I have been told by some that a lot of my notes seem “off”. Of course, when I dig into real numbers they are going to give a different picture than is being painted day after day on the financial game shows. Why is it that many think I am the one disseminating information that is incorrect? What would my motivation be to do that? Eventually I would be exposed and it would be better if I said nothing at all. Of course, the financial game shows NEED you to keep buying because their sponsors depend upon it.
Let’s take a look at what the mainstream media said about holiday sales. Supposedly, the holiday shopping season was one of the all-time best- even if it was accomplished by shoppers going into record levels of new debt. I was skeptical and said that the holiday shopping season would disappoint. As the numbers are being released it is apparent that the holiday shopping season WAS weak.
After Macy’s announced their results their stock dropped 17% in after hours trading on January 9th. Keep in mind that Macy’s has a large on-line presence. The increase in on-line sales, while increasing at a brisk pace, is NOT making up for the lack of sales in stores. PEOPLE SIMPLY DON’T HAVE THE SAME DISPOSABLE INCOME THAT THEY HAVE HAD IN THE PAST. PERIOD.
Sears is trying to stave off bankruptcy, JC Penny is closing stores all over the place, auto makers are shuttering plants across the globe BUT somehow I am supposed to believe I am witnessing “the greatest economy of all time!” I am also seeing Korea’s export numbers (the lifeblood of their economy) crash, Chinese economic activity at decades lows (and possibly worse than reported) and Germany’s industrial production collapsing. I am also seeing not only riots across Europe because people are suffering economically but now they are hitting back in France by pulling their money out of the banks. Sounds like a global slowdown to me!
I have been listening to many interviews lately and I wanted to make some points about the gold and silver markets here. After 10 years of, in my opinion, unfettered “money printing” and buying of assets to blow up the largest bubble in the history of the world (many call it the “everything” bubble) it appears that the effects of this folly are now becoming apparent. You can only pretend for so long that a problem is fixed when it is not. It will likely become very apparent that you cannot fix a problem of too much debt by creating more and pretending that the additional debt is growth and now we can pay the interest we have promised. After a while, the debt overwhelms the system (again!- that is what 2008 was all about).
Many still seem to be worried that Harry Dent’s prediction of $700.00 gold may happen. I think even Harry has backtracked on that one. The reason it could have made sense is that in 2008 gold went down along with everything else as margin clerks sold anything they could to meet margin calls- gold and silver included. At this time, however, in an interview Bill Fleckenstein did on King World News he smashed that idea by showing that the vast majority of investors OWN NO GOLD. Of course, you can’t sell or be forced to sell something you don’t own. (Unless you are JP Morgan, Goldman Sachs, HSBC, Deutsche Bank, etc. but that is another story).
As I look at the charts today gold has been moving up nicely- since just about the time JP Morgan stopped being short. Amazing how they can seem to get it right every time! I also noticed that the price must be moving up a little too quickly for those “in charge” because the raids at 4AM and 8AM have resumed after a brief pause in that activity. The “activity” is selling paper promises of gold into the market at a time when the fewest buyers are available and putting in a market (Sell it at whatever price) order rather than a limit order (I will only sell if I get at least this price). Obviously, anyone who was actually investing for a profit would want to sell when the most buyers are available and you would expect that a limit order would likely be used also.
I am sure there are many more shenanigans that I am not aware of but this is so obvious a total novice could spot it. Of course, as the price is hammered lower the banks, central banks and sovereign countries have been buying in massive amounts. Ted Butler has reported that JP Morgan ALONE has amassed over 750 million ounces of silver and 20 million ounces of gold FOR THEMSELVES.
It appears to me that if you short something you don’t actually own (you and I would go to jail for that), make a profit, and after that pay yourself handsomely and with the excess profits buy what you were shorting you are actually amassing real assets with virtually nothing. Who needs to “print” money when you can maneuver this way?
Even with all of this going on global banks are seeing their share prices plummet. I believe this is an ominous sign along with many others.
I listened to a webcast with Jeffrey Gundlach of Double Line Capital (aka the bond king). In the webcast he went through a lot of data but the most telling to me was when he was discussing high yield and floating rate loans. They were smashed late in 2018. He basically said to use this recent rally to get out. I believe he said look at this as a gift and sell into this strength.
It appears that the smart money is recognizing that times are changing. There have been reports about large fund managers snooping around at mining companies looking for investment opportunities.
Just about every metric I am looking at is bullish for both gold and silver right now and that should lead to opportunities in mining shares also.
Keep in mind that this sector is famous for volatility both ways- up and down. I expect that even if prices rise substantially, as I believe they will, there will be pullbacks that may give you some distress.
Regardless of what moves the central banks and their cohorts may make I believe they are painted into a corner and that gold in particular will be one of very few winners going forward and silver, if the “printing” game continues may outshine even gold. People will become much more interested in these monetary metals as confidence in fiat currencies fade. I believe that time is approaching quickly. I also believe your time may be short if you want to buy gold and silver at a price you can afford.
I even heard Jim Cramer said that it may be time to add some gold to portfolios- that is a surprise!
Mike Savage, Financial Advisor
2642 Route 940 Pocono Summit, Pa. 18346
Securities are offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.
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