The Wall Street Reform and Consumer Protection Act of 2010 is better known as “The Dodd-Frank Act” to the American public. What the American public does not know about, is that it codifies a “bail-in” provision that ensures that the United States can conduct the type of bail-in that we saw in Cyprus.
The bank bailouts of 2008 and 2009 will now be history as Dodd-Frank authorizes the Federal Deposit Insurance Corp. to recapitalize failed financial institutions by confiscating customers’ deposits.
A bail-in takes place before a bankruptcy under current regulations, regulators would have the power to impose losses on bank depositors while leaving other creditors of similar stature, such as derivatives counter-parties untouched. If your bank goes bust then your deposits/savings will be taken from you and turned into shares of the bank. You have no say in the matter because in legal terms, as a bank depositor, you are just an unsecured creditor of the bank.
A derivative is a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by the use of high leverage. Smart investors like Warren Buffet view derivatives as “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.” At this point in time, I certainly agree with him 100%. I blame derivative instruments like collateralized debt obligations (CDOs) and credit default swaps (CDSs) for the financial crisis in 2008.
The name “derivative” reflects a sense that derivatives somehow derive value at one or more future points in time based on observable events such as prices, interest rates, exchange rates, indexes, events of default.
The real problem with derivatives has to do with overexposure by the banks and “uninformed investors. I believe derivatives can add value to companies as long as the corporate leaders at those companies use restraint and hold a limited amount.
Derivatives may not be a financial instrument that the average investor wants to try on their own, but derivatives can add value to society when used appropriately and in moderation.
A bail out is when the government steps in so that the financial institution can avoid bankruptcy or insolvency and is not able to continue operations It may take the form of a direct transfer of capital. In September of 2008 the insurance conglomerate AIG found itself in serious financial problems the Federal Reserve bailed it out by extending $85 billion (and eventually $182 billion) in credit to the company. Proponents of bailouts say that they keep an economy afloat when an industry thought too big to fail otherwise would collapse. Many opponents contend that bailouts are inefficient and non-competitive companies ought to fail.
Dodd Frank was passed in the aftermath of the crisis to avoid another speculative bubble.
The key fact of Dodd-Frank, Title II of the Act to establish an Orderly Liquidation Authority, which vests the FDIC with the authority to conduct a European-style bail-in. The preamble to the Dodd-Frank Act claims “to protect the American taxpayer by ending bailouts.” This is done, through “bail-in”, which is a critical feature of the internationally established regime of what is called cross-border bank resolution.
It claims to protect the American taxpayer by ending bailouts. That is done by implementing” bail-in” to stave off financial collapse, but is this constitutional?
The Dodd-Frank Wall Street Reform and Consumer Protection Act took up 848 pages and contained 383,013 words. In July 2012 an additional 8,843 pages of rules were added, representing only 30% of the rules to-be-written. The estimate for the final length of the Act is 30,000 pages. The six largest banks in the U.S. spent $29.4 million lobbying Congress in 2010, and flooded Capitol Hill with about 3,000 lobbyists–a ratio of 5 lobbyists per 1 congressman The Dodd-Frank Wall Street Reform and Consumer Protection Act currently stands as the single longest bill ever passed by the U.S. government. The length of the bill was intended to intimidate members of Congress and the public as well.
Title I of the Dodd-Frank Act requires each banking entity to periodically submit to the FDIC and the Federal Reserve a resolution plan that must address the company’s plans for its rapid and orderly resolution under the U.S. Bankruptcy Code.
Title II of the Dodd-Frank Act provides the FDIC with new powers to resolve by establishing the orderly liquidation authority (OLA). Under the OLA, the FDIC may be appointed receiver for any U.S. financial company that meets specified criteria, including being in default or in danger of default, and whose resolution under the U.S. Bankruptcy Code (or other relevant insolvency process) would likely create systemic instability.
Title II requires that the losses of any financial company placed into receivership will not be borne by taxpayers, but by common and preferred stockholders, debt holders, and other unsecured creditors, and that management responsible for the condition of the financial company will be replaced. Once appointed receiver for a failed financial company, the FDIC would be required to carry out a resolution of the company in a manner that mitigates risk to financial stability and minimizes moral hazard. Any costs borne by the U.S. authorities in resolving the institution not paid from proceeds of the resolution will be recovered from the industry.
