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Market Mayhem Sparks Metal Moves - David Erfle #6280 · Financial Survival Network

• 0:00
  Speaker 1: It's really interesting how all this is playing out as
• 0:03
  Speaker 1: soon as Trump got elected, right, I mean yeah, chaos
• 0:06
  Speaker 1: and uncertainty and volatility, those are those are the buzzwords
• 0:10
  Speaker 1: now and that's what gold loves the most, right, chaos
• 0:13
  Speaker 1: and uncertainty.
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  Speaker 2: You're listening to Carrie Lutz's Financial Survival Network, where you
• 0:18
  Speaker 2: get valuable information. You just can't find anywhere else to
• 0:22
  Speaker 2: thrive in today's trying times. You need the Financial Survival
• 0:26
  Speaker 2: Network now more than ever. Go to Financial Survivalnetwork dot
• 0:31
  Speaker 2: com and get your free newsletter and gift. Financial Survival
• 0:35
  Speaker 2: Network now more than ever.
• 0:41
  Speaker 3: And welcome you are listening to and watching the Financial
• 0:45
  Speaker 3: Survival Network. I'm your host, Carrie Lutz. David Earthley, Junior
• 0:48
  Speaker 3: minor Junkie is with us and now and wow this market, David.
• 0:54
  Speaker 3: First it looked like gold was going to go parabolic
• 0:57
  Speaker 3: and we did you know, uh, that didn't happen, and
• 1:03
  Speaker 3: there goodness yea, And we.
• 1:06
  Speaker 1: Don't want to see a blowof top just yet, do we? Yeah?
• 1:09
  Speaker 3: One hundred bucks in one day, right, uh, you know,
• 1:13
  Speaker 3: eighty something today. I mean we're here on mid May
• 1:17
  Speaker 3: May fourteenth, and man, but silver is holding pretty.
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  Speaker 1: Steady, absolutely yeah, I mean we had a we had
• 1:25
  Speaker 1: an isolated high at thirty five hundred back in April,
• 1:30
  Speaker 1: and we've got we've now had two consecutive reversal candles
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  Speaker 1: on the monthly here. Well, of course the month isn't
• 1:36
  Speaker 1: over here in May, but as far as the gold
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  Speaker 1: price is concerned, it continues to make these strong moves
• 1:44
  Speaker 1: higher and then when it corrects, it has a short
• 1:48
  Speaker 1: sharp move lower and then it starts consolidating. Well, this time,
• 1:53
  Speaker 1: the gold price got extremely overbought on the monthly due
• 2:00
  Speaker 1: for a healthier pullback, right, I mean when the gold
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  Speaker 1: price from a bottom of sixteen hundred about eighteen months ago. Right,
• 2:09
  Speaker 1: the gold price has more than doubled, and the pullback
• 2:14
  Speaker 1: so far had been pretty mild, anywhere from a little
• 2:17
  Speaker 1: over six percent to over twelve percent. And so now
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  Speaker 1: I wouldn't be surprised to see a corrective pullback in
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  Speaker 1: the fifteen percent range. That would be a healthy correction,
• 2:30
  Speaker 1: and it would take the gold price back down to
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  Speaker 1: twenty seven to twenty nine to seventy five three thousand,
• 2:37
  Speaker 1: where there's really good support, and it's also eighteen week
• 2:42
  Speaker 1: moving average support. That's pretty much where the gold price
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  Speaker 1: has gone down and corrected to several times during this
• 2:48
  Speaker 1: move over the past eighteen months. I mean that thirteen
• 2:52
  Speaker 1: year cup and handle breakout was very powerful and the
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  Speaker 1: first target was reached at three thousand, and the augomatic
• 3:00
  Speaker 1: target is four thousand. So I wouldn't be surprised to
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  Speaker 1: see a correction here, probably maybe into June. But you know,
• 3:09
  Speaker 1: anything could happen geopolitically that that that could take the
• 3:13
  Speaker 1: gold price back up again. Economically, you know, there's all
• 3:17
  Speaker 1: these catalysts lurking out there that that could take the
• 3:21
  Speaker 1: gold price higher before it does correct down to that
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  Speaker 1: fifteen percent, So you know, anything goes here. But as
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  Speaker 1: far as the silver price is concerned that you mentioned, yeah,
• 3:33
  Speaker 1: that's that's very bullish that that the silver price is
• 3:36
  Speaker 1: holding up better here because we had that gold silver
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  Speaker 1: ratio popped to one hundred and seven, right, I mean, whatever
• 3:43
  Speaker 1: that whenever we had that gold silver ratio one hundred,
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  Speaker 1: which is extremely rare. The last time it happened was
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  Speaker 1: during COVID it popped a one twenty four. It's it's
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  Speaker 1: screaming that that silver is super cheap here, and it's
• 3:57
  Speaker 1: it's it's it's it's base sickly due to catch up.
