volcano-collapseIf legendary investor Marc Faber is right, A Perfect Storm Is Brewing For Gold and Silver

 

From Mac Slavo:

Economist Marc Faber, who is known in many circles as Doctor Doom for his oft gloomy forecasts, says that stock markets are overvalued, but stops short of saying that a crash is imminent.

Though valuations are high and sentiment is dangerously optimistic, Faber argues in a recent interview with Fox Business that there are huge money flows still making their way into U.S. equities.

And over the next three to six months Faber says much of that liquidity from foreign and domestic investors may start moving into precious metals and precious metals stocks:

[There won’t be a sell off] in the near future… but if you look at the valuation of stock they’re high. If you look at the valuation of the US dollar it is high… If you look at the money flows in the last few weeks a lot of money has flown into US equities, both from domestic investors and international investors… as a contrarian this is not a particular good sign.

However, there is a lot of liquidity in the world… the liquidity will move into precious metals and precious metals stocks… so I would be long gold shares, silver shares, platinum and the underlying physical…

I also think that sentiment is much too optimistic about stocks and far too pessimistic about bonds…

Full Interview:

Faber may be on to something, as demand for gold via ETF’s is surging at levels not seen since the 2011 run up in precious metals prices, suggesting that for those on the sidelines now may be a good time to buy gold and related assets.

As the elite meet in Davos to discuss banning cash, investors around the world are flocking to safe havens. Nowhere has this been more visible than in China, where so much money moved into BitCoin that it broke through $1000 stopping just shy of all-time highs.

The sudden and precipitous rise of the digital currency is an indicator of what may happen with precious metals should they become the next go-to safe havens for panicked investors.

With the strength of the US dollar today and President Trump recently warning that a strong dollar is not good for trade, it is quite possible that a policy shift with the new administration could weaken the dollar, adding further upward pressure on the gold price going forward.

If Faber is right, there is a perfect storm brewing for gold and silver.

junk-silver

    • Its [********] Mod and if you delete this comment I will delete my account here and move my thousand dollar account somewhere else

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    • LOL!  How can they be doing “God’s work” when Lloyd Blankfein is handling that over at Goldman Sachs?  OMG, the egos of these bankster morons.

  1. Trump Administration Outlook  CFTC Regulatory Reform  Swaps Trading Blueprint
    January 19, 2017 CFTC; Derivatives
    One of the most sweeping changes brought about by the Dodd-Frank Act1 was the introduction of a new regulatory framework for swaps trading. In 2013, the Commodity Futures Trading Commission (“CFTC”) finalized its rules on swap execution facilities (“SEFs”) and swaps trading on SEFs. Less than four years after these rules were finalized, the change in Presidential Administration will result in a change in leadership at the CFTC, which means the CFTC will revisit the swaps trading regime implemented in 2013.  In particular, Commissioner J. Christopher Giancarlo has criticized the CFTC’s implementation of Dodd-Frank’s regulatory framework for swaps, and in 2015 published a white paper detailing these criticisms and suggesting reforms to the CFTC’s swaps trading rules.2 Commissioner Giancarlo recently referenced this white paper and noted the CFTC swaps trading regulatory framework has resulted in fragmentation of global financial markets. Commissioner Giancarlo stated that this fragmentation is “caused by ill-designed rules and burdensome regulations—and the application of those rules abroad—is harming market liquidity and market safety and soundness, increasing the systemic risk that the Dodd-Frank Act was predicated on reducing.”3 Therefore, Commissioner Giancarlo said: The time has come for the CFTC to revisit its flawed swaps trading rules to better align them to market dynamics, allow U.S. swap intermediaries to fairly compete in world markets and reverse the tide of global market fragmentation. Commissioner Giancarlo, the sole Republican Commissioner, will be named Acting Chair when current Chairman Timothy G. Massad steps down on January 20, 2017, and may be the candidate for permanent Chair. In the coming months, the CFTC is likely to look to Commissioner Giancarlo’s white paper to provide a blueprint for changes that can be made to the CFTC’s swaps trading regime. In a speech given on January 18, 2017, Commissioner                                               

    1 Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203, 124 Stat. 1376 (2010). 2 J. Christopher Giancarlo, Pro-Reform Reconsideration of the CFTC Swaps Trading Rules: Return to Dodd-Frank (Jan. 29, 2015) (hereinafter “Swaps Trading White Paper”).  3 Keynote Address of CFTC Commissioner J. Christopher Giancarlo before the ISDA’s Trade Execution Legal Forum (Dec. 9, 2016), available at: http://www.cftc.gov/PressRoom/SpeechesTestimony/opagiancarlo-18.

    • Forget global liquidity.  What really matters most is “global stupidity”… and the banksters have MUCH more than their fair share of that.  So do many others for allowing these cretins to run wild as they have in the past.

      IMO, ALL banks should be converted into local and regional utilities.  They should be allowed to offer a small range of approved services and NOTHING else.  Let them be of real use for a change instead of always trying to buy up everything with the money they create out of thin air and run roughshod over everyone around them.

      A small part of what the banks do is not only useful but necessary.  Unfortunately, they have gone FAR beyond that and it is time to rein them in.  “Bigly”, as Trump would say.

       

  2. I still don’t get how people are saying equities are overvalued. During the 87 crash the S&P P/E ratio peaked at 50/1, dot com bust at 46.5/1 and the 2008/9 crisis 122/1. Today we are 23/1. The Dow cannot crash with the S&P at this level. At the very worst or best depending how you look at it the Dow can only have a normal correction before moving higher.

     

  3. @jj  From the research I’ve done, the S&P PE is this ‘low’ due to the $3 trillion of stock buy backs these companies executed with access to zero interest rate capital.  The actual PE is well over 40/1 and one researcher said it’s around 46/1.  Earnings reports are smoke and mirrors.

    Not that I don’t this fraud can’t be continued given the gullibility of people buying into the reasonable PE MOPE.  Once rates rise in 2017, predicted at 3-4 bumps in prime, the cost of stock buy back loans will rise to the point where buy backs would be unaffordable.  Rate increases in 2017 will do major damage to those companies, individuals and states who’ve been on a borrowing binge measured in the $50 trillion range.

    @Killroy  I went back and censored my own material just now.

     

     

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