The bitter truth about what may happen to gold is not all that exciting and likely don’t want to know, but you need to understand what is unfolding as we speak…..
Long story short, the prices of bonds look as though they are about to rally once again. Mounting fears of a stock market correction has money flowing into bonds which in turn will drive interest yields lower yet gain.
But the BIG PICTURE of what he FED said the other week about how they plan to raise rates in 2015 and cut QE down to $55 billion per month hurts the long term outlook for gold.
This news may not sound that important, it actually is and undermines the price of miners, silver and gold in a big way. Find out why gold is falling and the threat that could trigger a much larger meltdown in the long run with my gold forecast video.
Chris Vermeulen
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Saturday, March 29, 2014
Thursday, March 27, 2014
Peter Schiff Shares His Offshore Strategies
By Nick Giambruno
I’d bet that most International Man readers are familiar with Peter Schiff. He is a financial commentator and author, CEO of Euro Pacific Capital, and is known for accurately predicting the 2008 financial crisis.
He also has a very keen understanding of internationalization. Peter shares with me his strategies in this must read discussion below that I am happy to bring exclusively to International Man readers. (If you are not already a member, you can join for free here.)
Nick Giambruno: Peter, do you see the potential for another financial crisis in the U.S. playing out in the not so distant future?
Peter Schiff: Unfortunately, yes. I mean, how soon is very difficult to tell. In fact, right now you’ve got a high level of complacency. The stock markets are rallying to new highs, nominal highs. People seem to be convinced that the worst is behind us, that the central banks of the world have solved their problems by papering them over. But, you know, I don’t think they’ve solved anything. I think they’ve compounded the underlying problems that caused the last crisis, and so now the next crisis will be that much worse because of what the central banks did, in particular the Federal Reserve.
The Fed is right now trying to prop the economy up, the housing market up with cheap money, and it is operating under the delusion that one day it can take that cheap money away and the economy and the housing market will just sustain on their own, but that’s not possible. The Fed is building an economy that is completely dependent on that cheap money. And so if you take it away, the economy implodes, but if you don’t take it away, then it’s worse.
Nick Giambruno: So what measures do you see coming into place—things such as capital controls?
Peter Schiff: Well, certainly as currencies depreciate, governments look to try to find ways to stop the bleeding. What’s really is going on with inflation is that you have a huge transfer of wealth from savers and lenders to debtors, and of course the US government is the world’s biggest debtor, but a lot of American voters are in debt too.
If you’re a saver and you don’t want to watch your assets confiscated through the printing press, then you’re going to try to protect yourself. You might do that by moving your dollars abroad, converting them to foreign currencies, trying to get out of harm’s way, and that’s when you have the government potentially coming in with capital controls.
Putting taxes on foreign currency transactions or maybe outright prohibiting them altogether, that will make it more difficult for you or more expensive to take protective measures. I think we’ve already got the beginnings of capital controls in the United States. The government is making it very difficult for Americans to do business abroad. Many foreign financial institutions, banks, and even bullion depositories are refusing to do business with American citizens for fear of retaliation by the IRS or other government agencies.
Nick Giambruno: So what can Americans and others living under a desperate government do to minimize this risk?
Peter Schiff: Well, the first thing that you could do is minimize your purchasing power risk. So you don’t have to get your money into a foreign bank or foreign brokerage account to get out of the dollar. I help Americans diversify globally within a US account, but their portfolio consists of foreign assets, whether it’s foreign bonds, government bonds, corporate bonds, foreign stocks, dividend-paying stocks, commodities, or precious metals. These are all things that will protect purchasing power in an inflationary time period, and things that the federal government—the Federal Reserve—can’t levy the inflation tax on.
If you’re more worried about political risk—about the US government seizing your assets—then you want to take the next step. This is not just getting out of the dollar, but getting your money out of the country. But again, the US government is making that more difficult right now.
I know personally. I set up a foreign brokerage firm as a subsidiary of my foreign bank, which I also set up, called Euro Pacific Bank. I did this predominantly for foreigners who were having trouble investing with my US brokerage firm. The securities rules and regulations are now so onerous that it almost caused me to view any foreigner as a terrorist. So if somebody in Australia wanted to open up an account with me, there was so much paperwork involved that oftentimes they would just give up halfway through the process. So what I did is I set up this foreign bank so that I wouldn’t have to operate under those confines, so I can be more competitive to a foreign investor, but I can’t offer these services to Americans.
My foreign bank is no different than many other foreign banks. In order to really protect the privacy of my foreign customers, I can’t accept American customers. And if I accepted American customers, my compliance cost would be so high that I would have to charge my foreign customers more for transactions to try to stay in business. So to mitigate all that regulation and the potential of having to share all the information on my foreign clients with the US government, I’m just not taking American customers with my foreign bank.
Nick Giambruno: So Euro Pacific Bank, where is it headquartered and why did you choose that jurisdiction?
Peter Schiff: It’s in St Vincent and the Grenadines (the Caribbean). I did it for a number of reasons: it’s close to me, but also because of the banking laws. You have secrecy, privacy, and you have no tax. They’re not going to impose any income tax on my company as an offshore bank, they’re also not going to impose any taxes, any withholding taxes on my bank’s customers’ interest income or their capital gains. And no one is going to pierce the wall of secrecy. You’re going to have to go in to a St. Vincent’s court and get a local court order to get any information from my bank.
The bank is regulated, but it’s not nearly as onerous as the type of regulations that I would face trying to do this business from the United States. In fact, some of the things we’re doing offshore might be completely impossible because they would no longer be economically viable if I tried to do them in America, but I can do them offshore because the government doesn’t impose these artificial barriers.(Editor’s Note: You can find out more about Euro Pacific Bank here.)
Nick Giambruno: Generally speaking, which countries are you particularly bullish on?
Peter Schiff: It’s kind of like a monetary or economic triage; I’m always looking around the world to see which countries are in the least bad shape, which countries are the least reckless and the least irresponsible. You really can’t find any one country that’s doing it perfectly. You just have to find the ones that are making the fewest mistakes.