• 4:02
  Speaker 1: Because this is what happens, right, Gold makes huge moves,
• 4:05
  Speaker 1: silver lags, and then silver catches up. So what happened
• 4:10
  Speaker 1: on Monday when we had the trade deal over the
• 4:15
  Speaker 1: weekend and everybody waxed you for it, and and the
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  Speaker 1: Dow went up a thousand points, the gold price went
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  Speaker 1: down over one hundred dollars, and the silver price was
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  Speaker 1: hit pretty hard too. But silver hammered sharply and it
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  Speaker 1: was basically unchanged on the day. It was wasn't down
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  Speaker 1: that much. And while the gold price ended down ninety bucks,
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  Speaker 1: and that took the gold gold gold silver ratio below
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  Speaker 1: one hundred. So that's that's the bullish element here because
• 4:42
  Speaker 1: we're starting to see silver catch up even though the
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  Speaker 1: gold price is correcting here. Yeah.
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  Speaker 3: Yeah, and it's kind of following a predictable pattern. And
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  Speaker 3: we were talking pre call about how silver assets are
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  Speaker 3: now getting snapped up.
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  Speaker 1: Yeah, I mean, it's we had another We had another
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  Speaker 1: takeover this week Pan American Silver, you know the world's
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  Speaker 1: fourth largest silver miner. They they've agreed to take over
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  Speaker 1: MAGS Silver and uh. This followed Majestic Silver taking out
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  Speaker 1: Gatto's Core taking out Silvercrest and then more recently, Endeavor
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  Speaker 1: purchased Peruvian silver miner Minera Colpa. So see these miners,
• 5:32
  Speaker 1: they they see the writing on the wall. They know
• 5:35
  Speaker 1: they have to replace their assets here before the before
• 5:38
  Speaker 1: the silver price takes off, and these assets that they
• 5:41
  Speaker 1: want to acquire get more expensive because you know, I mean,
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  Speaker 1: these these miners are making gobs of cash here. I
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  Speaker 1: mean Pan American they were able to add a cash
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  Speaker 1: sweetener to their offer, right, I mean, they just ended
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  Speaker 1: their quarter with a fantastic earnings for Q one and
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  Speaker 1: they had almost a billion dollars in cash, and they're
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  Speaker 1: spending half of that cash as as a cash sweetener
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  Speaker 1: to take over Matt, to take over MAG. The rest
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  Speaker 1: of it is in shares, and they they're they're still
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  Speaker 1: getting a good deal on it, even though they're paying
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  Speaker 1: a premium because Mag is. The offer is twenty five
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  Speaker 1: percent below Mag's all time high back in twenty twenty one.
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  Speaker 3: Hey, we've how many years have we've been listening to
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  Speaker 3: Mag's story for? I can't remember the head geo's name,
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  Speaker 3: Peter McGaugh, Peter Bray, Like we've been listening to him
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  Speaker 3: for I think twelve years, for me Rich's silver mine
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  Speaker 3: in the world, the whole story, and here we are.
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  Speaker 3: Finally one day somebody woke up and realized they had
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  Speaker 3: to have him.
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  Speaker 1: Yeah. Yeah, Wanna Sipo is a prime is a primary
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  Speaker 1: silver asset, which is very rare. And even though they're
• 6:57
  Speaker 1: they're taking over, they're taking over Mag, they're only taking
• 7:00
  Speaker 1: they're only buying forty four percent of that Mind because
• 7:05
  Speaker 1: it could it's controlled by Fresnillo, who's the operator, and
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  Speaker 1: they owned fifty six percent of it. But still it's
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  Speaker 1: a cash cow. I mean, the Mind generated free cash
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  Speaker 1: flow of over seventy seven million in Q one, and
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  Speaker 1: that's almost triple the year ago level. So Pan Americans
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  Speaker 1: make a making a very wise move here.
