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Yes, the virus is affecting the economies in Europe and Canada and that's weakening their currencies wrt the US$ and a stronger US$ means a lower gold price. Still the POG fell only 1.2% this past week while Treasury yields moved higher (Treasuries not acting as a safe haven from the stock market losses)
Excerpts from Doug Noland's CreditBubbleBulletin:
European currency weakness supported the dollar. Gold was a relative winner, with losses limited to 1.2%
The Treasury market seemed to speak loudly and clearly: “Don’t look to me for a hedge – not with Trillions of new supply coming!” In what must be alarming to many, Treasury bond prices suffered marginal declines in the face of a potent “risk off” dynamic in equities and corporate Credit. If you can’t trust Treasuries (as a hedge), whom do you trust?
A Kansas business magnate's secret collection of more than 130 antique cars hidden in barns just sold for $2.5 million — see 16 of the priciest vehicles : https://www.msn.com/en-us/autos/enthusiasts/a-kansas-business-magnate-s-secret-collection-of-more-than-130-antique-cars-hidden-in-barns-just-sold-for-2-5-million-see-16-of-the-priciest-vehicles/ss-BB1azfyV?ocid=msedgntp#image=1
My comment: Somehow $2.5 Million just doesn't seem like a lot of money anymore given that the Fed can print $4-$5Trillion at will and Congress can spend $3Trillion in 6 months. You just lose all sense of the value of money. Better to own antique cars than to hold US$.
Yeah. Trump just doesn't get it. I don't think Biden will win, but I do think Trump will lose. Biden's whole message is beat Trump and Trump just lives in LaLa land. We are indeed in big trouble with either of these guys as president.
The virus is taking its toll on the markets. Europe is shutting down (just look at France) to reduce the number of infections. The number of new daily cases in the US is hitting record numbers. And the virus is expected to worsen during the colder months. If the country starts to really shut down, the markets will take a big hit. They are already being hit, but an economic slowdown will mean much lower prices. The election, I think, is a secondary factor. No matter who wins, half of the population will be disappointed and that may very well result in social unrest. Here's an excerpt from Doug Noland's CreditBubble Bulletin :
A few data points: Daily infections in France averaged about 550 during June. They had surged to 13,970 by the first day of October. A record 52,013 infections were reported last Sunday and 49,000 on Friday. Daily Italian infections peaked at 6,557 on March 21st and then averaged below 300 for much of the summer. Infections jumped to 2,548 on October 1st and were a record 31,084 Friday. Spain has observed daily infections surge from several hundred in June to Friday’s 25,595. After beginning the month at 2,503, German cases Thursday rose to 16,774. Cases have spiked to 24,000 in Belgium, 22,000 in Poland, and 9,000 in Switzerland. In the UK, after averaging below 1,000 during the summer, new cases averaged about 25,000 over the past week.
Cases here at home remained highly elevated all summer. And if U.S. infections now follow Europe’s trajectory, our nation is facing a dark and challenging winter. By the look of new infection trends in the likes of Michigan, Ohio and Illinois, a worst-case scenario appears increasingly likely. This is a highly infectious virus that now permeates the entire country – cities large and small, the suburbs and rural communities
Biden could bankrupt gold stocks, warns expert, but what is the bullion's fate? : https://www.kitco.com/news/2020-10-30/Biden-could-bankrupt-gold-stocks-warns-expert-but-what-is-the-bullion-s-fate.html
My comment : A worst case scenario would impact only miners operating in the US. That would actually increase the value of non-US miners.
Excerpt:
Giannotto said that the Democrats would pursue an “environmentally focused Dodd-Frank style” type of regulation, while not an outright ban on the industry, would make operations cost-prohibitive.
“An outright ban isn’t necessary to force these companies into bankruptcy. It’s really just to strangle their access to capital, their access to investors, that’s one hand, the second is direct regulation of their activities to try to make them economically unviable,” he said, adding that putting restraints on consumers would also harm the producers.
COVID, COVID, COVID. Too many investors think the markets are immune because of the Fed. Now we wait for massive stimulus and corresponding national debt.
It's been a very long time since we had a REAL recession where prices plummet and you can buy stuff for 10 cents on the dollar. I think the recession of 1992-1993 was the last time that happened. The Fed always steps in to inflate to prevent a real recession. But if there are a lot of bankruptcies and layoffs, then you'll see bargain prices. That's why I keep increasing my cash position through savings. Here's something to consider :
2021: A Year Of Mass Bankruptcy : https://www.zerohedge.com/economics/2021-year-mass-bankruptcy
Excerpt:
The federal government has a printing press. They can bail out Illinois mismanagement and Chicago mismanagement and basically bail out the politicians who did all of these things. This will come at the cost of the financial markets in general and the currency markets in particular.
