Latest / Financial Survival Network / Powell's Pivot, Gold and Precious Metals Markets -- Craig Hemke #5974

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Powell's Pivot, Gold and Precious Metals Markets -- Craig Hemke #5974 · Financial Survival Network

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You know, even in strong bull markets in the precious metals, it's always
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two steps forward, one step back. You know, you get this rush
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of speculator money, which is you know, kind of came rushing in at
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the end of November and gold gallowy up what it closed the month for the
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first time over two thousand on spot gold a month of November and then the
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next day at rally know the thirty bucks. You were listening to Carrie Letz's
0:22
Financial Survival Network where you get valuable information. You just can't find anywhere else
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to thrive in today's trying times. You need the Financial Survival Network now more
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gift. Financial Survival Network now more than ever. And welcome you are listening
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to and watching the Financial Survival Network. I'm your host, Kerrie Lot's say,
0:54
we're at December eighteenth. Powell has pivoted, so it certainly would appear
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has happiness, peace and prosperity been restored to the homeland and what does it
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mean for you? Our good friend from TF Netlesreport dot com, Craig MK
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is with us. Got a question for Craig or myself. Shoot me an
1:12
email kl at Cherry Lutz dot com. Craig, great to have you back.
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So the moment we were all waiting for, right right, what has
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been a long year. I've already been thinking about what will I call my
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macro cast that I write in January as we look ahead. And the initial
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working title, though not a word has been written yet, is something like
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better early than never or something. Because this is I was expecting this type
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of conversation by about June or July. I didn't think there's you know,
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after our experience in late twenty eighteen when the ten year note got to three
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and a quarter and Quindy dried up and all that jazz, I figured we
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couldn't make it much passed you or July before the FED was talking about pivoting
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and everything regardless of whatever inflation was doing, because they got to keep the
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plate spitting. I think what I missed was this massive reverse repo thing.
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And you know that the two point two trillion dollars or whatever it peaked out
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at that was kind of quarantined under the title of excess reserves at the FED,
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and that has now drawn down to like what like seven hundred and fifty
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billion and on pace to run out by some time in the first quarter.
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And I think that's what I missed, because that allowed the FED to kind
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of play along with this higher for longer stuff for about six months, longer
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than I thought. And so as we begin twenty four, I think again,
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I better early than never, or however you want to phrase that.
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I think we're finally going to get the end of the argument. You know,
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where one side people say, oh, no, Fed, oh how
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credibility, you know, higher for longer, And on the other side there's
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people like yours, truly like he's full of because they've they've done the same
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crap for fifteen years, ever since they started QE in twenty nineteen or twenty
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nine, and they'll do it again. And so we're finally going to get
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that answer, I think pretty quick. So funny thing is that at the
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same time he had to do it, I think because the banks are collapsing,
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and in the end he serves at the pleasure of the banks, purportedly
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the pleasure the president, but really when the banks lose faith in the head
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of the FED, which happens on occasion, like with Volker, they get
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rid of them, and they're willing servants among our public servants. Just go
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ahead with it, right that that's an important point to Kerry. Next year's
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presidential election year, and we've been talking about that all year long too,
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that the yeah, you know, Focahontas and Bernie Sanders and you know,
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and their ilk are going to start piling on if you know, the economy
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really is weakening in the first quarter, and you know, and unemployment is
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back over four percent, you know, all that kind of stuff, which
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is what the FED themselves is projecting. You're going to get a lot of
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political pressure for the FED to start cutting rates to just anything, you know,
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give the stock market to keep going up, you know, and that
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kind of thing. So you're right, I mean, this is the independent
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FED, and that's another leg of a stool for next year. You know.
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I once remember reading an article in Barrens this thirty forty years ago,
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and Alan Ablson said, the FED is doing what it does best, getting
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a president reelected, you know, and nothing's changed, although I don't know.
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Sometimes things are so far gone that even the FED, with the magic
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of the money pump, can't can't save things. For the incumbent. We've
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seen that, yeah, number of times, say so, question is all
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right? So the banks were still borrowing, banks were more, banks were
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getting ready to collapse. Obviously that had to have figured into the calculus.
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Jamie Diamond said, you know, we don't want any more acquisitions, forced
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acquisitions, and so what choice did he have really? And the interesting thing
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was it looked like gold had kind of hit an intermediate peak. And then
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the day the day he issued that statement, man back over two thousand.
