Posted at 2:28 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

Great explanation, by Egon, of everything gold related, including transitory inflation, debt, and no exit door from governmental malfeasance. A very good read.

However, I do take issue with his modesty. His very conservative stance.

Egon states that $4,000 gold is achievable by the end of the decade.

No doubt!

It could conceivably reach that level in 6 months time.

What he fails to convey is gold’s potential to rise above and beyond levels witnessed by Bitcoin. I’m talking $50,000+. Perhaps significantly higher if all the dominoes line up:

– Gold backed Yuan

– Dollar’s loss of reserve currency status

– Massive domestic inflation from a deteriorating Dollar.

– Relentless debt accumulation, compounded with higher interest rates, making funding impossible.

– Major bank and corporate defaults leading to systemic collapse.

– Comex bankruptcy on FTD’s

– Bullion banks being squeezed for delivery.

– Geopolitical turmoil

– Ensuing hyperinflation to meet government obligations.

In my mind, gold’s bullish trajectory may happen through speculative fever initiated by the movement of excess liquidity draining from a plummeting bond market and collapsing equities, chasing a minimal amount of gold and silver to be had. Everyone scrambling toward a single exit door.

Or, it may simply be the repricing of gold to the Dollar’s death spiral. Cheaper Dollars buy less gold; need more Dollars to buy the same one ounce.

He also reminds us that “…nations with their backs against a debt wall is always the pursuit of inflation by design, not deflation.”

That is NOT transitory.

His disbelief in the “transitory” premise got me thinking…

I just realized……I’m transitory!

CIGA Wolfgang Rech

Wolfgang,

There is no point in making a forecast “dollar” price of anything, especially gold. We really have no idea how much gold the US really has since there has been no audit since the 1950’s. We also have no idea how badly they will inflate money supply, although we we do know they have already gone ballistic. In other words, both the numerator and denominator are unknowns. I would suspect the end result will be how many “0’s” at the end of some number will be the case!

Best,

Bill

Why Is Gold Not Rising?
September 24, 2021

Many are asking why gold is not rising, as just about every other commodity makes new highs in the backdrop of inflationary tailwinds.

That’s a very fair question.

Some are even saying gold is dead, a silly and “barbarous” old relic of ancient times, ancient math and ancient common sense.

Needless to say, we beg to differ, not because we are Swiss-based gold bugs, but simply…well… let’s explain.

Current Price vs. Current and Future Roles

For those who see history and math as guides rather than “barbarous” and outdated disciplines, their convictions regarding gold’s role, and even price trajectory, do not wane or rise simply due to the paper price of gold.

To some extent, and despite Basel 3, gold remains openly manipulated by a handful of central and bullion banks who are terrified of gold’s shine for no other reason than it embarrasses currencies (and mad monetary experiments) falling deeper into discredit.

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Jim/Bill,

Silver. Not just triple digits price, but high triple digits.

No algos or calculus required. Just simple math.

CIGA Wolfgang Rech

What a shock that Kitco of all places would post such a bullish argument?

Bill

Silver Price To Hit “High Ranges” Of Triple Digits; Not Enough On Planet To Meet Demand – Neumeyer
September 24, 2021

(Kitco News) – Keith Neumeyer, CEO of First Majestic Silver, has previously called for the silver price to eventually hit triple digits. Now, he’s upgrading that forecast.

“We have two new driving forces which are electric cars and solar panels. These technologies, these businesses, really didn’t exist for the most part a decade ago. Today, I’m even more committed. I’m thinking triple-digit silver…I was always thinking in the low end of that triple digit. But now, I’m thinking it’s possible to get into the higher end of that range,” Neumeyer told Michell Makori, editor-in-chief of Kitco News at the Denver Gold Forum.

Monetary stimulus, along with the debasement of the U.S. dollar, should help gold, which in turn would provide tailwinds for silver, but Neumeyer noted that silver has a sound future regardless of monetary policy due to its demand and supply fundamentals.

Importantly, there simply isn’t enough silver production to meet long-term demand growth.

“As a mining industry, the miners produce about 800 million ounces of silver annually. You look at electric vehicles, the world will be consuming about 100 million ounces this year. You look at solar panels, another 100 million ounces. So, you have two industries that are consuming more than 10%, or close to 20%, of the world production. Above ground supplies are depleting at very fast rates. The deficit continues. Where is the silver coming from?” he said.

Neumeyer’s comments come as governments around the world, including the U.K., the state of New York, and California, have set deadlines on terminating sales of combustion engine vehicles.

