Exclusive KE Report Commentary – Tue 11 Feb, 2020

Look at safe assets and industrial commodities to understand the true risks and fear in the markets

David McAlvany, CEO of McAlvany Financial Group joins me to weigh the moves in US markets to safe assets and industrial commodities as a barometer of general economic health. With copper and oil moving down hard this year and bonds and gold holding at higher levels there is an underlying fear in traders minds. You won’t know it from the US equity markets moves but the central banks can be thanked for that.

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Comments:
  1. On February 11, 2020 at 9:39 am,
    cfs says:

    The general equity markets are booming because money is being pumped into the economy.
    Right now inflation and interest rates are low. But there is a danger that Trump will not be re-elected. In my opinion, because the media is pro-Democrat, and Trump’s re-election is dependent on the state of the economy and if the economy takes a downturn because of the corona virus, the public is sufficiently fickle to not turn out to vote for Trump.
    e.g.
    https://www.commondreams.org/news/2020/02/11/sanders-crushes-trump-18-points-among-independent-voters-new-national-general

  2. On February 11, 2020 at 9:43 am,
    cfs says:

    In the meantime to corona virus now has an official name:
    https://www.huffpost.com/entry/new-coronavirus-name-covid-19_n_5e42ce60c5b6f1f57f192d7f

    Not exactly an inspirational naming, but ….

  3. On February 11, 2020 at 9:46 am,
    cfs says:
  4. On February 11, 2020 at 10:10 am,
    cfs says:

    2020-02-11 07:09 ET – News Release
    Mr. Russell Ball reports

    CALIBRE MINING ANNOUNCES INITIAL DRILL RESULTS FROM LA LIBERTAD AND AMALIA, INCLUDING 17.84 G/T GOLD OVER 7.0 METRES

    Calibre Mining Corp. has released initial results from exploration drilling completed during the fourth quarter of 2019 at the La Libertad mine and the Amalia exploration property.

    The program tested four zones of prospective epithermal-style gold mineralization at varying stages of development, ranging from active mining to prediscovery exploration. The company completed 27 drill holes targeting the Jabali and Esmeralda deposits and the Buenos Aires gold system. A further eight shallow drill holes were completed on two vein structures at the Amalia property. The results will serve to further orient the company’s 2020 exploration program for La Libertad and Amalia, which is part of the company’s broader exploration strategy that includes the El Limon mine and Pavon advanced-stage exploration project.

    Highlighted drill results include:
    Amalia:
    17.84 grams per tonne gold over 7.0 metres of estimated true width (ETW) from 60.6 m depth in hole EZ19-001;
    La Libertad:
    10.66 g/t Au over 1.7 m ETW from 123.5 m depth in hole JB19-473;
    2.59 g/t Au over 3.0 m ETW from 38.0 m depth in hole EM19-004;
    4.56 g/t Au over 1.1 m ETW from 4.6 m depth in hole PU19-004.

  5. On February 11, 2020 at 10:28 am,
    Miklo says:

    Guys, whats your opinion of the probability of a sudden surge in silver price just as in 2016 and june 2019?
    Silver tends to rocket after gold surges, so i guess we have to wait on the gold price to pop.

    I listened to this from SRSRocco, which was pretty interesting:
    https://www.youtube.com/watch?v=imbUDif-Kg0

    The Guggenheim partner held an interview from Davos in which he believed that silver was going to be the best performing asset in 2020 and that he was heavily invested in the metal.

    On the OMX Nasdaq there are highly leveraged silver certificates, X12 and X15. They went up from a couple of cents to a couple of dollars (2.500%) when silver went from 14 to 19 in the latest surge. I recall 2011 when silver surged. Those certs went up from SEK2-3 to SEK3.500.

    Obviously I know all about decay and that volatility kills the certificate, however, if one times the surge, there are nice money to be made. Especially when silver MAY have found a bottom at these levels. One never knows, right…

    • On February 11, 2020 at 11:00 am,
      John Kruschke says:

      Milo:
      First I would like to say that your previous post yesterday was a ray of sunlight on a cloudy day. Always good to hear those express their faith. Lord knows there are enough around that don’t have any.
      I do not think one can make comparisons to past performance of Silver to what is happening today in the Futures.
      In 2008, most people think it was a housing crash in reality it was Bear Stearns massive Silver short that was absorbed by J.P Morgan with the blessing of the CFTC who changed the rules and Grandfathered them in. Also note that the Chinese ended up with J P’s headquarters building.

