Posted at 7:10 PM (CST) by & filed under In The News.

BANG: Why The Gold Miners Could Soon Make FANG Look Tame
May 3, 2018

I’ve written recently about the FANG stocks and another popular group I call MCBM. Both trade at valuations that look extreme relative to their history. There’s another group, though, that I have been watching that appears to be trading at a significant discount to its normal range over the past couple of decades.

This latter group I call BANG (Barrick Gold, Agnico Eagle, Nemont Mining and Goldcorp) and I like the acronym not just because of the allusion to and juxtaposition with FANG but also due to the fact that rising gold prices could make for explosive gains in these stocks if their valuations begin to normalize at all.

The chart below plots the median enterprise value-to-revenues for the four stocks over the past 20 years. The thing that really jumps out at me is that BANG is currently cheaper today than it was in the early 2000’s at the end of the last major gold bear market when the price of the precious metal was fully $1,000 per ounce cheaper than it is today.

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Posted at 10:06 AM (CST) by & filed under Jim's Mailbox.

He must read JSMineset.

Dave

Smart Money Diversifying Into Gold – One Billionaire Invests Half His Net Worth
May 2, 2018

Some big investors see warning signs ahead for markets but are holding their positions. Egyptian billionaire Naguib Sawiris is taking action: He’s put half of his $5.7 billion net worth into gold.

He said in an interview Monday that he believes gold prices will rally further, reaching $1,800 per ounce from just above $1,300 now, while “overvalued” stock markets crash.

“In the end you have China and they will not stop consuming. And people also tend to go to gold during crises and we are full of crises right now,” Sawiris said at his office in Cairo overlooking the Nile. “Look at the Middle East and the rest of the world and Mr. Trump doesn’t help.”

President Donald Trump is aiding Sawiris in one way, though: If a North Korean peace deal can be reached, the Egyptian’s investments there may finally pay off. After 10 years of waiting to repatriate all his profits easily and control his mobile-phone company, Egypt’s second-richest man says an accord would let him reap some of his returns.

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Bill and Jim,

Yesterday the Fed not tightening again is so incredulous. With the massive tax cuts we have and low unemployment they claim and with even their hand picked inflation gauges all above 2%, they bailed. Stagflation keeps the status quo a little longer until after North Korea and Iran issues are over and that will be soon. If the Fed had raised rates and noted both strength in growth and inflation the bond market would have tanked smartly. And stocks too without a doubt. Dollar may have got a bid but with TED spreads widening I doubt the dollar would have stayed strong. If the Fed had bailed and noted growth weakness and  a more submissive time to inflation, dollar would have tanked and stocks too because of weakness tone. The Fed chose the stagflation statement that would appease both bond, dollar, stock, gold bears and bulls. But they could have chosen that statement and still raised a measly 0.25% but did not. The tipping point is near. The blame and trigger will not be a true exogenous event like a geopolitical or China trade war currency manipulation, it will be a heterogeneous event that is so obvious yet most believe it to be exogenous. Higher rates on both long and short end is putting an end to the Greenspan’s put that has put so many investors into a state of intentional ignorance and/or cognitive dissonance.

CIGA Kevin

 

Jim/Bill,

Some nice charts on commodities and gold, but the lumber chart astounds me!

When you consider lumber, and recently, news stories of how the Saudis want $80+ oil, you just about cover most of what makes industry tick.

It’s a foreboding sign of things to come, namely inflation.

CIGA Wolfgang Rech

My Case For Gold Hitting A Record High Above $2,000
May 03, 2018

(Kitco News) – Before I lay out to you why gold will hit new highs in the coming years, I want to first thank you and all of my loyal Kitco readers who have followed my daily reports for so many years. I have a lot of irons in the fire, but writing for Kitco, and you, is one of my very favorite daily chores. I hope you continue to follow me in the coming years.

If you know me well by having read my Kitco daily reports for years, you know I’m pretty straight-forward and not much for hyperbole or bombastic proclamations. While the headline of this special report may sound like I’m really going out on a limb, just read on and let me explain.

I am going to show you three charts that lay out my case for gold pushing to new highs above $2,000 an ounce. These charts will corroborate my notion that it’s not a stretch to suggest gold will hit a new all-time high in the coming years, or possibly sooner.

Goldman Sachs Commodity Index (GSCI) at a multi-year high

See on the monthly chart for the GSCI that prices are at a more-than-four-year high and have been trending higher for two years, suggesting more upside for the raw commodity sector in the coming months, and likely much longer. Commodity markets are highly cyclical. The raw commodity sector is embarking upon what I believe will be a years-long up cycle that will produce new record highs in several, or even many, raw commodity markets.

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Posted at 7:01 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

Anybody getting the message yet?

The need to feed the debt machine.

2 month T-bill?

What are they thinking of?

Perhaps no one wants the longer dated stuff because of the oncoming inflationary spiral.

Perhaps they don’t want to put excess pressure on longer rates.

Either way, when rates do head higher, refunding could be a serious issue.  Not only in finding buyers, but potentially higher rates would kill any budget in terms of financing the interest cost on the debt.

