hyperinflationTraders today universally believe inflation is dead, that there is no persistent decline in the purchasing power of money.  That’s what government price indexes around the world are indicating.  But this false notion is one of recent years’ main Fed-conjured illusions.  Price inflation is the result of rising money supplies, and they have been skyrocketing
Serious risks are mounting that they will spill into price levels.

Gold was beaten to a pulp as the Fed seduced investors into forgetting prudent portfolio diversification.
With the Fed shifting from record easing to a years-long tightening cycle, the fortunes of the markets are due to reverse.
The stock markets are going to face a stiff headwind for years, forcing investors to diversify back into alternative investments led by gold. 
Is your portfolio ready for this monumental shift?

Zeal090415AThe epicenter of gold’s intractable weakness over the past couple years has been the Federal Reserve’s upcoming rate-hike cycle.  Everyone assumes higher interest rates will devastate zero-yielding gold, leaving it far less attractive.  This premise led investors to avoid gold like the plague, and speculators to short sell it at wild record extremes.  But provocatively, history proves gold thrives in Fed-rate-hike cycles.

silver updateThe smaller gold miners and explorers have suffered catastrophic stock-price losses in recent years.  These extreme declines have led investors and speculators to assume that much of this sector won’t survive lower prevailing gold prices.  But nothing could be farther from the truth.
The hated and left-for-dead junior-gold sector is not only very strong financially today, but could still thrive at much lower gold prices.

falling-bearThe US stock markets just suffered an extraordinary plunge, shocking traders out of their complacency psychosis.
This cast the foundational premise behind recent years’ incredible stock-market levitation into serious doubt.  Traders are finally starting to question whether central banks can indeed manipulate stock markets higher indefinitely.
Any wavering in this faith has very bearish implications for stock prices.

falling-bearThe entire gold-mining sector was crushed last month, suffering a full-blown panic.  This was triggered by an extreme shorting attack on gold by American futures speculators.  As fear-blinded traders rushed for the gold-stock exits, they claimed their selling was rational because gold miners’ very existence was threatened by such low gold prices.
But that’s a total fallacy, this sector has no problem weathering sub-$1200 gold.

falling-bearWith gold languishing near deep secular lows, its technicals look hopelessly broken.  Sentiment is off-the-charts bearish, with traders universally convinced gold is doomed to spiral lower indefinitely.  But gold’s weakness this year is very deceiving, as it wasn’t the product of global fundamental supply-and-demand forces.
Extreme record shorting by American futures speculators spawned these artificial lows.

fall plungeGold has certainly had a rough summer, facing withering selling pressure from record futures shorting.  The resulting new secular lows have greatly exacerbated the already-extreme bearish psychology long plaguing this metal.  But considering the howling headwinds gold has suffered in recent years, it has actually proved amazingly resilient
This indicates strong latent demand due to accelerate as sentiment shifts.

hyperinflationGold stocks suffered a full-blown panic this past week!  This exceedingly-rare magnitude of selloff was triggered by extreme futures shorting intentionally executed to force a flash crash in gold.  After gold’s major multi-year support failed in this Machiavellian onslaught, gold stocks plummeted.  The levels of fear were so epic that this entire sector was slammed much deeper into fundamentally-absurd price territory.

my-shorts-on-fireWhat if the withering selling pressure devastating gold and silver this summer is artificial?  What if the traders dumping the precious metals don’t actually own them in order to sell them?  What if 2015’s apparent glut of gold and silver has been mostly borrowed first and then sold?  And what if these short sellers used extreme leverage to dump these metals?  This scenario radically changes precious metals’ outlook.
A record short-covering frenzy is imminent…

falling-bearGold and silver are languishing near major lows, trudging through the barren sentiment wasteland of the summer doldrums.
The major factor behind this weakness is extreme shorting by American futures speculators.  But their heavily-bearish bets are actually VERY BULLISH for both precious metals.
Not only do these traders as a herd always bet wrong at price extremes, their shorts are guaranteed near-future buying.

falling-bearThe US stock markets were quick to rally after the Federal Reserve did nothing at its June policy meeting.  Traders love the endless dovishness gushing forth from this Yellen Fed.  But their complacency is very misplaced.  It was epic Fed easing that fueled the stock-market levitation of recent years.  So the Fed shifting away from these extraordinary policies is a major downside risk for these Fed-inflated stock markets.

gold bottomGold remains deeply out of favor, languishing near major lows.  Traders are still convinced gold is going nowhere, and want nothing to do with it.  But provocatively that’s par for the course in early June, when gold slumps to its most-important seasonal low.
Gold’s seasonals are now bottoming, just ahead of the usual major surges in global gold demand coming in late summer and autumn.  This is a fantastic time to buy.