      • On February 11, 2020 at 2:25 pm,
        Matthew says:

        The miners look ready to launch as well. GDXJ’s daily Bollinger Bands are now narrower than they were at the end of last May and price action has been perfect, holding above the 50 day MAs and speed line support.
        https://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=1&mn=0&dy=0&id=p22673067854&a=720361085

        • On February 11, 2020 at 9:59 pm,
          Excelsior says:

          Matthew – That’s a good GDXJ chart and when looked at in relation to those speed lines, it looks like there is still room for the miners to break higher in the coming months.

      • On February 11, 2020 at 11:56 pm,
        Miklo says:

        Thanks John! Appreciate your kind words!
        Have a nice day/evening! 🙂

    • On February 11, 2020 at 2:15 pm,
      Matthew says:

      Miklo, it is 2003 again for silver:
      -The 5 quarter EMA just crossed above the 25 quarter MA for the first time since 2003
      -The quarterly Bollinger Bands are at their narrowest since 2003
      -The quarterly RSI(14) just moved above 50 as it did in 2003 just before a 65% move in 7 months
      -Quarterly MACD and stochastics buy signals

      https://stockcharts.com/h-sc/ui?s=%24SILVER&p=Q&yr=50&mn=11&dy=0&id=p98708367799&a=714975649
      (Sorry, must be a stockcharts subscriber to view.)

      In my opinion, a silver surge is likely.

  6. On February 11, 2020 at 10:31 am,
    Charles says:

    Osisko Royalty appears to be making an initial breakout of an inverse head and shoulders pattern on the daily chart on above average volume.

    • On February 11, 2020 at 1:16 pm,
      RICHARD/DOC says:

      Could be.

      • On February 11, 2020 at 1:32 pm,
        bonzo says:

        Doc, I sure hope the bottom is in for OR.

    • On February 11, 2020 at 4:26 pm,
      Matthew says:
      • On February 11, 2020 at 4:31 pm,
        Matthew says:

        Throw this in before the bell tomorrow and OR should have no trouble returning another great day:
        https://www.nasdaq.com/market-activity/stocks/gold/earnings

        • On February 11, 2020 at 4:36 pm,
          Matthew says:

          I’ll be surprised if they don’t easily beat the estimate again and nothing moves stocks up as consistently as beating earnings.

          • On February 12, 2020 at 7:49 am,
            Matthew says:

            And Barrick did beat the street again, by 3 cents: .17 vs .14

          • On February 12, 2020 at 7:52 am,
            Matthew says:

            Barrick also raised their dividend 40% from.05 to .07

          • On February 12, 2020 at 12:38 pm,
            Charles says:

            Yesterday might have been a fakeout as OR reversed hard today. Earnings are next week which could be the tell for the stock. A bearish rising wedge could also be playing out.

          • On February 12, 2020 at 12:56 pm,
            Matthew says:

            I won’t benefit from either outcome but I think you are going to be pleasantly surprised. Today looks more like a fakeout to me, all things considered.

          • On February 14, 2020 at 1:41 pm,
            Charles says:

            It looks like you were right. I think there could be one more small dip early next week, and then perhaps off to the races on earnings release later in the week.

  7. On February 11, 2020 at 11:43 am,
    Bob UK says:

    I have spent the last few days watching one truly appalling video after another coming out of China. These are the ones that are able to get through the Google – do no harm – firewall of the Chinese state.

    Sadly, no sooner than the videos appear than they are erased by the likes of Twitter and Co. We truly are living in Orwell’s 1984 with the people who think that they are champions of freedom – working within many of the social media companies – actually being the oppressors.

    I could write a long list of the scared, angry, sick and dying that I have seen in Chinese videos. Buildings being welded up with people inside. Apartment blocks mysteriously burning down. So many, many dead. I watched one video on Sunday of a young mother and her 3 children found dead in their tiny apartment. Poverty stricken in life and then succumbed to the coronavirus. In another video a woman, seemingly trying to escape her apartment, tried to climb down the outside balcony and fell to her death. Yet another video showed a woman sat on her apartment balcony wailing for help because her husband could not breathe. No one came to help. No one dared to. No one physically could.

