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Patrick MontesDeOca
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Published Technical Analyst, Author, Commodity Trader, Systems Developer, Algorithmic Intelligence, Computer Modeling of Processes. I custom build Proprietary Artificial Intelligence for each individual client's portfolio needs. After more 30 years in the business, Patrick MontesDeOca has... More
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  • EXCLUSIVE! PATRICK MONTESDEOCA INTERVIEWS DAVID MORGAN ON 2012 SILVER FUNDAMENTALS!

    Hello, I am Patrick MontesDeOca with Capital Metals Trading Group, where we investigate market intelligence intelligently and we have a lot of fun doing it.

    For today's interview we packed up the crew and headed out to Palm Springs for the 2012 Cambridge House Economics Seminar. There we ran into one Mr. David Morgan who has always had some very informative and fascinating things to say that I think you'll find quite interesting.

    I have the considerable pleasure of having with us Mr. David Morgan, author economist and publisher of silver-investor.com and the Morgan Report.

    PM: David, thank you so much for taking the time out of your busy schedule to be with us here today.

    DM: Patrick, it is a pleasure especially in the sunshine.

    PM: David, with everything currently transpiring in the global financial markets and socio - politically for that matter, why isn't every investor or saber in precious metals?

    DM: I think it is a lack of education, also lack of knowledge, lack of monetary history and lack of getting the truth. I mean basically, an investment advisor any stockbroker or commodities broker or financial planner should really want to have a very basic understanding of what money is, and the subtitle of the Morgan Report is money metals and mining. Why money! Well, money transcends more people around the planet that are more interested in their money than anything else, the pervasive is pervasive in every way, it supersedes race, it supersedes nationality, supersedes economic class. The only people that are more concerned about their money than the poor are the rich. Everyone's concerned about money so it's some subject that everyone takes for granted and they don't understand the topic. Me, I am looked as somewhat of a monetary historian among other things. I mean silver is my expertise and I don't mind that title, but I am much bigger than that. Well, metals have proven as the money of choice. If you took a true free market, the people decide what money is. People say, well it could be anything. It could be sea shells or salt or it could be paper, could be electronic digit or it could be one that is logically true, then money can be anything, then money could be silver and gold if you apply that same logic, and of course again going to reinforce the point silver and gold is where the people have chosen like when they chose sea shells or beef or sand or whatever, it always had some problem with it.

    Whereas the classic Aristotelian logic behind the precious metal is that it is rare, it is tangible, meaning an ounce of gold is an ounce of gold no matter what form it is in as long as the purity is the same. It is recognizable and it preserves well, so the fundamental facts of gold and silver stood the time of five thousand years. People that know that realize why they should have some savings in real money. But you won't get that message from CNBC. You won't get that message from a certified financial planner; you don't hear that from your stockbroker. You might hear that from a coin dealer here and there, but you are not going to hear it so it is under education in my view.

    Patrick, I think it's that people are not responsible for themselves, especially today you got to have a trainer environment or… I will just go on that rant for a minute, what people are taught… are so ignorant that they can't do anything on their own. They cannot do their own exercise program, and they got to get a trainer, they can't figure out their own finances so they got to get a financial planner, they can't figure out what they should eat so they get their own chef. I am being a bit facetious but the idea is no… suck it up and learn yourself, be an adult get responsible and make your own financial decisions, it is your money!

    PM: David, until some trust order and confidence is restored into the markets you recommend holding physical product until such time if ever trust and confidence is restored, could you expound upon that a little more?

    DM: Patrick, if I can go back to just give you my mission statement which is to teach and empower people to understand the benefits of an honest financial system. Basically, the breakdown is that the whole system has become so corrupted from the top all the way through the bottom. That people don't know what to trust and a paper monetary system based on confidence, and that confidence is breaking down rapidly. We just go back and look at central banks; they are net buyers of gold now. Sovereign governments are buying gold so everyone understands the game is almost over and because they're doing it, I think the individual should know to wake up and to realize that it is probably the only asset class that is going to get them through these turbulent times financially. I would not recommend a hundred percent in metals but I think ten to twenty percent weighted is probably very important for anybody that again, gets the idea that these financial markets are in turmoil to put it politely.

    PM: David, these are unprecedented times from a financial and economic standpoint. Do you think it's out of the question for an unprecedented move in gold or silver to happen in the next few years?

