Saturday, 14 March 2020

How To Navigate The Crash in The Age Of Algos, ETFs And Digital Copycats: Gold Is The Ultimate Hedge - The Best Gold Companies Are The Wealth Generators.

After this very tough week, it is more important than ever to have the Big Picture in front of you and separate the main messages from the Panic Market Noise. We are on the same level as before. We are all set. There is NO margin. "The market is NOT going to ZERO." Trillions of dollars are being printed. POTUS is printing money and buying Oil to create inflation and support the shale oil industry. Very important - interest payments on student loans are waved. "Free CoronaVirus tests, and paid leave for our impacted American workers", and expand of food stamps program are being agreed by POTUS and House Speaker in the US in the major "The Families First Coronavirus Response Act." 

The virus, as we discussed in January, is the major external shock. Millions of investors were brutally educated by the ruthless Mr Market again. The Risk Is Real. And now as per our notes, finally, we have all bazookas blasting at the same time: Coordinated Rates Cuts with more to come next week, Liquidity Injections by Trillions, Fiscal Stimulus and direct help (the most important now) to households. Now let's dive - not into the market, but into our charts. 

How can we navigate the Crash in the age of Algos, ETF and digital copycats? Our brave scientific thesis remains the same. Gold is the only Ultimate Hedge. And the best Gold Companies will be the wealth generators. After this Panic, manipulation and forced selling Gold will outperform cash in US Dollars as well during the "Operation Recovery". All timeline of previous near-death experiences in the markets is compressed now from many months to a few weeks. We have elections coming. 

Let this sink in for a moment. According to Jim Puplava: "The Bull Market is over after 11 years. FED injected $1.5 Trillion dollars of liquidity compared to ... $1.2 Trillion dollars of QE #1 after 2008 Crash and GFC which was injected over the whole year." The Mother of all QEs is here.

Gold is the only Ultimate Hedge. Very unfortunately, this bloody massacre will claim a lot of very good people. Mr Market is ruthless. It is difficult, but we can all learn and, ideally, on the mistakes which have been already made by others. Now, all hot air in the world will be pumped into the bubbles. Chose yours wisely. Panic is the best time to buy historically, but it depends on what you are buying. 

Yours very truly paid for his education for all Top 50 Ivy League Universities combined. And nobody can be certain yet that even this education will be any good in the end. Otherwise, all PhDs will be billionaires. 

But we all have the luxury of getting access to the best knowledge available these days. Then we need the discipline to apply it. We all saw the signs. Even in January decisive action could help. These were the classic sell signals.

As you already know, these are my travel notes. Do your own research and make your own journey. If you joined me, thank you. We are all set. We are ready. Now, let's check the navigation system. 

Gold - The Ultimate Hedge was getting back closer to $1,600 again after the 3rd "Operation Sledgehammer" and despite all selling to cover for the margin calls in the Asian and morning for European markets trading day on Friday 13th, 2020. 

It is important to note here that Gold is hitting an all-time high in a lot of currencies in those markets already. 

Chart by ZeroHedge

The Global Financial System was acting, finally, as expected. There were bans on short selling across the world, injections of liquidity and FED has unveiled The Mother of QE starting with $1.5 Trillion funds which will be made available via New York FED. 

The 4th "Operation Sledgehammer" was unleashed on Friday 13th, 2020 just before the celebrations of "market recovery" during the POTUS National Emergency Declaration. The messages from the operators of the Global Financial System were very clear: "The Market Is NOT Going To ZERO" and "Gold Is NOT The Asset You Should Own." As we already know, the general public cannot fully embrace and celebrate "market recovery" with Gold trading above $2,000. It is important to note here that we still have bread, but the circus is closed.

I agree here with David Brady: Coordinate Action means a lot of things: global rates cuts, liquidity injections, market manipulations by buying futures and selling paper gold. These are not conspiracy theories anymore after Court revelations about JP Morgan traders and their Gold market manipulations. Tip of the iceberg - as they say? "Operation Sledgehammer" provides bullion banks with the ability to join and amplify the waterfall and orchestrate additional pressure on the price of Gold in order to cover their shorts at the lower levels. The ideal time is when investors are forced to sell Gold in order to cover margin calls. 

Chart by Holder Zschapitz

And it is the only time when you have the coming major announcement about QE on steroids, more rate cuts and other global stimulus programmes measured by Trillions of US Dollars which we will see this weekend and next week. "Operation Sledgehammer" can and will happen many more times, artificial suppression of the Gold price will continue but with greater difficulty by the day. This is why it is crucial NOT to be on the margin. All charts are only showing the potential, it is important to be alive at your destination and not to be wiped out during your journey. 

