Could Buffett Buy 130 Million Ounces Of Silver Again?

By Mike Gleason – Re-Blogged From Silver Phoenix

Earlier this week, precious metals markets got a surprising Buffett bounce.

Legendary investor Warren Buffett isn’t often associated with gold – at least not in a positive way. In the past Buffett has made derisive comments about the monetary metal. He once quipped that gold “has no utility.”

A perpetual optimist on the U.S. economy, Buffett by nature doesn’t like the message that is sent by higher gold prices. He has likened investing in gold to “going long on fear.”

Warren Buffett and silver

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What’s Next, Trillion-Dollar Coins?

By Stefan Gleason – Re-Blogged From Gold Eagle

The massive set of stimulus measures rolled out last month by the Treasury Department and Federal Reserve has left many Americans wanting more… and politicians scheming for new ways to dole out additional trillions in cash.

Most taxpayers have already received their $1,200 “stimulus” payments. However, that one-time payment will do little to repair the long-term financial health of the 26 million (and rising) who are newly unemployed.

And it surely won’t bail out all the small business owners who were callously deemed “non-essential” and forced to shut down during this pandemic.

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“Squad” Member Proposes Minting Trillion-Dollar Coins

Re-Blogged From Headline Wealth

[As I recall, this originally was an Obama idea. –Bob]

Is America headed the way of Zimbabwe — an economically wrecked country that notoriously began issuing currency in trillion-dollar denominations?

A proposal by a U.S. Congresswoman would have the Treasury Department mint $1 trillion platinum coins.

As reported by the Washington Examiner:

Rep. Rashida Tlaib has proposed sending everyone in the United States $2,000 immediately and then $1,000 per month to counter the economic fallout of the coronavirus pandemic.

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Gold And Silver Prices To Head Dramatically Higher

By Mike Gleason – Re-Blogged From Gold Eagle

Mike Gleason: David, we had you back on at the beginning of the year and you shared some amazing insights on palladium, and we’ll get to that in a bit because that market is still very interesting. But first off, you’ve been watching the Fed balance sheet closely here and I wanted to get your comments about that to begin with. Now, after the extraordinary expansion, which followed the 2008 financial crisis and a few rounds of QE, the Fed began contracting the money supply in 2017. You’ve been making the case that the withdrawal of liquidity could trigger another catastrophe.

So, let’s start with the basics here. If you would, please explain the history of the Fed’s balance sheet, and why it is something investors should be carefully watching.

David Jensen: Yeah, I think that the root of it all, the reason we’re watching so closely is the tremendous imbalance between the amount of cash, liquid cash that’s in the system versus the amount of debt. And the Fed has run interest rates from around 20% in 1980 down to 0% or 0.25% here a couple of years ago. And what they’ve done is expanded the greatest debt bubble in history. The total debt in the U.S., now on all levels according to the Fed’s flow of funds report is about $72 trillion. And to serve as that $72 trillion of debt that’s in extent, there’s only $14 trillion of liquid currency in deposits and in physical cash. So, what we’re seeing now is that the Fed needs to continually to expand the money stock with the money supply. The money supply is the annual change or the addition to the outstanding money stocked addition to the $14 trillion that’s out every year. And they need to add a substantial amount so that the debt can be serviced and so that the economy can continue to move forward.

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Precious Metals Round-Up

By Alasdair Macleod – Re-Blogged From Gold Eagle

Growing evidence of an economic downturn despite unprecedented monetary inflation since Lehman means a new credit and systemic crisis is becoming increasingly certain. In an attempt to prevent a new crisis developing, this time the scale of monetary inflation by the authorities will have to be even greater. The rise in the price of gold since December 2015 and its break-out from a three-year consolidation period earlier this year confirms that the risks of a credit and systemic crisis undermining fiat currencies have been increasing for some time.

It is now likely that in future portfolio managers will increase their investment allocations in favour of gold and actively consider investing in silver and platinum as well. It is in this context that this article looks at the price relationships between the three precious metals and their relevant monetary and investment characteristics.

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Automakers Flash Warning Over Supplies Of Critical Metals

By Stefan Gleason – Re-Blogged From Silver Phoenix

While motorists continue to enjoy the benefits of a longstanding supply glut in crude oil, car manufacturers are becoming increasingly worried about shortages. Not in liquid fuels, but in metals.

The automotive industry requires certain strategic, rare, and precious metals. Without them, batteries for electric cars wouldn’t function and catalytic converters for gasoline engines wouldn’t work.

Many of the metals that play a critical role in both conventional and electric vehicles now face potential supply shortfalls.