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We ever going to see some two thousand again? Well probably, you know
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in the EBB and flow of how the pricing scheme works. You know,
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even in strong bull markets and the precious metals, it's always two steps forward,
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one step back. You know, you get this rush of speculator money,
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which is you know, kind of came rushing in at the end of
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November and gold gallowy up would it closed the month for the first time over
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two thousand on spot gold a month November, and then the next day at
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rally another thirty bucks. Then we go out at all time aaly high,
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all time weekly high, just set an all time monthly eye. Every single
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derivative short you know, futures contract naked short is now underwater. When the
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market signed off on December the first, Oh, cherry lo, what holy
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cow? You mean there was a big thing then that when the market's reopened
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on Sunday the third, No, you don't say. Banks are just buying
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time and they wash out those speculators that came rushing in. We saw it
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on the Commitment of Tradity report last week, and so they get washed out
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and then market kind of resets. Then you take another two steps forward,
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and then they'll get washed out again. One of these times we will substantially
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break and hold out of this trading range we've been in for three years,
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and then we'll get another big rush and that ought to take us up some
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point in the first half of the year next year to twenty three hundred or
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so. I would think that's where I thought we'd get in the back half
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of this year. So sticking with that theme being about six months too early,
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I think we'll get there reasonably soon. Just a matter of time here.
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And yeah, yeah, it's you know, like you said, they
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got to keep the plates spinning, and this is the way they do it.
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But you know, things have changed around the world greatly since the tightening
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and all that, since they started ratcheting uprates, China is really on the
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break of collapse, if they haven't collapsed already, which you could have an
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argument about. It's kind of like when the economic cycles guys say, oh
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yeah, that's right, we were actually in a recession for the past year.
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Well, without a even some semblance of a free flow of information,
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it appears that China's collapse is well underway if it hasn't already happened, and
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other countries' issues happening. What is your take on where we're headed here?
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Because it doesn't look like it's going to be the Chinese century this year.
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That's great, twenty two thousand to twenty one hundred, right, it is.
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You know that the old saw I think maybe used to say about Japan.
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You know, they sneeze and we get a cold or you know,
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however that used to go, that will be a drag, right, that's
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going to factor in nextion. You could say that could maybe adversely impact commodities
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in general, but that implies that there's actual some fundamental driver to all these
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commodity prices that are derived through the trading and futures contracts. It's like,
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heck, Carrie, even even the now crude oil has been completely taken over
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by those CTA trading funds, you know, where it's like seventy percent of
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the daily volume of trading crudel, which is a hand down the biggest commodity
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market, like two point two trillion dollars worth of year, Even that now
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is done. So when remember like the whole things started in the Middle East
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and back in early October and crude oil went up from like eighty up to
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ninety and then boom just starts sinking like a stalon and everyone like, well,
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this doesn't make much sense. Yeah, So anyway, have that all
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relating all this back to China commodity prices that I guess remains to be seen,
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but I do I do think again, when push comes to shove,
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if the choice is between hey, we got to look credible on this inflation
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fight, or we have to fund the you know, multi trillion dollar deficits,
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we got to pay the interest on the national debt, we got to
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take care of any banks that might be failing, that's the way the Fed's
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going to go. And I think it's to me it's almost folly that people
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sit there and think, oh, no, no, no, no,
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Powell's going to keep rates at five and a half percent. Yeah. So
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the other thing is getting back preadmal question what happened last week and did Powell
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actually pivot and all that stuff, And predictably this always happens to Carrie,
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especially in the last year year and a half, when it's all hinged upon
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this pivot pause stuff, Powell comes out, they have their what I call
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the FED lines, the statement after the FOMC meeting. Then Powell starts flapping
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his guns, you know, a half hour later in his press conference,
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and almost every single time Gold goes straight up because you've got to read between
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the lines that's coming now at the conclusion of what's called a quiet period,
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where in the week to ten days leading up that FOMC meeting, now of
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those goons Fed governors speak, they'll go quiet, right, it's wonderful,
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correct, it's great. Okay. So anyway, as soon as the FMC
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is done, you got Thursday, all suddenly Friday, man, every goon's
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looking for a microphone. They want to get on CNBC or Bloomberg or whatever.