Heading down dire straits.

CIGA Wolfgang Rech

Treasury Increases Auction Sizes To Fund Soaring Deficit; Launches 2-Month Bill
May 2, 2018

While traditionally a snoozer, this morning’s Treasury’s refunding announcement was closely watched for details on how the US Treasury’s plans to fund its soaring budget deficit in the coming quarters, shortly after it announced it had sold a near record $488BN in debt in the last quarter. Specifically, bond traders were looking at how much upcoming auctions would increase by, and whether the Treasury would also introduce a 2 Month bill auction as some strategists had expected.

Well, the Treasury did all that and more, revealing that it would sell $31BN in 3Y notes on May 8, a $5BN increase vs the $26BN sold last quarter; additionally, the 10Y refunding auction on May 9 will also increase by $1BN to $25BN vs $24BN last quarter, and a similar increase for the 30Y auction, which would increase to $17BN on May 10 vs $16BN last quarter.

That was just the beginning: among the other debt-busting details revealed today were the following

  • Treasury to introduce two-month bill later this year
  • Keeps TIPs auctions unchanged, evaluates new five- year TIPs sale
  • 2-, 3-year note auctions to rise by $1 bln per month
  • Boosts 5-, 7-, 10-, 30-year debt auctions by $1b
  • Floating-rate note auctions boosted by $1 bln

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It is about time, as this is a public ambush for political reasons by the Dark Side. Courtesy of JB.

Jim

 

Posted at 10:12 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

…the dumbing down of America is perilously close to the 50% threshold!

46% Favor Government Guaranteed Jobs for All
April 30, 2018

Senator Bernie Sanders is looking ahead to the 2020 presidential election with a proposed federal government program that guarantees all Americans a job with health insurance. Nearly half of voters like the idea.

(Want a free daily e-mail update? If it’s in the news, it’s in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

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Watters: Mueller Is Trying to ‘Criminalize the Exercise of Presidential Power’
May 1, 2018

Jesse Watters said President Donald Trump should be alarmed at what Special Counsel Robert Mueller apparently wants to ask him, citing leaked questions attributed to the former FBI director’s team.

“They don’t care if he fails, I think they’re more worried about him succeeding,” Watters said.

Watters said the Mueller probe is supposed to be about colluding with Russia, but judging by the leaked questions, Mueller appears to be playing the role of a wily “therapist” intent on “getting inside the president’s head” and thereby proving “obstruction.”

“I don’t think that Mueller has a [collusion] case against the president. He’s building a very deadly serious case,” he said.

Watters said that if Trump answered the largely “open-ended” questions under oath, “you’re going to be impeached.”

He said that many of the questions are about Trump’s tweets.

“If you can get indicted for tweeting something, that’s crazy,” Watters said.

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Posted at 10:08 AM (CST) by & filed under USAWatchdog.com.

May 2, 2018

By Greg Hunter’s USAWatchdog.com

Renowned geopolitical and financial cycle expert Charles Nenner says, “The mainstream media talking heads are telling you to buy, but never tell you to sell.” Nenner says the time to sell stocks is getting close and explains, “It’s just a hopeless situation. I feel sorry for people who invest their money. We have had a nice ride, but soon the whole thing will come tumbling down. They listen to all these things and have no clue on how to invest . . . . I think soon . . . this will become the longest expansion in financial history. . . . So, this could be the longest expansion ever, what are you playing with? You are gambling with nonsense. So, it’s over.

.  .  .

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Posted at 5:10 PM (CST) by & filed under General Editorial.

Jim Sinclair’s Commentary

 

Banks need to be prepared for the RESET, when it occurs. Banks need to have the technology already in place when a RESET happens.

 

It makes perfect sense for Banks to hire computer programmers/engineers. 25% of Goldman Sachs workforce is computer programmers. It is no secret to anyone that the cutting edge and state of the art technology in finance is toward digital, cashless, crypto-currency and block chain technology. The demand for programmers to develop this technology is unavoidable. Dedicating a high percentage of a bank’s workforce to a RESET transition makes absolute sense, and would certainly be an imperative for any financial institution.

 

Since Goldman Sachs’ has shrunk their market makers from a workforce of 500 down to 3, it therefore seems unlikely that the programming efforts are being aimed at the markets. Why would 9,000 programmers and state of the art technology be needed when a financial institution is shrinking an area of business focus?

 

It could be postulated that programmers are developing Artificial Intelligence (AI) in finance. Banks are the entities of the 1% elite, and have an unsurpassed psychological need for control. Such entities are manifestly controlling, and would be extremely unlikely to give financial control to anyone or anything, particularly something they could not control. The need to control would eclipse any notion of AI in the financial and banking institutions.

 

Let’s read between the lines in the programming agendas and efforts of large banks. Often, what is not said is more important and more telling than what is actually stated. In the case of the following article, what is taking place in the workforce of Goldman Sachs’ tells more by what isn’t said. There is no mention of digital or cashless, etc. Let’s let the employment of engineers and programmers speak for itself since we already know the financial trend is toward digital and cashless technologies. It isn’t rocket science to read between these lines. What is unsaid about this hiring and this trend is plainly conspicuous by it’s absence.

