Part of what I try to do with these is try and bring you some highlights and analysis of what’s going on in the resource investment realm. Many of you don’t have the time to listen to these interviews that I do – so below I’d like to catch you up on some important things I saw in the last week.
Ted Butler and the shorts
Ted wrote another article this week on the concentrated short position, essentially stating that the big 4 appear to be trapped. I agree. Today with options expiration we may see a blast down. If not, perhaps they have lost all control. What I’m seeing is this….
If you look since March 30th, it shows that the swap dealers are going MORE short into the price rise below. I stopped really caring about this chart because I have a lot of people saying different things trying to translate this to me. At face value, it appears they are shorting into a price rise, betting that at some point the price will drop and they can buy back.
But what I’m seeing with the silver price is RSI being corrected with time, not pullbacks
It doesn’t appear over 70 at the moment, and this looks like the daily could still have some legs. I listened a lot to John Howell on YouTube to get me a lot of my technical trading understanding. I’m not a technical trader, but I feel it’s extremely important to understand price action and patterns to see where the psychology of buying or selling COULD go.
What you learn from watching people like John is that when things run up, it draws up the RSI. The RSI can be corrected in TIME or PRICE, or perhaps both. This is essentially what we saw with gold with the run up last summer that was too much, too soon, being corrected with time and price.
This is something corrected by time…
This is corrected by price
What we are seeing with silver over the last 8 weeks or so is stair stepping up – gently moving up, correcting mostly in time by sideways moves, and occasionally some price corrections.
Today I felt would be a big test of this. By the time I hit publish on this, price could be smashed below $26.50. Or $27? But what if no smashes occur? Apparently a lot of bankers are to meet tomorrow in Washington and no one knows what it’s about. Bix Weir suggested this could have something to do with market and rigging – but I’d say that’s a long shot. IF it was the case, it would make the case that a lot of work done by the likes of Chris Marcus and them to bring attention to the silver market COULD be having the effect of lots of eyes watching the banks at the moment. Who knows. That’s some wild speculation…
Right now, you had gold hit its all time high last summer 2.5x its 1980 high, and resting at about 2x the high at the moment. Still, silver is 1/2 its 1980 high and commodities are all seeing all time highs. My metrics show that we are in stage 4 and all conditions are set for launch. You had John Lee state that we need to hold $27.50 for a week and THIS is the important number. I agree. We are working sideways at the moment and holding.
If no smash today, I think we still see some profit taking happen but nothing crazy.
Are we ready for the slingshot move? Everything I and many others have been discussing could be playing out, as we speak. The pressure is mounting. The BIG thing that threw a wrench into March plans was the 10 year continuing to rise up. I believe now the markets digested this move, and along with CPI numbers – it has revealed that this IS a good position for gold and silver to be in.
Could be a day of popcorn and fireworks. Or nothing.
Today, I just hope for sideways action. That’s the best we can hope for.
Marin Katusa was just on Palisades pitching his new book, and I’ll be buying that over lunch today. Currently, I’m still reading Rickards book as well as Don Durrett’s book on investing in mining (he wrote this in 2019, and pretty much nailed what was to come in the next 12-24 months).
Katusa for me was an acquired taste. I do not know him, nor does he know of me. When I first got involved with this space 18 months ago, it was watching 3-6 hours of videos a day. I absorbed everything. I didn’t have any idea who he was, and he came off as smug and a douche, to be honest. He was name dropping all the time…’my good friend bozo the clown and I went to mines in Namibia”. But I kept listening. He was hard to dismiss. Arrogant? That’s probably a better word. My guess is this guy has no time or patience for your shit and this persona is a way of telling you to cut through the bullshit and get to the point. My other guess is with his close friends over some drinks he’s probably a much different guy than what you and I see on YouTube.
I have listened to a lot of his videos, and he’s pretty good at “skating to the puck” as he calls it. I like his big ideas. He talks a lot about the swap lines. He’s big into uranium in the future. And, he discusses his alligator approach. I have written previously that I hear people saying they’d like to be the next Buffett or Musk – and I’d like to be the next Katusa. I’m 45 and a very senior level in my field, so zero chance I’d leave it unless someone threw serious money at me. Which won’t happen. So I’m stuck listening to his YouTube videos and YES – I will buy his book. Maybe over the next 5 years I get in on a lot of these deals and can then retire from my current profession and be a full time investor? One can dream.
