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Silver Investor Community Discussion Forums - SilverSeek.com - SilverSeek.com Articles http://forums.silverseek.com/ Public comments on articles published on SilverSeek.com en Wed, 17 Oct 2018 16:50:25 GMT vBulletin 60 http://forums.silverseek.com/images/misc/rss.png Silver Investor Community Discussion Forums - SilverSeek.com - SilverSeek.com Articles http://forums.silverseek.com/ You Can’t Eat Gold http://forums.silverseek.com/showthread.php?69107-You-Can’t-Eat-Gold&goto=newpost Wed, 17 Oct 2018 16:42:08 GMT *“You can’t eat gold.” The enemies of gold often unleash this little zinger, as if it dismisses the idea of owning gold and indeed the whole gold... “You can’t eat gold.” The enemies of gold often unleash this little zinger, as if it dismisses the idea of owning gold and indeed the whole gold standard. It is a fact, you cannot eat gold. However, it dismisses nothing.

This gives us an idea. Let’s tie three facts together. One, you can’t eat gold. Two, gold is in backwardation in Switzerland. And three, speculation is a bet on the price action.

The fact that gold is inedible is supposed (by the enemies of liberty) to be proof positive that a gold standard wouldn’t work. Of course, there’s always the retort: You can’t eat dollars!

That may be emotionally satisfying, but there is a deeper issuer that the anti-gold crowd is missing. Yes, money makes terrible food but, also, food makes terrible money. A car makes a lousy airplane. And a shoe makes an awful TV. Cow poop is putrid as food for people, but it works well as fertilizer for plants. Each thing fits a particular purpose.

Why does food make terrible money? One reason is that it’s perishable. No one—other than a refrigerated warehouse—can make a bid on food beyond his own short-term needs. Without this robust bid, food has limited marketability. That is, it has a wide spread between its bid and offer prices.

Think of it in human terms, or even personal terms. Suppose you strolling along the sidewalk, and you’re hungry. You see a restaurant sign, “Hamburger + fries + drink $10.” You would pay the offer price. The next restaurant is going out of business, and its sign says, “All inventory must go! 50 hamburgers and 50 pounds of fries for $100!” You would not pay it (unless you were with 49 friends).

Why not? It’s because you can’t possibly carry 49 juicy hamburgers and 49lbs of hot, greasy fries with you as you walk! The bid price is zero or nearly zero. So the bid-ask spread on food is quite wide.

Other than for eating, a hamburger serves no purpose. And you only need to eat a finite amount (unless you are Hafthor Bjornsson). Any burgers beyond that are of no value to you, because they don’t keep very long. You don’t want to stockpile them.

Economists would say that the marginal utility of hamburgers falls rapidly. The first hamburger satiates your hunger. The second fills you up. The third, well, maybe you were really hungry. The fourth doesn’t do anything for you. It’s useless.

Gold is in Backwardation in Switzerland

Now we switch to the second topic. Gold is in backwardation in Switzerland. What does that really mean in human terms? It means you can give up your 100oz gold bar for 3 months, get free use of about CHF 120,000 in the meantime, and in the end get your gold bar back. Plus about CHF 400 in profit.

No one is taking this deal.

Let that sink in. Lots of people have these gold bars. Which they cannot eat, as we have already proven. But they won’t let them go for even three months. The free use of francs and the profit are not attractive. This either means they don’t trust their counterparty to give the gold back, or else that the francs are even more useless than the gold.

Given the high price of the franc—just over $1—we don’t think that the problem is trust of the counterparty. We would say (and have argued these past few weeks) that the problem is that the Swiss National Bank so flooded the market with francs that they’re now useless.

So useless, that people will not decarry gold for a profit. So useless that the bid to borrow them—the bid on the interest rate—is negative.

Speculative Assets Are Useless

Switching topics again, let’s return to something we have often criticized: buying stocks or bitcoin with the hope that the price will rise. Why will it rise? Because the next guy will come along and bid higher. Why will he do that? Because he expects the yet another buyer to bid even more. And so on?

No. There is an end to this cycle. Inevitably, the supply of buyers is depleted. And then what happens is silver in spring of 2011. Or stocks in 2008. Or tulips in 1637.

Why are there no more buyers? To answer, let’s tie all three of these seemingly isolated facts together. People are buying something, not for any use they can make of it, but solely to front-run that next buyer. He also has no use for it, but merely buys to unload to the next buyer in the chain.

