Nick Hodge – Less Liquidity And Rising Volatility Will Be Constructive For Gold

Nick Hodge, Co-Owner of Digest Publishing and editor of Foundational Profits and Hodge Family Office, joins us to review a number macroeconomic trends and how those relate to expected moves in general US equities and commodities resource stocks in gold, copper, oil, and more.


This is a wide-ranging discussion that gets into the Fed policy, the debt ceiling debate, the ongoing banking crisis, debt rolling over at higher interest rates, inflation CPI readings, a recap of Q1 earnings season, tech stocks recently seen as a safe haven, the potential for a recession in the latter part of this year, and how that could effect the demand for various commodities and related stocks.  




    May 10, 2023 10:16 PM

    The gold and silver miners all popped last Thursday and IPT was among the stronger ones with an intraday gain of 6 percent BUT it also gave all of that gain back by the day’s close while everything else including SILJ, GDX, PAAS and EXK finished 1.5 to 2.5 percent higher and NEM finished 4 percent higher. Today with 4 sessions behind us since then we know that IPT was a bellwether as it correctly warned of danger while the rest did not. Short, medium and long term it happens often but of course not always.
    2011 brought major long term highs and and IPT topped before everything else including GDX, NEM, EXK, PAAS (there was no SILJ at the time). It was the same in 2020. Most miners topped in August but IPT topped in July. And in April this year, IPT topped more than a week before everything else.

    The “debt ceiling” theatre/fraud/clown show is probably the main thing holding our miners back for now. There is no ceiling. Our completely un-American Ponzi-Keynesian system guarantees that much. The ceiling has been raised/ignored something like 80 times so far in the last 60+ years so it makes little sense worrying about it no matter how many politicians insist that you should.

      May 10, 2023 10:25 PM

      Did you happen to sell your IPT holdings when it topped in April. Must of been quite the dump having bought successive lows for past couple years.

        May 10, 2023 10:07 PM

        I sold a tiny amount and the only reason I remember it is because I might have been the last (or only) one to sell the precise high. The trade was a less than one-tenth of one percent of my position.
        I don’t actively trade TSX-V stocks and IPT is no exception. There are much better stocks for that.
        My last significant sales of IPT happened in 2020/21.
        I continue to buy and have done so this week.

      May 11, 2023 11:11 AM

      Speaking (EXK) Endeavor Silver…

      Did folks here see that fishing line selloff today of over 14% ? (good grief!)

      I ended up buying another tranche in it later in the day at $3.61, which raised my overall cost basis some, but it still seemed like and overdone corrective move, without any real reason behind it. Quite strange…
      Maybe it was a larger fund exiting their position and it ran people’s stops. (?)

        May 11, 2023 11:15 AM

        Why Endeavour Silver Stock Crashed Today

        By Neha Chamaria – May 10, 2023

        “Endeavour Silver (EXK -14.05%) stock crashed today and was trading 12.4% lower as of 12:30 p.m. ET. Prices of silver were trending lower as well, but that’s not the reason behind the silver stock’s fall.”

        “Endeavour Silver operates two silver-gold mines in Mexico. The stock has been holding up well since March as investors expected strong numbers from the company after a solid fourth quarter. This morning, though, the miner reported lower revenue and a sharp drop in earnings for its first quarter.”

        “Endeavour Silver’s revenue fell 4% year over year in Q1 despite higher sales volumes for gold. Its net income plunged 45% to $6.5 million, with management putting the blame on higher raw material and labor costs and a stronger Mexican peso.”

        “While a fall in profits can be concerning, the markets seem to have overreacted.”

    May 11, 2023 11:02 AM

    The Great Wealth Illusion

    Jesse Felder – The Felder Report – May 9, 2023

    “It’s no secret that for the past decade and a half the Federal Reserve has made it its mission to create a ‘wealth effect’ in the economy by boosting asset prices. Back in 2010, Ben Bernanke explained, “…higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.” And so he began a process of printing money with the explicit purpose of inflating asset prices, a policy that has been continued by each of his successors.”

