Canada – WTF? I’ve been to see you twice. You were so beautiful. Your Toronto streets were amazingly clean. Your people are friendly. I so want to come back to visit you and explore your wilderness, fishing, and mines. But we have a problem that most people are now seeing. That is, you don’t have the level of freedoms I have here and this is the first time in my life I’m understanding this.

I rail against my government plenty – mostly dealing with clownish buffoonery. It started with the second Bush here. I thought he was an extremely nice family man who I wanted to have a beer or six with, but felt he was in way over his head of responsibility. With Obama, I voted for him twice, but in the second term I soured on his admin over the ability to administrate fairly – IRS scandal started it. I had problems with the Twitter-er in chief saying dumb things, but you don’t get to where he was without being masterful in many ways. Still – there is an issue with him when it comes to his delicate ego, and I believe his narcissism has no boundaries. However, I felt Trump was deeply competent as an executive, and many of the things he held at bay are now coming home to roost under the rule of…buffoonery and incompetence.

I bring all of this up because I have been free to criticize my government without fear of prosecution. Now, when it comes to my job, that’s another story. In this country, employers can fire you for opening your mouth about certain things. In my position, if there was an issue, an employer would first most likely nudge you and tell you to stay away from certain things before they fired anyone – simply because lawsuits in this country can protect employees from unfair termination. As an employee, I do not have a right to free speech – to an extent – but there are a lot of gray areas there. However, my employer cannot throw me in jail for protesting, or fine me, etc.

This leads me to Canada. Canadians, I don’t know how you feel about us here in the US, but Canada is sort of like a half-brother to me and many of my countrymen. You share a lot of the same DNA, but have a different parent you might see every other weekend and with this, you may live under a different set of rules from me. Canada has been a dream place for me and some of my buddies to talk about on fishing trips we may never get to – but it is a destination that is very much admired, even if we can’t get away from our families to do it.

What I have seen in Canada the last few weeks blows my mind, and I can tell you, my half-sibling, if that shit happened here, it would all fucking burn. What we had seen was a movement to get awareness that vaccine mandates for all is an overreach of government. Politically speaking, they were peacefully protesting and I even saw bouncy houses. They called it, “The Honkening”. Trucks blasting their horns all the time, trying to be heard. Despite people in the cities hearing the noise, they never heard the message being blasted to them at 130 decibels – “I will not be ruled”.

To that, I’ve seen the posts by Canadian politicians saying they would take care of this. You then watch Twitter and it lights up with thousands of these pro-mandate people seemingly goose-stepping in line with their ruler. Not one of them questioning the reason for the mandates. This, as many countries in the world are standing down all sorts of mandates and directives as they try and get back to life before we knew what COVID was.

Then, the crack down of the police took the streets, but not before the government inflicted financial warfare on its people. If you wanted to support this cause – and you donated to apps like GoFundMe, the Canadian government was trying to first – actively seize these funds, and then second, IF you donated so much money to this, retroactively, we will come after you and freeze your bank accounts. They seized the trucks of the truckers, cancelled their insurance to operate, and went after all of their business accounts.

These rules were implemented using an Emergency Act – which these types of powers are to be used during War time, not during a bouncy house protest. The extreme overreach of government here will have consequences at the polls. Or will it? After this fiasco, Trudeau went then and asked for an extension of these powers and they were granted like 180-150. In my country, we are seeing overreach as well, but many of my countrymen are very confident in our ability to vote people out when overreach has happened. Until now.

What we have seen recently was a 103 year old man run for president from his basement, with rallies that had dozens of people. He was running against an extremely popular president among his fans, who was having daily rallies of 30,000-50,000 people. When I had heard that Biden defeated Trump by 10m votes, my heart sank. It wasn’t that he lost. It was that mathematically, that tally was not possible and part of me questioned my ballot box for the first time in my life.

I bring this up because IF there are now issues with the ballot boxes in the West, then these socialist rulers can do as they please, for as long as they please. They rule this, for the most part.

And – in case you can’t tell – they rule most of social media, as well. Where dissenters are now “de-platformed” and lose their voice, the Canadian government has now gone one step further – “financial de-platforming”. This was the part that made my skin crawl.

Look – there are a LOT of my friends out there that voted for Biden. I voted for Obama twice, so in a sense, I had already voted for Biden twice. I can disagree with them on things. And – each of us is free to donate to the causes we see fit, politically. What the Canadian government just did was equal to linking a protest movement to a terrorist movement – in that if you supported a terrorist in any way, they could seize your bank account. This is what they seemed to do. Then, they marched the police out to tell everyone that anyone who participated would be hunted down, prosecuted, and have “financial sanctions” on them.