They’re all buying something they can’t use, in the hopes of selling it, but no one is asking if anyone has any use for it!

This is why mainstream investors do not buy gold.


http://news.goldseek.com/GoldSeek/1539622800.php
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Don’t Follow Fake News Or Fake Analysts In Metals http://forums.silverseek.com/showthread.php?69106-Don’t-Follow-Fake-News-Or-Fake-Analysts-In-Metals&goto=newpost Wed, 17 Oct 2018 16:29:31 GMT *I think we have all seen many episodes of fake news in the media when it comes to politics. However, what is even more pervasive is fake news in... I think we have all seen many episodes of fake news in the media when it comes to politics. However, what is even more pervasive is fake news in financial analysis. And, I was urged to write this quick public note to set the record straight.

I have railed for years against those analysts who have pointed to news events to explain what has happened in the market, especially as an excuse for something that happened which they did not foresee. I view such “analysis” as only being used as a scapegoat for the reason they did not foresee a market move.

The most glaring example is when the market dropped from 2011 to 2015 when most did not see it coming, and analysts claimed that the market was manipulated to drop during that entire time rather than recognize it was a standard correction they did not foresee coming.

But, what is worse is to use news events in a dishonest manner to try to explain why a particular bullishly inclined analyst did not see a correction coming.

A member of my trading room sent me a video which just was made by a “cycles” analyst. Within this video, the “analyst” claims that the reason gold dropped from the highs made earlier this year was because of the liquidation of the Vanguard Precious Metals and Mining Fund.

But, as I alluded to earlier, this is simply fake news and is conveniently and dishonestly used as an excuse by this analyst. The fact is that Vanguard made its announcement on July 27th 2018.

http://forums.silverseek.com/newthre...newthread&f=16
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SilverSeek.com Articles valerb http://forums.silverseek.com/showthread.php?69106-Don’t-Follow-Fake-News-Or-Fake-Analysts-In-Metals
Consider This Your Final Warning About Gold, For Bulls And Bears Alike http://forums.silverseek.com/showthread.php?69105-Consider-This-Your-Final-Warning-About-Gold-For-Bulls-And-Bears-Alike&goto=newpost Tue, 16 Oct 2018 04:46:29 GMT *Sentiment is a funny bedfellow. When the metals market was at the lows back in August, everyone and their mother were again certain that we were... Sentiment is a funny bedfellow. When the metals market was at the lows back in August, everyone and their mother were again certain that we were going to break below $1,000 in gold. Yet, that exact sentiment is what kept us from doing so, no different than what we saw at the end of 2015.

Currently, the sentiment has been turning bullish again, with many thinking the current rally is the break out everyone has been awaiting. As for me, I am not quite so certain.

I often use the GDX - the miners index- to track overall sentiment in the metals complex. When the GDX was back down in the 17-18 region, I was looking for an initial bottom. However, I only expected that bottom to generate a corrective rally back up towards the 20-21 region before the final lows would be struck. While I can always be wrong, allow me to present to you my goalposts and we can all determine how the market will be progressing in the coming weeks.

As I noted in my last update:

Ideal support now resides between 17.70 and 18.25 in the GDX, with resistance at 20-20.90. My primary expectation is that we will test resistance before we break support. Moreover, should resistance hold, it will point us down to 15.25-16.40 region as a potential long-term bottom in the GDX for this two-year long second wave retrace off the 2016 high.

Alternatively, should we see the GDX break out through the 20.90 level, with strong follow-through over 21.20, that will open the door for the GDX to follow those miners which have likely bottomed, and would signal that the bottom has been struck, and a rally towards the 26-29 region is in progress. It would also mean that we will only see a corrective retrace in the GDX while those miners that have not likely bottomed complete their downside structures to lower lows.

For now, I have no clear indications that the GDX has bottomed, so my primary perspective is looking for a lower low in the GDX. But, as I have discussed many times in the past, the GDX has been torn between its stronger components and its weaker ones. The question is which will rule the day for the GDX in the coming months, and, for now, I think the weaker ones will keep the GDX below resistance and point us to a lower low in the coming months. But, I would be pleased to be proven wrong on this one, and you know which levels to watch to know how this one will turn out.

This past week gave us the rally to the minimum target of 20 I was expecting in the GDX. But, the market may not yet be done.

http://news.goldseek.com/GoldSeek/1539604920.php
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Has “It” Finally Arrived? http://forums.silverseek.com/showthread.php?69104-Has-“It”-Finally-Arrived&goto=newpost Tue, 16 Oct 2018 04:36:38 GMT Is this week's 6% market drop the start of the Big One?

