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It Is Pure Fantasy & Delusion To Think Of Gold As An Investment Or a Hedge Against Inflation!

After reading recent articles by others and listening to what continues to pass as ‘fundamentals for gold’, I think it might be helpful to restate,…

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This article was originally published by Munknee

After reading recent articles by others and listening to what continues to pass as ‘fundamentals for gold’, I think it might be helpful to restate, and elaborate on, two specific things which gold is not: (1) Gold is not an investment and (2) Gold is not a hedge against inflation.

This post by Lorimer Wilson, Managing Editor of munKNEE.com, is an edited ([ ]) and abridged (…) version of a post by Kelsey Williams

GOLD IS NOT AN INVESTMENT 

…To be considered an investment, gold’s value must have the potential to increase over time. Gold’s value, however, is constant and unchanging. Since the price of gold peaked in 1980, there has been NO INCREASE in the value of gold; and a lot of volatility on the downside. The volatility in gold’s price has everything to do with the U.S. dollar –  and nothing else. If you owned one ounce of gold in 1980 at $650 oz. and owned it in 2011 at $1895 oz., and again in 2020 at $2060 oz., there has been no increase in value.

Sure, the price went up; but the increase in price reflects only the loss in purchasing power of the US dollar (the effects of inflation) and not any increases in gold’s value. Also, there is no reason to expect anything different in the future. As such, gold is not an investment; nor has it ever been. (see Gold Not An Investment; You Won’t Get Rich)

GOLD IS NOT AN INFLATION HEDGE

Some people promote gold as a hedge against inflation. They are wrong on two counts. First, they are incorrect in what they mean when they refer to inflation and second, gold is not a hedge against inflation.

  1. Inflation is the debasement of money by government and central banks.The inflation is created by continually expanding the supply of money and credit. The expansion of the supply of money and credit cheapens the value of all the money in circulation, leading to a loss in purchasing power of the currency – the U.S. dollar. What most people usually mean when they say ‘inflation’ is  an increase in prices…
  2. A general increase in prices for most goods and services over time is the result of the loss in purchasing power of the U.S. dollar. The dollar’s loss in purchasing power is an effect of inflation. The inflation, however, has already happened. Inflation is an intentional creation of government and central banks…There is no hedge against government action to create and destroy its own money; but gold [which], when used properly, can act as a restraint on governments tendency to do so.

WHAT GOLD IS

Gold’s higher price in dollars, over time, is an inverse reflection of the decline in purchasing  power of the U.S. dollar…[so] we will need to see renewed, lasting, significant weakness in the US dollar, manifest in the form of much higher prices for everything we buy and sell, IF the gold price is going to move above above $2000 oz. If that does happen, gold can help you preserve your wealth. Any increase in gold’s price would help offset the higher cost of living. That is all you should reasonably expect from gold. To expect more than that is fantasy and delusion.

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Author: Lorimer Wilson

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Marvel Discovery bolsters “multi-commodity” portfolio with acquisition of uranium project

2021.12.05
For over half a century, uranium has been one of the world’s most important energy minerals.
It is used almost entirely in nuclear reactors…

2021.12.05

For over half a century, uranium has been one of the world’s most important energy minerals.

It is used almost entirely in nuclear reactors for generating electricity; a small portion of the mineral is also used in radioisotopes for medical diagnosis and research.

Nuclear power is widely considered an efficient form of energy creation. One uranium pellet weighing just 6 grams produces the same amount of energy as a tonne of coal.

Today, nuclear power is the second-largest source of low-carbon energy used to produce electricity, following hydropower. During operation, nuclear power plants produce almost no greenhouse gas emissions.

According to the IEA, the use of nuclear power has reduced carbon dioxide emissions by more than 60 gigatonnes over the past 50 years, which equals almost two years’ worth of global energy-related emissions.