Dodd-Frank, Title II, Sec. 209 (b):
if claims are made against a firm, they will be paid in this order:
- administrative costs
- the government
- wages, salaries, or commissions of employees
- contributions to employee benefit plans
- any other general or senior liability of the company
- any junior obligation
- salaries of executives and directors of the company; and
- obligations to shareholders, members, general partners, and other equity holders
The liquidation during resolution is done at the discretion of the receiver, the FDIC, on the basis of salvaging what is, in its view, most important for financial stability. Under Title II, Sec. 9 E, it is stated that the FDIC, “shall, to the greatest extent practicable, conduct its operations in a manner that–..(iii) mitigates the potential for serious adverse effects to the financial system.”
When you deposit money in a checking or savings account, that money no longer belongs to you. Technically and legally, it becomes the property of the bank, and the bank just issues you what amounts to an IOU. The bank considers this as an unsecured debt.
You will have to stand in line behind trillions of dollars of derivative payouts before your checking and savings accounts will be made available to you. Both the Bankruptcy Reform Act of 2005 and the Dodd Frank Act provide special protections for derivative defaults, giving them the legal right to demand collateral to cover losses in the event of insolvency.
Reinstating America’s traditional banking act is crucial to protecting U.S. depositors by rebuilding the wall of separation between commercial banks and investment banking which would dissolve the “mega super market” banks.
Glass-Steagall was repealed by Congress and President Clinton in 1999 under pressure from Wall Street speculators who needed access to Main Street’s commercial bank deposits. Less than 10 years later, Wall Street suffered a financial collapse that required hundreds of billions in taxpayer bailouts to the country’s largest banks.
If implemented as an act of the United States, an act of the sovereignty of the United States, (Glass-Steagall) would effectively override Dodd-Frank. It would override this bail-in regime as soon as it is implemented,
This Act needs to be nullified or the result of its enactment will be the mass destruction of U.S. citizens through economic means. The fact is this has NOT been openly disclosed to bank depositors or the general public.
This legislation will result in the mass destruction of the citizens of the United States through economic deprivation, through the collection and extraction of funds done in such a way as to leave the US Bank holders subject to become extremely desperate to the point of extermination.
The United States of America has been a free and sovereign nation, based upon a foundation of law. What underlies the founding laws of the nation is the issue of its “Right”. The right of the nation to govern itself and to govern in a way that upholds the right of each citizen to his or her life, is the most fundamental value in law.
As of 2010, the total world derivatives had a value of $1.2 quadrillion, approximately 20 times the world GDP. Because of the lack of clarity of the derivatives markets, the exact numbers are virtually impossible to produce. However, the Bank for International Settlements quoted global OTC derivatives – derivatives that have a paper-trail–at $632 trillion as of December 2012.
Dodd-Frank, will deprive the citizens of the United States of those rights guaranteed to them under the Constitutional Law to their right to life. They will be deprived of their right to petition their government, they will be deprived materially and certainty that many will be deprived of their lives–by violence, poverty, starvation, extreme want, or suicide.
This Act establishes a Cyrus style bail-in mechanism that would enable the government to transfer enormous amounts of wealth from the collapsing banks into the hands of a private cartel that control the new Orderly Liquidation Authority.
The FDIC will be held accountable for losses to banks via the risky derivatives estimated in the HUNDREDS of TRILLIONS of dollars. This would BANKRUPT the U.S. government.
It’s time to REPEAL this monstrosity and PASS H.R. 129 or S.985 Restore Prudent Banking Act of 2013, which represents the return of Glass Steagall – separating investment banking from commercial banking.
In my view, we cannot wait for the next banking crisis to occur, this is a fraud developed by the banking industry to STEAL more of our money and why I have recently started to accumulate physical metals here (gold and silver) and having it stored with a third party vault out of the banks grasp as an insurance plan for worst case scenario.
Each week I will break down and discuss the major problems unfolding in both the United States and Internationally. While it makes me sick to my stomach thinking about what can and will likely happen and the result it will have on the economy and our lifestyles, the only thing we can do is prepare ourselves and position our capital properly to avoid and or profit from the next financial crisis and bear market in stocks.
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The last few months have been great for our trades for both individual stocks and ETFs. We have has 7 winners, 1 loser, and we are still long:
Next week I will tell you about two more stocks that I think will start making some big moves also. They are CMC Metals Corp. (TSX.V: CMB) which is a gold exploration which is going to get their assay (what is an assay?) next week and is about to start production and they have a very exciting story, and companies in the past who have been in the same situation have seen insane share appreciation.
