“I don’t see Silver going below $30…”
David Morgan, Silver Guru
Understandably so, David Morgan.
Just a week ago 3.6 Million Ounces of Physical Silver were removed from the COMEX Registered Inventory – fully 17% of the Total Registered Inventory of Silver. There are Big Buyers of Physical Silver.
And yet Cartel (see Note 1) Price Suppression Actions and several Main Stream Media Spinners would have us believe that demand for physical Silver (and Gold) is topping out.
Why even the least expensive local coin shop marks up its Bullion Silver Eagles of recent vintage by 11% over spot.
In sum, that part of the Public which relies mainly or solely on the MSM for its news is being Tricked – to use the Halloween Metaphor – into half-truths, misinformation, and that Manufactured News otherwise known as Disinformation. And of course there are blatant News Blackouts.
Those gulled into such Fictions will not have the “Treat” of being “long” the next time Silver and Gold Explode upward, and they will be (and are being), misdirected into investments that have little or no Profit or Wealth Protection Potential. Consider the fate of initial investors in the Facebook IPO for example.
Similarly, those who (still) contend that Markets are not subject to Heavy Intervention (i.e., Rigging) are denying (just to take one example) that the Massive Rig Job performed on LIBOR, has cost borrowers around the world, public and private alike, hundreds of billions in excess interest charges.
So in order to surmount the effects of this rigging in order to profit and protect it is essential to monitor Independent Media and the Interventionals as well as Fundamentals and Technicals.
Those who do monitor the Independent Media will be more likely to be alert to inconsistencies. For example, even though major Equities indices are near 5-year highs consider that:
- The transportation stocks are not confirming the recent Bullish Equities moves in general.
- Small cap stocks are not significantly outperforming large cap ones.
- Defensive stocks are somewhat outperforming others.
- Third Quarter Earnings Reports are confirming what we earlier forecast – that the Technology bubble is topping and deflating.
The foregoing are not signals of a Bullish Equities Markets for the mid and long term. Indeed, we already have a confirmed Hindenburg Omen indicating an Equities Market Crash may be on the horizon. But how often have you heard the foregoing discussed or even reported on in the MSM?
In a similar vein, Key Real Statistics reflect an ongoing recession (i.e. No Recovery) with a very Real possibility of a Hyperstagflation. Consider noted Economist, John Williams’ (shadowstats.com) recently reported findings.
“Quarterly Industrial Production Contracted for First Time Since Official Recession
Quarterly Pace of Inflation Picked Up, With CPI and PPI Topping Market Expectations
September Year-to-Year Inflation: 2.0% (CPI-U), 2.0% (CPI-W), 9.6% (SGS)
Real Average Weekly Earnings Continued to Tumble
Inflation Provided Half of September Retail Sales Growth
“The economy continues to show signs of faltering, while the pace of inflation continues to increase. On the economic front, half the 1.15% monthly gain reported in September retail sales (see Commentary No. 475) was due to inflation, and that non-inflation component likely will evaporate away in the monthly revisions ahead. The 0.41% monthly gain in September industrial production was due largely to prior-period downside revisions. Nonetheless, as reported, third-quarter 2012 industrial production showed the first quarterly contraction for the series since the end of the “recession” in second-quarter 2009.
“Adjusted to pre-Clinton (1990) methodology, annual SGS-Alternate CPI inflation rose from roughly 5.2% in August to 5.5% in September, while the 1980-based measure rose from about 9.3% in August to 9.6% in September, versus 9.0%.
“The chances for sustainable, real (inflation-adjusted) gains in retail sales remain nil, where the consumer lacks adequate income growth and credit availability to fund ongoing increases in real consumption.
“Headline September 2012 industrial production reflected a third-quarter 2012 quarterly decline, even in official reporting.”
“COMMENTARY NUMBER 476: September CPI, Industrial Production, Real Retail Sales and Earnings”
John Williams, shadowstats.com, 10/16/2012
Yes, Real U.S. Inflation is already Threshold Hyperinflationary at 9.6%. Main Stream Media, where art thou Main Stream Media?