And I think high on that list are Singapore and Hong Kong. Those markets are relatively free of regulation, free of taxation. I mean, it’s not nonexistent, but on a relative basis you have a lot more freedom there, and so you have a lot more prosperity there. You have much better economic fundamentals. And not just in those two places, but in Southeast Asia in general, in a lot of the emerging economies, you’ll find a lot less government and a lot more freedom. People are working harder, they’re saving, they’re producing, and they’re exporting. You don’t have these trade deficits, budget deficits, and you don’t have armies of people looking to retire on government entitlements. In Europe, we still like Switzerland even though they are making mistakes tying their currency to the euro. I think eventually they will change that policy. Scandinavia, we have been investors in Norway, we’ve been investors in Sweden. Also Australia and New Zealand have been longtime favorites. We’ve been investing down there or even closer to home in Canada. We do have some investments in South America. We’re diversifying around the world trying to get into the right countries, the right currencies, the right asset classes.
Nick Giambruno: On a different note, we’ve seen the number of US citizens renouncing their citizenship sharply increase. We have also seen high-profile people like Tina Turner and Eduardo Saverin give up their US citizenship. Would Tina be eligible to use Euro Pacific Bank?
Peter Schiff: Yes, once you renounce your US citizenship. The only people who can’t bank with me are American citizens, or green card holders. So once you are no longer an American citizen, as long as you don’t reside in the United States, then you are welcome at the bank.
I think a lot of people are doing this obviously for tax reasons, although they can’t necessarily claim it’s for tax reasons. You have to fill out a form if you want to renounce your citizenship—which, by the way, you can only get from a foreign embassy or consulate. Those forms used to be free. Now they’re $500 apiece. So think about that. If they can charge you $500 for that form, they could charge $5,000, they could charge $5,000,000. They could basically make it impossible for you to leave. And they’re trying to make it more difficult ever since Eduardo Saverin from Facebook went to Singapore.
Now the government is trying to come up with all sorts of ways to punish Americans who try to give up their citizenship, and this really is the sign of a nation in decay. Fifty years ago, nobody would want to give up American citizenship. They would cherish it. The fact that so many people are paying tremendous amounts of money to get this albatross off their neck shows you how much times have changed, that an American passport is not an asset to be cherished but a liability that people are willing to pay to get rid of.
Nick Giambruno: And what about yourself? Do you believe you are adequately diversified internationally?
Peter Schiff: I think my investments are; I own a lot of foreign stocks. I have a lot of precious metals, I have a lot of mining shares. But I still live in the United States, so I’m obviously still vulnerable here. My family is here, so I haven’t done anything about a physical exit strategy. Although I do think I have financial resources that would afford me the ability to relocate, but I haven’t actually taken any steps other than setting up a foreign business. I have the foreign bank in the Caribbean. I have a brokerage firm Euro Pacific Canada, and so I’ve got offices up there.
I’m also thinking about opening up an office in Singapore and trying to move more of my business—particularly my asset management business—to move it from the US. Not only because of favorable tax treatment outside the US, but because of the regulatory environment. If you want to be globally competitive, you need to be in an area where you can minimize these costs because if I have those costs and my competitors don’t, then I am at a disadvantage. And also because I think that over time people are going to be more and more hesitant about sending their money to the United States. So if I’m going to manage money, I might have to manage it offshore, because I think people will be worried about sending it here. They might be worried that the US government might take it.
If it ever gets really, really bad that you feel that you have to leave, by then it might be illegal to take any gold or silver out of the country. Right now you can take more than $10,000 worth of cash or cash equivalents—which would include gold bullion—out of the country as long as you tell the government that you’re taking it. And if you don’t tell them and they catch you, there’s a big fine and jail penalty. But one day it might not be the case. It might be that you are prohibited from taking any significant amount of money out of the country, and who knows what the penalty might be if they catch you. But if it’s already out of the country, then you don’t have to worry, because you’re leaving with nothing and the money is on the other side of the border waiting for you.
Nick Giambruno: So the idea is to preempt capital controls?
Peter Schiff: Yeah, well, you get out the window before they slam it shut. That’s the whole idea, and right now those windows are shutting all around as more and more offshore institutions are saying “no thank you” to an American customer. But the other reason that you want to act sooner too is if they impose exchange controls or fees on purchasing precious metals. They don’t ban them, but they have a big tax on the transaction or a big tax on the foreign exchange. If you want to buy Swiss francs, they can have a transaction tax. You want to get your money out of the dollar before those taxes are imposed, because if you wait until they’re imposed, then you can’t get as much money out, because a lot of it is being lost to taxes.
In getting out of the dollar, you’re trying to avoid the inflation tax, but they’re hitting you with some other kind of tax in the process because that’s really what they are trying to do. A lot of people are worrying about the income tax or the estate tax and they go through elaborate means to try to minimize those taxes, but then they leave themselves vulnerable to what might be the biggest tax of all: and that’s the inflation tax. So you have to act to protect yourself before so many people are trying to protect themselves that the government makes it almost impossible to do so.
Editor’s Note: Internationalization is your ultimate insurance policy. Whether it’s with a second passport, offshore physical gold storage, or other measures, it is critically important that you dilute the amount of control the bureaucrats in your home country wield over you by diversifying your political risk.
You can find Casey Research’s A-Z guide on internationalization by clicking here.
He also has a very keen understanding of internationalization. Peter shares with me his strategies in this must read discussion below that I am happy to bring exclusively to International Man readers. (If you are not already a member, you can join for free here.)
Nick Giambruno: Peter, do you see the potential for another financial crisis in the U.S. playing out in the not so distant future?
Peter Schiff: Unfortunately, yes. I mean, how soon is very difficult to tell. In fact, right now you’ve got a high level of complacency. The stock markets are rallying to new highs, nominal highs. People seem to be convinced that the worst is behind us, that the central banks of the world have solved their problems by papering them over. But, you know, I don’t think they’ve solved anything. I think they’ve compounded the underlying problems that caused the last crisis, and so now the next crisis will be that much worse because of what the central banks did, in particular the Federal Reserve.
The Fed is right now trying to prop the economy up, the housing market up with cheap money, and it is operating under the delusion that one day it can take that cheap money away and the economy and the housing market will just sustain on their own, but that’s not possible. The Fed is building an economy that is completely dependent on that cheap money. And so if you take it away, the economy implodes, but if you don’t take it away, then it’s worse.