By Chris Martenson

With the recent plunge in the S&P 500 of over 5%, has the long-anticipated (and long-overdue) market correction finally begun?

It’s hard to say for certain. But the systemic cracks we've been closely monitoring definitely got an awful lot wider this week.

After nearly a decade of endless market boosting, manipulation and regulatory neglect, all of the trading professionals I personally know are watching with held breath at this stage. The central banks have distorted the processes of price discovery and market structure for so many years now, that it’s difficult to know yet whether their grip on the markets has indeed failed.

But what we know for certain is that bubbles always burst. Inevitably. Each is built upon a fallacy; and when that finally becomes apparent to enough people, the mania ends.

And today, there are currently massive bubbles in stocks, bonds and real estate. Every one courtesy of the central banks (as we have written about in great detail here at PeakProsperity.com over the years).

And with no Plan B in place to gracefully exit the corner they have painted themselves -- and thereby the global economy -- into, the only option available to them is to double-down on the pretense that we'd all be screwed without their stewardship. They have to do this I suppose. To admit the truth would throw the world into panic and themselves out of a job.


Who knows what they think privately? But in public, they give us real gems like these:

Williams Says Fed Rate Hikes Helping Curb Financial Risk-Taking

U.S. interest-rate increases will help reduce risk-taking in financial markets, Federal Reserve Bank of New York President John Williams said.

"The primary driver of us raising interest rates is just the fact that the U.S. economy is doing so well in terms of our goals,” Williams said Wednesday in a reply to questions after a speech in Bali, where the annual meetings of the International Monetary Fund and World Bank are taking place. “But I would also add that the normalization of monetary policy in terms of interest rates does have an added benefit in terms of financial risks.”

"A very-low interest-rate environment for a long time does, at least in some dimension, probably add to financial risks, or risk-taking, reach for yield, things like that," he said.

"Normalization of the monetary policy, I think, has the added benefit of reducing somewhat, on the margin, some of the risk of imbalances in financial markets."

http://news.goldseek.com/GoldSeek/1539518880.php
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The Morgan report: Markets Are Changing and Bitcoin is Lagging? http://forums.silverseek.com/showthread.php?69103-The-Morgan-report-Markets-Are-Changing-and-Bitcoin-is-Lagging&goto=newpost Tue, 16 Oct 2018 04:32:30 GMT *By David Morgan* * https://youtu.be/oZkTcZXrwsA* By David Morgan

https://youtu.be/oZkTcZXrwsA
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As The Markets Sell-off The Precious Metals Rebound http://forums.silverseek.com/showthread.php?69102-As-The-Markets-Sell-off-The-Precious-Metals-Rebound&goto=newpost Tue, 16 Oct 2018 04:28:05 GMT *To the surprise of many investors, the precious metals have rallied while the broader markets continue to sell-off. Currently, both gold and silver... To the surprise of many investors, the precious metals have rallied while the broader markets continue to sell-off. Currently, both gold and silver are solidly in the green while the major indexes were all the red following a huge sell-off yesterday. The Dow Jones Index has lost nearly 1,000 points in the past two days while the gold price is up nearly $25.

However, even though we could see a late-day rally in the markets, and even higher stock indexes over the next few months, the bear market for stocks is still coming. The Dow Jones Index has now suffered two large sell-offs in the past ten months:



In January, the Dow Jones Index fell by more 3,000 points, and the current correction is only one-half of that amount. So, I expect to see a continued correction over the next month. Because October is the worst month for market Crashes, this could be one hell of a blow for not only the economy but also, for investor confidence.

http://news.goldseek.com/GoldSeek/1539351694.php
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Has The Bear Market Begun? http://forums.silverseek.com/showthread.php?69101-Has-The-Bear-Market-Begun&goto=newpost Sat, 13 Oct 2018 03:17:36 GMT *It seems the pundits have lost their way. The reasons for the market moves have now confounded most market participants and pundits to such an... It seems the pundits have lost their way. The reasons for the market moves have now confounded most market participants and pundits to such an extent, and they are stretching so far to provide a reason for a market move, that we have moved from the ridiculous to the sublime.

