I haven’t seen the official numbers yet, but I’m betting the PDAC saw substantially fewer delegates than in years past – a sure sign that the great unwashed have yet to comprehend that the TSX Venture in general and precious metals stocks in particular are in the early stages of a bull market. The newsletter writer’s hall was half full, the aisles in the investor exchange were un-crowded, and you could fly into Toronto any night of the show and find a downtown hotel room.
Most of the writers I listened to were hesitant to solidly call the onset of a bull phase. With the exception of course of the usual suspects who are always calling for a bull market if they are saying anything at all, the tone from that crowd would best be categorized as ‘cautiously optimistic’.
For me, the market has all the signals going off that it did in January 2009, with the notable exception that ‘tapering’ as it is called in perception management parlance, is actually a driver of precious metals, in direct opposition to what the mainstream financial blah-blah-blahs were trying to sell us.
Precious metals have started to trade in opposition to the Dow and S&P 500, the U.S. Dollar, and bonds. If the tapering is real and not just a head-fake for the sake of a reprieve before the target on Janet Yellen’s back begins to receive arrows pressuring for a resumption or doubling down of QE, then confidence in the U.S. dollar and bonds will continue to erode a la China’s $78 billion cut to purchases, and a bit of a Greek-style rout might just ensue.
That of course would cause interest rates to rise, which would kneecap euphoric dot-com-era-esque equity exuberance, and the illusion that America and the rest of the world are actually in recovery will be harder to maintain. Since the only two tools the kids at the Fed have in their sandbox are Capital Fabrication from Thin Air and Interest Rate Suppression, those would be dusted off an deployed to stem panic in the streets.
While this would also incite an abandonment of the last month’s return of investors to the TSX Venture, albeit temporarily, the net effect on precious metals might just be that really big inflection point that all the gold bugs have been barking about for the last 15 years.
My pet theory – as yet still only relegated to the realm of conspiracy – is this: Through quantitative hocus pocus and the ancillary magic of fractional banking, billions of dollars have been diverted to gold and silver exchange traded funds in settlement of futures and ETF contracts in lieu of gold, and that tapering will actually limit the effectiveness of that nefarious program.
Remember tin April 2013 when Goldman Sachs and the Wall Street Journal (in a case of blatant market manipulation that confirmed the collusion among mainstream media and banks) concocted the hyperbolic ‘Short Gold!’ headline.
Many will dismiss the idea that such a program could be coordinated by the global elite banking cartel, but I have one word for you: LIBOR.
The investigations into LIBOR has predictably victimized a few scapegoats to support the perception management product that it was just a few bad apples running their own self-enrichment scheme unbeknownst to their bosses, and no real culprits will ever be identified.
Now here we have a class action lawsuit against the London Gold Market Fixing Ltd. cartel, which, unsurprisingly, is membershipped by the same nameplate financial institutions who hosted the LIBOR scandal. I guess rate fixers are just more prone to fraud as a result of some sort of coincidentally widespread character flaw.
Or is it that journalists are ordered by editors to stay away from the manipulation story until some hard evidence is produced. Regulators consistently defuse the investigations of inconveniently ambitious and forthright staff members like Bart Chilton and Brooksley Born. The pattern is obvious for anybody with more than a quarterly memory.
Remember how, starting with the take-down of gold in September 2011 by the ETF and futures crowd, that suddenly geo-political tensions were coincident with a rise in the dollar, and gold and silver actually fell? And suddenly, it was ‘the norm’ for USD to rise on such news as Iran threatening the Straight of Hormuz.
Now suddenly the seemingly automated drone of Bloomberg and Wall Street Journal news bombing has suddenly reversed course, and we’re back to rises in precious metals with geopolitical tensions again. As it the flip flop never happened, and indeed, nobody seems to be noticing.
And other factors that are very bullish for precious are starting to manifest.
The United States’ push to freeze $60 billion worth Russian money in Switzerland has put the world on notice not only is Switzerland no longer a reliable haven of secrecy: its an enthusiastic enforcer of The Patriot Act on behalf of the United States. Which has now conveyed the message to the world’s billionaires that if you or your country crosses the U.S.A., then all the American mumbo jumbo around the sanctity of private property and free markets is immediately null and void, and your money is their money. Isn’t that going to catalyze a veritable stampede into gold and silver?
I guess time will tell, but certainly the trading in the last week and month are indicative of an elevated number of strong buyers in the physical market. Under the
