Sunday, February 24, 2019

Physical Precious Metal Portfolio Swaps-Everyone Has Their Own Reasons

by Andy Hoffman, Miles Franklin:

Two weeks ago, I made the rare, bold step of proclaiming this the “most Precious Metal bullish I have ever been.”  The reason being, that never before had so many “PiMBEEB,” or Precious Metal bullish, everything-else-bearish, factors been present and/or imminent – politically, economically, and monetarily.  Including, I might add, the increasingly large odds that “ ” Trump will ignite a major war, be it in Syria, Iran, or North Korea; in each case, involving our “biggest geopolitical foe” Russia – whose Prime Minister, in response to the onerous, and entirely unprovoked economic sanctions the U.S. imposed on it last week, had this to say about the current state of Russo-American relations.

First, any hope of improving our relations with the new US administration is over. Second, the US just declared a full-scale trade war on Russia. Third, the Trump administration demonstrated it is utterly powerless, and in the most humiliating manner transferred executive powers to Congress.”

This, at a time when the global economy is as weak as at any time in the post-Financial Crisis era, with a potentially nation-destroying “debt ceiling” battle mere weeks away.  Not to mention, as gold, silver, and platinum mine supply is anticipated to dramatically decline for the foreseeable future, whilst governments’ above-ground, available-for-sale “suppression inventory” is running on fumes – as global demand, led by the Eastern Hemisphere, remains stubbornly near all-time highs; as the money printing explosion that has enabled history’s largest, most destructive fiat Ponzi scheme – to the point of generating “dotcom valuations in a Great Depression Era” – is on the verge of going parabolic.  Not to mention, as the Cartel’s “worst nightmare” – Bitcoin’s SegWit Activation – occurred barely 24 hours ago; whilst government market-propping has become so desperate, and blatant, it may very well be “called out” in the very near-term.

With each passing day, it is becoming more and more obvious that the world’s “leadership” is taking us down the same “99{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}”-destroying path that all such “leaders” have traversed throughout history, amidst the terminal, malignant stage of dying fiat regimes.  And none more so than the “reserve currency”-issuing United States – which, faced with the ultimate “lesser of evils” choice last November, elected a man who, after rapidly realizing “the swamp” could not be drained, is reverting from a brief flirtation with responsible leadership to “the Donald” we all know and hate.  I.e., a narcissistic egomaniac, who may be one of the most confrontational people on the planet.  Who obviously – and ominously – believes war is not just an acceptable option to resolve the conflicts he created, but the desired choice.  Not to mention, a real estate developer who proclaims himself a “low interest rate person” – and better yet, the “King of Debt.”  Which is why, just two days ago, I penned “the most Precious Metal bullish quote ever,” when he said the following.

“I like a dollar that’s not too strong.  I mean, I’ve seen strong dollars.  And frankly, other than the fact that it sounds good, lots of bad things happen with a strong dollar.  And I do like low interest rates. I mean, you know, I’m not making that a big secret. I think low interest rates are good.”

Which incredibly, was followed up with yesterday’s “did I say yesterday was the most Precious Metal bullish quote ever?  Well, it took Trump just 24 hours to top it” article, based on this historically dangerous “tweet.”

North Korea best not make any more threats to the United States.  They will be met with fire and fury and, frankly, power the likes of which the world has never seen before.”

Heck, if it weren’t for the extremely important topic I decided upon – i.e., pragmatic actionable investment advice – I could easily have written a second “topping” article this morning, when our lunatic “Commander in Chief” not only revealed his warped potentially catastrophic “core values”; but at one fell swoop, both boasted of, and threatened to use, America’s “weapons of mass destruction.”

My first order as President was to renovate and modernize our nuclear arsenal.  It is now far stronger and more powerful than ever before.”

Comically, the government’s captively-owned “media arm” attributed yesterday’s last minute “Hail Mary” rally in the “Dow Jones Propaganda Average” to “news” that Trump’s “fire and fury” tweet was not an official White House policy, but an “off the cuff” remark.  But make no mistake, there’s no Spin City or West Wing hierarchy in the White House – as perhaps more so than any Executive Branch in U.S. history, the Trump Administration is a one-man show – run by a ruthless, unyielding “CEO” who appears hell-bent on launching a major war, with one of the most geopolitically dangerous nations on the planet.