There are more than 440 nuclear power reactors currently in operation across 30 countries, with another 50 or so under construction. Together, these nuclear reactors account for around 10% of the world’s electricity and one-third of global low-carbon electricity.

As a zero-emission clean energy source, nuclear power has become a vital part of the global energy transition, which would see nations shift away from the use of fossil fuels as the main source of electricity generation.

Nuclear electricity production. Source: World Nuclear Association, IAEA PRIS

Last year, as many as thirteen countries produced at least a quarter of their electricity from nuclear plants. Prior to 2020, electricity generation from nuclear energy had increased for seven consecutive years.

In a recently updated outlook report, the International Atomic Energy Agency (IAEA) said it expects world nuclear generating capacity to double to 792 gigawatts (net electrical) by 2050 from 393 GW(e) last year.

This was about 10% higher than the 715 GW(e) projection previously given by the IAEA, citing that many countries are considering the introduction of nuclear power to boost reliable and clean energy production.

“The new IAEA projections show that nuclear power will continue to play an indispensable role in low carbon energy production,” IAEA Director General Rafael Mariano Grossi stated.

The prospects for nuclear power will likely grow higher in the next two decades and beyond with many countries now targeting net-zero carbon emission. Growth is projected at around 2.6% annually through 2040, according to the World Nuclear Association (WNA).

Uranium Market

Positive developments for nuclear energy have also served as a strong tailwind for the long-dormant global uranium market.

As all commodity markets tend to be cyclical, uranium has languished near historical lows for the better part of the last decade, but the tide is beginning to turn.

Since the third quarter of 2021, uranium prices have enjoyed a sudden revival, rising by about 40% just in September, outpacing all other major commodities.

The price surge coincided with a burst of demand in uranium investments, led by Sprott Physical Uranium Trust, which has amassed a uranium stockpile that is equal to about 16% of the annual consumption from the world’s nuclear reactors, reflecting a massive bet on nuclear’s rising prominence in a carbon-free future.

Since mid-August, the Sprott fund has been snapping up uranium from the spot market almost on a daily basis, sometimes buying more than 500,000 pounds in a single day, according to its website and social media account. That helped to drive uranium futures to its highest since 2012.

Two exchange-traded funds focused on uranium — NorthShore Global Uranium Mining ETF (URNM) and the Global X Uranium ETF (URA) — have also seen a resurgence, with investors having poured more than $1 billion into them so far this year.

However, even before the recent price rally started, demand for uranium from the investment sector was growing, claims John Ciampaglia, CEO of Sprott Asset Management, which oversees the physical trust.

ETFs that track uranium are some of the best performers of the last two years, reversing a downturn that came when investors shunned the commodity following the Fukushima nuclear disaster in 2011.

About 20 million pounds of uranium had already been locked up by buying from London investment firm Yellow Cake Plc, Toronto-based Uranium Participation Corp. and a few junior uranium development companies, according to Jonathan Hinze, president of UxC LLC, a leading nuclear fuel market research firm.

The Sprott uranium fund was formed out of an April takeover of UPC, which at the time held 18 million pounds of uranium. In March, Yellow Cake bought $100 million worth of uranium from Kazatomprom, the world’s top uranium miner. The Kazakh producer is also said to be in talks to supply uranium directly to Sprott, according to Bloomberg reports.

Although uranium demand from utilities has not increased much, Kazatomprom has warned of supply shortages in the long term as investors scoop up physical inventory and new mines aren’t starting quickly enough.

Years of persistently low prices have led to planned supply curtailments of existing production capacity, lack of investment in new capacity, and the end of reserve life for some mines. These factors are all likely to jeopardize the long-term security of uranium supply faced with a rising demand for carbon-free electricity.

To complicate matters, utilities normally do not come to the market when they need uranium; instead, the mineral must be purchased years in advance to allow time for a number of processing steps before it arrives at the power plant.

So as the spot market continues to thin, driven by investor purchases, there may not be enough uranium to adequately satisfy the growing backlog of long-term demand.

