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Thursday Conversation - David Jensen

48

There are two important things that I needed to discuss with David Jensen. One, the ongoing dollar shortage and liquidity crisis. Two, the new all-time highs in palladium. Fortunately, he was happy to join me for this podcast and you should be sure to give it a listen.

On Twitter (@RealDavidJensen), David has been warning everyone for months that The Fed's contraction of the money supply was going to lead to some serious liquidity issues...and here we are. As David explains in a discussion punctuated with the three charts below, this is a problem that will only get worse in the weeks and months ahead.

And we conclude with a discussion of palladium as it breaks out to new all-time highs. Earlier this year, we described palladium as a possible "magic bullet" for exposing The Banks' fractional reserve and digital derivative pricing scheme. Could palladium follow rhodium ever higher and lead to a supply shortage and run on The Banks? We'll see....

Thanks for listening and thanks to David for sharing his expertise with us.

TF

  48 Comments

AGXIIK
Sep 26, 2019 - 3:08pm

FIRST What to buy today? Gold and silver?

Or invest your capital in IPOs.

Like that bicycle exercise company

Peloton fell a ton

Jensen has a good handle on how QT over the last 2 plus years sucked a lot of capital out of the market. With stressed on failing assets and loan repayments taking its toll on $70-90 trillion in debt, the cash inflow to banks could be the key to the liquidity crunch.

Whatever reason for the liquidity crunch, this could become an inward spiraling-self fulfilling prophesy that causes major systemic damage across all the world's banks, particularly the weakest of them

Gasivs Buttox
Sep 26, 2019 - 3:47pm

Lot of pain in the miners today

I don't know about you but I didn't have a single miner in the green today. Despite that, Royal Nickel didn't trigger my buy price. Damn! Was there anything good about today in the gold and silver sector?

ps. My dumb luck didn't save me from taking a shit kicking in Wesdome. But am I selling?

Nope.

NW VIEW
Sep 26, 2019 - 3:54pm

What and who are you going to believe???

We have a barrel full of experts, here and on sites like Greg Hunter and even Bo. They say gold is going to $10,000 and the value of our fiat will be only 5% of what it is today. Did we believe any of them? Does not look like it to me. If we actually believed them, we would be shouting for joy, being able to buy a shiny gold coin for just over $1500.

It is kind of like the preacher telling us that we will go straight to hell, and soon, if we do not give him $10,000. You need to sift through the folly and hidden agendas to find the truth. Therefore, I am going to buy a shiny coin and soon. Jim

BenithoGasivs Buttox
Sep 26, 2019 - 5:01pm

@ Gasivs Buttox

Over 20 names in my portfolio and over 20 in the red... - Kirkland #1 again with only a few pennies down

chrtoo
Sep 26, 2019 - 5:25pm

Portfolios.

Not a good day but I did a little better with 6 of 17 green, today.

Brixton, Almadex, Azucar Min, Northern Vertex, Dolly Varden & Klondike.

CHR.

lakedweller2
Sep 26, 2019 - 5:30pm

@Gas

Here’s a few they missed:

Amex Exploration: +5.5

Japan Gold: +6.03

Metallic Minerals; +6.73

They are probably saving them for future abuse.

streber
Sep 26, 2019 - 5:37pm

Comment from the BBG article Craig put up this a.m.

Banks Not Flush Enough
To One Day
Flush Bad Debt Down
.

I'll point out the following every chance I get. Luxury apt and condo development has spread like weeds in every major city. The Fed seems to have little data about the liabilities of these new assets or the growth in wages and employment that will pay for them. My point is that these tremors in money markets aren't issues of internal system imbalances. They are, as you point out, originating with needs (like tax payments) for REAL money NOW. Before the Fed creates a repo facility it needs to explain why it was caught off guard. It should make a better case about why this is a real solution, not a temporary band-aid that could ultimate exacerbate an unidentified problem, like this question of "flushness".

At some point it will become obvious that all these new high-rise development is malinvestment. There will be a rush to raise cash. Then the point about what "flush" means will become front and center.
===

ZH had an article earlier about the Miami Condo Implosion and affect on lenders(just beginning and gonna be worse than before).

Fits perfectly with my bias that there is mucha caca floating around that most don't yet know about.

Like this: https://www.zerohedge.com/energy/us-shale-state-deep-anxiety-survey-sign...

dre
Sep 26, 2019 - 5:53pm

Stock flow ratios

Hi Craig, do you know why different metals have different stock-to-flow ratios?

I saw stats from a few months ago that gold has a S/F ratio of 62, silver is 22, palladium is 1.1 and platinum is 0.4.

Platinum is rarer than gold and as easily stored (all the platinum ever mined could fit into a living room, apparently), yet for some reason no one is storing more than a few months of its production. So why are people storing gold and not platinum or palladium... how can this behavior be explained?

I feel like without understanding the significance of stock-to-flow ratios, I'm missing a big part of the picture here.

Hawkman
Sep 26, 2019 - 7:06pm

Outstanding podcast TF

He reminds me a lot of Kyle Bass. Straight talk and calling it as it really is. What a contrast to the daily fog of ‘everything is awesome’.

Thanks,

Hawk

Boggs
Sep 26, 2019 - 7:07pm

Question

I don't trade stocks because I find it tedious, I guess I take the long view and want to buy and hold. That is why I buy little round pieces of metal. But I haven't bought those in over a year.

I have a few stocks that I buy each month through their dividend reinvestment option...they have done rather well. But I have no exposure to the miners, I want to play in that arena but I read all the comments of people getting killed...almost daily.

So...one of the guys who works for me is investing though an app called "robinhood". If anyone has any info on that I would appreciate your feedback.

I also want to thank Turd for bringing back the hat tip. You told me you were going to do it, but frankly I lost hope. I just made a little donation to the site as a way of saying, "thank you".

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
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Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

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