That said, I want to refocus today’s discussion on the aforementioned actions one could, and should, take to optimize their portfolios, as the “eye of the storm” created by the historic market manipulation – of all markets – has provided a potentially life-changing investment opportunity.  Which is, per last month’s “ultimate Precious Metal portfolio high-grading opportunity”; “perfect storage options to capitalize on historically undervalued gold, silver, and platinum”; and “valuation anomalies suggest historic Precious Metal lows” articles; the opportunity to optimize one’s physical Precious Metal portfolio, to capitalize on the expectations, fears, and/or constraints of your personal circumstances.  Which, as Miles Franklin’s principals can tell you from decades of experience, differ dramatically across its diverse client base.

For instance, some may want to take advantage of the historically undervalued silver/gold and platinum/gold ratios, at a time when physical premiums are historically low.  Which, care of the aforementioned “perfect storage options” – i.e. our Brink’s segregated storage programs in Montreal and Vancouver – can be cheaply “financed” with the only storage programs we are aware of (certainly, in the Western Hemisphere), that charge not as a percentage of bullion value, but at a fixed cost per ounce.

Conversely, some – like myself – may be attracted to the lowest numismatic premiums in at least the 28 years Miles Franklin has been in business; i.e., lower than during the Precious Metal bear market bottom in the mid-1990s.  To that end, care of such “optimization,” my gold portfolio is now entirely comprised of premium, high-end products – like century-plus old numismatics; and “modern day numismatics” like the limited edition, .99999 fine Royal Canadian Mint “call of the wild” series.  Which, care of Miles Franklin’s unique “Private Safe Deposit Box” program at Brink’s Toronto and Vancouver, I can store in a FATCA/FBAR compliant (according to the best of our knowledge) facility, in which only I have the keys.

That said, the reasons people make swaps are often unrelated to “profit potential” itself – but other factors, like logistics.  For instance, some people – particularly, those holding significant amounts of metal at home, may feel more comfortable “downsizing the weight” of their portfolio by swapping silver into gold or platinum; whilst others may do the same thing – not because of “weight fears,” but simplification of their estate planning process.  Heck, some may want to sell some of their Precious Metals to take a position in the “twin destroyer of the fiat regime,” Bitcoin – to take advantage of the upcoming “ultimate monetary death cross” of cryptocurrency over fiat.  Whilst conversely, some may want to take some of their windfall cryptocurrency profits off the table, to diversify into fellow “scarcity assets” like Precious Metals; that not only have a 5,000-year track record of unparalleled wealth preservation, but have been suppressed by a maniacal Cartel, which in my view will be either destroyed or voluntarily disbanded in the not-too-distant future, to their lowest-ever inflation adjusted valuations at a time when, as exemplified by Janet Yellen’s “ding dong, the Fed is dead” speech last month, Central bankers are on the cusp of history’s most hyperinflationary money-printing explosion.

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Same As It Ever Was

by Turd Ferguson, TF Metals:

While we’ve all noticed some of the extreme and historic changes to the Commitment of Traders report over the past two months, the once/month Bank Participation Report belies the fact that nothing has yet changed. Whenever price rallies, The Banks are still quick to take the short side of the trade.

First, we should probably begin this post with the usual background and disclaimer:

We’ve written about these CFTC-generated reports so many times, it would be impossible to link every post. However, nearly every post began with these bullet points. Here they are again, just so that we’re on the same page:

  • The CFTC’s Bank Participation Report is issued monthly from a survey taken at the Comex close on the first Tuesday of every month. The report summarizes the combined positions of the four largest U.S. banks (primarily JPM, MorganStanley, Citi, Goldman but occasionally others) and the twenty largest non-U.S. banks (Scotia, HSBC, DeutscheBank, UBS, Barclays and others).
  • Always keep in mind that these reports might be utter nonsense and complete falsifications, designed to mislead you and get you leaning the wrong way. In 2014, JPMorgan was fined by the CFTC for “repeatedly submitting inaccurate reports relating to the required reporting of positions”. See here:

Again, we know that what The Banks report as their “positions” provides an incomplete picture at best. Not only do The Banks maintain considerable long and short bets in the OTC market, they also operate numerous, offshore hedge funds and utilize these funds to take positions not included in the CFTC data as “commercial”. So, what good are these reports? Similar to the weekly Commitment of Traders reports, the Bank Participation Report is only useful/interesting when considered historically…and that’s what we’ll do again today.