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  Speaker 3: Yeah, definitely, And the only mistake they made was not
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  Speaker 3: doing it a lot sooner exactly.
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  Speaker 1: Yeah. I mean MAG was trading at eight dollars ever
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  Speaker 1: a year ago.
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  Speaker 4: So so yeah, I mean I owned it to twelve
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  Speaker 4: thirteen years ago, made a couple of bucks, sold it,
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  Speaker 4: but I guess I.
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  Speaker 1: Needed to be in it for the long haul and
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  Speaker 1: just didn't know. David. Yeah, I mean that's that's that's
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  Speaker 1: the thing with these with these stocks, I mean, especially
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  Speaker 1: with these Well they were a junior back there, and
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  Speaker 1: the mag's no longer a junior with a two billion
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  Speaker 1: market cap.
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  Speaker 3: Yeah, ain't that's the truth. Ain't that's the truth. So
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  Speaker 3: where are we heading here? How long is the correction
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  Speaker 3: going to last?
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  Speaker 1: For? Oh my crystal Ball's broken here, that's what like
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  Speaker 1: I said, Yeah, I don't see it going any lower
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  Speaker 1: than that twenty nine to fifty three thousand level, because
• 8:21
  Speaker 1: you know, a lot has to go right with the
• 8:23
  Speaker 1: world here. I mean, if you take a look at
• 8:26
  Speaker 1: what's going on with with the debt, I mean, that's
• 8:30
  Speaker 1: not going away, it's just getting worse. I mean, the
• 8:34
  Speaker 1: corporate debt wall has over a trillion dollars in bonds
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  Speaker 1: set to roll over this year. I mean, the corporate
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  Speaker 1: debt service has basically doubled since the Feds started tightening
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  Speaker 1: in twenty twenty twenty two. So yeah, I mean, and
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  Speaker 1: on the flip side of that, you know, China, we
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  Speaker 1: used to be the world's largest buyer of our debt,
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  Speaker 1: now the world's largest seller of our debt, and they're
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  Speaker 1: using the sales of our treasuries to buy gold. And
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  Speaker 1: Japan used to be a big buyer and now they're
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  Speaker 1: the second biggest seller because of their economic problems over there.
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  Speaker 1: So you know, this debt situation isn't going in a
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  Speaker 1: way anytime soon. And the gold, the gold price sees this.
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  Speaker 1: And it also here's Federal Reserve Federal Reserve Chairman Jero
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  Speaker 1: Boub basically saying, hey, we're in a stagflationary situation here.
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  Speaker 1: That could mushroom because we've got we've got growth slowing
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  Speaker 1: below two percent in Q one while CPI, the CPI
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  Speaker 1: inflation that was reported this week is still at two
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  Speaker 1: point eight percent. And and and the third domino of
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  Speaker 1: stagflation is weakening jobs data, which is a lagging indicator. Sure,
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  Speaker 1: jobs are holding up for now, but I mean a
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  Speaker 1: lot of these layoffs that have been announced recently. And
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  Speaker 1: also you've gotten the consumer credit, I mean, consumer confidence
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  Speaker 1: continues to decline. They see the writing on the wall.
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  Speaker 1: You know, when consumers sense there's a recession coming and
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  Speaker 1: all this uncertainty. You know, when you hear when you
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  Speaker 1: hear fed Chair Powell and his press conference to say
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  Speaker 1: that the word uncertainty more and more times during each
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  Speaker 1: press conference. That makes consumers uncertain. And when they're uncertain,
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  Speaker 1: they don't spend money, they save it, and if they
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  Speaker 1: save money, then the economy doesn't grow because our economy
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  Speaker 1: is based on a seventy two percent consumption. So the
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  Speaker 1: gold price is stiffing out all this. You know, all
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  Speaker 1: these catalysts haven't gone away. What this is, this is
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  Speaker 1: just a healthy correction and consolidation of these huge gains recently.
