October 3, 2019
The Miles Franklin Newsletter
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From The Desk Of David Schectman
The other big thing that occupies my thoughts is the role of JPMorgan at this point. There should be no question that JPMorgan has amassed prodigious quantities of physical silver and gold and, in fact, is still accumulating physical metal. So much physical metal that the accumulated amounts dwarf any paper short positions held by JPMorgan. This means that in the event that gold and silver prices turn upward for any reason, JPMorgan will be the single biggest beneficiary. Let me repeat that – on higher silver and gold prices, JPMorgan gains the most. – Ted Butler
 
The Justice Department, like the CFTC before it, appears to have taken the easy and chicken way out by doing its best to avoid a direct confrontation with JPMorgan over serious market manipulation matters. Nothing would make me happier than to be proven wrong, but I’m not holding my breath. – Ted Butler
 
As far as where we go from here, it’s still the same old song. The only bearish factor is whether the managed money traders will sell to the downside and we should soon find out given the proximity of the key 50-day moving average. While no one can know for sure whether the managed money traders will sell, if they do sell, I’m still of the firm opinion that should result in the very last price rig to the downside, based upon the reasoning that the big commercial shorts won’t add aggressively to shorts after their near-death experience of the past few months.

I’m still more convinced than ever that silver and gold prices will soar in the not too distant future and if the commercials succeed in flushing out the managed money traders one last time that will mark the bottom for a very long time to come. – Ted Butler
 
As Ted Butler has been pointing out for years...with no exceptions that matter, it's what the Managed Money traders are doing that determines the price of gold and silver. If they're buying, the act of them doing that is what causes prices to rise -- and if they're selling, prices fall . It has nothing do with interest rates, the stock market, the Fed...or the price of tea in China. As I state in my COT commentaries every week, it's virtually all Managed Money traders buying or selling [or what they're tricked into buying or selling] against the Commercial traders, that sets the price. The correlation is virtually 100 percent. The other two categories of traders [the 'Other Reportables' and 'Nonreportable'/small traders] don't matter -- and have never mattered. That's all there is, there ain't no more.   – Ed Steer
David's Commentary (In Blue):

Lately both the precious metals market and the stock market seem to be going nowhere. They are range-bound. Actually, gold looks pretty strong even though the last smack down pushed the price just below $1500 - the bull market is still in play. The stock market is stuck around the 26,000 to 27,000 range and does not seem able to break out. I decided to refocus my “lens” and step back a bit. Going back to March 29 th , I found that the Dow was 26010 and as I am writing this in the early afternoon of October 2 nd , the Dow is 26010. All of the “noise” and it has gone nowhere. Next, I looked at gold during the same time frame. On March 29 th gold was $1,293 and today it is $1500. Gold is up a very hefty 16%. 
 
Sometimes we just have to look under the hood because what appears to be going on is in fact not at all. If anything, gold (and silver too) is doing very well and it is the stock market that is stuck in the mud. And that makes sense if you view gold as a financial asset that looks ahead and warns you of upcoming problems. 
 
The world economy is slowing down and Europe is already in a recession. China can’t be doing well as we are their biggest customer and Trump’s tariffs certainly are taking a toll. You can’t go by the BLS numbers on the economy. They are as phony as a three-dollar bill. Better to look at the Fed and what they are doing. They have ushered in QE4 (in one form or another). If things were all wine and roses, there would be no need for them to continue to lower interest rates adding tens and tens of billions in repo money to keep the banks ability to lend money intact.
 
As I see it, gold is sitting on the edge of a razor now. It could correct back to $1,400 but I doubt it. It could also take off from here and never look back. But if that does happen the bigger event would be a huge plunge in the economy and the stock market. It is coming you know. The ONLY question is when. That’s what we use gold for - It helps us understand WHEN. 
 
