Investing in Silver – 3 Must See Charts

Submitted by Mark O’Byrne  –  GoldCore

Precious metals continue to look  very undervalued vis a vis most asset classes – particularly stocks and bonds.

This is especially the case with silver which has fallen by more than 70% from what we believe was an intermediate price high of $49 in 2011 – despite surging demand for silver bullion coins and bars from canny buyers investing in silver.

24hGold - If You Are A Silver ...
Silver Eagle Sales – Full Year 1996 and First 19 Days of 2016

 

Silver is currently trading at just over $14.25 per ounce – 1/77th of the price of gold at $1,100/oz. GoldCore continue to believe that silver will surpass its non-inflation adjusted, nominal high of $50 per ounce in the coming years. Indeed, we believe that silver will surpass its inflation adjusted high or real record high of over $150 per ounce in the next 5 to 7 years.

We are currently doing a research note on silver which will outline why we are so positive on silver.

In the meantime, let us whet your appetite and give you an understanding of the rationale for our bullishness. Steve St Angelo of the SRSrocco REPORT has just done an excellent blog with three very interesting charts which contribute to our positive outlook for silver bullion.

24hGold - If You Are A Silver ...
Silver Eagle Sales – 1996 (Full Year) Versus 2016 (Full Year)

 

He points out that

In 1996, total Silver Eagle sales for the year were 3,466,000. Now compare that to the 4,950,000 Silver Eagles sold in the first half of January. We must remember, Silver Eagle sales in 2016 started on January 11th. So, in just six working days (this Monday was a holiday), the U.S. Mint sold 43% more Silver Eagles than all of 1996.  Continue reading

Tsunamis, Runs and Rubles

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

It is said that a tsunami announces itself when the ocean suddenly and for no apparent reason recedes back farther than anyone could imagine. Left stranded are everything from beachgoers to fishing vessels of all sizes and even marine wildlife suddenly exposed to the open air. The spectacle creates a dangerous curiosity which the naturally curious humankind has difficulty avoiding. There were many stories of similar behaviors in the biblically deadly 2004 Indian Ocean tsunami, as people at these beach destinations were stuck in place by the sheer nature of the event; to their own mortal peril.

This is admittedly at best a fitted analogy, but you get the point. There are times when so unnatural seems some occurrence that it overrides common sense. There is no logic to it; it is its own logic. That dangerous process is all the more so wherever the phenomenon stretches into symptoms or outbreaks that are unfamiliar even under benign circumstances. Such it is with this dollar “run.”

It has all the hallmarks of a bank run, only that there isn’t (maybe) the traditional features of convertibility that everyone heard about in their ancient economics textbooks laying blame upon gold. Currency elasticity in the form of central banks authorized with full discretion and flexibility was supposed to have relegated bank panic to the same past as those books. The events in 2008 put that notion to rest. Continue reading

David Zervos is…. “Giddy In Love”

Submitted by Thad Beversdorf  –  The First Rebuttal Blog

Screen Shot 2016-01-18 at 9.02.23 PMWell Zervos, I just got around to reading your 2015 year end QE love letter.

“The key for 2016 will be to drown out this nonsense with good old fashion QE loving. And so just in time for the New Year, we are bringing out some new swag to help spread the message of QE love. Attached is a picture of our 2016 hat. It’s simple – just a heart on the front with the letters QE inside”

Wow, too much of the 1985 Sassicaia or was it the Hibiki 30-year over an ice ball with a Behike 56??  Unfortunately as you awoke from your love potion induced haze you had to witness the worst start for markets of any year in US history.  Now I’m not one to get in between two star crossed lovers David, but you and QE might want to rethink this relationship.

I’m not going to sugar coat this David, QE is a but a Sirens’ song, full of tantalizingly dangerous temptations whose love is not coming back to you anytime soon, no matter how many hats you wear professing your love to it and no matter how many markets you chase it to.  And even if it were to endeavour some heartfelt return, you’d be wise to heed the lyrics of Lynard Skynard, “things just couldn’t be the same”.  Unlike the Free Bird David, QE has changed.  It’s older now and tired, it doesn’t pack the same punch.  David, it’s time to let go. Continue reading

The Sleepwalkers Awaken

A host on bubblevision this afternoon noted that the S&P 500 is now down $2 trillion for the year and wondered if his panel could explain “what’s happened since January 1st?”

The implication, of course, was that since no new recessions have started—- nor have any new wars been declared, polar glaciers melted or Wall Street banks gone down for the count——that the market’s worst ever start of the year was surely overdone. Maybe it was even BTFD time again.