Click to see chart: http://schrts.co/l66lXx
The other company is Morro Bay Resources Ltd. which is a gold and silver exploration in Mexico. They are new to the scene but also have an exciting situation and management team as we slowly enter the next commodity bull market.
Click to see chart: http://www.stockhouse.com/companies/quote/v.mrb/morro-bay-resources-ltd
Last but not least, here is my analysis of what to expect with the broad market, and commodity sector as a whole:
Have a great weekend and we will talk Monday!
Disclosure of Interest and Advisory Cautions: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp., Discovery Ventures Inc., Morrow Bay Resources Ltd., and CMC Metals Ltd. In addition, the author owns shares of Cardiff Energy Corp., Discovery Ventures Inc., Morrow Bay Resources Ltd., and CMC Metals Ltd. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.
From being heavily involved in the gold market since 2001 I have seen numerous gold mining shares rocket 300% – 1200% in value. Long time readers of my reports know I call these rare plays “Golden Rockets” and I would like to talk about a stock which has all the ingredients to emerge as a huge winner.
Before I get into the details it is important that you know where we are in terms of the resource and specifically metals like gold, silver, copper, nickel etc…
For YEARS commentators have been saying buy precious metals and gold stocks, and they have been dead wrong in terms of their timing. In short my readers and I have waited over three years for the next bull market to start in this sector. In fact, we have not traded or owned a single gold stock since 2011.
You see when it comes to trading/investing, timing is EVERYTHING. Even if you pick the best stocks they can underperform if the overall sector is out of favor. You do not want to own shares of companies when they are out of favor because it will pull the share price down nine times out of ten no matter how strong the company financials may be.
The key is to patiently sit on the sidelines until the market tips its hand showing its true strength/weaknesses and then wait the perfect opportunity presents its self which is what I am sharing with you here.
As a technical analyst 90% of my work is based around price (price patterns, momentum, sentiment, and volume). Taking into account global markets, US equities market, the dollar, commodities, and economic data I have provided a simple comparison on what I feel will happen with US equities, gold, and gold miners.
Most of my analysis is mimicking that of 2000 when stocks topped and gold miners emerged to generate an average return of 1000% (10x ROI).
With the US equities market teetering on the verge of collapse, properly positioned gold miners are basing and preparing to rocket higher as a leveraged safe haven play.
Now let’s get into the important stuff… My Golden Rocket Play!
The company is Discovery Ventures Inc. (TSX.V: DVN) and they have a high grade gold and copper claim. There are several things I like about this play that make it highly attractive and it will get the attention of investors over time.
The details I share are a quick overview so be sure to perform your own due diligence.
Here is a run-down of their core project which is called “Max Mine and Mill”:
The Max Mine and Mill Project consists of 59 mineral claims totaling approximately 5,489 hectares and certain under surface rights located in Revelstoke mining division of the Province of British Columbia.
The Max Mine and Mill includes an underground molybdenum mine, crushing, milling and concentrating facilities, tailings storage facilities, mineral claims, mining leases, licenses and other holdings located near Trout Lake in the Revelstoke mining division of the Province of British Columbia.
What really excites me about Discovery is that this new mine is entering the market at a great time. A few years ago claims, mining equipment and energy were selling at premium prices. In the last couple years Discovery cleverly acquired to properties (Max Mine & Willa) including state of the art mining equipment. The Max Mine won the 2009 B.C Mining & Sustainability Award, which proves the land and location of this project is great.
The cost of the Max Mine and Mill could have easily cost a company $100 million for the land and equipment but because the previous company was mining another material which no longer has much value Discovery purchased the package for only $6 million.
The Max Mine portion of the deal also came with a massive tax savings. Discovery now has a $50,000,000 tax pool which means potentially a quicker return on investment for Discovery and a higher earnings per share for investors.
An added bonus with the new properties is that Discovery needed a mill solution, and ironically one of the properties had one. Now both projects (Max Mine and Willa) can share the mill, which saved Discovery a lot money and will cut down in processing costs when they go into production in the coming months.
Discovery now has fully permitted mining project located in the best jurisdiction in the world for exploration and mining, and the Kootenay region has a prolific history in this sector.
Discovery Ventures Preliminary Economic Assessment (PEA)
Discovery Ventures has a powerful PEA for its two new properties (Max Mine and Willa). What the PEA shows is the potential life expectancy of these new properties based on their current mineral findings, production per day, estimated revenues (will vary depending on commodity value), IRR%, and their CAPEX.