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And usually what they do is they if the market they think overreacts to
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what Powell does. They just come out and openly contradict him. And that's
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what happened last Friday. Hey, right away at eight o'clock hour on CNBC,
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here comes Goon Williams. You know, Oh, we didn't even talk
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talk about ray cuts. Wait a second, hold on, I can look
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at the dot plot on your document. You did damn straight you talked about
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ray cuts because you're throwing three of them for netwear? Is the consensus just
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hid? But that's what they do though, right, I mean, nothing
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new about that. That's in the politicians and financiers lying who whatever think that
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would happen, right exactly. So what the Fed did then last week is
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on the quarter March, June, September and December, they put out what's
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called a Summary of Economic Projections, which is nothing more than like you and
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me and a handful of your other guests all writing down. Our guests are
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our guesses, right, I mean, they don't know any more than you
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and I do. Even Powell himself admits that. But anyway, they write
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them all down, all seventeen of them, bru in June, at the
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June and conclusive of June meeting. They were collectively guessing or projecting four rate
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cuts in twenty four and five, and twenty five's a Fed themselves, we'll
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be back to zero. Well, getting close. So then in September you
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get a little couple upticks, you know, of the manipulated data, and
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all of a sudden, they're only projecting two rate cuts in twenty four and
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five in twenty five, and ever go crazy and the dollar rallies, you
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know, and all this kind of stuff. Well, now here we are
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in December. We're finally right before twenty four, and they went back up
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to three projected rate cuts and four in twenty twenty five. So they took
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one off at twenty twenty five and slid it forward. You know why they
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did that, who knows, But it's again, they themselves are obviously discussing
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rate cuts because they went from projecting two to now projecting three. And that's
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you know, whether they do three, four or five whatever. Again,
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the FED themselves is telling you this is what they expect. And so this
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notion that the FED is you know, higher for longer and not going to
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high, I just I'm kind of swimming against the tide on them. Yeah.
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Well, you know, I always had a theory about how they predicted
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the weather, and I think it's the same thing. Right, ten guys
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around the table and they say, how many of you think it's going to
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rain today? And three guys raise their head. You got a thirty percent
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chancewer early on. Right. Well, that's how it's done well. And
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that's I use that exact metaphor none of it. Yeah, that's a metaphor.
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Okay, thank you. It's not an idiom or anything like that.
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So I use that last week in an interview because and I think it's accurate,
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because they're eventually predicting chaos. Right. You can't just say there's this,
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this, and this that affect the economy and it's three variables. It's
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like three thousand variables. Yeah, and when one moves and affects the other.
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I mean Powell himself has admitted. And you go back and they get
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all the transitory crap. There was few in two years ago. Yeah,
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you remember that the Saint Summary of Economic Projections I was talking about in twenty
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twenty one. Yeah, we're expecting no rate ikes and maybe just like fifty
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basis points of rate hikes by twenty twenty three, what'd we get five hundred?
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Yeah, So they don't know, they're just guessing. Yeah, And
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it's like the weatherman. The weatherman, you know, tries to put out
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a forecast. This is your seven day forecast from Acuweather Channel forty one.
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They don't know what's going to happen in seven days. But if they get
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it right, they go, oh, look how smart we are. But
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the climate's changing and you know, at the end of the century, we're
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all cooked right that. You know, they're very sure of themselves. But
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tried predicting the weather three days ahead, that not so much right exactly.
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And that's and it's the same thing again. Weather is a complex, chaotic
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system too, right, and yet you know, maybe you can predict it
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twenty four hours out to some degree of you know, with all the models
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they have now. But it's the same thing when when the weather guy gets
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it right during the newscast, I'll say, hey, we've been shown most
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accurate for three years. When they get it wrong, they'll look at you
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and go, well, you know, there's the leather crickets man, mid
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gigg you know, that's that's just the way it is. So we look
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at you know, you know what's coming back to life lately. I'm sure
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you noticed it. Copper. Yeah, yeah, it's very again. We're
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bucks, which is resistance for sure, Yes, but it's probably going to
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blow through it in the coming year, certainly if gold is going up.
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Yes, you know, that's something I wrote about last year in the first
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week of January for this year's forecast, because there were all these forecasts in
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January of last year, even from like Goldman Zachs saying that above ground copper
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was going to be extinct by maybe August or September, and I think,
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whoa, Apparently that hasn't happened yet. However, you're right about price.
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It's been moving up rather steadily. And if the dollar continues downward next year,
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as I suspect it will, yeah, you get above four dollars and
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four to forty, and all of a sudden you're back of the old all
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time eyes of four to eighty. And then you know, you kind of
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get a feeding frenzy on top of that, and that'll help silver, you
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know, And any other thing I would add for anybody wondering about silver,
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I do. I felt strongly did we get there this year? I thought
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we'd get to twenty three hundred because I was six months ahead of myself.
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I guess when we break out above twenty one hundred and gold and you get
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about a ten percent rally on top of that, and we get to about
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twenty three hundred, at some point the first half of next year, will
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the gold silver ratio be one hundred and silver still be at twenty three?