In the last several years I have outlined how the market has completely ignored the dozens of negative geopolitical events that were supposed to have adversely affected our market as it has continued to rally towards our long-term targets.
So, do any of you ever realize how ridiculous many of these news reports sound when they try to link the market action to the news? As I have said, there is almost always some positive news of the day to which the media can relate positive market action, and vice versa. But when there is no news to which they can easily relate the market action, it highlights how silly it really is to relate the news to the market action.

In fact, the market action we have seen at times almost mocks those who believe that negative events will cause negative reactions in the stock market. The other week, we saw announcements regarding another $200 billion in trade tariffs. And what did the market do? Yup, it immediately rallied over 50 points. Please take a look at my attached chart, which highlights how we rallied 9% since the start of the trade wars:




And, after the 50-point rally that kicked off after the latest $200 billion trade-war announcement, the market dropped 40 points and we saw reports like this on news forums:

http://news.goldseek.com/GoldSeek/1539351622.php ]]>
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The Credit Cycle Is On The Turn http://forums.silverseek.com/showthread.php?69100-The-Credit-Cycle-Is-On-The-Turn&goto=newpost Sat, 13 Oct 2018 03:14:04 GMT *We are on the verge of moving into an era of high interest rates, so markets will behave differently from any time since the early-1980s. There are... We are on the verge of moving into an era of high interest rates, so markets will behave differently from any time since the early-1980s. There are enough similarities with the post-Bretton Woods era of the 1970s to give us some guidance as to how markets are likely to evolve in the foreseeable future.



The chart above says much. Last week, the yield on the 10-year US Treasury bond broke new high ground for this credit cycle. The evolution of key moving averages in bullish sequence (for higher yields, but sharply lower bond prices) is a model example out of the chartist’s textbook. The underlying momentum looks so powerful that a quick rise to 3.5% and beyond appears to be a racing certainty. The credit cycle, transiting from a period of cheap finance into higher borrowing costs is clearly on the turn.

In the fiat-money world, everything takes its valuation cue from US Treasury bonds. For equities it is theoretically the long bond, which is also racing towards higher yields. Having ignored rising yields for the long bond so far, the S&P500 only recently hit new highs. It has been a fantasy-land for equities from which a rude awakening appears increasingly certain. It is likely that the current downturn in equity prices is the start of a new downtrend in all financial assets that have been badly caught on the hop by the ending of cheap credit.

http://news.goldseek.com/GoldSeek/1539287773.php
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Gold Action Does Not Make Sense http://forums.silverseek.com/showthread.php?69099-Gold-Action-Does-Not-Make-Sense&goto=newpost Sat, 13 Oct 2018 03:10:57 GMT *I have been hearing for years how gold is manipulated to go down, and is expected to rise when allowed to trade freely. So, according to these... I have been hearing for years how gold is manipulated to go down, and is expected to rise when allowed to trade freely. So, according to these manipulation theorists, gold is really only supposed to move in one direction and would never see any corrections.

Yes, I know that sounds ridiculous, but this is a perspective in the market. And this is why so many were not able to foresee the correction which began in 2011.

And, who do these folks believe is manipulating the market? Well, it’s the commercial traders of course. And, when gold took a $20+ drop pre-market on Monday, again, we heard about how the commercial traders successfully raided the gold market.

But, wait a second. Something does not make sense. According to the Commitment of Traders reports, these commercials are more net long than they have ever been. So, are the manipulators now being manipulated? If so, by whom? Or, have we just seen evidence that suggests that the manipulation theorists have it all wrong?

I am sorry to ask questions that make you think about truths and realities in the market. I take it as my personal responsibility to make you question everything you read or hear, because most of what you read or hear is pure fallacy that has been propagated by analysts and market participants alike.

As far as the SPDR Gold Trust (NYSEARCA:GLD) is concerned, as long as we hold over the 111 level, I am looking for a rally back to the 116.25 region. But, as long as the 116.25-118.25 region holds as resistance, I am viewing this as a corrective rally, which will point us back down as deep as the 105 region, with a minimum target at 109.

http://news.goldseek.com/GoldSeek/1539266012.php
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COT Silver Report - October 12, 2018 http://forums.silverseek.com/showthread.php?69098-COT-Silver-Report-October-12-2018&goto=newpost Sat, 13 Oct 2018 03:08:35 GMT *http://silverseek.com/commentary/cot-silver-report-october-12-2018-17444 For anyone not able to see the complete COT report or would prefer to... http://silverseek.com/commentary/cot...-12-2018-17444

For anyone not able to see the complete COT report or would prefer to see the combined Gold and Silver COT reports

http://news.goldseek.com/COT/1539372338.php
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<![CDATA[If This Doesn't Scare You, Nothing Will]]> http://forums.silverseek.com/showthread.php?69097-If-This-Doesn-t-Scare-You-Nothing-Will&goto=newpost Fri, 12 Oct 2018 03:19:00 GMT *Technical analyst Clive Maund charts the markets and explains why he finds that the U.S. stock market is at an unprecedented overbought extreme. * ... Technical analyst Clive Maund charts the markets and explains why he finds that the U.S. stock market is at an unprecedented overbought extreme.





-->There are times in life when being alarmed is actually a healthy defense mechanism that gives you an advantage over the many for whom "ignorance is bliss." This is one of those times.

The U.S. stock market is now at a dangerous unprecedented overbought extreme, as the charts that we will look at in this update make abundantly clear, after years of being wafted higher by a combination of QE, ZIRP and stock buybacks, and latterly Trump's tax bonanza, which has kept the party going by making windfall cash available for still more buybacks. However, with QE having already reversed into QT (Quantitative Tightening) and rates rising, the tide has already turned, and the vice is closing inexorably on the market, which will soon buckle and collapse back into an overdue and very necessary bear market that will serve to at least partially flush out the monstrous excesses of the past decade, before they come riding to the rescue with QE4. The magnitude of these excesses means that the bear market is likely to be anything but orderly, and it should be characterized by at least one big crash phase.

With respect to the timing of the onset of this bear market, which will likely start with a crash phase, because of the continually increasing pressure being exerted by QT and rising rates, we can expect the Republican party to pull out all the stops to prevent it caving in before the mid-term elections in just under a month, since a strong economy is one of the central planks of their campaign. What may happen is that we see wild volatility around the time of the election and then, regardless of the outcome, the market goes down soon after. However, we should keep in mind that October has long been notorious as the month when stock market crashes are most likely to occur, and the Deep State, which controls the Democratic Party, would love nothing better than to bring the market crashing down ahead of the mid-terms in an effort to discredit Trump and the Republicans and reduce their share of the vote.

The chief purpose of this article is to make it crystal clear to you, via the following charts, that the market is at a wild extreme and will soon tip into a savage bear market that will wipe out a lot of leveraged traders, so that you will not only be ready to take steps to protect yourselves, but for good measure position yourselves to turn this situation to your advantage.

http://news.goldseek.com/CliveMaund/1539196302.php
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Rising Interest Rates Start Popping Bubbles — The End Of This Expansion Is Now In Sig http://forums.silverseek.com/showthread.php?69096-Rising-Interest-Rates-Start-Popping-Bubbles-—-The-End-Of-This-Expansion-Is-Now-In-Sig&goto=newpost Fri, 12 Oct 2018 03:11:18 GMT *Rising Interest Rates Start Popping Bubbles — The End Of This Expansion Is Now In Sight Towards the end of economic expansions, interest rates... Rising Interest Rates Start Popping Bubbles — The End Of This Expansion Is Now In Sight

Towards the end of economic expansions, interest rates usually start to rise as strong loan demand bumps up against central bank tightening.

At first the effect on the broader economy is minimal, so consumers, companies and governments don’t let a slight uptick in financing costs interfere with their borrowing and spending. But eventually rising rates begin to bite and borrowers get skittish, throwing the leverage machine into reverse and producing an equities bear market and Main Street recession.

We are there. After a year of gradual increases, interest rates are finally high enough to start popping bubbles. Consider housing and autos:

Mortgage Rates Up, Affordability Down, Housing Party Over

The past few years’ housing boom has been relatively quiet, but a boom nonetheless. Mortgage rates in the 3% – 4% range made houses widely affordable, so demand exceeded supply and prices rose, eventually surpassing 2006 bubble levels in hot markets like Denver and Seattle.

But this week mortgages hit 5% and people have begun to notice. Here’s an example of the resulting media coverage:

Mortgage rates top 5 percent, signaling more home price cuts

Some of us out there still remember when the average rate on the 30-year fixed mortgage hit 9 percent, but we are not the bulk of today’s buyers. Millennials, now in their prime homebuying years, may be in for the rude awakening that credit isn’t always cheap.

