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The Most Important And Bullish Gold Chart You’ll Ever See

December 13, 2016

Barely 24 hours before the Fed takes another giant step toward destroying whatever’s left of its “credibility”; and likely, proving yet again that rising rates are decidedly NOT “Precious Metal bearish”; I could easily write full-length articles on a half dozen separate “PM bullish, everything-else-bearish” topics – starting with the fact that, as discussed in yesterday’s “history’s largest bubble” article, the unprecedented equity surge that coincided with Trump’s victory is a giant hot-air balloon floating in a sea of pins.

Yes, historic market rigging – including suppression of history’s largest “anti-bubble,” Precious Metals – is a part of the unprecedented market movements that have pushed the “Dow Jones Propaganda Average” to its most overbought level in 20 years; with yesterday’s close (as all other indices declined, and interest rates breached a six-year downtrend) being surpassed on that metric on just three other days in the Dow’s 120-year history.  However, there are still some actual market participants remaining; who, collectively, have never been more bullishly positioned in stocks, or bearishly in Treasuries.  Which inherently makes absolutely no sense, either logically or historically; as rising rates always yield lower valuations – not to mention, weaker economic activity; particularly in an environment of historic, parabolically surging debt.

That is, until you realize the stock of the “Vampire Squid” itself, Goldman Sachs, is responsible for a whopping 30% of the Dow’s post-Trump gain, due to the facts that former Goldman partner Steve Mnuchin was nominated to be Trump’s Treasury Secretary; current Goldman Chief Operating Officer Gary Cohn was appointed as head of Trump’s National Economic Council; and last but not least, the Dow is a price-weighted average, with Goldman its highest priced – and thus, most influential – stock.  In other words, a mirage of statistical chicanery, amidst an ocean of the very crony capitalism America had hoped to have shed when it rejected Hillary Clinton.  And did I mention that the second biggest post-election Dow gainer is none other than JP Morgan – care of the “99%’s” biggest enemy, Jamie Dimon, being appointed to the head of the U.S. Business Round table, which will unquestionably give it “insider access” to the White House?

Yes, this is unquestionably history’s biggest financial bubble, whether simply considering its presence qualitatively – amidst the weakest global economy in generations; the highest ever debt levels; a surging dollar that torches U.S. corporate earnings and emerging markets’ debt service ability;  historic global political turmoil; and a European banking system on the verge of collapse, as highlighted by today’s announcement that Italy’s largest bank, Unicredit, will be laying off 14,000 workers.  Or alternatively, quantitatively, by the fact that on essentially all metrics, stock valuations are above those of the past century’s previous bubble peaks.  Of course, in each of those periods – 1929, 1987, 2000, and 2008 – economic activity was booming, debt dramatically lower, currency exchange rates stable, and the world politically calm.

And I haven’t even mentioned the gargantuan post- Trump bubble in base metals – which plunged to multi-year lows amidst an historic ghost city-led construction bubble that tripled China’s cumulative debt in less than a decade; yet, have exploded higher on hopes of an unfinance-able; and relatively speaking, piddling; Trump fiscal stimulus plan.  Which, even if it miraculously comes to fruition, would occur simultaneously with a massive economic slowdown in China – which last week, admitted its economy is commencing a lengthy downturn.  Not to mention, that its economic data is falsified.

Just yesterday, both Senate Majority Leader Mitch McConnell (whose wife, Elaine Chao, was nominated to be Trump’s Transportation Secretary) and House Speaker Paul Ryan” poured cold water on the idea of a massive stimulus package, effectively laying out markers on taxes and spending that that could cramp Trump’s ambitions.”  In other words, Trump’s Republican “allies” are already revolting against his suicidal deficit spending plans.  This, aside from the fact that the “suspension” of the $20.1 trillion debt ceiling will end on March 16th with a national debt well above that amount – which undoubtedly, will catalyze historically contentious budget discussions which, if they don’t shut the government down outright, will cripple it indefinitely, with not a chance in hell of a massive tax cut and/or fiscal stimulus being the end result.  And yet, the Dow continues to rise each day due to the ambiguous propaganda meme of “Trump-flation” – i.e., the debt-fueled, non-productive deficit spending which not only has little or no chance of occurring, but whose expectation has catalyzed a massive dollar and interest rate surge that makes it even less finance-able, politically palatable, and acceptable to the trillions of corporate lobbies desperate for a weaker dollar.

Which brings me to today’s extremely provocative topic – which happens to coincide with Precious Metal prices having been brutally smashed amidst the same post-Trump manipulation and propaganda blitzkrieg that has caused the aforementioned historic bubble inflation of stocks, base metals, crude oil, and the dollar.  Not to mention, the fact that PMs were smashed in the week heading into the election, under the then meme that Hillary Clinton’s “sure victory” would also be “bad” for Precious Metals, and “good” for stocks.  This, as physical premiums in India and China are trading at historic highs, given how desperate citizens – and Central banks – are for the only real money the world has known, as currencies crash, political regimes tumble, and “cashless societies” virally spread.  Not to mention, as perhaps the most damning evidence yet of Precious Metal suppression – care of Deutsche Bank and its criminal crony conspirators –has gone mainstream.

Which is, visual proof of what I have said all along, when two years ago I started speaking of the guaranteed Precious Metal production collapse in both gold and silver – care of the most “mainstream” information source imaginable, Standard & Poors’ Global Market Intelligence Division.  Which is, following last week’s report that silver production did in fact peak last year, the following chart depicting just how steep gold’s production collapse, which also commenced this year, will likely be.  I.e., a whopping 20% over the next decade, during a time when unquestionably, fiat currencies will be historically devalued.

It’s been just two years since JP Morgan’s Precious Metal analyst, John Bridges, predicted that the world’s largest gold miner, Barrick Gold, would see its annual production plunge from roughly six million ounces at its projected peak in 2017, to 4.5 million ounces in 2020, and “even lower” a “few years later.”  Since then, I have desperately sought a “holy grail” chart, depicting how close Barrick’s expectations were to the rest of the gold (and silver) mining industry.  And finally, I have it!

This chart is so telling, little additional commentary is required – other than to say that it is unquestionably the “most important, and bullish, gold chart you’ll ever see.”  Which, in a world of guaranteed explosive money printing – as history’s largest, most destructive fiat Ponzi scheme implodes – not only should, but must inevitably yield debilitating product shortages.  This, as history’s most egregious, blatant, and now admitted price suppression scheme has pushed prices down – particularly in the heart of the “strong dollar” manipulation operation, the US – to their most undervalued levels ever, with literally dozens of potential near-term catalysts to reverse the current, historically rigged “down trend.”  Which hopefully, will prompt you to act to protect your hard-earned savings whilst you still can; equally hopefully, by giving Miles Franklin the chance to earn your Precious Metals business.

Courtesy of

Andrew ("Andy") Hoffman, CFA joined Miles Franklin, one of America's oldest, largest bullion dealers, as Media Director in October 2011. For a decade, he was a US-based buy-side and sell-side analyst, most notably as an II-ranked oil service analyst at Salomon Smith Barney from 1999 through 2005. Since 2002, his focus has been entirely on precious metals, and since 2006 has written free missives regarding gold, silver and macroeconomics. Prior to joining the company he spent five years working as an investor relations officer or consultant to numerous junior mining companies.

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