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Palladium Just Zoomed Past Gold

By Frank Holmes – Re-Blogged From Gold Eagle

Palladium might not fill headlines the way gold does, but it’s been on fire lately. Not only has the precious metal been the best performing commodity for two years straight, but its price also just shot past gold for the first time since 2001. For the first time ever, it broke through $1,400 an ounce last week before pulling back somewhat. From its 52-week low set in August, palladium has climbed almost 70 percent. It’s added about 16 percent in the past 30 trading days alone.

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Big Silver Price Move Foreshadowed As Industrial Panic Looms

Mike Gleason: It is my privilege now to welcome in David Jensen of Jensen Strategic, a highly-studied mining analyst in precious metals expert with close to two decades of experience in the mining industry, and it’s great to have him on.

David, thanks so much for the time today and nice to finally talk to you.

David Jensen: My pleasure, Mike. It’s good to touch base with you.

Mike Gleason: Well, David, you’ve been closely following the palladium market, and that’s where I wanted to focus much of our conversation today, because that’s obviously where most of the fireworks are happening in the metals these days. Now, for the most part over the last few years, gold and silver prices have been bouncing around and have been basically in trading ranges. But palladium has been a different story, however. The metal has been climbing steadily for most of the past three years. Things got off to a rough start in 2018, but since the middle of August, prices have rallied more than 30% and we’re back to all-time highs.

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What Is Happening To Platinum?

By Clint Siegner – Re-Blogged From Silver Phoenix

You may have noticed the platinum price has fallen well below gold’s price and it continues to underperform the other precious metals. What is happening in the platinum market?

We see a handful of factors driving the recent declines in platinum. For starters, it is facing the same challenges we find in gold and silver prices.

The dollar has been getting stronger, interest rates are rising, and traders on Wall Street have rarely been more carefree. Mainstream investors are positioning for economic strength, not looking for safety.

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Most Wear-Resistant Metal Alloy in the World

Re-Blogged From Sandia National Laboratory

If you’re ever unlucky enough to have a car with metal tires, you might consider a set made from a new alloy engineered at Sandia National Laboratories. You could skid — not drive, skid — around the Earth’s equator 500 times before wearing out the tread.

Sandia’s materials science team has engineered a platinum-gold alloy believed to be the most wear-resistant metal in the world. It’s 100 times more durable than high-strength steel, making it the first alloy, or combination of metals, in the same class as diamond and sapphire, nature’s most wear-resistant materials. Sandia’s team recently reported their findings in Advanced Materials. “We showed there’s a fundamental change you can make to some alloys that will impart this tremendous increase in performance over a broad range of real, practical metals,” said materials scientist Nic Argibay, an author on the paper.

Fighting Friction

Sandia National Laboratories researchers Michael Chandross, left, and Nic Argibay show a computer simulation used to predict the unprecedented wear resistance of their platinum-gold alloy, and an environmental tribometer used to demonstrate it. (Photo by Randy Montoya) Click on the thumbnail for a high-resolution image.

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Mining Gold And Silver From Bombs

By Rory Hall – Re-Blogged From http://www.Gold-Eagle.com

Most of the precious metals community understands the importance of gold and silver for military use. This aspect of the precious metals has actually been one of the more realistic concerns I have held for a number of years. When the USGS stated a few years ago that silver could be the first element on the periodic table to go extinct that should get the silver bugs attention for a variety of reasons. One of the more serious reasons would be strategic use – the creation of killing machines, bombs and all things destruction.

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Commodity SWOT (Strengths, Weaknesses, Opportunities, & Threats)

By Frank Holmes – Re-Blogged From http://www.Gold-Eagle.com

Strengths

  • The best performing precious metal for the week was platinum, up 6.11 percent and finishing the month up 11 percent. Palladium, however, was even stronger, surging 17 percent for the month. Both metals have benefited from better auto sales in China and concerns over potential labor strikes in South Africa.
  • Energy and mining investment has collapsed to its lowest level in nearly 15 years, according to Macquarie Research, and appears to have hit bottom. This could be a sign that it is due for a rotation upwards with the recent strength in precious metal prices.

  • In addition, healthy inflation has returned, according to the core PCE price index, which increased at a pace of 1.9 percent annualized in the first half of the year. Private sector wages and salaries also increased 2.6 percent over the last year.

  • Platts reported that both Chinese and Russian banks increased their gold purchases during the month of June, after they had both slowed their gold purchases in May. Russia added around 18 metric tons, and China added around 15 metric tons. China is now the sixth-largest holder of gold reserves, and Russia is the seventh-largest. The two countries have accounted for over 95 percent of total central bank purchases of gold in the last two years, in their efforts to diversify away from foreign currency.