Are you fucking kidding me?

You then have had people come out and say this trucker thing is somehow racist? Honk honk means Hail Hitler???

I can tell you, dear brother, that that shit would not fly here. I can also tell you that if this behavior is not stopped, it will end in further tyranny.

But….is that what they want?

I told my friends when this mandate came out that my thinking was they were going to back us into a corner to provoke us. Some crazy redneck would not want his kids held down and vaxxed and would do something horrific that I can’t even mention here without being censored. The point is many of you see these things for what they are, rather than the motives behind them.

What you see: “a nice a handsome politician is telling us he wants to protect us. He says if 70% of people get this, it could eliminate the virus and we can get back to normal. He says anyone not getting it is putting others’ lives in danger.

What you do NOT see: even if you have the vaccine, you can still get and pass COVID. This is a well known fact that women on the View just last month were denying as reality. The bar continued to move, until EVERYONE needed it – and many don’t want it for a variety of reasons. Unlike measles, tuberculosis, or serious viruses, this had a 1/10,000 chance of killing me.

In this country, we also have the Ex-post facto situation – meaning, you cannot create a law AFTER something has occurred to punish people. In this case, you have seen Canadians donate $50 weeks ago, to then LATER have an emergency situation with emergency rules, to then retroactively go after people? There was financial warfare here – the small restaurants and corner hardware stores all had to close, where big box stores were deemed “necessary”. In this country, we have 4 million or so small businesses, and many lean to the right to reduce regulations and taxes so their small business can be more profitable. What better way of quashing this group then to literally shut them down for years and force them into bankruptcy?

Canada – WTF is going on there? We do share one parent at least, but I don’t think that was the parent that dumped tea. We are a special brand of people you don’t want to piss off, and you are a very polite society that actually may be on the brink of being pushed too far.

Lastly – I saw a video of a guy who just told truckers to take a few weeks off because Manhattan has 3 days worth of supplies. There’s a trucker convoy heading to DC, and my guess is the guys here may try similar actions to what they did in Canada with financial repression. 8 steps ahead, this screams as a pre-cursor to why we need government run central bank digital currencies and they will use this to turn off your wallet until you comply with their mandates and laws. Those who speak up will be left in financial ruin and will not be able to pay for anything or have access to their money.

Virus (create an emergency) –> Vaccine (create solution you need to mandate for safety) –> Media gaslighting into compliance –> unrest and upheaval (normal reaction by sane people who do not want to be controlled) –> financial and legal sanctions against those who do not comply (bank accounts, firearms, ability to work) –> digital crypto currency to enforce mandates into 100% compliance.

I was on the fence about CBDCs until this event. I saw the good in them. Then I saw how a government I thought was free like ours completely destroy peoples’ lives who politically opposed them. CBDCs will never occur in this country, due to our ability to push tea off of boats. And 400m guns.

Miner shares and metals

You see gold is going up, so Barrick MUST do the same, right? Ehhhh…not so much. There is obviously a close correlation, but when I first started in mining stock investment, this was the hardest thing to wrap my mind around. I started in Feb 2020 right before the bottom fell out, so I got in on the ground floor of a lot of stuff in March and ran up my portfolio to a 2x or so by July. Every day things were going crazy! Then, you would see metals go up, but miners going down. I didn’t understand this. I hope to explain this a little to you here.

While there is a high correlation over a broad time to metals and the metals miners, on a much smaller timeline you might be more interested in looking at technical indicators on charts. For example, let’s just say you won 10 blackjack hands in a row. A degenerate gambler would say that they are on a streak. A statistician would think the probability of them losing sooner rather than later is higher than lower. I say that loosely understanding dice probabilities – but the point here is that if you have Barrick or Newmont go up 20 days in a row, it’s on a hit streak. You can MEASURE this hot streak using the RSI – or relative strength index. It is not perfect, but it sort of gives you a good idea if something is running a little hot – or cold. When it’s around 70 or higher, they say it is “overbought” and when it is 30 or lower, they say it is “oversold”.

Here’s what this looks like for gold.

You can see the green circles in the bottom hit 70, and the corresponding peaks that are at 70. You can see in each case, the bottom is about to fall out. That could start today with options. At the time of this writing, we are at 1901, and by Friday, we could be $1830 or so. Not on any real news, but due to the banks who write the options do not want to pay out. Additionally – you have speculators ALSO seeing this who are BETTING on gold going down.

