Major Miners

There are signs of life in the most despised sector of the market: gold and silver miners. May 10, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Major Miners SEAN RING When I had a conversation with the renowned Rick Rule last week, he shared an intriguing insight. He pointed out that central banks were essentially hosting a gold party, and when retail investors eventually wake up from their slumber, it could propel gold and silver to unprecedented heights. It's important to note that Rick’s analysis is not based on mere speculation, but on simple mathematics. He suggests that gold could potentially reach a staggering $8,000 to $10,000. His rationale is straightforward: the historical average portfolio holding of gold is 2.0%, but it’s currently a mere 0.5%. Therefore, a return to the mean, or the average, could quadruple the gold price from its current level. And how will that mean reversion happen? When retail buyers return to gold. (And silver, too, but we’ll get to that later.) If you’re a Strategic Intelligence subscriber, you’d have seen that yesterday, my esteemed colleague Jim Rickards wrote, “I have updated my forecast that gold will move past $25,000 per ounce by 2026 or sooner. That’s not a guess; it’s the result of rigorous analysis.” Jim continues: U.S. M1 money supply is $17.9 trillion. (I use M1, which is a good proxy for everyday money). What is M1? This is the supply that is the most liquid and money that is the easiest to turn into cash. It contains actual cash (bills and coins), bank reserves (what is actually kept in the vaults), and demand deposits (money in your checking account that can be turned into cash easily). The total amount of official gold the U.S. has is 8,133 metric tonnes. That equals 261.5 million troy ounces. One needs to make an assumption about the percentage of gold backing for the money supply needed to maintain confidence. I assume 40% coverage with gold. (This was the legal requirement for the Fed from 1913 to 1946. Later it was 25%, then zero today). Applying the 40% ratio to the $17.9 trillion money supply means that $7.2 trillion of gold is required. Applying the $7.2 trillion valuation to 261.5 million troy ounces yields a price of $27,533 per Troy ounce of gold. That’s the implied non-deflationary equilibrium price of gold in a new global gold standard. To paraphrase my favorite fictional libertarian Ronald Ulysses Swanson, just reading, copying, and pasting that gave me a semi. Anyway… Right on cue, the Twitterverse (or X-verse, now?) erupted with a bunch of charts I’ve collected and curated for your edification. If you’re already long gold and silver, this will only enhance your confirmation bias. Your FOMO (Fear Of Missing Out) bells will ring if you're not. We’ll start with the fear trade (gold) and move on to the greed trade (silver). Gold First, let’s start with Northstar Charts. This chart shows what we already know. At first, Gold kept bumping its head on the overhead $2,000 resistance. In a reverse of polarity, that resistance, once broken, became support. Now, it looks like gold will remain above $2,000 for good. (Though Northstar cautioned we may get an ugly move to $1,900 or so before we recover. Credit: [@NorthstarCharts]( Next, Jesse Colombo looks at gold’s current bull flag pattern. From StockCharts.com’s Chart School: Flags are short-term continuation patterns that mark a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance or decline with heavy volume, and mark a midpoint of the move. Importantly, it’s a consolidation and continuation pattern. That means it’s taking a breather before resuming its uptrend. Credit: [@The BubbleBubble]( Let’s move on to silver. Silver Tavi Costa is usually excellent. I’ve followed him for years. Here, he writes about why silver is so important. Then, he shows a chart of the silver price and explains why he thinks we’re heading up from here. (Hint: it’s another bull flag, similar to gold’s.) Credit: [@TaviCosta]( Next, venerable trader Peter Brandt shows another chart pattern, known as an area island or island reversal pattern. Again, from StockCharts.com: An island reversal is a reversal pattern that forms with two gaps and price action in between the two gaps. These gaps tell us that the island reversal marks a sudden, and sharp, shift in direction. Even though they are relatively uncommon, island reversals are potent patterns that warrant our attention. Credit: [@PeterLBrandt]( Notice how silver reversed course after the island reversal. Next, onto the main event: the miners. [Urgent Notice]( Our records indicate that you ARE NOT currently signed up to receive Monday's time-sensitive trade alert from our company's top trader. This idea could double your money in a single day. Don’t miss this opportunity. [Add your name to our list today](. [Click Here To Learn More]( The Miners In this chart, Northstar shows the tremendous gap between gold (black line) and the gold miners (orange line). Northstar writes, “When gold breaks out versus the CPI, the miners should do very well.” The miners, indeed, have much catching up to do! Credit: [@NorthstarCharts]( Next, Peter Brandt points out all the bull flags in the gold and silver miners and gold and silver junior miners. Credit: [@PeterLBrandt]( Finally, Don Durrett, who runs Gold Stock Data, gave out his four favorite silver miner stocks on X. Credit: [@DonDurrett]( Don also posts videos on YouTube. His latest analysis of [24 Large Cap Gold/Silver Producers]( is worth watching, especially if you’re after new tickers to invest in! Wrap Up I’m loathe to sound like other newsletter writers who tell their readers, “You must act now! If you don’t, you’ll lose out forever!” But I genuinely believe it’s the time of the precious metals and their miners. I hope you participate in this exciting opportunity, as your involvement is crucial in creating the life you want for you and your family. You deserve it! Have a great weekend. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… What’s More Important: People or Institutions? SEAN RING Of the people. By the people. For the people. The first job of any government is to protect the people. If a government can’t defend its people, it has no purpose and must be replaced. As a Hoppean Libertarian, I am positioned further right on the political spectrum than most libertarians. This perspective shapes my critique of an article I recently encountered in Law and Liberty. In a piece titled “[Unanchored in El Salvador]( G. Patrick Lynch compares El Salvador’s President, Nayib Bukele, to chemotherapy for El Salvador’s social cancer. It’s little more than a hit piece, attacking both Bukele and his right-wing “fanboys.” Having lived in dangerous environments, I find it hard to take seriously those who critique leaders like Bukele from the safety of their homes. And before Bukele’s presidency, El Salvador was far more dangerous than New York, London, or the Philippines. Before I get into Lynch’s article, let me give you a bit of background. New York, Singapore, and Hong Kong I grew up outside New York City and remember the 70s and 80s. It was a shithole. Not until Rudy Giuliani came in with his “broken windows policy” did The City clean itself up. Cops were all over the place, and crime fell off a cliff. It was the world's greatest big city in the late 1990s. When I moved to Singapore in 2009, I was already aware of the complete lack of crime there. Singapore had, and still has, a reputation for being “sterile,” but that usually comes from Westerners who are used to filthy, crime-ridden cities. The comments were completely different when I spoke to a South African friend who lived in Singapore. “I love it here. I can let my kids stay out until 3 am and sleep soundly.” Hong Kong elicits much the same reaction, except for sterility. Hong Kong is a dirty city, but there are no crimes. Again, children are entirely safe there. What did all these cities have in common? A police force that enforced the law, kept the peace, and tolerated zero indiscretions. They still do this in Singapore and Hong Kong. How’s the Big Apple doing? Or Chicago? Or San Francisco? [[Claim Your $1 Copy Today] Jim Rickards Endorses New Book From Top Hedge Fund Titan!]( [Click Here Now To Claim Your Special $1 Book Offer]( Lynch’s Critique of Bukele Let Lynch himself lay out the case before Bukele: El Salvador has had a very bad case of social cancer for a while now—namely, it has had a chronic violence and crime problem. Long ranked as the most dangerous country in the Western hemisphere, daily life in El Salvador was dominated by crime gangs. Now the reflexive tendency in Latin America, not without reason, is to assume this involves drugs. And without question, El Salvador has narco-trafficking. Okay, it was terrible. Lynch continues: Gangs in El Salvador surprisingly have their roots in the US. Salvadoran immigrants got involved in illegal activities in the US and started to establish criminal enterprises back home. While the US has a fairly robust legal system and law enforcement mechanism, El Salvador and most of Central America do not. Policing is poor, civil society is weak, and rule of law is virtually non-existent. The gangs thrived, like an invasive species. Bukele began his term by trying to disrupt gang finances and policing well-known areas where the gangs extorted money from locals throughout the country. He also rehashed many of the public works proposals he tried as mayor. None of that solved the problem, so Bukele decided to change to a much more radical and aggressive form of medicine. In El Salvador, the police and rule of law didn’t exist. Bukele locked down prisons - a huge source of revenue - for the criminals. So, Bukele tried a few things before his big crackdown. Lynch writes on: Eventually the gangs had an outburst of violence and Bukele seized the opportunity to round up tens of thousands of suspected gang members in a nationwide sweep led by his military and police. He packed these individuals into a newly built prison that was unlike any other in the region. Stacked on top of one another and essentially deprived of most of their civil liberties, the prisoners have been locked away for several years. However the violence and crime rates in the country, unsurprisingly, have cratered. El Salvador is now one of the safest countries in the hemisphere and Bukele is a rock star in his country. Well, what do you expect? An elected official hired to do a job does it. Yes, it makes him a rock star in today's clown world. Joke Biden won’t even close the US border. Here’s where Lynch resorts to name-calling: The great American philosopher Alfred E Neuman was famous for his expression that was summarized by the phrase “What, me worry?” He graced the front page of Mad Magazine posed in various crisis situations. Many Salvadorans, and those of the American right who are currently “fanboys” of Bukele, are undoubtedly thinking the same thing now. Faced with a failed state and social crisis, a heroic political leader seems to have emerged to save his nation despite criticism from international organizations and human rights groups—the very groups that the American right and many Latin Americans ridicule. Bukele seems a perfect solution to a serious challenge facing the region. … It’s easy to see why so many on the right have become enamored with Bukele. They too lack basic respect for rules and institutions. They, like him, are largely unanchored by any coherent set of ideas or philosophy. Raw power and faith in “great individuals” seem to be their only consistent views. The rise of contempt for elites and policy experts after the financial crisis and Covid lockdowns have dovetailed with a fear of immigration, crime, and disorder. Bukele looks like a prototype for them, and they are swooning. The Left cares about intentions. The Right cares about results. It’s not like Bukele rounded up these criminals and summarily executed them. He put them in prison, where they belong. And I take massive issue with Lynch’s accusation that the Right doesn’t care about institutions. We didn’t take the Long March through them. The Left did and destroyed them. If the rule of law were enforced, Bukele wouldn’t have been needed. And when institutions no longer serve the people they were built for, they deserve to be torn down and replaced with something that works. Wrap Up As my good friend and former Mises Institute Jeff Deist posted, “It’s up to the Salvadorans to decide.” Ultimately, that’s true. In the meantime, I’m rooting for Bukele. He cleaned the country up in one fell swoop. He reminds me of a young Lee Kuan Yew, the founder of modern Singapore. Singapore’s success speaks for itself. Hopefully, El Salvador’s success will, too. All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. 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