Valuations are now ridiculously aberrant; sentiment is outrageously complacent and risks are spiralling into uncharted waters based on historical data, but—and this is an enormous "but"—the "invisible hand" has continued to save stocks and bonds and cap the rallies in the precious metals with astounding consistency. So, in the interest of the health and well-being of my favorite dog and the mental sanctity of my better half, I refrain from making big bets against the serial manipulators. In another life and in another era, I would be "balls to the wall" short this bloated pig of a stock market but trying to play this in a rigged casino where there has been ZERO chance of winning using conventional analytics has been and continues to be a mug's game.
Our beloved junior explorers as represented by the TSX Venture Exchange are now backing off despite (in some cases) positive results and rising gold and silver prices. It also doesn't help that despite new highs in global equities, base metals are now well off the highs of early February when copper traded up to $2.76/lb and zinc up to $1.345/lb. Copper has since retraced to $2.58/lb but zinc has undergone a mini-crash with the current price around $1.0988, which is an 18% correction. The amount of "heat" I took back in late March when I penned "Buy Precious, Sell Base (Metals)" is now rather irrelevant with gold having traded up from the date of the missive through $1,295 from $1,248 and zinc down from $1.25/lb. to under $1.10/lb.
While it was actually a call on the U.S. dollar, it was, nevertheless, an on-the-money call but it hasn't benefitted anyone holding the junior explorers as my current darlings, Canuc Resources Corp. (CDA:TSX.V) ($0.375) and Stakeholder Gold Corp. (SRC:TSX.V) ($0.245) have retraced along with most of the other TSXV names. Both companies are fully funded and are a few short weeks from the commencement of exploration on their respective projects with CDA (market cap: $15.75 million) drilling the highly prospective silver-gold San Javier in northern Sonora while Stakeholder (market cap: $5 million) is drilling the Goldstorm project tied onto Seabridge's Snowstorm project in Elko County, Nevada. (The Canuc project at San Javier is under the direction of ex-Tinka V.P. Exploration John Nebocat [discoverer of the Ayawilca deposits] while Stakeholder's Goldstorm project is under the direction of ex-Newmont Mining V.P. Exploration Robert Cuffney.)
Finally, I know that many of you out there have been rendered "weary" by the length of time it is taking for the precious metals to break free from the shackles of intervention, collusion, manipulation and fraud. While I like to fancy myself as somewhat immune to the debilitating impact of the psychological poundings of capped breakouts and coordinated assaults, it actually DOES have an impact when I sit down to write these commentaries. There are only so many topics to discuss and when they all converge around the criminality of central bank and government management of the global economy and politics through the financial markets, the mind sort of "shuts down" in attempting to utilize creativity to get a point across.
However, my recent trip into the UK and Ireland allowed me to reflect outside of the warmth of my comfort zone upon the state of the global economies and based upon conversations that I have had over the past month in Bristol, Cheltenham, Dublin, Limerick and good old Oshawa, Ontario, the main focus for EVERYONE is housing. The main collateral in the portfolios of the global banking cartel has always been real estate and because the wonderchild financial engineers have found a way to lever up their balance sheets, the only way that another meltdown could be averted was to reflate the collateral.
Now, with housing bubbles being reflated everywhere, affordability is no longer important (in terms of carrying costs); all that matters is equity. As long as you bring enough skin into the transaction, bankers EVERYWHERE will allow you to step up to the wicket of land speculation and that is exactly what it is – rampant and blatant speculation.
In order to keep the flow of money moving in the direction of that all-important bank collateral, these timely interventions serve to train the millennial horde of selfie-snapping, Facebook-posting newbies that "Gold is bad" and that "Stocks, bonds, and housing are good" and only through this constant pounding in both actual and psychological warfare has the public narrative been able to reshape the accepted methods of inflation hedging.
While 40 years ago my mentors were busy reaping the rewards of sound money philosophies and practices through gold ownership in the late 1970s, today's synthetic narrative allows the new generation to abandon the historical use of precious metals in favor of cryptocurrencies and blockchains with little regard for the risk associated with the old adage that "Possession is nine-tenths of the law." Only through a cataclysmic confiscation by way of cyber warfare or attack will the sheer veracity of that adage be felt; only AFTER such an event will the true value of physical ownership and possession of gold and silver be truly appreciated and ACTED UPON.
In the meantime, my loved ones cower under beds and sheds, my friends look upon me with wonderment and pity, the dart board is filled with tattered pictures of CNBC anchors past (Simon Hobbs) and present (Brian Sullivan), and my ball-and-chain hammers stays beside me at the ready.
Such is the life of a seasoned and very stubborn gold and silver bull.