Craig Hemke – Key Macroeconomic Data On Tap, The Bear Market, Precious Metals, Stagflation, Central Banks, What Could Break, And The Strange Action In Physical Silver Markets
Craig Hemke, Editor of TF Metals Report, joins us to review the key economic news on tap heading into November, as well as thoughts on the larger bear market in equities, the precious metals sector, the US dollar, stagflation, central bank policies, what in the economy could break causing a shift in those policies, and reflections on the strange action in the physical silver market.
I have a question for some of you who buy bullion the real stuff. Or some of you who track the premium on the real stuff. My question to some of you like Jerry Matthew X and many others in here, way back then when silver hit $49 close to $50 per ounce The famous Eric Spratt how many look up to fleeced retail investors at the very top he obviously knew a thing or two he dumped so much silver had a premium right before silver tanked. Bob M spoke about this on one of his latest interviews and I could not disagree. As good as Erik sprott is he falls in the category of pumper for his own benefit and good on him that’s how he’s made his billions he dumps at the high and he buys at the law but you never know when that exactly is.
My question to many of you is currently I’m hearing a lot of gold and silver specifically is super expensive and there is a high premium on it, what makes it any different then when Erik sold out at the top? Is it possible that these high premiums could be indicating a top in silver and gold and we are about to head further south? Don’t shoot the messenger I just would like to know your responses and you’re educated thinking. I would like to know if some of you think they were different times and what the macro of those times were what makes them so different for example currently we have high inflation but a shortage of the real stuff the bullion and so we have a tight market. Was it the same in 2011 high?
The high premiums that you’re hearing about pertain to manufactured retail products like rounds and small bars with recognized hallmarks (not “good delivery” bars of roughly 1,000 ounces). It’s akin to supply-demand tightness in bread, bagels and donuts but not the wheat required to make them.
Sprott’s PSLV is currently trading at a 2.11 percent discount to NAV. On July 8th it bottomed at 4.64 percent below NAV. Compare that to the January 9th 2012 spike to a 34.22 percent premium to NAV. That spike spelled big trouble because it represented massive complacency and certainty among the bulls.
PSLV hasn’t traded at a premium to NAV in well over a year. The only thing wannabe bulls should fear now is fear itself.
Thanks for the explanation Matthew. It makes plenty of sense.
HI Glen …. I posted a PHY. silver article on the other page , Nick Hodge. Just titeled Silver , It ‘s by a guy over at Wallstsilver called Ditch-the deep state………… hope that helps.
Thanks Irish, I will take a look at it 🙂
Hello Glen…………………
Your question……… “is it possible that these high premiums could be indicating a top in silver ”
My Answer:…………… my experience with locating PHYZ (rounds/ coins)……… the shop owners are just passing along
the extra premium that they have to pay. from the Mint/suppliers……… If, you go to the bigger suppliers, of PHYZ, like
Apmex, SD, JM.. Miles, SilverTown, …they are all marketers./retailers (supposed wholesalers) to the shop owners . Miles Franklin and a few get the opportunity to be distributors for the MINT….. they are all selling a story to the
sheeple stackers, … most are pumping the story on the MINT shortage of Silver Eagles….. and have for years…….. The scheme works with the likes of PCGS and NGC,(grading services) …..which hoard the Silver Eagles and turn the coins obtained from the mint, into MS 69 and MS 70..(the best grade fetching a higher price).
Stacking collector coin and stacking silver bars is a whole different game….
I think Matthew, is correct on the 1000oz bars(which the sheeple johnnie six pack is not buying nor could they afford ).
JMO……..and Observation from doing this for 30 yrs…..
WHO OWNS THE GRADING SERVICE FOR COINS………………….BLACKSTONE………… LOL…….. like duh
NGC is a subsidiary of Certified Collectibles Group (CCG), which owns six collectible certification services and is in turn owned by Blackstone, a multibillion dollar New York City hedge fund.[1]
MARKETING SCAM……………….. me think………………. 🙂
Interesting the the black stone Jerry. Thanks for this.
Coin World sent the same coins to each grading service over the course of a year, each coin being graded by all Third Party Graders it was sent to. They found that “In no case did the grading services agree on the grade of any given coin, and in some cases the difference in grading was as much as seven points off”.
Do YOU think……………….
……. THAT BLACKROCK and THE US MINT……….. might just be playing everyone for a SUCKER……………… ?????????
Wow thanks for this Jerry! Also thanks for naming a few retailers/distributors as well. Makes plenty of sense like Matthew says as well. Thanks amigo
Question 2………….GLEN……. you ask
” Is it possible that these high premiums could be indicating a top in silver and gold and we are about to head further south?”…………. GOOD Question.
My answer: IMO…….. I do not think so., over the long term…… short term , who knows….