And we should add, U.S. unemployment claims numbers released October 18th show a dramatic increase in these claims.
As well, real U.S. unemployment is 22.8% per shadowstats.com.
And even China’s Official Growth Rate has dropped under 8% (but to its credit, the MSM did report on these two, but with not much by way of analysis of the implications).
And Earnings season reports are mixed at best. So, contrary to the tricks of MSM spin, no Economic Recovery or Market Bull looks likely to appear in the foreseeable mid or long term future. (See our recent Alerts for an Analysis of the Short-Term)
Indeed, U.S. Home Ownership Rates are at a 15-year low and still falling.
In sum, if one believes that all the foregoing will lead to an Equities Market crash in 2013 as we do, soon it will be time to get short (just as we recommended in 2008 before The Crash, with profitable consequences for our subscribers).
But NOW there are Profitable Sectors ripe for investment, which we expect will be profitable right through any market crash.
Consider that Price Increases for basic food stuffs, and especially Corn, Wheat, and Soybeans started their dramatic rise well before the drought in the U.S. and elsewhere. The “Arab Spring” uprisings were sparked, after all, by Food Price increases.
Lester Brown correctly analyses the Essential Food Supply-Demand situation when he says:
“Food is the New Oil and Land the New Gold”
The Daily Ticker’s recent cogent analysis of Brown’s perspective is:
“The United Nations food agency reports that food prices are rising again, reaching 6-month highs and nearing levels not [seen] since 2008. Higher prices then spurred food riots in the Middle East and North Africa, which fueled the Arab Spring.
“There's no sign of widespread food riots now, but eventually there could be, says Lester Brown, president and founder of the Earth Policy Institute and author of the new book “Full Planet, Empty Plates: The New Geopolitics of Food Scarcity.”
““The term 'food unrest' will become part of our daily vocabulary…” It reflects the imbalance between the supply of food and demand for food globally.
“On the demand side, says Brown, is a growing global population -- 80 million more people born each year -- and more people moving up the food chain, which means as many as 3 billion people are consuming more "grain intensive products" like meat, milk and eggs.
“On the supply side, severe drought in the U.S., Russia, the Ukraine, Pakistan and Kazakhstan have crushed grain harvests at a time when crop yields are stagnating in many countries.
““We're doing everything we know how to do. We've eliminated nutrient constraints, moisture constraints and we've designed the most efficient plans we can… there's not much else to do.”
“The impact of all this are higher food prices in the U.S. and more competition for U.S. grains from China—which dominates soybean consumption now, says Brown. But in countries like Ethiopia, India, Nigeria, Peru and The Republic of the Congo the effect is much more dramatic.
““There are now millions of families in the world that plan foodless days. They can't afford to buy enough food at inflated prices to maintain their consumption levels," says Brown.
“Food is the New Oil and Land the New Gold: Lester Brown”
Bernice Napach, Daily Ticker, 10/5/2012
So we continue to be bullish on the Essential Food Commodities Sector going forward, and have made recommendations designed to profit from this. We recently recommended a Fertilizer Company stock (trading at just over 40¢/share) with tremendous profit potential, for example. (See Note 2 and 3 below regarding specific Recommendations)
Also we are Bullish going forward on certain commodities especially those which China uses and has the resources to purchase (as compared with Bangladesh, say, with relatively little Purchasing Power). China is in a position to limit, but not prevent, any Global Economic slowdown. It has over $3 Trillion in foreign currency reserves and other Assets. And with its GDP growth is officially still in the healthy 7% range. And just last month its retail sales were up 14%.
And of course there is one commodity that the Chinese are leading the way in Buying, and that all should buy more of on Dips – Physical Gold. It is a superb Inflation and Wealth Preserve.
And we also agree that it is unlikely Silver will be pushed below $30 an ounce either. In sum, the upside is Tremendous for both these Monetary Metals, Trumping the “Tricks” of inadequate MSM and Official “News” reporting via independent information sources, is the road to Profitable Treats.
October 18, 2012