver market.

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The Most Precious Metals Bullish I’ve Ever Been

by Andy Hoffman, Miles Franklin:

Today is a very big day for me – at least, in my mind. As, at five years, nine months, my employment with Miles Franklin has officially tied the previous longest job of my career – at Salomon Smith Barney, from May 1999 through February 2005. After which, I spent five years working for numerous mining companies – all of whom, either went bankrupt or otherwise failed. Thus, when I was afforded the opportunity to “move up the totem pole” of stability in October 2011 – as Marketing Director of one of America’s oldest, most trusted bullion dealers – I jumped at the chance. Since then, the partnership I formed with the firm’s owners, David and Andy Schectman; and brokerage and back office team – most of whom, have been with the firm for decades – has been, in my view, extremely successful. To that end, I look forward to serving the Precious Metals community for “as long as it takes,” until the war we are fighting with the powers that be is inevitably – and hopefully, imminently – won.

That said, I intend to make significant waves on this day of extremely important personal achievement. As, per today’s title, I am departing significantly from my “box” of industry commentator – with a more forceful statement of what I anticipate. Sure, I could be wrong; but as the title of my July 18th SGT Report podcast states – taped when gold was $1,240/oz – I foresee “no more downside to Precious Metals.” And no, I don’t mean they can’t go down at all; but instead, that the supply/demand fundamentals have become so positive on an absolute basis; and more so, relative to their historically suppressed prices; that I view their all-in risk/reward profiles as the most favorable in the 15 years I have been watching this sector, tick for tick.

Yes, I know four pieces of economic propaganda – I mean, “data” – are coming out an hour from now; and the “all-important” GDP report tomorrow, rivaled only by the CPI and NFP jobs report in the amount of politically-motivated accounting gimmickry they are subject to. However, it’s starting to feel like gold and silver are becoming “immunized” to “bad news” like “better than expected” economic data. And now that Janet Yellen “sealed the deal for no rate hikes until at least December (expectations fell to 0{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} for September and 48{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} for December) after yesterday’s uber-dovish FOMC policy statement; it’s difficult to envision the dollar demonstrating material strength any time soon, unless something really bad occurs in Europe.

Which of course, would be wildly PM-bullish. As irrespective, per what I discussed in the five “if a nuclear bomb destroyed Europe” articles penned over the past three years, the “dollar index”; which is largely a proxy for the dollar/Euro exchange rate; is in reality, immaterial to the dollar-priced gold and silver. To the contrary, they are determined by supply/demand factors in dollars; and given the accelerating tsunami of dollar-negative events coming our way; as PM prices trade at all-time inflation-adjusted lows; it’s difficult to envision an environment where prices do not, at the least, challenge last year’s post BrExit highs in the coming months, en route to much higher levels thereafter.

Amidst the historic price suppression, and most violently PiMBEEB – or Precious Metal bullish, everything-else-bearish” – environment in memory, PM sentiment has been driven to levels not experienced in my entire 15 years in the sector. And yet, gold is, on average, no more than 15{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} below its all-time high in nearly all fiat currencies. Not to mention, it – and silver – are up roughly 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} from their ultimate bottoms of December 2015; “coincidentally,” the week the Fed first raised rates. This, as the most manic COMEX “commercial” short covering ever is ongoing – to the point that in both metals, their cumulative net short positions are at lows last seen in…drum roll please…December 2015 – when gold and silver prices were significantly lower than today.

Everywhere I look, lies, propaganda, and manipulation have caused chaos in the world of Precious Metal “analysis” – particularly from those incented to pretend markets are freely traded, who literally ignore “sixth sigma” price movements in their pursuit of remaining mainstream. For instance, this “veteran trader” – who claims gold’s value will never be “allowed” to be realized. Or the top Bitcoin technical analyst – who is actually quite good in Bitcoin; who is constantly calling for sub-$1,000 gold due to the “weak technicals” the charts paint – despite his admission that he has always been wrong about this prediction; and that frankly, gold’s enigmatic price moves have him “puzzled.” Or, best of all, “wrong way Harry” Dent – who a year ago, predicted “$700 gold by mid-2017.” And then there’s Wall Street – which considers gold its mortal enemy; and the Precious Metal “newsletter writers” who pretend they have proprietary technical knowledge. And of course, Central bankers, which view gold the way vampires view the light of day.

The problem is, that essentially everything their “research” is predicated on is either fatally flawed or purposely influenced. As no matter what angle one takes, of how the world has “changed” or whatnot, Precious Metals always have, and always will be, effective stores of value; particularly when this, the most egregious price suppression scheme ever concocted, runs its course. And in my view, per what I have been writing of endlessly in recent weeks, this scheme is nearing the end of its rope. Supply-wise, gold and silver production – platinum, too – are expected to plunge in the coming decade, have decidedly peaked in 2015. This, as the malignant, terminal stage of history’s largest, most destructive fiat Ponzi scheme causes Central bank money printing – already, at record-high levels – to go parabolic. Not to mention, as the inventories of above-ground, available-for-sale metal have been taken down to mere fumes by Central banks and governments – most notably, the United States – in misguided, unwinnable efforts to prolong the dying status quo.

And then there’s the actual news flow; starting with the ugliest global economic environment of our lifetimes, save a few “deer in headlights” moments post-9/11, and at the height of the 2008 Financial Crisis – featuring all-time high, parabolically rising debt that can only be serviced with record low; in many cases, negative; interest rates. Next, the historic wealth inequality a decade of historic money printing and market manipulation has caused – which in turn, has catalyzed social upheaval the world round; even in the U.S., where Donald Trump was elected President.

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The Coming Collapse Of U.S. Shale Oil Production

by Steve St. Angelo, SRSRocco Report:

The death of U.S. Energy Independence will occur when the collapse of shale oil production begins.  And when U.S. shale oil production finally peaks and declines, it could fall much more rapidly than we realize.  The rate at which U.S. shale oil production declines in the future is based on two key factors, remaining reserves, and the oil price.

Before I get into the remaining shale oil reserves, let’s first consider the price.  When the oil price collapsed from mid-2014 to a low at the beginning of 2016, frackers cut drilling considerably.  From March 2015 to September 2016, total U.S. shale oil production fell approximately 600,000 barrels per day (info  However, this decline was not due to the peak in production, but rather, because the low oil price made drilling shale oil uneconomical.

The Imminent Collapse of America’s Economy


by Karl Denninger, Market Ticker:

The idiocy of the left knows no boundaries.

First it was Red Hen, the restaurant.  Well, ok, that was second, after another staffer was chased out of a restaurant the other day.  Now we have Maxine Waters, a sitting Congresswoman, advocating for this sort of behavior.

Boycotts of this sort are legal, by the way.

Has Maxine thought through how dumb it is on a personal level to egg on this sort of crap, legal or not?

See, Maxine lives in a nice, safe, “blue” area and she has plenty of money.