Nick Giambruno: So what measures do you see coming into place—things such as capital controls?
Peter Schiff: Well, certainly as currencies depreciate, governments look to try to find ways to stop the bleeding. What’s really is going on with inflation is that you have a huge transfer of wealth from savers and lenders to debtors, and of course the US government is the world’s biggest debtor, but a lot of American voters are in debt too.
If you’re a saver and you don’t want to watch your assets confiscated through the printing press, then you’re going to try to protect yourself. You might do that by moving your dollars abroad, converting them to foreign currencies, trying to get out of harm’s way, and that’s when you have the government potentially coming in with capital controls.
Putting taxes on foreign currency transactions or maybe outright prohibiting them altogether, that will make it more difficult for you or more expensive to take protective measures. I think we’ve already got the beginnings of capital controls in the United States. The government is making it very difficult for Americans to do business abroad. Many foreign financial institutions, banks, and even bullion depositories are refusing to do business with American citizens for fear of retaliation by the IRS or other government agencies.
Nick Giambruno: So what can Americans and others living under a desperate government do to minimize this risk?
Peter Schiff: Well, the first thing that you could do is minimize your purchasing power risk. So you don’t have to get your money into a foreign bank or foreign brokerage account to get out of the dollar. I help Americans diversify globally within a US account, but their portfolio consists of foreign assets, whether it’s foreign bonds, government bonds, corporate bonds, foreign stocks, dividend-paying stocks, commodities, or precious metals. These are all things that will protect purchasing power in an inflationary time period, and things that the federal government—the Federal Reserve—can’t levy the inflation tax on.
If you’re more worried about political risk—about the US government seizing your assets—then you want to take the next step. This is not just getting out of the dollar, but getting your money out of the country. But again, the US government is making that more difficult right now.
I know personally. I set up a foreign brokerage firm as a subsidiary of my foreign bank, which I also set up, called Euro Pacific Bank. I did this predominantly for foreigners who were having trouble investing with my US brokerage firm. The securities rules and regulations are now so onerous that it almost caused me to view any foreigner as a terrorist. So if somebody in Australia wanted to open up an account with me, there was so much paperwork involved that oftentimes they would just give up halfway through the process. So what I did is I set up this foreign bank so that I wouldn’t have to operate under those confines, so I can be more competitive to a foreign investor, but I can’t offer these services to Americans.
My foreign bank is no different than many other foreign banks. In order to really protect the privacy of my foreign customers, I can’t accept American customers. And if I accepted American customers, my compliance cost would be so high that I would have to charge my foreign customers more for transactions to try to stay in business. So to mitigate all that regulation and the potential of having to share all the information on my foreign clients with the US government, I’m just not taking American customers with my foreign bank.
Nick Giambruno: So Euro Pacific Bank, where is it headquartered and why did you choose that jurisdiction?
Peter Schiff: It’s in St Vincent and the Grenadines (the Caribbean). I did it for a number of reasons: it’s close to me, but also because of the banking laws. You have secrecy, privacy, and you have no tax. They’re not going to impose any income tax on my company as an offshore bank, they’re also not going to impose any taxes, any withholding taxes on my bank’s customers’ interest income or their capital gains. And no one is going to pierce the wall of secrecy. You’re going to have to go in to a St. Vincent’s court and get a local court order to get any information from my bank.
The bank is regulated, but it’s not nearly as onerous as the type of regulations that I would face trying to do this business from the United States. In fact, some of the things we’re doing offshore might be completely impossible because they would no longer be economically viable if I tried to do them in America, but I can do them offshore because the government doesn’t impose these artificial barriers.(Editor’s Note: You can find out more about Euro Pacific Bank here.)
Nick Giambruno: Generally speaking, which countries are you particularly bullish on?
Peter Schiff: It’s kind of like a monetary or economic triage; I’m always looking around the world to see which countries are in the least bad shape, which countries are the least reckless and the least irresponsible. You really can’t find any one country that’s doing it perfectly. You just have to find the ones that are making the fewest mistakes.
And I think high on that list are Singapore and Hong Kong. Those markets are relatively free of regulation, free of taxation. I mean, it’s not nonexistent, but on a relative basis you have a lot more freedom there, and so you have a lot more prosperity there. You have much better economic fundamentals. And not just in those two places, but in Southeast Asia in general, in a lot of the emerging economies, you’ll find a lot less government and a lot more freedom. People are working harder, they’re saving, they’re producing, and they’re exporting. You don’t have these trade deficits, budget deficits, and you don’t have armies of people looking to retire on government entitlements. In Europe, we still like Switzerland even though they are making mistakes tying their currency to the euro. I think eventually they will change that policy. Scandinavia, we have been investors in Norway, we’ve been investors in Sweden. Also Australia and New Zealand have been longtime favorites. We’ve been investing down there or even closer to home in Canada. We do have some investments in South America. We’re diversifying around the world trying to get into the right countries, the right currencies, the right asset classes.
Nick Giambruno: On a different note, we’ve seen the number of US citizens renouncing their citizenship sharply increase. We have also seen high-profile people like Tina Turner and Eduardo Saverin give up their US citizenship. Would Tina be eligible to use Euro Pacific Bank?
Peter Schiff: Yes, once you renounce your US citizenship. The only people who can’t bank with me are American citizens, or green card holders. So once you are no longer an American citizen, as long as you don’t reside in the United States, then you are welcome at the bank.
I think a lot of people are doing this obviously for tax reasons, although they can’t necessarily claim it’s for tax reasons. You have to fill out a form if you want to renounce your citizenship—which, by the way, you can only get from a foreign embassy or consulate. Those forms used to be free. Now they’re $500 apiece. So think about that. If they can charge you $500 for that form, they could charge $5,000, they could charge $5,000,000. They could basically make it impossible for you to leave. And they’re trying to make it more difficult ever since Eduardo Saverin from Facebook went to Singapore.
