Monday, February 29, 2016

Legend Warns Of Coming Anarchy, Hyperinflation And A Frightening Endgame

"On the heels of eight weeks of chaotic trading in markets, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, just warned the world is headed toward anarchy, hyperinflation and a frightening endgame.
Egon von Greyerz:  We are now seeing the perfect bull trap in stock markets Eric.  After a fall this year in the Dow of 2,450 points, we have now seen a rally of 1,250 points, which is roughly a 50% retracement…"

Now We Can Finally Start Buying The Gold Miners

"...But the bottom, says Rule, has finally arrived. In a long interview just released by Kitco, he sounds unreservedly bullish. Some excerpts:
Given the enormous size of the US treasury market and the small size of the gold market, a small transfer of funds from Treasuries to gold — which we are seeing in the last three months — has an outsized impact on the gold market. Gold and gold equities currently occupy between 1/4 and 1/3 of 1% of the savings and investment matrix in the US, while the comparable number in 1980 was 8.
What I am arguing for is a total or partial reversion to the mean which if it occurred would take gold as a part of the savings and investment matrix from 1/4 or 1/3 of 1% up to as high as 1.5%. That relatively small gain in market share would have an absolutely dramatic impact on gold and gold stocks. Will it occur immediately? No. Might gold retest support before it continues? Yes. But I believe that we are beginning to witness a little tiny bit of disintermediation out of Treasuries in favor of gold, and I think that is extremely bullish.
Another thing to remember is that the certificated gold products, the ETFs, GLD in particular, have witnessed dishoarding. That is they have witnessed really substantial selling for 18 months. But lately there has been an absolutely incredible influx of cash into GLD. The consequence of that is that GLD has to take on gold or has to take on gold depository receipts.
Remember that for the last six or seven years the paper market has driven the physicals market and the paper market itself has been driven by the ETFs. ETF demand is positive now rather than negative, so the ETFs are stocking rather than destocking gold. I am inclined to believe that the paper markets will now take gold up the same way the paper markets took gold up in 2009 and 2010 rather than taking gold markets down.
The gold mining industry had a very close brush with capital inadequacy and the increase in demand for gold equities is going to be met by an absolute rush of bought deals among the seniors and intermediates. I think the offer that you saw the other day of Franco Nevada is indicative of what you are going to see. [So] no hurry on the big and intermediate miners. Longer term (a year or year and a half), gold miners at all levels I think will be relatively attractive.
I expect the mining industry to avoid making disastrous mistakes for at least two or three years. The consequence of an increasing gold price and increasing free cash flow per share that is not wasted for two or three years should be an increased cash flow on a per share basis. I suspect that an increasing gold price and increasing corporate performance will have a very good impact on gold equities.
Remember that when gold moves, the first thing that moves is gold itself. Listeners underinvested in gold need to address that and begin to buy.
The second place that you go is, of course, the high-quality senior producers with balance sheet flexibility that can generate free cash and growing revenues. It is important that you do not buy the waterfront; that instead you buy the best issuers. I would draw your attention to names like Franco Nevada, Goldcorp, Randgold; companies that have a history of operational efficiency, capital discipline, good balance sheets, and relatively low costs. One then can apply the same discipline in the intermediate size producers which generally come up after the big producers.
Of course, the most spectacular moves are always going to be in the speculative stocks. I suspect that we will not see a move, a real move, in the speculative stocks for as much as nine months. Of course, extra caution is required buying the speculative names. But for those listeners who have been in the game as long as some of your listeners have, who have paid the tuition, who pay attention to the numbers with regards to the juniors rather than the narratives, I think this will be a spectacular market. It is really important to understand the depth and severity of the bear market and what that means for the bull market.
In the juniors, measured by the TSXV [Toronto Venture Exchange], is a market that fell by half and then it fell by half again and then it fell by half again. This is a market that is down by 90% in real terms which means it is precisely arithmetically 90% more attractive than it was in 2011. This is a market that can double and make up as a consequence of doubling 15% of the decline that it suffered. This is a market that has a long, long way run if you select your stock correctly."


Sunday, February 28, 2016

ALERT: Important Update On The War That Is Raging In The Gold And Silver Markets

"Below is an important update on the war that is raging in the gold and silver markets.
The following charts are from Jason Goepfert at SentimenTrader.
King World News note:  Below you can see the commercial hedgers position in the silver market market.  Note that commercial hedgers have been adding aggressively to their short positions on the recent surge in the price of silver (see multi-year chart below).
KWN I 2:26:2016


A Dire Warning And Total Global Collapse

"A dire warning and total global collapse.
King World News note:  William McChesney Martin was the longest serving Chairman of the Federal Reserve, serving under five presidents, from 1951 – 1970.  His warning sounds an alarm in the midst of the insane policies being pursued by central bankers around the world.
This was from Art Cashin’s piece yesterday:  A Bit More From McChesney Martin – In his famous “punchbowl” speech (10/19/55), the then Fed chief talked about the theoretical tradeoff to boost inflation a bit to help unemployment. Here’s what he said:
There are some who contend that a little inflation–a creeping inflation–is necessary and desirable in promoting our goal of maximum employment. My able associate, Allan Sproul, President of the Federal Reserve Bank of New York, put his finger on the fallacy in this contention in testifying before a Congressional committee earlier this year when he said:
“Those who would seek to promote ‘full employment’ by creeping inflation, induced by credit policy, are trying to correct structural maladjustments, which are inevitable in a highly dynamic economy, by debasing the savings of the people. If their advocacy of this course is motivated by concern for the ‘little fellow, they should explain to the holders of savings bonds, savings deposits, building and loan shares, life insurance policies and pension rights, just how and why a rise in prices of, say, 3 per cent a year is a small price to pay for achieving ‘full employment. They should also explain to all of us – – little, big, and just plain ordinary Americans–what becomes of our whole system of long term contracts, on which so much of our economic activity depends, if it is to be accepted in advance that repayment of long term debt will surely be in badly depreciated coin.”