These are very attractive numbers, but if you don’t know what they mean let me explain:
The company should be able to produce 500 tons per day of high grade material through their state of the art equipment. There is enough material for them to mine for 4.25 years. With the current price of gold, silver and copper they could generate $164,000,000 in revenue.
I should also mention that DVN also announced that is has filed an application with the ministry of mines to re-open the existing adit portals and conduct underground exploration activities to sample some of the mineralized zones, which could increase the mines life and revenues.
What I like about these numbers is that I feel commodities especially metals will enter a new bull market which will last 3-5 years and it should start later this year. When precious metals become the global safe haven from collapsing currencies the price of gold will soar. I would not be surprised to see gold double or triple in value.
The IRR means (What is Internal Rate of Return?). The higher the number the more desirable the project is by investors. And with an IRR of 412% Discovery is a hidden gem in my opinion.
The CAPEX for this project is extremely low… and as investors that is exactly what we want. It means the cost to maintain project each year is low. (What is Capital Expenditure?)
Golden Rocket Chart Analysis: DVN.V
Unfortunately this company launched at almost the worst time back in 2010. They started just before the price of gold and silver topped out. But with every negative there is always a positive takeaway. And that is the fact that they have survived once of the most difficult times this sector has seen in years and the share price is trading with a low evaluation.
During the past few years the share price has been building a major basing pattern between 10 – 50 cents. Shares have been moving from those of weak hands to those of strong long-term investors. And this is exactly what the On Balance volume indicator at the bottom is telling us.
As this gold exploration company sees light at the end of the tunnel to start gold production investors continue to want more shares.
This will be Discovery Ventures first project to go into production and it is the key which will ignite the rocket under the share price. Once this company staring producing and making money investors of all types will want to own shares.
A great comparative example of what Discovery Ventures has with another company of the past with a similar situation is Klondex Mines Ltd. (TST: KDX). In 2013 they had a low of $0.91 and the price continues to climb with a current price of $3.38. That is a 370% return during a time when gold and silver have been in a bear market. Just imagine the potential for Discovery Ventures (TSX.V: DVN) when it starts production and the gold price rises!
Naturally I am a very conservative person in both life and trading. But I also know that when things make logical sense and there is a potentially great investment I always put some of my money to work with them. I like Discovery for the reasons stated above and why I own shares of this stock.
Last but not least today they announced confirmation of a $7 million line of credit, which also has some of the funds being convertible into shares for the investor providing the capital. This is great for Discovery and its shareholders long term. This will allow them to compete the balance of the work and become a full production gold mine.
If you remember the dot com bubble as clearly as I do and are a technical analyst then you will recall the month which the NASDAQ broke down and confirmed a new bear market has started. The date was November of 2000.
You may be wondering why I bring this up. What do tech stocks have to do with commodities?
Good question because they have nothing in common. But the key here is that when a bull market ends in one asset class that money is shifted into another. That money moved into commodities and resource stocks and in a big way.
Precious metals and miners exploded, surging an average of 1000% return (10 times ROI) over the next six years, topping out in 2008. In fact, these resource stocks bottom the exact month which the NASDAQ confirmed it was in a bear market on Nov 2000.
Compare Dot-Com Bubble & Burst to Precious Metals Stocks
Over the next couple of weeks, I will be sharing some of my top stock picks in the metals sector (gold, silver, nickel, and copper). If you missed the 2001 and 2008 metals bull market then you best pay attention and be sure you don’t miss what is about to happen.
Compare Bull Market in Stocks with the Energy Sector
The financial markets and asset classes move in cycles, and there are times when specific sectors outperform others. Resources stocks specifically the energy sector is about to enter its strongest phase within the US equities bull market which started in early 2009.
Oil stocks have a lot of positive things in their favor in my opinion, though many will disagree. But it’s all in how you look at the data and your investment horizon.
During the previous market tops which are the same for NASDAQ, DOW, S&P 500, energy stocks have outperformed most sectors. Why? In short, we will always need energy, many of the companies pay dividends and when money starts to roll out of equities the underlying commodities typically hold their value for an extended period of time.
These past stock market tops generated 36%-40% returns during a time when most traders and investors were losing their shirts, or should I say lost 50% of their life savings… Which train would you rather be on?
Now take a quick look at the price of crude oil
Oil has formed what is called a (double bottom, or “W” formation and also appears to be completing a cup & handle pattern). Whatever you want to call it, they are all very bullish patterns, meaning a much higher price for oil is expected.