The average rate on the 30-year fixed loan sat just below 4 percent a year ago, after dropping below 3.5 percent in 2016. It just crossed the 5 percent mark, according to Mortgage News Daily. That is the first time in 8 years, and it is poised to move higher. Five percent may still be historically cheap, but higher rates, combined with other challenges facing today’s housing market could cause potential buyers to pull back.

“Five percent is definitely an emotional level inasmuch as it scares prospective buyers about how high rates may continue to go,” said Matthew Graham, chief operating officer of MND.

Home sales have been sliding for much of this year, and total annual sales are expected to come in lower than last year. Affordability is the clear culprit. With rates now more than a full percentage point higher than a year ago, that adds at least $200 more to a monthly mortgage payment for a $300,000 loan. It also knocks some borrowers out of qualification because lenders are strict on how much debt a borrower can carry in relation to his or her income.


http://news.goldseek.com/DollarCollapse/1539176400.php
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SilverSeek.com Articles valerb http://forums.silverseek.com/showthread.php?69096-Rising-Interest-Rates-Start-Popping-Bubbles-—-The-End-Of-This-Expansion-Is-Now-In-Sig
The Banks Are NOT On Your Side http://forums.silverseek.com/showthread.php?69095-The-Banks-Are-NOT-On-Your-Side&goto=newpost Fri, 12 Oct 2018 03:06:07 GMT Certain precious metals analysts are once again claiming that, soon, the Banks will be "on your side". This isn't true, it hasn't been true and it won't ever be true so long as the fractional reserve and digital derivative pricing scheme continues.
Since much of the current optimism is based upon analysis of the CFTC-generated Commitment of Traders report, let's simply take these reports at face value. We can assess whether anything has recently changed in regards to COMEX silver and determine whether or not the Banks are now "on your side".

Earlier this year, the CoT categories of "Large Speculator" and "Commercial" made stunning reversals, and for the first time in the 32-year history of the reports, the Large Speculator category (hedge funds, money managers, trading funds) was revealed to be NET short, while the Commercial category moved NET long.

At the peak of this positioning, the CoT survey of Tuesday, September 4 showed the Large Specs to be NET short 28,974 contracts, while the Commercials were NET long 14,613. These were all-time highs for the respective categories.






Four weeks later, the price of COMEX silver had rallied a whopping 50¢, and another CoT survey was taken last Tuesday, October 2. And what did it show? The Large Specs had reduced their NET short position by 11,500 contracts and covered nearly 19,000 of their GROSS shorts. At the same time, the Commercials had themselves moved back to 1,012 contracts NET short, largely by adding nearly 11,000 contracts to their GROSS short total. See below

http://news.goldseek.com/GoldSeek/1539173220.php

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“Gold Is On The Cusp” Of An “Explosion Higher” As Stock and Tech “Crash Is Coming” http://forums.silverseek.com/showthread.php?69094-“Gold-Is-On-The-Cusp”-Of-An-“Explosion-Higher”-As-Stock-and-Tech-“Crash-Is-Coming”&goto=newpost Fri, 12 Oct 2018 02:59:27 GMT *Few investors have a deeper understanding of the tech sector than Fred Hickey.* *The renowned editor of the popular investment newsletter «The... Few investors have a deeper understanding of the tech sector than Fred Hickey.

The renowned editor of the popular investment newsletter «The High-Tech Strategist» draws alarming parallels to the bursting of the dotcom bubble in the year 2000 and spots high risks in stock market darlings like Amazon and Apple.





For the industry veteran, one important reason to be concerned are rich valuations. He also sees troubles ahead with respect to the rise in interest rates and the growing mountain of debt around the world.

Against this background, the outspoken contrarian sees bright opportunities in gold and in attractively priced mining stocks.

About Fred Hickey

For many investors around the world, Fred Hickey’s monthly newsletter is a must read. It’s a unique treasure of deep knowledge that goes way beyond the tech sector. Having grown up in Lowell, Massachusetts, in the heartland of the computing cluster around Route 128, Mr. Hickey has been fascinated by technology since his youth. After graduating from the University of Notre Dame, he started working for the former telecom giant General Telephone & Electronics. In 1987, he began writing his newsletter for his friends and family. After just five years it went so well that he could make a living out of his investing tips. Today, Mr. Hickey who likes to take long walks in his rare spare time, lives far away from Wall Street in Nashua, New Hampshire, and in sunny Costa Rica.




Mr. Hickey, despite raising interest rates, global trade tensions and turmoil in the emerging markets the stock market in the United States is chasing one record after record. How long will this go well?

