Loading ...Well, while financial events do not normally involve sounds, the haunting spectre of seeing over 65% of all bonds issued around the world paying a negative return evokes memories of a “bad moon rising” of which ancient folk lore of the lunar omen has filtered down through generation after generation. The problem here in 2019 is that NO generation has EVER encountered a financial instrument paying a negative yield because if you buy one, you have to pay the issuer to hold it. This absolute insanity is the nuclear torpedo that is heading for the starboard side of the Good Ship “Modern Monetary Theory” as she steams headlong into the abyss becoming rapidly known as the “Japanification” of all things financial.
So today, we not only have the Great American Military Machine kept alive by life support mechanisms designed to keep the U.S. dollar strong and in demand as the world’s reserve currency, we have the major global economic regions all run by governments that have a coordinated and comingled comittment to total currency debasement and the complete annihilation of the purchasing power of their respective currencies. Saving money is archaic and reckless; debt management is avant-garde and prudent. The beguiling dying moan of the swan is the sound reverberating through the walls of central banks and houses of parliament or congress because the global financial system is drowning, choking, asphyxiating on its regurgitant debtload and there is absolutely nothing that anyone can do to prevent its mortal demise. And you wonder why gold just hit a six-year high?
The gold miners smell better times ahead and for those of you too young (or too old) to remember the gold old days of 2002-2011, the HUI-to-gold ration peaked in the .55-.60 range in the 2006-2008 period, and that was with gold bullion under $1,000. Today at $1,548, the ratio is one quarter of that level, having risen since the late 2015 lows at .091 to the current .15 level. The point I make is that the gold miners that choose to live or die by the sword of unhedged production carry enormous leverage to rising gold (and silver) prices. Secondly, the gold miners as represented by the HUI, are leading, not lagging, indicators for gold and silver prices and are confirming indicators for the major trend in gold.
