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Thursday Conversation - Holiday Jackass


It's not a full holiday weekend as the US markets will be open on Friday. Regardless, it's tradition around here to check in with Jim Willie for a mid-summer update so here you go.

As usual, we mainly tried to discuss three, major themes...though, as usual, the conversation often veered off to cover other areas, as well. For this podcast, those themes are:

  1. The recent news of the EU's INSTEX system and how this is the next stage in the decline of the petrodollar. What is INSTEX? See here: https://www.forbes.com/sites/francescoppola/2019/06/30/europe-circumvent...
  2. The global bond market. Will the entire world eventually move to zero or negative rates or will the "bond market bubble" finally burst?
  3. With gold finally breaking out of a six-year trading range, what should we expect next? And what about silver?

As always, major thanks to The Jackass for his willingness to share his valuable time. After all we've been through...and with where we are currently...there has never been a more important time to consider a subscription to The Hat Trick Letter. You can find out more information here:

Have a great day!



Jul 4, 2019 - 3:15pm

Hold on to your juniors

Willie discussed Barrick and how not a lot of new gold will show up on the market as price rises. The bigger producers have been in such a crunch due to the continued boot on the throat pricing mechanisms of the Comex and LBMA that yes they'll need new resources for demand and to do that delution is the name of the game to buy juniors/resources.

Some companies like Yamana and New Gold(both of which I gave up on) still have 1400 to 1600 viable gold in the ground and will do well but they are so beaten down and have been operating in the red for some time. I do still have a couple of holdings similar but I also see the royalty/streamers having a heyday in the coming environment because of their holdings in the junior sector. I have always liked the royalty companies.

Jul 4, 2019 - 2:49pm

Italy Ready to Advocate Removal of EU Sanctions Against Russia

ROME (Sputnik) - Italy is prepared to denounce EU sanctions against Russia as "harmful" and advocate their removal, while Italian businesses display interest for the Russian market, Russian Direct Investment Fund (RDIF) CEO Kirill Dmitriev told reporters Thursday. "It [Italian government] is prepared to clearly voice to the European Union that sanctions against Russia are harmful and should be abolished", Dmitriev said.

"We can see that Italian businesses actively enter the Russian market and have interest for it. Italian businesses are against the sanctions. That is why we see the new Italian government being even more inclined toward cooperating with Russia than the previous one. Italian businesses want and will invest in Russia," Dmitriev added.

The new Italian government, a coalition comprising the anti-establishment Five Star Movement (M5S) and the Eurosceptic Lega party, led by Salvini, has consistently called for the lifting of anti-Russia sanctions and Moscow’s reinstatement as a strategic mediator of the Syrian, Libyan and Yemeni crises, and a partner in counterterrorism efforts.


Jul 4, 2019 - 2:44pm

Putin on Chances of Restored Russia-EU Ties: 'It's Possible...

Russian President Vladimir Putin has said that the opportunity for improving Russia-EU ties is always there, but that not everything depends on Russia."On our part we are ready to make our own steps toward Europe," Putin said, speaking at a press conference in Rome on Thursday along Italian Prime Minister Giuseppe Conte.

"Like I've said during my meeting with my Italian friends, you shouldn't always demand that Russia implement the Minsk agreements [on peace in Eastern Ukraine] in those areas where it's not up to us. For example, the Minsk agreements call for the restoration of economic ties between the Donbass and Ukraine. But it was [Ukrainian President Petro] Poroshenko's decisions that prevented Donbass from restoring these relations. It's not up to us, it's not up to Russia to restore what's broken in Ukraine. We cannot interfere with that, it's not up to us," Putin said.

Saying he was aware of Italian commitments to organisations including the EU and NATO, Putin said he hoped Italy would remain "consistent" in its position in favour of easing anti-Russian sanctions, and working in favour of the restoration of full-fledged relations between Russia and Europe.

Russia, Italy Committed to Resolving Libya Crisis

Asked to comment on the prospects of a political settlement in the crisis in Libya, Putin said he and Prime Minister Conte had agreed on the need for coordination, and said he was concerned over reports that terrorist militants from the Syrian province of Idlib were establishing a presence in Libya.

"We agreed to continue the coordination of efforts toward peaceful settlement in Libya, where, unfortunately, the situation is deteriorating, the terrorist threat is growing, and the number of victims is increasing. Both of us believe that it is important for the political and military forces in Libya to establish a ceasefire, to launch a dialogue, to take measures for restoring the political process aimed at overcoming the country's breakdown and to form unified and efficient state institutions," Putin said.


Jul 4, 2019 - 2:41pm

Iran Summons UK Envoy Over 'Illegal Seizure' of Oil Tanker

The Iranian Foreign Ministry has summoned UK Ambassador to Iran Nicolas Hopton over what it described as the "illegal seizure" of an oil tanker carrying Iranian oil to Syria, Iranian state television has reported, citing Foreign Ministry spokesperson Abbas Mousavi. Earlier, Spanish officials said that the Grace 1, a Panamanian-flagged supertanker carrying Iranian crude oil to Syria and seized by British patrol ships off Gibraltar, was detained at Washington's behest.