    DM: My personal belief is that the move in gold and silver in terms of paper prices are going to go down in economic history books. I mean, never in the world have we had a system that didn't fail in paper-based or un-backed monetary system it has been tried again and again. China was the first one to use paper money. They used it eight times and it failed eight times. With a hundred percent failure rate every time it has been tried throughout monetary history it failed. So the idea that the United States dollar will not fail, and what will that mean?… well, what that will mean is that the precious metals will do the reciprocal of the opposite of what the dollar does and we are already seeing that. But I think the move ahead is going to be substantial. Just to get some fair value in today's paper price for silver you have to be $100 an ounce. And that is fair value, markets usually go undervalued to fair valued to overvalue. So in overvalued terms you could see silver go to hundreds of dollars an ounce.

    PM: Why do you think we are generally so underinvested in gold and silver relative to our Asian counterparts?

    DM: A lack of knowledge, lack of understanding, lack of education. I think that people turn over to money is too complicated of a subject. I need a financial planner, my stockbroker knows what is best for me. Gold and silver are volatile and there's no real promotion of gold and silver. Most of your mainstream financial products that you hear about on the mainstream press and financial channels don't emphasize gold at all but gold does get some press much more than silver does, but nonetheless it's not really given the truth and what I mean by that is that gold has been the best asset for the last decade. Gold has gone up every year for the last ten years in a row and that would be something that you think an honest financial system that CNBC talking heads would talk about "well, we looked over last year John and guess what?... gold was up again this year. In fact it's the tenth year, eleventh year in a row." But you don't hear that, you hear them at conferences like this but you don't hear them in mainstream because I think if the general public got the idea that gold is continuing to go up they might get on the internet and type in why is gold going up on to Google and start reading.

    PM: David, you're big on gold and silver mining stocks what's the prudent play with this type of investment at this time?

    DM: Well, I'll just back up a slight bit why I am big on the mining shares. I've always advocated a physical position before you move into that arena. I really like that arena because you still get leverage and one of my friends here at the conference Frank Barbera, I listened to his lecture this morning and he pointed out like Newmont, which is a big major mining gold mining concern has got a dividend policy now that every time that gold stabilizes a $100 dollar higher they increase their dividend rates. If we were to go for example to $2,500 dollars an ounce and stabilize there for a certain period of time the dividend rate would be like 6 or 7 percent yield. Now that is a nice healthy yield I think any financial planner worth his weight, and is really earning his money and has his heart in the right place for his clientele will be looking at something like that. I mean the biggest question I get…I get several, but one of the biggest ones I get is how do I earn income from gold? Well, Newmont is now going to pay you an income promoting gold. So that's just one, and I focus a little differently. Most newsletter writers are in a box and the box is that they really doubt any mining shares. I like to speculate like everybody else, but I really don't emphasize that part of the market. I look at the top tiers, the mid tiers and the growth tiers. I do a little bit of speculation and I do a lot of good research. We really try to find companies of merit before we put any suggestions out.

    PM: David, everything else being somewhat equal, what are things going to look like in two thousand and fourteen when the fed releases its lock on zero base interest rates. What's this going to do to the dollar, inflation and the recovery in general?

    DM: Well, the Fed sets the discount window and they set the rate that banks can borrow from each other, and the rate the bank can borrow from the fed… and put that money to work at a higher interest rate, and that is called the spread. Any time you get a positive spread you are going to re-liquify your balance sheet. The fed is doing that deliberately because the banking system failed. But it's not failed to the point where we cannot get to our money. Having said that, the market actually controls interest rates beyond the discount window the feds uses to set rates. So you can actually see an increase in interest rates by demand or demand and supply of the money system itself that could take place. So far it hasn't, but bond buyers are the fed and the fed is actually buying its own debt so to speak. The treasury and the United States government borrows all the money into existence, they are really not printing it directly. Then when the treasury wants to sell off or borrow more money the fed goes ahead and purchases some previously issued loans and creates actually cash into the system. Regardless, I think you are going to see a different situation… and of course most people reading this interview do not understand money or inflation. They don't get it. Well, I was only making $12,000 a year in 72. Now I make $82,000 a year. That is a lot bigger number, but those numbers are just for the idea, the idea that it might put you in a positive. I don't know but the point is you have a lot more dollars, your standard of living is only maintained because you put your wife to work and you got a second job, and maybe made a couple good investments. In other words, the person's power of the average American's life wealth status has actually gone down, not up during that time frame and this is something that's critical. That goes back to what I write about money, metals and mining. I keep pounding in my reports and in the public domain about the seriousness of this problem because people often say, well… no one told us or… I don't understand. And you are not going to see me very often on CNBC. I do get on Fox business actually fairly regularly, but nonetheless I don't run into a lot of people telling the general public, the investing public the truth about these matters.

    PM: David, can you comment on the benefits of buying gold or silver coins relative to gold or silver bullion in times of uncertainty such as these or is there a benefit?

