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