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TFMR Podcast - Friday, May 15

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It was a great end to a great week where the old TFMR adage is proven yet again. To celebrate, I thought we should make this podcast immediately public in the hope that more people will choose to come along with us on this ride.

We are in the early stages of what will be the greatest precious metal bull market you are likely to see in your lifetime. To profit from this...and to secure your future...I urge you to consider a membership to TFMR. Its only $12/month and, this weekend only, we're running a discount due to the uncertain economic times.

And just so you know, it's not like we just stumbled upon this last week. Here are links to our two most recent annual forecasts. Please take a look. You'll see that we're clearly onto something and ahead of the curve in terms of analysis:

So, if you'd like to join us, just go to this link: www.tfmetalsreport.com/subscribe. Once there, select the monthly subscription option and then enter the coupon code "GOLD". This will save you $6 on your first month but every dollar counts at a time like this. I hope you'll join us. You'll find that the regular $12/month cost can be made up pretty quickly through the information we share here.

For today, just a lengthy general discussion followed by a mention of this story that broke right after the NYSE close: https://www.zerohedge.com/markets/fed-warns-stocks-face-significant-decl...

From there, we begin with these screenshots:

Next, we discuss Comex gold and silver and the persistent premiums/spreads versus spot:

Next, we check the daily and weekly charts of the mining shares:

And we close the week as we always do, with a look at your latest CoTs...which remain the most"bullish" since late June of last year.

Again, I hope non-members of TFMR will take the time to join us. You can bump along doing your own thing OR you can spend 40¢/day to learn A LOT about the precious metals and mining shares and then put that knowledge to use.

Have a great weekend, everyone!

TF

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Orange
May 16, 2020 - 1:00pm

Alasdair

Expects the dollar to collapse this year.

https://kingworldnews.com/alasdair-macleod-5-16-2020/

jack3617
May 16, 2020 - 12:59pm

Wallbridge

Had a thought on Wallbridge. Mr Hemke during the interview asked Mr. Sprott if he thought Wallbridge would put everything into their own production or do a takeover.

Mr Sprott said he's sure they will be a takeover. That was a surprise to say the least. I imagined a process toward a working mine especially w/Kirkland on the board.

Just interested what others thought.

Conversation starts @ 23:00

https://soundcloud.com/sprottmoney/sprott-money-news-weekly-wrap-up-51520

pcJLS
May 16, 2020 - 12:49pm

Oliver

I believe he is correct on his gold spike prognosis. There will be some moment in time, when the investment community will experience a collective "oh shit" moment - and then we will see that kind of movements in the gold price, as everyone tries to get in at the same time. Peter Schiff mentions something similar.

May 16, 2020 - 12:32pm

@Doople

Excellent point you raise. I have not looked recently at the laws regarding 1031 exchanges. So, I did a quick google search, and to my horror, found this:

https://www.irs.gov/newsroom/like-kind-exchanges-now-limited-to-real-pro...

Yikes. No longer can one trade unlike personal property for real estate. Oh well. The tax gain belongs to the seller, not me, the buyer. As far as the IRS is concerned, my acquiring of the land means I take on a liability, in the form of taxes and maintenance, management fees, etc.

I still stand by the proposition, though, that exchanging physical gold for real estate is the trade value, separate and apart from any valuation based in terms of fiat paper "pricing."

And, I will add, that even though the law changed in 2018, I have every confidence that the law will once again change, and new ones will come to pass. One must have a worthy tax person to guide one through the exchange.

AgstAger
May 16, 2020 - 12:23pm

Good read...

"The problem is that we’ve entered this crisis devoid of the necessary tools needed to rescue the economy without destroying the US currency at the same time."

https://www.kitco.com/commentaries/2020-05-14/The-US-dollar-the-final-ac...

DoopleCalifornia Lawyer
May 16, 2020 - 12:16pm

California Lawyer

Not sure I understand what you are saying regarding 1031 exchange. I have completed many 1031 exchanges in my real estate career and I have always understood that one can exchange real estate for real estate as it is a like kind of exchange and both are real property. I have never heard that one can exchange physical gold or silver for real property and qualify for a 1031 exchange. Can you please expand on this? Thank you.