As you know by now, I follow Ted Butler very closely. He is one of those writers who always has interesting things to say and offers good information, but he is no better than anyone else in timing moves in silver and gold. He passes if off with the usual comment, silver and gold will make their move when JPMorgan allows it to happen. That’s not very useful, but it is, nonetheless, probably the truth. Recently, he changed his tune. And I think this is important. He believes the current pullback in silver (and gold) is the last chance for the Commercials to get out from under an enormous loss (in the billions), in their short position. And he believes once they get out from under this dangerous short position that they will not do it again. I can’t recall Butler ever saying this before. Let’s hope that now that he has stuck his neck out, that he is correct.  If he is, then once gold and silver start moving back up, which could be any day now, then the move will be the train leaving the station.
 
And it will be something to behold. I’ve been in this industry for 36 years and this will be the first time that there will be no competition to slow down the precious metals move up. Who wants to buy bonds, that pay practically nothing and are the biggest bubble of all? Who wants to stay in cash when interest rates are pathetic or, in Europe actually negative, along with bond rates?  If the stock market is falling, which it will, and real estate is already dropping, where else would one put their money? 
 
Eric Sprott is a pretty heady investor. Recently he invested one million dollars in American Creek. He owns 32.5 million shares and knows a great opportunity when he sees one. I usually stay away from exploration mining companies but this one has intrigued me for several years. I have a million shares plus warrants myself and Andy owns it too. It is cheap and is one of those long shots that can pay off big time. Check them out. I am not “pumping” the stock so I can sell my shares at a profit. I will hold it until the sector gets hot and then sell it, at hopefully many times what I paid for it.
American Creek Reports Composites on Treaty Creek Drill Holes Including GS19-48 (838.5m @ 0.728 g/t Gold) and GS19-49 (1081.5m @ 0.589 g/t Gold Including an Upper Interval of 301.5m @ 0.828 g/t Gold) Located in British Columbia's Golden Triangle
 
Cardston, Alberta--(Newsfile Corp. - September 30, 2019) -  American Creek Resources Ltd.  (TSXV: AMK) ("American Creek") ("the Corporation") is pleased to announce composite results from JV partner Tudor Gold's ongoing drill program being conducted at the Treaty Creek Project located in the Golden Triangle of NW British Columbia. As announced on September 23, 2019 we now have results from two deep vertical diamond drill holes (drilled to a depth of over 1,000m) and four definition drill holes. All six holes intercepted significant gold mineralization over wide intervals at the Goldstorm Zone. 

The headlines are full of the "Impeach Trump" movement. In the following interview, Gerald Celente tells you why it is nothing but a waste of time and in the articles that follow, it explains why it is a foolish thing to do and will backfire on the Democrats. Man, we live in interesting times.




TRUMP IMPEACHMENT ACTION A “WASTE OF TIME” SAYS GERALD CELENTE
GLOBAL MARKETS TANK WHEN DEMS IMPEACH TRUMP
 
By Greg Hunter’s   USAWatchdog.com
Top trends researcher Gerald Celente says if the Democrats impeach President Trump, the markets will tank and cause what he is forecasting to be the “Greatest Depression.” Celente explains, “What’s going to happen, as this impeachment process intensifies, go back to what happened when ‘Slick Willie’ Clinton got impeached, you saw the DOW go down almost 20% into correction territory. Now, it’s different than in 1998 because we still had growth going on. If this market goes down, it’s going to go down real hard because it’s already artificially being propped up with monetary methadone that morons and imbeciles call quantitative easing and negative and zero interest rate policy. So, now, when this thing goes down from the pressure of impeachment, there is nothing to hold it back up. . . . We have a global slowdown. We have pressure all over the world . . . . Economies have been artificially propped up, and the monetary methadone is wearing off. The addicted bull is ready to go under.”

Celente adds, “So, when you go back to impeachment, we look at a global economic process putting all the pieces together, and you have to look at what this is going to do in the climate that we are in. When this impeachment pressure starts hitting and hitting and hitting, the markets are going to collapse globally. . . . It will cause all the global markets to go down because the United States is the only semblance of a strong economy, and it’s weakening.”

LET THEM GO AHEAD AND IMPEACH TRUMP.... HERE'S WHAT HAPPENS THEN......
 
