John Rubino over at Dollar Collapse – Mon 22 Oct, 2018

Italian Bonds Downgraded But What About The Overall Euro?

As expected Italian bonds were downgraded today to one step above junk, “stable”. The yield on a 10 year dropped a little bit today to just under 3.50% but the almost straight up move in yields over the past few months is the real concern.

John Rubino, Founder of the Dollar Collapse website shares his thoughts on the overall health of Europe. With the ECB no longer the major/only buyer of bonds from the European countries the question is who is going to support the bond markets over there?

Click download link to listen on this device: Download Show

Click here to visit John’s site.

John RubinoCory Fleck
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  1. On October 22, 2018 at 11:21 am,
    Matthew says:

    Off topic:
    Trey Reik nails it…

    A common institutional apprehension over gold’s portfolio merits is fear that gold and gold equities will prove vulnerable to any sharp downdraft in U.S. asset markets, so why bother with gold in the first place? This logic no doubt stems from “what happened last” reasoning tied to the 2008 market experience. In the fall of 2008, gold succumbed to broad financial asset deflation. We would suggest market conditions for gold in 2018 bear little resemblance to those in play back in 2008. Commodities were perhaps the hottest hedge fund theme on the planet during 2008, exceeded only by ubiquitous shorts in U.S. financials. Complicating matters, the hedge fund community was wildly leveraged on London-based (non Reg-T ) “total return swap” platforms, routinely extending 4-to-1 credit for standard portfolios. Most forget that on September 19, 2008, the SEC stunned the world in enacting a “temporary emergency action to prohibit short selling in [U.S.] financial companies to protect the integrity and quality of the securities market and strengthen investor confidence.” Translation being, hedge funds which were correctly and massively short U.S. financials were forced to cover these shorts and, by way of risk management, liquidate offsetting long positions across the commodity spectrum.

    Given the brutal and sustained collapse of broad commodities since 2014, we would suggest commodity positioning in 2018 is virtually opposite that of 2008. Further, when proverbial “detritus” next hits the monetary “fan,” the U.S. dollar is unlikely to enjoy anywhere near the safe harbor bid it commanded in 2008, when the Fed’s balance sheet measured a svelte billion, or just 22% of its currently bloated profile.

    Interestingly, during the 1377-point, 5.2% decline of the Dow Jones Industrial Average on October 10 and 11, spot gold rose 2.9%. Even more impressively, the venerable Philadelphia Stock Exchange Gold & Silver Index (XAU) soared 7.84% over the two-day span. Suffice it to say, these divergent performances herald far different market conditions for precious metals in 2018 than those existing in 2008.

    • On October 22, 2018 at 2:40 pm,
      Bonzo Barzini says:

      Reik makes sense to me. Why would anyone buy a 10 year Italian bond yielding 3 1/2% when silver is at $14 ?

  2. On October 22, 2018 at 1:11 pm,
    CFS says:

    Off topic.
    Built more jails…..

  3. On October 22, 2018 at 10:17 pm,
    Matthew says:
  4. On October 22, 2018 at 11:41 pm,
    Excelsior says:

    (GLDN) Golden Ridge Drills a New High-Grade Gold Discovery; Intersects 20.00 meters of 11.63 g/t Au and 13.8 g/t Ag at the Boiling Zone

    October 15, 2018

    • On October 23, 2018 at 7:51 am,
      Charles says:

      Hi Ex –

      You said a few days ago you were contemplating getting back into Novo Resources. I am wondering if with the dip recently if you got back in.


      • On October 23, 2018 at 9:04 am,
        Bonzo Barzini says:

        NEM should buy back all the Novo they sold to KL.

        • On October 23, 2018 at 9:15 am,
          Charles says:

          No kidding. Good luck with that! I don’t think there are that many shares available at these levels. I bought some more at $1.57. The stock could go down more, but I couldn’t pass up the opportunity to buy some more.

      • On October 23, 2018 at 2:49 pm,
        Excelsior says:

        Hi Charles,

        No I haven’t pulled the trigger on Novo yet, but have been watching it. My biggest concern is whether it can convince the market it can economically extract the gold, which will take trial mining. Now that the froth has been swept off it does look like a good value proposition, but so do most of the stocks in the PM sector (lol).

        If they deliver on their strategy it will one for the history books, and may challenge most mid-tier and major mining companies with their huge land position, but they are also pulled a number of different areas on different deposits, so I’d like to see a more clear path forward on value creation and focus.

        Regardless, I’ll likely take a punt back and get a position going soon.

