Monday, April 13, 2020

WEEKEND WRAP: Stocks: Best Week Since 1938; Unemployment Hits 16.8 Million; The Case for $100 Silver

Another tumultuous week concluded early with Wall Street ending the workweek a day short for observance of Good Friday.

For a four-day week, there was certainly no shortage of eventful, breaking news stories, something for everybody.

More than six million Americans signed up for unemployment benefits, boosting the number of fresh applications to nearly 17 million in the last three weeks, more than 10% of the US labor force (157 million).

Stocks staged a dramatic rally, posting the best weekly gains since 1938, as the Federal Reserve launched another volley into the market, this time a $2.3 trillion directive aimed at buying municipal bonds as well as expanding a credit backstop for new debt issued by highly rated firms to include so-called “fallen angels” - companies that were investment grade in mid-March but have subsequently been downgraded from BBB to -BB.

In other words, the Fed is helping out companies which made bad credit decisions. Average Americans should be so lucky. No word was forthcoming from banks and credit card companies on a repayment moratorium for unemployed workers or stressed-out businesses. Some are offering some forms of forbearance, but debtors have to contact the issuer and ask for help. Like the so-called PPP (Payment Protection Program) that is offering loans to small businesses, the major banks - the same ones who were bailed out in 2008-09 - are not going out of their way to help people.

...thus, Americans are staying home and boozing more.

All 50 states are now under declared emergencies for the first time in US history and the national guard has been called out to at least 19 states to aid in coronavirus mitigation and control efforts.

OPEC+ countries agreed on Sunday for cumulative production cuts of 9.7 million barrel a day after Mexico agreed to a compromise. Though it's a record slowdown, crimping supply is unlikely to have any lasting effect on the demand crunch caused by so many countries now on varying degrees of lockdown.

Brent crude was around $32 a barrel as of Friday while the U.S. benchmark West Texas crude closed under $23.

Treasury yields improved over the course of the week with all maturities gaining. The 30-year finished at 1.35% after closing out the prior week at 1.24%. The biggest gains were in the shortest maturities, with 2-month bills topping all, gaining 16 basis points, from 0.11 to 0.27%. The 10-year note improved from 0.62 to 0.73%. Overall curve structure remained flat, a mere 115 basis points end-to-end.

Gold tested seven-year highs, closing at $1685.60 in New York Thursday. Silver also gained, ending at 15.40 per ounce, but that hardly tells the story for the physical market for both precious metals. Premiums are extreme and delivery times are out 30-45 days with many dealers imposing minimums. See the special section below on the case for $100 silver.

Happy Easter!

At the Close, Thursday, April 9, 2020:
Dow Jones Industrial Average: 23,719.37, +285.77 (+1.22%)
NASDAQ: 8,153.58, +62.68 (+0.77%)
S&P 500: 2,789.82, +39.84 (+1.45%)
NYSE: 11,136.61, +234.01 (+2.15%)

For the Week:
Dow: +2666.84 (+12.67%)
NASDAQ: +780.49 (+10.59)
S&P 500: +301.17 (+12.10%)
NYSE: +1255.98 (+12.71%)

The Case for $100 Silver

Silver, which has been mercilessly suppressed by central banks since 1873 (see: "The Crime of '73" here, here, here, and the chart at right) when they essentially bankrupted most of rural America, a new valuation system must be considered because the current one only benefits bankers who hate competition.

Click for larger image
This proposal is to tie silver to gold at the long-established 16:1 ratio. It's only fair, after decades of manipulation to where the ratio is an absurd 100:1 or higher presently. It's often been said that gold is the money of kings, silver the money of gentlemen. As an enlightened - albeit suppressed group - gentlemen investors in silver should take the initiative and buy up every available ounce from dealers at today's prevailing prices, while agreeing on the new standard, throwing the silver investment world into absolute chaos.

The only place that has reliable prices for silver currently is eBay, where the majority of sellers (and buyers) are regular people, small businesses, or separate entities of the dealers themselves (this was explained to me by people at Scottsdale Mint). The most recent sale prices on eBay are presented below:

Type Low High Avg. Median Per Oz
1 oz coin 21.50 33.95 26.77 26.95 26.77
1 oz bar 24.99 35.83 29.01 29.38 29.01
10 oz coin 217.50 325.00 252.21 247.49 25.22
10 oz bar 198.00 342.00 232.13 216.50 23.21
100 oz bar 1929.00 2150.00 2005.22 1981.47 20.05

Average per ounce all types: 24.85

Obviously, these are much higher than what the dealers are offering, but the tradeoff is guaranteed fast delivery (1-3 days standard), versus dealers taking advance orders, imposing minimums, and openly stating that silver deliveries are 30-45 days from date of cleared purchase.

Those quote prices are from actual sales, and available to the general public, which is as it should be. If players in the market want to continue to quote the theft prices in the futures market, let them play with their paper. Nobody stands for delivery at the COMEX except JP Morgan (per Ted Butler), which has control of the market with their huge short book and horde of physical.

There is a bit of a problem making JP Morgan filthy rich via the pegging scheme, but those are the breaks.
When the dealers eventually come on board silver will once again stand aside gold as the preferred money of the common man. Everybody will want to own some and it will still be reasonably priced at... here it comes...
based on today's gold price of $1685.60 (and when that breaks loose, expect $4000 gold)...

$105.35 the ounce.

Reprice all your silver at a 16:1 ratio with gold. Do it now.

Why allow central banks and market scammers (cough...JP Morgan... cough) the privilege of setting prices when it's obvious they aren't very good at it, long-term or that they set prices to benefit themselves and allies in the price-rigging scheme?

If all holders of silver reprice at a 16:1 ratio to gold and refuse to sell unless at that price or very close to it, who would complain and how loudly?

The COMEX, naturally, and all the participants in the futures and spot frauds. Let them complain. We counter that they are only trading paper. Nobody stands for delivery.

Individual holders of sliver are just that, INDIVIDUALS. Many of them have plenty of gold as well. If silver is repriced at 16:1 gold, that will set off a firestorm.

As for the dealers and their 30-45 day delivery times, well, I threatened a well-known online dealer, with whom I have a long-standing relationship, with legal action concerning my purchase of 10-ounce bars on March 16. Funny thing, the day after I got a response to my email, which made no mention of my proposed legal action, my order shipped. The dealers are arbitrageurs in the grand scheme. Not much better than the banks or the paper exchanges.

If a few of them latch onto the idea that they can price their silver at (currently) $105.35 an ounce, that will shake up the PM universe. $105.35 is a lot better than $15 and change.

The current gold:silver ratio is a farce. The people who think gold is manipulated fail to see the bigger picture. Silver is affordable to massive amounts of people and could serve as an alternate currency and real money.

Let's go for it. Don't sell any silver unless somebody will pay you its real worth. In the meantime, keep buying at bargain basement prices all the way up. It will eventually happen if enough people stick with it.

You're welcome.

Rick Gagliano

Video highlights:

Here is GATA Chairman Bill Murphy, interviewed by Robert Kientz for Murphy asserts that the banks suppressing gold and silver prices have run out of metal and the futures market has broken as its increasing attempts at deception fail. 16 minutes of excellent back-and-forth:

In the same vein, here's James Rickards giving a speech in Vancouver, 2018, titled Is the Future of Money Gold, Crypto or Fiat? Fascinating stuff from one of the world's leading experts.

Finally, this must see video from the Epoch Times, the first documentary movie on the origin of CCP virus, Tracking Down the Origin of the Wuhan Coronavirus. Please take note that Downtown Magazine nor Money Daily has never endorsed any video or any article as "must see" or "must read." This is the exception.

No comments: