#COMEX’s #Gold & #Silver Trade Data Doesn’t Add Up!

"How did you go bankrupt?"

Two ways. Gradually, then suddenly.

     Ernest Hemingway, The Sun Also Rises 

Is COMEX Data Rigged?

— We all know the answer to that...

It now seems the mother of all short squeezes may finally be near, as more and more investors take Physical Delivery of Gold, rather than roll over their Futures Contracts... 

"Just like a fear of cash shortages would cause a run on the banking system, fears of physical precious metals shortages could cause a run on whatever is left in the COMEX warehouses."

"While the COMEX claims there is enough gold in registered to satisfy current deliveries, we have started to see some anomalies in the data which potentially paint a different picture."

Interesting piece on how the fudging of the numbers on the COMEX is going to come around and bite them in the …, sooner rather than later, as more and more people are taking delivery of physical metal vs. rolling over their paper contracts...  this has been going on for years, but the potential short squeeze is becoming more glaring as the pumping of liquidity, without any real backing, goes into overdrive. 

"while the COMEX allows as many paper derivative contracts to be placed as bets on the market price, we only have a finite amount of the real metals available on the market at any given time. Those cannot be printed up at the push of a button on a computer like the paper contracts can be. This has two effects on the market.

"First, when the physical deliveries are miscounted, the paper contract derivative trades overstate short term speculative interest in the metals versus those willing to take ownership. Secondly, and probably more importantly, it overstates the amount of physical metals available for delivery on the futures market for those that want to take delivery. It basically amounts to fraud, much as if your bank claimed to have enough cash for your deposit, and then notified you when you showed up to the bank that you would have to wait 2-3 months to get your cash."!!! 

Buy When There’s Blood in the Streets—Even If It’s Your Own

Highly recommend this research piece by Crescat Capital on the valuation of Gold Miners vs. the S&P 500. 

From the February top for large cap stocks, it would take a 56% selloff just to get to long term mean valuations, a 74% decline to get to one standard deviation below that... 1932 was an 89% drop from the peak. The initial decline in this market so far is comparable to 1929 in speed and magnitude. There will certainly be bounces, but even after an almost 30% fall in the S&P 500 through yesterday's close, we are not even close to the "blood in the street" valuations that should mark the bottom for stocks in the current global recession that has only just begun.

But value investors do not have to despair today. There is one area of the stock market that already offers historic low valuations and an incredible buying opportunity right now. Small cap gold and silver mining companies just retested the lows of a 9-year bear market. Last Friday, they were down 84% from their last bull market peak in December 2010! This was a double-bottom retest at a likely higher low compared to the January 2016 low when they were down 87%. Now that is what we call mass murder! …precious metals juniors reached record low valuations last Friday relative to gold which is still up 18% year-over-year. Mad value. Look at that beautiful divergence and base. The baby was thrown out with the bathwater in a mass margin call. Last time the ratio was in this vicinity, junior gold and silver miners rallied 200% in 8 months. 

Blood in the Streets

Crescat Capital

Crescat News and Updates

March 17, 2020

Dear Investors:

Are you looking for securities to buy to take advantage of the carnage in the financial markets from the coronavirus? Baron Rothschild, the 18th-century British banker advised that "The time to buy is when there's blood in the streets, even if it is your own." He made a fortune buying government bonds in the panic that followed the Battle of Waterloo against Napoleon. But it's not sovereign debt of the world's superpowers that is on sale today; it's not the S&P 500 or Dow either.

US government bonds already had their biggest year-over-year rally ever, and at record low yields, they are no bargain. As for US stocks, it's only the first month after what we believe was a historic market top. The problem is that the pandemic just so happened to strike at the time of the most over-valued US stock market ever based on a composite of eight valuation indicators tracked by Crescat, even higher than 1929 and 2000. It also hit after a record long bull market and economic expansion. The stock market was already ripe for a major downturn based on an onslaught of deteriorating macro and fundamental data even before the global health emergency.

As we show in the chart above, we believe there is much more downside still ahead for US stocks as a major global recession from nosebleed debt-to-GDP levels has only just begun.

Eric #Sprott’s Investment Spree in #Gold & #Silver #JuniorMining Co.’s Continues

Oreninc published an update to Eric Sprott’s investment spree in the junior mining space. 

He’s invested another C$69.3 million in August and September to bump his total to $176.7 million.

“Since Oreninc first wrote about his investment blitz at the end of July Sprott has since invested $20.1 million in Jaguar Mining, $12.0 million in Chesapeake Gold, $6 million in Amarillo Gold, $5.0 million in Kootenay Silver as well as investments in Benchmark Metals, Freegold Ventures, Aftermath Silver, Stroud Resources, Kore Mining, Excellon Resources, Dolly Varden Silver, Pure Nickel, Stuhini Exploration, American Creek Resources and Teuton Resources.

“While the majority of his investments are in gold juniors, with the silver price starting to show signs of life, Sprott has invested in five silver juniors since the start of August and ten since May, as well as two nickel companies”  

See the piece on :: Oreninc ::

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