Gold settles at a more than 1-week low, but inflation remains ‘economic wind of a commodity wildfire’
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By Myra P. Saefong and Mark DeCambre – MarketWatch – Nov. 19, 2021
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“Gold futures settled at their lowest in more than a week on Friday, on the back of a sharp drop in oil prices and a rise in the U.S. dollar to around the highest level in about 16 months.”

“The steep declines in crude oil spooked the raw commodity sector today, including the metals and gold,” Jim Wyckoff, senior analyst at Kitco.com, told MarketWatch. “Crude is the leader of the raw commodity sector, and now it looks like it has topped out, at least for the near term.”

“A higher U.S. dollar index was also a ‘daily negative’ for the metals,” said Wyckoff. “A rising dollar can hurt demand for assets priced in the currency, making them more expensive for buyers using weaker monetary units. On top of that, the dollar tends to attract interest during times of uncertainty about the global economy, weighing on bullion and other commodities.”
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https://www.marketwatch.com/story/gold-rises-early-friday-but-pop-in-u-s-dollar-caps-metals-gain-11637327391?siteid=yhoof2

Daybreak in the Land of Precious Metals
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Michael Ballanger for Streetwise Reports (11/17/21)
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“From a technical perspective, I could not ask for a more enviable confluence of conditions and events. Firstly, the precious metals bucked the trend of yielding to U.S. dollar strength so to the degree that this decoupling marks a new paradigm of gold and silver drivers, it was a watershed week. Secondly… it was that silver outperformed gold and that the HUI outperformed both metals while the mightily gilded TSX Venture Exchange surpassed 1,000, symbolizing the return of “animal spirits” to the world of precious metals.”

“To coin the Longfellowian phrase, it was as if the world of the hard asset disciple rolled into light; it was daybreak everywhere, and it was long overdue.”
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https://www.streetwisereports.com/article/2021/11/17/daybreak-in-the-land-of-precious-metals.html

I spent a little time Sunday evening reviewing (GPL) (GPR) Great Panther to see if it was a turnaround candidate or a potential distressed producer that could be a takeover candidate for another larger or better producer. The latter looks more likely at this point, as they really have their work cut out for them to turn things around operationally and financially. It might be best if another company took them over and put them out of their misery, which could be an interesting investing angle.
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1) First of all they have really high All-In Sustaining Costs: $1,950 – $2,050 per Au oz sold, so their margins are not nearly as good as most other gold producers. A rising price environment would give them nice upside leverage as a result, but they are in the highest quartile in costs for existing producers.
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2) Their 3rd quarter operations and financial review was nothing to write home about, but here is what the President and CEO did write about on November 3rd.

“The third quarter was challenging operationally, with lower than planned production, which led to greater than anticipated unit costs,” stated Rob Henderson , President & CEO of Great Panther. “We expect Q4 to be another challenging quarter due to the previously reported temporary suspension of mining in the UCS pit and incremental pushback requirements. Limited mining of ore was authorized by the geotechnical committee to continue in the southern portion of the pit. In order to ensure safe working conditions, we intend to ramp down mining in UCS at the end of the year and resume the pushback in mid-2022 when seasonally drier conditions are expected.”
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3) They also just put their Guanajuato Mine and Cata processing plant on care and maintenance, which is not going to help them dig out of the hole much quicker, as they are looking to get their ship turned around. Brutal.
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“While the Company continues to proactively engage with CONAGUA in regards of the tailings dam permit, the decision has been made to put the Guanajuato mine and the Cata processing plant on care and maintenance as of November 30, 2021 . The Company is continuing to operate the San Ignacio mine and is exploring alternative arrangements for the mine including third-party processing of ore.”
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https://www.greatpanther.com/news-media/news/great-panther-reports-third-quarter-2021-financial-results

Simon Hunt: Market Valuations have Diverged Considerably from Reality
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Palisades Radio – Nov 18, 2021
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“Tom welcomes back Simon Hunt to discuss the generational risks in the global economy. There are growing bubbles everywhere, along with enormous amounts of speculation, overvalued markets, and geopolitical tensions which all appear to be worsening. In addition, we have central bankers running wild. Debt can’t continue to grow faster than the economy. Navigating these risks is difficult. You can either run with the crowd or take preventative actions. Interestingly, two countries China and Russia have chosen to take prudent action for their economies. They are preparing for the monetary collapse outside of their countries. They understand that this will end badly.”