Not Enough Supply

According to the World Nuclear Association, for about 445 reactors with a combined capacity of over 390 GWe, this would require some 76,000 tonnes of uranium oxide concentrate containing 64,500 tonnes of uranium from mines each year. For context, total production from mines was about 47,700 tonnes last year.

More significantly, mine production as a percentage of world demand has been on the decline for the past five years, from 98% in 2015 to just 74% in 2020, WNA data shows.

World uranium production and reactor requirements. Source: OECD-NEA, IAEA, World Nuclear Association

While the balance is usually made up from secondary sources including stockpiled uranium held by utilities, recycled or re-enriched uranium, and ex-military weapons, their share of the total supply will decline over time and should not be counted on for electricity generation in the long term.

According to a report by WNA, primary uranium production from existing mines will decrease by 30% in 2035 due to resource depletion and mine closures, while new planned mines will only compensate for exhausted mine capacities.

With mine output seeing further declines due to the Covid-19 pandemic and now investors hoarding more physical uranium, the industry is in dire need of strategic investments on mine projects to assuage future supply concerns.

Uranium Mining Overview

Uranium is a naturally occurring element with an average concentration of 2.8 parts per million (ppm) in the Earth’s crust. Traces of it occur almost everywhere.

In fact, it is more abundant than gold, silver or mercury, about the same as tin, and slightly less abundant than cobalt, lead or molybdenum. Large amounts of uranium also occur in the world’s oceans, but in very low concentrations.

To make nuclear fuel from uranium ore, the uranium is first extracted from the rock, then enriched with the uranium-235 isotope, before being made into pellets that are loaded into assemblies of nuclear fuel rods. In a nuclear reactor, there are several hundred fuel assemblies containing thousands of small pellets of uranium oxide in the reactor core.

The nuclear chain reaction that creates energy starts when U-235 splits or “fissions”, which produces a lot of heat in a controlled environment.

Most of the ore deposits supporting today’s biggest uranium mines have average grades in excess of 0.10% of uranium (or 1,000 ppm), and even the low-grade ores must be 0.02% to support a mine. Therefore, uranium operations are constrained to just a few places with suitable orebodies that can be mined economically.

While uranium production occurs in 20 countries, more than half of the world’s total output comes from just 10 mines in five countries, with Kazakhstan leading the way as usual (over 19,400 tonnes). Other notable producers include Australia, Namibia and Canada.

The largest producing uranium mines in 2020. Source: World Nuclear Association

Some uranium is also recovered as a byproduct with copper, as at the Olympic Dam mine in Australia (BHP), or as byproduct from the treatment of other ores, such as the gold-bearing ores of South Africa, or from phosphate deposits in places like Morocco and Florida. In these cases, the concentration of uranium may be as low as a tenth of that in orebodies mined primarily for their uranium content.

Various types of uranium mines can be found throughout the world. Open-pit mining occurs where orebodies lie close to the surface, while underground mining methods are employed where orebodies are deeper.

Meanwhile, some orebodies may lie in groundwater in porous unconsolidated material (such as gravel or sand), and may be accessed simply by dissolving the uranium and pumping it out; this method is known as in situ leaching (or in situ recovery in North America). For some ore, usually those with very low-grade (below 0.1%U), it is treated by heap leaching, which is similar to in situ mining.

Canada’s Athabasca Basin

As one of the leading uranium producers, Canada is rich in uranium resources and has a long history of exploration, mining and generation of nuclear power. Up until 2019, it had mined more uranium than any other country (539,773 tU) in history, about one-fifth of the world total.

By 2021, Canada has known uranium resources totalling 606,600 tonnes U3O8 (514,400 tU), with exploration still continuing. A majority of these resources are in high-grade deposits, some one hundred times the world average.

Canada’s uranium mining industry is represented by the major discoveries in the Athabasca Basin of northern Saskatchewan, which have accounted for most of the country’s production since the 1970s. The region is known to host some of the largest high-grade uranium deposits in the world.

