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Central Banks Are Now In The Endgame

Central Banks Are Now In The Endgame

Authored by Egon von Greyerz via GoldSwitzerland.com,

Central bankers were handed the Midas curse half…

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This article was originally published by Zero Hedge
Central Banks Are Now In The Endgame

Authored by Egon von Greyerz via GoldSwitzerland.com,

Central bankers were handed the Midas curse half a century ago. Midas turned everything that he touched into gold– even his own food. Exactly 50 years ago (15 Aug, 1971) central bankers were handed a much worse curse by Nixon. But instead of turning everything into gold, their curse was to turn all real assets, including gold, into worthless paper, creating the perfect setup for this central bank endgame.

Nixon had of course not studied history. Because if he had, he would have understood that his lie was $100s of trillions worse than the Watergate lies:

“THE EFFECT OF TODAY’S ACTION will be to stabilise the dollar”

Hmmmmmm!

As the chart below shows the dollar has lost 98% in real terms (GOLD) since 1971. Just a one hour history lesson would have taught Nixon that no currency has ever survived in history since all  leaders without fail have done what Nixon did.

Reminds me of the line in Pete Seeger’s song Where have all the flowers gone”:

“WHEN WILL YOU EVER LEARN, WHEN WILL YOU EVER LEARN?”

Well, they will never learn of course. History has taught the very few who are willing to listen that there is no exception.

Every single currency throughout history has been debased until it has reached ZERO as I outlined here.

It seems incomprehensible that presidents and central bankers have not learnt they will all play the role that their predecessors have, in destroying the nations currency.

With their arrogance, they are all obviously hoping that they can pass the baton on so that it won’t happen on their watch. And because most leaders have a relatively short reign in relation to the lifespan of a currency, they often escape even though guilty.

Nixon for example believed that he committed a good deed and stabilised the dollar. If he is looking down from above, he will now 50 years later, see that his actions have created a “mere” 98% fall so far.

So Nixon saved the dollar very briefly with the consequence of killing it forever! When will they ever learn?

A DYSFUNCTIONAL GLOBAL ECONOMY

The period after I was born at the end of WWII  was followed by a long chapter of law and order in the West. This was not just in society at large but there was also order and discipline as well as courtesy in schools and families.

Today in many countries there is no respect for teachers, parents or even the police. All eras go through cycles and the worst part of the cycle is what we are experiencing now.

Moral and ethical values are gone and crime is rampant. This is not new in history and regularly happens at the end of major eras or cycles. This happened for example at the end of the Roman Empire as Rome disintegrated economically and morally. Decadence was rampant then as it is today. So were debts and deficits.

The emperor Commodus started it all and was the ancient Nixon. Gallenius finished it off and was the Greek version of Biden.

So dissolution of values and principles are clearly a consequence of financial and economic  dysfunction.

The fact that the US for example has increased the federal debt every year since 1960 (with four minor exceptions) is a sign of chronic disease and total dysfunction.

If the US government for over 60 years has become increasingly more decadent, both economically and morally, how can we expect the people to behave differently?

Many countries in the world have fared in a similar manner but because of the size of the US economy and the reserve currency status of the dollar, the consequences are considerably more significant.

WE ARE NOW IN THE CENTRAL BANK ENDGAME

The song I am forever blowing bubbles” was written in 1918, not long after the creation of the Fed. Clearly the composer saw it coming:

“I’m forever blowing bubbles,

Pretty bubbles in the air,

They fly so high, nearly reach the sky,

Then like my dreams they fade and die.”

It will be no different with the current bubbles. They have already flown so high and reached the sky. Just look at central banks’ balance sheets which are now going exponential:

As the graph shows, since the Great Financial Crisis started in 2006, the balance sheets of the four biggest central banks have gone up 6X. Since the current crisis accelerated in 2019, the growth is now EXPLOSIVE!

But it is not just central banks blowing bubbles. Because the whole world has become a bubble:

It took 2000 years to reach $100 trillion global debt and most of that is accumulated since 1971. Then 50 years later global debt trebled to $300 trillion.