When they see trillions of dollars in bailouts here and trillions of bailouts there, they will conclude maybe you don’t want to hold the currency of the country that is doing this. Then the U.S. starts looking a lot like Illinois does now, not AAA credit and that is when the debt spiral starts. This causes people to lose faith in the currency, and then it’s game over. . . . There are mass layoffs coming one way or another. It’s just a question of who gets laid off.”
re: tax increase will not hurt the market other than maybe short term, as it only is on the super rich
My comment: If Capital Gains taxes are treated as ordinary income and ordinary income rates are raised to 62% max, then that will affect investors and it will have a very negative impact on the markets. The tax increases would most likely occur in 2021Q3 and take affect in 2022. If you have large capital gains, you would have a very large tax bill at a time when the market would be retrenching.
I've already voted and I wrote in my candidate : None of the above. He never wins though. I think we are in trouble whoever gets elected president.
67 Million Ounces: World's Biggest Gold Reserves Discovered Deep In Siberia : https://www.zerohedge.com/markets/67-million-ounces-gold-worlds-biggest-gold-reserves-discovered-deep-siberia
Excerpt:
The world's biggest gold deposits will likely remain untouched for the foreseeable future. According to Bloomberg, Polyus said earlier this year that it would focus on smaller projects and reducing its debt ratio in the coming years before developing the giant field
A Blue wave in the Senate sends the gold price back above $2,000 - DailyFX.com : https://www.kitco.com/news/2020-10-26/A-Blue-wave-in-the-Senate-sends-the-gold-price-back-above-2-000-DailyFX-com.html
Excerpts:
"If Biden wins, but Republicans maintain hold of the Senate, then it will be difficult to pass new stimulus measures," he said. "The Senate composition to me is what matters most the situation for gold because a Biden win, a democratic Senate and a democratic house is the most inflationary outcome you can get. You'll see the strongest fiscal stimulus package, and that's an environment where real yields fall, the dollar goes down, stocks go up and gold goes up."
Vecchio said that he expects when the votes are tallied, Democrats could take control of the Senate with 52 seats, which would be enough to give them a majority.
"I do think we get more stimulus before the end of the year but not before the election," he said.
With the Federal Reserve expecting to keep interest rates at the zero-bound range through 2020 and potentially significant government stimulus flooding the markets next year, Vecchio said that there is potential for inflation to rise 2.5% or even 3%, which would mean significantly lower real interest rates.
"If real yields are depressed and continuing to move lower, then gold continues to gain, especially as deficits expand," he said. "It's also possible that we see concerns about sovereign credit ratings, uh, become to come to light again."
FWIW -
My comment : There are a lot of if's in this article, but who knows, maybe silver could go to $100. I'm not convinced. Capital Gains taxes could upset the best laid plans.
$100 silver price: when and why we will see it – David Morgan : https://www.kitco.com/news/2020-10-26/-100-silver-price-when-and-why-we-will-see-it-David-Morgan.html
Excerpt:
Assuming a $4,000 gold price target in two to three years’ time, which is roughly a 100% increase from current levels, and assuming a normalization of the gold-silver ratio to 40-1, then silver should be trading at $100 by the time gold doubles in value, said David Morgan of TheMorganReport.com.
I see zero chance of a stimulus package before the election. The Reps can't even pass a $500 Billion package. And if there's a Biden win, Reps will want to be seen as the party concerned about the deficits and will be reluctant to pass a large stimulus bill. It will be up to the Dems if they take control the Senate.
The spike in COVID cases is taking its toll on the markets. The economy will slow if there are a lot of shutdowns. You can't print your way out of COVID.
Joe Biden Forgets Trump's Name Again, Claims He Is Running Against "George Bush" : https://www.zerohedge.com/political/joe-biden-forgets-trumps-name-claims-he-running-against-george-bush
My comment : If Biden is elected, I don't think he will serve a full term due to dementia /senility. That would mean we would have Kamala Harris as president. Things would just go from bad to worse. Who knows who would be pulling the strings.
