SD Outlook: We have deteriorating fundamentals, and gold & silver know this. In fact, gold & silver got dibs on the bacon. Here’s why…
I was dragged to the mall over the weekend.
I actually don’t mind going to the mall once every few months.
It is, after all, amusing to watch people dressed in what look like brand new clothes, shopping for, well, you guessed it – brand new clothes.
As if Americans don’t have enough brand new freakin’ clothes.
I also enjoy looking for signs of the retail apocalypse, and there were plenty.
The first thing I noticed were several empty spaces where there used to be stores.
The emptiness was masked by painted drywall and marketing, but what is taking place is that several stores are moving to different locations within the same mall.
That is not a good sign.
Because when large stores are moving, such as H & M, that’s a lot of empty retail space because the company is basically tying up two larges retail spaces in the mall during its move.
And I’m pretty sure there aren’t more retailers just lined-up and fighting for dibs to open up stores in the newly vacated spaces.
Those spaces will remain boarded-up, however, in my opinion, with painted drywall that’s plastered with advertising, so as not to, you know, not to draw so much attention to the fact that retailers are turning into zombies.
Furthermore, retailers that are downsizing are simply buying themselves a little more time to exist, so they’re making some adjustments needed to survive.
We know downsizing must be the case, especially as Retail Sales plummeted in December.
There is simply not a wave of brand new mall-type retailers sweeping the nation.
A second thing I noticed were three stores in this mall that are closing down.
Crazy 8’s, Gymboree, and Charlotte Russe.
Keep in mind that both the store shuffling and the closing of stores altogether are taking place just as we finished what is supposed to be the busiest time of the year for retailers.
Furthermore, anecdotally speaking, malls located in cities where there is real winter weather seem to have higher foot traffic during the winter as people search out indoor activities, such as shopping, eating out, or seeing a movie.
Third, there is a Payless shoe store in this mall, and as likely everybody knows by now, Payless is going the way of Circuit City this year.
OK, “Hey Half Dollar, you idiot! Everybody knows the economy is booming ever since President Donald J. Trump Made America Great Again, so of course they are going to close down all the Payless shoe stores because people don’t need to buy that cheap crap anymore – now they can afford good shoes!”.
Keep sippin’ that Kool-Aid.
Just know they already said “last call”.
And that hangover is going to be miserable.
But I digress.
There is one more anecdotal point I want to make about my trip to the mall: All the clothes are very cheap quality and very expensive at the same time.
Now, when I say cheap, I mean crappy, low-quality materials.
When I say expensive, let me give you an example: Rothco “fatigues”.
Yes, that crappy clothing company that made cheap Chinese knock-off US Military “style” clothing, which you actually couldn’t ever wear in the US military because the pants didn’t conform to the strict specifications and tolerances for real military fatigues, but Rothco has somehow become popular recently, and they’re targeting the youth of America.
Which means they’re targeting ‘Ol Half Dollar’s wallet.
Here’s an example screenshot of the pair of pants I purchased over the weekend (in a skinny, youth size they will outgrow in one year, mind you:
Only in 2019, stores are now charging $53 a pop (in the mall) because, well, they’re “hip” now and considered “trendy”.
The Rothco pants are nothing more than flamboyant camouflage patterns of the same low-quality military “style” clothing, which, since I felt them in my own hands over the weekend, the pants also feel like they are even lesser quality than I recall from my experience with them many years ago, when the company just made a very limited range of military knock-offs (without trying to be trendy).
Which leads me into an extension of this point: Fashion today looks like a combination of the 1980s, mixed with Goodwill, only with today’s new mall apparel, the rips are artificial, as are the pre-fading and the pre-staining, though the mall clothes are 100-times the cost of clothes purchased at Goodwill.
And Goodwill clothes, generally speaking, are of better quality than the crap they’re selling in the malls nowadays.
The same goes for garage sales, yard sales, estate sales, thrift stores, and all those type of places where used clothing can be purchased.
I’m just giving Goodwill as an example of used clothing.
Everybody seems to know that second-hand store.