Now the government is trying to come up with all sorts of ways to punish Americans who try to give up their citizenship, and this really is the sign of a nation in decay. Fifty years ago, nobody would want to give up American citizenship. They would cherish it. The fact that so many people are paying tremendous amounts of money to get this albatross off their neck shows you how much times have changed, that an American passport is not an asset to be cherished but a liability that people are willing to pay to get rid of.
Nick Giambruno: And what about yourself? Do you believe you are adequately diversified internationally?
Peter Schiff: I think my investments are; I own a lot of foreign stocks. I have a lot of precious metals, I have a lot of mining shares. But I still live in the United States, so I’m obviously still vulnerable here. My family is here, so I haven’t done anything about a physical exit strategy. Although I do think I have financial resources that would afford me the ability to relocate, but I haven’t actually taken any steps other than setting up a foreign business. I have the foreign bank in the Caribbean. I have a brokerage firm Euro Pacific Canada, and so I’ve got offices up there.
I’m also thinking about opening up an office in Singapore and trying to move more of my business—particularly my asset management business—to move it from the US. Not only because of favorable tax treatment outside the US, but because of the regulatory environment. If you want to be globally competitive, you need to be in an area where you can minimize these costs because if I have those costs and my competitors don’t, then I am at a disadvantage. And also because I think that over time people are going to be more and more hesitant about sending their money to the United States. So if I’m going to manage money, I might have to manage it offshore, because I think people will be worried about sending it here. They might be worried that the US government might take it.
If it ever gets really, really bad that you feel that you have to leave, by then it might be illegal to take any gold or silver out of the country. Right now you can take more than $10,000 worth of cash or cash equivalents—which would include gold bullion—out of the country as long as you tell the government that you’re taking it. And if you don’t tell them and they catch you, there’s a big fine and jail penalty. But one day it might not be the case. It might be that you are prohibited from taking any significant amount of money out of the country, and who knows what the penalty might be if they catch you. But if it’s already out of the country, then you don’t have to worry, because you’re leaving with nothing and the money is on the other side of the border waiting for you.
Nick Giambruno: So the idea is to preempt capital controls?
Peter Schiff: Yeah, well, you get out the window before they slam it shut. That’s the whole idea, and right now those windows are shutting all around as more and more offshore institutions are saying “no thank you” to an American customer. But the other reason that you want to act sooner too is if they impose exchange controls or fees on purchasing precious metals. They don’t ban them, but they have a big tax on the transaction or a big tax on the foreign exchange. If you want to buy Swiss francs, they can have a transaction tax. You want to get your money out of the dollar before those taxes are imposed, because if you wait until they’re imposed, then you can’t get as much money out, because a lot of it is being lost to taxes.
In getting out of the dollar, you’re trying to avoid the inflation tax, but they’re hitting you with some other kind of tax in the process because that’s really what they are trying to do. A lot of people are worrying about the income tax or the estate tax and they go through elaborate means to try to minimize those taxes, but then they leave themselves vulnerable to what might be the biggest tax of all: and that’s the inflation tax. So you have to act to protect yourself before so many people are trying to protect themselves that the government makes it almost impossible to do so.
Editor’s Note: Internationalization is your ultimate insurance policy. Whether it’s with a second passport, offshore physical gold storage, or other measures, it is critically important that you dilute the amount of control the bureaucrats in your home country wield over you by diversifying your political risk.
You can find Casey Research’s A-Z guide on internationalization by clicking here.
The article Peter Schiff Shares His Offshore Strategies was originally published at International Man
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Monday, March 24, 2014
Why Junior Gold Mining Stocks Are Our Favorite Speculations
By Laurynas Vegys, Research Analyst
Despite last week’s pullback, the precious metals market is off to an impressive start in 2014. Gold is up 10.6%, silver 4.3%, and the PHLX Gold/Silver (XAU) 17.1%. Gold, in particular, had a great February, rising above $1,300 for the first time since November 7, 2013. This has led to some very handsome gains in our Casey International Speculator portfolio, with a few of our recommendations already logging triple digit gains from their recent bottoms.Why Junior Gold Mining Stocks Are Our Favorite Speculations
One of Doug Casey’s mantras is that one should buy gold for prudence, and gold stocks for profit. These are very different kinds of asset deployment. In other words, don’t think of gold as an investment, but as wealth protection. It’s the only highly liquid financial asset that is not simultaneously someone else’s obligation; it’s value you can liquidate and use to secure your needs. Possessing it is prudent.
Gold stocks are for speculation because they offer leverage to gold. This is actually true of all mining stocks, but the phenomenon is especially strong in the highly volatile precious metals. Most typical “be happy you beat inflation” returns simply can’t hold a candle to stocks that achieved 10 bagger status (1,000% gains). In previous bubbles—some even generated 100 fold returns. And we may see such returns again.
It’s Not Too Late to Make a Fortune
Here’s a look at our top three year to date gainers.
What’s especially remarkable is that all three of these stocks shot up much more than gold itself, on essentially no company specific news. This is dramatic proof of just how much leverage the right mining stocks can offer to movements in the underlying commodity—gold, in this case. Two of the stocks above are on our list of potential 10 baggers, by the way.
So have you missed the boat? Is it too late to buy?
Looking at the chart, two bullish factors jump out immediately:
- Gold stocks have just now started to move up from a similar level in 2008.
- Gold stocks remain severely undervalued compared to the gold price. A simple reversion to the mean implies a tremendous upside move.
- After 13 consecutive months of decline, GLD holdings were up over 10.5 tonnes last month. The trend is similar to other ETFs.
- Hedge funds and other large speculators more than doubled their bets on higher gold prices this year.
- Increase in M&A—for example, hostile bids from Osisko and HudBay Minerals to buy big assets.
- Apollo, KKR, and other large private equity groups have emerged as a new class of participants in the sector.
- Gold companies’ hedging of future production—usually a sign of insecurity among the miners—shrunk to the lowest level in 11 years.
- China continues to consume record amounts of gold and officially overtook India as the world’s largest buyer of gold in 2013.
- Large players in the gold futures market that were short have switched to being long.
- Central banks continue to be net buyers.
Any correction ahead is a potential last-chance buying opportunity before the final mania phase of this bull cycle takes our stock to new highs, well above previous interim peaks.