Why Biden's Tax Hikes Matter: US Households Sit On $1 Trillion In Unrealized Capital Gains : https://www.zerohedge.com/markets/why-bidens-tax-hikes-matter-us-households-sit-1-trillion-unrealized-capital-gains
My comment : Surely the Biden administration would realize that a doubling of the capital tax rate would crash the markets and would try to soften the blow either by reducing the max rate or by phasing it in over time. Still, any large increase in capital gains rates would mean a significant market selloff regardless of how much the Fed prints.
Excerpts:
Among the tax proposals, the timing of a potential capital gains tax rate hike has been a key focus of many investors. Long-term capital gains and qualified dividends are currently taxed at a maximum rate of 20%, along with a separate 3.8% tax on investment income. Vice President Biden has proposed taxing these as ordinary income for filers with over $1 million in annual income. This would roughly double the tax rate on capital gains and dividend income from 23.8% to 43.4%.
Considering the continued chronic lack of liquidity of the market, while the selling in absolute terms is manageable, the fact that we may see a selling waterfall ahead of the Biden tax hikes into an extremely illiquid market suggests that there is a major risk for a market crash late in 2021, assuming a Jan 2022 rollout of the capital gains tax increase.
Housing Market Goes Nuts, Everyone Sees It, But It Can't Last : https://www.zerohedge.com/personal-finance/housing-market-goes-nuts-everyone-sees-it-it-cant-last
My comment : The Fed has created a mania in the housing market
Excerpts:
There is a shortage until suddenly there is a glut. This always surprises people.
This is happening in San Francisco — and something similar is happening in Manhattan and some other cities. The City was long described by its “housing shortage” that drove up prices and rents though there has been plenty of housing, but all high-priced, and people couldn’t afford it. And suddenly that “housing shortage” has turned into a glut. The city is flooded with a historic amount of inventory, including a record-breaking number of condos for sale, and there is a large offering of vacant apartments, and rents have plunged, with one-bedroom rents down 19% in five months.
In addition, there is lots of supply waiting in the wings, including: A portion of the homes whose mortgages are in forbearance and delinquent will have to be sold to cure the delinquent mortgage; homes whose owners moved into their recently-bought new home will end up on the market; and homes owned by investors for vacation rentals will end up on the market if vacation rentals continue to be a drag in those cities. This surge in supply can happen suddenly, as it has happened in San Francisco.
This Is How A State Goes Bankrupt, Illinois Edition : https://www.zerohedge.com/markets/how-state-goes-bankrupt-illinois-edition
My comment : The (really, really big) chickens coming home to roost
Excerpt:
The last remaining escape hatch for the worst-run cities and states is a massive (easily multi-trillion dollar) bailout by the only remaining entity with access to that kind of credit, the federal government. After the upcoming election, whichever party ends up in charge will face the specter of bond defaults and mass layoffs in Illinois, California, New York, New Jersey, Connecticut, and Kentucky, among many other places.
The potential -
The link below is a Utube film explaining the potential of Condor's Pucamayo project (Condor has 7-8 other projects with 3 of them being world class potential)
https://stockhouse.com/companies/bullboard?symbol=v.cn&postid=31776753
My comment: The current environment is a perfect storm for a major Gold and Silver Bull Market given both the monetary and fiscal stimulus that has already been injected into the system and the amount yet to come. A Dem sweep could very likely see another $3Trillion stimulus package in January. And all of this could very well lead to a US$ crisis where the reserve currency status is threatened and inflation becomes a significant problem. If that happens, the Fed's hands would be tied wrt additional monetary stimulus. We live in interesting times. It's like accelerating to the edge of the cliff with no brakes.
Condor -
Part of the delay is due to the courts being shut down. Having land access (ie crossing rights over other properties to get to Pucamayo is critical). They need the courts to approve of this and I'm not sure they have reached a final agreement with one of the land owners. CNRIF also says they have another way to access the property. Yes, I think C$0.29 is OK. I added my last 100K shares at US$0.233. I don't intend to add any more.
Thanks for the Jim Rogers interview. Indeed the huge and unsustainable DEBT has been the single guiding principle behind my investing strategy. The real question is how does it all end. I think the CBs will continue to print, but at some point printing causes a negative feed back such as inflation, higher interest rates, weaker currencies (at least against the PMs), etc. So, will there be a debt jubilee or will there be sovereign debt defaults or what ? One thing I plan to do is to transfer my PM holdings into tangible assets once those assets become substantially depressed due to recession. I expect both financial stocks and real estate to get hit hard. Everyone is relying on the Fed to keep asset prices inflated and real estate buyers are in a manic buying mode. That will end once layoffs mount and the economy retrenches. Biden may very well expedite that if the Dems take over the Senate and they raise income tax rates over 60% and treat capital gains as ordinary income.