OK, with that said, let’s take a look at the latest report that was surveyed on Tuesday, August 1 and released late last Friday, August 4.

If you’ve followed along for any length of time, then you know how The Banks make a market on the Comex. Once upon a time, The Banks operated as agents for the miners. The mining companies would hedge and/or sell forward their future production and would do so by having the agent Banks issue contracts on the Comex. The miner, through The Bank, would be on the short side of the trade and a speculator would bet on the long side. This is largely how the commodity markets functioned since they were first created.

However, over the past two decades, the amount of mining company hedging has declined to nearly zero. The most recent estimate we’ve seen showed only a total of about 270 mts of production in 2016 ( Even if ALL of this hedging occurred on the Comex, this would only represent a need for about 87,000 contracts of open interest. However, we all know that total Comex gold open interest routinely averages in the 450,000-500,000 contract range. Thus the difference between 87,000 and current open interest is simple Bank speculation.

Again, we can’t attribute EVERYTHING to the Comex and surely some of the stated Bank Comex positions are offset with other positions in London and on the opaque OTC “markets”. However, when we consider the history of the Bank Participation Report data, a clear trend emerges and its one that, unfortunately, is quite clearly still present today.

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Is Amazon getting ready to take over the retail gold market?


by Kenneth Schortgen, The Daily Economist:

In the 1970’s Arlo Guthrie sang a line in perhaps his most famous song that went, “You can get anything you want at Alice’s Restaurant”.  And perhaps that mantra should now be applied to as the online retail giant is slowly but surely trying to co-opt everything from electronics to clothing to food…

And now even gold bullion?

Since I’ve been actively researching gold coins and other precious metals, my computer must have cookies that tell Amazon I’m a great candidate to buy gold coins. I wouldn’t be surprised if you saw a similar ad on your computer soon. 

Of course, it makes sense for Amazon to break into this market. After all, investors are using precious metals to protect their wealth from inflation and a falling dollar. And according to what I’m seeing, this is just the beginning of a major trend! 

If Amazon can capture just a small part of this demand — and mark prices up just a bit on gold and silver coins — the company will lock in some serious profits! 

Of course, the gold coin market will only be a small part of Amazon’s growing global business. And by now, you should know that I’m not going to suggest you buy Amazon’s stock. The shares are too expensive and risky. 

But the mere fact that Amazon is profiting from selling gold coins should tell us something about the gold market. Specifically, that demand is strong. – Daily Recknoning

According to the over 40,000 listings now on for Gold Eagles, the majority of prices for the U.S. minted coins are extremely outrageous compared to what you would pay elsewhere online, or even at your local coin shop.  But since most investors overall today rarely look at fundamentals when purchasing an asset, it is very likely that many consumers who enjoy the convenience of shopping on Amazon will not even flinch at paying premiums of over $200 per ounce.

For now has a long way to go to compete with the more well established local and online dealers of gold bullion on price, but what their joining in on the gold market indicates for sure is that demand for precious metals remains high, and that the online giant has now put gold in its sights as the next product it wants to dominate in the retail market.

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Andrew Hoffman – Trump Does it Again and Again

by Kerry Lutz, Financial Survival Network:

What’s Really Happening Wednesdays with Andrew Hoffman:

  • Wednesday’s article, “Most Precious Metal Bullish Quote Ever”.
  • Trump, Re: Weak dollar
  • Today’s soon-to-be-released article, “Did I Say Yesterday, the Most Precious Metal Bullish Quote Ever? Well, Trump Took Just 24 Hours to Top It!”
  • Trump, Re: North Korea’s “Fire and fury”
  • Yesterday’s HUGE crypto event
  • Bitcoin SegWit Activation – The Gold Cartel’s worst nightmare
  • All contributing to the premise of July 27th’s “The Most Precious Metal Bullish I’ve Ever Been”
  • Etc., etc.

Click Here to Listen to the Audio

Keiser Report: Trumponomics (E1107)

from RT:

In this episode of the Keiser Report Max and Stacy discuss the coming sequel to the global financial crisis and the bond bubble warnings from Alan Greenspan. In the second half Max interviews Dr. Michael Hudson about Trumponomics, anti-trust, repeat banking offenders and his father’s proverbs.