I bring this up because I think everyone needs to hear what Katusa says. We can all be in an echo chamber with our assumptions the dollar is a dying currency. He disagrees. But that’s the idea – listen to peoples’ ideas that are different from yours. You may not agree with what they say, but you can gain another perspective on a problem you are trying to solve. I disagree with him in broad strokes where I think he significantly, significantly underestimates the status of my country in regards to how fractured it is, the distrust in government, and distrust in media. He may have been trying to be kind with how he worded things, but at my age, this is the worst I have ever seen it, with zero hope amongst many of us that it will get better anytime soon. Still – I want to read this book to see how he comes to these assertions and his logic. I think it will be fascinating.
To leave this off – one thing I am seeing which I didn’t hear him talk about is that the east is gaining a ton of gold and I feel that at some point in time, it’s going to be the West with monopoly money and IOUs and “debt tools” versus the East with gold and currencies backed by gold. WHEN this rug is pulled out, no one from the East will accept the trash currency we devalued into oblivion. I believe this is one reason that China is working very emphatically on the Silk Road initiative. I believe all of these nations will become intimate trading partners and gold/digital gold will be the ultimate means of settling debts. Where he gives a lot of credit to certain individuals, I can take the opposite approach to say that those really smart people are trapped in a problem created 40 years ago and they are trying to do their best to keep the wheels on this. And someday, those wheels are going to fall off when the dollar goes into free fall and nations are then exporting their dollars here to get whatever goods and services they can. This includes all of our commodities. If silver is a massive strategic metal and you have countries from the East buying it at massively discounted prices – how long can governments support banks keeping this at low prices? They can’t. The value of the dollar has been going down and countries holding our dollars will want to get rid of them for lumber, pork, chicken, GOLD, and SILVER. And THIS is what blows up the futures markets.
So I want to read Marin’s book to see if I’m missing a lot. I’m always open to changing my mind. But 5,000 years of history suggests the mean reversion to gold is coming at some point as the backing of all currencies. It’s not a matter of IF, but WHEN. Could still be 20 years out.
I listen to this guy a lot. I wanted to point out he was just on with Daniela Cambone and he mentioned that “these things happen” when he was discussing the 110m oz correction in the LBMA inventory. I’d like to know the date, time, and situation when we last saw inventories in a vault off by TEN PERCENT.
It’s a vault. You had ONE JOB and that is to TRACK METAL.
Let me be clear. Someone needs to be fired or someone needs to go to jail. Misplacing a few bars is understandable. Accidentally adding 110m oz is criminal. That is roughly 3500 tons ADDED by MISTAKE.
Rickards kinds of completely dismisses this as not a big deal. This is a head scratcher to me. Only thing I can think of is he’s friends with someone influential in this mess that can be fired and he’s trying to do a buddy a solid by not tossing him to the wallstreetsilver herd.
I am wondering, did ANYONE who heard this or read this, think, “adding 110m oz by a vault by accident is routine. Nothingburger”. Anyone? Jim…Read the audience. I still bought your damn book, but this is harsh.
Tether to take all cryptos down?
My youtube suggested an interview with Rob and Deso, so I queued it up and listened this past weekend. I thought this was recent. No, it was from 6 months ago. Two parts. It talks about “How Tether’s ponzi scheme may damage bitcoin“. Deso was also on a month ago with Rob talking about this.
Big picture that Deso points out is that tether was supposed to be 1:1 with the USD. Then in 2019 they found it was only backed by 74% or so. Recently, an audit came out (well after this video) to state that tether was backed by something like 3.87% cash. The rest were something like “cash equivalents”. Apparently, the holdings aren’t very transparent with Tether. Many suggest these holdings are other cryptos. Like Bitcoin.
What the suggestion is, is that Tether “prints” a batch of coins, then uses these coins to buy bitcoin or other cryptos and also sells some of these tethers to people for USD. If someone wants to sell Tether back, they then may have to liquidate bitcoin or other cryptos to get the cash to pay out.