re: Condor -
Condor reacted yesterday to their AGM meeting which investors apparently liked the presentation at the meeting. Now they need to deliver. COVID is preventing drilling but they plan to drill Huniac Punta in 2021H1 and once Covid restrictions are lifted they will drill Pucamayo. Condor will be getting $4.8 Million for the sale of Soledad in December which will go a long way for drilling multiple properties. They still need to get access rights to Pucamayo which has to go through the courts once Covid allows. So, for now it's just a matter of waiting which I have been doing since 2011. In the meantime I've increased my CNRIF position to 1 Million shares. You can find a lot of info on the CNRIF bullboard at stockhouse.com which is https://stockhouse.com/companies/bullboard?symbol=v.cn
FWIW -
Goldman Expects A Structural Bull Market For Commodities In 2021, Sees Gold Hitting $2300 : https://www.zerohedge.com/markets/goldman-forecasts-structural-bull-market-commodities-2021-sees-gold-hitting-2300
Excerpt:
Focusing on Gold, Currie said that expansionary fiscal and monetary policies in developed market economies continue to drive interest rates lower and create demand for hedging the tail risks of inflation, lifting demand for precious metals. As a result, Goldman forecasts gold prices at an average of $1,836 per ounce in 2020 and $2,300 per ounce in 2021, and expects silver prices to be at around $22 per ounce in 2020 and $30 per ounce next year.
Fears Of Biden Capital Gains Tax Hike Spark Avalanche Of Private Company Sales : https://www.zerohedge.com/markets/prospect-biden-capital-gains-tax-hike-sparks-avalanche-private-company-sales
Excerpt:
At the start of the month, we reported that as part of his proposed tax reform, Joe Biden would increase the maximum tax rate for long-term capital gains by a whopping 66%, from 20% currently (23.8% when accounting for the additional 3.8% ACA tax) to as high as 39.6%, for those making over $1 million or for proceeds of a business sale over $1 million.
Of course, Biden would have to win the presidency and the Democratics would have to gain control of the Senate for his tax proposals to become law.
To be sure, even if Biden wins and implements his tax plan, corporate owners may still have time to cash out. Most of President Donald Trump’s corporate tax cuts, which were enacted into law in 2017, became effective in 2018, a year after he came into office.
I think Biden wins by a substantial margin. Trump is his own worst enemy and he just does not think like an a down to earth person. I don't like either candidate. The markets will be in big trouble of the Dems take control of the Senate because capital gains will probably be taxed as ordinary income and the income tax rates will also be increased substantially. I think a Dems controlled Senate will cause the markets to plunge hard and fast.
Which election outcome is best for the stock market ?
I read an article that posited that the Dems winning the presidency and the Senate was the best outcome because it would mean a lot of spending by the Dems (ie a lot of stimulus). I think it would be better if the Reps held the Senate in order to block capital gains tax increases. Some are suggesting up to 49% capital gains taxes (ordinary income tax rate) which would be a hard hit to the stock market. What do other posters think ?
The Fed can hold off a correction because there is a stimulus package coming from Congress and because a vaccine is imminent. Besides Powell says the Fed never runs out of money. Trouble may come from overseas.
US: International trade deficit widens to $79.3 billion in July : https://www.fxstreet.com/news/us-international-trade-deficit-widens-to-793-billion-in-july-202008281254
My comment : The triple deficits (trade, Fed balance Sheet, sovereign) just keep expanding. Dirksen's quote needs to be revised to Trillion here, Trillion there :
Dirksen is noted as saying, "A billion here, a billion there, pretty soon, you're talking real money."
The Democrats will break the country very quickly. They think nothing of spending $3Trilion to bail state and local governments.
Pelosi On Stimulus Talks: 'We're Not Budging' : https://www.zerohedge.com/markets/pelosi-stimulus-talks-were-not-budging
Watch the debates. This is where Biden could fumble. And all the more reason for Pelosi to think there should be no debates :
My comment : If Biden refused to debate, I think he would be viewed as weak and a coward.
"I Don't Think There Should Be Any Debates" Says Pelosi, Calling Them An "Exercise In Skullduggery" : https://www.zerohedge.com/political/i-dont-think-there-should-be-any-debates-says-pelosi-calling-them-exercise-skulduggery
Excerpt:
Democrats around the country have begun to pressure the Biden campaign to call off all debates with Donald Trump due to the coronavirus pandemic, they say.