Said differently, you can buy clothing that is 10-times better quality and 100-times cheaper if you buy used clothes rather than buying new clothes at the mall, but as an added bonus, where the mall gives you something that looks raggedy and retro, the used stuff actually is vintage, and from a time when clothes were made to last.
I guess I’m mumbling through a way of saying that the retail apocalypse is about to get much, much worse.
The state and local governments do not receive the sales tax revenue on the used clothing like they do on the new, expensive stuff either.
Additionally, people will cut their clothing budget when times get tough, and people will buy less expensive clothes when times get tough.
My point is this: Anecdotally, after spending a few hours in the mall over the weekend, I observed at least four dynamics confirming that not only is the retail apocalypse in full swing, but the worst is in front of us, not behind us.
Economic events are light this week, with holiday affected trading hours today for President’s day today, but since I opened up with the fundamentals, I want to continue with them.
Here’s the thing: The economy, the markets, politics and geo-politics are all in various state of deterioration
Let’s name a few –
- Unresolved trade wars
- Broad, wide-ranging slowdowns in autos, housing, etc
- Skyrocketing government spending/budget deficits
- The “Fed Put” (not a sign of market strength)
- Stock market bubble that just had one heck of a ramp job (not a sign of strength)
- US dollar looking like it wants to weaken
- Border wall & Budget problems
- 2020 Election uncertainty
- Swamp creatures returning to the swamp (i.e. Anthony Weiner released from prison)
- Regime change in Venezuela
- Tensions with Europe pivoting to China and Russia
- The Middle East is still a disaster
That’s just a few examples of the fundamental problems, and notice the problems are wide-ranging, and both domestic and global.
It’s not even about putting lipstick on a pig, either.
It’s more like the pig has been slaughtered.
And the bacon may taste good.
But it won’t last forever.
And there aren’t enough slices for everybody.
In other words, it will be over very soon for the market and the economy.
So don’t be fooled by the propaganda because the fundamentals are terrible.
The gold-to-silver ratio is heavily suggesting a purchase of silver:
And with silver under $16, in 2019, it only requires being willing and able, because, in my opinion, silver is a no-brainer here.
I mean, silver was in the $15’s in 2006:
Just like gone are the days of $3 to $5 silver, very soon, gone will be the days of $15 – $20 silver.
It’s like this: Nothing happens for very, very long periods of time, and then a helluva lot happens over a short period of time.
We’ve had $15 silver for a helluva lot of time.
If silver moves significantly, and in just a matter of months, don’t say ‘Ol Half Dollar didn’t explain it.
Because I think silver will move like that soon.
There may be limited trading, but gold looks to be starting the week with strength:
And that makes sense too, considering the fundamentals for gold are strong.
I think we can get over $1350 this week.
I thought that last week too.
And I was wrong.
So we’ll see.
Palladium is over $1400 and looking like we might get that upside surge after all:
Although I am expecting consolidation, either here, or after the surge.
Platinum has been the laggard:
I’m not expecting any significant downside action, however.
I’m looking to either bottom base around $800, and if we don’t bottom base, I’m looking to start climbing the wall of worry.
Like copper is climbing the wall of worry:
I think copper continues with its current trend.
Crude oil is going to be very, very interesting to watch:
I think we do move to the upside to complete the inverse head-n-shoulders pattern.
You know, that whole “self-fulfilling prophecy” thing where it happens because so many expect it to happen.
I’m also still looking for crude oil to be in the upper $70s pretty soon.
The Russell 2000, at least the week before last, was looking like it wasn’t able to tag its 200-day:
Although it is now looking like it will tag the major moving average.
Of course, it helps when you’re fear gauge has a 14-handle:
However, like I’m looking for the stock market to crash, or at least brutally grind lower, I’m also looking for volatility to begin picking-up again.
Yield on the 10-Year Note knows that a change in market dynamics is imminent:
Which is why it has been in suspended animation.
Read, just sitting back and waiting for it.
I think we get a drop in short-term rates as the stock market comes crashing down.
I also think the dollar looks tired here:
I think the dollar begins its move down very soon.
I think the move down in the dollar will see 96 given up pretty easily, with better support at 95 and 94.
That said, once we lose 94, well, yeah.
I’ll be looking for multi-year highs.
Only In gold & silver prices.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.