Inflation and the coming market crash. Is now the time to be positioned?
John Rubino, Founder and Editor of The Dollar Collapse website joins us to share his thoughts on how rising inflation will finally lead to the major crash and possibly financial reset that the bears have been predicting.
With all due respect, Cory you are exemplifying the sentiment typical at the lows of a counter cyclical asset like gold.
Fair comment Ed, I feel like the sentiment is now completely washed out. Unfortunately sentiment can stay low for a while. Gold needs a catalyst and the argument of too much debt doesn’t move the needle. We need something else to drive interest.
Nothing going for gold/PMs right now.
The best you can hope for is a sideways trading range for the next 12-15 months that Jeff Christian alluded to in his last interview here.
But the PM miners are going to get ground into the dirt. Without the PM prices moving up, the rising cost of mining, especially with the rising oil price, will erode margins.
Only low cost, high margin producers will survive, but don’t expect any big moves up in their share price.
HI Joe … I have to dissagree that gold will trade sideways for the next 12-15 months.
I would take whatever Jeff Christian says, with a pinch of salt , afterall the guy is part of the club , you know the one we are not members off.
Ditto … Irish…. SPOT ON….
Thanks Jerry .. People need to do their own DD , & not believe everything the talking heads say. I believe Gold PHY & the Miners have a very rosy future , i also believe the turning is coming soon. Having said that, my money is on Silver.
Thank Tony,… for the reply…. I would have to agree with you completely…..
The Turn is coming…
Agreed IrishT. It is best for everyone to do their own due diligence and develop their own personal investing strategy. I also believe that the PMs and related gold and silver miners still have a rosy future, and am more heavily weighted to Silver exposure as it is likely to outperform Gold on a percentage basis when the next leg of the bull market kicks in. Ever Upward!
Nickel price tumbles on China’s power crunch
Mining.com – September 27, 2021
“The nickel price declined — along with most metals — as China’s power crisis spread from factories to residents, adding risks to supply chains, demand, and economic recovery.”
“The power crunch in the top metals-consuming country has already caused supply losses at metal smelters, fabricators and steel mills over the past few months. Prices of aluminum surged to the highest level since 2008 earlier this month as the energy-intensive sector was a major target of the country’s move to curb power usage.”
“For nickel, prices are under pressure as the energy crisis is curbing output mostly at stainless steel mills and power restrictions may tighten further into the fourth quarter,” stockbroker CICC said in a note on Monday.
https://www.mining.com/nickel-price-tumbles-on-chinas-power-crunch/
I posted the following on another site and wasn’t sure where to post here but it may have application. Hopefully someone will read it and keep it in mind. FWIW:
“Too many think in some alternative world of their own making, that personal attacks have some value. If they prefer that world, they should remain there and spew hate on their own. The vast majority of the remainder of us prefer to respect human life and the potential contributions that each of us make to enable a more peaceful and quality environment where no one person is ‘entitled’ to more than any other person. And, if that sense of entitlement leads to attempting hate or violence on another, then that sense if entitlement must be met with rejection so the rest may proceed with moving forward and ever upward.”
Ever upward was stolen from Ex.
Thanks for that post David. Very well-stated and appreciated.
“Sense of entitlement” instead of sense if entitlement
Peter Boockvar: It’s Torture to Be in Gold Right Now, But I Like It
Stansberry Research (09/27/2021)
It’s going to be hard for the market to avoid a hiccup as the Fed moves to taper, says Peter Boockvar, Bleakly Advisory Group Chief Investment Officer. “Jay Powell and the Federal Reserve are just doing what doves do,” he says.
“We are in a stagflationary environment” Boockvar states, based on September PMI data from Europe and the U.S. He explains that the slagflation story can “truly be global” with the fall of Evergrande.
“Boockvar is remaining bullish on the long-term outlook for precious metals as a form of “financial sadomasochism,” hanging on for an eventual reward.”
“He concludes that the exploding debts and deficits in the U.S. share a correlation with the value of the dollar’s outlook, where Boockvar believes it will remain under pressure.”
Lyn Alden Part 1 – Ray Dalio’s Debt Cycle Predicts Stock Market, Inflation, Gold Performance in 2021
Jay Martin, Cambridge House – Sept 22, 2021
“Lyn Alden returns to the show for a 2 part deep dive into Lyn’s investment framework. Lyn shares practical rules for testing your own investment ideas, vetting investment gurus, and how she adapted Ray Dalio’s long-term debt cycle framework to guide her own portfolio.”
Lyn Alden Pt 2 – How Central Banks Will Control You Using Digital Currencies: China & Beyond
Jay Martin, Cambridge House – Sept 23, 2021
“In Part 2 of this conversation with Lyn Alden, Jay and Lyn discuss utopian and dystopian outcomes of digital currencies; including bearer assets like bitcoin, the efficiencies of stable coins, and the potential for governments and central banks to use central bank issued digital currencies for surveillance and control.”