Sunday, February 21, 2016

A World On The Edge Of Chaos

"By John Ing, Maison Placements
February 20 (King World News) – Gold bullion and gold stocks came back from the dead, attracting new money defying the rout in commodities. Gold held its value better than other assets. That previous haven, the dollar plunged sparking a scramble for safety, amid the demise of bullish market sentiment, the peaking of every market from Shanghai to Nasdaq, Middle East turmoil and concerns over the health of the global financial outlook. Although this long overdue correction was well advertised, the markets now view the glass as half empty, rather than half full…"

Legend Issues Dire Warning About A Terrifying Future And The Trigger For Total Global Collapse

"On the heels of seven weeks of chaotic trading in markets, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, just issued a dire warning about a terrifying future and the trigger for total global collapse.
Egon von Greyerz:  “Eric, the world is likely to enter the worst economic downturn in history at any time now. There have been depressions in many countries and regions before, but the world has never been in a situation when every single major economy is on the road to bankruptcy..."

Wednesday, February 10, 2016

Keep Your Seatbelt Fastened – Another Round Of Panic In Stocks Is Likely

"On the heels of the Nikkei plunging 8.5 percent in the past two trading sessions, a legend in the business is telling people to keep their seat belts fastened because another round of panic in stocks is likely.
King World News note: The piece below refers to the “Taper Tantrum.” The term “Taper Tantrum” refers to the surge in US treasury yields (global government bond yields as well), in summer of 2013 when then-Fed Chairman Ben Bernanke put a spotlight on the wind down of Fed asset purchases (tapering off QE).
Here is a portion of today’s note from legend Art Cashin:  Of Canaries, Mine Shafts And Other Warning Signals – Brian Reynolds hangs his hat at New Albion Partners and follows the stock market with a bit of a different perspective. For years, Brian has maintained that U.S. pensions are so underfunded and desperate for yield in a ZIRP environment that they change their risks profiles. They hire hedge funds who then lever their money into equities. 
Brian’s thesis has allowed him to make some great market calls in the last couple years. Monday, however, Brian sent a somewhat cautionary note to clients. Here’s what he wrote: 
In this morning’s column we highlighted the surge in our insurance company CDS index up to the 112 basis point area. We wrote “The most worrisome thing we are looking at in the near term is insurance company credit derivatives.” 

This Is How Frightening The Global Collapse Has Now Become

"On the heels of the Nikkei plunging a jaw-dropping 11 percent in just 3 days, and the world banking system entering another round of panic, this is how frightening the global collapse has now become.
But first, a short-term note of caution…
From Investor’s Intelligence: 
 “(The) BULL/BEAR ratio is (now) at multi-year lows and lower than September/October, 2015 (see remarkable 10-year chart below).
KWN I 2:10:2016


Sunday, February 7, 2016

RED ALERT: The Public Now Has One Of The Largest Short Positions In History!

"The following commentary is from Jason Goepfert at SentimenTrader:  According to the latest data from the Commodity Futures Trading Commission, small speculators are now back to net short, valued at about $4.2 billion against the indexes (see stunning chart below).
KWN SentimenTrader I 2:5:2016

SentimenTrader continues:  This week, the percentage dropped to -10% for one of the few times since 1993 (see remarkable chart below).
KWN SentimenTrader II 2:5:2016


Today’s Felix Zulauf Interview And Signs That A New Gold Rush Is Now Taking Place

"On the heels of some fireworks in the gold market this week, along with the mining shares, are we seeing signs that a new gold rush is now taking place?
Today KWN will be interviewing legendary Barron’s Roundtable Panelist Felix Zulauf…
But first, the following commentary is from Jason Goepfert at SentimenTrader:  Traders have moved than $750 million into the main gold fund, GLD, over the past week (see chart below).
KWN SentimenTrader I 2:5:2016
Inflows are a good thing as long as they don’t become extreme. This weekly flow is the 2nd-largest since 2012, and it hasn’t taken much of an inflow in the past few years before sellers returned…"

Monday, February 1, 2016

ALERT: Legend Warns Global Governments Are Now Preparing For Total Collapse

"As global markets head into what will surely be another wild trading week, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, warned that the governments of the world are now preparing for total collapse.
Egon von Greyerz:  Eric, 25% of government bonds are now negative around the world. On Friday morning Bank of Japan was the latest country to introduce negative rates. There are now 13 countries with yields up to 2 years being negative and 10 countries with negative yields up to 10 years. I have been saying for a very long time that Japan is bankrupt and negative rates will of course not save their economy…"

ALERT: Peter Boockvar – We Haven’t Seen Real Chaos Yet, But It’s Coming And Gold Is Going To Skyrocket

"With the price of oil plunging more than 6 percent and the Shanghai Index hitting new lows overnight, today Peter Boockvar warned King World News that we haven’t seen real chaos yet, but it’s coming and gold is going to skyrocket.
Eric King:  “Peter, the game plan is for the West to inflate.  The West has to inflate in order to get out of this debt.  Your thoughts on the central banks, their attempts to create inflation and where that will end.”
Peter Boockvar:  “In theory it makes sense — you inflate your way out of too much debt.  The problem is that bond markets in Europe, the U.S., and certainly in Asia, are so egregiously overpriced that the desire for higher inflation, if they are successful, is going to blow up their bond markets…"