“Simon discusses consumer sentiment and how it is signaling higher prices and high inflation. We’re seeing inflation running hotter than income. We’re going to see a slow down in global business activity soon. The Fed will certainly respond with more money regardless of its severity.”
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https://youtu.be/1ker02c1Dg4

That was a significant plunge in most of the Uranium stocks the last few days, but specifically Friday.
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I was selling back some of my U miners last week and the earlier part of this week and got them down from 70% to 60% exposure, and also exited Azarga completely (again) on Monday. If enCore would just come back down out of the clouds to Earth, then I’d buy into it moving forward as the arbitrage window has narrowed and the Azarga investors approved the merger already. Hoping to see a bit more pain in the U-stocks before buying into enCore though.
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However Friday I did add back to most of my uranium positions into the weakness like UUUU, URG, UEC, NXE, and PTU. I didn’t add to DNN (just holding what I have for now) as it still seems rather lofty here, so waiting for more of a pullback in it to add more. Overall, I’m back up to 70% positioned again. In a way, I hope the U stocks get creamed next week, as I’d like to get up to 80%-90% deployed again, but want to see the U mining stocks correct down further by 15%-20% further before adding too much more than what I’m currently holding.

You never seem to be getting uranium royalty Ex…..any reason why????…. especially the extra leverage in the warrants that don’t expire until dec 2024

I’m not opposed to Uranium Royalty Corp Wolfster, but thus far I’ve just played the sector moves with the individual uranium miners. I thought initially it was a bit over-hyped, as it was just Amir’s basket of long-dated U royalties that he unloaded into that vehicle, but since then they’ve added more key U royalties from other companies that are more interesting, and it’s a company that I’ll likely grab a position in during a corrective move in the sector.

It’s an interesting counter-argument from Jeff Snider about what most are seeing as a secular inflation trend underway, as he is focusing on just the supply/demand side of what is driving the higher CPI numbers, and saying it isn’t about new or more money creation. The actual truth though is we’ve all seen insanely large fiscal programs under each administration, and massive amounts of central bank monetary expansion for years and years now, so that IS inflationary. Period.
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One would need to be both blind and deaf for the last 12 years to come away with the idea that there wasn’t new money creation behind the inflation we’ve seen for a long time now. Since 2009, where the Fed first started its “emergency” and “temporary” quantitative easing program, they’ve been growing their bloated balance sheet. It is totally nuts that the central bank is still engaged in “emergency” and ‘temporary” QE over a decade later, as if we’ve stayed in the Great Financial Crisis this whole time since 2008-2009. .
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Some would argue we never fixed the issues that were the problem from that financial recession, and they’d be correct, because all we did was paper over them by a massive increase in the money supply. We’ve had all kinds of stimulus bills, programs (remember the new home credits, cash for clunkers, appliances rebates on taxes, etc…) as well as helicopter money to citizens, too big to fail bailouts for companies with the government intervening in the free markets, huge subsidies and tax incentives for failed solar belly flops like Solyndra or good ole’ Elon Musk to get Tesla off the ground. That was all backstopped by ripping off taxpayers and Fed backstopping and monetizing this debt by creating funny money. The liquidity the Fed has injected for 12 years now is what juiced all the inflation in the general stock markets, tech companies, collectibles, fine art, and more recently FinTech, NFTs, and the Cryptoverse. This massive amount of new money creation (the definition of inflation) is precisely why we are seeing (and have been seeing) they symptoms of this inflation in the uptick in prices in services, events, and the prices of many goods for years. Many of these areas that directly effect average citizens are even measured in the CPI metrics, but the inflation was there hiding in plain sight for anyone that just followed their wallet. Unfortunately, the main stream media and bogus government metrics have hoodwinked so many people into erroneously believing we didn’t really have any inflation. That is 100% BS.
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This erroneous narrative that there was no inflation is so simple to dissemble.
Are sporting events, movies, concerts, college tuition, landscaping, senior care, medical bills more or less expensive than they were a decade ago? Are tires or batteries or beer or liquor more expensive or less expensive than in 2009? Is food more or less expensive than it was a decade ago? It’s ridiculous for anyone to claim we haven’t seen inflation growing for many years, long before the recent hotter CPI readings in 2021.
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While I agree with the premise that in the 1950s we saw hotter CPI readings without more monetary creation and thus inflation, that is apples and oranges to where we are now. Did Jeff not notice the string of endless multi hundreds of Billions of dollars, and now multiple Trillions of dollars in government bills on the fiscal side for years and years now? Did he not notice on the monetary side of things the Fed continuing to buy assets with their pedal to metal the last 12 years?
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Sure there are some supply issues from the 1 1/2 years of ridiculous pandemic lockdowns across the world, and because the “just in time” business model broke down over this period, and because many workers and truck drivers have quit or were foolishly let go over draconian vaccine mandates, but that isn’t the only driver in higher CPI prices.
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There were already system challenges in place that were leading to an inevitable rise in commodities prices. The raging fuel prices are are direct result of terrible policy decisions to punish oil and gas companies for fracking and creating energy independence for the United States. Radical environmental groups and organized lobbyist groups have made it tougher and tougher to get permits, to start new Oil & Gas projects, Coal projects, Nuclear projects, focusing instead on Wind and Solar which has thus far been a failed experiment. With the stroke of his pen Joe Biden killed the Keystone Pipeline build, killed thousands of jobs, and is threatening to close down the Line 5 pipeline, and then has the gall to state there isn’t much they can do to lower energy prices.
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With the base metals, it is a similar issue where there has been a massive underinvestment in new Copper, Nickel, Tin, Aluminum, Iron, Zinc, mines and the prices had only one way to go up….
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Labor prices and wages had been kept artificially low for too long and then were artificially forced higher with the $15 minimum wage BS, but now, after locking down the planet for almost 2 years, and many people reorganizing their lives and priorities, wages are rising organically because they need to. With all the money supply and the dollars buying less goods and services, people need to get paid more to meet their cost of living requirements. When input costs from commodities go up in tandem with rising wages, then it leads to cost push inflation. This is on top of the true classical definition of inflation being an increase in the money supply, which as previously stated, we’ve seen more new money supply that any other point in history.
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While it’s an interesting narrative to try and blame the hot CPI readings on simply supply chain bottlenecks or surges in consumer demand… it fails for a few reasons.

1) Many of the areas surging (rents up 16% YOY) Senior care, concerts, sports, private school, college tuition, landscaping, home contractors, consultants, etc…. has all gone up for reasons that have nothing to do with supply chain issues or bottlenecks.

2) There has been and is PLENTY of inflation in many areas of daily life not measured in CPI readings, and those government metrics miss a great deal. That is the real world most of us live in (maybe some of the economists don’t live in the real world). Anyone following John Williams Shadow Stats for over a decade could see we had inflation at 6-10% in many areas of the real world, that never showed up in the CPI. It was a result of the money creation leading to inflation, as there was no pandemic during those years, so that narrative from Jeff really falls apart in that sense.

3) Rising wages are not because of supply chain bottlenecks. They are a direct result of people’s cost of living going up, because obviously inflation has caused everything to go up in prices. Supply and demand of certain industries plays into that, but it is hard to escape the obvious truth. We’ve had inflation for many years, and now the government can no longer disguise it even in their phony CPI readings.

Alasdair Macleod: Price Inflation is Only Just Beginning
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Palisades Radio – Nov 16, 2021
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“Tom welcomes back Alasdair Macleod to the show. Alasdair is the Head of Research for Goldmoney and an advocate for sound money.”