Zeal060515AGold remains deeply out of favor thanks to global central banks’ extreme money printing.  This fueled a global stock-market levitation that has temporarily short-circuited normal market cycles, leaving investors infatuated with stocks to the exclusion of prudent portfolio diversification.
This has left them radically underinvested in gold, which sets the stage for massive mean-reversion buying when they inevitably return.

down goldThe great endeavor of investing can be distilled down into four simple words, buy low sell high.  They are so basic, so resoundingly clear, that even a child can understand this principle.  Yet still the great majority of investors never achieve significant success.  Even while full-well knowing the core idea of investing, they end up buying high and selling lowThat treacherous struggle of investing must be overcome.

Zeal052215AGold has been fairly volatile so far this year, seeing plenty of big daily surges and selloffs.  But with all these largely netting out to the sideways grind of recent months, gold’s price action has been frustrating for bullish and bearish traders alike.  Gaming gold in these strange central-bank-distorted times requires closely watching its primary driver, the collective bets of American futures speculators.  They portend a rally.

gold stocks trainSilver has enjoyed a fantastic week, awakening from its bottoming slumber to surge with goldAnd this strong silver investment demand is likely only starting.  American stock traders and futures speculators control two of the world’s largest pools of capital active in the silver market.
And the former group still remains woefully underinvested in silver, while the latter still has massive short positions left to cover.

gold bottom

Gold stocks’ reign as the most despised sector in all the stock markets remains unchallenged.  They’ve even been abandoned by contrariansBut such universal antipathy and apathy is the breeding ground for major bottoms.
And despite gold’s lackluster performance, gold stocks have actually been rallying on balance for 6 months now.  Given their extreme undervaluations relative to gold, this strength is likely to persist.


Mexico has long been a silver juggernaut.  The indigenous peoples had been successfully mining this shiny-white metal since well before the Spanish colonials swarmed the shores in the 16th century.  Several hundred years of Spanish development globalized Mexico’s silver prowess.  And still today in the post-independence era silver mining is still going strong.

2 Housewives

The Chinese stock markets have been rocketing higher in a popular speculative mania.  New Chinese investors are flocking to their local red-hot markets, borrowing heavily to buy hyper-speculative stocks.  Like all past manias, this one is guaranteed to end badly.  And when China’s parabolic stock indexes inevitably collapse, the global stock markets face serious risks of getting sucked into that fear-fueled stampede.


In simple-average terms, the elite S&P 500 stocks were trading at a staggering 25.9x earnings!
And in market-cap-weighted-average terms, their collective P/E wasn’t much lower at 24.0x.  These levels are dangerously high.  14x is historical fair value for US stocks.  21x is expensive, and twice fair value at 28x is hyper-risky bubble territory

silver currency

The Spaniards of centuries past controlled the world’s elite maritime fleet.  And this fleet’s colonization of the Americas is well-documented.  The Spanish Crown would have told you their primary mission was to convert the indigenous people to Catholicism.  But in reality it was trade and a craving for all things exotic that ultimately supported this campaign.
And perhaps the one thing that the Spaniards couldn’t get enough of was silver.  In Mexico and Peru in particular they found hoards of this shiny-white metal.  And via both conquest and discovery they quickly gained control of the world’s silver trade.
Though Spain no longer controls the trade today, Mexico and Peru are still atop the silver rankings, collectively responsible for about one-third of the world’s mine production.  And this allows for fortunes to be made by the mining companies on the ground in these two countries.  In Spanish the word fortune is translated as fortuna And Fortuna Silver Mines is poised to live up to its name as one of Latin America’s premier primary silver producers.