    “Over this time, quantitative easing, as the policy is called, has been inordinately successful in boosting asset prices while not so effective in boosting the economy. The most straightforward evidence of this is the fact that household net worth relative to the economy has soared to record highs during the QE era. If it had worked the way Bernanke intended then, after a brief surge in the ratio, it would have flattened out as growth in the economy caught up to growth in asset prices. Clearly, that didn’t happen…”

    May 11, 2023 11:21 AM

    So, here is a big boy M&A deal in the Lithium sector…

    I used to be positioned in both Galaxy Resources and Orocobre as they both made the journey up from developers to legit lithium producers, and they had fantastic runs, but then they merged to form Allkem, where I sold out of the story.

    FMC one of the original “big 3” lithium producers, rebranded as Livent a few years back. I think they were the #4 and #5 largest lithium producers the last time I checked… but it’s been a year or more since I reviewed that.

    Regardless, now these two behemoths are merging to form a true force of nature in the Lithium sector. Wow!


    Allkem and Livent Corp Join Forces in A$15 Billion Merger, Bolstering Lithium Production for EV Batteries

    by Leo Grove – May 10, 2023

    “Australian lithium producer Allkem, formerly known as Orocobre, has entered into a A$15 billion merger agreement with New York Stock Exchange-listed Livent Corp. The deal comes as prices and demand for lithium, a key component in electric vehicle (EV) batteries, continue to rise. The announcement is expected to be made when US markets open on Wednesday night.”

    May 11, 2023 11:35 AM

    Today is the opposite of last Thursday. The whole sector is down hard but not IPT. A good sign? Probably.
    Silver/SLV is finally backtesting the breakout over its January high…

    May 11, 2023 11:42 AM
    May 11, 2023 11:22 AM

    US Annual Inflation Increase Slows To Below 5%, Price Pressures Still Strong

    Lucia Mutikani – Reuters – May 10, 2023

    “In the 12 months through April, the CPI increased 4.9%. That was the smallest year-on-year rise since April 2021 and followed a 5.0% advance in March.”

    May 11, 2023 11:27 PM

    Shad and Cory

    Another really great interview with Nick. I admire his ability to explain WHY the underlying fundamentals are changing and HOW it will transpire. Nick’s analysis resonated with me: A person who just wants to retain the wealth they have while keeping up with inflation – a very old-fashioned concept.

    With regards to the “Debt Ceiling” discussion. I don’t think it will get very interesting until the Interest-On-Debt numbers (and projections) are fully understood by the average American. The US government publications do not make it easy to find this information (and different sources have different numbers). However, the St. Louis Fed has a “nice” chart showing “Federal government current expenditures: Interest payments” Q12023 = $928.929B from Q12022: $603.280B. This is a 54% increase Year-Over-Year and the curve has gone non-linear, obviously due to the past 15 months of US Federal Interest Rate increases.


      May 11, 2023 11:16 PM

      Fifty-four percent increase in one year, astounding! Profligate printing will crush the economy, the Dollar and most American people.

      May 11, 2023 11:56 PM

      The Fed is trapped. The purchasing power of the dollar is heading much lower no matter what the Fed chooses to do. Inflation of the money supply to keep the scam going amounts to a sneaky form of default but would be relatively friendlier to the US debt market while the alternative outright “honest” default would scare away what’s left of foreign demand for US debt and result in a lower credit rating for USA Inc.
      Efforts to divide, conquer, censor and disarm are way up in recent years because of what’s unfolding regardless of other pretenses and corporate media narratives. Nothing threatens the old order like economic collapse driven by a currency crisis.

        May 11, 2023 11:29 PM

        Very well put, these 100+ year old institutions need to be smacked down…

    May 11, 2023 11:33 PM

    Unfortunately, Americans will be left to wallow in all that USD debt, stuck with a useless CBDC, while much of the world will sail off debt free and their own digital currency backed by real stuff.

      May 11, 2023 11:32 PM

      The entire West is in the same boat to a great degree and will follow the Fed’s policies. All currencies will buy less and less even though some will appear to rise periodically as they fall less quickly than the USD.