Did I Say Yesterday, The Most Precious Metal Bullish Quote Ever? Well, Trump Took Just 24 Hours To Top It!

by Andy Hoffman, Miles Franklin:

Man, do I keep crazy hours!  Seriously, I am now averaging four hours per night of sleep; to which I can only say, thank goodness for my 24/7 gym, and a laptop equipped with hundreds of podcasts, and thousands of Amazon Prime TV shows and movies.  As for tonight, while I’m writing at the early hour of 11:00 PM Wednesday, I went to sleep at 9:30 PM.  I wasn’t planning to get up, but after getting kicked in the shins playing soccer this evening, it hurts so much, I can’t get back to sleep.  Thus, considering I have podcasts scheduled at 8:00 AM and 9:00 AM; and that today’s principal topic is so obvious; I figured I’d write it now, whilst the pain remains so acute.  And please don’t email to tell me I need more sleep – as my body will do what it wants, and I don’t just like, but love writing at such odd hours.

Anyhow, by obvious, I mean our “Commander-in-Chief” is living up to my greatest pre-Election fear, honed over a lifetime of watching “the Donald”’; i.e., an ego so large, he would rather destroy the world than be perceived as “losing.”  Which unfortunately, is exactly how Kim Jong-Un feels, too; i.e., the lunatic megalomaniac, with a Napoleon complex, running a totalitarian state in spitting distance of Seoul, Tokyo, Beijing, and…Guam, where the U.S. operates one of its largest military bases.

But before I get to the quote that, just 24 hours after attributing the “most Precious Metal bullish quote ever” to el Presidente himself; and two weeks after proclaiming to be the “most Precious Metal bullish I’ve ever been”; not to mention, 12 hours after Bitcoin’s SegWit protocol locked in – i.e., the “gold Cartel’s worst nightmare”; consider that, whilst Cartel-suppressed Precious Metals are trading at their “lowest inflation-adjusted prices ever”; PPT-supported stocks are trading at “dotcom valuations in a Great Depression Era” – as exemplified by the following, unfathomably damning charts, of 1) stocks’ highest-ever – by a huge margin – price/sales ratio; and 2) also by a huge margin, stocks highest-ever net debt/EBITDA ratio.

Throw in the essentially 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} correlation between equity market valuations and Central banks’ cumulative balance sheets – let alone, what they hold “off balance sheet”; and you can see how stocks, and bonds, are so hopelessly addicted to low interest rates and quantitative easing, rates can never be reduced, and monetization must exponentially increase.  I.e., the definition of a Ponzi scheme – of which, today’s global version is by far history’s largest and most destructive; quite obviously, amidst the final stages of its terminal, malignant phase.

To the contrary, Precious Metal demand, amidst the weakest Western sentiment in memory (care of unprecedented 24/7 price suppression, and equally relentless equity support), global demand remains stubbornly near record-high levels.  This, as two decades of price suppression has left Central banks’ “manipulation inventory” at “fume” levels; whilst Cartel-crippled supply continues to inexorably plunge – likely, for years to come, in goldsilverand platinum.

Given that backdrop, it’s barely 48 hours since the Donald uttered what I at the time deemed the “most Precious Metal bullish quote ever” – although, with all due respect, it could easily be tied with a hundred others from “leading” politicians and Central bankers; like, for instance, “Goldman Mario” Draghi, who nearly five years ago to the date, claimed he’d do “whatever it takes” to LOL, “save” the Euro.  Which was, when the self-proclaimed “King of Debt,” Mr. “low interest rate person” himself, said…

“I like a dollar that’s not too strong.  I mean, I’ve seen strong dollars.  And frankly, other than the fact that it sounds good, lots of bad things happen with a strong dollar.  And I do like low interest rates. I mean, you know, I’m not making that a big secret. I think low interest rates are good.”

Well, before the ink on this quote dried, our “Commander-in-Chief” topped it; again, by a large margin; when once and for all, he proved that, contrary to his campaign promise of reducing America’s military entanglements (whilst LOL, proposing dramatic military spending increases), he may actually be a bigger warmonger than George “WMD” Bush and Barack “Nobel Prize” Obama combined.  And heck, perhaps even Hillary “I’ll do anything to invade Russia” Clinton.

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