Discussing De-Dollarization with Da Jackass

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A perceived acceleration toward the end of US dollar hegemony has been a hot topic here at TFMR this week. Thus, we thought it should be the primary topic for our holiday weekend Jim Willie discussion, too.

There's no easy way to summarize this conversation with bullet points. Instead, just notice that we began the call by discussing de-dollarization and then just let it flow from there.

I think you'll find this interesting and informative. Thanks again to The Jackass for so freely sharing his time with us!

TF

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CaptK
Sep 2, 2018 - 8:32pm

Bill Cara Weekly Trade Recommendation

Weekly Trade Recommendation

This week we put on a long position in gold (GLD). Sentiment has soured to such a point that we expect that the sharp selling between August 13-16 marked a selling capitulation. Gold just hit its lowest level since January 2017.

Looking at Commitments of Traders data (COT), gross shorts surged in August, which is typically a sign that the short side has gotten too crowded. In fact, money managers (proxy for speculators) have never been more bearish on the gold outlook since the CFTC started to publish its COT statistics in 2006.

The summer sell-off in gold had been chiefly driven by an accelerating appreciation in the dollar, which has backed off since mid-August. The risk to our gold trade here is that the dollar index has entered a new uptrend, as shown below. Gold may rally with the dollar, but it more often an exception. The 10-year correlation coefficient between the dollar index and Gold is -0.585.

Additional reasons for our gold trade include inflation and risk-hedging. As shown above, inflation is rising and precious metals are the inflation hedge par excellence as an economy tops out and begins to move towards recession (and we should not be far from this stage of the economic cycle by now). Gold is also a safe-haven asset. While we don’t think the trade war will spill-over into prolonged geopolitical strife, any market anticipation of this should drive money into safe-havens such as gold.

https://www.billcara.com/market-analysis/market-missing-signs-of-economi...

garth
Sep 2, 2018 - 7:55pm

@Bard

I keep a number of silver miners in my basket but the one I like the most at this time because of the incredibly cheap price is Abraplata Resource Corp. (ABRA on the TSX venture and ABBRF on the OTC markets). If you want the most amount of silver in the ground for your investment dollar, I'm not aware of any others that are better (something like 5 cents US for an ounce of silver). Their Diablillos project has 81 million oz of silver plus 732,000 oz of gold. The challenge is the overburden - it may cost $100 million dollars if they were to remove it all and then do open-pit mining. So the cost to get it going would be $212 million according to their presentation but even-still, the after-tax IRR would be 30.2%! In this environment, that's a lot of money to get it going for a company with a $6.7 million market cap.

However, what the market is missing is the question of why not do underground mining here. That could actually get them deeper than the open-pit mining to the areas below where there is more silver and gold. There's no PEA yet for switching to this method but I know they are actively working on this. This is a good use of time now while market sentiment is low. SSR Mining owns 19% and management owns 10% so they've got skin in the game. (Full disclosure: I bought quite a bit of this stock in the 20 cent plus area (CDN) and continue buying now on a daily basis now that it's in the 8-9 cent area.)

onesong
Sep 2, 2018 - 7:09pm

Newager23...

you're always right there for anyone asking about miners! I for one, appreciate your recommendations! Big thank you!

Newager23
Sep 2, 2018 - 6:01pm

Bard

Silver stocks. Here's some more for your list: Pan American Silver, Hecla Mining, Americas Silver Corp, and SIL (the silver miner ETF).

Others that are worth a look: Great Panther, Coeur Mining, Fresnillo, and Hochschild Mining.

Bard the Bowman
Sep 2, 2018 - 5:14pm

Favorite silver stock picks...

Hey all,

With silver commercials net long I'm thinking about adding to my silver stocks. My favorites (though all decimated) have been First Majestic, Excellon and Endeavor. Any others stand out as solid companies once sentiment gets turned around?

Loving you all,

Bard

streber
Sep 2, 2018 - 2:40pm

Rob Kirby & Greg Hunter

"Trillions of dollars have been created & siloed to be used as necessary (defend U$D)."

"Stupid Amounts of Money Seeking Physical Gold & Silver"

Rob Kirby – Stupid Amounts of Money Seeking Physical Gold & Silver
streber
Sep 2, 2018 - 1:58pm

Reposting Andy Maguire from previous thread (thx TFM fan)

I much liked Andy's statement at 28:50 pointing out diff b/t Au & paper: There are $250 trillion of paper assets, $30 trillion of M1. These have utility value but no intrinsic value.

He then makes good comments re Cryptos & why Govs are trying to co-opt them.

Earlier he explained the CNY connection.

Well done Andy!

29 min, I ran it at 1.25, no problem
https://www.youtube.com/watch?time_continue=1016&v=O063vNsr1h0

Mickey
Sep 2, 2018 - 1:49pm

War Heros

IMHO, nearly everybody who is or was in the military is a hero, as most of them risked their lives. Some were luckier than others. Some made tremendous positive accomplishments, some "merely" contributed doing their part as part of the bigger efforts put forward.

Some went permanently AWOL

Lead, follow, or get the hell out of the way.

McCain IMHO was a hero just like millions others.

As a member of Congress, just look at th e overall situation we are in to see the net result if his accomplishment and many many others.

We are currently very divided, we are broke and we have little trust for any of Congress.

Need I say more. So thell me what are his great accomplishments, or any of the others too.

Fred Hayek
Sep 2, 2018 - 1:46pm

I find these interviews very interesting

I'd find them even more interesting if they were conversations.

AKA AuAgforever AIJ
Sep 2, 2018 - 1:23pm

...Future is now

Bitcoin Survey Suggests Bright Future For Cryptocurrency

Bitcoin could be in for a boost with U.S. students twice as likely as the country’s average to own cryptocurrency, a survey by Coinbase and carried out by researchers Qriously has revealed.

With 18% of U.S. student respondents saying said they own (or have owned) bitcoin or some other cryptocurrency, twice the rate of the general population, it suggests bitcoin ownership and adoption could be about to rise.

Students are often seen as bellwethers of cultural and technological change. Facebook, now the world's largest social network, was initially open only to students and found mass adoption among the world's youth before spreading to older generations.

Before that, a much younger internet, back in the 1980s, was predominantly used by students, academics and universities to share research before it was later commercialized.

Among all students surveyed, 17% said they consider their knowledge of cryptocurrency and blockchain was very good, compared to just 9% of the general population surveyed at the same time.

https://www.forbes.com/sites/billybambrough/2018/08/29/bitcoin-survey-su...

​​​​​​​

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