Friday, July 31, 2015

Here's What the Next Gold Bull Market Will Look Like

By Jeff Clark


We measured every bull cycle of gold stocks and found there have been eight distinct upcycles since 1975.

We also discovered something exciting: Only one was less than a double. (A second was 99.9%.)
Even more enticing is that the biggest one—a 601.5% advance in the early 2000s—occurred just after a prolonged bear market.

And our current bear market is longer than that one.
To get a sense for the potential upside, we applied the percentage gain from each of those upcycles to our recommended BIG GOLD picks.

We can’t show you our entire portfolio out of fairness to paying subscribers. But look what those gains would mean to GDX, the Gold Miners ETF (based on the June 1 price).

Gold ETF Current
Share
Price
1976–
1980
1982–
1983
1986–
1987
1989–
1990
1993–
1994
2000–
2003
2005–
2008
2008–
2011
554.2% 205.1% 141.8% 51.5% 99.9% 601.5% 206.4% 272.5%
GDX $19.49 $127.51 $59.45 $47.14 $29.53 $38.96 $136.72 $59.72 $72.60

Keep two things in mind about this table:
  1. The percentage gain from each past bull market is calculated using an index. The stronger companies will perform better than a static ETF.
  1. It’s not unreasonable to think that the gains in the next bull market will be similar to some of the higher returns listed above. That’s because stocks will be rising from the depths of one of the more severe bear markets.
Here’s what the price for popular royalty company Royal Gold would look like if it matched past bull markets.

Royalty
Company
Current
Share
Price
1976–
1980
1982–
1983
1986–
1987
1989–
1990
1993–
1994
2000–
2003
2005–
2008
2008–
2011
554.2% 205.1% 141.8% 51.5% 99.9% 601.5% 206.4% 272.5%
Royal
Gold
$64.23 $420.21 $195.93 $155.34 $97.30 $128.38 $450.56 $196.79 $239.26

You might think royalty stocks won’t show similar gains going forward. It’s true they’ve already performed well. However, it’s more likely they’ll be wildly popular than anything else. That’s partly because there are only a few of them in this industry.

Now take a look at the prices our top silver pick would hit.

Silver
Producer
Current
Share
Price
1976–
1980
1982–
1983
1986–
1987
1989–
1990
1993–
1994
2000–
2003
2005–
2008
2008–
2011
554.2% 205.1% 141.8% 51.5% 99.9% 601.5% 206.4% 272.5%
Top
BIG GOLD
Silver Pick
$3.71 $24.27 $11.32 $8.97 $5.62 $7.42 $26.02 $11.37 $13.82

If silver rises along with gold in the next bull market—something we think is extremely likely—this small niche market will absolutely soar.

No other sector is as depressed as the mining sector. A return to anything close to some of the stronger past bull markets will hand us tremendous gains.

The June issue of BIG GOLD focuses on the top silver pick listed in the table. I’m convinced it will at least triple from current levels in the next precious metals bull market.

We have two very specific reasons why it will do so. And these two factors are unmatched by almost any other mid-tier or major producer.

Get our analysis along with the name of this stock in the just-released BIG GOLD.
We also include a special offer on bullion that has numismatic potential. These coins sell at bullion prices, yet will likely return much greater profit than standard bullion. And they come at discounted prices you won’t find elsewhere.

It’s “The Two Best Silver Plays to Buy Today”—a highly actionable issue that tells you exactly what to buy and why. Get it now.

Saturday, July 25, 2015

The Police State and Property Taxes… What You Can Do About It

By Nick Giambruno


A police officer pulled over Floyd Dent for a routine traffic stop.
A violent altercation followed.

The officer dragged Dent out of his car, appeared to put him in a chokehold, and punched him in the head. He then used his stun gun.

A disturbing but hardly unique encounter. These kinds of things happen all the time. It seems like there’s a new police abuse video uploaded to YouTube every day. In many cases, these incidents turn deadly. Dent is lucky the officer didn’t kill him on the spot.