In spite of the good start to 2014, most of our 10 bagger gold stocks are still on the deep discount rack. And you can get all of them with a risk free, 3 month trial subscription to our monthly advisory focused on junior mining stocks, the Casey International Speculator.
If you sign up today, you can still get instant access to two special reports detailing which stocks are most likely to gain big this year: Louis James’ 10 Bagger List for 2014 and 7 Must Own Stocks for 2014.
Test drive the International Speculator for 3 months with a full money back guarantee, and if it’s not everything you expected, just cancel for a prompt, courteous refund of every penny you paid.
Click Here to Get Started Now
I hope you will take advantage of this opportunity in front of us—while shares are still relatively cheap.
The article Junior Mining Stocks to Beat Previous Highs was originally published at Casey Research
Get in on Thursdays FREE webinar before it's to late...."How To Trade Options – The Complete Roadmap"
Saturday, March 22, 2014
FREE WEBINAR: How To Trade Options – The Complete Roadmap
Just click here to register now!
Doc has put together a short video explaining exactly what he is going to cover in this webinar.
Click here to watch the video now!
Here are just a few of the details........
• The real secrets that successful options traders won’t tell you!
• How a one trick pony loses every time
• How to prepare and profit from any market condition
• How easy options trading can be with the right tools
• Why these four strategies will set you up for life
• How options trading can fit into your schedule…not vice versa.
• And one secret about volatility that could save your account
Watch the video now and please feel free to leave a comment and let us know what you think
See you in the markets!
FREE WEBINAR: How To Trade Options – The Complete Roadmap
Saturday, March 15, 2014
Is this Gold's "Best of the Breed" a Golden Rocket!
Gold
and gold stocks have be stabilizing for months and have been quietly
rising. Many gold stocks are up 30% even 50% in the past three months.
The $HUI AMEX Gold Bugs Index is up over 30% from the lows.
If you think you have missed most of the move already you are wrong. The truth is most of the biggest rallies in stocks take place after a basing pattern with 30 -50% or more has formed. This is signaling massive accumulation in gold stocks and its happening right now by the institutions.
So in this exclusive report I want to share one golden rocket stock pick which I feel has huge upside potential “IF” the precious metals market and miners can breakout of this stage 1 pattern it has formed.
One thing that excites me is about precious metals and gold stocks is the fact that we have heard nothing about gold, silver or mining stocks in the media for months… almost like the big institutions have told the media to avoid putting the spot light on it until they accumulate all they can in terms of physical bullion and stock shares.
This is the same for a few other sectors I have been watching build massive stage 1 bases in over the past few months and will be investing and actively trading them also once they break out of the basing stage.
Gold Stock Trading & Investing Success Formula
1. KISS – Keep It Simple Stupid! – Non one likes or follows complicated trading strategies
2. Understand and know how to identify the four market stages – Read My Book: Click Here
3. Know why and how stages must be traded for timing your entry, profit taking and exits.
4. Scan the market for the top performing sectors and focus on stocks/ETFs within those sectors.
5. Review all stocks and funds to meet setup criteria and trade only the best looking charts primed to start a new bull market (low overhead resistance nearby, strong relative strength, strong volume on breakout, 30 week SMA moving up etc..) Get this done for you: Click Here
6. Sit back, watch and monitor position for possible change in the stage, to adjust stops and identify profit taking levels.
Golden Rock Stock Pick
The chart below is top quality gold stock which has all the characteristics of a big winner. Just to be clear, I normally do not mention individual stocks within public reports. I am not compensated in any way to post this report. This is nothing more than my technical outlook on a stock and not investment advice. I do plan on buying some shares of this company this week or next.
Golden Rocket Conclusion:
While it still my be a little early for precious metals to bottom, it looks as though the stage (pardon the pun) has been set for a precious metals bull market to start. As they say, there is always a bull market somewhere… the key is finding it and taking the proper action.
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Just visit The Gold & Oil Guy
Sincerely,
Chris Vermeulen
Founder of Technical Traders Ltd. - Partnership Program
Check out our other "Gold and Crude Oil Trading Ideas"
If you think you have missed most of the move already you are wrong. The truth is most of the biggest rallies in stocks take place after a basing pattern with 30 -50% or more has formed. This is signaling massive accumulation in gold stocks and its happening right now by the institutions.
So in this exclusive report I want to share one golden rocket stock pick which I feel has huge upside potential “IF” the precious metals market and miners can breakout of this stage 1 pattern it has formed.
One thing that excites me is about precious metals and gold stocks is the fact that we have heard nothing about gold, silver or mining stocks in the media for months… almost like the big institutions have told the media to avoid putting the spot light on it until they accumulate all they can in terms of physical bullion and stock shares.
This is the same for a few other sectors I have been watching build massive stage 1 bases in over the past few months and will be investing and actively trading them also once they break out of the basing stage.
Gold Stock Trading & Investing Success Formula
1. KISS – Keep It Simple Stupid! – Non one likes or follows complicated trading strategies
2. Understand and know how to identify the four market stages – Read My Book: Click Here
3. Know why and how stages must be traded for timing your entry, profit taking and exits.
4. Scan the market for the top performing sectors and focus on stocks/ETFs within those sectors.
5. Review all stocks and funds to meet setup criteria and trade only the best looking charts primed to start a new bull market (low overhead resistance nearby, strong relative strength, strong volume on breakout, 30 week SMA moving up etc..) Get this done for you: Click Here
6. Sit back, watch and monitor position for possible change in the stage, to adjust stops and identify profit taking levels.
Golden Rock Stock Pick
The chart below is top quality gold stock which has all the characteristics of a big winner. Just to be clear, I normally do not mention individual stocks within public reports. I am not compensated in any way to post this report. This is nothing more than my technical outlook on a stock and not investment advice. I do plan on buying some shares of this company this week or next.
Golden Rocket Conclusion:
While it still my be a little early for precious metals to bottom, it looks as though the stage (pardon the pun) has been set for a precious metals bull market to start. As they say, there is always a bull market somewhere… the key is finding it and taking the proper action.
If you want simple, hassle free trading and investing join my newsletter today.
