Frank Holmes: Closing the Gold Window Opened the Door to Modern Monetary Theory (MMT)

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The drawback is that, in the years since the end of the gold standard, there’s been a significant and growing lack of discipline when it comes to government spending. Before 1971, there was a natural limit to how much money could be printed. New issuances were dependent on the amount of gold sitting in the nation’s coffers.

Today, with the dollar backed not by a hard asset but by the “full faith and credit” of the U.S. government, the federal debt is closing in on an astronomical $28 trillion, which is more than 130% of the size of the U.S. economy.

Macrovoices: #254 Luke Gromen: The FED Faces No Easy Choices

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• Is this the beginning of the end for the U.S. dollar as the global reserve currency?

• Relative decline to other fiat currencies or loss of purchasing power?
• Democratic control of the Senate – how does this affect yields?
• When will deficits start to matter?
• How do you translate the current state of the dollar into investment strategies?
• Bitcoin vs. Gold

• Are we finally at a point of runaway wage & price inflation?

Crescat Capital: December Performance Update

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It is time to gird for full Modern Monetary Theory. With the democratic sweep in place, we are about to experience even more of the double-barreled fiscal and monetary stimulus that we saw in 2020. Overwhelmingly today, such policies have served to incite animal spirits toward financial assets. Investors are already positioned, all in, on both stocks and bonds in the US creating a highly imbalanced market. The problem is that money printing married with fiscal spending is crashing head-on with an emerging commodity supply problem that will likely stir up rising inflation which is bearish for both equities and fixed income. Get ready for a volatile 2021, the year of reckoning for twin asset bubbles as the world attempts to emerge from the Covid-19 pandemic.

Jim Rogers: Legendary investor warns of stock market bubbles in 2021

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Famed investor Jim Rogers, the founder of the Quantum Fund, recommended investment in silver in the New Year as its price is substantially lower than historic high.

The financial commentator made the advice in a recent joint interview with the Korea News Plus and E-Trend, a YouTube channel focusing on economic and stock market news.

“Silver is down 50 percent from its all-time high. Gold is down 10 percent from its all-time high, less than 10 percent. I will buy both, but I will buy more silver than gold,” he said.

“I have been buying travel, entertainment, tourism, wine, and restaurant companies because people did not go out and could not go out, but in 2021, people will go out again, and people will travel again,” he said.

Crescat Capital November Performance Update

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Surrounded by speculative excess everywhere, our short positions in select hyper-overvalued US equities remain key tactical holdings in Crescat’s Global Macro and Long/Short funds. November’s market move appears to be a last gasp for stocks, which are suspiciously out of sync, with the downturn in the business cycle already in progress. In our view, investor positioning is historically imbalanced based on a composite of indicators:

-The put to call ratio for US stocks just hit its lowest level since 2000

-Options volume has surged to its highest on record

-21.6% of all call options were bought by small traders, the largest level since the tech bubble

-Median short interest for the S&P 500 has plunged to 17-year lows

-We now have the largest percent of S&P 500 members above their 200-day moving average in 7 years

-Market sentiment, measured by the Investor’s Intelligence, is at its highest level since just prior to the Volmageddon shock in 2018.

-According to SentimenTrader, for the 1st time in 15 years, 60% of their indicators are showing an excessive amount of optimism, the highest reading yet.

Ronald Stöferle: Inflation special report

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Our special report on inflation is finally out. Inflation is quickly becoming one of the main topics of due to the events which have especially unfolded this year. A whole arranges of topics and factors play into it, and we took the time to unpack them all. 

Every regime has its paradigm. For the past 40 years it has been a deflationary paradigm. Inflation was to be killed and this can be seen in many articles and publications. The symbol was the defeat of stagflation in the early 80s. All of this has now undoubtedly turned to inflation.

Ronald Stoferle: All roads lead to gold

 

Frank Holmes: Gold Could "Absolutely" Hit US$2,000 Again This Year

Grant Williams: Super Terrific Happy Hour Ep. 7 - John Hathaway: Being A Doyen Is A Good Thing, Right?

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Join Stephanie and Grant for a fascinating conversation with a true legend of the precious metals industry, John Hathaway.

The three discuss John's storied career, what the gold market looked like twenty years ago, how John's experience of multiple cycles has helped him deal with the volatility inherent in the precious metals space and what he expects to see going forward.

Gold's role in a portfolio, how to identify potential investments and the importance of managing the psychological component of what can be a tempestuous ride all come under the microscope.

