1984 By 2025

Junior Mining & Exploration Specialist
October 10, 2021

Contrary to first impressions, the title of this missive is not a reference to the centimetric dimensions of my waistline circa last December, but rather a timeline to a societal and economic state of change in which we as citizens of the West now reside.

George Orwell wrote one of my favourite novels, “Animal Farm” (a parody on Russian dictator Joseph Stalin), written in 1945, four years earlier than the dystopian social science fiction novel, “Nineteen Eighty-Four” in which memorable phrases and words like “Big Brother”, Thought Police”, “Thought Crime”, and “Double Think” have survived through decades and are now totally appropriate in the Year of our Lord 2021. In fact, global politicians and central banks began to go “Orwellian” the day that the Bank of Japan decided to fight deflation by owning every bond and stock in that nation. The Orwellian torch was passed to America when Congress blinked in 2008 and acquiesced to Hank Paulsen’s one-kneed plea for a bailout and as we all know ad nauseum, an historical snowball began its descent down the slippery slope of fiscal and monetary insanity and not only is it now continuing but also accelerating.

A friend of mine sent me a wonderful message this morning that parodies the famous Vaudeville skit of Bud Abbott and Lou Costello “Who’s on first?” in which they discuss the current rules on the pandemic and vaccination protocols. It is worthy of reproduction:

Bud: ‘You can’t come in here!’
Lou: ‘Why not?’
Bud: ‘Well because you’re unvaccinated.’ 
Lou: ‘But I’m not sick.’
Bud: ‘It doesn’t matter.’
Lou: ‘Well, why does that guy get to go in?’
Bud: ‘Because he’s vaccinated.’
Lou: ‘But he’s sick!’
Bud: ‘It’s alright. Everyone in here is vaccinated.’
Lou: ‘Wait a minute. Are you saying everyone in there is vaccinated?’
Bud: ‘Yes.’
Lou: ‘So then why can’t I go in there if everyone is vaccinated?’
Bud: ‘Because you’ll make them sick.’
Lou: ‘How will I make them sick if I’m NOT sick and they’re vaccinated.’ 
Bud: ‘Because you’re unvaccinated.’ 
Lou: ‘But they’re vaccinated.’
Bud: ‘But they can still get sick.’ 
Lou: ‘So what the heck does the vaccine do?’
Bud: ‘It vaccinates.’ 
Lou: ‘So vaccinated people can’t spread covid?’
Bud: ‘Oh no. They can spread covid just as easily as an unvaccinated person.’
Lou: ‘I don’t even know what I’m saying anymore. Look. I’m not sick. 
Bud: ‘Ok.’
Lou: ‘And the guy you let in IS sick.’
Bud: ‘That’s right.’
Lou: ‘And everybody in there can still get sick even though they’re vaccinated.’
Bud: ‘Certainly.’
Lou: ‘So why can’t I go in again?’
Bud: ‘Because you’re unvaccinated.’
Lou: ‘I’m not asking who’s vaccinated or not!’
Bud: ‘I’m just telling you how it is.’
Lou: ‘Never mind. I’ll just put on my mask.’
Bud: ‘That’s fine.’
Lou: ‘Now I can go in?’
Bud: ‘Absolutely not?’
Lou: ‘But I have a mask!’
Bud: ‘Doesn’t matter.’
Lou: ‘I was able to come in here yesterday with a mask.’
Bud: ‘I know.’ 
Lou: So why can’t I come in here today with a mask? ….If you say ‘because I’m unvaccinated’ again, I’ll break your arm.’
Bud: ‘Take it easy buddy.’
Lou: ‘So the mask is no good anymore.’
Bud: ‘No, it’s still good.’
Lou: ‘But I can’t come in?’
Bud: ‘Correct.’
Lou: ‘Why not?’
Bud: ‘Because you’re unvaccinated.’ 
Lou: ‘But the mask prevents the germs from getting out.’
Bud: ‘Yes, but people can still catch your germs.’
Lou: ‘But they’re all vaccinated.’
Bud: ‘Yes, but they can still get sick.’
Lou: ‘But I’m not sick!!’
Bud: ‘You can still get them sick.’
Lou: ‘So then masks don’t work!’
Bud: ‘Masks work quite well.’
Lou: ‘So how in the heck can I get vaccinated people sick if I’m not sick and masks work?’
Bud: ‘Third base.’