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  Speaker 1: I mean, the gold price went up as much in
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  Speaker 1: one quarter as it did all last year. So those
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  Speaker 1: gains need to be consolidated, and that's what's happening here.
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  Speaker 3: Interesting. Interesting, So yeah, so we're talking just a matter
• 11:03
  Speaker 3: of months, six months?
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  Speaker 1: Is that how long it's going to take? Who knows?
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  Speaker 1: I mean, I have no idea. What I'm what I'm
• 11:10
  Speaker 1: concerned mostly about is basically what's going on with the juniors.
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  Speaker 1: And it's not concerning anymore. Right, It had been concerning
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  Speaker 1: over the past few years as they continued to lag,
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  Speaker 1: not only the gold price but the miners. Well that
• 11:23
  Speaker 1: has flipped in a big way. If you take a
• 11:25
  Speaker 1: look at at the GDX and the GDXJ, they went
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  Speaker 1: up about fifty five percent from their lows at the
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  Speaker 1: beginning of the year, and they're consolidating now, they're they're
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  Speaker 1: they're they've corrected about fifteen percent. And if they if
• 11:40
  Speaker 1: they if they come down to test their breakouts, their
• 11:43
  Speaker 1: four year breakouts, that would be another five percent correction.
• 11:47
  Speaker 1: But if you take a look at the TSX venture, right,
• 11:51
  Speaker 1: it continued to climb when both GDX and gd XJ
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  Speaker 1: peeked in the mid April. They continue, they can the
• 12:01
  Speaker 1: TSX venture continue to climb. So what that is telling
• 12:04
  Speaker 1: you is these uh sex, these resource sector professionals who've
• 12:09
  Speaker 1: been in this sector god in early, the smart money
• 12:12
  Speaker 1: that got in early, they're taking some of their massive
• 12:15
  Speaker 1: gains in the minors and the royalty plays and and
• 12:19
  Speaker 1: they're rotating them into these juniors. So that's what I
• 12:22
  Speaker 1: want to see, and that's and that's what you're seeing
• 12:24
  Speaker 1: because these juniors are are so ridiculously inexpensive. And now
• 12:30
  Speaker 1: that these and now that these these miners are making
• 12:33
  Speaker 1: all this money and M and A is picking up
• 12:35
  Speaker 1: again because basically, you know, their shareholders are saying, hey,
• 12:41
  Speaker 1: you shored up your balance sheet, great, you're paying us
• 12:43
  Speaker 1: good dividends, great, you're doing share buybacks. Great. Now we
• 12:47
  Speaker 1: want growth. You need to use some of that cash
• 12:50
  Speaker 1: and replace those ounces that that you're digging up out
• 12:52
  Speaker 1: of the ground, and you need to do it on
• 12:54
  Speaker 1: Bay Street as as opposed to trying to trying to
• 12:57
  Speaker 1: find them your yourself because it takes too long. So
• 13:01
  Speaker 1: that's that's what I'm very excited about. I've you know,
• 13:04
  Speaker 1: there's several companies that in my portfolio in the Junior
• 13:08
  Speaker 1: Minor port Junior Minor, a junkie portfolio that I share
• 13:11
  Speaker 1: with my subscribers, some of my subscribers and I have
• 13:13
  Speaker 1: been doing very very well this year, and a lot
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  Speaker 1: of these companies that they formed these these beautiful consult
• 13:20
  Speaker 1: these beautiful you know, multi year consolidation patterns, some of
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  Speaker 1: them at all time highs and some of them at
• 13:27
  Speaker 1: all time lows. So the ones that the ones that
• 13:31
  Speaker 1: are forming these consolidation patterns, these these multi year consolidation
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  Speaker 1: patterns at all time lows, they're the higher risk optionality plays.
• 13:40
  Speaker 1: With all this gold in the ground, right some of
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  Speaker 1: them are have have made these these you know, these
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  Speaker 1: beautiful accumulative bases that they're breaking out of. And the
• 13:50
  Speaker 1: ones that were bifurcating earlier, they're making higher bases right
• 13:55
  Speaker 1: after after moving up so well with the gold price.
• 13:58
  Speaker 1: So you know, it's very very exciting right now to
• 14:01
  Speaker 1: be a junior goldstock investor. So will Canada arise again?