Royal Marines boarded the ship, which has a 300,000 tonne carrying capacity, early Thursday morning. Prime Minister Theresa May later praised the seizure, with a Number 10 spokesperson saying Gibraltar had sent a 'clear message' that the UK would not tolerate any violation of the sanctions.


Angry Chef
Jul 4, 2019 - 2:41pm

Move Over Saudi Arabia, OPEC Now Belongs to Russia

Interesting perspective. Russia is now the swing player in the Oil market in order to keep prices high. America needs high Oil prices in order to support the fracking industry ( and the associated derivatives which isn't mentioned in the interview ). Whereas Russia can support much lower Oil prices because they have a diverse economy. So Saudi Arabia needs to work with Russia to keep the price high. This is probably why they want to keep Iran's Oil under tap. Iran has huge supplies of untapped Oil. If it's allowed to be developed then Iran would be the dominant player in the MENA ( some say they already are ). And what would happen to the derivative complex then ? Let alone the Project For a Greater Israel.


Jul 4, 2019 - 2:30pm
Jul 4, 2019 - 2:19pm

China spotlights military drill amid Hong Kong protests

Beijing, Jul 3 (AFP) An army-linked newspaper in China has run photos of a week-old military drill in Hong Kong, a move analysts described as a warning to Beijing's critics as the city grapples with a wave of anti-government protests.

The People's Liberation Army (PLA) has maintained a garrison in Hong Kong since the former British colony was returned to Beijing in 1997, but its troops generally keep a low profile and are rarely seen in uniform in public.

The unit's routine military exercises have not attracted much attention in the past. But a PLA-affiliated newspaper posted photos of the week-old military drill on Tuesday -- a day after pro-democracy protesters ransacked Hong Kong's legislature and left anti-Beijing messages on its walls in an unprecedented show of anger.

"The intention of this exercise is obvious. It is to warn the Hong Kong independence elements and to deter foreign interference in Hong Kong affairs," said Ni Lexiong of the Shanghai National Defence Strategy Institute. "If things develop to a more extreme level, and if the Hong Kong government isn't able to cope with the situation, the central government may use troops."


Jul 4, 2019 - 2:13pm

Gold pushes over $1,400 with Fed rate cut on horizon

Matthew Amlôt, Al Arabiya English Thursday, 4 July 2019

Global uncertainty throughout the past 12 months has fueled the rise in the price of gold throughout 2019. Fears of a trade war stifling economic growth and a slowdown in overall economic activity have increased the price of gold to over $1,400.

“The gold price has been helped recently by an increasingly bearish outlook for the global economy, mainly due to ongoing trade tariff disputes,” said Ben Kilbey, battery metals/precious EMEA at S&P Global Platts. “Uncertainty remains rife, and for now gold is well bid. However, should a resolution to the trade tit-for-tat land then all bets could be off, and risk-on could return in earnest. Another boon for bullion has been the increased likelihood of an interest rate cut from the US Federal Reserve later in the year. In dollar terms, gold has hit six-year highs over the past month, and is currently well supported around the $1,400/oz mark,” added Kilbey.

It is no longer the Fed alone that is looking to ease monetary policy. “The European Central Bank, the Bank of England, possibly the Bank of Japan and other central banks across the globe are looking to ease monetary policy. Australia and New Zealand have already begun easing, and it’s not like we’re going to have synchronized global easing in monetary policy. This could be one of the major reasons gold prices have risen above $1,400,” said Hussein Sayed, chief market strategist, FXTM.


Jul 4, 2019 - 2:05pm

To Those Holding Great Panther Mining . . .

They're selling another $120M of stock, thus diluting existing shareholders.

Or, as the IKN blog puts it:

" Nice timing guys, Holiday Week filing, making sure as few eyeballs as possible see it. Therefore, welcome to IKN. "

Jul 4, 2019 - 1:46pm

Happy 4th! And hope you all "Score More"

"The second day of July 1776, will be the most memorable epoch in the history of America. I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival. It ought to be commemorated as the day of deliverance, by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires, and illuminations, from one end of this continent to the other, from this time forward forever more." - John Adams

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Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
9/1 10:00 ET ISM Manu Index
9/1 10:00 ET Construction Spending
9/2 8:15 ET ADP employment
9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
9/3 8:30 ET Initial jobless claims
9/3 8:30 ET Trade Deficit
9/3 12:30 ET Goon Evans
9/4 8:30 ET BLSBS

Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
8/25 10:00 ET Consumer Confidence
8/26 8:30 ET Durable Goods
8/27 8:30 ET Q2 GDP 2nd guess
8/27 9:10 ET Chief Goon Powell Jackson Hole
8/28 8:30 ET Pers Inc and Consumer Spend
8/28 8:30 ET Core Inflation
8/28 9:45 ET Chicago PMI

Key Economic Events Week of 8/17

8/17 8:30 ET Empire State Manu Idx
8/17 Noon ET Goon Bostic
8/18 8:30 ET Housing Starts
8/19 2:00 pm ET July FOMC minutes
8/20 8:30 ET Jobless claims
8/20 8:30 ET Philly Fed
8/20 10:00 ET LEIII
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Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
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8/12 8:30 ET Consumer Price Idx
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8/14 8:30 ET Retail Sales
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8/14 8:30 ET Cap Ute and Ind Prod
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Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
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7/27 8:30 ET Durable Goods
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