        • On October 23, 2018 at 6:17 pm,
          Charles says:

          Thanks for your analysis Ex. I figure it is due for at least a bounce and I plan to reduce my share count down if it stalls out in the short term. I realize it could easily travel back to where the rally originally stated at around 50 cents so I will be keeping a close eye on the shares I recent purchased.

          • On October 23, 2018 at 6:58 pm,
            Excelsior says:

            Good thoughts Charles. Personally, I don’t think it will get that low (50 cents) and many jaded bagholders that bought during the frenzy and got their feathers ruffled being impatient have sold after the last few months. That is when I like to start buying…. when things simmer down…..

            Sure, there may still be a bit more downside weakness, but most of the speculative hot air has come out, but unlike a silly pump-n-dump explorere, Novo is the real deal, with a real team, and they have demonstrated the gold is there, and just need to mine it for a proof of concept to the market and the interest will return.

            I just read this editorial from Bob M. where Goldfinger was interviewing him with some fair questions on Novo, and I agreed with most of Bob’s responses back. Since this blog is mostly over I’ll post that section below:


            > Goldfinger: “2018 hasn’t been kind to the high-flyers of 2017, both Garibaldi and Novo have performed very poorly this year. You’ve been right by being bearish on Garibaldi but you haven’t been so right on Novo this year after watching its share price increase more than 1000% in 2017. Is this simply a case of expectations getting out of hand or is there something wrong with these stories now? More specifically what is going on with Novo?”

            >> Bob Moriarty: “You raised an interesting point and i’m glad you did. When nothing changes with a stock except that the price is lower it’s usually a good opportunity to buy more. I’ve not been negative on Novo but I have now pointed out for 14 months that the nugget gold in the Pilbara is impossible to measure. It’s as simple as you cannot measure it, you can only mine it. The company has come to this realization and they’ve started bulk sampling, which is basically bulk mining. A bulk sample is mining. When you have things like alluvial diamonds or big nugget gold you cannot measure it, you can only mine it. SGS has unfortunately completely screwed the pooch, they were supposed to set up a small processing plant beginning all the way back in December of 2017 and we’re now in October 2018 and I don’t think they have anything yet.”

            “Now it’s important to note that Pacton has gotten in bed with Artemis and Artemis has a plant at Radio Hill that they’re in the process of recomissioning. The problem is that we’ve got all these geologists scratching their heads wondering what the grade is because Novo has only had 5 results in total from SGS in the last year. Here’s what everyone who’s interested in Novo should do, they should go back and look at the video from the Denver Gold Show last year and see that they had 300 pieces of gold in a 10 meter by 15 meter area. That’s a lot of damn gold. The gold is there and whether you can measure it or not doesn’t matter. Novo just needs to get into production and show everyone that the gold is there. Pacton has been smart enough to realize that they should do an end run around SGS and simply process their own gold.”

            > Goldfinger: “We now know from Garibaldi that no news is usually bad news in the junior mining sector; Garibaldi didn’t put out an NR for three months while they were drilling the crap out of Nickel Mountain and then they delivered some underwhelming results which has led to the stock getting nearly cut in half. I am concerned that the lack of meaningful news from Novo is also actually bad news. What is it going to take for Novo to turn the share price around?”

            >> Bob Moriarty: “Well there will be news and there will be results out shortly and I believe that will do it (turn the share price around). But you need to go back to my book and remember that everything goes up and everything goes down. If a company has a really good set of projects and the shares are now 50% cheaper than they were a couple of months ago it’s not a bad thing, it’s a good thing if you’re an investor because now you’ve got an opportunity to buy it cheaper. You want to sell and take some profits when the mob is rushing into a story and you want to buy when nobody cares about the story anymore and the weak hands are getting shaken out.”

            “I was writing about Novo when it was C$.45 per share and I said it was going to go up ten-fold and maybe even a hundred-fold and I was absolutely correct. If some guy wants to buy into the story at C$6.00 and then complain when it drops back to C$2.50 well screw him and the horse he rode in on. Judging by the number of people complaining on the Novo chat boards we’re probably pretty close to a tremendous buying opportunity.”

            > Goldfinger: “It’s an interesting dynamic to see Pacton get into bed with Artemis considering that Novo and Artemis aren’t on the best of terms, and both Novo and Pacton are heavily bankrolled by Eric Sprott.”

            >> Bob Moriarty: “Eric Sprott is behind both Novo and Pacton through Kirkland Lake and through his own personal investment fund. I know that Eric Sprott, Greg Gibson, and some people from Kirkland Lake just flew to Australia and I highly suspect that they were very upset with what was going on and what wasn’t going on. I would be upset too if I was running Novo in Australia and SGS was telling me “we’ll get to you in 6-8 months”, I’d jump over the wall and pull a bull whip out and say “let me show you a trick with this bullwhip i’ve got, bend over!”

