- Smart money bets against gold, loses
- How to juice gold’s next big run for 15- or 30-fold gains
- Another rally: Here’s the key level to watch on the S&P
- Scheidt scopes out tech bargains at CES in Vegas
- Banksters win, with both Republicans and Democrats
- Choosing up sides in the “new American civil war”
Gold has pushed above $1,290 this morning. The Midas metal is up $115 from its lows less than six months ago.
Looking out longer term, that low in late July confirms an uptrend going back to late 2015…
The funny thing is, the “smart money” has been betting against gold these last six months.
“Hedge funds and other big institutions have consistently been net short gold futures since July,” observes our Mike Burnick.
“But remember, this is the same crowd who had their butts handed to them in the stock market last year. They’re likewise wrong about gold.
“As these institutions scramble to cover their positioning, it’s bound to fuel an explosive rally in gold into this year.”
If gold is moving up this year, gold stocks are sure to move up even stronger.
As you might already know, the miners are like a leveraged bet on precious metals. It’s painful when gold is slumping, but highly lucrative when gold rallies.
Relative to gold at this moment, “the companies that produce the yellow metal are even more undervalued right now,” says Mike, “and have a lot more upside potential in the years ahead.”
Mike directs your attention to this chart of gold stocks relative to the broad stock market represented by the S&P 500. “Gold mining stocks are trading at the deepest discount to the S&P 500 in two decades!”
Note that bottom in 2000. That was the start of an epic rally for gold stocks — up more than 1,000% by the peak in 2011.
“It’s not uncommon to see select gold mining stocks deliver five–10 times the upside potential of physical gold prices,” Mike says.
“That means if gold rockets to $5,000 an ounce in the years ahead, a stellar 300% move from today’s price, the best gold mining stocks could easily soar 15- or even 30-fold in value. Maybe more.”
Mike’s guidance: “Grab some bullion and, more importantly, consider taking a stake in the VanEck Vectors Gold Miners ETF (GDX). This fund gives you a piece of the action by investing in the best miners in the business.”
[Ed. note: If you have a shorter time horizon to rack up huge 15- or 30-fold gains, Mike urges you to check out his “three-step retirement plan.” It could set you up to be a multimillionaire.
For best results you’ll want to act before midnight tomorrow — as Mike explains when you follow this link.]
Another day, another rally: The Dow is up half a percent as we write — less than 100 points away from reclaiming the 24,000 level.
No big economic numbers this morning, but traders are anticipating the minutes from the Federal Reserve’s December meeting, which should be out by the time you read this.
At the risk of repeating ourselves, Fed “minutes” are not like the minutes from your local school board. They’re not an objective record of who said what. They’re a political document designed to elicit a certain reaction from the market.
In light of Fed chairman Jerome Powell’s “patient” signal to the market last Friday… and the Dow’s 1,200-point rally since… the people crafting the minutes will be careful to say nothing contradicting that message.
But never mind the Fed: Alan Knuckman — our man in the Chicago options trading pits — is watching a key level on the S&P 500.
The S&P has rallied about 10% off its lows of Christmas Eve. If it can push back above the 2,600 level, Alan says that would mark a return to “the 2018 long-standing sideways trading range.”
Right now, the S&P is about 15 points away from reaching that level.
Crude is rallying hard again now that Saudi Arabia’s energy minister confirms the kingdom will slash its exports by 10% this month compared with November levels.
At last check a barrel of West Texas Intermediate is only 13 cents away from $52. The day after Christmas it was trading below $44. Yowza…
“As you review your investments heading into this new year, I suggest adding some extra firepower to some key technology stocks,” says our Zach Scheidt.
Zach has ventured out to Las Vegas this week for the annual Consumer Electronics Show. He’s been posting regularly on Twitter…
Yes, it’s fun to check out all the cool gadgetry years before it comes to market. But Zach is taking this trip very seriously: “When the market sold off in the fourth quarter of last year, the tech sector was one of the hardest-hit areas,” he reminds us.
