by Andy Hoffman, Miles Franklin:
I want to start by demonstrating just how desperate the powers that be have become – to preserve a dying status quo, in which the causes of decades of profligate fiscal and monetary policy are being exposed by the effects of political destabilization; economic stagnation; debt explosion; social unrest; and serial currency collapse.
Yesterday’s epic combination of “PM-bullish, everything-else-bearish” headlines; including Trump’s contentious exchanges with Presidents of Mexico, Iran, and Australia – following China, Japan, and Germany two days earlier; ugly, way below expected Deutsche Bank earnings; dovish Bank of England and Japan policy statements -following the previous day’sepic Federal Reserve punt; and a surging January Challenger job cuts report.
After which, the Cartel did its thing, using the same “Cartel Herald” algorithm as always, to push gold and silver down after the 10:00 AM EST close of the global physical markets. Still, both metals touched highs for the year; having decidedly held their 50 day moving averages of $1,177/oz and $16,71/oz, respectively, as they prepare to inevitably challenge their 200 day moving averages of $1,266/oz and $17.93/oz, respectively. At one point, the (meaningless but widely watched) “dollar index” fell as low a as 99.3, before moving back up towards the key psychological level of 100; i.e., the post-election breakout level, representing the market’s current view on just how realistic the (ridiculous, soon-to-be-permanently-disproven) “Trump-flation” meme actually is.
Fast forward to today – as I edit, three hours after “another dovish jobs report”; and with the dollar back down to 99.7; gold and silver again challenging $1,220/oz and $17.50/oz); and the benchmark 10-year Treasury yield at 2.43%, I can’t help reiterating last month’s “2.5%, ‘Nuff Said” thesis; i.e., that the 10-year yield – as a proxy to U.S. interest rates in general – simply CANNOT rise above this increasingly obvious “line in the sand” without annihilating the U.S. – and global – economy; and subsequetly, the vast majority of already collapsing fiat toilet papers. This, compared to the 3.0% “economic line in the sand” I first predicted – and was proven wildly correct about – three years ago; as today, the economy is in much worse shape; whilst global debt levels are much higher.
Aside for the, rigged headline number of 227,000 new January “jobs” being “better than expected,” everything else about the report, as usual, was horrible. Starting with the fact that the household survey showed a decline of 30,000 jobs; whilst December’s NFP headline number was revised downward by 40,000, entirely offsetting this month’s “beat.” Moreover, the all-important average weekly earnings number, at up 0.1%, was well below the expected 0.3%, despite countless minimum wage increases having been enacted to start the year; whilst last month’s supposedly “great” 0.4% average weekly earnings gain was revised down to just 0.2%. And again, I cannot empasize enough how vital wage growth is to the Fed’s thesis regarding inflation – which for the vast majority of Americans, is non-existent.
Sure, the labor force increased for the first time in ages; likely, due to people making New Year’s resolutions to look for a job; but unfortunately, most of them didn’t get one, resulting in a rise in the (already laughably understated) “unemployment rate.” And if you believe what the BLS tells us – that (mostly minimum wage paying) retailers were the biggest source of January jobs, following the worst holiday spending season since the 2008 crisis, I have a bridge in Brooklyn to sell you.
Trust me, if the Cartel is failing to smash Precious Metals on a day when the jobs report was supposedly “great,” what’s left of actual market participants decidedly know otherwise. Let alone, in the currency and bond markets – which loudly and clearly, are increasingly questioning the Fed’s (ridiculous, impossible, propagandist) expectation of three rate hikes this year.
Which brings me to today’s slightly less “economic” topic – although clearly, the reasons behind Precious Metal storage decisions are as much economic, as they are political and logistic. Which is, further commentary about what I believe to be the future of Precious Metals – and even cash storage (in this case, U.S. dollars, Canadian dollars, and Swiss Francs); i.e., Miles Franklin’s new, to the best of our knowledge unparalleled in the bullion industry, Private Safe Deposit Box program with Brink’s Toronto and Vancouver – as detailed in this article from November, when the service was launched; and this interview with President and Co-Founder Andy Schectman, in which all aspects of the program are discussed.
I’m not going to go over specific attributes of the program here, as they are discussed in detail in the aforementioned article and interview. And of course, you can call one of Miles Franklin’s brokers – on average, with roughly 25 years of bullion industry experience – at 800-822-8080; and they’d be happy to answer any questions you might have. Instead, I’m simply going to share my experience with the program, now that I have just become a client.
Long-time readers know that Miles Franklin commenced its segregated Precious Metal storage program with Brink’s Montreal back in 2012, which was expanded to Brink’s Vancouver location last year. I have been a satisfied client since 2013, and personally attended two regularly scheduled audits – where I witnessed my personal metal be counted. And now, as of this month, I’m a client of the Private Safe Deposit Box program, too.
The reason I bring it up, as that Andy Schectman and Joel Kravitz spent more than a year working on the logistics of this one-of-a-kind program; and when I personally saw the finished product, I couldn’t have been more impressed. To wit, I received in the mail – by signature delivery, of course – a vacuum-sealed packet holding a laminated, authenticated certificate describing my Brink’s Toronto holdings; as well as two keys to my personal safe deposit box. And by personal, I mean that no one, aside from me, has a key. Not even Brink’s themselves, or Miles Franklin.
Yes, Brink’s and Miles Franklin are aware of what’s in the box for accounting and logistics purposes – but they do NOT have a key; and thus, cannot open the box unless I send a key with explicit instructions. After which, if the contents change – due to a deposit or withdrawal – I’ll receive a new vacuum-sealed bag, with a new authenticated holdings certificate and my key back. Or, alternatively, I could simply go to the vault myself, or send the key with a third party – provided I send Brink’s explicit instructions of what that person is allowed to do.
With the global political, economic, and monetary situation more uncertain that at any time in generations, the urgency to protect one’s financial net worth has never been stronger; and given Precious Metals’ unchallenged historical track record, there’s no better way to “insure” yourself than physical gold and silver. And if offshore storage in Canada – one of the most politically stable jurisdictions on the planet – is for you, please give Miles Franklin a call; as in our view, our new Private Safe Deposit Box program represents the “future of Precious Metal storage.”
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