In short, higher oil prices, means more profits for energy companies, it’s that simple.
An Oil Junior Resource Stock
There are times during market cycles when I like to own shares of some junior companies. When a major shift looks imminent within a market or sector just like we saw in 2000 and again in 2008 I like to hold shares in companies which have the potential to rally several hundred percent.
A couple of weeks ago I talked about a speculative oil stock Cardiff Energy Corp. which I own shares. The story behind this stock is real and the horizontal well which they will start drilling mid-June 2015 has the potential to generate 5-7 times of a vertical well. Below is the chart with my short term targets.
The low priced crude oil is wreaking havoc with oil companies and share prices. The best plays are those who have the lowest cost of production per barrel and I heard this well could produce profits even if oil was trading at $25 per barrel and sold at WTI pricing with no discount.
The energy behind this share price is very impressive and shows that investors are confident in the horizontal well. If they strike oil who knows where the share price could rally to.
Detail Third Party Report: http://rockstone-research.com/images/PDF/Cardiff1en.pdf
Side note: I met with Jack Bal the President, CFO, and Direction of Cardiff Energy Corp. in Toronto recently to learn more about the company and projects. Cardiff is currently doing a private placement to raise capital and if I’m correct investors can get shares at 25% discount from the current market value. And from what I understand they have room for a few more small investors. If this is of interested to you give Jack Bal a call directly at Cardiff Energy 1-604-306-5285, and you can mention this report if you want.
Next Bull Market Conclusion:
In short, every good investment will eventually become a bad one and vice versa. Knowing when to shift our capital from one sector to another is vital for steady long-term growth of our portfolio.
Over the next couple weeks through this multi-part series I will be sharing some very lucrative stock picks which I am investing in and the second one will likely be a nickel resource company that looks poised to rocket higher.
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Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.
History has proven that 100% of fiat currencies have failed the test of time. The average life span of a fiat currency is 40-50 years. With the US dollar now in it’s 44th year it makes you wonder if the end of the greenback is near.
The only money that has held the test of time has been asset-backed currencies using gold. Or through owning gold and silver bullion.
But without getting into the details to save us all time let’s take a quick look at what gold and silver are doing.
Both gold and silver have been dropping in value for 4 years with investors keeping their eye and capital tied up in the equities market. QE1, QE2, Operation Twist, and QE3 have helped to take investors capital out of metals and into equities (US Dollar-based investments) and will be left holding the bag when the dollar is devalued and stocks plummet 70% or more.
The manipulation in gold and silver pricing the past few years which continues to drag prices lower to this day gives the sinking feeling of hopelessness for investors of physical metals scaring them out of the market. The reality of it in my opinion is that this is the great buying opportunity in our lifetime before the global economic crash.
These hard assets being gold and silver will likely be used as the asset to back the coming world currency, after the global economic crash. The ensuing worldwide chaos it could cause when currencies fail, trade fails, and people struggle for quality food is something I hope is avoided.
While I do not think there is not enough gold to support a currency maybe silver will be the next asset to back a currency?
Something big is going to be happening with silver I feel. After a 16 month period of “dormancy” from the silver giant JP Morgan have returned with a vengeance to take delivery of record amounts of physical silver in the Comex vaults yet again.
In the first two weeks, April of 2015 alone JP Morgan purchased a whopping 8,300,000 ounces of silver.
JP Morgan currently holds over 55,690,000 ounces of silver and that number continues to grow.
What does this mean? No one knows for sure, but my guess it’s going to support something new, big and important down the road and I think riding their coat tails it not a bad idea.
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Over the years, hundreds of various self-proclaimed prognosticators who said a global economic collapse were to happen on this date or that date have failed. Sort of like the old story about the shepherd who cried wolf.
Unfortunately this is EXACTLY what looks to be getting ready to happen. But first let me mention that the most accurate doomsday/sky is falling talking heads out there who have predicted several life changing events correctly in the past always seem to be 3-5 years early.
Why are these people always a few years early in predicting these events?
I believe it is because they focus almost strictly on fundamentals and economic data and ignore price analysis of various assets which could help in timing these events. There is no doubt in my mind they are correct about the fundamentals being out of whack and unsustainable, but I know from trading that fundamental data can lead or lag the actual markets themselves by several years.
In 2011 and 2012 several global economic collapse scenarios started to float around the market place. Now 4-5 year later we have yet to have a global collapse. But, what is interesting is the fact that many of the things they said would start to happen HAVE started happening in the past few months.