    Below is another heart-breaking video. It is of the bodies of 3 young children, perhaps from the same family, being put into a single body bag by people inside a hospital. The care they give these children, with one man even pulling down the jumper of one child as a loving parent would do, is enough to make the toughest of people to weep.

    I don’t know how long this will be on twitter.

    https://twitter.com/jenniferatntd/status/1227286747282857985?s=20

    It is hard to think of markets at this time. I think all the mistakes of 1918 are being repeated – a mixture of ineptness and arrogance by political leaders and doctors the world over.

    • On February 11, 2020 at 1:24 pm,
      OOTB Jerry says:

      Sorry, that page doesn’t exist……..
      Thanks for trying to post it………

      • On February 11, 2020 at 1:30 pm,
        OOTB Jerry says:

        Ok, saw the one below……….

  8. On February 11, 2020 at 12:00 pm,
    Charles says:

    Bob UK – I am sure it was horrible, but it appears it is already down. I agree it is very sad to see such disregard for human life. We are definitely living what Orwell foresaw. Don’t know where it all ends, but know life will get a lot harder for all of us.

    • On February 11, 2020 at 12:29 pm,
      Bob UK says:
      • On February 11, 2020 at 1:38 pm,
        bonzo b. says:

        This corona virus seems to be a biologically engineered weapon according to Dr. Boyle.
        Did it somehow escape from the lab in Wuhan or was it deliberately spread by a foreign power? This could be catastrophic.

      • On February 12, 2020 at 8:11 am,
        SilverDollar says:

        Bob: Thank you for this repost. Very Sad but telling! Personally I appreciate the updates from Dr. Chris Martenson.

  9. On February 11, 2020 at 1:36 pm,
    cfs says:

    I don’t know what the future will bring, but as the Board of governors of the Federal Reserve discuss things today, I thought it worth to think about the future and throw out preconceptions to think through money, interest rates and politics.

    We know politicians like to buy votes by increasing debt, but….
    a. they are torn between the ever increasing carry cost which limits.
    b. the more they borrow, the more votes they can buy, by borrowing from the future.

    If, IF, all major countries conspire and borrow at roughly similar rates, is it possible to keep interest rates low, and thus the carrying cost of debt low, for an extended period of time ?
    I would suggest the answer is YES.
    Clearly, as interest rates approach zero, there becomes no limit to debt because of cost of carrying cost of debt, per se.
    So what is the new limiting factor ?
    a. People or countries may refuse to accept the currency of an over-indebted country.
    b. It is possible to print money to pay for debt carry cost, but if that stimulates a trade deficit, currency value may decrease.

    IT ALL DEPENDS IF ALL COUNTRIES INFLATE THEIR MONEY SUPPLIES AT SIMILAR RATES.

    It seems to me the limiting factor only sets in as excess money buying limited goods causes price inflation.
    But as longer

    as countries are inflating money supply at roughly equal rates, AND countries are buying each others debt, then it is possible the bonds will soak up enough money, so that money can match production, SUCH THAT PRICE INFLATION IS NOT A NECESSARY RESULT OF MONETARY INFLATION.

    i.e. Is it not possible that expansion of money supply and increased national debts do not have to lead to inflation and/or monetary collapse ?

    IT ALL DEPENDS ON THE INTERNATIONAL COLLUSION. This collusion does not have to be explicit. It only requires countries to mimic each other as one country appears to become more prosperous as a result of money printing.

    Since ultimately huge debt provides for instability should any one major player choose not to cooperate, or if trade imbalances get out of hand, it is possible for colluded monetary expansion to stop, but it does not have because of debt size in itself.

  10. On February 11, 2020 at 1:39 pm,
    OOTB Jerry says:

    Best Video…….Fake Fed….
    https://www.youtube.com/watch?v=iFDe5kUUyT0

    • On February 11, 2020 at 1:41 pm,
      OOTB Jerry says:

      Anyone that thinks they know anything about debt……should watch this one……

      • On February 11, 2020 at 1:45 pm,
        cfs says:

        THE WHOLE POINT of my paragraph above was to get away from the trap of classically thinking about debt.

        Examine alternatives. ETC.

        • On February 11, 2020 at 1:51 pm,
          OOTB Jerry says:

          At this stage of the GAME……….a cartoon and pictures is worth $75 TRILLION ……
          The interest on the debt is over $10 TRILLION according to the debt clock

          • On February 11, 2020 at 1:52 pm,
            OOTB Jerry says:

            THE DEBT WILL NEVER BE PAID………………..JUBILEE is the ONLY WAY OUT…….