Just visit The Gold & Oil Guy
Sincerely,
Chris Vermeulen
Founder of Technical Traders Ltd. - Partnership Program
Check out our other "Gold and Crude Oil Trading Ideas"
Thursday, March 13, 2014
Which Month is the Best for Buying Gold?
By Jeff Clark, Senior Precious Metals Analyst
Many investors, especially those new to precious metals, don't know that gold is seasonal. For a variety of reasons, notably including the wedding season in India, the price of gold fluctuates in fairly consistent ways over the course of the year.This pattern is borne out by decades of data, and hence has obvious implications for gold investors. Can you guess which is the best month for buying gold?
When I first entertained this question, I guessed June, thinking it would be a summer month when the price would be at its weakest. Finding I was wrong, I immediately guessed July. Wrong again, I was sure it would be August. Nope.
Cutting to the chase, here are gold’s average monthly gain and loss figures, based on almost 40 years of data:
Since 1975—the first year gold ownership in the U.S. was made legal again—March has been, on average, the worst performing month for gold. This, of course, makes March the best month for buying gold.
But: averages across such long time frames can mask all sorts of variations in the overall pattern. For instance, the price of gold behaves differently in bull markets, bear markets, flat markets… and manias.
So I took a look at the monthly averages during each of those market conditions. Here’s what I found.
Key point:
The only month gold has been down in every market condition is March.
Combined with the fact that gold soared 10.2% the first two months of this year, the odds favor a pullback this month.
And as above, that can be a very good thing. Here’s what buying in March has meant to past investors. We measured how well gold performed by December in each period if you bought during the weak month of March.
Only the bear market from 1981 to 2000 provided a negligible (but still positive) return by year’s end for investors who bought in March. All other periods put gold holders nicely in the black by New Year’s Eve.
If you’re currently bullish on precious metals, you might want to consider what the data say gold bought this month will be worth by year’s end.
Regardless of whether gold follows the monthly trend in March, the point is to buy during the next downdraft, whenever it occurs, for maximum profit. And keep your eye on the big picture: gold’s fundamentals signal the price has a long climb yet ahead.
Everyone should own gold bullion as a hedge against inflation and other economic maladjustments… and gold stocks for speculation and leveraged gains. The greatest gains, of course, come from the most volatile stocks on earth, the junior mining sector.
Following our recent Upturn Millionaires video event with eight top resource experts and investment pros, my colleague Louis James released his 10-Bagger List for 2014—a timely special report on the nine stocks most likely to gain 1,000% or more this year. Click here to find out more.
The article Gold Is Seasonal: When Is the Best Month to Buy? was originally published at Casey Research.
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Monday, March 10, 2014
What 10 Baggers (and 100 Baggers) Look Like
By Jeff Clark, Senior Precious Metals Analyst
Now that it appears clear the bottom is in for gold, it’s time to stop fretting about how low prices will drop and how long the correction will last—and start looking at how high they’ll go and when they’ll get there. When viewing the gold market from a historical perspective, one thing that’s clear is that the junior mining stocks tend to fluctuate between extreme boom and bust cycles. As a group, they’ll double in price, then crash by 75%..... then double or triple or even quadruple again, only to crash 90%. Boom, bust, repeat.Given that we just completed a major bust cycle—and not just any bust cycle, but one of the harshest on record, according to many veteran insiders—the setup for a major rally in gold stocks is right in front of us.
This may sound sensationalistic, but based on past historical patterns and where we think gold prices are headed, the odds are high that, on average, gold producers will trade in the $200 per share range before the next cycle is over. With most of them currently trading between $20 and $40, the returns could be stupendous. And the percentage returns of the typical junior will be greater by an order of magnitude, providing life changing gains to smart investors.
What you’re about to see are historical returns of both producers and juniors during three separate boom cycles. These are factual returns; they are not hypothetical. And if you accept the fact that this market moves in cycles, you know it’s about to happen again.
Gold had a spectacular climb in 1979-1980, and gold stocks in general gave a staggering performance at that time—many of them becoming 10-baggers (1,000% gains and more). While this is a well known fact, few researchers have bothered to identify exact returns from specific companies during this era.
Digging up hard data from before the mid-1980s, especially for the junior explorers, is difficult because the information wasn’t computerized at the time. So I sent my nephew Grant to the library to view the Wall Street Journal on microfiche. We also include information we’ve had from Scott Hunter of Haywood Securities; Larry Page, then-president of the Manex Resource Group; and the dusty archives at the Northern Miner.
Note: This means our tables, while accurate, are not at all comprehensive.
Let’s get started…...
The Quintessential Bull Market: 1979-1980
The granddaddy of gold bull cycles occurred during the 1970s, culminating in an unabashed mania in 1979 and 1980. Gold peaked at $850 an ounce on January 21, 1980, a rise of 276% from the beginning of 1979. (Yes, the price of gold on the last trading day of 1978 was a mere $226 an ounce.)
| Returns of Producers in 1979-1980 Mania | |||
| Company | Price on 12/29/1978 | Sept. 1980 Peak | Return |
| Campbell Lake Mines | $28.25 | $94.75 | 235.4% |
| Dome Mines | $78.25 | $154.00 | 96.8% |
| Hecla Mining | $5.12 | $53.00 | 935.2% |
| Homestake Mining | $30.00 | $107.50 | 258.3% |
| Newmont Mining | $21.50 | $60.62 | 182.0% |
| Dickinson Mines | $6.88 | $27.50 | 299.7% |
| Sigma Mines | $36.00 | $57.00 | 58.3% |
| Giant Yellowknife Mines | $11.13 | $39.00 | 250.4% |
| AVERAGE | 289.5% | ||
Today, GDX is selling for $26.05 (as of February 26, 2014); if it mimicked the average 289.5% return, the price would reach $101.46.
Keep in mind, though, that our data measures the exact top of each company’s price. Most investors, of course, don’t sell at the very peak. If we were to able to grab, say, 80% of the climb, that’s still a return of 231.6%.