As you can see in the graph above, I am projecting $2 quadrillion or more in the next 4-9 years. Sounds massive and sensational but the math is simple. If we add unfunded liabilities of at least $200 trillion globally plus total derivatives of at least $1.5 quadrillion, that takes us to $2 quadrillion.

As the derivatives bubble explodes, or rather implodes, in the next few years as we hit the central bank endgame, all that money will be printed by central banks in a futile attempt to save the financial system.

August 15, 1971 was the beginning of the End for the current economic era and currency system.

The Great Financial Crisis in 2006 was the start of the End of the End.

In August 2019 when central banks panicked and stated they would do whatever it takes, the  final stage of End of the End started.

In the graph above I have indicated that this very final stage and endgame of our current monetary system will end between 2025 and 2030. The end of a major economic era is of course impossible to forecast.

Normally things take longer than we expect. But when the hyperinflationary central bank endgame starts (followed by a depressionary implosion), things normally happen very quickly. Hyperinflationary periods are typically 2-4 years.

CONSEQUENCES – CONSEQUENCES

We have invested seriously in physical gold since 2002. We had the years leading up to this century studied global risk and carefully researched the best way to protect against this risk. Our conclusion was the financial and currency system was unlikely to survive based on our risk analysis which also included understanding history.

We are not gold bugs but see owning physical gold as the best protection against  the consequences of another failed financial and currency system.

As we discussed in our MAMChat last week discussing the gold flash crash, the attempt to depress the gold price by dumping $4 billion of paper gold was just the final part of a normal correction.

Our interest in gold is purely for fundamental reasons but sometimes it is interesting to look at technical patterns.

The chart above shows that the corrective C-wave reached support at $1,680. That was probably the end of a minor correction and gold should soon start the move to the next target of $3,000. Rising above $1,900 will be confirmation of the resumed uptrend.

Gold is in a secular uptrend since 1999 and no action by central banks can stop the move to levels that are unthinkable today.

But investors should not focus on what price gold could reach but instead how far their assets (stocks, bonds, property) measured in dollars or euros can fall.  In my view the falls will be much more than 50% and probably more than 90%.

Physical gold, securely vaulted in a safe jurisdiction such as Switzerland, has always been the best protection against a failed currency and financial system.

This time will not be different.

Tyler Durden Thu, 08/19/2021 - 06:30

Precious Metals

Red Pine shares rally on Ontario gold drill results

    VANCOUVER – Red Pine Exploration Inc. [RPX-TSXV] shares rallied Monday after the company released new and notable results from drilling at its…

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VANCOUVER – Red Pine Exploration Inc. [RPX-TSXV] shares rallied Monday after the company released new and notable results from drilling at its 100%-owned Wawa Gold Project, located two kilometres southeast of Wawa, Ontario.

Exploration highlights include the discovery of a high-grade gold mineralization in the Jubilee shear zone more than 400 metres downdip of the current boundary of the Surluga deposit inferred resources.

Visible gold has also been observed in two different veins in the Jubilee shear zone and Surluga South discovery, the company said.

Red Pine shares advanced 9.25% or $0.05 to 59 cents on volume of 353,080. The shares are currently trading in a 52-week range of 95 cents and 30 cents.

The Wawa project covers over 5,500 hectares and hosts several former mines with combined historic production of 120,000 ounces of gold. Currently the largest gold discovery on the property is the Surluga deposit.

Two mineral deposits (Surluga and Minto Mine South) contain an estimated NI 43-101-compliant resource of 1.3 million tonnes of grade 5.47 g/t gold or 230,000 ounces in the indicated category and 2.7 million tonnes at 5.39 g/t gold or 471,000 ounces in the inferred category.

Over 95% of the contained ounces at both deposits are located between surface and a depth of 350 metres. Both deposits remain open at depth.

The company has previously said it planned to complete an estimated 15,000 metres of diamond drilling this year, with the program continuing into 2022.  It said the aim will be to expand Surlaga at depth and test other targets.