Crescat Capital Investor Letter Q3 2020

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History does not exactly repeat, but it often rhymes. The art and science of macro investing is comparing past business cycles with the present across a mosaic of different indicators and time frames to determine the most probable path forward for markets. Throughout time, financial markets and the economy have been intimately linked to cycles of expansion and contraction of money and credit. The Federal Reserve was created by bankers and enacted by Congress in 1913 to provide a more flexible and stable monetary and financial system, but by no means did the Fed repeal the business cycle. In fact, the central bank has often played a role in amplifying booms and busts. For example, after introducing large-scale purchases of government securities to stem the recession of 1923, the Fed continued to expand the money supply and suppress interest rates through the remainder of the 1920s. Such monetary policy fanned the flames of historic stock market speculation which culminated in the stock market crash of 1929 to 1932 and the Great Depression. The macro set-up today is eerily similar as we will explain below.

Policy makers have no choice but to continue diluting the value of fiat currencies to enable a levered financial system to withstand such extreme macro imbalances. If past is prologue, large central bank interventionism leads to the appreciation of monetary assets and, in our view, precious metals will be the real beneficiaries of a global synchronized debasement trend that now seems irreversible. Therewith, gold and silver mining companies should be the largest beneficiaries of this environment. They look fundamentally stronger than any other industry in equity markets today. In fact, free cash flow among the top 20 miners have grown by 132% year over year in their latest report. 

John Hathaway: Gold, The Simple Math

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The very strong investment fundamentals for gold and gold mining shares are based on what has been a slow irreversible drift towards significant U.S. dollar (USD) devaluation.

In simple mathematical terms, the gold market could not clear at current prices if 1% of the $100 trillion4 or so of institutional assets under management were to move into the physical metal. Record year-to-date inflows into gold-backed ETFs have exceeded any previous year. But in dollar terms, this amounts to a paltry $51.2 billion requiring the acquisition of 936.2 metric tonnes of gold (according to Meridian Macro Research). By contrast, a $1 trillion inflow into gold bullion would require 18,000-19,000 tonnes, equal to roughly six years of annual world gold production. A shift of this magnitude by asset allocators would require a bullion price of $5,000-$10,000 an ounce.

Russell Napier: Gold, The Euro, and Capital Controls

 

Russell Napier is the Author of "The Solid Ground", an independently published global Macro investment report. Russell is also a Co-Founder of ERIC (www.eri-c.com) the platform for the sale of individually priced investment research. He was a Consultant Global Macro Strategist with CLSA Asia-Pacific Markets for almost twenty years. In 2013, Russell was elected as a fellow of the CFA Institute of the UK.

Frank Holmes: Some Are Betting on Red, Some on Blue. I'm Betting on Gold

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Whether you support President Donald Trump or not, you must acknowledge that one of the bedrocks of his governing style is unpredictability. To some critics, Trump’s behavior and decision-making process may seem erratic, but I believe they make a sort of sense when viewed through the lens of game theory.

Take, for example, his hot-and-cold stance on a new coronavirus stimulus bill this week. On Tuesday, Trump unexpectedly tweeted that negotiations with House Speaker Nancy Pelosi would halt until after the election. “After I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Businesses,” he said.

That same day, Trump appeared to change his mind—reportedly after he saw how the stock market, and particularly airline stocks, reacted to the news. (I often say that he’s the first American president who keeps his eye on the stock market and sees it as a gauge of his success.) “The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support,” he tweeted.

In Gold We Trust 2020

In Gold We Trust 2020:

Since 2007, the annual In Gold We Trust report is THE authoritative report on gold investing, and is required reading for anyone interested in the precious metal market. As a team, Ronald-Peter Stöferle and Mark Valek analyze the state of the global financial markets, monetary dynamics and their influence on gold price developments like no other.

Crescat Capital: A New Bull Market for Precious Metals

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2020 Q2 Investor Letter

Central banks are facing a serious predicament. After decades of ongoing accommodative monetary policy, the world is now sitting at record levels of debt relative to global GDP. In our view, there has never been a bigger gulf between underlying economic fundamentals and security prices. 

We are in a global recession, but equity and credit markets still trading at outrageous valuations. Markets are trading on a perverse combination of Fed life support and rabid speculative mania. Meanwhile, demand for gold and silver, which is fundamentally cheap, is starting to take off as central banks are engaged in new record easy monetary policies. 

Ongoing easy monetary policies in the face of today’s asset bubbles in stocks and fixed income securities has a high probability of leading to a self-reinforcing cycle that drives investors out of these over-valued asset classes and into under-valued precious metals. Here are just some of the reasons Crescat is selling richly valued stocks at large and buying undervalued gold and silver including mining companies today.

Jim Rogers: Beware The Stock Market Is A Ticking Time Bomb

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Legendary investor Jim Rogers believes the next decade is going to be tough for global investors. In an interaction with ETNOW, he said the worst of his lifetime is yet to come, which will take a huge toll on many of the hyped-up stocks.

Commenting on the ongoing trend, where expensive stocks are getting more expensive and cheap ones are getting cheaper, he said this always happens towards the end of a bull market, as people think they are safe, and thereafter, you have a blow-off in the market.

Roger said governments and central banks are printing a huge amount of money. There are chances that people might lose their confidence in governments and can move towards precious metals.