from Silver Doctors:
Best case scenario is for silver and gold to rally next week, but you can see…
“Man, Powell is such a hitter. He is relentless in his desire to help the underclass of this country. More than anyone. It’s truly incredible. . .and joyous!” —March 17 tweet from CNBC “Mad Money” host Jim Cramer
TRUTH LIVES on at https://sgtreport.tv/
Since the mid-1990s, I have been forced to observe the antics of the one man who epitomizes the transformation of stock investing from casual hobby to full-time obsession over the past 25 years, and that man is Jim Cramer. This is the stock market “guru” who, in the days leading up to death of investment bank Lehman Brothers in 2008, told millions of viewers that “Bear Stearns is fine; do not take your money out!” Within days, JP Morgan was strong-armed into buying Bear for something like $2 per share, after trading at $160 a year earlier.
With that in mind, I was floored last Wednesday when I read Cramer’s tweet praising Fed Chairman Jerome Powell as if he were some kind of messiah sent by our Maker to save the world. It is bad enough to lavish unearned accolades on this former stock-salesman-turned-central-banker, but to actually deify him as the “savior of the underclass” was nauseating.
Let us all get one thing very straight: Jerome Powell does not work for the underclass. The very utterance of the word “underclass” is an insult in itself, but anyone with a knowledge of the history of the Federal Reserve knows full well that there was never any intention to serve the “underclass” when it was created in 1913, after a notorious meeting of bankers on Jekyll Island, S.C., at the private hunting lodge owned by J.P. Morgan. It was designed to be a mechanism allowing the global banking system to be protected from the panics such as the one in 1907, that nearly crashed the system. When those bankers, drinking fine whiskies and expensive champagne, sat around that big dining room table hatching their scheme to create a monetary “safety net” underneath their private fortunes, the thought of the plights of “those without privilege” was the farthest thing from their minds.
When I first entered the financial world in the late 1970s, there were perhaps a handful of coworkers that could tell you who was running the Bank of Canada, and even fewer knew who ran the Fed. There were market experts and even a few gurus, but government stayed out of stock market affairs and continued to do so right up until the October 1987 Crash. The President’s Working Group on Capital Markets arrived after that, which spawned the Plunge Protection Team (PPT), now believed to be the legions of full-time traders over at the New York Fed.
Then, Fed Chairman Alan “The Maestro” Greenspan assumed ownership of the U.S. stock market and deftly elevated himself to god-like status, such that by the time the dot.com bubble burst in 2001, the entire world bought and sold stocks based on the thickness of his briefcase or shine on his shoes. That was 20 years ago.
Where we are today is an abomination of every facet of “generally accepted accounting principles,” because stocks around the world are now at record highs, while pension funds are forced to hold bonds bearing negative rates of interest, all while governments struggle with insolvency-bred chaos. Europe is completely broke, and Canada is even worse, but nothing compares to the sheer size and weight of the mountain of American debt—federal, state, corporate and individual—that is magically serviced by government-sanctioned counterfeiting. Yes—that is exactly what is being performed in order to keep the “system” afloat. Counterfeiting.
Now let me swing back to the Cramer statement at the start of this missive and point out that this money-printing exercise is being justified by the Fed chairman under the guise of “maximum full employment” (touted as one of the Fed’s stated mandates). It is, in reality, yet another excuse to liquify the balance sheets of his masters that created the creature from Jekyll Island 108 years ago.
The first dollar of liquidity that was printed by the Fed in the fall of 2019 was from REPO funds that went directly to the banks. Long before COVID and long before lockdowns, Jerome was patching the holes left behind by his beloved member banks, and all through 2020 and continuing today is the delivery of “Dollar One” to the banks first and to everyone else “later.”
I want everyone to tell me where in the book of demographics do we see the terms “banker” and “underclass” walking arm-in-arm down the aisle? So, when a Wall Street personality like Jim Cramer tries to deify a former securities peddler as the next coming of Mother Teresa, I react in the only manner that counts. I take his picture and place it in the middle of the dartboard and hum projectiles at his smug little face. As juvenile as that may sound, it is wildly satisfying.
I continue to believe that gold has put in a short-term bottom, with my March 8Email Alert delivered to subscribers that morning with gold at around US$1,680/ounce. However, gold needs to surpass the $1,740 level, which is the downtrend line drawn off the early January high and the April high.
However, what has been capping the up moves in the metals in Q1/2021 has been the trajectory of the U.S. 10-year yield, which impacts the TIPS (Treasury Inflation-Protected Securities) and gold, and the TIPS are strongly correlated, primarily by the algobots that rule markets these days. Also of note is the gold-to-silver ratio, which has been creeping back up.
I do not want to see the GSR break above 70, lest we find ourselves with an underperforming silver market. Since the gold chart looks so dodgy these days, it has been the technical resiliency of silver that has kept me in the bull camp, albeit tentatively. If the GSR violates the 100-dma (daily moving average) at 72, it portends serious weakness to silver versus gold and thus removes the positive underpinning for the entire precious metals complex.