    DM: I think there is. I think it is like owning one unit of a hundred ounce bar versus one hundred coins. In the coin form you got a hundred decisions you can make. You could sell one at a time, ten at a time twenty at a time and that kind of thing. Where as if it was in bar form you have to make one decision and it has to be correct. So, I really teach and have taught often at the beginning, if you are going to start in the physical arena you should really start with small coinage first, and if you're a high net worth individual bars are easier to stack and track but that's an individual case. Most people are better served by owning the coins.

    PM: David, with all the negative news every time you open a newspaper, turn on the television or go to the web, as a trader, is there contrarian sentiment to these scenarios that might want to shape your strategy going forward?

    DM: When I first started in the markets I really had a strong math background and still do. My first degree is in engineering before I went on to know the economic side of things… which is my passion. And I thought I could do really well in the stock market based on my ability in math. I mean, figuring out what the true price-to-earnings ratio is or what everything's forecast would be or what the margins are in a given company. And I found out pretty early that knowing the math of the company is a tool but only a tool. That's not really the best way to determine where the market is going to go. So, I had to regroup and think about it and what I determined was the psychology. It's the sentiment, you know and that's one part hard to get a handle on because of the sentiment indicators. I have a very good… actually key to keying into sentiment because of my service. When I have a lot of new subscribers, I know sentiment is very bullish and when no one is buying our reports at all, I know sentiment is very bearish. And that's a good indicator, when it's very bearish that is the time to buy and when it is very bullish it is a good time to sell. So, right it's not necessarily a good indicator. I would say, I don't agree totally that it's the lowest I've seen personally based on my work. And when I see, but again, I think there's a reason for the market to go up higher. This is a different sentiment although that's important and I don't want to contradict myself. Hear is something that we haven't talked about. What I've been able to determine over the last six months is that we're ready for the next leg up because the professional money managers are coming into the market. The last resource show I did for the Cambridge House was in January, and most retail people since are scared and sentiment is low. The hedge funds, the people that have real money to invest, not saying the individual doesn't. I'm talking about group money is ready and getting back in this market in smart significant ways. It is not only in the mining side but the coin side. I happen to be well connected as you know throughout the industry. Two to the larger wholesaler/retailers in the coin business, both have got massive campaigns going through Wall Street to buy physical product. So that is the kind of money that is coming to this market to move it higher. It is coming to this market and I believe that we're going see now is a good move in the metals this year.

    PM: Is there a chance that the US will revert to the gold standard to defend the dollars position as a world reserve currency?

    DM: I've been asked that question many times. If you think you want gold standard or not and the answer is one, I don't know. I would like to see I think, if it did happen it would be in a pseudo- gold standard of the partial backing not classical standard. I don't see ever a classic true gold coin standard being activated in the United States ever again. But again going back to my mission statement as long as there is integrity and honesty in a system, actually if the paper system had worked it never would have had to destroy itself. That's just human nature. People see an edge; they start to increase the money supply for a good cause a good package. Whatever the great mandate or cause is it gets corrupted over time. I would like to see some integrity installed back in the system. I think, you'll even be able to inspire partial gold backing, or maybe some commodity backing of some type. But time will tell, will see.

    PM: David, you are speaking at the summit here. Can you give our viewers a brief synopsis of what you might be speaking about?

    DM: Every year at least, I revamp myself because I can hear myself talk every day. I get tired of it… but seriously, I decided to try to make it a more general fun speech and I put myths in the silver market. And I put myths in the silver market, here's one myth, it goes back your coin question. One of the myths about silver market, get lots of questions from coin dealer's and maybe even a few more aware financial planners, although that's very rare but the thought that the actual wording as well that you also spoke, and I think everyone should own little. But I just did the data, because the idea is… everyone and a little, too very ambiguous terms. Who is everyone and how much is a little. On this recently made video I said okay, if everyone in the planet, talk about six to seven billion people on the planet. I cut that down… I accepted five percent of everyone just in the United States… three hundred ten million to twenty million, how much is a little… another ambiguous term. So I went ahead and took it to two ounces. I think we all agree that even thirty five dollars silver or seventy bucks is not a big event for most people. I thought about it, so I said what if you had three hundred fifty million people which is bit more than a true population of the US and everybody bought two ounces, that's roughly seven hundred million ounces silver which is the entire mining supply of the globe on an annual basis. So if everyone bought a little it will buy of the entire mining supply and none will be left over for industry at all. And it's only a little of a little, in other words it's only five percent of the population behind something like seventy bucks which the average income earner of the United States or even a welfare recipient can certainly afford seventy bucks a year. So the idea for everyone to own a little is impossible. That's the point I want bring home very strongly, it is precious for a reason. It is precious and is scarce and it is hard to get to and does take time and energy.