“For some stocks, this sell-off made sense. A few of the large-cap tech and media companies were trading at unreasonably high prices before the sell-off. Investors got carried away with growth expectations and were willing to pay too much for these stocks. It was just a matter of time before these stocks came back to more reasonable levels.”
(That’s Zach’s understated way of saying “I told you so” when it comes to the FANG group — Facebook, Amazon, Netflix and Google.)
“But Wall Street has a habit of ‘throwing the baby out with the bath water’ and selling good stocks alongside the expensive tech stocks that were coming back to Earth,” he goes on.
“That sets up a great opportunity for us to buy shares of quality technology stocks at prices that would have been unthinkable just a few short weeks ago.”
No place like CES to make up a shopping list. Stay tuned…
The banksters win, no matter what, Part 1: One of Donald Trump’s nominees to the Federal Reserve’s Board of Governors sees the writing on the wall — and is walking away.
Last year Trump nominated Nellie Liang, a career Fed economist, to fill one of two remaining vacancies on the Fed board.
Among her dubious “achievements” in 30 years at the Fed was developing the bogus “stress tests” for the big banks after the Panic of 2008. As we’ve carped here in the years since, the tests were rigged to look as if the banks are in dandy shape to withstand another financial crisis. As stress tests go, this was no grueling sprint on an incline treadmill — it was a leisurely stroll through the park.
Incredibly, Liang’s efforts weren’t good enough for the banksters. The Wall Street Journal reports Liang is withdrawing her name from consideration — “a casualty of opposition from the banking industry, which feared she would stymie efforts to loosen financial regulation.”
The Senate slow-walked her nomination last year, never scheduling confirmation hearings. Now that the midterm elections have come and gone, the White House would have to submit her name for consideration again… and go to the mat with the likes of Sen. Pat Toomey (R-Pennsylvania), who said, “I have some concerns about her approach on specific regulatory matters as well as general regulatory matters.”
Liang just spared the White House the trouble. “The likelihood of a prolonged process,” she said in a statement, “could have left me in professional limbo for too long.”
The banksters win, no matter what, Part 2: Wall Street is courting several of the potential front-runners for the Democrats’ 2020 presidential nomination.
From CNBC: “Billionaire and Blackstone Chief Operating Officer Jonathan Gray; Robert Wolf, CEO and founder of economic advisory firm 32 Advisors; and Mark Gallogly, a founder of private investment firm Centerbridge Partners, are just a few of the Democratic financiers who have spoken with 2020 hopefuls about a wide range of topics, including the upcoming campaign, according to people with direct knowledge of the matter.”
Which candidates? So far they’re all sitting U.S. senators — New York’s Kirsten Gillibrand, New Jersey’s Cory Booker and California’s Kamala Harris.
The CNBC story gingerly addressed the high stakes: “Democrats who run in the 2020 presidential campaign will likely face intense scrutiny over their links to Wall Street and will have their ability to attract small-dollar donors tested.”
That’s the closest the story came to acknowledging how Hillary Clinton’s secret speeches to Goldman Sachs were among the factors that ultimately doomed her 2016 candidacy. Heh…
“The war between Red and Blue won’t last long if it happens at all,” a reader writes as reactions continue to pour in to our “new American civil war” thesis.
“One side has lots of guns, ammo and people that know how to use them. The other side is confused on which bathroom to use.
“Guess which side I’m on?”
Not so fast, counters another: “As I sit here at this late hour pondering the state of our floundering Union I am struck by the shortsightedness of my fellow 5 readers.
“To allow differences of political opinions to fall into armed conflict would be playing into the very hands of the Powers that Be, which most of those same persons would claim to fear. Despite the 350 million firearms in this country, in any region in which armed conflict erupted you would see a swift ‘shock and awe’ response from armored personnel carrier and body armor-equipped law enforcement personnel, which have been covered in these missives.