This is the element many of you miss. When I first thought of the futures, I did look at it through the lens of someone SELLING metals. They are not. They are selling CONTRACTS. These contracts CAN be settled in physical, OR cash. Meaning, there are legitimate buys and sells with this. Additionally, you have the legitimate hedging (long and short). But most overlook the speculators who are betting on price movement and use the futures as a form of a blackjack table. Right now, they just saw you get 21 ten times in a row, and these guys are having side bets stating they think you will lose the next hand. When enough of these bets come in, it actually moves the price down. So unlike a betting line which is separate from the action, you have gamblers here who actually can affect the outcome of their bet, IF they bet enough.

However, there is a limit to this. This is then “seller exhaustion”. This is essentially then where those betting the price goes down are met equally with the “price is going up” crowd. It’s also like losing 30 hands in a row of blackjack, and the stats guy is saying, “you are due”. This is the oversold part.

If we look at the same chart but look at the red circles, you can see 4 red circles which have the “oversold”. So on the big picture, you saw the run up to 2089, then consolidation – and the red circles indicating you just lost 30 hands in a row, time to bet big up. You can see once it hits 30, you have a nice leg up. The LAST time we hit 30 was August 2021. And, you can see in the BLUE circles, when the cruise liner turned around, you weren’t losing 30 hands in a row anymore before people started betting on you, maybe it was only 5. Meaning, when you are in an up leg like this, you will have corrections, but you won’t often get to that RSI of 30. No one wants to wait until 30, they pile in and find a bottom before that. If you see that red dotted line above, that was the line I drew several months ago projecting the directionality of this move to the arc. The shape was relatively accurate, but it lagged early and has been catching up recently.

I feel we are at a time where we will start to go down and right to the arc. Perhaps today it starts. Due to geopolitical reasons, it might not go down AS much as I discuss above, but the potential is there with price action for perhaps a drop to 1810. To me, this is bullish as fuck (AF) so I want this pull back soon, so I can then get back to my miners.

But Nate – even if gold pulls back, it doesn’t mean the miners will. Yup. And it’s quite possible even with a pull back to $1810 that the miners aren’t killed with it. Why? My FSM right now is priced as if gold was like $1250-$1400. Go up and down the gold mining stocks and you can see most of them priced as if it was $1500 gold. Many may have been pricing in a significant pull back, or perhaps even a market crash which takes gold down to $1500 already.

When metals are in a bull market, you see gold move first, then the majors, then mid tier producers, then silver, then juniors, then exploration plays. I may have messed up mid-tier and silver in that mix, but the idea is this: Gold made a move, and the majors then followed – and the others didn’t move as much. This was perhaps a show that some pension funds got into GDX. Big money, if you will. So if/when gold sells off a bit, these guys are the holders of GDX and it’s not going anywhere. In fact, when gold pulls back, these funds may be looking to add to their positions, expecting another leg of gold coming soon.

Take a look at the MACD, this is where your big money gets in and out of things for trades. This de-risks them to their bosses. You and me can YOLO on FSM at $3.60, but a guy running a billion dollar fund cannot do this when there are a lot of risk indicators there. This is why you can see idiots like me doing well on trades and outperforming – but then other times get my ass handed to me on GDX/SILJ options when the big money wasn’t in the trade. Their mantra is “don’t lose money”. Mine is to maximize my profits. That is, we have different risk appetites. But THEY have deep pockets, and when the deep pockets come in for a swim, the waters rise significantly.

Now, if all you did was buy at the green circles and sell at the red circles (paper gold), you would have made a fortune. These are the professional poker players here. You are the amateur. What you notice about this is – they miss the absolute bottoms, but also miss the absolute tops. They MAY use these tools in conjunction. Perhaps you see 75 RSI and the top of this RSI rolling over – perhaps you start selling tranches. The reverse is true on oversold – perhaps RSI is 30 or 25, and you see it turning up, and you might want to buy some here.

These are the charts you use to buy PAPER GOLD. Remember, if you buy and sell physical, you have premiums. But I’d advise when doing miners, to keep eyes on the charts for your miners like above. Gold can give you the directionality of the sector – but miners behave RELATIVE to metals. In that, you can see an oscillation of sorts. Sometimes gold runs up, then everyone crowds into miners like an accordion. Other times gold sells and people bail ship on miners and then some. To keep this simple, I’ll use a gold to GDX chart to show the relative price against the majors.

You can see big peaks here in 2016 and 2020 where gold divided by the GDX had really high numbers. This was perhaps like right after March 2020, gold sold off, but miners went FAR worse, then gold rebounded far more quickly. What you then saw was the miners launched into orbit and far outperformed gold. From July 2020, gold retreated, but the miners fared worse over the last 18 months.

When zoomed in, this is what you see today.

