John Rubino – Interest Rates, The Breaking Point In Fed Policy, US Dollar From Strength To Potential Collapse, And Gold
John Rubino, Founder and Editor of The Dollar Collapse website, joins us to discuss the interest rate environment, Fed policy, the global movement to find dollar alternatives, and yet the dollar’s recent strength as a safe haven along with gold. We start off reviewing how rising interest rates in response to the Fed policy of hiking rates to try and combat persistent and high inflation, will eventually impact the general equities markets and real estate markets in a corrective fashion.
Next we shift over to the trend of dollar strength over the last year in the face of global uncertainty, and that for now, as the world reserve currency, that it is still seen as a safe have. However, the US response to weaponizing it’s monetary and banking policies towards Russia regarding the war in Ukraine has only hastened the longer-term trend of more nations using dollar alternatives and looking for a new system, as Russia continues to sell their raw commodities and goods in rubles, other currencies, and even gold.
We wrap up with the continued role of gold as a safe haven and store of value, and something the global central banks hold as a hedge to dollar and other currency holdings. These attributes underpin why he sees it trending higher in relation to dollars as things develop medium to longer term, despite the potential risk of a market crash scenario potentially threatening the PMs in that kind of a sell-everything type of event.
Ukraine crisis: Why India Is Buying More Russian Oil
By Shruti Menon – BBC Reality Check (03/28/2022)
“Russia is seeking new markets for its oil exports as Western sanctions tighten – and India has been taking advantage of discounted prices to ramp up imports from the country.”
What can Russia do to sell its unwanted oil?
The Economist – March 27, 2022
“China and India sniff a bargain.”
“Most of what has flowed out of Russia in recent weeks was bought and paid for before the war started. Now less oil is leaving the country in the first place. Worries about sanctions, bad publicity and logistical headaches have prompted many buyers to pause purchases. On March 24th the volume of Russian seaborne oil exports, at 2.3m barrels per day (bpd), was nearly 2m below the level on March 1st, reckons Kpler, a data firm. As those barrels fail to sell, the price of Brent crude, the global benchmark, is nearing $120. Yet for the countries willing to risk opprobrium and jump through new logistical hoops, Russian oil is starting to look like a bargain. That in turn could set off a lasting shift to the patterns of trade.”
https://www.economist.com/finance-and-economics/what-can-russia-do-to-sell-its-unwanted-oil/21808447
Gold Not Cash Or Bitcoin Is Putin’s Haven
March 24, 2022 – Ahead Of The Herd
“Gold is often criticized by Wall Street as kind of a useless investment… Gold is rejected as an investment because it doesn’t produce sprouts, meaning without a dividend or yield, the steady income and systematic growth sought after by institutional investors isn’t there.”
“But gold performs two jobs that fiat currencies, or any other financial innovation, cannot do; first, it acts as a safe haven in times of turmoil, second, as a store of value.”
“Nowadays the only people and institutions who own physical gold (bars and coins, not jewelry) are central banks and those who distrust the monetary system – people who see gold as a hedge against inflation, and/or want to own it as insurance against some calamity (e.g. banking system collapse), when getting access to cash is difficult or impossible, and paper currencies plummet in value.”
https://aheadoftheherd.com/gold-not-cash-or-bitcoin-is-putins-haven/
Russia Just Told Us The Ruble is Implicitly Backed by Gold and Bitcoin
By VBL – GoldFix Substack – March 25, 2022
“In order to balance supply and demand in the domestic precious metals market, the Bank of Russia will buy gold from credit institutions at a fixed price from March 28, 2022. After the specified period, the purchase price of gold can be adjusted taking into account the emerging balance of supply and demand in the domestic market.”
“We are not given to hyperbole. This is a path we’ve studied for years as students of history. This is not a fomo panic buy (or sell) statement. It is a geopolitical observation. There comes a point where no matter how good a captain is, after which, he cannot steer his ship to avoid an iceberg. The dollar is on a collision course with China and Russia on trade. If the iceberg does not melt, the choices are: crash, or scuttle with the affluent surviving in lifeboats.”
The following was reported yesterday. The implications are geopolitically staggering. We hope our governments are paying close attention:
“Russia is open to accepting Bitcoin for its natural resources exports, the chairman of the country’s Congressional energy committee, Pavel Zavalny, said in a press conference on Thursday.”