If, oil is going higher,…… and the Fake Fed keeps printing money, … which they have to, for the good old bank scam…… around the world. Any answer is just a WAG…… 🙂
We’d all be on Eric Sprott’s yacht if we knew when to go long, when to short
Eric Sprott has experience and knowledge in investing in miners. He knows as well as we do that all miners don’t succeed. A percentage of miners do succeed, and when they do they can average risk. There is nothing evil about his investments but he does have an advantage in that miners need financing. They seek him out as he has funds. He has the opportunity to provide funds at a premium over our opportunities in the open market. The company has an opportunity to continue operations without seeking out banks which are known to be unfair and unethical. Either way would be dilutive … but Sprott is involved in potential success whereas banks in potential failure. He can pick and chose and when he picks there is a chance it is more probable of success than I can do. That is a positive but not a guarantee. That is worth something in the investment arena.
Added: He is often subjected to mandatory reporting that most of us don’t have to do. We often know what he is doing with his shares, but he never knows what we are doing. The positive thing is that he probably doesn’t care. But we should, and he has a percentage of the company. Seems fair. At least more fair than Wall Street and the media are.
GLEN
>>>>>>>>>>Eric……… gets first shot………. on any finds…….. no doubt about that………
No doubt Eric, knows before anyone………. Only dumb thing he has done is….take the JAB… 🙂
I think Eric, ….along with Morgan, are not short on taking advantage of a situation…. 🙂
This picture looks great to me but I’d like to see the week end with strength…
https://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=5&mn=0&dy=0&id=p36805122426&a=988301549
Metals up in the paper market 11:00 PM CST. So what.
Fed Freaky Friday…
Next week another Meeting.
Knocking down Miners more important for The Fed image than the Welfare of the People or the Markets. Thank your Leadership.
“Leadershit”……………. more like it……………. USofA, the corporation has your back…… lol…….. 🙂
More Calibre News:
Environmental approval
FREAKY FRIDAY………………….. AGAIN………………………… 🙂 🙂 🙂
Not what I wanted to see in AG and HL, which is the upper weekly bollinger band clearly rejecting price.
When the BB bands are narrowing as they are now, rejection like this often precedes a move lower–usually enough to at least generate expanding BBs. Very disappointing.
The recent inflation and GDP data probably mean the Fed is going to remain “hawkish.” Given the recent dynamic, I am not sure how any of the major trends established for the last 2 years are reversed without an express Fed pivot. And it is pretty clear that the miners haven’t been discounting anything.
While technically I can see a massive rally starting in the miners, I still don’t see what stops the slide fundamentally as long as the Fed remains tighter than the rest of the world and continues to engage in QT.
If you believe the Fed will continue raising rates and QTing no matter what happens with the stock market or bond market, what’s the case for being long PM miners?
If OTOH, you believe the Fed will cave if the stock are bond market blow up, there is a more than decent chance mining stocks get taken out to the woodshed too. So why not wait patiently for this sh!tshow to play out (as has occurred multiple times since 1998)?
I am 100% for buying bullion, because I firmly believe you will retain your purchasing power, at a minimum. The miners OTOH are a completely different story at present. I repeat–a huge number of gold bugs predicated their speculative bets on the assumption that the Fed could never raise rates or engage in QT without blowing up the entire system. Well here we are, and the Fed has basically pulled the pin.
Fed could waffle on tightening next week, and then the media will falsely interpret the info as directed by the Fed. Isn’t that the way the game is played. “They lie and everyone interprets it wrong”. Their balance sheet sucks, international banks have unplayable derivative debt and sovereign debt is beyond covering interest payments. All goals achieved … time to hint at reset or design a new flag for the new fascist state.
Thank god I own some CAT, one of the few “conventional” stocks I own, although it is clearly a proxy for commodities. Look at its weekly candle this week.
CAT:GDX is breaking out of a HUGE 5 year inverse H&S at present which projects substantially higher.
CAT could have legs here but CAT vs GDX could very well be setting a bull trap.
https://stockcharts.com/h-sc/ui?s=CAT%3AGDX&p=W&yr=5&mn=0&dy=0&id=p79538773968&a=1278734341
The chart is the chart and there is absolutely nothing that suggests relative or absolute weakness.
At this point, the mining thesis is relying on nothing but hope. Hope of a fed pivot or hope that the trend of the last 1-2 years is somehow reversed.
The miners were cut in half since the Fed has started raising rates and engaging in QT. If you truly believe the Fed will maintain that course of action, what’s the evidence that the miners will ever actually mount a bull run (not just a countertrend rally)?
Moreover, the miners are not only battling against general equities, they are battling against the metal itself, a battle which they have been losing badly since 1995. With respect to XAU:gold, it is interesting to note that the 200 and 600 WMAs are likely going to cross for the first time in decades sometime as early as March ’23, but as long as price remains below the 200 WMA, the bears are in total control.