On Monday, the company said results from 2021 drilling continue to illustrate the untapped potential of the Wawa Gold Project. Drill hole SD-21-298A returned 25.73 g/t gold over 4.78 metres true width in the Jubilee Shear Zone, including 41.73 g/t gold over 1.93 metres (true width) and 45.80 g/t gold over 0.92 metres (TW), more than 400 metres down dip from the current boundary of the Surluga Deposit inferred resource.

“Hole SD-21-298A confirms the presence of zones of high-grade mineralization in the Surluga South exploration target and represents an exciting development in the discovery made by Red Pine in 2020,’’ the company said in a press release, Monday.

“In the northern end of the Jubilee Shear Zone, [over] 400 metres down-dip of the inferred resource of the Surluga deposit, step-out drilling results suggest that higher-grade gold mineralization extends into previously unexplored areas,’’ the company said. “These results are beginning to define a zone that could expand the resource at the northern end of the deposit.’’

Meanwhile, Red Pine said its production has significantly improved with two operating drills on site. It said the contractor’s recent ability to operate the third drill will significantly improve drilling production at the site. A third drill, which will target the Darwin-Grace greenfield target, is on schedule to start this month.

 

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Precious Metals

Running a Fossil Fuel Business Isn’t What It Used to Be

It’s becoming more and more difficult to be in the fossil fuel business. On both sides of the Atlantic, lawmakers and unelected bureaucrats are turning…

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It’s becoming more and more difficult to be in the fossil fuel business. On both sides of the Atlantic, lawmakers and unelected bureaucrats are turning up the heat, so to speak, on companies over the issue of climate change.

In the U.S. House of Representatives, Democrats have launched an inquiry into whether oil companies have participated in so-called “climate disinformation.” Last week, letters were sent to top executives of Exxon Mobil, BP, Chevron and Royal Dutch Shell seeking records, and hearings are scheduled for next month.

Meanwhile, the Securities and Exchange Commission (SEC) is expected to propose a series of new disclosure requirements all publicly traded companies must make, possibly as soon as year-end, to inform investors about potential climate risks associated with their business.

In Europe, the strategy appears to be to choke off any and all lending to the fossil fuel industry. Next year, the European Central Bank (ECB) is expected to look into the trading operations of major banks in what’s being called a climate “stress test,” and at least one big activist investor group, ShareAction, is pressuring lenders to cut all ties to fossil fuels.

Of course, none of this accounts for the fact that fossil fuels still supply around 80% of the world’s energy.

Or that many leading oil and gas producers are investing billions in renewable energy, including wind and solar, and energy storage technology. Chevron, in fact, just unveiled plans to triple its investment in lower carbon energies to $10 billion through 2028.

Could Climate Scientists Be Held Liable?

Climate change was top of mind at the Gold Forum Americas conference I attended and spoke at last week in Denver.

In conversations I had with some of my peers, the question was raised whether certain scientists could be held financially liable for spreading their own “climate disinformation,” which has sown fear and prompted policymakers to enact new draconian taxes and regulations.

Here’s how one colleague put it: In nearly every other profession—from physician to engineer to money manager—there are mechanisms in place to hold bad actors accountable. Why is that not the case with scientists, who may make promissory or misleading statements that materially impact individuals and businesses?

The idea sounds farfetched, but it’s not completely unheard of. In 2012, an Italian court found six seismologists guilty of manslaughter for failing to give proper warning of an earthquake that killed some 300 people. This ruling was overturned in 2014, but it had the effect of putting public facing scientists around the world on high alert.

To be clear, I don’t support charging scientists with crimes. Modern technology, as advanced as it is, still cannot successfully predict earthquakes with any degree of certainty.

Fewer, Not More, Hurricanes Making Landfall in the U.S.

Perhaps the same is true of the climate. We are led to believe that climate change is responsible for causing more hurricanes, for instance, but if you look at the Environmental Protection Agency’s (EPA) own data, you’ll find that the number of North Atlantic hurricanes that strike the U.S. every year has been trending down over the past 120 years. To date, the deadliest natural disaster in U.S. history remains the Great Galveston hurricane, which pummeled the Texas city in 1900, several years before Henry Ford even began mass producing the Model T.