I purposely included that long diatribe because somewhere along the line from Wuhan, China to the legislatures of almost every country in the Western World, people have completely lost their ability to reason calmly. For tens of thousands of years, Mother Nature gave the human race a wonderful blessing called the “immune system” and over time, humans have allowed their own bodies to build up resistance to all kinds of nasty germs that have cropped up from time to time and while some are nasty and some are quite mild, at no time have citizens been exposed to the kind of martial law that we are now witnessing with these vaccination and viral prevention protocols. 

This microbe narrative that crept out of an experimentation facility in Wuhan, funded in no small way by American money, has been modeled around Orwell’s creation of the “Thought Police” where anyone misaligned with the government-controlled narrative are immediately and summarily villainized. Citizens in my small Ontario town are going about their lives as if it is “business as usual”, allowing an unproven agent into their bloodstreams in order to be allowed to enter restaurants, provided, of course, that they are able to prove that they followed the orders of the provincial government. I do not know whether is a generational divide that has creaky old freedom-fighters like me facing off against youngsters that insist that I “take one for the team” in order for the local economy to “normalize”. The short-sightedness of that line of thinking is beyond all comprehension. To coin a phrase used by George Gammon “Freedom is more important than health.” You all may blink when I nod in agreement to such a statement but history has proven that a lack of freedom is acutely deleterious to societal and economic health and that is what our obedient citizens, politicians, and central planners fail to grasp. This massive metamorphosis in attitudes toward individual rights and freedom extends way beyond the pandemic, too. It transcends scientific debate and encompasses monetary and fiscal policies even to the point of interfering with the “Christian Work Ethic” which, while now totally politically incorrect in its usage, nevertheless represents a large part of the fibre and heritage of the North American settlement event. To survive in a harsh environment like the Canadian winter took enormous swathes of grit and resilience and it was European settlers, first the French and then the English, Scottish, and Irish that escaped the elitist rulers in their native homelands that on a regular basis instituted either new rules or revised rules that bolstered their economic and political control of public behaviour. Santanyana warned us that “Those that cannot remember the past are condemned to repeat it” so I find it interesting that in my Twitter feeds, the most informative are from those individuals that have lived under oppressive regimes and they use the 2020-2021? pandemic and the 2008 GFC as early warning signs of history repeating itself. From where I sit, it is certainly rhyming with those memorable sonnets that would be Weimar Germany, Hungary, and Venezuela.

In case you are wondering where I am going while perched defiantly on this virtual soapbox, I have begun a dark descent into a heretofore unthinkable state of mind consisting of resignation, capitulation, and despair. I despair for the today’s young people who have been handed a malodorous bag of fecal indebtedness, fostered by the generation that marched against war, poverty and racial inequality while rejecting “materialism” as unsound. Somewhere between the end of the Viet Nam War and the beginning of Gulf War I, bell bottoms and love beads were replaced with pinstriped suits and Brooks Brothers shoes and evidence of that lies in the fact that when boomers snuck home for a weekday lunch, it was mom that prepared the sandwiches while that same event today has the nanny microwaving a veggie plate.

Contributing to this funk that has increasingly invaded my day-to-day psyche is the fact that my beloved gold market has devolved into a type of serial predictability. Responding to a massive miss in the September BLS jobs report, gold bolted up over $22 per ounce within minutes of the report but when the final bell rang ended Crimex trading, gold was down from its intraday high of $1,782.40, going out at $1,757.20. I watched the Twitterverse move from chest-thumping “I-told-you-so’s” to whimpering “they-did-it-again’s” with the barrage of celebratory tweets at 8:30 a.m. dwindling away to the scattered expletive deleted’s and the odd reference to manipulation by all of the usual gang of gold bugs.

The reality of our predicament lies in the two-year chart of December gold futures which clearly illustrates why gold investors are not exactly feeling the love that other market participants have enjoyed this year. If you are a purist, you have to take the August 2020 intraday top at $2,117.50 and the August 2021 low at $1,677.90 which represents a 20.76% correction that by definition is a “bear market”. As the gasps and screams of protest fill the airwaves, even if you give gold the benefit of the doubt and use only the closing prices or the London fixes, it is painfully evident that it has been over fourteen months since gold registered a new high while the S&P 500 has made fifty (50!) all-time highs in 2021 alone. Toss in the abomination of the laughable #SilverSqueeze movement back in early February (which embodied the old joke from WWII that a new French tank was being introduced that had four gears – one forward and three in reverse) and you have to place 2021 as a really bad year for gold investors (and gold newsletters).