– Bitcoin Magazine
“As part of the pushback by Russia from western trade sanctions and restrictions in using SWIFT, Russia has had to openly accept alternative payment methods and systems for its assets. A large part of that solution is using Gold and Bitcoin for Trade.”
Russia Sets Fixed Gold Price As It Restarts Official Bullion Purchases
Monday March 28, 2022 – Anna Golubova – Kitco News
“Russia’s central bank resumed its gold purchases from local banks on Monday, but it set a fixed price on the precious metal. Starting this week, the Russian central bank will pay a fixed price of 5,000 roubles ($52) per gram between March 28 and June 30, the bank said on Friday. This is below the current market value of around $68.”
The central bank added that “the resumption in buying will ensure supply and uninterrupted production of local gold.”
Russia Just Made A Case For Owning Gold — And Nobody Noticed
Brett Arends – MarketWatch – March 28, 2022
US Bond Yields Biased Higher on Hawkish Fed, SHY at Risk of Further Losses
Mar 28, 2022 – Diego Colman, Market Analyst – Daily FX
– U.S Treasury rates have soared in recent weeks amid hawkish repricing of Fed’s monetary policy outlook
– The short-end of the curve has experienced the largest moves, with the 2-year yield up approximately 88 basis points to 2.32% in March
– With short-dated yields on the rise, SHY will remain on a downward trajectory in the near term
The International Gold Price Fell More Than 1% Due To The Strength Of The US Dollar And The Imminent Peace Talks Between Russia And Ukraine.
Mar 28, 2022 – SMM News
“On Monday (March 28), international gold prices fell more than 1%, the dollar strengthened and US 10-year Treasury yields held steady near multi-month highs, as investors’ attention to potential Russian-Ukrainian peace talks further undermined gold’s safe-haven attractiveness.”
“The dollar index hit a three-week high of 99.312, making gold more expensive for holders of other currencies. Us 10-year Treasury yields have soared to nearly three-year highs as markets grapple with high inflation and the hawkish attitude of the Fed.”
Michael Langford, director of AirGuide, a corporate consultancy, said: “if the US job creation data for March is around 500000 or more, I think gold is likely to fall sharply in the short term, as this will support the Fed to accelerate interest rate hikes.”
Hawkish Fed spooks hedge funds to take some profits in gold, but sentiment remains solidly bullish
Neils Christensen – Monday March 28, 2022
(STGO) Steppe Gold Resumes Production at the ATO Gold Mine in Mongolia
By Alex Deluce – The Gold Telegraph – March 26, 2022
“As countries worldwide continue to deal with inflation, gold is beginning to catch the interest of generalist investors globally. Gold prices in U.S dollar terms are up 10% in the past six months…”
https://www.goldtelegraph.com/steppe-gold-resumes-production-at-the-ato-gold-mine-in-mongolia/
Gold is up 10% in six months, YUUUUUUUUP gold is reflecting inflation. DT
Agreed DT. Market participants concerns around inflation is a big component of why gold has moved higher for the last half year, as currencies purchasing power are continually eroded over time. Other contributing factors that have underpinned the bid in gold are the slowing growth and economic health, weakening general stock markets, and yes, the Ukrainian geopolitical tensions piled on recently and then eased. Also, central banks have been buying gold again recently, and likely represent some of the large buying volume showing up on days when gold dipped down briefly to the high $1780’s and $1790’s at one point.
The massive unpayable amount of national debt found all over the world is another contributing factor.
This world debt clock is always fascinating to check in on:
Yep, there stands the most pressing problem, a problem not even seen as a problem, no other problem is so vital or so pressing as the problem America is about to face; how do we get back to honest money. Yet economists and financiers aren’t interested in even addressing the problem because they want to keep their pockets full of printed dollar prosperity all the while fooling The American Public.
Now that Russia is effectively back on the gold standard, Americans will have to put themselves back on a gold standard, that will be very difficult because gold goes where real money is and The Western World doesn’t have real money, so precious metals will continue it’s eastern trajectory. DT
I tried to think of something intelligent and not repetitious to say on this topic but nothing came to mind, so…..no comment.