The move is cyclically long in the tooth and both daily and weekly overbought. Breakouts with such a backdrop rarely stick.
Daily CAT:GDX
https://stockcharts.com/h-sc/ui?s=CAT%3AGDX&p=D&yr=1&mn=3&dy=0&id=p24285547384
Look at the Dow’s weekly candles over the last few weeks. It’s crazy.
Also look at Dow:gold, which is on the cusp of breaking out to the upside after a 2 year consolidation! this week’s candle is scary. The Dow:GDX chart isn’t quite as bullish, yet.
If Dow:gold breaks out, it is in all likelihood headed to new all time highs and for sure the high set back in the 1990s.
US stocks have benefited way more than mining stocks over the last 20 years from “inflation,” and now that the Fed is tightening, it looks like US stocks may benefit more (or suffer less) from tightening financial conditions. Mining speculators have been so off the mark it is beyond ludicrous. It is as if God is trolling them.
At this point, I am willing to lose it all in mining positions I have held for 7 years. I should just take what I have left and buy bullion and hole up for the apocalypse.
Sounds like capitulation is here …. Or more transfer of wealth.
I think it is fairly clear that Central Banking is the problem as neither politicians nor media will identify The Fed as creating the inflation problem. Even Wall Street on Parade has repeatedly asked why they are the only Financial Investigators that highlights Wall Street’s criminality. The rest just continue to treat Central Banking as a credible government operation. Really sick in a Drmocracy.
The Dow’s 100 WMA is still rising and hasn’t even flattened out yet (unlike anything PM related), which for me means there is still a real possibility of new all time highs . Nothing would shock me at this point.
Let’s be real, there is no way the declining 50 WMA is going to stop the Dow a second time. It’s at least breaking through that level to really make shorts or wanna be longs question reality. 100% the Dow will test and likely exceed its 100 WMA at 33,300. The bull is still very much alive for the Dow.
Hi Green, anyone who would predict that The Dow is on the verge of a wild advance is either mad or a genius for mass psychology. Especially considering what has been happening in the debt trap that The Fed is currently in. LOL! DT
ADM, another resource/ag related conventional stock on the cusp of breaking out to new highs this week.
ADM was one I was up big on but was dumb enough to trade it for HL a few months ago. ADM is what an actual bull looks like. I have no idea why I sold it. It has been stellar and actually behaved like a stock in a raging bull.
Stocks like ADM and CAT–you get all of the upside from the conventional markets and little if any of the downside, the exact opposite of mining stocks.
Yesterday – 1% was the fixed # all day long that my account was down.
Today it is -2%…
DIA’s (Dow’s) rise looks like nothing more than a countertrend rally to clean out weak adopters of the new bearish trend. This short term rise is unlikely to be sustainable but it does have the help of the weekly chart which looks decent at least superficially. The following chart is the daily…
https://stockcharts.com/h-sc/ui?s=DIA&p=D&yr=1&mn=1&dy=0&id=p57658809077&a=1278738361
Let’s be real, the Dow’s rally is nothing but bad news for gold bulls. At a minimum it gives the Fed more breathing room to keep tightening. And when the Dow breaks out vs gold, it will likely be the last nail for many mining stock speculators.
On a purely technical basis, I was hopeful that at least the miners were poised for a bit of a large countertrend rally. Now, although that scenario is still alive, it could be accompanied by a marginally lower low to be made in the weeks ahead.
fundamentally though, I don’t see any light at the end of the tunnel. Because it feels as though nothing but a pivot will reverse the damage in PMs, and with the Dow rising it gives the Fed plenty of room to keep tightening.
I’m sure someday something will blow up to send at least gold bullion to the moon. I have absolutely zero confidence that the miners will even be around when that day comes (most will probably wisely be nationalized before then).
I’m being very real when I say that the Dow’s rally is meaningless because it won’t amount to anything bigger.
The miners are in for much more than a countertrend rally whether most people see it fundamentally or not (most rarely do which is why the charts are preferable to fundamental analysis).
We’ll see.
I never imagined the Fed would be able to keep this farcical system going for so long. But when all global central banks are in cahoots, they can drag things out for literally ever. Such is the power of the printing press.
At this point I have zero idea what makes the metals and miners go up other than massive QE, and that only after a crash or liquidity event. I think the 2016 low is an exception given how severe the bear market was–it was buy the news (the rate hike) and mean regression did the rest.
The miners have been basing for a decade now in a very wide range. Who’s to say they won’t ultimately break down once the 600 WMA catches down to price (which is imminent and has already happened in GDX and XAU).
Good stuff guys.
High Frequency Trading … Got to Love It…
Is there another choice? (Simon and Garfunkle sing something at this pount)