Gold and silver prices have remained resilient, with both above $30, while a potential gold short squeeze looms as repo volumes reach $2.3 trillion and the repo to reserves ratio hits 70%.
The Federal Reserve has been losing $1-3 billion per week since September 14, 2022, accumulating $200 billion in unbacked losses, signaling potential economic instability.
Silver open interest has experienced a significant 33% reset from 190,000 to 130,000 contracts in a few months, marking the fourth largest reset since 1980 and potentially fueling a sustained rally above $30.
The Fed’s final rate cutting cycle is expected to commence, potentially destroying the dollar and leading to 0% interest rates, with implications for global “fat currencies”.
A rare “golden cross” in the Gold to S&P 500 ratio, with the 50-day moving average crossing above the 200-day moving average, signals potential gold outperformance against stocks, last seen at the beginning of the 2001 bull market.
In a money printing environment, governments artificially inflate economic growth, necessitating caution when investing based on seemingly strong economic statistics that may be faked.
While gold and silver are bullish against paper currencies, their allocation should be based on personal wealth situations due to their lack of income generation.
Platinum remains depressed among precious metals, but Faber is bullish on it and oil, believing the world is underestimating future demand as evidenced by commercial traders’ light short positions.
Faber is bearish on the S&P 500 and NASDAQ, considering them grossly overpriced and over-owned, and recommends buying other stocks instead of the Magnificent Seven tech stocks.
Uranium stocks are expected to see higher demand and prices, with Faber more interested in stock prices than commodity prices after a recent good move and correction.
Socialist policies and excessive regulations can lead to economic inefficiencies and inequalities, as demonstrated by historical examples in 19th century Canada, US, and Europe.
The US government’s spending reaching 89% of GDP by 1910 and accelerating after the Great Depression has resulted in shrinking economic growth.
The SEC and other regulatory agencies are criticized for protecting wealthy individuals and Wall Street rather than small investors, with Faber describing the Consumer Protection Agency as a “joke”.
Wealthy people often support Socialist policies because they can manipulate them, while Socialists are considered dangerous in every society, as explored in Joseph Schumpeter’s book “Capitalism, Socialism and Democracy“.
At Ferguson Island, drill holes need to target 400m under cover to hit the mineralized surface, where 3% copper and 1.1g/t gold were intersected for 40m, followed by a massive sulfide zone of 5.2% copper and 1.6g/t gold over 6m.
The US faces five significant conflicts simultaneously, including Ukraine-Russia, Hezbollah-Israel, Hamas-Israel, Israel-West Bank, and China-Taiwan, with potential for major military escalation and economic chaos.
According to Bob Morad, a veteran with 20 months of combat experience and 800 missions, the US is unprepared for a real war, while Russia is fully prepared.
With 400 million guns in the US, there’s a risk of 50-100 random shooting events occurring within a month, potentially leading to martial law and disrupting the 2024 election.
The influx of over 10 million illegal immigrants, primarily from Venezuela, coupled with voter registration without photo ID, raises concerns about potential electoral fraud and violence.
Gold mining shares are currently at their cheapest relative to gold in history, yet are predicted to be the safest investment for the next decade, despite major mining companies being utterly destroyed.
The speaker anticipates that the FED’s rate-cutting environment and potential economic chaos will lead to increased inflation, causing gold mining shares to outperform in the near future.
The world is amply supplied with oil and natural gas, with US natural gas priced at $10-15/barrel oil equivalent, leading to engine switching and arbitrage opportunities that challenge traditional oil demand.
China’s switch to LNG trucks from diesel, driven by air pollution concerns, is displacing hundreds of thousands of barrels of oil demand daily, with natural gas burning 70% cleaner than diesel.
OPEC’s shrinking core, now 12 countries from 15 in 2019, has reduced its oil output to 75% of US/Canada combined, weakening its market influence.
Artificial intelligence will drive massive demand for electricity, with natural gas as the primary fuel, potentially resolving the current natural gas glut and meeting the equilibrium price of oil and gas.
The US’s deep lead in producing cheap hydrocarbons will synergize with its strong lead in AI, radically changing the energy dynamic and creating investment opportunities.
Natural hydrogen, a carbon-free energy source, could be drilled at large scales if successful, providing a significant game-changing headwind for the energy industry.
Stimulated production, involving water injection underground to naturally produce hydrogen, is a speculative but potentially revolutionary area of energy production.
The Relative Strength Matrix ranks energy as one of the worst performers in the last 58 days, with XLE (energy stocks) and FCG (natural gas stocks) deteriorating the most.
Gold broke out of a 6-month base at $2500, reaching an all-time high of $2557, with technical analysis predicting it to reach $3000 in the next 6 months.
For a balanced portfolio, consider a 5-10% allocation to metals, with a strategy to buy 20-30% now and potentially allocate more to silver for smaller investments and more to gold for larger amounts.