Today’s situation reminds me of the fall 2000 which was a very difficult time for me as a contrarian investor. The internet bubble had broken in March when the Nasdaq peaked at 5132 and all those crazy valued dotcom stocks had crashed. In the three weeks after the Nasdaq had peaked it looked like the whole stock market had broken. But it hadn’t because investors rotated into what they perceived to be safer big cap tech names. So, they piled into stocks like Intel, Cisco, Microsoft, Nortel, EMC and Sun Microsystems. And that’s what we’re seeing today in a similar way with stocks like Amazon, Apple and, again, Microsoft.
What happened next?
Once we got into September and October, the market started to roll over. Back then, I was short via puts a number of tech stocks. My biggest short position was Intel and the stock first went higher and higher. In August 2000, Intel rose 20% in just one month and pushed into a new high of almost 76 $ a share. For me, these were some of my toughest days trying to fight the mania. The maniacs were piling into the stock and had no clue. They were only chasing momentum – just as they’re doing it today.

But as soon as Labor Day rolled around, Intel’s shares started to fall because fundamentally the business was deteriorating. Intel had to lower its outlook and the stock crashed 45% in one month. Think about it: At that time, Intel was the second largest company in the world. It’s the equivalent of Amazon today which means that Amazon’s market cap would go from around $1 trillion to $550 billion in just one month. That’s a shocking thing. But the difference is that Intel’s P/E ratio was 55 back then. Amazon’s is 155 today.

http://news.goldseek.com/GoldSeek/1539169200.php


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The Branded Economy http://forums.silverseek.com/showthread.php?69093-The-Branded-Economy&goto=newpost Fri, 12 Oct 2018 02:47:33 GMT Last week Donald Trump, in his own estimation, succeeded in replacing what he claimed to be the "worst trade deal in history" with what he claims was "the best trade deal in history." If true, this would not only make good on one of his central campaign promises, but it would be a genuinely significant development. In reality, the unveiling of the United States-Mexico-Canada (USMCA) trade deal is just the latest iteration of the President's talent for branding. As is the case in other aspects of the president's view of economic matters, the difference between then and now is almost purely semantic.

As originally written in 1994, the North American Free Trade agreement (NAFTA) comprised hundreds of pages organized into 22 chapters. As Canada and Mexico are the United States' largest trading partners, the agreement covered countless industrial, agricultural, and service sectors. Since then it has gone through many updates and expansions, adding to its complexity and reach. But during his campaign, Trump continuously faulted NAFTA, which was drafted during the Bill Clinton Administration, as a primary source of America's economic woes. He promised to scrap it and replace it with something better. In a Rose Garden ceremony he was careful to point out that the new deal was not "NAFTA 2.0" but an entirely new animal. But that is just not the case.

As far as anyone can tell there are only a few differences between the two agreements, focusing on autos, dairy, and intellectual property rights. And even those changes are not particularly significant.

For instance, automakers can qualify for zero tariffs if 75% of their vehicles' components are manufactured in the U.S., Canada or Mexico, up from 62.5% under NAFTA. These changes amount to rounding errors in areas that are notoriously opaque to begin with.

USMCA's provisions on wages for auto-workers are potentially a bigger deal. Starting in 2020, 30 percent of vehicle production must be done by workers earning at least $16 per hour. That's about three times the wage of the average Mexican autoworker. The percentage rises to 40 percent in 2023. This may lead some to believe that big changes are afoot. But given the current rise in automation this may not make that big an impact. It also may mean that more cars made in Mexico will simply be shipped to other markets, thereby depriving U.S. consumers of inexpensive cars.

Canada also agreed to loosen its restrictions on dairy imports from the U.S., allowing American farmers to expand exports for about $560 million worth of dairy products. That's about 3.5% of Canada's dairy industry, and less than 1% of ours. While this may be a small hit to Canadian farmers, it will actually benefit Canadian consumers, and will be a rounding error for U.S. farmers.

USMCA's tougher intellectual property rules may make the biggest impact. The pact includes new rules that will make it harder for Canadians to buy patented drugs at prices below rates that are available to Americans. While this will certainly raise drug prices for Canadians, it is far from certain, as negotiators suggest, that it will lead to lower prices in the U.S. In fact, prices will rise for U.S. patients who have been able to buy cheaper drugs in Canada.

http://news.goldseek.com/EuroCapital/1539094931.php
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