Gold: What A Long And Not So Strange Trip

The Gold Miner correction was well earned, but it was not a bubble.

Even today there is some pablum out there talking about how if inflation is good for gold it is especially good for gold miners. I will simply repeat once again that if gold usually does not benefit fundamentally by cyclical inflation (i.e. inflation promoted for and currently working toward economic goals) the gold miners never do, unless they rise against their preferred fundamentals as they did during two separate phases in the last bull market, which were justly resolved with crashes.

Here are a couple charts we used in NFTRH 648 in a segment written to set the record straight. We have also used these charts – especially the first one – since the caution flags went up last summer, visually by the first chart and anecdotally by the usual suspects aggressively pumping the unwitting masses. Buffett buys a gold stock!… okay, well so much for that. Sentiment became off the charts over-bullish and now, as we prepare for the final act of the correction, it’s the opposite. That’s perfect.

HUI had far exceeded the Gold/SPX ratio and so it was very vulnerable from a macro fundamental perspective. Why on earth would players want to focus on miners digging a rock out of the ground that was starting to fail in a price ratio to the stock market? They wouldn’t, and since last summer they didn’t.


But from a sector fundamental perspective the Gold/Oil ratio (Oil/Energy is a primary driver of mining costs) and HUI show that the 2020 rally was nothing like the two bubbles of yesteryear, when not only did HUI hit danger signals (!) noted above by a macro fundamental indicator, it also made two separate bubbles vs. this sector fundamental. This time? Nope, no bubble here. Continue reading "Gold: What A Long And Not So Strange Trip"

The State Of The Macro

As our Continuum chart predicted over a year ago, Jerome Powell was called to his higher inflationary powers when the macro markets liquidated with great violence and terror. This link shows the Continuum (30yr yield and its monthly EMA 100 limiter) as it was then, begging for inflationary action…

Oh Jerome? Bond market calling…

Below is the Continuum today. Since the linked post from February 2020, a lot has happened and it has been according to the plans we laid out last spring. The plan was inflationary because the Fed was going into steroidal inflation mode. The ‘Fed comfort box’ on the chart has thinned out from the original post because the red dotted limiter (monthly EMA 100) has declined appreciably since then.

These many months the NFTRH target has been 2.5% to 2.7% on the 30yr Treasury yield. This week that zone’s lower bound got dinged. It is coming time for a cool down at least if the macro reflation is going to get a second wind. What could provide that second wind? Continue reading "The State Of The Macro"

Gold & Gold Stock Corrections Are Normal

Corrections in Gold and Gold Stocks are completely normal in an inflationary macro market phase.

Every week I notice the agony ratcheting up incrementally. While the rest of the casino takes off to the speculative heavens, gold sits on its heavy ass and the gold miners go nowhere in a downward-biased perma-correction. Or so it seems. It’s all normal and I’ll explain why.

First of all, it is not healthy to be railing against unseen nefarious manipulative interests. That is emotion and emotion has to be kept out of it (and yes, I get as aggravated as the next guy sometimes, but it cannot affect your plan or you will be the victim, the mark). You have to take what the market gives you and roll with it. All markets are manipulated when you consider that the greatest manipulation of all is courtesy of the Federal Reserve, implementing it's MMT (Modern Monetary Theory), err, that is TMM (Total Market Manipulation) toward desired ends.

The primary tool in that manipulation is inflation. The oldest trick in the Fed’s book. But they can only inflate under cover of a deflationary macro and the 2020 COVID-crash made that the story and as yet it’s a condition that keeps on giving license to the inflators. But very likely sometime in 2021, our indicators will signal a failure into another deflationary liquidation or a more intense inflationary problem, neither of which would be positive for the economy. Continue reading "Gold & Gold Stock Corrections Are Normal"

Can The Silver Bugs Alter The Macro?

As to the post’s title, they sure are trying. Despite doubts that the stodgy old likes of me may have.


But for two days at least dem bugz is successfully battlin’ dem boyz on da COMEX. The result is that the Silver/Gold ratio (weekly futures chart) has been rammed to a new high for the post-crash move. If we back completely away from the #silversqueeze punchbowl, this is an indicator guiding the way for forward inflation.

silver gold ratio

So again, can the silver bugs alter the macro? Are the silver bugs altering the macro or is silver just doing what it has been technically capable of doing all along? Since well before #silversqueeze (a ‘me too!’ operation to the famous Reddit plays of late) was promoted by its originator, gold had been trending down vs. silver. Continue reading "Can The Silver Bugs Alter The Macro?"

Yield Curve Relentlessly Steepens

Another week, another yield curve steepener and continuation of the trend that began in August 2019.

yield curveyield curve

Flipping to the bigger picture I added in SPX, Gold, and the CRB commodity index for reference. With the levels of MMT TMM (total market manipulation) injected in the markets since Ben Bernanke cooked up the diabolical macro manipulation known as Operation Twist, I can’t pretend to quant the past to the present… Continue reading "Yield Curve Relentlessly Steepens"