In truth, the reason they don’t want Biden to debate Trump is that they don’t think Trump will play by their rules. The president would take over the debate and make it about what he wants, not what Biden wants.
Democrats are also worried about Biden’s mental stamina and his ability to remain engaged for an hour and a half during a debate.
Warren Buffett buys gold : https://www.kitco.com/news/2020-08-14/Warren-Buffett-buys-gold.html
Excerpt:
Long-time precious metal bugaboo, Warren Buffett, loaded up on Barrick Gold (NYSE:GOLD), according to a Berkshire Hathway 13F released today.
Buffett bought just under 21 million shares. Current stake is worth $563 million.
Buffett can move stocks. Barrick traded down 0.59% to $26.99 today. However Barrick shot up after hours when the news broke, and the stock hit $29.
I don't think it matters who get elected, the economy is and will continue to be in deep trouble (the stock market is not the economy) and the national debt will explode higher. There's just too much debt (household, corporate, and public) and printing more money will not correct that problem.
If there is a real debate between Biden and Trump, watch for Biden's senility to show through and cast doubts on his ability to govern. If it doesn't happen in the debates, it will most certainly happen after he is elected. Also, Biden needs to stop swearing, Damn It. He uses the "Damn It" phrase I think to show he means business, but I think it is artificial.
re: Condor -
Yeah, I just want them to start drilling Pucamayo. We should know if Pucamayo has 10M oz soon after the first drill results. Huniac Punta also is expected to have a lot of silver. Condor has 11 projects in Peru and I expect some to be world class. I'm still holding my 900K shares. Hopefully we get drill results soon. Here's more on Condor:
Condor Resources: An easy to Test 10+ Moz Target And More
https://www.thehedgelesshorseman.com/condor-resources/condor-resources-an-easy-to-test-10-moz-target-and-more/
National debt is $26.6Trillion and will exceed $28Trillion this fiscal year. By how much depends on the size of the stimulus package.
I think a Biden win will be very negative for markets especially if Dems take control of Senate. It will be tax and spend (on social programs). Trump would be bad for the country as well. There are no good choices.
Here's something to consider:
From the FT (James Politi): “Mr Biden made the US central bank a key focus on his plan for a ‘major mobilisation of effort and resources’ to help ‘advance racial equity across the American economy’, his campaign said… In particular, it said that Mr Biden would work with Congress to amend the Federal Reserve act to force the central bank to ‘aggressively enhance its surveillance and targeting’ of ‘persistent’ racial inequalities.”
I think if there is no stimulus package, stocks tank fast unless Fed intervenes. If there is a "modest" stimulus package of say $1Trillion, then stocks sink slowly, and if there is a package approaching $3Trillion then gold explodes higher.
Stock Market Crash 2020: Welcome To The End Game : https://www.forbes.com/sites/investor/2020/07/16/stock-market-crash-2020-welcome-to-the-end-game/#a893eff5782d
Excerpt:
The Nasdaq is on its final run and is going vertical, a classic end of bubble move. This is trader heaven and turns into speculator hell for those who think that markets do grow to the skies. It could go up a long way in price but it won’t go for long in time. It could last to Christmas, it could fold tomorrow, but my feeling is that unless this bubble is cut down by the Fed, the final move will be large and quick.
If it does enter the terminal bubble phase and then collapse, it will be the second blow to the U.S. and world economy, which repeats the 1930 narrative of the one-two punch of twin crises. In the Great Depression it was “stock market crash” followed by “banking crisis.” Here it will be “lockdown” followed by “stock market crash.”
It won’t be hard to see it coming because if the Nasdaq goes vertical it will be hard to miss. Therefore, let’s hope the Federal Reserve can keep a lid on it because if they can’t we are in deep trouble.
JPMorgan: "Central Banks Have Created A Collective Hallucination Where Valuations Are Entirely Fabricated": https://www.zerohedge.com/markets/jpmorgan-central-banks-have-created-collective-hallucination-where-valuations-are-entirely
Excerpt: Her advice to those who nonetheless want to put their money into something: "Investors should look to the things that make sense fundamentally before investing." Things such as gold, because once fundamentals prevail the current monetary system will no longer exist
A final comment from Noland -
That sick feeling in my stomach returned this week: this is out of control. COVID is out of control. Market speculation is out of control. And it’s this combination that recalls the unease I was experiencing back in February, as a speculative marketplace was content to completely disregard mounting pandemic risk.
My comment : At some point, economic stimulus will not be enough to override the economic fundamentals due to COVID.