 

See article below…

 

Computer Engineers Now Make Up A Quarter Of Goldman Sachs’ Workforce
April 30, 2018

 

Goldman Sachs’ David Solomon said the bank now employs thousands of engineers in its effort to stay on the cutting edge of financial technology.

 

Keeping up in modern finance “requires a lot of investment,” said Solomon, president and next in line to be CEO at the firm, from the Milken Global Investment Conference on Monday. Companies such as Goldman need to answer questions like “how to hold on to your legacy businesses but create an environment that’s conducive” to innovation, he added.

 

The chief operating officer added that Goldman Sachs has hired about 9,000 engineers to help ensure that the bank keeps up with peers in the age of modern banking. For a company with just over 36,000 employees, the bank’s influx of computer engineers now represents approximately 25 percent of its entire workforce.

 

“Ours is a business of information … pattern recognition and historical context are important,” he explained, saying that it’s important to the company’s success that it continues to hire about 2,000 people fresh out of school each year.

 

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Posted at 5:47 PM (CST) by & filed under Bill Holter.

 

 

 

 

 

 

 

 

 

 

I have tried to explain this concept many times before but never had a chart to do it with. Please note the start date of the chart is 1971, this is not by any coincidence as that was the year the U.S. dollar became fully fiat and backed by nothing but “faith”. Before getting started, it is important to understand what August 15, 1971 really meant and why Nixon took us off the gold standard. The obvious is because with France and other nations demanding conversion of dollars into our gold, it would have only been a few short years before our stockpile was completely depleted.

The other, less obvious (so far) reason to come off the gold standard was because it allowed the U.S. to operate without the “restrictions” on monetary (and fiscal) policy that a gold standard imposes. In other words, once gold’s restrictions were lifted, literally unlimited amounts of dollars could be printed by the Fed along with unlimited amounts of fiscal borrowings by the Treasury…to a point. The chart above actually shows you exactly where that point in time was, please let me explain “why”.

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Posted at 12:06 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

My former partner, Yra, remains the most knowledgeable person I know.

Yra Harris: “There Are Increasing Concerns Around The Globe That Central Bankers Do Not Have An Exit Strategy”
April 29, 2018

Back in November, we brought to the attention of our readers a stunning admission from one of Citi’s head credit strategists, Hans Lorezen, who said matter-of -factly that during his conversations with central bankers, there was a growing fear that they’ve lost control:

    In the context of a self-reinforcing, herding market, the pivot point where the marginal investor is indifferent between putting more money back into risk assets and holding cash instead is fluid. But when the herd suddenly changes direction, the result is a sharp non-linear shift in asset prices. That is a problem not only for us  trying to call the market, but also for central bankers trying to remove policy accommodation at the right pace without setting off a chain reaction – especially because the longer current market dynamics run, the more energy will eventually be released.

    That seems to be a growing fear among a number of central bankers that we have spoken to recently. In our experience, they too are somewhat baffled by the lack of volatility and concerned about the lack of response to negative headlines…. Our guess is that sooner or later in the process of retrenchment they will end up going too far – though that will only be obvious with hindsight.

Fast forward to today when as Yra Harris writes in his latest Notes from the Underground, the realization that central bankers are on the verge of panic is that much closer, because as the veteran trader and strategist notes, “the continued efforts by the ECB, BOJ and Swiss National Bank to keep their overnight rates at crisis-era levels is increasing concerns around the globe that central bankers in general do not have an exit strategy.”

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Bill Holter’s Commentary

Do people even know this?

PDF

Bill Holter’s Commentary

We have said for years “at least China has built and will be left with new infrastructure when the debt façade comes down”.  The US on the other hand has eaten its seed corn!  I remember vividly being chastised by Monty Guild for suggesting China was also playing the debt game, were/are they?  It looks like Wharton believes they have!

How Long Can the ‘Chinese Miracle’ Last?
April 24, 2018

Podcast via Knowledge@Warton

Bill Holter’s Commentary

I was a UT fan until this weekend…

University of Texas to Treat Masculinity as a ‘Mental Health’ Issue
April 27, 2018

The Counseling and Mental Health Center at the University of Texas at Austin recently launched a new program to help male students “take control over their gender identity and develop a healthy sense of masculinity.”

Treating masculinity as if it were a mental health crisis, “MasculinUT” is organized by the school’s counseling staff and most recently organized a poster series encouraging students to develop a “healthy model of masculinity.”

The program is predicated on a critique of so-called “restrictive masculinity.” Men, the program argues, suffer when they are told to “act like a man” or when they are encouraged to fulfill traditional gender roles, such as being “successful” or “the breadwinner.”

Though you might enjoy “taking care of people” or being “active,” MasculinUT warns that many of these attributes are actually dangerous, claiming that “traditional ideas of masculinity place men into rigid (or restrictive) boxes [which]… prevent them from developing their emotional maturity.”

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