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This Is The Bottom On Prec Metals

The main global central bank has capitulated and now acknowledged that runaway debt can only be resolved with currency devaluation. Therefore this is the major turn and the miner stocks with some staying power to see them through the next 18 months or so are the buy. Paper contracts on PM are going to get dicey because there is simply insufficient physical to back the paper but can still be traded for short term gains. The ETF's can work for awhile but close them once they reach the peaks previously attained.

Now commodities as a whole will generally increase in nominal terms but I believe that lessened demand keeps overall pricing lower for longer. PM are not commodities but fiat money alternative.

September 2012 marked the beginning of this unfettered rush to devalue but I had thought that the US monetary leaders would restrain the process. Wrong. The reins got handed off first to BOJ in October 2014 and then to ECB in Jan 2015 and then to PBOC in May 2015. Only now, they all have the problem of running out of collateral to buy and will be left with only one option, widespread global currency devaluation.

Buy the ruble. It will appreciate against the basket of USD, Euro, yuan, yen and dollar look alikes. Stocks took a breather today because this is bad but guess what? No further free fall at this time and I rescind my call for the 1800's. Nope, just like the instability that followed the Aug 2012 ECB comments and the Sep 2012 fed comments, the market trended down until real billions a day showed up in Dec 2012.

We will lose some traction ahead of the October & Dec meetings but then is the time to buy. The real value will go down but the nominal will go up just like the Venezeluan market. How about that? We managed to convert the world, both developed and emerging, into a socialist crapshoot. Take the 65 trillion in sovereign and near sovereign debt (think 17 trillion Chinese shadow banking debt which is completely govt) and another 130 trillion in all other forms of corporate, re, and personal and a global GDP of maybe 55 trillion.

Now how much of that debt can be repaid annually out of the GDP? Five percent? Ten percent? Simple there is 200 trillion and it would 40 years to repay without another dime or centavo added. Nope. Play the PM paper game, bank some gains and invest in user RE in heavily populated areas where people live, work, and play. Lower commodity prices right now will help pay at a lower cost the capital investment. No debt. Use cash resource.