But what’s really remarkable about this incident is that there was any kind of accountability at all. In many cases, the government and the fawning mainstream media sweep cases of police abuse under the rug. The State is extremely reluctant to hold its enforcers to account. But sometimes it’s forced to when overwhelming video evidence comes to light that sparks public outrage.

Once a video of the Dent incident became public, the officer lost his job. He’s now on trial, facing charges of mistreatment of a prisoner.

Dent also decided to sue the city of Inkster, Michigan, where the incident occurred. Surprisingly, he won. The city of Inkster settled for $1.4 million.

The problem is, Inkster doesn’t just have an extra $1.4 million laying around. So what did the local politicians do? They decided to squeeze a little extra juice out of the taxpayers, of course. They did this by raising property taxes.

A local media source estimates the new property tax will amount to about $179 on a home valued at about $55,400.

Now that doesn’t sound like a lot. But consider that the median income in Inkster is just $26,500 and that 40% of its people live below the poverty line. They simply don’t have an extra $179 to pay for a police abuse lawsuit which had nothing to do with them. The case has outraged people there, and rightly so.

There are a lot of things that are outrageous about this story. But there’s one that I find most instructive. And that’s the very concept of property tax. It’s an insidious perversion of property rights. How can you think you really own something that the government forces you to pay an insatiable and ever-increasing amount of tax on?

If you ask me, it’s impossible to truly own something that has a property tax attached to it. You would possess such an item, but you wouldn’t own it. It’s an important distinction. Stop paying your property taxes to find out who really owns your home. In actuality, you’re merely renting the home you thought you owned from the government.

Whenever politicians want to steal more money, they can simply increase property taxes and hope nobody notices. It’s like changing the dial on a thermostat. The Floyd Dent case showed this.
Turning to property taxes to quench a thirst for money is not unique to the politicians in Inkster, Michigan. It’s a universal feature built into the DNA of almost any politician in the world. Consider the bankrupt government of Greece. Here’s an excerpt from an article in The Guardian:

The joke now doing the rounds is: if you want to punish your child, you threaten to pass on property to them… Greeks traditionally have always regarded property as a secure investment. But now it has become a huge millstone, given that the tax burden has increased sevenfold in the past two years alone.

The sad reality is that there are few countries in the world that do not have a property tax. Fewer than 20 to be exact. We cover them in detail in Going Global. The only way to skip the annual property tax harvest is to own real estate in these countries.

It’s not just a matter of minimizing or eliminating property taxes, though. Yes, that’s extremely important. But foreign real estate offers a number of other tremendous benefits, too.
It’s a hard asset outside the immediate reach of your government. They cannot confiscate it without a literal act of war.

It opens the door for you to obtain an offshore bank account, residency, and maybe even citizenship, in another country.

It diversifies your portfolio and can bring income streams in a foreign currency if you rent it out.
These are but a few of the huge benefits foreign real estate can give you.

For a more detailed discussion, you may wish to check out Going Global 2015.
The article was originally published at internationalman.com.

Tuesday, July 21, 2015

The Economic Alamo

By Jeff Thomas

The world's tax havens are the economic Alamo—the last holdout against world economic domination.... 

Read more.

Saturday, July 18, 2015

Capital Controls and a Bank Holiday in Greece… Here’s How You Can Profit

By Nick Giambruno


For the unprepared, it happens like a mugging…
When you hear a central banker or politician deny that something is going to happen to bank depositors, you can almost be certain that it will happen. And probably soon.

Coming from a government official, the real meaning of “No, of course not” is “Could be tomorrow.”
There’s a reason for the dishonesty. The government needs to take the public by surprise. Otherwise they won’t get the results they want from capital controls or a bank holiday.

The term bank holiday is a politician’s euphemism. When one happens, you won’t be celebrating. You won’t be able to access your bank account, and you’ll be worried.
How will you get by, and how long will the lockout last? And when it ends, will all your money still be there? Will any of it remain?

Calling the experience a bank holiday is like calling a street mugging a surprise party.
Once the banks are closed - or on “holiday,” as the government puts it - the politicians are free to help themselves to as much of the customer deposits (including yours) as they want. It’s like an all-you-can-steal buffet.