OceanXJLS
May 16, 2020 - 12:11pm

circuit breakers

A few years back they added a 'circuit breaker' on pm exchange, didn't they? trading would be suspended if gold jumped $100 during the day. Craig probably remembers the details etc...

May 16, 2020 - 11:55am

What “PRICE” to “SELL” Silver?

To be in this moment with the proper mental focus and with all due consideration for rationality, one must "Get their mind right." [Cool Hand Luke reference, still a classic . . .]

Ilikerocks2: Nice handle by the way. Let me urge you to go read what Mr. TF wrote in reply to your question. I also urged you to read carefully what AGKIIX wrote, it is so good I cut and pasted it:

"I'd like to buy a 1,000 acre parcel of land east of Fallon, complete with a stream, small lake, shooting range, flat spot for a residence, maybe a small mine, an air strip, bottom land for alfalfa crops, some open range for a few cows, a few hundred acres of trees and well off the highway. My time to convert would be somewhere around silver $150-200 an ounce, doing a 1031 trade with the seller."

Since I had my mind warped in law school with the Socratic Method, I'll start with a question: What is the lesson I'm hoping to teach with the title of my post?

Yep. Let's not skip over assumptions and use an unsound premise to build a question. Let's dig deep, and analyze the underlying facts, to reason to a solid, logical conclusion that withstands scrutiny.

Some ready attacks are these: "But you can't eat silver." "Silver is an industrial metal." Etc.

When the question is what PRICE, one must immediately stop, and get one's mind right. "PRICE" is a conditioned response to you being bombarded with propaganda that FIAT paper somehow holds value because some authoritarian figurehead whom you never once gave consent to govern you, decided it to be so. ALL fiat devalues to its intrinsic value of ZERO over time. ALL of it.

So, the first question is, if one is going to trade one's physical silver held in hand for fiat paper, what is the timeline that one intends to hold onto the physical? If it is short term, then holding physical and then exchanging it for fiat paper, is really just a medium of exchange arbitrage effort. It might go well, it might not. On that basis, one could just as easily trade FOREX or go to a casino and declare victory when one's fiat paper balance increases relative to the original fiat paper exchanged initially for the physical silver.

If one is going to hold physical silver long term, then, one must first identify the objective in doing so. Is it to satisfy some urge to hold shiny in one's hand, because of the heft, the feel, the noise it makes when clinking coins together, to show off to friends who may marvel at the size of one's stack, thus delivering an emotionally satisfying compliment to the holder of the physical? All of these are extremely valid points, and this is basically the collector's mindset, whether is it muscle cars from the 60's and 70's, dolls, stamps or butterflies. In this regard, exchanging some or all of the collection for fiat paper is never going to replace the emotional satisfaction of possessing the collection. So, it really does not matter what amount of fiat is exchanged, right? And, most likely, the collector is not parting with the collection until the heirs sell it at auction after the collector is dead.

One may accumulate physical silver for insurance against the fiat paper scheme coming to its natural end, aka, the end of the great Keynesian experiment. In this regard, the PRICE of physical silver in terms of paper fiat is irrelevant, except as to the accumulation price, in which, therefore, it is ALWAYS a function of the relative "PRICE" of the fiat paper to other variables, such as the fiat paper "PRICE" of gold, or other commodities, or the SP 500, real estate, etc. Stated simply, buy low and buy the dip, the hold on for dear life.

AGKIIX has it exactly right. Once acquiring physical silver, its value should always be viewed in terms of what it will TRADE or EXCHANGE for, and never in terms of numbers of fiat paper units.

In this context, then, there are two useful trading concepts. The GOLD : SILVER ratio, and historical comparisons from earlier bouts of hyperinflation and currency collapse.

