-- Published: Thursday, 26 December 2019 | Print | Disqus
Stewart Thomson, Graceland Updates
1. Massive upside breakouts are taking place across the precious metals sector. Many mining stocks, especially silver-oriented, are skyrocketing.
2. Unfortunately, I believe most investors who are Trump fans have become over-obsessed with the relatively minor but media-promoted gains in the US stock market, and they are missing out.
3. Please click here now. Double-click to enlarge this “bull wedge breakout gift from Santa” gold chart. Chinese New Year for 2020 lasts from January 25 to February 11, and I expect strong Chinese citizen demand will keep gold in powerful “rally mode” to at least the start of this important holiday.
4. The US stock market gained hundreds of percent under presidents Roosevelt, Reagan, Clinton, and Obama, but only about 50% so far under Trump.
5. That’s partly because Trump didn’t ramp up debt the way those other presidents did. Government debt rose almost 200% during the Reagan administration, 1000% under “crazed gold confiscator” Roosevelt, but only by about 10% so far with the Trump administration.
6. Trump has been incredibly fiscally responsible, especially considering that he cut taxes dramatically, but the stock market won’t see the kind of performance it did in the past unless the Fed becomes even more ridiculously dovish than it already is, and Trump ramps up debt, into the danger zone.
7. The growth problem in America comes down to demographics and debt. Trump inherited a 100% government debt to GDP ratio. In contrast, it looks like that ratio was only about 30% when Roosevelt and Reagan were elected.
8. Unlike his predecessors, Trump simply doesn’t have any room to increase debt in a major way, and even a tiny increase in debt is incredibly dangerous.
9. It’s not Trump’s fault, but government debt is completely out of control. Arguably, so is corporate and private citizen debt. US demographics are too pathetic to even contemplate trying to create higher GDP growth to “grow the nation out of debt”.
10. That worked in the 1950s under Truman and Eisenhower because demographics were the opposite of what they are today.
11. Please click here now. Double-click to enlarge. The bottom line: The gold breakout looks awesome, and this silver breakout looks even better!
12. Any tiny increase in US government debt now could be the single spark that produces a massive inflationary fire, and the price action in both silver stocks and bullion suggests the fire may be getting ignited right now.
13. Investors need to face reality: Reagan was elected when the baby boomers entered their prime working age. The Fed was engaged in the biggest rate cutting cycle in the history of America, savers still got great interest payouts, and there was no China or India that mattered.
14. Now, there’s little room to cut rates, savers are destroyed by lunatic Fed policy that promotes ever-more debt, the boomers want free pension money handouts, and China and India have eight gold and silver focused citizens for each debt focused American. It’s the ultimate “no-brainer” that gold and silver are the main investment play… for today!
15. Please click here now. Double-click to enlarge this majestic SILJ junior silver stocks chart. The up channel is technically perfect, and a surge in silver bullion would create a semi-parabolic move higher for SILJ.
16. How is it possible that silver stocks are ripping to one fresh new high after another, leaving bullion behind? Well, there is commercial trader bullion shorting activity on the COMEX. Money managers are buying silver stocks, not COMEX contracts, and it doesn’t take much money flowing into these stocks to push them dramatically higher.
17. A COMEX silver price surge is coming though, because there are two big inflationary forces at play. First, the easing of trade tensions is opening the door for global growth in the late stage of the business cycle. That’s incredibly inflationary. Wage growth and consumer spending growth in China (Consumer spending growth is above 20% in some major Chinese cities now) is going to push prices higher in both China and the West. This growth-oriented inflation can be called “good inflation”.
18. At the same time, de-dollarization and “red-lined” American government, corporate, and citizen debt is beginning to create “bad” inflation.
19. When Barack Obama took office in early 2009, I received literally thousands of emails from Western gold bugs about how much money they were supposedly going to make by shorting the US stock market.
20. I told them they were facing the wrong way. They needed to view the election of Obama as one of the greatest buying opportunities for the stock market… in the history of America. The bottom line: Never bet against the Fed if the Fed goes wildly dovish, because a wildly dovish Fed is a Fed endorsed by the government. As I predicted, the stock market ripped higher, and the short positions failed completely.
21. Now, I’m getting emails about how there can’t be any inflation because Trump is elected. Wrong. All wrong. Inflation is about to soar, and investors with lots of silver stocks will score!
22. The US stock market is rising because of the Fed, not Trump. The Fed’s “psychotic” dovishness has created a corporate buybacks mania. If Liz Warren is elected, she’ll kill those buybacks. I like that. Simply put, “Warden” Warren will force corporations to spend money on wages and expansion at a time when that is most inflationary.
23. The biggest bull run in history for gold and silver stocks is getting underway, and it’s going to accelerate regardless of whether Trump or the democrats win in 2020. Thousands of gold bugs who shorted the stock market in 2009 are buying it now. They will be left behind by gold and silver stock investors if Trump wins. If Warren wins, they could be wiped off the financial map.
24. Please click here now. Double-click to enlarge this key SIL versus Dow chart. Silver stocks are about to “destroy” the Dow. Is Santa coming, to fill wise investor stockings with silver-oriented goodies to ring in the New Year? I think so!
Thanks!
Cheers
St
Stewart Thomson
Graceland Updates
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-- Published: Thursday, 26 December 2019 | E-Mail | Print | Source: GoldSeek.com