“The automotive industry, worldwide, produces 19 million automobiles a year, of which, 5 million of those are electric cars,” he said. “So, if you’re going to replace every fuel combustion car on the planet, by, let’s call it 2030, 2035, call it 2040, how are you going to replace a billion cars at the rate of 5 million cars a year? Where’s all that silver coming from? Do the math. For every 5 million cars, you need 100 million ounces of silver, so it’s simple. There’s not enough silver on the planet to meet the demands of government,” he said.

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Commodities at a low versus paper…in your lifetime! What’s in your wallet?

Bill

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Jim/Bill,

Transients is the name of the game.

The excuse du jour.

Always reactive. Never proactive.

Where does the government find these managers?

They couldn’t manage to wipe their asses because they never thought of stocking up on toilet paper.

They stimulate energy intensive manufacturing while restricting oil and gas exploration via the green movement.

But not to worry. Its only transient!

CIGA Wolfgang Rech

You of course are correct Wolfgang, but few will make this connection…

Bill

Column: Worldwide Energy Shortage Shows Up In Surging Coal, Gas And Oil Prices
September 24, 2021

LONDON, Sept 24 (Reuters) – Record gas and electricity prices in Europe, record coal prices in China, multiyear-high gas prices in the United States and oil prices well above their real long-term average are all manifestations of the same global energy shortage.

In the aftermath of the coronavirus recession, energy production has failed to keep up with rapid growth in consumption as energy producers struggle to raise output while demand has bounced back quickly.

The business cycle downturn and slump in energy prices caused by the pandemic, and before that the U.S./China trade conflict, depressed investment throughout the energy sector in 2019/2020.

Since then, the global economy has experienced an exceptionally rapid cyclical recovery, aided by low interest rates, bond buying and massive government spending, which has focused on energy-intensive merchandise rather than services, boosting energy consumption at extraordinary rates.

The result is a severe cyclical shortage of energy, evident in below-average inventories and surging prices for coal, gas and oil in all the major consuming regions of the world.

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Posted at 8:31 AM (CST) by & filed under In The News.

Bill Holter’s Commentary
Posted without comment…

GOP Rep Demands HHS Address Claims Of Underreported Vaccine Injuries Following Project Veritas Video

September 23, 2021
Update (1440ET): Rep. Paul Gozar has sent a letter to the US Department of Health and Human Services demanding a “full review of all HHS health care systems nationally to ensure full compliance with vaccine injury reporting laws including reporting all adverse events occurring after the administration of the COVID-19 vaccine,” following the release of this week’s Project Veritas undercover recordings.

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Posted at 8:25 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Add this one to the list. Can you remember how many times the delusionals told you “oh no, that’s not true. Snopes fact checked it; false”? Well, here you go, Snopes…!

‘He Raped Me Every Morning’: Snopes Co-Founder Accused Of Sexual Abuse By Most Recent Wife
September 22, 2021

The saga of Snopes co-founder David Mikkelson just keeps getting worse.

Mikkelson, who made headlines in 2016 for cheating on his co-founder wife and marrying an escort – only to be suspended by Snopes last month for mass plagiarism – has been accused of raping his now-ex escort wife ‘every morning’ and playing mind games with her, according to Newspunch.

In a September 9 Facebook post, Elyssa Young – who split with Mikkelson at some point in 2020, wrote:

    “The worst thing about covid-19 for me personally is how complete my comprehension is that if i were to contract it I would die utterly alone.”

(Fact check: False. Elyssa has just a 1% chance of dying, assuming she’s under 50 years-old.)

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Bill Holter’s Commentary

Taking a knee for the right reason!

Awesome Moment On Tennessee High School Field…
September 23, 2021

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Posted at 8:24 AM (CST) by & filed under Jim's Mailbox.

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Money supply to the moon…and velocity in the toilet at the same time? Are they hoarding it or shunning it? What is it worth anyway? Yes, dismal Dave has a sense of humor!

Bill

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Posted at 12:06 PM (CST) by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

It looks like we are on track for yet another global financial meltdown.  This time it is coming out of China in the form of a failed property development company called Evergrande.  It’s five times bigger than Lehman Brothers, whose failure cratered the global economy in 2008.  Will central banks, including the Fed, just let it all fail or will they print massive amounts of money trying to stop the fall?   If history is a guide, we should get ready for the most money creation ever.  In May, financial writer John Rubino said, “This is beyond the ability of any individual to fix.  We can’t save the system.” We sure can print a lot of money to try though.