So this is the price of gold falling against GDX. As you know, since August 2021, gold has been in an uptrend which had been going against the downtrend of the overall consolidation. Yes, miners got beaten up at a time, but since January, they are now outperforming gold. The good news here is this has a lot of room to run. This moves down in one of three ways

  1. Gold pulls back harder than the miners
  2. Miners move up more quickly than gold
  3. A combination of both

So using all of the above, you can then look at individual miners or ETFs to determine if now is a good time to buy or sell. Remember, gold may pull back and miners could actually go sideways to slightly lower.

Looking at GDX – for me, this is a HOLD. Why? You can see the green top of the price chart is a double top. It bounced down from the 400dma. You can see RSI just hit 70 and may be headed back down. You can see the wide divergence of the MACD looking like the top line wants to roll over. However, you did not have the SELL signal the big boys use. This could run a little hot, but at high 60s RSI, buying is weak, knowing there’s a sell off coming. It’s not because they don’t believe in gold. It’s because they have a 2 showing with their cards, and they fold to play the next hand.

Let’s take a look at how this CAN run hot?

In March 2020, we had the massive sell off, and you can use RSI as an amateur to maybe buy a tranche here, BETTING that it would go higher. This is RISKY. However, this may get you closer to a low, OR you could catch a falling knife – which I have done many times. The pros came in with the MACD crossover signal, rode that up until May, sold off into the rise, then bought back on the next MACD crossover. IF you were only waiting for RSI to get to 30, you would have been waiting an eternity as massive run ups may not pull all the way back to 30. For example, now is one of those times where gold can correct hard over 1-2 weeks and the GDX might only get to 50 or so – and price can go sideways. You can work off RSI with price and/or time. This may also help the moving averages catch up, and when gold is ready to make a nice move up again, the pros are buying in then and GDX takes off.

With my FSM, this is why many haven’t chased it. First, there’s risk with the San Jose mine still, although that has been mostly de-risked. It’s not that I’m smarter than hedge fund guys, it’s that – take a look at the chart – there’s too much risk. So idiots like me jump in, then wait for the big boys to get their buy signals. These can also be moving averages, especially with the 50, 100, and 200 day moving averages. If we look at gold, we can see…

Gold is WAY above all of its moving averages, another indication a strong correction is coming.

Silver? It has FINALLY peaked above the 200dma, but with options expiration in just 3 hours, we might see a close below that. RSI is NEAR 70.

Looking at Fortuna?

I pulled back a little from FSM. Not that I don’t like it. I LOVE it. But it wasn’t moving. It will move. Violently. Look at the charts above. My HOPE with this play was that the issue that caused the risk would be removed (it was) and thus we can gain back the $1.52 lost. It still hasn’t come back. In fact, FSM has been under-performing. Look at that arc there. Remember what I said about bettors? You have now equal amounts betting for and against (in a sense) where the buying and selling have created a chop of sorts. As this arc turns up, we will see higher prices, but the BIGGER player can’t really get in yet. It has recently closed above it’s 50dma, but the MACD is a weak buy and the RSI is 53 – and you are FAR below the 200dma. So if this price is rising into that 200dma, and you get a good MACD buy signal, THAT might be a $.50-$1.00 gap up in a day or two. I see a trading channel here around $4.00 give or take at the high end of this. So, I drew back some of my stupid long position, for now, to find a few other things that might move. One of them was metallic minerals.

Here, it is below the 200dma, but the MACD just had a buy signal and the RSI is relatively low. I figured I might get a 10-20% move in this in a few weeks and get out for a quick trade while I’m waiting for FSM to cook.

Anyway…

Both metals are due for pull backs, but their miners may not suffer the same fate – the majors, that is.

I bring all of this up because people get mad when metals move, but miners don’t. Somedays, metals don’t move and miners explode. I made a MASSIVE mistake with my GDX options playing the gold chart instead of the GDX chart. This was during that time where it was very apparently gold would outperform GDX. This is how you learn shit. I learned that, and now passing on to you.

But I also bring this up due to Uranium. I have friends on Twitter who want me to get into Uranium. I have several times, but my plan was to make a fortune in metals, then roll profits in 2023-2024 into other items as the precious metals cool off. What I witnessed in the summer of 2020 was awe inspiring – but a lesson that needs to be taken into the uranium sector.

With gold, remember – you SHOULD have gold, then majors, then yada yada yada. What happened was every idiot like me heard about how juniors can go 10x and we all went directly there and not to Newmont. I had a killing on some things. But if you look at the charts for a lot of those juniors to now 18 months later, you have many of them who have gone down 3-4x. To me, this is EXACTLY the same thing I witnessed with uranium – and you were having Rick Rule everywhere telling everyone how his WORST performer in the uranium juniors was a 22x. This got everyone exited, and you then had the exact same thing happen – people skipped the majors and went right to the juniors.