“Lyn also shares her ideal portfolio allocation (replacing bonds with PM and other hard assets in a 60-40 portfolio) and her top speculative assets over the next 5 years (Bitcoin and Uranium plays).”
Speaking of digital currencies and crypto currencies….
Bitcoin down again today over 5%
Ethereum down again today over 7%
Likely on the follow through and realization that China banning the cryptos could open the door to more countries introducing more regulations around the cryptoverse.
It will be interesting to see if more countries take the trailblazing path of El Salvador and the Ukraine embracing the cryptos, or if more nations see the cryptos as a threat to their control of the fiat monetary system and introduce more harsh regulations like China just did.
We are still waiting on the Fed’s whitepaper on digital currencies due out to the marketplace soon, along with how the ECB, Bank of England, Bank of Japan, and other central banks will react as far as future policy trends around Bitcoin, Ethereum, stable coins like Tether, and the other 900 cryptos. It will be fascinating to follow along…
FXHedge @Fxhedgers 5:48 PM · Sep 27, 2021 · Twitter Web App
SEC Gensler: Crypto Markets Will ‘Not End Well’ Without Regulation
(EQX) Equinox Gold is Becoming a Top Ten Gold Company Globally – Christian Milau
Jay Martin, Cambridge House – Sept 27, 2021
“Christian Milau and the Team at Equinox Gold have built a multi-billion dollar gold producer in a few short years. Christian catches Jay up on the Premier Gold Mines acquisition, including the ‘sleeper’ project at Greenstone that is set to be one of the largest mines in Canada. Jay and Christian discuss sentiment in the gold sector and Equinox’s path to becoming a top ten gold company in the world.”
Powell Says Spike In Inflation Lasting Longer Than Expected
Martin Crutsinger – AP Economics Writer – Sep. 27, 2021
“But, in remarks prepared for delivery Tuesday, he says that if inflation does not abate, the Fed is ready to use its tools to lower the pressure on prices.”
Fed Chief Jerome Powell Says Inflation Is Elevated but Likely to Moderate
The Federal Reserve chairman is set to testify before Congress with Treasury Secretary Janet Yellen on Tuesday
By Nick Timiraos – Wall Street Journal – Sept. 27, 2021
“Inflation is likely to stay high in the coming months before moderating, Federal Reserve Chairman Jerome Powell is set to tell Congress at a hearing on Tuesday morning.”
“In testimony released by the central bank on Monday, Mr. Powell largely repeated remarks he made at a news conference last week after the central bank indicated it was likely to begin reversing its easy-money policies at its next meeting, Nov. 2-3.”
Powell Says Spike In Inflation Lasting Longer Than Expected = not as “transitory” as we jawboned
ECB’s Lagarde Keeps Door Open to Higher Inflation
By Reuters – Sept. 27, 2021
“Inflation in the euro zone could exceed the European Central Bank’s already raised projections but there are few signs of this already happening,” ECB President Christine Lagarde said on Monday.
“Lagarde stuck to the ECB’s official view that inflation will ease back below 2% next year but seemed to acknowledge growing concerns, including inside the central bank, that higher price growth might be here to stay.”
German Inflation Could Stay Above 2% Through Mid-2022 – Bundesbank
September 27, 2021 – Reuters
“Inflation has surged this year on a plethora of one-off factors from tax hikes to supply bottlenecks and commodity price rises, fuelling a debate about the need for exceptionally easy monetary policy, particularly among inflation-wary Germans who already harbour some mistrust of ECB policy.”
“Inflation rates between 4% and 5% are possible on a temporary basis between September and the end of the year,” the Bundesbank said. “Inflation is then likely to decrease noticeably at the start of 2022 but it will still be above 2% by the middle of the year.”
Beware : Dollar Breakout !!
Also beware of the general markets breakdown…
At least my SPXS short on the S&P 500 is paying off nicely today.
Transitory…it is all Transitory. Give it 10 years….
+10 On a long enough timeframe everything is “transitory.”
The Fed’s narrative has been so predictable. Jawbone the market that inflation is just transitory to keep institutions from panicking out of bonds, and then when inflation persists, admit is lasting longer and staying higher than anticipated. That’s why we call it Fedbabble… because it’s nonsensical statements meant to talk the markets into submission.
Anyone that has been paying attention to prices escalating in almost every area of life could see that inflation was growing long before the CPI numbers confirmed it, and that some of it would be “sticky” and stay higher for longer. Not a surprise…
What is likely to be “transitory” is any confidence left in the central banks at this point.
