I’m no statistician – and god knows, in rigged markets like Precious
Metals, such “analysis” must be taken with a grain of salt. That said,
the Cartel’s unrelenting attempts at “technical analysis busting” are
decidedly less successful during bull market phases – as we are in
NOW; then in bear market phases, like mid-2011 to late 2015. And
nowhere more so than early 2011, when the “COTs” were blown out of the water
despite a massive paper short position, which forced them to cover all the
way up to $50/oz silver. In fact, were it not for the biggest
manipulation operation in history – the May 1st, 2011 “Sunday
Night Paper Silver Massacre” – the world may as we know it may be decidedly
different today. And heck, it took another two years of “named
storm” attacks – like September 5th, 2011;s “Operation PM
Annihilation I”; December 7th, 2011’s “Operation PM Annihilation
II”; February 29th, 2012’s “Leap Day Violation”; and April 12-15th,
2013’s “Alternative Currencies Destruction”; to finally slow down the PM
bull. Only to watch prices bottom in late 2014 in the majority of
currencies, and in late 2015 in U.S. dollars.
During these four short years of misery – although they seemed endless for
Precious Metal bulls, particularly those holding “paper PM proxies” – all the
Cartel inadvertently “accomplished” was a worldwide run on above-ground
inventories; annihilation of the (long-term) mining production outlook; and
an explosion of physical demand, to all-time highs. This, as the global
economy plunged to its lowest level since the Great Depression; whilst debt
exploded, and money printing went parabolic.
As for said “technicals,” it doesn’t take rocket science to see that
silver – trading at $16.15/oz as I write Tuesday morning – is on the verge of
breaking out of a massive “head and shoulders bottom,” going all the way back
to last summer, after having completed its “golden cross” (50 DMA rising
above the 200 DMA) two weeks ago. Will it do what historically, prices
have done in perhaps 90% of such situations? We’ll see, but if fundamentals
have anything to do with it, I’d upgrade such “odds” well above 90%.
To that end, on a morning where headlines such as “average German bond
yields below zero”; “Brazilian Presidential impeachment process commences”;
“IMF supports Central banks’ move to negative interest rates”; “small
business index unexpectedly plunges”; “Bernanke says helicopter money may be
the best available alternative”; “IMF again cuts global forecast, as it warns
of secular stagnation”; and countless other “wildly PM-bullish,
everything-else-bearish” headlines, the prospect for Precious Metals prices
have never been rosier. Nor, for that matter, have their valuations ever
been so far below “fair value.” Which is probably a major
reason why the Fed and President held “emergency meetings”
yesterday.
Realizing, of course, that the Cartel’s sole goal is to make such
forecasts “look bad” – in its unrelenting attempt to influence popular
opinion via (increasingly futile) manipulation – I think it’s fair to “toot
my horn.” Not that I’m the only person to say such things; but
the fact remains that the “PM community” has been its own worst enemy for as
long as I’ve observed it – from those that simply don’t get it; to those
“churning” clients; to the biggest sin of all – not understanding, and
communicating, the fact that the primary reason to own physical Precious
Metals is to PROTECT and INSURE oneself from monetary disasters that
mathematically must occur. As opposed to “paper PM proxies” –
let alone, when traded, as opposed to invested in. Which,
like the rest of the massively manipulated paper markets, are rank speculations.
Which, I might add, can be extremely profitable if done successfully; and
devastatingly unsuccessful if not.
Again, my “analysis” is geared solely toward helping people to understand
such manipulations, so they don’t lose sight of the physical forest through
the paper trees -NOT to help them “trade” metals, paper proxies, or any other
markets. And in that respect, I believe I have been highly successful –
such as, against an avalanche of “popular opinion” in the PM community,
demonstrating that the vaunted “COTs” are far more of a fear-mongering “paper
tiger” than an actual deadly threat – particularly in bull market phases like
today; and double particularly when one’s goal is to buy-and-hold
actual physical metals; as opposed to trading paper proxies.
To that end, I explicitly detailed such views in “the
COTs no longer matter, part II” on March 16th, and “about those COTs”
on March 28th. Moreover, I don’t think anyone else
has written of the importance of the pending secondary offering of the Sprott
PSLV closed-end bullion fund – as predicted in March 7th’s “Admiral
Sprott rides again!” And lo and behold, since the pricing of said
offering Thursday night – in a decidedly powerful statement of surging institutional
demand (which I first discussed in February 22nd’s “institutional
gold and silver demand, the final piece of the puzzle”) – the price of
silver has surged from $15.05/oz to $16.15/oz, or 7%. Which is why, the
second the deal was announced Thursday afternoon, from my hotel room
in Cancun, I penned “PSLV
secondary offering – a major blow to the Cartel.” And putting the
“exclamation point” on the Cartel’s current state of CHAOS, one of Zero
Hedge’s top stories this morning is “silver surges to eight month highs, as
hedgers unwind.” Yes, “hedgers” – as in the COTs that started massively
covering their COMEX silver shorts two weeks ago; and currently, are in major
scrambling mode, as they attempt to draw a “line in the sand” at the top of
the “right shoulder” of said “head and shoulders bottom.” Which, as
noted above, is going to be MUCH more difficult to do now that we are in a
bona fide bull market phase, with the forces of monetary doom
encircling them like rabid vultures.
And it’s not just me that’s given physical Precious Metals
investors the right advice, but Miles Franklin as a whole. And no more
so in our recommendation, for as long (27 years) as we’ve been in business,
to avoid “numismatics” unless you truly understand them, and are willing to speculate
on their objective “non-melt” value. Let alone, the wide spreads,
weak liquidity, and countless other factors that “load the deck” against
nearly all numismatic investors; typically, in favor of bullion dealers that
generate large sales commissions – despite, in nearly all cases, hurting
their clients.
That said, Miles Franklin has been emphatically bullish about numismatic
products, or “numismatics” like modern day limited edition series’, if they
are purchased at little – or in some cases, zero – incremental premium over
generic coins. And nowhere more so than the Royal Canadian Mints’
silver Wildlife and Birds of Prey series, and gold Call of the Wild
series. In each case, we have aggressively marketed them as soon as
they were issued, when trading at barely any premium over generic gold and
silver Maples. Most recently, in February 22nd’s “gold
roaring grizzly and silver cougar predator, the cheapest numismatics around”
– at which point, this is what the premiums looked like for the Wildlife,
Birds of Prey, Call of the Wild, and brand new Predator series’ looked like.
That was seven weeks ago, before the Precious Metals bull phase had
yet been confirmed. And during those seven weeks, as the gold bull
market led, the gold Call of the Wild coins had a significant premium surge –
of five percentage points for the Howling Wolf, which was discontinued a year
ago, and two percentage points for the Growling Cougar, which was
discontinued, well, seven weeks ago. The Roaring Grizzly still trades
at just a 1%-2% premium to generic gold Maples, but will only be sold until
next February. And like the Howling Wolf and Growling Cougar, they are
the only .99999 fine gold coins available that we are aware of.
As for silver, the new Cougar Predator, of which just one million ounces
will be sold, still trades at just a 3%-4% premium to generic silver
Maples. However, as you can see by the performance of the prior ten
such series’ – over a five year period – the likelihood that this premium
will rise in time is quite high. Not to mention, in buying it today,
the most important part of the “trade” – silver itself – is near its lowest
levels in six years, with its best fundamentals in generations.
In other words, we at Miles Franklin continue to believe the gold Roaring
Grizzly and Silver Cougar Predator are the “cheapest numismatics
around.” To that end, if you have any questions about them, please call
us at 800-822-8080, or email me personally at ahoffman@milesfranklin.com.