What scares me the most is the fact that the US bond bubble may burst, the USA will not be able to service their debt, the dollar will collapse in value, and a new currency will emerge.
If this happens everyone will experience some rough times for a while. Keep in mind that most of the US dollars are held outside the United States. The dollar is global and will send a shockwave into several countries financial systems.
Secret New Global Economic Treaty
Barack Obama has been working secretly on a new treaty and potentially new world currency. Only members of Congress are allowed to look at the treaty and they are being banned from saying anything to the public.
Americans could lose most of their wealth overnight and thanks to all of this secrecy they won’t even see it coming. There is the potential for a massive devaluation in the dollar which could happen literally overnight. This means Americans (individuals holding primarily US Dollars) will wake up one morning with a fraction of the wealth they had 24 hours ago. Its scary stuff to say the least.
This new treaty is the “Trans-Pacific Partnership”, and is being touted as perhaps the most important trade agreement in history. Very few people in this country are talking about it.
Currently, there are 12 countries in negotiations: the United States, Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. These countries have a total population of 790 million people which accounts for an astounding 40 percent of the global economy. If the EU, China, and India join then this treaty will likely pass.
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By Jeff Clark
It’s the news everyone dreads—a call from the hospital. And it’s about one of the most important people in the world…
[Every ALL-CAPS ITEM below contains silver or is required in its use.]
You hear the nurse talking urgently through your TELEPHONE and you realize it’s serious…
You grab your REMOTE CONTROL and turn down the volume on your PLASMA TV that’s playing your favorite DVD movie. You push the BUTTON and the SPEAKERS go mute. You press “save” on the KEYBOARD of your COMPUTER.
“Yes, she’s okay,” the nurse tells you. “But you need to come to the HOSPITAL right away.”
That’s all you need to hear. You yell to your spouse and grab your CELLPHONE to call your siblings.
“Is she alright?” your wife asks frantically. She was using the VACUUM CLEANER and WASHING MACHINE and didn’t hear the conversation.
“Yes, but hurry,” you reply, reaching to turn off the STOVE.
Your wife springs into action—she pushes the TOYS out of the way, grabs a WATER BOTTLE from the REFRIGERATOR and closes the MICROWAVE door.
You run to the bedroom and put on that new SUNBLOCK SHIRT she got you and check yourself in the MIRROR. You notice the glint off your SOLAR PANELS shines brightly through the WINDOW. You’re sweating and are glad the AIR CONDITIONER and AIR PURIFIER are working.
Your wife opens the LATCH to the front door. You notice she’s wearing those EARRINGS you got her for Christmas, the ones you put in with the CD of her favorite singer.
You unlock the car with your REMOTE KEY and rev up the ENGINE. Your wife opens the POWER WINDOWS while you adjust the POWER SEATS.
You leave the RADIO off, and are impatient at the STOPLIGHT, even though you can already see the CELLPHONE TOWERS on top of the hospital. Your wife is talking to your other family members on her CELLPHONE.
You pull up to the toll booth and the SCANNER beeps you through quickly. Your wife glances at her WATCH, and you remember she needs a new BATTERY.
You enter the hospital through the AUTOMATIC DOOR and a receptionist uses an IPAD to give you the room number. The indoor temperature is cool and you remember reading about the new INSULATION the hospital used in construction. You quickly push the ELEVATOR BUTTON for the second floor.
You reach the room and there is your mother, lying on a RECLINING BED, with a BREATHING TUBE in her mouth. She’s connected to NUMEROUS HOSPITAL DEVICES, some of which display readouts on a COMPUTER SCREEN. You try not to panic, as you see various SURGICAL INSTRUMENTS lying on a nearby SILVER tray.
“Your mother is on MEDICATION,” says a doctor walking into the room. He has a STETHOSCOPE around his neck and EYEGLASSES perched on his nose.
“She fell and sustained some injuries, but she will be okay.” You see the BANDAGES on her face and arms, and the doctor notices your concern.
“We’ll take some X-RAYS to be sure she didn’t break any bones,” he says. “And she’s already on ANTIBIOTICS, so we’ll catch any infection before it starts.”
You take a deep breath of relief as you realize she’ll be okay. You grasp your mother’s arm and notice she’s still wearing her favorite BRACELET.
The doctor uses a LAPTOP to update her status. The nurse uses a WATER PURIFIER to fill the water pitcher and sets it on the ANTI-SCRATCH surface of the nearby table.