Here’s a sampling of how some successful junior gold stocks performed in the same period, along with the month each of them peaked.
| Returns of Juniors in 1979-1980 Mania | ||||
| Company | Price on 12/29/1978 | Price Peak | Date of Peak | Return |
| Carolin Mines | $3.10 | $57.00 | Oct. 80 | 1,738.7% |
| Mosquito Creek Gold | $0.70 | $7.50 | Oct. 80 | 971.4% |
| Northair Mines | $3.00 | $10.00 | Oct. 80 | 233.3% |
| Silver Standard | $0.58 | $2.51 | Mar. 80 | 332.8% |
| Lincoln Resources | $0.78 | $20.00 | Oct. 80 | 2,464.1% |
| Lornex | $15.00 | $85.00 | Oct. 80 | 466.7% |
| Imperial Metals | $0.36 | $1.95 | Mar. 80 | 441.7% |
| Anglo-Bomarc Mines | $1.80 | $6.85 | Oct. 80 | 280.6% |
| Avino Mines | 0.33 | 5.5 | Dec. 80 | 1,566.7% |
| Copper Lake | $0.08 | $10.50 | Sep. 80 | 13,025.0% |
| David Minerals | $1.15 | $21.00 | Oct. 80 | 1,726.1% |
| Eagle River Mines | $0.19 | $6.80 | Dec. 80 | 3,478.9% |
| Meston Lake Resources | $0.80 | $10.50 | Oct. 80 | 1,212.5% |
| Silverado Mines | $0.26 | $10.63 | Oct. 80 | 3,988.5% |
| Wharf Resources | $0.33 | $9.50 | Nov. 80 | 2,778.8% |
| AVERAGE | 2,313.7% | |||
If you had bought a reasonably diversified portfolio of top-performing gold juniors prior to 1979, your initial investment could have grown 23 times in just two years. If you had managed to grab 80% of that move, your gains would still have been over 1,850%.
This means a junior priced at $0.50 today that captured the average gain from this boom would sell for $12 at the top, or $9.75 at 80%. If you own ten juniors, imagine just one of them matching Copper Lake’s better than 100-bagger performance.
Here’s what returns of this magnitude could mean to you. Let’s say your portfolio includes $10,000 in gold juniors that yield spectacular gains such as the above. If the next boom cycle matches the 1979-1980 pattern, your portfolio could be worth $241,370 at its peak… or about $195,000 if you exit at 80% of the top prices.
Note that this does require that you sell to realize your profits. If you don’t take the money and run at some point, you may end up with little more than tears to fill an empty beer mug. In the subsequent bust cycle, many junior gold stocks, including some in the above list, dried up and blew away. Investors who held on to the bitter end not only saw all their gains evaporate, but lost their entire investments.
You have to play the cycle.
Returns from that era have been written about before, so I can hear some investors saying, “Yeah, but that only happened once.”
Au contraire. Read on…...
The Hemlo Rally of 1981-1983
Many investors don’t know that there have been several bull cycles in gold and gold stocks since the 1979-1980 period.
Back in the day, most exploration was done by teams from the major producers. But because of lagging gold prices and the resulting need to cut overhead, they began to slash their exploration budgets, unleashing a swarm of experienced geologists armed with the knowledge of high potential mineral targets they’d explored while working for the majors. Many formed their own companies and went after these targets.
This led to a series of spectacular discoveries, the first of which occurred in mid 1982, when Golden Sceptre and Goliath Gold discovered the Golden Giant deposit in the Hemlo area of eastern Canada. Gold prices rallied that summer, setting off a mini bull market that lasted until the following May. The public got involved, and as you can see, the results were impressive for such a short period of time.
| Returns of Producers Related to Hemlo Rally of 1981-1983 | ||||
| Company | 1981 Price | Price Peak | Date of High | Return |
| Agnico-Eagle | $9.50 | $21.00 | Aug. 83 | 121.1% |
| Sigma | $14.13 | $24.50 | Jan. 83 | 73.4% |
| Campbell Red Lake | $16.63 | $41.25 | May 83 | 148.0% |
| Sullivan | $3.85 | $6.00 | Mar. 84 | 55.8% |
| Teck Corp Class B | $17.00 | $21.88 | Jun. 81 | 28.7% |
| Noranda | $33.75 | $36.38 | Jun. 81 | 7.8% |
| AVERAGE | 72.5% | |||
Gold producers, on average, returned over 70% on investors’ money during this period. While these aren’t the same spectacular gains from just a few years earlier, keep in mind they occurred over only about 12 months’ time. This would be akin to a $20 gold stock soaring to $34.50 by this time next year, just because it’s located in a significant discovery area.
Once again, it was the juniors that brought the dazzling returns.
| Returns of Juniors Related to Hemlo Rally of 1981-1983 | ||||
| Company | 1981 Price | Price Peak | Date of High | Return |
| Corona Resources | $1.10 | $61.00 | May 83 | 5,445.5% |
| Golden Sceptre | $0.40 | $31.00 | May 83 | 7,650.0% |
| Goliath Gold | $0.45 | $32.00 | Mar 83 | 7,011.1% |
| Bel-Air Resources | $0.81 | $1.60 | Jan. 83 | 97.5% |
| Interlake Development | $2.10 | $6.40 | Mar. 83 | 204.8% |
| AVERAGE | 4,081.8% | |||
The average return for these junior gold stocks that had a direct interest in the Hemlo area exceeded a whopping 4,000%.
This is especially impressive when you realize that it occurred without the gold stock industry as a whole participating. This tells us that a big discovery can lead to enormous gains, even if the industry as a whole is flat.
In other words, we have historical precedence that humongous returns are possible without a mania, by owning stocks with direct exposure to a discovery area. There are numerous examples of this in the past ten years, as any longtime reader of the International Speculator can attest.
By May 1983, roughly a year after it started, gold prices started back down again, spelling the end of that cycle—another reminder that one must sell to realize a profit.
The Roaring ’90s
By the time the ’90s rolled around, many junior exploration companies had acquired the “intellectual capital” they needed from the majors. Another series of gold discoveries in the mid-1990s set off one of the most stunning bull markets in the current generation.
By the summer of ’96, these discoveries had sparked another bull cycle, and companies with little more than a few drill holes were selling for $20 a share.