    PM: David Morgan silver - investor.com and the Morgan report. David, thank you so much for being with us here today. I really appreciate you taking the time from your busy schedule to join us. Hopefully we can do it again soon.

    Disclosure: I am long PSLV, AG, AGQ, SLW.

    Additional disclosure: PRECIOUS METALS PRODUCTS TRADING INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

    Mar 20 12:52 PM | Link | Comment!
  • THE EASY MONEY WAS MADE ON GOLD!
    By Patrick MontesDeOca

    Looking back at the 2011 highs in gold of 1923.70, it seems the easy money for the yellow metal was made last year on Sep 6.

    If we look at the chart above you can clearly see an ABC correction that bottomed on Dec 29, 2011 at 1535.50. One can also see a classic bullish pattern configuration that in technical terms is called a down flag formation within a potential head and shoulder bottom. These are very bullish patterns that identify any potential change taking place in the market cyclical trends, alerting us the secular underlying major long term bull market is intact and is getting ready to put into perspective and challenge the previous high made for this cycle top which took place in 2011 above $1900 per ounce.

    What are these technical bullish patterns telling us after last week's price action?

    On February 29, the market broke more than $100 dollars during the day session with a high of 1792.30 and a low of 1688 closing at 1711.30 down $64.70 from the previous week.

    This price action took place during a live televised broadcast by Ben Bernanke, after signalling the financial markets that based on the latest economic reports regarding unemployment and inflation there was no major need or concern by the Federal Reserve Bank to put QE3 back on on the table.

    The media had a blast with this information and precipitated what appears to be is a massive maneuver of central bank intervention causing the price of gold to drop more than $100 per ounce and silver close to $1.50 per ounce in one trading day. This has all the signs of another concerted effort by the paper shorts to manipulate the price of gold by causing massive panic liquidation of speculative stop loss orders precipitated by algorithmic trading triggered by the negative sentiment created by the media.

    All of this was taking place simultaneously as the ECB was injecting $712.4 Billion of liquidity to the euro-zone crisis, providing record low interest rate loans to member banks. This is the second infusion of liquidity or capital by the IMF and the US in the history of the financial markets according to James Sinclair, one of the world's leading gold experts in an interview with king World News.

    "If, in fact, what Bernanke attempted to tell the investment world today, that QE may not be necessary because of a modest improvement in the statistics of unemployment, if that was truly to be believed, then the stock market should have been off 800 points while gold was gold was down $100. Because the same thing moving the stock market is what's moving the metals and that is pure liquidity
    Click here to read the full interview...

    In a King World News Interview, Michael Pento, who founded Pento Portfolio Strategies comments "Global central banks have now entered the twilight zone of monetary policy. Never before in the history of planet earth have we seen such a synchronized counterfeiting scheme to monetize insolvent sovereign debt!...read more

    As I mentioned earlier, the easy money was made in gold, but let me tell you where lies yet a hidden treasure and the best trading opportunity in decades... and that is in the silver market!

    GOLD/SILVER RATIO

    According to Eric Sprott, of Sprott Asset Management and the PSLV Silver Trust ETF, the Gold to Silver ratio should narrow to about 16 from the current levels around 50. This puts the Silver market fair value at around $100 per ounce and according to Mr. Sprott...this will be the decade for silver!...read more

    Eric Sprott, had this to say about what took place the day of the plunge in gold and silver:

    "I can only imagine it's the same forces that for the last twelve years have been at work in the gold market, trying to keep the volatility very large on the downside. As you are aware, we hardly ever get days when you get an intraday $100 rise in gold. When we look back at what happened (on Wednesday) we saw huge sell orders in gold and silver." Eric Sprott continues:

    CONCLUSION

    If we take a look a little closer at the weekly silver chart we can see the bottom of this leg was made on Dec 29, 2011 at 26.14. Since this low was made a rally ensued that produced a whopping $11.34 per ounce gain or a 43% move in just a couple of months. It is fair to say the market is overbought at these levels and testing previous levels of support could be very healthy for the bulls long term. As it consolidates at these levels it should continue to offer a major buying opportunity. This unprecedented move appears to confirm we could be looking at the first leg of the yearly cycle for 2012.

    Using the high of 37.48 made on February 29th and the low made on Dec 30, 2011 of $26.14, we can identify the following Fibonacci support and retracement levels:

    1. 33.10
    2. 31.89
    3. 30.40

    STRATEGY

    Use any corrections into major support areas to accumulate the actual physical metals as the strong cash money or institutional physical buyers have stepped up their bids around the recent lows made last week.