A bank holiday usually dovetails with capital controls, which are restrictions on the free flow of money out of the country. Capital controls make it hard for the country’s remaining wealth to dodge a future mugging.

Bank holidays and capital controls are all about the government maximizing the amount of money available for them to confiscate during a crisis. Pen up the sheep, and they’re easier to shear.
It’s a common pattern… 1) country in financial trouble, 2) government denials, 3) surprise bank holiday, 4) wealth confiscation, and 5) capital controls.

It’s a pattern we’ve seen repeated in many countries in economic crisis.
We saw it in Cyprus during their banking crisis of 2013. The trap slammed shut without warning on an otherwise ordinary Saturday morning. The government declared a surprise bank holiday. Capital controls and a bank deposit confiscation followed. It occurred despite repeated promises from the highest Cypriot politicians that bank deposits would be safe.

And now we are seeing the same pattern in Greece.
For the past month, Greece’s government has been denying that it intends to impose capital controls. Yesterday, Sunday morning, the Greek Finance Ministry repeated the denial yet again. Then on the same day - a few hours later - the Greek government declared a weeklong bank holiday. And they would impose capital controls after all.

But don’t worry. The Greek Prime Minister promised that bank deposits would be "completely safe.”
Rather than being “completely safe,” they are far more likely to be harvested by the Greek government, which is free to do as so many troubled governments have done… take the money and run.

Given Greece’s years of chronic financial weakness, none of this should come as a surprise.
There was ample time for any Greek citizen to protect himself from what the government is now doing. But now, with the bank holiday in place, it’s too late.

Moving money into something that Greek politicians can’t steal with a couple taps on a keyboard - like a Greek bank account - would have bought a large measure of protection.
A bank account in another EU country like Austria, a piece of real estate in South America, some physical gold in Singapore or a brokerage account in Hong Kong would have been just what the doctor ordered.

Most people understand that it’s foolish to keep all their eggs in one basket. Yet they fail to go far enough in applying the principle. Diversification isn’t just about investing in multiple stocks or in multiple asset classes. Real diversification - the kind that keeps you safe - means holding assets in multiple countries, so that you’re not overexposed to the economic and political risks that are present in every country.
The problem is, despite having options available to them, many Greeks had a “this can’t happen here” mentality. So they did nothing to prepare. The reality is, what happened in Greece can happen in any country, as it has happened throughout history.

But could it really happen in the US? According to Judge Andrew Napolitano, the troubling answer is YES. The judge is a legal expert. He knows all about bank holidays, capital controls, and other shenanigans politicians pull. The judge has said, “People who have more than $100,000 in the bank are targets for any government that’s looking for money to shore up its own inability to manage its finances.”

The whole ordeal in Greece is yet another example of why international diversification is so important. It’s a prudent strategy because it frees you from absolute dependence on any one country. Achieve that independence, and events or policies where you live can never dominate your life.
Wealthy families have been doing it for centuries. Today, with modern communications, international diversification is within everyone’s reach.

International Man’s mission is to help you protect your personal freedom and make the most of financial opportunity around the world. Global diversification is at the heart of it. Discovering the best investment opportunities around the world is another. And, ironically, the best opportunities often show up after a government has done its worst to a country. For example, in places like… Greece.

Investor sentiment in Greece is nearing the point of maximum pessimism… the point at which almost nobody wants to buy. Prices of Greek stocks have already crashed headfirst into the pavement, so we may be getting close to the best time to buy. As Baron Rothschild advised: Buy when the blood is in the streets.
That’s what crisis investing is all about, and it’s enormously profitable.
Seeking out home runs in crisis markets is exactly what Doug Casey and I do in each monthly issue of Crisis Speculator.

Back in 2013 there was another crisis in a Mediterranean country… Cyprus.
Doug and I put our boots to the ground in Cyprus to search the rubble for investment bargains that would be too good to resist. And we found them.