            “How do you take ten months to set up a small processing facility that should take a couple of months? SGS absolutely dropped the ball and it has cost Novo shareholders hundreds of millions of dollars in equity. Now I think there’s a real difference between what Garibaldi has and GGI’s lack of news and what Novo has and the situation that has caused Novo to not have more bulk sample results out to the market. I know that Novo has the gold and the market will eventually come to this realization as well, however, I don’t think anything Garibaldi has put out during the last 15 months is of substance and they need to either put up or shut up. I’m not gonna be surprised if Garibaldi doesn’t have sufficient tonnage for an economic deposit at Nickel Mountain.”

            > Goldfinger: “If you can’t measure the nuggety gold in the Pilbara then how can Novo determine whether it’s economic to mine it or not?”

            >> Bob Moriarty: When I was in the Pilbara last year we drove past a pit that the roads department had gone in and blasted to get gravel out for the roads. Now two of the guys who were working for the roads department realized that there was gold there and they went back to where the gravel came from with a metal detector and they took out more than 200 ounces of gold in a weekend. It is not a question of is there gold there, yes there is gold there and it is impossible to measure. But if you can make $10,000 in a day with another fool and a metal detector you’re not going to have any problem mining at a profit.”

            “The funny thing is that Keith Baron and I are the only two guys who have been over there who understand placer mining. Keith says it can be mined for US$100/ounce and I say he’s crazy, it can be done for ½ of that. Kirkland Lake has tracked the gold from Comet Well to Egina and that’s 125km away. We’re talking gold at surface and it’s going to be easy to mine, hey I don’t know if it’s 2 oz/tonne or 2 grams/tonne but either way it’s going to be very profitable. Novo just needs to get a resource together for the mines department to issue a permit. The gold is there.”

            “Everybody wants to make this shit way too complicated. The whole point of exploration is to figure out whether or not we have a mine. If you don’t have a mine you can stop spending money and go look somewhere else, but if you do have a mine then you put the damn thing into production. Everybody wants to know with precision what the grade is but that’s bullshit you don’t need to know the exact grade, what you need to know is whether it’s economic or not to mine. If Keith Barron who’s one of the top geologists in the world and a placer miner says it’s US$100/ounce to mine the conglomerate gold in the Pilbara then he’s absolutely correct and all the whiners and naysayers are full of shit.”


  5. On October 23, 2018 at 3:48 am,
    Ozibatla says:

    Watch ya back gold, palladiums coming!

    • On October 23, 2018 at 6:36 am,
      Matthew says:

      I expect palladium to continue higher versus gold but even if it catches it, it will still be down 75% since it peaked at 4x gold in 2001.

      • On October 23, 2018 at 9:00 am,
        OOTB Jerry says:

        Would Platinum be a better buy at the present price……than gold ?
        Would Platinum be a better buy at the present price……than palladium?

        • On October 23, 2018 at 9:05 am,
          Matthew says:

          Yes, but it looks like it will underperform both metals for a little while longer. Here’s plat priced in pall:

          • On October 23, 2018 at 3:38 pm,
            OOTB Jerry says:

            Thanks Matthew………That looks like a very sick chart………JMO

  6. On October 23, 2018 at 6:40 am,
    Matthew says:

    But palladium is overbought vs gold on both the weekly and monthly charts…

  7. On October 23, 2018 at 9:08 am,
    Matthew says:

    SLV broke its four month downtrend on the 15th but is still below an important fork resistance:

    • On October 23, 2018 at 9:16 am,
      Charles says:

      It looks like the price could ping pong for a little bit between the blue line and the black line. Fill the gap perhaps or double bottom? I would probably favor a double bottom or at least a test of the low.

      • On October 23, 2018 at 9:27 am,
        Matthew says:

        Yes, it could drift down for awhile but would have to fall a long ways to give the bears a chance (big picture).

        • On October 23, 2018 at 9:33 am,
          Charles says:

          Yes I would agree it does not look like a good shorting opportunity. On the weekly the 5 wma crossed the 10 day last week, but the 20 wma is still overhead. It will be interesting to watch.

      • On October 23, 2018 at 9:29 am,
        Charles says:

        Actually looking at the shape of the recent bottom it looks more like a rounded bottom which makes me think it could just fill the gap and then rise above the top of the cup at $14. However the $14 level has already been hit twice so maybe the third time it breaks through. AlsoThe PSAR on the daily chart is right above at the $14 level which seems like odds favor some retracement after the PSAR is hit given how long it has been down trending.