However, I don’t know who would be willing to sell their gold to Russia for Rubles, AND at a substantial discount. Maybe Putin is going to twist Kinross’s arm. Stay away from KGC for the time being.
It is interesting to note that after Gold had closed last week at $1939.80, that after the fall in overseas trading that the price range today was 1,921.35 – 1,929.40
This demonstrates once again that the $1921 support held tight, like it has on about 4 other occasions in the last month or so. We are only a few days from the end of the month and quarter, it would be really nice to see gold close above that level.
Spoke too soon. 😞
Just noting that $1921 had held a number of times recently. Gold is now $10 below there at $1911 but the month/quarter isn’t over until Thursday, so we’ll see what happens over the next few days.
Yes it’s recovered after being down maybe $40 at one point.
Yes, I didn’t realize initially it had dipped that low in the early morning, but nice to see it bounce back so quickly, which shows how much pent up buying pressure there still is at lower levels.
Gold back around $1917 at present, and both Silver and the PM miners have held up well overall, so that is another strong indicator.
$HYMC closed up 81% in the market hours and then up another 10%+ in afterhours trading today. It now has a market cap of $248 million.
Hycroft Mining Holding Corporation, for those that haven’t been following along, is the #gold mining company (built from the ashes of the failed Allied Nevada) that (AMC) AMC Entertainment [a movie theater chain company that became a #MemeStocks phenomenon last year] just speculated on with company funds a few weeks ago in the recent (HYMC) capital raise.
AMC went up 44% today to a $15 Billion valuation. These are wild markets.
Hycroft Mining Holding Corporation (HYMC) NasdaqCM –
$2.3200 +1.0400 (+81.25%)
At close: 04:00PM EDT
$2.5700 +0.25 (+10.78%)
After hours: 07:59PM EDT
The #MemeStocks were definitely back on the menu today…
In addition to (AMC) AMC Entertainment up 44% on the day , there was also (GME) Gamestop up 24% on the day [on March 14th just 2 weeks ago it traded down to $78.06 and today closed at $189.59], and (BBBY) Bed Bath and Beyond up 16% today.
>> Looks like the Wall Street Bets / Reddit / Robinhood/Stash/WeBull “Apes” are back to squeezing the shorts once again. Apparently the #ShortSqueeze isn’t over…
6 Meme Stocks in the Green Today: AMC, GME, HYMC, MULN, BBBY and NIO
William White – (03/28/2022) – InvestorPlace
GameStop Rides Meme-Stock Revival for Longest Rally Since 2010
Bailey Lipschultz – Bloomberg – March 28, 2022
GameStop Corp. (GME) rose for a 10th consecutive session Monday, giving the stock its longest winning streak since April 2010. Video-game retailer has soared 143% over 10-day winning streak.
AMC – AMC Entertainment jumps 45% for best performance since June
“The latest rally for the duo pales in comparison to the madness that shook Wall Street last year, but it’s a signal that investors aren’t done with meme stocks just yet. AMC Entertainment shares are up nearly 1,300% from where they ended 2020, while GameStop has gained more than 900% over that stretch.”
Did you include the $190 million financing at much lower prices in the market cap?
The market cap is probably more around $500 million for something that is more an exploration play at the moment
Only noting the overall market cap as that includes all data and assets, and no, out of the near 1000 explorers, very very few would have a half billion market cap. Most explorers have a $10-$50 million market, and some of the more advanced have $50 – $100 million. A very few may have $100 – $200 million, and then very very few any higher than that (maybe a dozen out of the thousand). Valuations that high are very rare with explorers.
Now, it’s a moot issue as Hycroft is a Developer and prior producer with some remnant production, so it’s not an explorer anymore, but even then there are development projects with big 2-4 million ounce reserves trading for $80 – $150 million market caps. Today’s valuation of $291 Million may be a fair market cap based on the size of their reserves, but it isn’t cheap at this point, like it was, and much of the re-rating has just happened. Now if it keeps getting pushed higher as a new popular meme stock, then there is no telling how silly things may get. (just look at AMC, GME, and BBBY lately).