    A weekly close above last week's highs of 37.48 would confirm the markets next upside target of 45.12 then 49.50, the 2011 highs made on April 29, 2011.

    Disclosure: I am long PSLV, AG, AGQ, SLW.

    Additional disclosure: PRECIOUS METALS PRODUCTS TRADING INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

    Tags: AGQ, SLW, GOLD, SILVER
    Mar 04 5:55 PM | Link | Comment!
  • SCAM ALERT! Www.goldinformationcenter.com A SCAM UNCOVERED!!

    By Patrick MontesDeOca

    For the last few weeks Mr. Nick Flamel, owner of www.goldinformationcenter.com, has been posting some pretty strong comments and making some very serious accusations criticizing my work, making slandering remarks and defaming my character, credibility and reputation for no reason at all except that he does not understand the nature of my work and he does it without any proof to substantiate any part of his rhetoric.

    I find this extremely unethical and decided to fight back and write this article to expose the real truth based on the evidence provided.

    Upon our own investigation we have found some startling evidence that shows clearly Mr. Flamel, as he calls himself is really Timothy L. Zurich of Atlantic Pacific Trading Group, a Commodity Trading Advisor registered with the National Futures Association (NFA), the same regulatory agency referenced in these false accusations against me, and posted on Mr. Flamel's website or is it Mr. Zurich?

    This may be a criminal violation of NFA rule and regulation and is subject to some very serious criminal, legal and regulatory consequences. After the fall of MF Global, I am sure the pressure is on the NFA to find some scapegoats and show an example of their jurisdiction, power and regulatory control over the commodities markets, or I should say the lack of control.

    Below is a link to the documentation that shows the evidence of how this scam works and it will speak for itself. I find it almost comical how these people's stupidity and blind arrogance deludes them into thinking they are smarter than the truth or above the law!

    You be the Judge!

    Jason Joseph Augustine and Timothy Lane Zurich of APTG (Atlantic Pacific Trading Group)

    He developed a fictitious character called Nick Flamel who runs a website called Gold Information Center which primarily posts inflammatory posts about other companies and individuals while placing ads soliciting for business and making indirect recommendations to their brokerage under false pretenses.

    Nick Flamel has his own Linkedin account and Facebook account with photos (Click Here). He is listed as the editor of the Gold Information center and replies to emails and solicits business. He tells these contacts that he can put them in touch with the right people! But the photo of Nick Flamel is the same as Timothy Lane Zurich, they are the same person. Nick Flamel even claims he went to Airborne school at Fort Benning GA!

    He has questionable companies advertising on his own site and seems to spend all his time writing derogatory posts about legitimate businesses and tries to link his website to direct traffic to him by attaching himself to big names tags in the financial industry and slamming them in nasty little reports, kind of bait and switch concept.

    When you request his material you get an email that tells you that they may no longer be working with that product. But they can re-direct your request to some other company based on what you need. It seems most of those referrals are going to companies that advertise on his site and may or may not pay a fee. Or he refers them to his commodity company which may be a violation, if not disclosed to the NFA.

    Based on his NFA profile disclosure it does not appear he complied with this required regulatory request. (Click Here)

    He posts a blog on Seeking Alpha as Nick Flamel, which is not regulated by the editing censors. Maybe they know his real identity. (Click Here)

    See his content on Facebook here: (Click Here)

    It is not private and the entire content on his wall is there for all to see. Including all the games he plays and inane comments he makes to his friends! and of course the profile photo of Mr. Flamel / Tim Zurick. He liked the photo so much he used it for all his social network profiles including Seeking Alpha!!

    Mr. Augustine is a family man, left the business to concentrate on his family, and write a book, see his Facebook page here: (Click Here)

    They work out of Las Vegas, a condo at: 52015 Torrey Pines # 1288,

    Las Vegas NV 89118

    702 810 4018

    The real Nicholas Flamel was a famous alchemist.

    Good Luck to you or whoever you are...and you out there BE CAREFUL! Sometimes things do not appear to be what they are. And like Mr. Scam Artist himself said, Do your due diligence before you do business with anyone advertising on the internet!

    BUYER'S BEWARE!

    (Atlantic-Pacific Trading Group Facebook Page)

    (Nick Flamel's Google Plus Account)

    (Message to Nick Flamel)

    (Message from Nick Flamel)

    (Another Message from Nick Flamel)

    (Another Message from Nick Flamel)

    (Truckers Report)

    Feb 25 3:32 AM | Link | Comment!
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