Were it not for superb drilling results in Getchell Gold Corp., my own performance in 2021 would have been less than inspiring but even Getchell has been impacted by the downdraft in junior miners, be they producers, developers, or the mightily-challenged explorers where great drill results are either yawned at or outright jeered.

The TSX Venture Exchange has been struggling since it hit its zenith back in February and now resides in bear market territory, albeit only mildly so. The mid-September low of 676 was 39.3% off the 52-week high of 1,113 so until it can reclaim the area above 900, the downtrend will continue to dominate sentiment for the juniors. However, there is a seasonal tendency for this group to bottom between mid-August and mid-September (which it did) with the history of the month of October being the only stumbling block to a strong year-end rally.

As mentioned earlier, my top-rated Getchell Gold Corp. has had a terrific year in both drilling results and share price performance based upon the Fondaway Canyon results that increasingly bear out the possibility (if not probability) of the existence of a Tier One asset emerging from the Central Zone. Also adding to the fireworks is the upcoming drill program at Star Point, a highly-promising copper-gold-silver porphyry prospect where the dumps at surface have yielded extremely high-grade values across the board. However, even with the outstanding outlook going forward, Getchell has succumbed to profit-taking and is now sporting roughly half of its earlier annual gain at 58% (down from over 110%).

This kind of share price action is exactly what discourages younger investors from re-populating the ranks of the junior mining investor class and it is not simply a matter of fifty new highs in the S&P or Bitcoin at $54,000 that is stealing thunder from what used to be “the only speculative game in town”. At the heart of the malaise is the fact that our more youthful investors see outsized risk with limited upside in miners versus simply following the Fed playbook and buying any and all dips in tech stocks or by going “all-in Bitcoin”. Additionally, as much as I would like to impart my sexagenarian wisdom in a finger-wagging exercise, how can I even fathom any semblance of an argument when such egregious amounts of newfound wealth has emanated not from “25.9 metres of 4.7 g/t gold” but rather from an Elon Musk tweet or a Fed governor speech. Pavlov taught digs to salivate at the sound of a ringing bell; Federal Reserve Board rock stars have taught the Millennials and Genexers to salivate at the sound of the word “accommodative”. It is really that simple.

Shakespeare wrote in Act One, Scene Three of Hamlet “This above all: to thine own self be true, And it must follow, as the night the day, Thou canst not then be false to any man.” So, when I pick a highly-disappointing reversal day as the genus for my weekly missive, its content has to be taken in context to the event that just occurred. To be clear: I remain a stalwart bull on gold and silver and the entire commodities universe with special attention to copper and uranium. While oil and natural gas are screaming higher as part of the normal over-exuberance of the near-term trend, the level of bullishness today exceeds the level of absurd bearishness that occurred when I watched near-month crude futures close their last trading session at something like minus $37.63/bbl. on April 20th, 2020. With each passing day and each journal entry on the central bank balance sheets, the purchasing power of global currency units is deteriorating. At this rate, the ability of existing wages to feed a family will disappear in an inflationary maelstrom not seen in recent history and certainly not seen since the 1970’s stagflation knocked the stuffing out of the middle and working classes.

If there is one simple reality that investors must all face it is that if given a choice of inflation versus deflation, the policy-makers will opt for inflation first and foremost. A deflationary outcome, while of great benefit to the average worker and family, would be a disaster for the investor class whose net worth is tied to the inflating collateral held by them and by the banking system. Deflation would also seriously impair tax receipts sending governments into insolvency and default. What we are witnessing is the legions of central bank salespersons (Powell, LaGarde, Kuroda) attempting to jawbone deflationary fears into the psyches of the international speculators now driving commodity prices into the stratosphere and one sure-fire way to “tamp down” inflationary expectations is to make damn sure that gold and silver prices remain contained. Those two monetary coal mine canaries have to be heard chirping away as opposed to lying on their backs with an effect that provide Powell & Co. with a public reference point for their “transitory” forecast that is about as believable as yesterday’s Crimex gold pit intervention.

To sum it all up, I leave you all with a quote from Orwell:

“Power is in tearing human minds to pieces and putting them together again in new shapes of your own choosing.”

********

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in Marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger's adherence to the concept of "Hard Assets" allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

The term “carat” comes from “carob seed,” which was standard for weighing small quantities in the Middle East.

Gold Eagle twitter                Like Gold Eagle on Facebook