falling-bear

The prevailing valuations in the lofty US stock markets are increasingly becoming a bone of contention.
Wall Street calmly asserts stocks are fairly valued or even cheap, since it has a huge vested interest in keeping people fully-invested.  But a growing chorus of dissenters is disputing that idyllic notion, warning that stock valuations are very high and portend great downside risk.  Indeed, topping valuations abound.

Gold Eagle

Gold was the safe haven this week.
This week precious metals continued their recovery, with gold up $35 at $1220 and silver up about $1 at $17 Friday morning, thus building on the improved trend since gold bottomed nearly $90 lower at $1132 on 7 November.
Gold seems to be finding support at the 50-day moving average (MA), which currently stands at $1198 and now rising.
The 200-day MA is at $1246, which suggests supply at this level could cap the rise for the moment: these levels matter to technical traders.
On Comex there is evidence of some buying of gold futures, as opposed to bear closing, which is reflected in the rise in net contracts for the managed Money category shown in the chart below:

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With PM’s rallying while oil & equities crash, in this week’s Metals & Markets The Doc & Eric Dubin discuss:

  • Repatriation Musical Chairs continues: Austria considering repatriating 225 tons of gold from the Bank of England- is France next?
  • Gold & silver rallying while oil & the equity markets roll over- what’s going on?
  • GOFO Rates Surge Positive- did the recent bounce free up bullion? 
  • Venezuela on brink of hyperinflation & collapse- a prelude of whats to come in the US?
  • 2015 Shaping up for Serious Turmoil- Will a Squadron of Black Swans Fly in 2015?

The Doc & Eric Dubin break down all the action in this week’s frenzied markets below: 

It seems rather appropriate that just seven days after the US government hit a whopping $18 trillion in debt, mainstream financial media has picked up the IMF’s recent World Economic Outlook report, which puts the US economy as #2 in the world.
The obvious truth is that the US is in decline.
And it’s being overtaken.

If the United States and Russia fought a nuclear war, who would win?  You might be surprised by the answer.  Under the Obama administration, the rapidly aging U.S. strategic nuclear arsenal has been shrinking.
Meanwhile, the Russians have been developing an entirely new generation of bombers, submarines and missiles that have the capability of delivering an absolutely crippling first strike.
At this point, most Americans consider a full-scale nuclear war to be inconceivable.  But in Russia attitudes are completely different. 

To the Russians, the United States is enemy number one these days and the Russians are feverishly preparing for a potential military showdown. 

The last silver parabola was breathtaking, as it went to nearly $50, nearly 150% higher than its previous peak of $21.50, in 2008.
Now ask yourself this question: what if that pattern simply repeated the next time they lose control?

tax IRS

The US dollar will soon purchase much less than it currently does.   The devaluation process that has reduced its purchasing power since 1913, every year on average, will continue.
The local currency devaluation process is clearly evident in Japan and will become increasingly evident in Europe and the US.

All unbacked currencies will be devalued and some will collapse before others.
Expect more discussion about gold backed Rubles, Yuan, SDR (IMF Special Drawing Rights) and others. Expect central banker resistance.
Prices for gold, silver, land, diamonds, art, and other real assets will increase substantially in dollar terms as the currency and bond bubbles eventually implode.
The general public will be angered by currency collapses and the apparent theft of their savings and pensions.    
What happens when EBT cards purchase half of what they did in the previous year? 
The Powers That Be will respond to the social unrest.

silver dollar

It all boils down to counter-party risk.  When the counterparty cannot demonstrate that they can be trusted…we have problem.
A prudent actuarial look at the entire world would force the insurance premiums to skyrocket.  Just as the skies open and the system collapses.
At the end the road, when the storm is over, the insurance policy written in physical precious metals will be left standing.
The metal itself intact for another 7000 years.  The metal you control and no one else.
The policy written in silver.

Bernanke-Dimon-Fed-Tunnel

The Doc and Eric Dubin from SilverDoctors & SD Bullion joined the SGTReport this weekend to talk about all things silver.
We discuss the new record in silver eagle sales and the fact that in ancient Rome, payment for a hard day’s labor was 1/10th of once ounce of physical silver.
Today, due to the massive manipulation, a person earning $50,000/year is compensated with the equivalent of 10-11 ounces of physical silver per day.
More than 100 times the historic norm — and it’s only possible because silver is the most manipulated, most undervalued tangible asset on earth.
The Doc points out that with the current silver gold ratio over 70 to 1, while the earth’s mining output in 2013 was a mere 8.3 to 1, a move to fundamental valuations could see silver place a 10 bagger vs gold!

The Doc & Eric Dubin’s full interview with the SGTReport is below: 

Monthly US$

Here’s what Silver looks like in the major currencies … This is the “Handle” part of the giant “Cup and Handle” you’ll see in the first posted chart below.
The historical monthly silver chart shows the spike in 1980 up to the 2011 spike to $49.84 (the day we got everyone out of the Silver Call Options).
The other charts point to the “Come to Jesus” moment for the bankers and those short Comex and LBMA Silver contracts once Silver breaks through the resistance lines in a strong manner ….

I believe a break above the $50 cup rim is a given, with the possibilities being a break above $100 an ounce.  

Jim Grant

I expect you’ll wind up saying something like this: “My generation gave former tenured economics professors discretionary authority to fabricate money and to fix interest rates. We put the cart of asset prices before the horse of enterprise. We entertained the fantasy that high asset prices made for prosperity, rather than the other way around.  We actually worked to foster inflation, which we called ‘price stability’ (this was on the eve of the hyperinflation of 2017).  We seem to have miscalculated.