The McArthur River and Cigar Lake mines, jointly owned by Cameco and Orano, have been the two main producers.

Cigar Lake is currently the world’s highest-grade uranium mine with 97,550 tonnes U3O8 (82,720 tU) of proven and probable reserves. The McArthur River mine, an even bigger operation than Cigar Lake, was placed on care and maintenance in 2018 due to market weakness.

Uranium mines in Canada. Source: World Nuclear Association

Past production can also be found at the nearby McClean Lake operation, which in the last 10 years has mostly been used to process ore from Cigar Lake; and the Rabbit Lake deposit, most of which had already been mined out after more than 40 years of mining.

To this day, the northern part of Saskatchewan remains a world leader in uranium production, with several proposed mines waiting in the pipeline (i.e. Denison’s Wheeler River) and various projects in the advanced-exploration phase.

Marvel Discovery

The most recent development in Saskatchewan’s uranium industry involves Canadian-based emerging resource company Marvel Discovery Corp. (TSXV: MARV) (Frankfurt: O4T1) (MARVF: OTCQB) and its latest asset acquisition from District 1 Exploration Corp.

Last week, the company announced it will assume all obligations under District 1’s option agreement to acquire a 100% interest in the Highway North property located in the Athabasca region of Saskatchewan.

The Highway North property is located 70 km southwest of the former producing Key Lake uranium mine. Aptly named for its location along Highway 914, the property consists of five contiguous claims totaling 2,573 hectares.

The Key Lake deposit, which is northeast of the property, contains two mineralized zones that historically produced a total of 4.2 million tonnes of product at an average grade of 2.1% U3O8.

Only 21 drill holes have been drilled on the property thus far totaling 3,527m between 1980 and 2008. Surface exploration and drilling have verified the presence of uranium mineralization along the Highway zone, with grades up to 2.31% U3O8 over 0.29 m.

Regional Geology

The deposit model for exploration on the Highway North property is a basement-type unconformity-related uranium deposit, such as those found at Eagle Point (part of Rabbit Lake), Millennium, and Gaertner and Deilmann (Key Lake).

This deposit type belongs to the class of uranium deposits where mineralization is spatially associated with unconformities that separate Proterozoic conglomeratic sandstone basins and metamorphosed basement rocks. Although rocks of the Athabasca Group and the basal unconformity do not outcrop on the property, they likely once overlaid the basement gneisses and metapelites which now do, as the current erosional edge of the Athabasca Basin, and potential outliers, is about 50 km north of the property.

In Saskatchewan, uranium deposits have been discovered at, above and up to 300 m below the Athabasca Group unconformity within basement rocks. Mineralization can occur hundreds of meters into the basement or can be up to 100 m above in Athabasca Group sandstone.

Typically, uranium is present as uraninite/pitchblende that occurs as veins and semi-massive to massive replacement bodies. Mineralization is also spatially associated with steeply dipping graphitic basement structures and may have been remobilized during successive structural reactivation events.

Such structures can be important fluid pathways as well as structural or chemical traps for mineralization as reactivation events have likely introduced further uranium into mineralized zones and provided a means for remobilization (see below).

Representative sections of three well-known unconformity-related uranium deposits of the eastern Athabasca Basin: Cigar Lake, Key Lake (Deilmann pit) and Eagle Point

The Highway Property straddles the Key Lake fault zone, an important corridor for structurally controlled Athabasca Basin-type uranium deposits.

Critical criteria on the property for these types of uranium deposits include the presence of graphitic EM conductors within metasedimentary packages, major reactivated northeast-trending fault systems that have been disrupted by obliquely cross-cutting subsidiary structures and the presence of uranium-enriched source rocks (see figure below). Exploration to date on the property has been limited.