Despite all the ugly headlines, sound, productive, and well-run Cypriot businesses continued to produce earnings and pay dividends. Anyone with a little money and a cool head could have bought their stocks on the ultra-cheap.

One of the Cyprus companies we recommended has more than tripled as of this writing. Another has more than doubled. Two others have come close to a double. Our readers have loved the experience.
We expect that even bigger bargains are emerging nearby, in Greece.

The financial crisis in Greece is not going to destroy the solid companies operating there. But it is going to make their stocks extremely cheap. And that could mean huge profits for you.

For full coverage of this rich profit opportunity, be sure to check out Crisis Speculator by clicking here.
The article was originally published at internationalman.com.

Wednesday, July 15, 2015

In GOLD We TRUST


The gold price has stabilized in 2014, after its collapse in April and June of 2013. Investors' interest in the yellow metal is los. Hence, market sentiment vis-à-vis gold is standing at a multi-year low, maybe even a multi-decade low. History learns that extreme underperformance usually lasts for one year. If history is any guide, than there should be a recovery in the gold price in the foreseeable future. Even with the severe underperformance since 2013, gold is up approximately 9% per year since it started to trade freely in 1971. As seen on the next chart, depending on the currency in which it trades, the average yearly performance is excellent for investors with a long term horizon. In other words, gold does what is always has done throughout history: preserve value and purchasing power.

Preservation of wealth is the primary reason why one should hold gold nowadays. Monetary policies of central banks are extremely unusual. The U.S. Fed could be talking about “normalization,” but with 7 years at zero percent interest rates we are nowhere near “normal” conditions. The most extreme monetary conditions, today, are being seen in Japan. It is really no coincidence that the gold price in Yen is near its all time highs. The gold price in Yen is simply reacting on the extreme expansion of the monetary base by the Japanese central bank. As the next chart shows, the balance sheet of the Bank Of Japan (BOJ) is approximately 65% of the country's GDP. In other words, the assets that the BOJ is holding nears 2/3 of the total economic output of the country. When compared to other regions, it is clear that is a monstrous amount. It seems that Japan is near its endgame.

A correction in the stock market is certainly in the cards. Why? Because traditionally the gold/silver ratio is mostly negatively correlated with the S&P 500. In other words, as the gold/silver ratio goes down which means there is a disinflationary environment, stocks come down as well. Over the last 25 years, that correlation has held very well, but started to diverge strongly 3 years ago.


Friday, July 10, 2015

John Williams- Panic Decline and Selling of the US Dollar Will Take it to Historic Lows and More!



What does renowned economist John Williams make of the strength of the dollar in the last year? He thinks the markets were anticipating the Fed raising interest rates because of the so-called “recovery.” Of course, the economy is not improving, and Williams thinks when the Fed tries to pump the economy back up, the dollar will dive.

Williams explains, “I was looking for a hyperinflation in 2014. What I did not expect and what I have missed is the big rally in the dollar. . . . The economy was never improving. Now, it’s not only not improving, but it is begging to turn down again. That’s the importance of quarter to quarter contraction. When you get that, you get official recognition that the economy is falling, and it is not recovering. So, as the expectations wane on the Fed tightening, you will start to see dollar selling. I think you are going to see a panic decline in the dollar at some point, massive selling of the dollar, not only that, it will take it down to levels of a year ago, but to historic lows. As that happens, you will see a tremendous spike in oil prices which will start moving the consumer price index pick up. . . . You have an overhang in excesses of $12 trillion outside the United States.

A goodly portion of that will be repatriated to the United States into the US markets. People will be dumping the dollar to get out of the dollar and the Fed is going to have to be monetizing all sorts of things. . . . What’s out of whack right now against reality is the strength of the dollar. We don’t have a booming economy. We don’t have a Fed that is going to happily raise rates, although they would like to. As the realization sinks in, the exchange rate of the dollar will start falling. Then, you will actually have a panic, and once that has happened, you will see a sharp upturn in headline inflation, and that will evolve eventually into hyperinflation. . . . A dollar panic is reflective of the problems here.”