By: Hyram F. Suddfluffel, PhD, (Political Science)
I have a degree in Political Science, and I am a card-carrying Libertarian. I've been studying politics and political history for the past 30 years. My specialty is U.S. Presidents. That said, I hope that the House of Representatives impeaches Trump. Let me tell you what will happen next.

1. The House can pass articles of impeachment over the objections of the
Republicans, and refer to the Senate for trial.
2. The Senate will conduct a trial. There will be a vote, and the Republicans will vote unanimously, along with a small number of Democrats, to not convict the President. Legally, it will all be over at that point.
3. However, during the trial, and this is what no one is thinking about right now, the President's attorneys will have the right to subpoena and question ANYONE THEY WANT.. That is different than the special counsel investigation, which was very one-sided.

So, during the impeachment trial, we will be hearing testimony from James Comey, Peter Strzok, Lisa Page, Bruce Ohr, Glenn Simpson, Donna Brazile, Eric Holder, Loretta Lynch, Christopher Steele, Hillary Clinton, John Brennan, James Clapper, and a whole host of other participants in this whole sordid affair and the ensuing cover up activities.
A lot of dirt will be dug up; a lot of truth will be unveiled. Finger pointing will occur. Deals will start being made, and suddenly, a lot of democrats will start being charged and going to prison.
All this, because, remember, the President's team will now, for the first time, have the RIGHT to question all of these people under oath – and they will turn on each other. That is already starting.

4. Lastly, one more thing will happen, the Senate will not convict the President. Nothing will happen to Trump. Most Americans are clueless about political processes, the law, and the Constitution. Most Americans believe that being impeached results in removal from office. They don't understand that phase 2 is a trial in and by the Senate, where he has zero chance of conviction. Remember, the Senate is controlled by Republicans; they will determine what testimony is allowed -- and **everything** will be allowed, including: DNC collusion with the Clinton campaign to fix the election in favor of Hillary, the creation of the Trump dossier, the cover up and destruction of emails that very likely included incriminating information.
They will incriminate each other for lying to the FISA court, for spying and wiretapping the Trump campaign, and for colluding with foreign political actors, especially George Soros. After the Senate declines to convict the President, we will have an election, and Trump will win. It will be a backlash against democrat petulance, temper tantrums, hypocrisy and dishonesty. Even minorities will vote for Trump, because, for the first time, they will see that democrats have spent 2+ years focused on maintaining their own power, and not doing anything at all about black murders in Chicago, homelessness, opioids, and other important issues that are actually killing people. And, we will spend the following four years listening to politicians and pundits claim that the whole impeachment was rigged.

So let's move on to impeachment.

Hyram F. Suddfluffel, PhD
Greg Hunter interviews Rob Kirby and discusses the dollar and oil. An interesting interview.
Greg Hunter
 
By Greg Hunter’s  USAWatchdog.com  (Early Sunday Release)
Macroeconomic analyst Rob Kirby thinks the dollar shortage and liquidity crisis has something to do with the booming oil and natural gas industry. Kirby points out, “America is producing an awful lot of energy, but they are not making money doing it. What is it that would make them want to do that? That’s when I started thinking about the rest of the world or the rest of the story. The rest of the story goes something like this: Venezuela used to sell all of its oil in dollars. Russia used to sell all of its oil in dollars. Iran used to sell all of its oil in dollars. Iraq used to sell all of its oil in dollars, and up until very recently, Saudi Arabia used to sell all of its crude oil in dollars, but I believe they are now selling some of their oil in currency other than dollars. So, we have many millions of barrels of oil that were formerly transacted in dollars, and these barrels of oil are now being priced in other currencies.  The dollars that used to buy that oil are now looking for a home, and they didn’t have a home. So, America had to create a home for those dollars, which is why America has ramped up their crude oil production. In the 2004 time period, America’s oil production bottomed out at 4 million barrels a day, and now it is producing 12 1/2 million barrels a day making it the world’s largest producer of crude oil. These barrels America is producing are all being sold for dollars. They needed a place or a home for those dollars.

Let’s just say the dollars that were left over when Venezuela, Iran and Russia stopped selling their oil for dollars created a spill on the floor, and they needed a sponge to soak them up. That’s why American crude oil has gone up dramatically, and that’s why American oil production is forecasted to grow even though they are taking losses on every barrel they are producing.

Kirby goes on to say, “Global dollar rejection is why America had to ramp up American oil production to begin with and global dollar rejection is accelerating. This is not going to stop. So, America is going to need to produce more and more dollars to soak more oil priced in dollars that America will produce at a loss. . . . Creating all this extra oil and pricing it in dollars makes the dollar look strong. Nobody producing these incremental barrels are making a penny. They are all hemorrhaging cash. The fact that all these dollars that are going into something that is hemorrhaging cash and losing money is the real reason why there has been no inflation. All these unwanted dollars are financing money droppable-1570110858430losing operations. If these dollars were going into things that made money, the returns would be invested and would be causing observable inflation. The opposite is occurring, and the dollars are disappearing.”
More…
Last week Ed Steer offered up the following:
The Fed's repo program, as everyone with a functioning brain has already figured out, is QE in another form...that will soon turn into the real deal. Despite what Fed chairman Powell is saying, U.S. interest rates are zero-bound. It has been "Print, or die" for years now, but it's now obvious that the powers-that-be are about to go full-on "Hotel California" in the U.S. as well.
 
Since there' nothing that you and I can do about the futures being planned by the Deep State, the best we can do is hold onto our physical precious metal...plus their associated equities...knowing that we will survive it in style.
 
And it's for that reason that I feel very comfortable with my unchanging "all in" position in the precious metals. They will be the only thing left with any value when this paper-constructed "Everything Bubble" meets up with its inevitable pin -- and that date draws ever closer.

As you already know, the usual 'wash, rinse, spin' cycle showed up on Wednesday. And as I've already said on a number of occasions...it would be short, but ugly -- and it's certainly all of that. Only the remaining depth, plus length remains to be seen. But as Ted has mentioned already, he expects this to be their final kick at the can. We'll find out in due course if that's true or not...however all the signs are there that there are big goings-on under the surface just out of sight.
 
Is there more downside to go? I don't know, but it doesn't really matter much to me, as I happily agree with Ted here, that this is their last hurrah. As I've mentioned on several occasions, that if we did get an engineered price decline, that it would be both short -- and ugly. So far it has lived up to that advanced billing rather nicely...unfortunately.
 
But not to be forgotten in all this, is what Ted Butler had to say in his quote in this space in Friday's column -- and it's worth repeating here...
 
"[Wednesday's] sharp sell-off in silver and gold prices, while not particularly welcome, can hardly be called surprising. Moreover, the sharp sell-off can be laid directly on the existence of the super concentrated short positions on the COMEX. The 7 big COMEX silver and gold shorts (excluding JPMorgan) have had their backs up against the wall of late, incurring their largest open and unrealized losses in history. It must be expected that these big shorts will make a stand and fight to drive prices lower. It's either rig prices sharply lower to save their skins...or be consumed like Bear Stearns if they lose control on higher prices." -  Silver analyst Ted Butler : 25 September 2019
 
Ted mentioned on the phone yesterday that their engineered price declines/salami slicing that began on Wednesday, has only gotten the Big 7 traders partially out of the margin call hole that they dug for themselves -- and it remains to be seen just how much more they'll be able to cover.
 
So the question that remains is...can they can continue to engineer prices lower -- and fully extricate themselves...or not? How these egregious short positions in both silver and gold resolve themselves over time will show how successful they've been. But regardless of all of that, JPMorgan...as a result of its huge physical silver and gold holdings, which became larger after yesterday's Preliminary Report...will come out of this making out like the bandits they are. The remaining short holders, including the Big 7 will, as I've stated before..."burn in hell."
 
I'm tired of talking about the U.S. economy...or any other economy for that matter, as they're all done like dinner.
 
The Fed's repo program, as everyone with a functioning brain has already figured out, is QE in another form...that will soon turn into the real deal. Despite what Fed chairman Powell is saying, U.S. interest rates are zero-bound. It has been "Print, or die" for years now, but it's now obvious that the powers-that-be are about to go full-on "Hotel California" in the U.S. as well.
 
Since there' nothing that you and I can do about the futures being planned by the Deep State, the best we can do is hold onto our physical precious metal...plus their associated equities...knowing that we will survive it in style.
 
And it's for that reason that I feel very comfortable with my unchanging "all in" position in the precious metals. They will be the only thing left with any value when this paper-constructed "Everything Bubble" meets up with its inevitable pin -- and that date draws ever closer.
 
And...and I always say...whether that occurs by circumstance, or design, remains to be seen.
This all went out the window 48 years ago. Nixon changed everything when he “closed the gold window” and set all currencies free to operate without any gold backing.
Zero Hedge
 
Gold provided an enforcement mechanism against mercantilism ...Starting August 15, 1971, when Nixon closed the gold window, there has been no enforcement mechanism...

That's a problem that tariffs cannot possibly cure.
How much gold is enough? Bill Bonner has an answer.
Legacy Research
 
Bill Bonner
 
Reader question:   Hi Bill, what is your suggested percentage of one’s total wealth that should be held in precious metals and cryptocurrencies? When I speak of these items, I am also including some leveraged exposures to things like mining stocks and precious metal ETFs like GLTR. How much of the physical metals and mined cryptocurrency should one hold vs. levered equity exposures of mining stocks? My overall portfolio contains equities, bonds, real estate (home and unimproved ranch land), oil and gas, and precious metals. I currently hold roughly 7.5% of my total wealth in precious metals and mining equities.
– Ross W. (Legacy Research member)  

Dan’s answer:   Great question. In The Bonner-Denning Letter, we recommend a 1% allocation to cryptocurrencies. Like everyone, we’re intrigued by the idea of decentralized money with no government interference. But we’re not entirely sold on the idea that there’s a new “digital asset class.” Cryptos can deliver massive gains but are also volatile and still inherently speculative (in our view).

Our allocation to precious metals is included in our “Real/Tangible Assets” section. It’s large, at 34%. A big chunk of that is obviously real estate. But the rest is precious metals. We haven't yet broken them out separately. If we did, though, it would likely be greater than 7% toward precious metals (more like 15-20%).

Please note, this allocation to gold and silver is a lot bigger than most portfolio managers or financial advisers recommend. But it reflects our view that financial assets are due for a big correction and that precious metals are a “safe-haven” asset with no counterparty risk (their value doesn’t depend on someone else’s ability to pay you).

We have a 25% allocation to stocks, which would include any gold and silver mining stocks that give you leverage on the gold price. However, we don’t pick stocks and leave that to our colleagues like Dave Forest and E.B. Tucker. 

We also have a 30% allocation to cash (storing up for after the crash to go shopping) and a 10% allocation to bonds. Our view is that government bonds are becoming riskier by the day, while some corporate bonds could do quite well by comparison. 
Read the following and understand why gold is real money and paper is simply paper. As SRSrocco says,
SRSrocco
 
GOLD vs. PAPER MONEY: Production Cost Is A Good Indicator Of Real Value 
By  SRSrocco  on September 25, 2019

The U.S. Treasury printed another $243 billion worth of paper money in 2018, with the majority being issued as $100 Federal Reserve Notes. What’s interesting is that the Reserve Banks estimated the number of notes they were going to remove from circulation and destroy accounted for 75% of the U.S. Treasury 2018 print order.

However, according to the FederalReserve.gov website, the currency in circulation in 2018 increased by approximately $100 billion:

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About Miles Franklin

Miles Franklin was founded in January, 1990 by David MILES Schectman. David's son, Andy Schectman, our CEO, joined Miles Franklin in 1991. Miles Franklin's primary focus from 1990 through 1998 was the Swiss Annuity and we were one of the two top firms in the industry. In November, 2000, we decided to de-emphasize our focus on off-shore investing and moved primarily into gold and silver, which we felt were about to enter into a long-term bull market cycle. Our timing and our new direction proved to be the right thing to do.

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