Commenting on the company’s latest acquisition, Marvel’s president and CEO Karim Rayani, said:

“The Highway North project is perfectly situated along the Key Lake shear zone with power, water and road accessibility. The geological setting is prospective for structurally controlled basement-hosted uranium deposits such as the Millennium zone and Key Lake deposits of Cameco. Marvel continues to present stakeholders a rare opportunity having exposure to multi-commodity – critical element opportunities under one umbrella.”

Conclusion

The Highway North property adds to the company’s diverse portfolio of Canadian exploration projects that already includes gold, silver, copper and rare earth elements.

In an interview with Proactive Investors to discuss the new deal, CEO Rayani said this uranium asset acquisition may have taken investors by surprise, but in a good way. “We’ve always been a multi-commodity play, so we felt it made a lot of sense to add this to the Marvel portfolio of projects.”

The Highway North project, which was put together by an ex-Rio Tinto team, shares similar characteristics to the largest development-stage uranium project in Canada being developed by NexGen Energy, the chief executive says.

According to Rayani, Marvel is headed towards more of a “mine bank”, having already completed one spinout over the last few months, and the uranium asset may follow the same path.

“Really, we’re leveraging our shareholder base, creating share dividends and an opportunity. So we’re going against the grains as a typical mining company with gold, especially with our market cap,” he added.

With an increasing focus on nuclear power as a reliable fossil fuel replacement, it is expected that uranium exploration in Saskatchewan will continue to thrive given the province’s vast resources. A recovery in uranium prices would also stimulate a fresh wave of investments from key players in the mining industry.

With uranium prices doing well at the moment, Rayani believes that Marvel’s new uranium property, as well as its gold projects, should pick up more steam heading into 2022.

Marvel Discovery Corp.
TSXV:MARV, Frankfurt:O4T1, OTCQB:MARVF
Cdn$0.09, 2021.12.03
Shares Outstanding 79.1m
Market cap Cdn$7.1m
MARV website

Richard (Rick) Mills
aheadoftheherd.com
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Author: Gail Mills

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Precious Metals

Hedge Funds Are Driving Price Action In The Gold Market

Hedge Funds Are Driving Price Action In The Gold Market

Via SchiffGold.com,

Looking at the data, it appears hedge funds are currently driving…

Hedge Funds Are Driving Price Action In The Gold Market

Via SchiffGold.com,

Looking at the data, it appears hedge funds are currently driving price action in the gold market

Please note: the COTs report was published 12/3/2021 for the period ending 11/30/2021. “Managed Money” and “Hedge Funds” are used interchangeably.

The Commitment of Traders analysis last month showed that selling had been exhausted and hedge funds were going long again. It highlighted the trouble gold faced at the $1,800 level. After the October Jobs and Inflation data, hedge funds went big into the market driving prices solidly through $1,800 before the market ran out of steam at $1,870.

The multiple attempts on $1,870 in rapid succession looked like another resistance would fall and send gold up through $1,900, especially if Brainard was nominated as Fed chair. Unfortunately, resistance held strong and a Powell nomination sent gold back through newly established support, which proved much more fragile on the way down vs the way up.

Gold is trapped below $1,800 again. A very weak jobs report provided only enough fuel to keep gold flat on the week. Will a hot inflation report next week be perceived as a “hawkish fed trade” or a “wealth preservation trade?” It all depends on managed money. The hedge funds are in complete control of this market at the moment as the data below shows.

Gold

Current Trends

Managed Money/Hedge Funds Net Longs increased slightly since last month, from 86k to 92k in November. On Nov 16, net longs peaked at 142k. This positioning accounts for the round trip gold took during November.

As the chart below shows, the November peak in longs did not see the same price appreciation as earlier this year. For example, in June of 2021 aggregate Net Longs were reaching 250k and the price of gold was at $1898. November saw net longs peak at 287k vs a price peak of $1853 on the same day (note: the price did reach $1879 but not on the same day as CFTC reporting).