POTUS sent his clear message on Friday 13th, 2020. FED and BIS Friends are bumping elbows and reassuring investors that "Markets Are NOT Going To ZERO." After The Bubble Crash 2020, there is no "Moral Hazard." POTUS is all in. Global stimulus. FED will cut rates to zero again maybe even next week in one "surprise move". We are entering into the real negative rates territory globally. This is the best environment for Gold.

Chart by Holder Zschapitz

FED is throwing $500 Billion US Dollar chips on the table in the market casino at a time just to keep The House running. Now the smart ones who are left will be looking for value. Few very important Myths are killed: Unicorns, Gold 2.0 bitcoin and ETFs. 

Today it is important that we have our notes. We can all breath out, hopefully. 2000 and 2008 have been flashed out in two weeks of March 2020. Time is compressed as Energy. Now this Energy will be finding the places to release itself, in some parts it will be devastating, in others, it should manifest new opportunities and crystalise value. The Black Monday 2020 Crash is here, now all global financial system will be printing new money very hard "as there is no tomorrow" in order to avoid the Great Depression 2020. You know the rules. #1 Stay Safe. No Margin. Avoid crowds. There is no point to be smart by "being dead". We all can make it only if we get there. We have the new set up for Gold Bull on steroids. 

Chart by Northstar

We are entering the next stage of the Gold Bull market - few very important myths have been destroyed. These revelations will bring those who survived back into Gold. Myth #1: now it is evident that there are NO Gold 2.0 or "digital gold" copycats - bitcoin has failed to act as a hedge. 

Another very important fact. Myth #2: there is no one for one "Synthetic Exposure" by any contract with any counterparty involved - all ETFs are "value gapping" in the moments of crisis. Illiquid ones can be destroyed in hours. All Algos are selling at the same time using the same algorithms reading the same headlines and cascading into total self-reinforcing selling avalanche of interconnected ETFs like it happened with JNUG, GDXJ and GDX. Avoid. You can trade it, but do not call it an investment. And we better not even start our discussion about "paper gold" here. There can be some paper, but definitely NO Gold.

My very personal vision of the future is the following. Total allocations in global portfolios to Gold were well below 1% coming into this Crash. Family officers are sweating out this weekend with billionaires assessing the damage and "hedging strategies" with bitcoin and a bunch of ETFs. The wise ones will make the first move by doubling the allocations to Gold. It will be the rocket fuel for the next leg of this young Gold Bull. 

Negative Real Interest Rates will push Gold to the new all=time high in US Dollars again. With Gold moving above $1,600 some smart wealthy people will be increasing allocations in their portfolios to 5% and more. 

With Gold above $1,500, Gold miners will be expanding margins and literally printing money, considering that Oil prices are 50% below than in January now. Portfolio managers will start buying Gold Majors like Barrick Gold and Newmont Mining in order to increase returns during the bear market in general equities.

Chart by Northstar

Gold majors are facing the Peak of Gold production and they will start M&A exploring for Gold resources on the Exchanges first. After the prices will be too high for M&A they will be entering in JVs with Junior Miners who holds the best projects in order to build up their pipelines of projects to replenish resources.

Smart money knows what real investment means. It means owning the business by owning the shares of the Company. Invest like Warren Buffett, who is proven to be right and sober again with his huge cash position. Nobody knows the future. I can only share with you what I am doing. 

I am going "Warren Buffett" in Gold. Buying a business and building it. No Margin. I will be back monitoring The Big Picture For Gold and TNR Gold place in this generational opportunity. Join us. Follow TNR Gold.

Thank you. We are building GEM Royalty for you - our Shareholders. Contact us and request your Skype Video update. Stay safe.

"...The upside is clear. Indeed, Novagold sees it well enough, since it retains a significant stake in TNR, and former Novagold director Greg Johnson now sits on the TNR board. How long it will take the rest of the market to wake up remains to be seen. 
Nonetheless Klip is confident that this is a company that’s going places. 
“We are not dreamers,” he says. “We did it with the copper. We did it with the lithium. I would like to make it even bigger with the gold. I would like to do better, to keep a 25% stake.” 
It’s a vision for growth that makes a lot of sense. In tough markets, where capital is scarce, this kind of approach may well end up being a model that others choose to follow too."

Please always read legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blog. Always consult a qualified financial adviser before any investment decisions. 
Do Your Own Research.

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