Tether itself can print up these coins and sell them or use them to buy assets like bitcoin. The suggestion I’d have to add to this is that 3% cash isn’t very liquid. If there is a sharp correction of 5% or so one day on bad news, then you may have people running out of Tether to get into cash. This then has the effect of this form of “central bank” or the like then having to liquidate bitcoin or other cryptos to settle in cash.
“The Wall Street Journal reported, “[Tether] has become a major source of liquidity in the cryptocurrency market. About 80% of all BTC trading is done in Tether, according to data from research site CryptoCompare.”” – source
This then causes a chain reaction of sorts, where people see their cryptos going down and then selling. This is perhaps an explanation as to how you can see 50% corrections in a month, or even 20% in a day.
The disclaimer here is that tether’s market cap of $8b or so is a fraction of the $500b of bitcoin. The thing is, rapid sales of large chunks of bitcoin could then cause this to “run the stops” of sort which then triggers panic selling. The problem with the $500b “market cap” for bitcoin is that you take the 18.5m bitcoin and times it by the price to get the market cap. Well, that’s not really an accurate way of doing it. If there’s a panic sell off, these $38k bitcoin are on a bid system, so if it doesn’t catch a bid until 10k, the “market cap” drops by 75% in a few hours. The suggestions are companies and exchanges HODL the bitcoin to make the available supply seem small, which drives up the price. But when the floodgates happen and massive quantities become available, the bid drops sharply. This then had the “$1T market” for bitcoin sort of juked up by artificially scarce supply by HODLers. Meaning, the only “high” value of the coin itself is when no one is selling. That does not tell me it’s a liquid asset if SHTF.
You then see what happens on ANY HINT of bad news….
I was watching the price of bitcoin in real time last week. It hit $30,100 and from there, a miraculous bump up. Gareth Soloway was on kitco several weeks ago that projected bitcoin would fall to $30k. Within days, this crystal ball projection was true. Like too damn true. Nailed it.
The question is, why didn’t it keep falling? This is where you have the Deso-type people of the world who monitor this stuff. Could it be that uniformly all people holding bitcoin had a buy order in at $30k? OR – is the more likely explanation a combination of the below:
- ARKK and MSTR realize if bitcoin hit $29,999 or the like, that there would be a freefall into the teens. These funds who highly back bitcoin needed to place large buy orders at $30,000 to hold this maginot line
- Tether’s assets are in crypto – it would appear. If they have a lot of holdings in bitcoin and this price is falling – this then means the existing tether are not backed 100%, but perhaps 75% if the value of BTC is in free fall. If you can then print billions of tether and have a massive buy order at $30k, you are also preventing the freefall of your assets, and artificially back stopping this line.
The question I would have for bitcoin investors is to closely understand why it bounced off of $30,000. Was it that everyone with laser eyes at THAT exact moment decided to BTFD? Or, did BIG BIG players here realize the house of cards was coming down and they had to backstop it or risk losing everything? Remember this question when you discuss “value proposition” to people like myself. I don’t need Musk to tweet about gold or silver. And, if he does, it won’t drop by 50% in a month.
I’m NOT against bitcoin – I have to say that. I am AGAINST people spending a MASSIVE portion of their wealth on this as a HIGHLY SPECULATIVE asset and being deceived by those big players as to what this actually is, what the utility is, and what its future is.
I am a proponent of Kinesis, so I am BIASED. With Kinesis, it is a DIGITAL TOKEN backed by gold and/or silver. This token is transferred from wallet to wallet and ownership of this TOKEN is registered on the blockchain. It is LEDGER TECHNOLOGY. So if I wanted to use this technology down the road to register things like house sales, car sales, contracts – it’s really good as a LEDGER.
This is what most crypto currencies are, to me. You are buying the real estate on the ledger.
What I see is you owning an address on a block chain, sitting there. You have an address in memory. You are betting that someone down the road wants to pay more for that address in memory, and they will want to park their tent there.