The “Keys to the White House” model has accurately predicted 9 out of 10 presidential elections from 1980 to 2020 and has been reliable for 160 years since 1860.
The model’s short-term economic key indicates no recession in the election year, while the long-term economy key shows Biden’s term had virtually double the real per capita growth compared to the previous two terms.
Significant policy changes under Biden, including revocation of Trump executive orders, infrastructure bill, gun control bill, stimulus bill, and tax bill, fulfilled the model’s policy change key requirement.
The model relies on quantitative, historical indicators of presidential elections, not polls or impressions, providing a more objective approach to election prediction.
The model considered Biden’s foreign policy success, specifically the Coalition of the West stopping Putin’s Ukraine invasion, as a factor in its prediction.
The stock market is in a stage 3 correction, with the QQQ testing the 150-day moving average, signaling a potential bear market and the need to consider moving to bonds or other assets.
NASDAQ is experiencing a short-term downtrend with distribution selling, while the S&P500 may be due for a bounce and rally, creating mixed signals in the market.
Crude oil is bearish, potentially falling to $45 or lower, with demand slowing and investors betting on decreased consumption.
Gold is primed for a bullish surge, with a projected measured move to $2700-2800 in the next year or two, before potentially declining in a financial reset.
The GDX (Gold Miners ETF) is in a 13-year pattern with a potential measured move to $45-50, possibly squeezing into the low 50s if the precious metal space experiences a final push.
According to Goldman Sachs, Trump’s economic plan would make the economy worse, while Harris’s plan would strengthen it, as reviewed by top economists.
Harris claims Trump has no plan to fix the economy, which is suffering under his administration, while she would implement a plan to strengthen it.
Harris states she will not take away anyone’s guns, but would proudly sign an assault weapons ban as president, contradicting Trump’s claim about her stance.
Harris accuses Trump of consistently using race to divide Americans throughout his career, calling it a tragedy for a presidential candidate.
Trump’s statement about “fine people on both sides” at the Charlottesville rally was reportedly fact-checked as true, despite being a controversial claim.
The US Navy faces a 13-14% manpower shortage, leading to overworked sailors, sleep deprivation, and ship mothballing, putting the entire fleet at risk.
The US’s 11-carrier fleet is outdated for a 15-carrier world, with each new carrier costing $50-60 billion initially and an additional $50-60 billion in maintenance over decades.
US missile defense technology, despite massive investment, proves ineffective against cheap drones and hypersonic missiles, as demonstrated in recent Red Sea attacks.
Russia’s adaptation of Soviet “dumb bombs” with GLIDE systems in Ukraine, costing only $20,000 each, challenges the effectiveness of expensive US carrier fleets against advanced air defenses.
The US faces a $2 trillion annual interest payment on debt, equal to the current defense budget, potentially necessitating cuts to Social Security and Medicare to fund military spending.
US global hegemony is challenged by unreliable Middle Eastern partners like Egypt and Israel, despite heavy funding, forcing the US Navy to protect shipping lanes independently.
Warren Buffett is reducing Bank of America Holdings due to fragility of banking system, inflation, interest rates, and potential bad debts from zombie companies, indicating heightened risk in the banking sector.
Central banks are accumulating gold to protect their currencies, as the dollar’s trade weighted index shows a bearish “death cross” sign, potentially signaling a move from 101 to 90.
The US economy is in a debt trap with a budget deficit of $380 billion in August, twice the COVID crisis level, and a debt-to-GDP ratio over 130%.
A credit crisis is looming, with business credit collapsing, consumers and investors facing credit constraints, and the Federal Reserve struggling to manage the economy through interest rates.
Russia is reportedly in a better financial position than the US, with a significantly lower debt-to-GDP ratio compared to the US’s 130%+.
Bitcoin’s bull run is ahead of schedule, with two all-time highs before the halving event occurring for the first time, driven by the four-year cycle hardcoded into Bitcoin’s supply and demand dynamics.
The current Bitcoin price run is primarily fueled by institutional investors through ETFs, with retail participation remaining low.
Central banks are stuck in a rate-cutting cycle to stimulate economies, with the Federal Reserve, Bank of England, and ECB cutting rates while the Bank of Japan attempts to raise them.
The Fed’s easing cycle at 3% CPI raises red flags, indicating a systemic crisis brewing as the financial system is held together by “spit and twist ties” under stress.
The decline of the nation-state is underway, with tech giants like Apple and Facebook having more influence over information flow, media, and news than governments.
Decentralized virtual companies and peer-to-peer value exchanges will become more important than national passports, with people using digital wallets and IDs for daily activities.
The 2020 US presidential election will significantly impact economic policies, with the DNC’s sudden shift on Bitcoin and crypto in summer 2020 suggesting a great bifurcation scenario.
The 2025 Canadian federal election is likely to see the Liberal Party lose power, with the Green Party potentially winning more seats than the NDP.
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