Had a look into their current presentation that mainly has exploration for 2022/23 (page 18)
You can also call it development. But it looks like they are far away from production
http://www.hycroftmining.com/wp-content/uploads/02-2022-BMO-Conference.pdf
Yes, I just looked at that slide #18 and they themselves titled it “Development Path – Next Steps”
There is always exploration with any stage company but much of the work they are doing in Q3 & Q4 is pure development work, and they are development stage company at this point and their guidance of work to go on this year and next are in preparation for development and eventual production.
– Receipt and analysis of all metallurgical results
– Review grinding circuit
– Review process flowsheet
– Review siting of major facilities including TMF, mill, dumps
– Continuing to monitor the inflationary environment
They don’t mention any production restart
That’s why I said exploration play
It looks like they need higher gold prices or better grades before they decide for a restart
Phosphate/Potash miner Centrex(CXM.AX) up 25% yesterday and 20% today. Since Matt Geiger(MJG) mentioned phosphate on KER several months ago this one is almost 4X.
Nice…. I was late to the party buy hopefully will get a piece of the action with DAN here in Canada
Another phony day of algo hits against commodities to cover the fraud of Wall Street and Central Banking. Bye…
Month end beat down. A chance to pick up some bargains.
Attention shoppers, those with the dry powder, there’s a blue light special in all gold isles.
Yep. Gold is down a whopping $13 from it’s close at $1925 yesterday to $1912 today, and GDX is up 0.18%, whereas GDXJ is up 0.26%. Not a very big blue light special, but some miners are under more pressure today, and sold off harder earlier in the day compared to where they are mid-day.
Personally my account is completely flat on the day at 0.01% up, so more of a nothing burger kind of day.
Price Quality: https://tinyurl.com/yc794bru
Gas & Oil — Gold & Silver — Market Pulse
Added to NKOSF @ $.55
I bought some Inomin Mines SYL-MINE at the very open today, it’s up 240%! LOL!
😳….👏👏👏
Wow! Very well done DT!
Wow also. Looks like no US symbol…but interesting hits.
In their over reaction to smash all the news this morning, I picked up a few Labrador Gold at .56. We will see if their bogus efforts were worth my while.
Added: I see Marty above also picked up some. He got them .01 cheaper. Good buy Marty!
Gold finally took out its March 16th low of 1895 like I thought it might but took longer than I expected. It has now tested its rising 50 day MA as well as an important price pivot (chart will update to include today’s action later today)…
Matthew
Mar 19, 2022 (Saturday)
I won’t be surprised if gold needs to take out Wednesday’s low before it goes higher.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=0&mn=11&dy=0&id=p13392486787&a=1128008072
Saved that chart for study and setting up…some interesting overlapping guides you are using lately…thanx Matthew
The sector is getting better by the day as silver, silver miners and smaller gold miners continue to confirm gold and the large gold miners.
Silver (SLV) backtested its 50 and 200 day MAs today while completing what appears to be a perfect a-b-c correction…
https://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=1&mn=0&dy=0&id=p86808373259&a=1132956157
Subjectively, sentiment seems perfectly supportive of further upside sooner rather than later as most remain unconvinced of the bullish outlook.
JOBY making its first daily AB=CD up since the IPO profit taking….The news is good but is has no earnings yet…It will trade in a range until full FAA approval…Probably they say about 2024…glta
Inomin! I liked the news release and got in at open. MC is still way too low. There is much excitement over at Ceo.
Chairman Xi Just Made a Big Move, China Announces They Will Keep Purchasing Crude Oil and Gas From Russia
March 28, 2022 – The Last Refuge
“China announces they will violate the western sanctions and continue to purchase crude oil and gas from Russia.”
“Chinese state energy company Sinopec will continue to buy crude oil and gas from Russia, a top executive said on Monday, even as Western democracies step up sanctions in response to the country’s invasion of Ukraine.”
“The company, known formally as China Petroleum and Chemical, is involved in two major projects in Russia: an oil and gas production joint venture called Taihu in the Volga-Ural petroleum basin in western Russia with state-owned peer Rosneft, and the development of the Amur gas chemical complex and processing plant with Sibur in the Russian Far East, adjoining China.”
https://theconservativetreehouse.com/blog/2022/03/28/chairman-xi-just-made-a-big-move-china-announces-they-will-keep-purchasing-crude-oil-and-gas-from-russia/