Figure: 1 Net Notional Position

While “Other” has stayed relatively flat over the last several weeks with healthy long positions, Hedge Funds have been in and out. To see the strength of the correlation, the chart below zooms in on only Hedge Funds but extends back to Jan 2018. Hedge Funds have taken back control of the market. Their positioning is driving the price action each week. The peaks and valleys are perfectly aligned.

Figure: 2 Managed Money Net Notional Position

Putting actual numbers shows the true effect. Below lists the year and the Hedge Fund correlation vs “Other” correlation:

  • 2017 .87 vs -.73

  • 2018 .94 vs -.74

  • 2019 .96 vs .57

  • 2020 -.8 vs .64

  • 2021 .82 vs -.02 (YTD)

  • 2021 .85 vs -.43 (July – Nov)

The Hedge Funds lost control of the market in 2020. This is when Other actually drove the market higher. The group was helped by strong ETF flows and record delivery requests at the Comex. 2020 created a new baseline price in the metal. For example, in April 2019 Managed Money Net longs stood at 37k with a gold price of $1,303. On Sept 28, 2021, gold net longs reached 30k vs a price of $1735. At the moment $1750 is showing as strong support just as $1800 proves hard resistance.

Correlation does not prove causation, but the data makes a compelling case for Hedge Funds driving price action. Bottom line: the “weak hands” of Hedge Funds are dominating the short-term price movements of gold, but the physical demand keeps the market trending upwards.

Weak Hands at Work

The chart below shows the week-over-week change by holder. The Hedge Funds spent 4 weeks building long positions followed by two weeks of hard selling. The traders are not in the market because of the fundamental reasons supporting the case for gold. They are jumping in and out, trading the news to make quick money in highly levered positions.

True investors should ignore this short-term movement and recognize the power of physical metal as insurance against government ineptitude.

Figure: 3 Silver 50/200 DMA

Still, for investors frustrated by the price movement, looking at the Hedge Fund trading provides a clear explanation. The table below has detailed positioning information. A few things to highlight:

  • The Managed Money Net Long monthly increase was driven primarily by shorts

    • Shorts have moved lower from 55k to 45k

    • Longs fell over the month from 141k to 137k

  • Other the past week, the move was primarily long liquidation from 152k to 137k

  • “Other”, which still represents the biggest Net Longs, was also driven by shorts closing

    • Longs were flat over the month at 172k

    • Shorts decreased from 44k to 39k, all of which came in the most recent week

It looks like there is “dry powder” on both sides of the equation. The monthly move was driven by shorts closing, but the weekly move was driven by longs closing.

Figure: 4 Gold Summary Table

Historical Perspective

Looking over the full history of the COTs data by month produces the chart below (please note values are in dollar/notional amounts, not contracts). The chart shows the last run-up in price in 2011, followed by the slow fall into 2015 until the new bull market started in 2016. The response to the Trump election (gold sold off hard) can be seen clearly in the sharp drop-off in late 2016.

This chart also shows how big the “Other” category has become on the long side. In 2011, Other Long had $8.6B in gross long vs $30.6B in the most recent period.

Figure: 5 Gross Open Interest

The CFTC also provides Options data. This has mainly been dominated by Producers, but recently Managed Money has played a larger role within the market. The current period shows a similar trend with Managed Money Longs decreasing from $2.8B to $2.4B during November.

Figure: 6 Options Positions

Finally, looking at historical net positioning shows the correlation of Managed Money positioning with price. The peaks and valleys in price are mirrored in the open interest. The correlation did strongly diverge last year after the March 2020 sell-off. Hedge Funds continued reducing net long positions even while the price rose dramatically. This was probably due to strong ETF buying which won’t show up in the futures.

Note: The correlation will look stronger because price is half of the Notional value equation

Figure: 7 Net Notional Position

Silver

Current Trends

The most recent move in silver was actually driven by Non-Reportables rather than Managed Money. While Hedge Funds were responsible for the drubbing silver took in September, their current net longs stayed relatively stable compared to Non-Reportables.

