Speaker 1: It's really interesting how all this is playing out as
soon as Trump got elected, right, I mean yeah, chaos
and uncertainty and volatility, those are those are the buzzwords
now and that's what gold loves the most, right, chaos
and uncertainty.
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Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Lutz. David Earthley, Junior
minor Junkie is with us and now and wow this market, David.
First it looked like gold was going to go parabolic
and we did you know, uh, that didn't happen, and
there goodness yea, And we.
Speaker 1: Don't want to see a blowof top just yet, do we? Yeah?
Speaker 3: One hundred bucks in one day, right, uh, you know,
eighty something today. I mean we're here on mid May
May fourteenth, and man, but silver is holding pretty.
Speaker 1: Steady, absolutely yeah, I mean we had a we had
an isolated high at thirty five hundred back in April,
and we've got we've now had two consecutive reversal candles
on the monthly here. Well, of course the month isn't
over here in May, but as far as the gold
price is concerned, it continues to make these strong moves
higher and then when it corrects, it has a short
sharp move lower and then it starts consolidating. Well, this time,
the gold price got extremely overbought on the monthly due
for a healthier pullback, right, I mean when the gold
price from a bottom of sixteen hundred about eighteen months ago. Right,
the gold price has more than doubled, and the pullback
so far had been pretty mild, anywhere from a little
over six percent to over twelve percent. And so now
I wouldn't be surprised to see a corrective pullback in
the fifteen percent range. That would be a healthy correction,
and it would take the gold price back down to
twenty seven to twenty nine to seventy five three thousand,
where there's really good support, and it's also eighteen week
moving average support. That's pretty much where the gold price
has gone down and corrected to several times during this
move over the past eighteen months. I mean that thirteen
year cup and handle breakout was very powerful and the
first target was reached at three thousand, and the augomatic
target is four thousand. So I wouldn't be surprised to
see a correction here, probably maybe into June. But you know,
anything could happen geopolitically that that that could take the
gold price back up again. Economically, you know, there's all
these catalysts lurking out there that that could take the
gold price higher before it does correct down to that
fifteen percent, So you know, anything goes here. But as
far as the silver price is concerned that you mentioned, yeah,
that's that's very bullish that that the silver price is
holding up better here because we had that gold silver
ratio popped to one hundred and seven, right, I mean, whatever
that whenever we had that gold silver ratio one hundred,
which is extremely rare. The last time it happened was
during COVID it popped a one twenty four. It's it's
screaming that that silver is super cheap here, and it's
it's it's it's it's base sickly due to catch up.
Because this is what happens, right, Gold makes huge moves,
silver lags, and then silver catches up. So what happened
on Monday when we had the trade deal over the
weekend and everybody waxed you for it, and and the
Dow went up a thousand points, the gold price went
down over one hundred dollars, and the silver price was
hit pretty hard too. But silver hammered sharply and it
was basically unchanged on the day. It was wasn't down
that much. And while the gold price ended down ninety bucks,
and that took the gold gold gold silver ratio below
one hundred. So that's that's the bullish element here because
we're starting to see silver catch up even though the
gold price is correcting here. Yeah.
Speaker 3: Yeah, and it's kind of following a predictable pattern. And
we were talking pre call about how silver assets are
now getting snapped up.
Speaker 1: Yeah, I mean, it's we had another We had another
takeover this week Pan American Silver, you know the world's
fourth largest silver miner. They they've agreed to take over
MAGS Silver and uh. This followed Majestic Silver taking out
Gatto's Core taking out Silvercrest and then more recently, Endeavor
purchased Peruvian silver miner Minera Colpa. So see these miners,
they they see the writing on the wall. They know
they have to replace their assets here before the before
the silver price takes off, and these assets that they
want to acquire get more expensive because you know, I mean,
these these miners are making gobs of cash here. I
mean Pan American they were able to add a cash
sweetener to their offer, right, I mean, they just ended
their quarter with a fantastic earnings for Q one and
they had almost a billion dollars in cash, and they're
spending half of that cash as as a cash sweetener
to take over Matt, to take over MAG. The rest
of it is in shares, and they they're they're still
getting a good deal on it, even though they're paying
a premium because Mag is. The offer is twenty five
percent below Mag's all time high back in twenty twenty one.