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Probably not so. Yeah. So if I'm right about the twenty three hundred
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part, then you can kind of pick your own gold silver ratio and kind
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of back go, you know, back reverse engineer price from there. Yeah,
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I think. Well, look, gold is trading added near its record
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high. Silver's trading fifty percent under, right, So which one's going to
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eventually take off? You know, it'll it'll start with gold and then it'll
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go to silver, right, I mean, and that's all usually works.
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Yes, I mean, it's again the idea of and let's say, you
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know, gold is annualized nine point three percent since the beginning of this century.
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He always cherry pick dates. You know, it's annualized forty percent or
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whatever since you know, the March of twenty twenty, you know, you
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know, yeah, let's just pick one and just say, okay, from
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the beginning of the century, it's annualized about nine per point three percent dollar
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terms. This year it's up so far eleven something like that. So we're
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just clipping along. So even if we just do that next year, we're
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talking, you know, twenty two hundred and change. And so at some
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point, as much as it's been a challenge to get silver above twenty six,
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they'll get above twenty six, and then we'll go above twenty eight.
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And like as with gold, all of a sudden, when it becomes a
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clear recognized breakout of this trading range that it's been in for three years,
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then you get this Russia speculator money, and all of a sudden you'll have
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it, you know, three handle and yep, we have seen it before,
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right, yeah, yeah, that's right. And then you know,
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and I hear I just keep spouting all this historical stuff. But this is
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kind of like how we ended twenty ten as well. Now we got two
18:15
weeks to go. But I remember the very I was only in the second
18:18
month of running. This website had started in November of twenty ten, and
18:23
I can go back. It was on a Google blog spot, so all
18:26
those old posts from thirteen years ago were still on all there and at the
18:32
end the very last post I wrote in twenty ten, so I wrote about
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us it was a superfecta because gold closed I don't know if it was New
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Year's Eve or the thirtieth or whatever, the last trading day of the year.
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It closed at the daily high, weekly eye, quarterly high, an
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annual high on all four of those charts. And you know what happened in
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twenty eleven and from there, I mean, at a pretty decent rally into
18:56
September, we got a shot at that the singer superfecta if we can rally
19:03
over these next couple of weeks. So that would certainly seem to set us
19:06
up rather positively. I would like to see this, It would be it
19:11
would be some vindication, but just that the whole world hasn't totally gone crazy.
19:17
Right, that's too late for that year. Yeah, yeah, yeah,
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yeah. I could not agree with you more. Hey, So all
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right, so what's what's new on TF Metals Report. Well, it's been
19:33
a great year. The site I think is extremely valuable and I couldn't to
19:41
the users of it, I guess, is what I'm saying. And not
19:42
just you know, not for what I do for the community aspect, you
19:48
know, I mean, anybody listening to us, no doubt, remember is
19:52
twenty twenty and what it is. I mean, that was a crazy year
19:56
between COVID and the riots and lakshit, oh crap. Well, I can
20:03
only imagine what twenty twenty four is going to be like. And so again,
20:07
I think we're a lot of the value of Ta Metal's report is just
20:11
the community of people where you can kind of interact and people like you and
20:15
I said, there going oh god care, Yeah, you know that right,
20:18
absolutely, there's a whole community people like carry and I kind of see
20:23
each other through. So it's going to be evolved year. I mean,
20:26
you need independent voices kind of giving you the news and telling you where the
20:30
markets are headed. So we can do that. It's also I think a
20:33
really important time to be connected, maybe not with your physical neighbors across the
20:40
fence, but with yeah, people around the world that can help you out.
20:42
That's that's what my site does, all right, and we're big fans
20:48
of it for sure. Lake Is in the show notes this interview on Financial
20:52
Survival Network dot com. Question for myself or Craig or anything else kl at
20:56
Carrie LUTs dot com. That's the approved email address, and while you're at
21:00
the site, please sign up for your free newsletter at Craig Always a pleasure.
21:06
Thanks for stopping by, and we'll touch base with you a couple months
21:10
and see how this is all unwinded. Happy Rama on a Quansmas, my
21:12
friend. Oh, thanks, I've been celebrating all of them everything we go
21:17
and I possibly can't. You never got it. I didn't offend anybody by
21:21
saying that either. Yeah, I got I'm certainly not offended. So if
21:25
I'm not offended, you're probably okay. It's probably okay. Well, Happy
21:29
rama on a Quansmas and we'll see you in twenty four, my friend,
21:32
Thanks for listening to Carrie Letz's Financial Survival Network, your solution to today's trying
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times. For the latest, go to Financial Survivalnetwork dot com. Financial Survival
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