“Alasdair notes the investment management industry is completely ignoring the expansion in money and the resulting inflation. Price increases are the consequence of this expansion of the money supply. We’ve experienced an expansion by 400% in M1; we are in hyperinflationary territory. Further spending on infrastructure using more printed money won’t make this any better.”

“Interest rates have to rise or the dollar will tank but raising rates too far will make the debt unserviceable. Ever-increasing deficits are simply inevitable in a debt fiat system.”

“Alasdair believes it’s a mistake to assign a particular number to the term hyperinflation. The U.S. appears on the verge of hyperinflation unless there is a policy change. Policies appear to be worsening and there is a movement away from free markets. Things are going to get a lot worse before they wake up to the problem.”

“The energy problems in Europe are both Geopolitical and due to climate agendas. The decommissioning of fossil fuel energy sources and overreliance on alternative energy sources is very problematic. In addition, we’re changing demand by promoting electric vehicles. We’re screwing ourselves by doing away with fossil fuels. He notes that much of the supply issues are due to overreliance on just-in-time inventories.”
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https://youtu.be/L4sPESPjP4Q

Peter Boockvar: Market Crashes Happen When Tapering Begins
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Palisades Radio – Nov 19, 2021
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“Tom welcomes back Peter Boockvar of the Bleakley Group. Peter discusses the latest CPI prints and the transportation bottlenecks.”

“High prices for houses have forced many to seek rentals driving rents higher. These are long-term structural issues and with low-interest rates, home prices have risen significantly. The ongoing mix of fiscal and monetary largess has caused many of these problems.”

“Infrastructure spending is pulling workers away from other employers and projects. This spending won’t necessarily do much for the economy. We need to stop spending and reduce some of this liquidity and get control of inflation.”

“Market corrections tend to occur around the Fed’s taper plans which is when we often see pullbacks. Therefore, we’re unlikely to skate through this taper program either. What the Fed does this time around will be interesting as they will risk tanking the dollar. It will probably be a no-win scenario as markets today are drunk on easy money.”

“He explains why yield curve control is difficult to reverse once implemented.”
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https://youtu.be/z4pTVONcXG4

Ex: now you are making sense!

Living in Asia, my last home cooked turkey dinner was 2008. Anyway, not a fan of holidays or weekends. Looking forward to Monday morning open on the ASX.

https://www.yosemite.com/wp-content/uploads/2019/10/Thanksgiving-Holiday-Event-2.jpg

US Army do great turkey dinners at their bases, but no locations in China.

Great article there from Matt Bohlsen, and that pretty much covers the spectrum for the DLE topic.
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I’ve invited him on the show, and we did talk briefly, but he stated he is too busy with his own subscription service and schedule to come on and do interviews.

Try Joe Lowry. I think he goes as a guest to other shows

https://www.globallithium.net/contact

He shares his knowledge for free and he really knows about lithium as he is coming from the industry

Destruction of Glass-Steagall created rocket fuel
for the dot.com pump & dump, which set the stage.

Did anyone ever figure out what phosphate play it was the one guest teased in his interview???

Nov 18
Matthew
15 hours ago
Gold will break out tomorrow with a close at 1883. Then it can go on to take out the June high near 1920.
https://stockcharts.com/h-s
I think your guess with 1811 is a better bet for another pop up.

You misunderstood that comment. It was definitely not a prediction. I was merely giving the closing price necessary to breakout the following day. I gave the number because that resistance is rising each day. Yes, I could have been clearer as I usually am but I wouldn’t have mentioned the number needed if I was declaring that would breakout; I would have just thrown the chart up and left it at that.
It’s like me saying today that gold will break its important weekly pivot with a close below 1811.73 this Friday. It’s an fyi, not a prediction.

Understood. A good trade is a good trade, but it just appears that the PM markets are opening up the week under pressure, and that short positions may do pretty good – at least in the morning hours.