Speaker 3: Hey, we've how many years have we've been listening to
Mag's story for? I can't remember the head geo's name,
Peter McGaugh, Peter Bray, Like we've been listening to him
for I think twelve years, for me Rich's silver mine
in the world, the whole story, and here we are.
Finally one day somebody woke up and realized they had
to have him.
Speaker 1: Yeah. Yeah, Wanna Sipo is a prime is a primary
silver asset, which is very rare. And even though they're
they're taking over, they're taking over Mag, they're only taking
they're only buying forty four percent of that Mind because
it could it's controlled by Fresnillo, who's the operator, and
they owned fifty six percent of it. But still it's
a cash cow. I mean, the Mind generated free cash
flow of over seventy seven million in Q one, and
that's almost triple the year ago level. So Pan Americans
make a making a very wise move here.
Speaker 3: Yeah, definitely, And the only mistake they made was not
doing it a lot sooner exactly.
Speaker 1: Yeah. I mean MAG was trading at eight dollars ever
a year ago.
Speaker 4: So so yeah, I mean I owned it to twelve
thirteen years ago, made a couple of bucks, sold it,
but I guess I.
Speaker 1: Needed to be in it for the long haul and
just didn't know. David. Yeah, I mean that's that's that's
the thing with these with these stocks, I mean, especially
with these Well they were a junior back there, and
the mag's no longer a junior with a two billion
market cap.
Speaker 3: Yeah, ain't that's the truth. Ain't that's the truth. So
where are we heading here? How long is the correction
going to last?
Speaker 1: For? Oh my crystal Ball's broken here, that's what like
I said, Yeah, I don't see it going any lower
than that twenty nine to fifty three thousand level, because
you know, a lot has to go right with the
world here. I mean, if you take a look at
what's going on with with the debt, I mean, that's
not going away, it's just getting worse. I mean, the
corporate debt wall has over a trillion dollars in bonds
set to roll over this year. I mean, the corporate
debt service has basically doubled since the Feds started tightening
in twenty twenty twenty two. So yeah, I mean, and
on the flip side of that, you know, China, we
used to be the world's largest buyer of our debt,
now the world's largest seller of our debt, and they're
using the sales of our treasuries to buy gold. And
Japan used to be a big buyer and now they're
the second biggest seller because of their economic problems over there.
So you know, this debt situation isn't going in a
way anytime soon. And the gold, the gold price sees this.
And it also here's Federal Reserve Federal Reserve Chairman Jero
Boub basically saying, hey, we're in a stagflationary situation here.
That could mushroom because we've got we've got growth slowing
below two percent in Q one while CPI, the CPI
inflation that was reported this week is still at two
point eight percent. And and and the third domino of
stagflation is weakening jobs data, which is a lagging indicator. Sure,
jobs are holding up for now, but I mean a
lot of these layoffs that have been announced recently. And
also you've gotten the consumer credit, I mean, consumer confidence
continues to decline. They see the writing on the wall.
You know, when consumers sense there's a recession coming and
all this uncertainty. You know, when you hear when you
hear fed Chair Powell and his press conference to say
that the word uncertainty more and more times during each
press conference. That makes consumers uncertain. And when they're uncertain,
they don't spend money, they save it, and if they
save money, then the economy doesn't grow because our economy
is based on a seventy two percent consumption. So the
gold price is stiffing out all this. You know, all
these catalysts haven't gone away. What this is, this is
just a healthy correction and consolidation of these huge gains recently.
I mean, the gold price went up as much in
one quarter as it did all last year. So those
gains need to be consolidated, and that's what's happening here.
Speaker 3: Interesting. Interesting, So yeah, so we're talking just a matter
of months, six months?
Speaker 1: Is that how long it's going to take? Who knows?
I mean, I have no idea. What I'm what I'm
concerned mostly about is basically what's going on with the juniors.
And it's not concerning anymore. Right, It had been concerning
over the past few years as they continued to lag,
not only the gold price but the miners. Well that
has flipped in a big way. If you take a
look at at the GDX and the GDXJ, they went
up about fifty five percent from their lows at the
beginning of the year, and they're consolidating now, they're they're
they're they've corrected about fifteen percent. And if they if
they if they come down to test their breakouts, their
four year breakouts, that would be another five percent correction.
