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Gold The Ultimate Iron Lady

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Posted by Stewart Thomson - Graceland Updates

on Tuesday, 06 February 2018 06:15

Feb 6, 2018

  1. The appointment of Jerome Powell as new Fed chair is likely the catalyst that ushers in a multi-decade era of rising inflation and soaring gold stocks.
  2. I’ve announced a long term target for GDX of $15,000. That really isn’t very high… given the strong inflation numbers that I am projecting for America in the years ahead.
  3. Having said that, Powell has only been on the job for one day. Investors need to show patience. Wait to see what he actually does before taking “back up the truck” market actions. 
  4. Powell’s first significant actions are likely to be announced at the March 21 Fed meeting. I expect a firm commitment to more rate hikes and more quantitative tightening.
  5. That’s inflationary because it boosts bank profit margins and they become more willing to take lending risk. That produces a rise in the velocity of money. 
  6. As the cost of borrowing rises, companies will raise prices and workers will demand higher wages. If Powell also makes a firm commitment to deregulating America’s thousands of small banks on or before March 21, inflation would accelerate even more rapidly.
  7. Please  click here now. It’s my contention that wage inflation of 20%+ is not just theoretically possibly, but morally justified. Here’s why:
  8. For many years, global governments have colluded with central banks to run socialist/fascist QE programs. These programs moved money from workers and savers to government bonds and stock markets. Additional money was simply printed and taken.
  9. QT, higher rates, and small bank deregulation are beginning to re-empower Main Street. This is happening while “Government Street” (the bond market and the dollar) and Wall Street risk disintegrating. 
  10. Please  click here now. Double-click to enlarge this exciting bond market chart. A head and shoulders top pattern is in play. The neckline has been crushed.
  11. Please  click here now. Around the world, governments are announcing import duties. That’s inflationary. If India’s government had cut the gold import duty, it would have increased demand, but the duty itself is also inflationary. 
  12. Please  click here now. Institutional money managers are starting to focus on the inflationary implications of Trump’s tax cuts that I highlighted when he first proposed them. In the context of QT, rate hikes, and deregulation, these cuts can increase inflation quite significantly.
  13. Please  click here now. Double-click to enlarge. The bond market is building what I have dubbed a “super top” pattern. The target of the super top is about 80. 
  14. The Fed has projected that rates will take many years to reach “normal” levels. This chart suggests the normalization process will take about seven more years.
  15. This “normalization” sounds great in theory. In the real world, it involves a decline to 80 for the T-bond price. That would drive borrowing costs for the US government to incredibly painful levels. 


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Gold & Precious Metals

Gold Stock Consolidation Continues

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Posted by Morris Hubbartt - Super Force Signals

on Friday, 02 February 2018 06:49

Today's videos and charts (double click to enlarge):

SFS Key Charts & Video Update

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Gold & Precious Metals

Gold Stocks An Inflationary Money Train

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Posted by Stewart Thomson - Graceland Updates

on Wednesday, 31 January 2018 06:12

Graceland Updates Points 1-24

1.    Technically and fundamentally, gold is poised to resume its magnificent rally that is taking investors into what I call a “bull era”.

2.    The next FOMC meeting announcement is tomorrow.  I expect the Fed to strongly signal more rate hikes and ramped up quantitative easing.  There’s an outside chance that bank deregulation is addressed, but that’s likely going to happen in the next meeting.

3.    Regardless, everything the Fed is doing is positive for inflation, negative for government bonds, and negative for the dollar.

4.    Please click here now.  Nothing is more terrifying to institutional bond market analysts than the prospect of significant inflation.

5.    The US government is on the ropes.  Rates are rising, QT is creating bond market liquidation, and wages are starting to surge.  The inability of the US government to finance itself in an inflationary environment means rate hikes and QT are negative for both the bond market and the dollar.

6.    Please click here now. Double-click to enlarge this key short term gold chart.



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Gold & Precious Metals

WORLD’S LARGEST SILVER MINES: Suffer Falling Ore Grades & Rising Costs

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Posted by Steve St. Angelo - SRSRocco Reportt

on Tuesday, 30 January 2018 06:39

Worlds-Largest-Silver-Mines-Falling-Ore-Grade-Rising-Costs-FIMAGEThe world’s two largest silver mines have seen their productivity decline substantially due to falling ore grades and rising costs.  Gone are the days when silver mines could produce silver at 15-20 ounces per ton.  Today, the Primary Silver Mining Industry is likely producing silver at an average yield of 4-5 ounces per ton.

In my newest video, I discuss the changes that have taken place in the world’s two largest silver mines, the Cannington Mine in Australia and the Fresnillo Mine in Mexico.  Falling ore grades and rising energy costs have contributed to the doubling and tripling of production costs at many silver mining companies.  Investors who believe it still only costs $5 an ounce to produce silver, as it did in 1999, fail to grasp what is taking place in the silver mining industry:

A big problem that has confused investors is the reporting of the “CASH COST” metric by the mining industry.  Some silver mining companies can brag that they have a very low cast cost of $5 an ounce, but they arrive at that figure by deducting their “by-product credits.”  By-product credits are the revenues they receive from producing copper, zinc, lead, and gold along with their silver.

For example, Hecla Mining stated their silver cash cost of $0.16 per ounce for the first three-quarters of 2017.  They were able to report that very low $0.16 cash cost by deducting $175 million of their zinc, lead and gold revenues.  Hecla’s three silver mines had total revenues of $278 million, but they deducted $175 million in by-product credits to get the low $0.16 cash cost.  They deducted 63% of their revenues to arrive at that low meaningless cash cost.

According to Hecla’s financial statements, they only made $4.2 million in net income on a total of $417 million in total revenues Q1-Q3 2017 (including $140 million from their Casa Berardi Gold Mine).  Thus, their net income profit was only 1% of their total revenues. How bad would Hecla’s losses have been if they deducted $175 million of their supposed by-product metals’ revenue from their bottom line?  How about a loss of $171 million?  So, please disregard the Cash Cost metric as it is totally meaningless.  Cash cost accounting does nothing to determine the profitability of a mining company.

As the silver mining industry continues to suffer from falling ore grades, costs will only increase going forward.  However, the biggest impact on the silver mining industry will be the decline in global oil production.  In my next video, I will do an update on the worsening U.S. Shale Oil Industry, even though production continues to increase.



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Gold & Precious Metals

Gold Stocks Put Options Protect Profits

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Posted by Morris Hubbartt - Super Force Signals

on Tuesday, 30 January 2018 05:37

Today's videos and charts (double click to enlarge) (originally published Jan 26th)

SFS Key Charts & Video Update

gcc



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