Number of North American Hurricanes that Reached the U.S., 1901 - 2018
click to enlarge

U.S. on the Verge of Becoming the Least Vaccinated G7 Country

Up until this point, I haven’t said anything about the media’s role in spreading FUD, or fear, uncertainty and doubt. The cause of a lot of people’s apprehensions can be laid at the feet of not just cable news channels, which sensationalize everything, but also social media platforms, which have allowed misinformation to run wild.

Here, I’m talking specifically about misinformation related to vaccines.

This topic also came up in Denver. I’m fully vaccinated against Covid and have even received a third booster shot, but many of my colleagues haven’t gotten their first jabs. When I ask why, they invariably say it’s because they don’t trust the government.

If that’s the case, I say, do they own gold or Bitcoin?

That aside, I believe the vaccine is our best hope to get back to life as it was before the pandemic. The planes and airports were packed on my way to and from Denver, but Transportation Security Administration (TSA) data shows that commercial air traffic is still down around 25% on average from the same time in 2019. That’s partly due to the fact that too many Americans are choosing not to get vaccinated.

In fact, the U.S. is about to become the least vaccinated high-income G7 country. Despite the U.S. having the largest stockpile of Covid vaccines, and despite it having a dramatic head start, the country will soon have the lowest vaccination rate of any G7 nation after Japan surpasses it.

Ancillary Fees Helped Keep Airlines Afloat in 2020

I’ll end with some positive financial news from 2020. In a year when air travel demand was clobbered by the pandemic, airlines managed to keep the lights on thanks in large part to ancillary fees. Like sales in general, ancillary fees fell in absolute terms, but they represented a bigger piece of airlines’ total revenue last year.

Ancillary Revenue as a Percent of Total Revenue
click to enlarge

Low-budget carriers appeared to benefit the most. Non-ticket sales were nearly 56% of Hungary-based Wizz Air’s total sales, the highest of any other company. Spirit Airlines was a close second, followed by Allegiant Air, Frontier Airlines and Ryanair.

More good news came out of Ryanair last week. The Irish low-cost carrier announced that it was lifting its growth target to 50% over the next five years, up from a previous target of 33%. This would mean Ryanair would carry more than 225 million passengers a year by 2026, after expanding into markets such as Italy, Scandinavia and Morocco. By this winter, the carrier hopes to operate about 90% of its pre-Covid capacity. Wheels up!

Curious to know the world’s top 10 airlines of 2021? Click here to see the countdown!

 

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (06/30/2021): Delta Air Lines Inc., American Airlines Group Inc., Ryanair Holdings PLC, easyJet PLC, Azul SA, Wizz Air Holdings PLC, Spirit Airlines Inc., Allegiant Travel Co., Southwest Airlines Co., Alaska Air Group Inc., Hawaiian Holdings Inc., United Airlines Holdings Inc.

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Economics

John-Mark Staude: Bullish On Uranium & Other Green Metals – The Daily Dive

On today’s Daily Dive, we welcome back John-Mark Staude, CEO of Riverside Resources (TSXV: RRI). Staude joins us today to
The post John-Mark Staude:…

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On today’s Daily Dive, we welcome back John-Mark Staude, CEO of Riverside Resources (TSXV: RRI). Staude joins us today to update us on the latest at Riverside, the supply and demand situation with copper, and the current outlook on gold. He also share his take on the Federal Reserve’s recent bond and interest rates policies, what commodities to watch, and the outlook for the market with respect to inflation movements.

Riverside Resources, listed on the TSX Venture exchange under the symbol “RRI”, is a unique take on the resource sector. The company bills itself as a prospect generator, with its business model focused on utilizing its database and experienced technical team to acquire and discover new potential exploration assets. The model has evidently worked very well for the company over its thirteen years of operation, with the firm having conducted a number of spin-outs and transactions that were beneficial to shareholders.


FULL DISCLOSURE: Riverside Resources is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Riverside Resources on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.

The post John-Mark Staude: Bullish On Uranium & Other Green Metals – The Daily Dive appeared first on the deep dive.

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