You settle into a PLASTIC CHAIR beside your mother and take a deep, relaxing breath. It then dawns on you just how much…
Silver Is Essential to Modern Life
There are numerous medical examples like this every day, where silver served a cornerstone purpose to treat a hospital patient. In fact, if you’ve ever been treated by a doctor or admitted to a hospital, you’ve been a direct recipient of one or more of the medical benefits of silver. From simple bandages to life-saving equipment in operating rooms, silver is quite literally a lifesaving precious metal.
Silver is used in nearly every major industry today, from biocides and electronics to solar panels and batteries. In fact, silver is so embedded in modern life that you do not go one day without using a product made with or by silver. It’s everywhere, even if you don’t see it.
Due to the exponential increase in the number of uses for this precious metal, demand has exploded. Check out silver’s growth…
- Jewelry and silverware use is up 27.2% since 2011.
- India imported 5,500 tonnes of silver last year, 180% more than just two years ago.
- Solar power accounted for 29% of added electricity capacity in America last year. “Eventually solar will become so large that there will be consequences everywhere,” says the US Solar Energy Industries Association.
- China’s solar industry is exploding—it represented about 0.2% of the global market in 2009, but last year soared to 17%.
- Silver demand in China exceeded a quarter million ounces last year for the first time in history.
- New uses for silver continue to be discovered. The latest fashion—a “scough”—uses silver nanoparticles to trap and kill germs and pollutants.
- Total industrial demand is projected to increase 5% per year through 2016—and outpace global GDP growth.
- In spite of the fall in price, ETF demand soared in 2014, as total holdings exceeded the 2011 record high.
Demand is relentless.
But Here’s the Best Part…
If you’re an investor, the price of silver is poised for a massive rebound, after one of the most severe bear markets in history. Silver has declined three consecutive years—and hasn’t fallen four straight years since 1991. The price is so undervalued that adjusted for inflation, $17 silver is equivalent to about $4 in the year 2000!
In fact, silver is currently trading below its price before the financial crisis struck in 2008, and before the first QE program was introduced. It’s basically trading as if no money has been printed!
There is a clear disconnect between this precious metal and its price.
And that is our opportunity. The silver price has overreacted so dramatically to the downside that it is one of the most compelling investments today. In fact, it’s hard to find a more distorted market full of opportunity.
While hopefully you won’t need silver to save your life anytime soon, we’re convinced it will be a portfolio-saving investment in the very near future.
Just like gold, a stash of silver bullion will help us maintain our standard of living. In fact, silver may be more practical to use for small purchases, as there will be times you may not want to sell a full ounce of gold. And in a high-inflation/decaying-dollar scenario, the silver price is likely to exceed consumer price inflation, giving us further purchasing power protection.
The bottom line is that silver is quite possibly the buying opportunity of this decade. The next few years could be very exciting. And if you like bargains, silver’s neon “Sale!” sign is flashing like a disco ball.
To take advantage of this potentially life-changing setup, we have a special offer in the just-released issue of BIG GOLD…
All investors should own a stash of sovereign bullion coins—Eagles, Maple Leafs, Philharmonics, etc. They’re the most recognizable around the world and the most liquid, an important trait when it comes time to sell.
However, we’ve identified a potentially lucrative trend in the silver market, where we can buy bullion coins with numismatic potential. In other words, these coins could increase in value much more than standard bullion coins. Even many veteran silver investors have not caught on to this trend.
How do we know these coins have numismatic upside? Because it’s already happened with similar coins. In fact, a similar coin from 2011 is now selling for near a 100% premium. And this occurred while precious metals were in a bear market!
Right now, you can buy this coin for roughly the same premium as a silver Eagle. In other words, there is essentially no risk to buying these coins—if for some reason they never accrue any numismatic value, they’ll still always sell for at least the price of bullion since they contain a full ounce.
And here’s the best part: our recommended dealer has discounted these coins exclusively for BIG GOLD readers. The price is lower than you’ll find anywhere else in the bullion market, handing us even further savings. We also include a similar discount on a gold coin with numismatic potential.
There’s much more to our May issue… We detail why we think the next bull market in gold could kick into high gear very soon (it’s in Jeff Clark’s introduction). It’s a development most mainstream investors are completely overlooking—which is our opportunity, because they’ll be surprised by this event and rush into the precious metals market literally overnight. If we’re right, it could light a fire under the gold price.