• 14:06
  Speaker 1: Well Canada? Right, well, yeah, you know, I mean it's
• 14:09
  Speaker 1: it's interesting if you take a look at uh the
• 14:12
  Speaker 1: uh the the the debt situation of the US right
• 14:17
  Speaker 1: and its economic situation. You got so currently the U,
• 14:22
  Speaker 1: the US credit is rated at at double A plus
• 14:26
  Speaker 1: by Moody's, you know, Fitch and s and P as
• 14:29
  Speaker 1: you know, the weakness in in the US credit rating
• 14:33
  Speaker 1: is basically reflected by rising credit default swap spreads. But
• 14:38
  Speaker 1: Canada's credit rating remains a triple A. But as as
• 14:42
  Speaker 1: far as as far as mining is concerned, you know,
• 14:47
  Speaker 1: and the big bugaboo for mining in base in in
• 14:51
  Speaker 1: North America and the US and Canada especially has been
• 14:55
  Speaker 1: permitting timelines, yes, and and now that Trump is in office,
• 14:59
  Speaker 1: U permitting timelines are are are being lowered, you know,
• 15:04
  Speaker 1: they're yeah, they're they're they're basically they they've targeted this
• 15:11
  Speaker 1: as something that needs to happen because they need these
• 15:14
  Speaker 1: critical minerals out of the ground. And Trump is big
• 15:16
  Speaker 1: on this, right and it's and it's switched over into
• 15:20
  Speaker 1: Canada as well. I mean in BC they're fast tracking
• 15:25
  Speaker 1: eighteen projects. In other provinces there they're talking about about
• 15:30
  Speaker 1: streamlining their timeline.
• 15:31
  Speaker 3: So that is huge, huge, And I think we'll leave
• 15:35
  Speaker 3: it at that. Canada is rising, but it might not
• 15:39
  Speaker 3: rise united. It could be a splintered off and who knows,
• 15:44
  Speaker 3: maybe we'll get a fifty first, fifty second, maybe even
• 15:47
  Speaker 3: a fifty third state.
• 15:49
  Speaker 1: And they help Verduc might become a fifty first state.
• 15:51
  Speaker 3: Yeah yeah, and they can keep the rest in Saskatchewan
• 15:54
  Speaker 3: fifty two. And I don't know how you do the territories,
• 15:58
  Speaker 3: but not my problem problem.
• 16:01
  Speaker 1: We'll stop at fifty two.
• 16:03
  Speaker 3: You know, the flag is getting a little too crowded anyway,
• 16:06
  Speaker 3: so we can't really handle too many more stars. But
• 16:09
  Speaker 3: maybe they become commonwealths or territorial possessions. I don't know,
• 16:15
  Speaker 3: but it seems like the albert and Alburdens are ready
• 16:19
  Speaker 3: to take the plunge, aren't they.
• 16:22
  Speaker 1: It sure looks like it. Yeah. I mean, it's really
• 16:25
  Speaker 1: interesting how all all this is playing out as soon
• 16:28
  Speaker 1: as Trump got elected, right, I mean yeah, Chaos and
• 16:32
  Speaker 1: uncertainty and volatility, those are those are the buzzwords now,
• 16:35
  Speaker 1: and that's what gold loves the most right chaos and uncertainty.
• 16:39
  Speaker 3: Agreed, all right, David, Thanks Junior minor junkie link in
• 16:43
  Speaker 3: the show notes. Got a question for David myself? Email
• 16:46
  Speaker 3: Klatcarrie Lutz dot com. While you're at the site, we
• 16:50
  Speaker 3: just ask that you sign up for our free newsletter.
• 16:54
  Speaker 3: Take a look at the Martin Armstrong book. You can
• 16:57
  Speaker 3: order it on the site. David, we'll talk to you
• 17:00
  Speaker 3: again soon, be well.
• 17:01
  Speaker 1: Thanks, Carry you too, always a pleasure.
• 17:02
  Speaker 2: Thanks for listening to carry Letz's Financial Survival Network, your
• 17:07
  Speaker 2: solution to today's trying times. For the latest, go to
• 17:11
  Speaker 2: Financial Survivalnetwork dot com. Financial Survival Network now more than ever,