Weaknesses

  • The worst performing precious metal for the week was gold, although still positive, up 2.16 percent. Most of the gains came after the Federal Open Market Committee (FOMC) meeting, as the U.S. durable goods orders dropped 4 percent in June, more than expected and the most since August 2014. Gross domestic product rose at an annualized rate of just 1.2 percent last quarter, while forecasts had called for a 2.5 percent increase.
  • Gold showed some weakness in trading sessions earlier in the week, related to rising speculation that the Fed will raise rates sometime this year. In addition, the Bloomberg Dollar Spot Index gained for three weeks in a row, and purchases in gold-backed exchange-traded funds have backed off from their three-year high earlier in the month.
  • Anti-corruption measures in China have taken a toll on gold jewelry consumption, with demand falling 17.4 percent compared to last year. Meanwhile, the investment-related demand for gold has picked up, with gold bar and coin purchases up 25.3 percent and 17.3 percent, respectively. China’s Ministry of Industry and Information Technology estimates that the country’s gold consumption will increase to 1,200 tonnes by 2020 from 986 tonnes in 2015.

Opportunities

  • The chief investment officer of TD Asset Management, Bruce Cooper, has shifted to a “maximum overweight” allocation to gold for its portfolios. The firm oversees more than $230 billion. Cooper is watching for Germany to shift away from its austerity approach and notes that if Hillary Clinton and the Democrats win the election and unveil fiscal stimulus, inflation could pick up in the global economy.
  • Amid the gold rally this year, Barrick Gold Corp. plans to continue its plans to sell off peripheral assets, starting with its share in the Australian Kalgoorlie Super Pit. Barrick reported that it made $968 million in debt repayments this year, nearly half of the target amount. Gold producers have had a mixed quarter for earnings as Newmont Mining and Agnico Eagle Mines beat estimates while Goldcorp and Kinross Gold missed. In fact, Agnico Eagle’s CEO, Sean Boyd, is optimistic for the future, stating that it’s not too late for investors to participate in this rally. Boyd cited the “tremendous amount of debt in the system,” along with strong demand from China and India.
  • Klondex Mines’ planned acquisition of the Hollister asset looks like a positive move for the mining company. The Hollister location has historically produced high grades of around 30 grams per metric ton of gold, and since the location is in direct proximity with the Midas Mill, there are several Klondex team members who have direct experience there. Klondex’s announced $100 million financing to fund the acquisition was met with three times the demand for the shares. Klondex released its second-quarter production results for the Fire Creek and Midas mines, exceeding analyst expectation. In addition, the Hollister and True North acquisition, completed earlier this year, significantly raises its production growth.

Threats

  • SkyBridge Capital, a firm which profited from gold during the surge in 2010 and 2011, now puts forth a cautious outlook for gold. A senior portfolio manager at the investment firm states that bullion’s rally could be hindered if the Fed decides to raise rates more quickly than expected, even though the fundamentals for gold are supportive. SkyBridge managed $12.6 billion as of May 31 and does not have any exposure to gold and precious metals currently.
  • Macquarie Research published a report this week with the outlook that fiscal policy will result in “financial repression for decades.” The firm calls the low rate policies an “implicit tax on savings” leading to weak consumption, and in turn, lack of investment by companies and stagnant wage growth. In addition there is a lot of pressure on entitlement programs such as pension funding.
  • BofAML notes that funding ratios for the top 100 corporate defined benefit pension plans are at all-time lows, due to the flattening of the yield curve, amidst the 70 percent rally in the S&P500 Index and $400 billion in contributions. Pensions may switch to more funding through debt instruments (liability driven investing). A higher allocation to fixed income will likely lead to lower returns for pension plans, more equity outflows and more slow growth.

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US Mint Reports Astounding Gold And Silver Demand

By Frank Holmes – Re-Blogged From http://www.Gold-Eagle.com

Strengths

  • In a down week for most markets, silver fared the best, falling only 0.11 percent.  There was no particular story supporting the move, but note that silver really didn’t fully participate in the precious metal rally last week and perhaps had less to lose.
  • Over the past five days investors bought 26.8 metric tonnes of bullion through exchange-traded products backed by the metal, according to Bloomberg, the most since January 2015 as seen in the chart below. In addition, Reuters says gold and silver demand is off the charts; the U.S. Mint sold nearly as much gold on the first day of 2016 as in all of January 2015, with silver sales equally as astounding.

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