Then again, maybe the outlook is just as bad as it was before January 1st, but that the outlookers have acquired a new outlook. Stated more baldly, perhaps the sleepwalkers have finally awakened.

That would certainly seem to be the case with the market’s high flyers. Most of this year’s spectacular flameouts have reported nothing new nor issued any disturbing 8-Ks. Amazon apparently had a swell Christmas, for example, but its share price is now down 19% from the bubblevision man’s line of demarcation.

Indeed, Amazon and its fellow FANGs (Facebook, Amazon, Netflix and Google) succinctly explain the pivot. They have actually been the canary in the coal mine all along; it just now that their warnings signals are being noticed. Continue reading

Fantastical Myths and Grim Reality

Submitted by William Bonner, Chairman – Bonner & Partners

Worthy Causes

LONDON – Whew! The Dow shot up on Wednesday morning and fell in the afternoon. Not a good sign [ed. note: indeed, it wasn’t]. We have to be careful not to say anything controversial today. Otherwise, we won’t be able to keep up with the mail. (Catch up on our controversial essays about the Oregon situation here and here.)

 

controversyAvoid!

What other people think matters. People get upset – even homicidal – over ideas and myths, not reality. Catholic, Protestant, Shiite, Sunni, Democrat, Republican, land rights in the West… captured U.S. soldiers… racial slurs… the master race…

Manifest Destiny… terrorism… global warming – there is no idea so bogus it can’t be the cause of a government program or a massacre. Thoughts – like viruses – enter the brains of humans and take control of them.

Then, acting as though they know what they are doing, people try to “improve” the world around them. They tax, kill, argue, torture, demonstrate, seize public land, write letters to the editor, and call up Rush Limbaugh. Ditto to that!

The cause is always a worthy one, of course. And there are always people to blame… people standing in the way of a better world. They must be forced to wear seat belts and sign up for health insurance – for their own good. Continue reading

Pile On Inventory

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

Despite continued cuts in production and supply chain activity, inventory through November persists in great imbalance. With December retail sales demonstrating a Christmas sales season only worse in 2008 and 2009, that isn’t like to have changed. It’s not as if manufacturers and imports have been robust to build that much inventory; production is already in clear recession. The only way to equalize is to force even greater production cuts, which is why I think we are starting to get the hints of full-blown recessionary forces.

As those wisps of suggestion penetrate further into financial markets, the less likely holdouts awaiting Janet Yellen’s version will be able to do so. That seems to have been the economic theme in manufacturing for the past year, so it is unlikely to be repeated this one. In terms of manufacturing sales, for the year (through November) sales are off about 4.2%. But even -4% or so is equivalent to about a $400 billion hole.

ABOOK Jan 2016 Total Busn Inv Manufacturing SalesABOOK Jan 2016 Total Busn Inv Manufacturing Hole

Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

Two Refugee Boats Sink off Greek Islands; At Least 21 Dead (GR)
At Least 12 Refugees Killed In New Tragedy Off Turkey (AFP)
Japanese Stocks Surge by Most in 4 Months In ‘Short Squeeze Galore’ (BBG)
Japan Must Let Zombie Companies Die (BBG)
China Shares Struggle Higher On Global Stimulus Hopes (Reuters)
Draghi’s Groundhog Day Heralds Seven Weeks of ECB Market Dialog (BBG)
A Scared World Is Taking Its Money And Running Back Home – and to the US (BBG)
Battered Emerging Markets Race to Stem Outflows (WSJ)
US Is Hiding -Saudi- Treasury Bond Data That’s Suddenly Become Crucial (BBG)
Is Something Blowing Up In OIL? (ZH)
Trillions Could Be Lost In British Housing Bubble Collapse (WMN)
Hundreds Of Mountain Tops Leveled To Make Way For The New Silk Road (Forbers)
Glory Days Of Chinese Steel Leave Behind Abandoned Mills And Broken Lives (G.)
Italy Could Trigger Europe’s Next Financial Crisis (Stratfor)
IMF Demands EU Debt Relief For Greece Before New Bailout (Guardian)
Capital Controls Cut Greek Exports By €3.5 Billion In 6 Months (Kath.)
Over 120,000 Greek Homes Close To Repossession (Kath.)
One Third of Greeks Cannot Afford Heating Or Hot Water (KTG)
Greece Demands That Refugees Declare Final EU Destination (Reuters)
Germany Takes Refugees’ Valuables ‘To Pay For Their Stay’ (Local)