What you do NOT do with crypto currencies (or crypto assets) is exchange a good or service. You exchange your dollars for an address with a tent. With a Kinesis or Lode, you are exchanging a receipt for gold or silver, and paying cash for this. This EXCHANGE is registered on the blockchain. You can then go to kinesis and exchange that token for cash or gold/silver sent to your home. Someone who trolls me on Twitter (an obvious bitcoin investor) calls Kinesis a “ponzi scheme”. Kinesis tokens are backed 1:1 with real metals in vaults with ALLOCATED metals. It is NOT unallocated. And, there’s no ponzi scheme to be had. The value of these tokens are not bid up based on their scarcity or lack thereof – the value of these tokens is linked to the underlying asset. So unclear how this is a ponzi scheme. If anything, cryptos that are NOT backed by anything are the ponzi scheme. The only value in them is by hyping them up and getting your friends and family to buy it for more. That’s sort of the definition of a ponzi scheme.
My frustration with the crypto community is they want to point to me white papers of math they do not understand to talk about security, hashing, voting, etc but they can’t tell me what the hell it is in 30 seconds or less. I have worked for 25 years in IT and have a master’s degree in cybersecurity. When I was doing that from 2010-2012, there was not a lot of talk about cryptos, at all. However, I understand IT at the bit and byte level. I have just about every relevant certification and degree you can have in IT. I talk with a LOT of people in IT at senior levels. Many of them feel the same way I do. They have no idea what the hell you are doing.
This is bitcoin:
IF you understand those concepts AND want to bet on its success – AND understand the risks, GREAT!! I WANT you to make millions!
But I fear a lot of people don’t know what the hell they are talking about and want you to buy their fancy campground for a million.
Don’t do it. On a trade like this, you want to be the first guy with a tent. You don’t want to be last to that party when everyone goes to sell their patch of land and no one is buying. That’s the chart you are seeing below with BTC price.
THIS is what Kinesis is:
The $20 bill had an orange label on it where you could take this $20 bill to the bank, slap it down, and get an ounce of gold. THIS IS KINESIS. It is DIGITAL MONEY. You exchange the digital tokens that are BACKED by this:
This is tether:
And this is what tether is buying, at continuously artificially inflated prices:
But it’s SCARCE!!! So is this. One of a kind painting by my 1 year old with his foot. Scarce!! I’ll sell the NFT to you for $1m.
Many don’t realize that platinum is 30x more scarce than gold, but 1/2 its value. That’s the point – scarcity doesn’t mean anything if there’s no demand for it. And THAT is what you need to take away from this. SO WHAT if there’s on 21m bitcoin ever made? Blockchain is here to stay. BTC? Dunno. But take scarcity out of every argument you can make FOR it.
If you like sound money, then Kinesis or Lode is where you want to be. This front end crypto currency is then making the gold and silver divisible quadrillions of times. The underlying resource is scarce – which is gold and silver. The tokens simply map to the metals.
If you can deny what I’m saying by not doing the following, I’ll listen:
- Point me towards literature that requires 2.5 weeks of full time study to actually describe what I’m telling you above
- Point me to 50 page white papers of math you don’t understand which is simply discussing the security and voting
Now, you can tell me I need 100 hours of study before I can speak on the subject. Likewise, I should be telling you that you should be an accredited investor or have a series 65 license to invest in any crypto – as is needed for someone like me to buy KVT from Kinesis. Because it is there to protect investors from themselves. Or, have an IT degree with 3000 hours of study in IT so you can understand what exactly it is you are buying at the bit and byte level.
That all being said – knock yourselves out. The warnings are everywhere. I hope you all drive Lambos and make me look like an idiot. I LOVE being wrong if a lot of people are happy on the other end of it. A weather forecaster does not get his rocks off forecasting a Cat 5 hitting a town (maybe some do), but is very pleased when his forecast is wrong and the crisis is averted. That’s the situation I’m in right now. I’m warning people to get out of their tent cities with this storm coming and everyone seems to be telling me I know nothing like I’m John F#%!$* Snow.
And there’s this….
I believe we might be in the Denial stage at the moment. We have touched $31k on BTC twice in the last week, and the third time it may break into the $20s. What then happens if this gets into the 20s? Where is the floor? $18k?
Tying this all together, IF tether appears to have greater issues, it can cause a mass amount of liquidating of cryptos into cash. To deny that is the equivalent of this:
I wish everyone safe trading and good luck, and hope the hurricane turns north and avoids all of the tent cities 🙂