+1 to the +10
Nice. That makes it a solid +11 🙂
Speaking of the Fed and their goon governors and henchman… (and what normally would be illegal if they weren’t central banksters…)
Here is some dark humor from the Northman Trader…
________________________________________________________________________________
Sven Henrich @NorthmanTrader 1:20 PM · Sep 27, 2021· Twitter Web App
“So Kaplan and Rosengren rode the gravy train all the way up, sold all their holdings when found out and now suddenly “retired” before the Fed tapers.”
https://twitter.com/NorthmanTrader/status/1442584997701898243
Dallas Fed President Traded S&P 500 Futures. Dallas Fed Will Not Say If He Shorted the Market During Pandemic Crisis in 2020.
By Pam Martens and Russ Martens – Wall Street On Parade – September 18, 2021
“A transaction that has been missed by major news outlets on the financial disclosure form for Dallas Fed President, Robert Kaplan, is a line item showing that Kaplan made “multiple” trades of more than $1 million in S&P 500 futures.”
“This is a stunning revelation for a multitude of reasons. First, Kaplan’s financial disclosure form shows that he already had exposure to the S&P 500 through more than $1 million in an S&P 500 Exchange Traded Fund (ETF), which trades during regular stock market hours.”
“Using S&P 500 futures gave Kaplan access to making directional bets on where the market would go after the stock market closed, which is typically when the Fed makes market-moving announcements.”
The U.S. Constitution’s primary flaw glares again.
Money & Wealth must be handled separately — in its own branch!
BTW, legislators and should not be lawyers, executives should not be politicians, and judges should be liable for treason charges, particularly the Supremes!
Of course, bankers verboten in the proposed Fourth Branch!
+4 Good point. The Central Bankers are like a 4th branch of government aren’t they.
Yes, behind the curtain, with Toto tugging!
Keep up the great work everyone! The charts, the chat and the knowledge from both sides is greatly appreciated. I think can always learn more.
Looks like we are certainly on our way to collect that liquidity below the double bottom. I really do hope if that is the case which highly looks like it we can do it quickly and fast so the October bottom/November bottom is in place and not December. I’m all my years of investing and being in this forum, I have never seen such an asset class like the miners get crushed like this while good corrected much less in term of percentages. These miners are at unprecedented and historical lows and the valuations speak differently.
I know there is plenty of frustrations to go around but I try to keep the overall positive picture, and I continue to say regardless of another take down which I think is the last push in miners, we are in a bull and we will break out of this long term bull flag to the upside or call it a falling wedge that is testing everyone’s patience. As much as some don’t like Gary, he is an asset like many in here. Here is an all the quote from him.
I believe it goes like this. The longer the base the higher in space.
We are getting close
Keep your patience
Good thoughts Glenfidish, and yes, “the longer the base the higher in space.”
Ditto…….. keep up the great work….. the BOTH OF YOU >>> on traget… 🙂
traget… humm what is that…. how about target… 🙂
Thanks ex and Jerry!
One of the ta guys I watch closely believes we are in day 35 of a daily cycle low. Not Gary. Makes a compelling case for late in the cycle and an important low. The argument will be is it the final low or a bounce and then down into October November?
The fact we are starting to have mergers and acquisitions tells me we are heating up.
The monthly chart for example on USA shows possible final low this month within these next two days if it closes above that fork line. That would be very telling. I keep saying USA/iamgold and few others led us down, will they lead us up? Who knows
We can have a case we’re some bottom now and others in a month nothing is concrete.
I remain 4% ready to deploy.
Bear creek
USA
Brixton
Scorpio
Iamgold
Remain on my view
Thanks Glenfidish for sharing your outlook, and the other TA guy’s thoughts on the daily cycle low.
As for Americas Gold & Silver I’ve continued to keep nibbling at it as it pulls back to build back up to the position I had prior to the blockades. I’ve up to about 70% of where I want to take it, and am looking for a spot to throw another log on the fire with another tranche or two, but that is the case in many of the PM miners I hold.
There are lots of compelling risk/reward setups in each category of mining stock (producers, developers, explorers, royalty companies) and it’s tough to figure out where to deploy any remaining dry powder. Out of each stage of miners there are different compelling arguments that could be made for buying the best of the best quality on sale, or conversely the most beaten down optionality that may rise the most in a rising metals price environment. Then there are the plethora of exploration companies potential drill news pending, the developers that are expanding with potential to be takeover target, or the producers with an operational turn-around story (like USAS, MUX, or SGI). Lots of choices…
So here is some of the biggest M&A news of the year so far in the Gold mining space:
We haven’t seen a Mega-Merger like this since Barrick and Randgold combined, or Newmont and Goldcorp combined. In this case it is 2 of the best senior miners combining into 1 company – Agnico Eagle and Kirkland Lake. Wow!