I was in URNM at $29 when it opened. I was in CCJ at $9. I was in Iso energy at $.36. None of this shit moved for months. So I got out of it, then many of these things moved up 3-5x. Now, you see everything pulling back – and it is gold 2020 all over again. I want back in on uranium at some point, but I know gold. I know silver. But I also know I might do best using MACD, RSI, and the moving averages to play these things. Could I miss the bottom? Sure. But I will let you guys find that for me. I feel pretty comfortable with my uranium understanding. I also have my eyes on the fact that K-Prom can make a profit at $25 uranium now where this wasn’t the case in 2007 or so with any size. Meaning, uranium may get a really, really good move up to $75 to $100. But I believe we won’t get that $150 move or so. I also believe many of these juniors are pieces of dirt somewhere that will never be built and it might be best for me to just play the sector with URNM and potentially SPUT.

I love a lot of things. I also love battery metals, solar tech, copper, energy, and commodities in general. But if I miss something, it’s an error of omission. If I chase something and get burned, it’s an error of commission.

So – the idea of the above was to educate you on how some of these pros might look at things differently than us, who see numbers on a chart, love something, and chase the shiny object. It is also to let you know that while you may have a great stock pick, sometimes it takes time for the big funds to be able to follow you into that move, like FSM.

COMEX EFPs

I put something out there as a general question to Twitter. I honestly am seeing answers. I don’t work in the financial industry. I know a good deal about the back end economics, finance, and politics going on. But the “financialization” of things is where it’s not my swimlane, and I won’t pretend to be an expert on it. I have relied on others that are well known on YouTube for information on this. That is, the question on the EFPs.

I put out something last summer also asking about it. I witnessed over 45 days, about 150m oz being sent off of the COMEX for EFPs. It was described I BELIEVE by Andrew Maguire as sending COMEX open interest of those who want metals to the LBMA for physical settlement. That is all my brain heard, and he may have said more. But I mention this because Bob Coleman replied to my question and provided a bit of an answer.

To be fair to Andrew (and Bob) – Andrew may have said some of the other things Bob did but my brain didn’t log them because I have no idea WTF those things are Bob is talking about. So I may have provided Bob incomplete information. Again, not going to blow smoke up your ass – if I don’t know about these things, I’ll tell you.

My point is this. IF you are long a silver contract, my GUESS is it’s one of a few reasons.

  1. Speculation – you think price will go up and you are betting it goes up
  2. Hedging – you are long hedging, perhaps sold short physical.
  3. Physical – you need metal, can’t find it, and want it.

So I’m having a hard time understanding how it gets routed to this EFP conduit. I buy the contract, tell them I want it, and then they have like 2-3 days to get it to me. In the meantime, there’s the buffet of shit that is offered to you instead? Forwards, swaps, cash settle (why would I need an EFP to do this if I can just do this from the COMEX), physical (why would I do this through the LBMA unless I’m in Europe if I can grab this from the COMEX – OR this may be a warehouse outside of COMEX, I get it).

But my overarching point is last week I saw 18m oz leave in this fashion, WHILE the open interest increased and so did the shorts. So the EFPs seem to direct LONG interest off of the COMEX while shorts just paper the market at whim on bets it may go lower. Obviously, there is LEGIT hedging as well. To me, it just seems like this EFP sort of favors price action down. Why wouldn’t you simply settle with selling from the COMEX? If you don’t have it in the COMEX, put it in the COMEX to sell. IF you want to offer other products are enticements, why are you selling a silver futures contract. It just seems like nothing more than another relief valve to reduce buying pressure on the physical inventory.

Think about this. Last week, 1/4th of the registered COMEX bars someone asked for, and were routed to EFPs. How were these buyers enticed? What were they offered NOT to take these COMEX bars?

My overarching thesis is a lot of the short selling that is going on is drawing down a 1.2b oz hoard of JPM being sold by Citi and BoA. This is speculative, and you can see the OCC report stipulating leasing – but nothing in those reports talk about what those agreements are, OR anything about short selling. But – IF you wanted to mask this shadow market going on, you want to obfuscate this sell volume from the COMEX inventory as to not alert any investors as to how much physical is ACTUALLY being demanded.

I want someone who is involved with the futures (I may tag Jim here) to walk me through how someone triggers an EFP, what options are offered, and how this is not reflected in actual silver demand on the COMEX.