Precious metals expert Michael Ballanger discusses the gold-silver ratio and the state of the precious metals market.
Based on the feedback I received over the weekend, I thought a quick follow-up would be in order on the topic of “deviant conundrum” because it was told to me by a wonderfully gifted retired English teacher that I was on the edges of plagiarizing my hero, Sir Winston Churchill, who once described Russia as “a puzzle wrapped in a mystery inside an enigma.” Given that I have been a fanatical fan of that wonderful Englishman since my boyhood, it stands to reason that I might have borrowed a few of his words because I have read virtually everything that man has written AND spoken since the 1960s. Being of English grand-parentage on both sides, it is at once both understandable and reprehensible that I worship Sir Winston; he would have been at the very center of the bull’s eye of the “Me Too” movement because of his views and attitudes not toward women, but toward those with inferior intellect and substandard courage. He would say today that those without either intellect or heart would not deserve anything vaguely resembling a “safe space.” Had there been a “safe space” movement in 1939, we would all be speaking German today because the rogues like Churchill would never been allowed to run the country.
So perhaps I should I should have referred to silver as “a puzzle wrapped in a mystery inside an enigma” in order to avoid any sort of duplicitous connotations, but the fact of the matter is that silver is, at least for me, ABSOLUTELY, a “puzzle” and an “enigma,” but the only “mystery” is how regulators are able to give the banks such an ugly and ignominious “pass” with the rise of “exchange for delivery” notices issued by the banks, which are essentially, in my view, IOUs for FAILED DELIVERIES, which, in the “good OLDE Days, would be “fraud wrapped in a con game inside a conspiracy.”
I must sincerely apologize to the grammar master who accused me of plagiarism because he has now pointed out that my last sentence was a “run-on” sentence and that I could easily have separated the two ideas with a period instead of a comma. Well, at the risk of continuing with another even more egregious “run-on” sentence, the silver market is on the verge of a serious upside price advance but when I read of the EFPs that are now the “rage” for the banksters (that were insolvent in 2008 and then once again BILLIONAIRES in 2009 thanks to OUR governments), I want to reach out to the heavens and seek out Sir Winston in order to glean his wisdom. I wish to ask the one politician that essentially saved the Free World from being enslaved by an Aryan dictator what he might think about entities that are allowed to control markets in the absence of any sort of “national emergency.” I am of the belief that he might dictate orders that might free the price mechanisms from their external controls on the basis that the economy is strong enough to avoid the need for any type of controls and since we are in a full-blown, late-cycle blow-off in stocks and real estate, it would be a truly Churchillian move to do so. However, we have no Sir Winston in power, and no one out there currently has the same character nor convictions to end the nonsense.
The gold-silver ratio (GTSR) made a new low close for the move off the March-April peak above 83 having closed yesterday’s pit session at 76.88 and is today at 76.67 so suffice it to say that it is now in a well-defined downtrend and headed decisively lower first to 65 then 50 and finally under 30 if all of the planets line up correctly.
However, the purpose of this follow-up is to relay to one and all that the plunging GTSR is actually an extremely bullish indicator for the entire precious metals complex and bodes well for the deeply depressed junior explorcos that have all settled down into “survival mode” now that summer has arrived. As you may know, the month of June is seasonally flat-to-weak but that reverses in the July-November period so this may be the month that we get traction in ALL of the metals, and if silver’s outperformance is any kind of lead indicator, then purchases of some of the well-positioned names could be quite a timely endeavour.
The greatest short squeeze of the year is now in full regalia as Elon Musk, the greatest stock operator since Bernard Baruch, has once again suckered the shorts into thinking that fundamentals actually matter. That his electric car company, Tesla Motors Inc. (TSLA:NASDAQ), is the most overpriced stock on the board is irrelevant; if you shorted the “technical breakdown” back in March at $330 and failed to cover in the ensuing crash to $247, you are now in serious trouble as TSLA has added $50 per share in the past week and sits at the $345 level. Could Musk take the stock to an all-time high north of $390? Of course he could, but my speculative instincts tell me that the stock is going to be hard pressed to get much above the current level with an RSI reading of plus-70. Now, do I mortgage the farm and bet it all on TSLA crashing to $25 (where it would still be overpriced)? Of course not, but because I am a dinosaur in a world of mutants, I will take a small position in the July $300 puts for $4.50 in an effort to bet against any thoughts of new highs. (At the time of this writing they were offered at $4.50 and traded down to $4.10. We were filled at $4.45 …read more
From:: The Gold Report