If one is solely going to accumulate either silver, or gold, or some combination of silver and gold, one can look at the gold : silver ration and make informed conclusions of which metal may be better accumulated at a particular time. That method is not failsafe, but tends to produce more accumulated ounces over time. Another method, and which is the method I use, is to accumulate ounces doing my best to dollar cost average. I refuse to accumulate the "rhino horn," and I always accumulate the "fishing line." Basically, speculative, sudden booms are not the optimal time to accumulate, but if it happens, oh well, the time horizon for making a sound trade tends to move substantially in the future, like at least a decade or more. On the other hand, accumulating during the time of a fishing line decrease in fiat paper priced metal, tends to produce the most optimal time for accumulating more ounces. Buying the dip is not without perils, and may or may not always work. What does work, is a steady, regular, disciplined approach to accumulating physical ounces. NEVER, EVER, NEVER is any of the stack ever "sold" for fiat paper.

If one get's one's mind right, and starts thinking in terms of ounces, to be exchanged for something valuable and tangible in the future, like land, equipment, cattle, even labor if such labor is used for improvements on real property, then the answer to the question at What "PRICE" to "SELL" silver becomes obvious: NEVER. Silver is NEVER "SOLD" for fiat paper. It is EXCHANGED for something of value. Fiat paper is worthless on a long enough time horizon, and lately, the rate of time for fiat paper to become almost worthless is about ten years in terms of purchasing power.

So, if one accumulates physical silver, holds it in one's possession, then there is no storage fee, and no govt paper reporting requirement. Whether silver physical in one's possession priced in terms of fiat paper rises in "PRICE" or falls in "PRICE" is irrelevant, for all purposes, including taxes, as there is no capital gain or loss to report since one is never engaging in a taxable event to report. Further, if one decided that circumstances warranted the exchange of physical for fiat paper, one could always travel to Texas or another similar minded state like Utah, and make the exchange where such exchange is not taxable as those states have declared that gold and silver are constitutional money not subject to inflationary capital gains and thus taxes.

Silver, or gold for that matter, are never to be viewed as "worth" a particular "PRICE" in terms of fiat paper. A better way to get one's mind right, is to try to start thinking in terms of the WEIGHT of silver or gold exchanged for another tangible good, and what would be fair given the input costs for production of the exchanged good.

For real estate, AGKIIX has it exactly right. The trade is priced in terms of number of ounces, and has NO RELATION whatsoever to "PRICE" in terms of fiat paper.

Personally, I look at real estate like this: What is the number of ounces of gold I would trade for that piece of real estate? It is really simple.

I personally view gold as it should have tracked in terms of fiat paper price, upwards substantially given all the money printing. Gold should be north of $10,000 per ounce. On the other side of the ledger, residential real estate, for example, is grossly overvalued, and should never have been priced beyond 3 times the median income for any region. If both gold and real estate were properly valued in terms of fiat paper, then, what would be a fair exchange trade, gold for three bedroom, two bath residential house in an average neighborhood? Is it 20 ounces of gold, 50, or 100 or more?

In the early 70's, in the USA, the average price for residential real estate where I lived was about $15-30,000 for a decent house. An average blue collar wage was about $10,000 a year. So is 3 times the median wage still holding? No way. It is due to the failure of Breton Woods in 1971, and the massive fiat paper creation along the way that has distorted and corrupted the proper intellectual approach to thinking of value.

So what is a home worth today? I have no idea. I do know though, that I will be searching for my personal one square mile of real estate, 640 acres, to create my fiefdom, and I will be doing so by trading gold for the land, using the 1031 exchange.

Prepare accordingly.

Ned Bradenbillhilly
May 16, 2020 - 11:34am

I second that, billhilly

In addition you will find physicians and pharmacists, former stock traders and generally "woke" metals fans. Our humble host has been godsend the last 9 years or so. THANKS Turd Ferguson!!

JLSpc
May 16, 2020 - 11:25am

PC I also like Mike Oliver's

He mentions a sudden move directly through ATH on gold - possibly $200 in a day.

My take: this will probably happen on the same day that highly regarded (almost always correct) technicians are looking for that "one last tradeable drop in the gold price" that their proprietary system is calling for.

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Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
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7/1 8:15 ET ADP Employment
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7/2 8:30 ET BLSBS
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Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
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6/23 9:45 ET Markit flash PMIs for June
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6/25 8:30 ET Q1 GDP final guess
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6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
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6/16 10:00 ET Chief Goon Powell US Senate
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Key Economic Events Week of 6/8

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Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
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5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
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Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
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Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
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Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
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4/28 8:30 ET Advance trade in goods
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