  11. On February 11, 2020 at 1:42 pm,
    cfs says:

    but as longer > but as long

  12. On February 11, 2020 at 1:56 pm,
    OOTB Jerry says:

    When you have dumb ***** like Maxine Waters as the head of the Financial Service Committee………… You Know we are LOST…..

  13. On February 11, 2020 at 1:56 pm,
    cfs says:

    our Video ASSUMES BONDS HAVE TO BE “REPAID”.
    Why?
    Do they HAVE to be paid by anything other than new printed money ?

    SUPPOSE all countries issue more and more debt…..What causes instability ?

    Suppose ultimately debt is settled as countries write off or swap debts ?

    MOST BONDS (80%) are held not by individuals but by central banks.

    Many Central banks are not privately owned, but are National banks.

    • On February 11, 2020 at 3:26 pm,
      OOTB Jerry says:

      How did the central banks get the bond in the first place…….that is discussed in the cartoon……
      How was it that a fake bank organization, encumbers a citizens and nation to begin with….
      Unlike the other nations, the USA has a constitution , although we are not following it,…if , we did follow it, ……the bond may not be of similar value……

    • On February 11, 2020 at 6:03 pm,
      Matthew says:

      CFS, the primary source of instability comes from what central banks do best: inflate. Regardless of the interest rate, the purchasing of government bonds by the central banks is inflationary. Therefore, society is being ripped-off. Whatever the details are between countries and their debt, the purpose of the whole scheme is to separate the masses from their money for the benefit of a tiny few.
      You and Chartster would not be defending this Marxist bullshit if Obama were still in office.
      Aside from the staggering theft by inflation, you’ve got to be pretty naive to think that the central banks are in the business of playing creditor and getting nothing in return.

  14. On February 11, 2020 at 1:59 pm,
    cfs says:

    Why don’t you THINK AND EXAMINE WHAT I WROTE.

    Shoot it down because of invalidity of my arguments.

    • On February 11, 2020 at 2:01 pm,
      OOTB Jerry says:

      The cartoon explains your question on the BONDS………watch it you might learn something

      • On February 11, 2020 at 2:03 pm,
        OOTB Jerry says:

        Start about 2 min mark……..fully explains your question.

    • On February 11, 2020 at 2:24 pm,
      OOTB Jerry says:

      Actually……At first I just posted under your arguments……I did not shoot your argument down……..I just thought the crowd would get more details out of the CARTOON…… 🙂

      • On February 11, 2020 at 2:29 pm,
        OOTB Jerry says:

        The Cartoon………..is still a must watch……for those who think they know everything about the FAKE FED..and DEBT…….jmo 🙂

  15. On February 11, 2020 at 2:04 pm,
    CFS says:

    What if the cartoon is wrong ?

    • On February 11, 2020 at 2:08 pm,
      OOTB Jerry says:

      Did you watch the cartoon……..

      • On February 11, 2020 at 2:40 pm,
        OOTB Jerry says:

        I also,…….suggest you go and get some information off the US DEBT CLOCK……
        It, has all kinds of info……going back to 1913…..when gold was $28…..
        According to the Debt Clock…….gold should be $9100 with all the printed paper…

        • On February 11, 2020 at 2:44 pm,
          cfs says:

          The debt clock makes the assumption that debt MUST be backed by gold.

          WHY is that valid ?

          • On February 11, 2020 at 2:53 pm,
            OOTB Jerry says:

            No…..it give you a starting point……..1913……..when this fake crap started….
            If, you look at the amount of accumulated INTEREST ……it is in EXCESS of the INCOME.
            in the amount of $10 TRILLION …
            All of this is associated with the PRETEND NEED of putting a BOND into circulation to begin with.
            Even with your ZERO interest rate idea……IT IS IMPOSSIBLE TO PAY BACK the DEBT
            Futher, Look at the AMOUNT of Each citizen owes…..to get back to Balance of zero.

        • On February 11, 2020 at 2:49 pm,
          cfs says:

          They didn’t.
          That is the way it is done with the Fed and other central banks.

          But it does not have to be that way.