The table below, which includes some of the better-known names of the day, is worth the proverbial thousand words. The average producer more than tripled investors’ money during this period. Once again, these gains occurred in a relatively short period of time, in this case inside of two years.
| Returns of Producers in Mid-1990s Bull Market | ||||
| Company | Pre-Bull Market Price | Price Peak | Date of High | Return |
| Kinross Gold | $5.00 | $14.62 | Feb. 96 | 192.4% |
| American Barrick | $28.13 | $44.25 | Feb. 96 | 57.3% |
| Placer Dome | $26.50 | $41.37 | Feb. 96 | 56.1% |
| Newmont | $47.26 | $82.46 | Feb. 96 | 74.5% |
| Manhattan | $1.50 | $13.00 | Nov. 96 | 766.7% |
| Cambior | $10.00 | $22.35 | Jun. 96 | 123.5% |
| AVERAGE | 211.7% | |||
Here’s how some of the juniors performed. And if you’re the kind of investor with the courage to buy low and the discipline to sell during a frenzy, it can be worth a million dollars. Hold on to your hat.
| Returns of Juniors in Mid-1990s Bull Market | ||||
| Company | Pre-Bull Market Price | Price Peak | Date of High | Return |
| Cartaway | $0.10 | $26.14 | May 96 | 26,040.0% |
| Golden Star | $6.00 | $27.50 | Oct. 96 | 358.3% |
| Samex Mining | $1.00 | $7.20 | May 96 | 620.0% |
| Pacific Amber | $0.21 | $9.40 | Aug. 96 | 4,376.2% |
| Conquistador | $0.50 | $9.87 | Mar. 96 | 1,874.0% |
| Corriente | $1.00 | $19.50 | Mar. 97 | 1,850.0% |
| Valerie Gold | $1.50 | $28.90 | May 96 | 1,826.7% |
| Arequipa | $0.60 | $34.75 | May 96 | 5,691.7% |
| Bema Gold | $2.00 | $12.75 | Aug. 96 | 537.5% |
| Farallon | $0.80 | $20.25 | May 96 | 2,431.3% |
| Arizona Star | $0.50 | $15.95 | Aug. 96 | 3,090.0% |
| Cream Minerals | $0.30 | $9.45 | May 96 | 3,050.0% |
| Francisco Gold | $1.00 | $34.50 | Mar. 97 | 3,350.0% |
| Mansfield | $0.70 | $10.50 | Aug. 96 | 1,400.0% |
| Oliver Gold | $0.40 | $6.80 | Oct. 96 | 1,600.0% |
| AVERAGE | 3,873.0% | |||
Many analysts refer to the 1970s bull market as the granddaddy of them all—and to a certain extent it was—but you’ll notice that the average return of these stocks during the late ’90s bull exceeds what the juniors did in the 1979-1980 boom.
This is akin to that $0.50 junior stock today reaching $19.86… or $16, if you snag 80% of the move. A $10,000 portfolio with similar returns would grow to over $397,000 (or over $319,000 on 80%).
Gold Stocks and Depression
Those of you in the deflation camp may dismiss all this because you’re convinced the Great Deflation is ahead. Fair enough. But you’d be wrong to assume gold stocks can’t do well in that environment.
| Returns of Producers During the Great Depression | |||
| Company | 1929 Price | 1933 Price | Total Gain |
| Homestake Mining | $65 | $373 | 474% |
| Dome Mines | $6 | $39.50 | 558% |
During a period of soup lines, crashing stock markets, and a fixed gold price, large gold producers handed investors five and six times their money in four years. If deflation “wins,” we still think gold equity investors can, too.
How to Capitalize on This Cycle
History shows that precious metals stocks move in cycles. We’ve now completed a major bust cycle and, we believe, are on the cusp of a tremendous boom. The only way to make the kind of money outlined above is to buy before the boom is in full swing. That’s now. For most readers, this is literally a once in a lifetime opportunity.
My colleague Louis James, Casey’s chief metals and mining investment strategist, has identified the nine junior mining stocks that are most likely to become 10 baggers this year in their special report, the 10-Bagger List for 2014. Read more here.
The article What 10-Baggers (and 100-Baggers) Look Like was originally published at Casey Research.
Saturday, March 8, 2014
Precious Metals Market Commentary for week ending March 7th - Gold, Silver, Copper
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May silver closed lower on Friday and below the 20 day moving average crossing at 21.218 would confirm that a short term top has been posted while opening the door for additional weakness near term. The low range close set the stage for a steady to lower opening when Monday's night session begins trading. Stochastics and the RSI are neutral to bearish signaling that additional weakness is possible. If May renews the rally off the late January low, the 25% retracement level of the July-December decline crossing at 22.802 is the next upside target. First resistance is last Monday's high crossing at 22.215. Second resistance is the 25% retracement level of the July-December decline crossing at 22.802. First support is today's low crossing at 20.755. Second support is the reaction low crossing at 20.010.
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May copper closed sharply lower on Friday as it renewed the decline off December's high. The low range close sets the stage for a steady to lower opening when Monday's night session begins trading. Stochastics and the RSI are diverging but are turning neutral to bearish signaling that additional weakness is possible near term. If May extends the decline off December's high, last June's low crossing at 307.05 is the next downside target. Closes above the 20 day moving average crossing at 322.30 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 322.30. Second resistance is February's high crossing at 331.30. First support is today's low crossing at 307.70. Second support is last June's low crossing at 307.05.
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Sunday, March 2, 2014
Weekly Gold Futures Recap With Mike Seery
Gold futures are trading above their 20 and 100 day moving average basically settling unchanged for the trading week going out this Friday afternoon in New York down about $8 at 1,323 after prices hit 1,345 in Wednesday’s trade as the trend still continues to the upside. I think this is just a possible pause as prices have had a heckuva rally in the last 2 months and I have been recommending a long position in gold for quite some time while placing my stop below the 10 day low which currently stands around 1,315 which is only $8 away so that stop is very tight with a high probability of getting clipped at that price on Monday, however continue to focus on gold and silver to the upside and if you’re lucky enough to get some panic selling I would still be looking at buying as 2013 created the low in gold prices in my opinion.
Trend: Higher
Chart Structure: Excellent
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