Figure: 8 Net Notional Position

This can be seen more clearly in the weekly chart. While Hedge Funds did liquidate the last two weeks, they only unwound some of their recent positions. Non-Reportables unwound their entire new position and then some.

Figure: 9 Net Change in Positioning

The table below shows a series of snapshots in time. This data does NOT include options or hedging positions. Important data points to note:

  • Within Managed Money, the monthly change was a modest 1600 decrease and was even positive last week

    • Longs drove most of the move, going from 52k to 54k last week and down to 48k this week

  • As of last week, NonRep had increased net longs by 3k contracts, 4x the movement of Hedge Funds

    • Longs went from 13.9k to 16.9k and down to 13.5k

Figure: 10 Silver Summary Table

Historical Perspective

Looking over the full history of the COTs data by month produces the chart below. The chart shows the last run-up in price in 2011, followed by the slow fall into 2015. The price collapse in silver in 2020 is clearly visible in this chart. As can be seen, gross longs are still well above the 2020 lows.

Figure: 11 Gross Open Interest

The CFTC also provides Options data. This has mainly been dominated by Non-Reportables, exceeding even Producers. Options have fallen off significantly from the spike last July and is still well below the peak in 2011.

Figure: 12 Options Positions

Finally, looking at historical Net positioning shows the correlation of positioning with price. Similar to gold, the peaks and valleys in price are mirrored in the open interest. Again, the latest pop did not generate the price increase that would have been expected given the magnitude of the move.

Figure: 13 Net Notional Position

Conclusion: How Will Hedge Funds Respond to the Fed?

Hedge Funds certainly trade using technical analysis, which is why Fib targets and round numbers (e.g. $1,800) prove to be such difficult resistance points. Over time, the physical market has pushed prices up, but the short-term move is dominated by hot money. How long until Hedge Funds call the Fed’s bluff? More importantly, how long until there isn’t any physical to back the paper contracts because it’s been delivered and then removed from the vault?

Astute investors should keep the long-term picture in mind. The short-term gyrations can be immensely frustrating, but gold and silver are not Bitcoin. They are not vehicles to get rich quick because that would disqualify them as safe-havens. Remember, what goes up quickly, can come down quickly. Stay the course, trust the fundamentals, use the CFTC analysis to explain the short-term price movements, and understand the protection provided by physical precious metals.

Tyler Durden
Sun, 12/05/2021 – 11:30






Author: Tyler Durden

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Economics

Berkshire’s Charlie Munger: Market “Even Crazier” Now Than During DotCom Boom

The Australian Financial Review reports that Munger said Friday that he believes the markets are wildly overvalued in places and that the current environment…

…[The Australian Financial Review reports that Munger said Friday that he believes the] markets are wildly overvalued in places and that the current environment is “even crazier” than the dotcom boom of the late 1990s that subsequently led to a bust. He is not wrong.

This post by Lorimer Wilson, Managing Editor of munKNEE.com, is an edited ([ ]) and abridged (…) excerpt from an article from zerohedge.com for the sake of clarity and brevity to provide you with a fast and easy read. Please note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

1. Investor demand for U.S. technology stocks amid the pandemic has taken the Nasdaq 100 to a relative record against the Dow Jones Industrial Average…exceeding the peak set during the dot-com bubble.

2. On an absolute basis, US stocks have never been more expensive relative to sales.and never been more expensive relative to the nation’s GDP.

4. …Munger wishes cryptocurrencies had “never been invented,” and thinks the Chinesemade the correct decision, which was to simply ban them. In my country, English-speaking civilization has made the wrong decision, I just can’t stand participating in these insane booms, one way or another.”…

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The post Berkshire’s Charlie Munger: Market “Even Crazier” Now Than During DotCom Boom appeared first on munKNEE.com.




Author: Lorimer Wilson

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