________________________________________________________________________________
(AEM) Agnico Eagle and (KL) Kirkland Lake Gold Announce Merger of Equals to Create Highest-Quality Senior Gold Producer
by @newswire on 28 Sep 2021
https://ceo.ca/@newswire/agnico-eagle-and-kirkland-lake-gold-announce-merger
It is interesting that the news had already leaked over the weekend, and yesterday resource investors were discussing the potential KL takeover at a premium on various chat boards, and the stock in KL had taken off on the IKN “rumor.”
Now today all those people are selling back out of it and KL got dumped because the reality is hitting home that it is a “merger of equals” without the big takeout premium. Welcome to 2021.
Isn’t speculating in the mining stocks fun?
Isn’t leaked news ripe for misinterpretation also fun?
Here’s one of the articles that was out yesterday morning front-running the news in the Kirkland Lake takeover before it was “announced” today to the market. Gotta love it.
___________________________________________________________________________
Kirkland Lake Gold shares up over 8% on M&A rumour
Mining.com editor – September 27, 2021
https://www.mining.com/kirkland-lake-shares-up-almost-8-5-on-ma-rumour/
If equal exchange, than minimal reduction in assets. Maybe it is a plan to combine those assets for M&A of juniors with large resources and expensive market caps. More or less spread the costs to minimize relative capital expenditures. Marriage of convenience.
Sure. That could be a contributing factor, and we’ll see if leads to some M&A of juniors down the road, but if this is anything like the prior “Mega-Mergers” then those companies spent the first 6 months divesting non-core assets out to the Juniors.
The news is significant for 2 main reasons:
1) We have another Mega-Merger, where instead of a takeout premium, it is a sideways merger of equals, and it further reduces down the available pool of “Major Producers.”
2) The news clearly leaked in advance, and traders trying to scalp a gain on the Kirkland Lake takeover “rumor,” before it became “news” got served a valuable lesson on “buy the rumor, sell the news” because there was no takeover premium. Also, there should be a SEC investigation into who was leaking the news of the merger in advance, but let’s not hold our breath on that happening.
Good comments about the various ways to scam the public. Creativity is an admired trait in some circles. Criminal creativity….
The HUI reached its 200 week moving average support just as it reached speed line support…
https://stockcharts.com/h-sc/ui?s=%24HUI&p=W&yr=3&mn=3&dy=0&id=p82557908468&a=949257852
The Gold market Rocks… and Rolls !!!
Rock & Roll Hoochie Koo!
A Midwest Derringer: https://www.youtube.com/watch?v=KdSQA3SgWqk
+1
The XAU turned up at a multiple support zone…
https://stockcharts.com/h-sc/ui?s=%24XAU&p=W&yr=5&mn=5&dy=0&id=p05866641610&a=1012440604
One more footfall likely
for a tradable bottom.
The US 10 year treasury plunged just in time to prevent a golden cross (50 day MA going above the 200 day MA).
https://stockcharts.com/h-sc/ui?s=%24UST&p=D&yr=1&mn=5&dy=0&id=p84043803514
Months ago, I thought that we would get one more multi month move up in gold in which gold and bonds would be correlated but the big disconnect looks like it might be getting started now. It’s too soon to tell but if so, the vast majority of participants, including market professionals, will find themselves on the wrong side of gold at the worst time.
Could well be, but for the moment, beware momentum.
XLE – XOP – USO :: MaxSat(7) :: Oil also may have a little more to go.
There is also the ETF (OIH) for the Oil services sector.
Yes, and not USO. Thanks!
(In-process) Price Quality: https://tinyurl.com/2vc9pznu
If today is a useful bottom, my decision to drop Oil was a mistake.
In any case, an “Energy” sheet will be added for both Oil and Uranium soon.
I think having an Energy sheet would be a good idea. You could put Lithium on there as well, in addition to Oil, Nat Gas, and Uranium. If you want to put on Solar there is the ETF (TAN) and for Wind (FAN).
The power of near absolute necessity resides in the three primary energy sectors. Natural Gas is a good addition.
As everything is updated manually, the number of rows must be kept down. Solar and Wind are trading vehicles, and their real world usefulness is limited. Copper, the PGMs, and Lithium are currently covered, though Precious Metals and Energy will be the main focus.
Needed are two or three Index/ETFs for each sector, with emphasis on securities rather than the underlying commodity. (Note that I’ve eliminated GLD and SLV, which should be followed individually, along with the Dollar and Rates.)
For Oil: XLE, XOP and possibly OIH
For Uranium: URA and URNM (currently used)
What do you suggest for Nat Gas, or for the others?
Although apparently commodity only, UNG looks to be working well.
USO too. XLE, XOP and OIH did not indicate significant lows last week, but both UNG and USO had qualified red saturation. Very useful.
Michael Boutros (Gold 46:20) : https://www.youtube.com/watch?v=w8Rs97hfqDY