Massive global money printing is what is coming, and it will come with huge consequences for all fiat currencies.  Rubino explains, “Stocks are tanking, cryptos are tanking, currencies of the world are getting volatile, politics are volatile and gold is going up while all this is happening, which it is supposed to do.  Gold is supposed to be the safe haven where you hide out when nothing else seems trustworthy. . . . That hasn’t been the case in prior bear markets.  When stocks tanked, they pulled down gold and silver. . . . It’s a good sign when markets start to behave rationally again.  When high risk assets don’t seem worth it anymore, capital flows into real assets that hold their value no matter what the government is doing to the currency.  That’s the way it’s supposed to work, and that is the way it is working. . . . Trust is probably the key word in this whole discussion.  Fiat only exists because we trust the people who are managing them to maintain their value.  You take the trust away and there is nothing there.  A fiat currency is not a real thing.  It doesn’t actually exist other than little pieces of paper that have no intrinsic value or computer code, which also has no intrinsic value.  So, you take away the trust that we had in the Fed, Treasury, Congress and the President to do the right thing, and be honest, when it comes to the financial markets, you take that away and there really isn’t anything there.  Nobody would want to hold a currency managed by people they can’t trust.  Pay attention to that because the less we trust the guys in charge, the less we trust the currency.  The less we trust the currency, the less we trust the financial markets and the less valuable these financial assets are.  So, it all ties together, and it all depends on that one word—Trust.”

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Posted at 10:31 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Greed is good?

The Justice Department Has Serious Grounds to Subpoena Trading Records from Dallas Fed President Robert Kaplan
September 20, 2021

Fed watchers are stunned that Fed Chair Jerome Powell thinks it is appropriate for the Fed to investigate itself following one of the most arrogant and brazen trading scandals in the history of the Fed.

The focal point of that scandal is Robert S. Kaplan, the President of the Dallas Fed, who held non-public, market moving information throughout last year but nonetheless traded in and out of tens of millions of dollars of individual stocks as well as – wait for it – S&P 500 futures, an instrument used by speculators to make highly leveraged, directional bets on the market. S&P 500 futures extend the trading day to almost 24/7 from Sunday evening to Friday night.

The type of trading done by Kaplan appears to be expressly prohibited by the Code of Conduct of the Dallas Fed. Appendix A on “Disqualifying Interests” of the Code of Conduct reads as follows:

“De minimis exemption for a matter of general applicability. An employee may participate in a particular matter of general applicability, such as rulemaking, where the disqualifying financial interest arises from ownership by the employee, his or her spouse or minor children of securities issued by one or more entities affected by the matter, if:

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Posted at 10:28 AM (CST) by & filed under Jim's Mailbox.

Bill/Jim,
For every complex problem there is an answer that is clear, simple, and wrong.’ H. L. Mencken. (1880-1956).
Dave
So Dave, what you are saying is…it sucks to be old?
Bill

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Posted at 8:43 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Credit always knows first…

Former Lehman Trader On “China’s Lehman Moment”
September 19, 2021

By Larry McDonald, former trader at Lehman Brothers, author of “A Colossal Failure of Common Sense” and publisher of the Bear Traps Report

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My name is Larry McDonald, that is the UK cover above. In the years before the failure of Lehman Brothers, I ran a successful distressed credit business at what was the 4th largest investment bank in the U.S. – becoming one of the most consistently profitable traders in the fixed income division. In late 2008, early 2009 – with Patrick Robinson, we penned “A Colossal Failure of Common Sense” – the Lehman Brothers inside story. At least once a month, I tell my wife while wearing a hopeful smile —“if we sell a million books — we´ll break even on our Lehman stock.” On September 15, 2008 – it all came crashing down in the largest bankruptcy in U.S. history. Known as, “the week that changed the world,” a very painful experience indeed. I was down on the mat looking up at the referee as he delivered the count. It was one of those fateful moments most of us face. Staring into the abyss, drenched in blood-curdling uncertainty, there are times in life when we must get up. Even when it looks like all is lost in a valley of no hope. Ultimately, the lucky ones learn there are valuable lessons in re-invention. The last 13 years have been a breath of fresh air.

Life’s Lessons

One of the important lessons in our book comes down to how to use leading credit risk indicators? In the 2007-2010 period, the global credit risk epicenter was obviously inside the US. In the 2011-2013 period, Europe´s banks were the focus during the Grexit panic. In recent years, Asia has become far more interesting, a new epicenter has been formed.

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