          JFK was planning on having the Treasury print currency (with the abolition of the Fed)

          • On February 11, 2020 at 2:58 pm,
            OOTB Jerry says:

            They didn’t………??????
            I know it does not have to be that why……..anyone that reads the constitution and history already knows that…..
            I have explained before the “CENTRAL BANK”…..go back and read A. Jackson 1837
            we have passed over this water many times……

          • On February 11, 2020 at 3:04 pm,
            OOTB Jerry says:

            I think JFK………was more interested in having a TRUE SILVER COINage in circulation , than have paper printed…….
            The paper was to have printed on the face……redeemable in silver coin….referred to as a SILVER CERTIFICATE….but, we have been over this before…

        • On February 11, 2020 at 2:51 pm,
          cfs says:

          They DID NOT NEED TO PRINT BONDS.

          JFK was planning on having the Treasury print money and abolish the Fed.

        • On February 11, 2020 at 2:52 pm,
          cfs says:

          test

  16. On February 11, 2020 at 2:30 pm,
    cfs says:

    Again. For about the fifth time.

    Suppose, what you call the JUBILEE is actually countries swapping bonds .

    • On February 11, 2020 at 2:35 pm,
      OOTB Jerry says:

      For the 2nd time ……DID YOU WATCH THE VIDEO….????

  17. On February 11, 2020 at 2:41 pm,
    cfs says:

    The premise of the cartoon is that there is not enough money created to pay the interest.

    As interest rate goes to zero, this becomes no problem.

    But people won’t “invest” in bonds at zero interest rates or negative interest rates.

    But “people” aren’t investing in bonds carrying zero and negative interest rates.

    Some investment firms are in the hope of capital gains, and 80% is countries, in order to adjust currency rates.

    I would suggest the precepts of the cartoon become irrelevant as interest rates go to zero.

    • On February 11, 2020 at 2:45 pm,
      OOTB Jerry says:

      Why did they need to get the BOND IN THE FIRST PLACE…..?

    • On February 11, 2020 at 2:46 pm,
      OOTB Jerry says:

      Why did they need to get the BOND IN THE FIRST PLACE…..?
      You better rewatch the video……….

      • On February 11, 2020 at 2:54 pm,
        cfs says:

        see above

        • On February 11, 2020 at 2:59 pm,
          cfs says:

          National debt is debt a nation owes.

          Not what a citizen owes.

          Many countries have defaulted in history, and not a single citizen has been killed or put in jail for the default.
          (His national money has become worthless, but the Nation owns that money, even when it is in your wallet.)

          • On February 11, 2020 at 3:10 pm,
            OOTB Jerry says:

            The govt……or nation…….extract taxes to pay a debt.
            No they just starve to death…….because the worth pieces of paper are not backed by sound money…..

          • On February 11, 2020 at 4:32 pm,
            OOTB Jerry says:

            worthless……

          • On February 11, 2020 at 6:13 pm,
            Matthew says:

            Re: “National debt is debt a nation owes.
            Not what a citizen owes.”

            This stupidity has to stop. What is a nation without its citizens? Nothing. And what does a nation have that it didn’t first take from its citizens? Nothing. You’re hopeless if you don’t understand the deleterious effects that debt has on a nation’s citizens’ well-being.

          • On February 12, 2020 at 5:54 am,
            OOTB Jerry says:

            Ditto I agree……..

  18. On February 11, 2020 at 3:10 pm,
    CFS says:

    Put simply…..

    Mike Maloney’s work becomes totally invalid for negative interest rates.

    What he describes then makes no sense.

    This is where the world is going, like it or not.

    So, perhaps,we should re-evaluate all tenets regarding money.

    • On February 11, 2020 at 3:12 pm,
      OOTB Jerry says:

      Really………are you kidding me……
      Humm……is the cartoon to advance or complicated…..come on…

  19. On February 12, 2020 at 12:09 am,
    Miklo says:

    Thanks Matt!
    I am fully invested in silver stocks, however if this plays out like I hope it does I am going to (hopefully) retire this year. These certs are amazing and can make you rich. The can also make you lose 100% in a trading day in a volatile asset like silver.

  20. On February 12, 2020 at 12:10 am,
    Miklo says:

    Thanks Matt!
    I am fully invested in silver stocks, however if this plays out like I hope it does I am going to (hopefully) retire this year. These certs are amazing and can make you rich. The can also make you lose 100% in a trading day in a volatile asset like silver.