But if you take a look at the TSX venture, right,
it continued to climb when both GDX and gd XJ
peeked in the mid April. They continue, they can the
TSX venture continue to climb. So what that is telling
you is these uh sex, these resource sector professionals who've
been in this sector god in early, the smart money
that got in early, they're taking some of their massive
gains in the minors and the royalty plays and and
they're rotating them into these juniors. So that's what I
want to see, and that's and that's what you're seeing
because these juniors are are so ridiculously inexpensive. And now
that these and now that these these miners are making
all this money and M and A is picking up
again because basically, you know, their shareholders are saying, hey,
you shored up your balance sheet, great, you're paying us
good dividends, great, you're doing share buybacks. Great. Now we
want growth. You need to use some of that cash
and replace those ounces that that you're digging up out
of the ground, and you need to do it on
Bay Street as as opposed to trying to trying to
find them your yourself because it takes too long. So
that's that's what I'm very excited about. I've you know,
there's several companies that in my portfolio in the Junior
Minor port Junior Minor, a junkie portfolio that I share
with my subscribers, some of my subscribers and I have
been doing very very well this year, and a lot
of these companies that they formed these these beautiful consult
these beautiful you know, multi year consolidation patterns, some of
them at all time highs and some of them at
all time lows. So the ones that the ones that
are forming these consolidation patterns, these these multi year consolidation
patterns at all time lows, they're the higher risk optionality plays.
With all this gold in the ground, right some of
them are have have made these these you know, these
beautiful accumulative bases that they're breaking out of. And the
ones that were bifurcating earlier, they're making higher bases right
after after moving up so well with the gold price.
So you know, it's very very exciting right now to
be a junior goldstock investor. So will Canada arise again?
Well Canada? Right, well, yeah, you know, I mean it's
it's interesting if you take a look at uh the
uh the the the debt situation of the US right
and its economic situation. You got so currently the U,
the US credit is rated at at double A plus
by Moody's, you know, Fitch and s and P as
you know, the weakness in in the US credit rating
is basically reflected by rising credit default swap spreads. But
Canada's credit rating remains a triple A. But as as
far as as far as mining is concerned, you know,
and the big bugaboo for mining in base in in
North America and the US and Canada especially has been
permitting timelines, yes, and and now that Trump is in office,
U permitting timelines are are are being lowered, you know,
they're yeah, they're they're they're basically they they've targeted this
as something that needs to happen because they need these
critical minerals out of the ground. And Trump is big
on this, right and it's and it's switched over into
Canada as well. I mean in BC they're fast tracking
eighteen projects. In other provinces there they're talking about about
streamlining their timeline.
Speaker 3: So that is huge, huge, And I think we'll leave
it at that. Canada is rising, but it might not
rise united. It could be a splintered off and who knows,
maybe we'll get a fifty first, fifty second, maybe even
a fifty third state.
Speaker 1: And they help Verduc might become a fifty first state.
Speaker 3: Yeah yeah, and they can keep the rest in Saskatchewan
fifty two. And I don't know how you do the territories,
but not my problem problem.
Speaker 1: We'll stop at fifty two.
Speaker 3: You know, the flag is getting a little too crowded anyway,
so we can't really handle too many more stars. But
maybe they become commonwealths or territorial possessions. I don't know,
but it seems like the albert and Alburdens are ready
to take the plunge, aren't they.
Speaker 1: It sure looks like it. Yeah. I mean, it's really
interesting how all all this is playing out as soon
as Trump got elected, right, I mean yeah, Chaos and
uncertainty and volatility, those are those are the buzzwords now,
and that's what gold loves the most right chaos and uncertainty.
Speaker 3: Agreed, all right, David, Thanks Junior minor junkie link in
the show notes. Got a question for David myself? Email
Klatcarrie Lutz dot com. While you're at the site, we
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Take a look at the Martin Armstrong book. You can
order it on the site. David, we'll talk to you
again soon, be well.
Speaker 1: Thanks, Carry you too, always a pleasure.
Speaker 2: Thanks for listening to carry Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than ever,