But you need to invest now, before it takes place, and while the discounted premium on these coins is still available. Either way, don’t let the current bear market fool you—it’s stretched to an extreme and will shift into a new bull market soon. Markets cycle, as history has repeatedly shown, and this market is due for its next upcycle.
Test-drive BIG GOLD at no risk, with a 3-month, money-back guarantee. It comes with the discount on the two bullion products that have numismatic potential, plus all our current stock recommendations, including tables that show the prices they’d hit if they matched past bull markets. The potential gains are enormous—and a tremendous opportunity if you don’t own precious metals stocks.
If you don’t like it, cancel. But we think you’ll find tremendous value for the low price.
The SP500 index (US Stock Market) continues to be in and Uptrend.
The major trend line on the chart below must be broken in a big way before a full blown bear market will be confirmed. This is still months away at best so do not worry. The AlgoTrades INNER-Market Analysis will get us positioned when the time is right and enable us to profit as the stock market falls in value.
Your long term equity investments can continue to be held at this point. Speculative and momentum stocks (Russell 2K index) continue to show weakness, so I would stay away from them. Large cap stocks will likely be in favor as the safe haven “blue chip” stocks, but when the market is ready to roll over, all stocks will fall. The safe haven plays should be bonds, gold, and inverse ETF funds.
We do fear a US dollar currency crisis, and if so investors will be moving away from US investments and the massive bond bubble may burst. But at this time, it is not a concern.
This chart I feel provides a great perspective on the overall market trend and price patterns. This is the 70 year prospective. I hope something like this unfolds. Fingers crossed to a 12 month correction/bear market. This will build the new base for the next super cycle.
US Dollar has now reached the upper resistance trend line… we could see weakness in the dollar going forward…
The Risk-Off Trade Is Slowly Unfolding
The S&P 500 index is losing its momentum. Money has been rotating into Bonds and global markets for a year in anticipation of the stock market correcting.
With six months of the SP500 index trading sideways we have had to focus on some other areas to find opportunities. Some recent winners have been long oil with UCO, long live cattle with COW, long Russia via RSX, and long Japan with EWJ. Those who follow my ETF trade alerts newsletter have avoided the recent chatter in the SP500. We have be doing even better with our active stock trades.
The Fear Index & Big Trend Analysis
The VIX index has been trading at low levels for a few years. This suggests that fear is low, complacency is high, and that SP500 is becoming vulnerable to a stock market correction.
In the chart below, I have placed the VIX index above the stocks trading above the 200 day moving average. As the number of stocks trading above the 200 day moving average falls it’s telling us that fewer stocks are moving up in value while the broad market climbs. This is bearish.
This provides a great visual of how falling markets correlate with investor fears. While overall market breadth remains strong, a change in the VIX often provides an early warning sign of potential danger.
“When The VIX Is Low Its Time to Go, When The VIX Is High Its Time To Buy”
Stock Market Rises with Fewer Stocks – RED FLAG
Since mid 2014 the US stock market has become move volatile. Fewer stocks participating in the markets move up. This can be seen by comparing the percent of stocks trading above their 200 day moving average and the S&P 500 index.
When a stock market stalls, which is what it appears to be doing, the movement is comparable to that of how an aircraft stalls. It slowly continues to rise, things become choppy/unstable, then it drops and picks up speed trying to regain stability and control.
Once the stock market or an aircraft come to a complete stall they both end with a violent drop. While I am not calling a top yet, understand each month we are getting closer.
An analyst and trader I respect talked about how the Dow Jones is flat for the the year, yet investors think big profits are bing made. But in reality we have not seen real gains and the broad market expand in months. More investors are bullish now than we have almost ever seen according to Investors Intelligence Survey with a whopping 57% of investors bullish on stocks.
The CEO of Ameritrade said that almost all of their 6 million traders/investor account are completely invested in stocks, and are leveraged using margin also. This is the ultimate contrarian warning sign of a bear market should begin over the next few months.
INNER-Investor Monthly Conclusion:
The great thing about being an investor is that the analysis and trends move relatively slow. We do not buy at the dead low, nor do we exit at the high, and sometimes we get shaken up during tough phases in the market like the second half of 2014 and first half of 2015.
I’ll be honest, the second half of 2014 and first portion of 2015 has been exceptionally tough to generate profits.
Winning streaks, and losing streaks are just part of investing and it happens to everyone and every strategy as the market has difference market phases and characteristics.
I believe the second half 2015 is will provide great opportunities and we will close the year out with decent gains.