“No personal small arms would do well enough against night vision, fully automatic weapons, drones and other toys that have been provided to our local law enforcement and the National Guard of any state in the union. And the next day would have the next iteration of the Patriot Act on steroids.
“To think otherwise is foolish, and ‘They can have my gun when they pry it from my cold, dead fingers’ is pretty much exactly what would happen. We need to be smarter than that. Personally I am thinking more on how we can arrange a financial Battle of Thermopylae (think: 300) against a larger, much better-funded opponent. If anyone has suggestions on how to force the 800-pound gorilla of the corporatocracy into a position in which its resources can’t dominate the playing field, I am all ears.
“Aside from that, our system has been completely infected with tendrils of corruption from top to bottom and I see no real way to confront it aside from doing all you can to protect your own. Along the lines of Atlas Shrugged, I fear the only real way to defeat the beast is to let it collapse of its own rotten, fetid core and be prepared to pick up the pieces with other intelligent people in its wake.
“The king is dead, long live the king, eh?”
“We live in a time of irony and reversals.
“Our new governor in California now seems to be championing states’ rights. The talking heads on network news wonder openly if it is fair NOT to edit the content of a speech by the president of the United States before they even hear it. European freedom of thought is protected by muting media attempts to report. Up is down and down is up. We can’t recognize the snowflakes for the wet, heavy Sierra cement blizzard accumulating on 45-degree slopes.
“Then again, the political system can stay irrationally stable longer than the call dates on our put options or even the expiration dates on three months worth of food in our pantry. What can we do besides hedge our bets and rotate our stock?
“Yes, please do keep this conversation going.”
The 5: Again, we will.
The 5 Min. Forecast
P.S. “I’m not convinced at all that there is one massive, single solution to a problem the size of the political split in this country,” says one last entry today.
“It does, however, sort of stick out like Mount St. Helens in full fury to me that the biggest real situation across the land lies in the realm of sound money (or lack thereof).
“A sound money system, by natural selection, tends to take most of the biggest tricksters out of the mix. It turns potential nuclear monetary meltdowns into mere hand grenades. With real value behind everything being traded, it’s almost impossible to get a true Texas-sized monetary disaster.
“To be successful, people have to learn real trades, not get degrees in how to twist the money into tighter pretzels.”
Yes, dear reader, this.
Sound money is the enemy of the banksters, Big Pharma, the military-industrial-surveillance complex and all the others in the power elite who stealthily “eat out our substance” in ways Jefferson never envisioned when writing the Declaration.
Much as we might long for the spirit of a second American Revolution, however, we fear the “new American civil war” could look more like the first French Revolution…
Your editor is having weird ’80s flashbacks today, including the “Japanese miracle” of that decade. Read More
We received an avalanche of responses to Tuesday’s episode of The 5… So we devote today’s issue to our readers’ perspectives. Read More
It’s totally counterintuitive: Gold throws off no income stream, but in a world where central bankers keep their thumb on interest rates, you need gold. Read More
It’s taken prestige media — and public health officials — about a month to come to grips with a glaring contradiction. Read More
“One of the questions I’m getting,” says Zach Scheidt, “is how can the market be so strong when the economy is so weak?’” Read More
Call it harebrained or genius, Americans might be taking a TRIP courtesy of the federal government. Read More
“There’s a lot of frustration in our country,” says bestselling author Graham Summers, “because we’re seeing a severe breakdown in the social contract.” Read More
Warren Buffett’s empire is under siege in 2020… “but that doesn’t mean there aren’t good deals to be had,” says hedge fund veteran James Altucher. Read More
A large swath of corporate America is sitting out social media — with both economic and political implications — for enabling “hate speech” and “misinformation.” Read More
“Entrepreneurship, technological creativity, is surprising,” says futurist George Gilder. “It’s disorder.” Read More