Archive for Opinions

Miner Accelerates Utah Vanadium Production, Begins Shipments

The Energy Report

Source: Streetwise Reports   02/14/2019

This company is now producing the metal at increasingly higher rates and purities.

Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.American) is now producing vanadium at commercial levels and is shipping it for sale to customers, the company announced in a news release.

Specifically, the company is producing about 175,000–200,000 pounds of vanadium pentoxide (V2O5) a month. With ramp-up continuing, Energy Fuels expects to reach full production by the end of Q1/19 of 200,000–225,000 pounds of high-purity V2O5.

During January, Energy Fuels continued increasing production, attained greater purity levels of the product and finished tinkering with its process, the company reported.

As for vanadium shipments, initial amounts are “being allocated for conversion to ferrovanadium that will be sold into spot metallurgical markets,” the release explained. The company expects to also sell finished vanadium to diverse customers in various industries that require a higher-purity product. Those end users are in the metallurgy, aerospace, chemical and battery spaces, among others.

Energy Fuels reported the current midpoint spot price of V2O5 in Europe is $17.25 per pound, up 11% from year-end 2018, when it was $15.50 per pound, according to Metal Bulletin.

“We are extremely pleased with Energy Fuels’ vanadium production to date. We believe our methodical ramp-up is paying dividends, as we are now producing an excellent vanadium product at increasingly higher rates and purities. The Company has discussed vanadium sales with potential buyers for the past several months, and now that we are producing commercial quantities of finished product, we are beginning to make shipments that will initially be converted and sold as ferrovanadium,” Mark S. Chalmers, president and CEO of Energy Fuels, commented.

“We also soon expect to sell into other industries that demand higher-purity product,” Chalmers stated in the release. “In addition, we are very encouraged to see vanadium prices remain strong, and at levels that we believe will support attractive margins. We expect to continue the planned ramp-up, and we will provide markets with further updates on our vanadium production at the Mill, as well as on our vanadium test mining program at the La Sal Complex, in the coming months.”

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Energy Fuels. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: EFR:TSX; UUUU:NYSE.American,
)

Explorer Drills Thickest Intercepts to Date at Carlin Trend Deposit

By The Gold Report

Source: Streetwise Reports   02/14/2019

The gold mineralization at the Nevada deposit remains open in all directions.

Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) reported in a news release phase 2 results from 18 reverse circulation (RC) drill holes and one core hole from the Dixie deposit and the Arcturus target to the west, both at the Railroad-Pinion project in Nevada.

“Two RC holes at Dixie intersected thick, vertically continuous zones of gold mineralization hosted in pervasively altered and variably oxidized Pennsylvanian-Permian debris flow conglomerate and calcarenite, the same host section as the Dark Star deposit approximately 4 kilometers (4 km) to the north,” the release described.

As for highlight holes, DX18-19 demonstrated 118.9 meters (118.9m) of 0.61 grams per ton (0.61 g/t) gold (Au), including two higher-grade zones of 10.7m of 1.49 g/t and 15.2m of 1.32 g/t Au. DX18-26 intersected 137.2m of 0.53 g/t Au including 9.1m of 1.26 g/t Au, and mineralization there remains open along strike. Assays from these two holes represent the thickest intercepts drilled at Dixie so far.

“Dixie is beginning to take shape as another valuable discovery by Gold Standard,” CEO and Director Jonathan Awde commented in the release. “Although more work needs to be done, the Dixie deposit is growing in size and grades appear to be improving to the north. Historically, the more we learn about deposits like Dixie, the more we find and the better they get. We also expect to make additional new discoveries in this year’s program.”

As for Arcturus, Gold Standard drilled an initial five holes situated about 750m west of Dixie. None of them showed any significant findings.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Gold Standard Ventures. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: GSV:TSX.V; GSV:NYSE,
)

‘Initial Recovery Tests Encouraging’ from Metals Project in Bolivia

By The Gold Report

Source: Streetwise Reports   02/14/2019

A ROTH Capital Partners report presented and commented on the Canadian company’s early-stage metallurgical findings.

In a Feb. 7 research note, Joe Reagor, a ROTH Capital Partners analyst, reported that New Pacific Metals Corp.’s (NUAG:TSX.V; NUPMF:OTCQX) initial metallurgical test results from its flagship Silver Sand project in Bolivia are “positive.”

Specifically, Reagor indicated, recovery rates came in as high as 96.7% for sulphide material and 97.0% for transition material. The material was shown to be nonrefractory. “The grind requirements imply capital and operating costs on the lower end of the potential spectrum,” he added.

Reagor pointed out that New Pacific Metals should be commended for conducting early-stage metallurgical testing, which helps derisk a project. The fact it did so when so many exploration companies opt not to also is “encouraging.”

Looking forward, Reagor expects release of the subsequent set of drill results will be the next major catalyst for New Pacific Metals. Those data could help better determine Silver Sand’s potential. Results from 97 holes from its 2018 drill program are pending.

ROTH has a Buy rating and a CA$3 per share price target on New Pacific Metals, whose stock is currently trading at around CA$1.97 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of New Pacific Metals, a company mentioned in this article.

Disclosures from ROTH Capital Partners, New Pacific Metals Corp., Flash Note, February 7, 2019

Regulation Analyst Certification (“Reg AC”): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

An Associated Person owns debt or equity securities of New Pacific Metals Corp.

Shares of New Pacific Metals Corp. and Silvercorp Metals Inc. may be subject to the Securities and Exchange Commission’s Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.

ROTH makes a market in shares of Silvercorp Metals Inc. and as such, buys and sells from customers on a principal basis.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.

( Companies Mentioned: NUAG:TSX.V; NUPMF:OTCQX,
)

Here We Go – Get ready for the Breakout Pattern Setup

By TheTechnicalTraders.com

We are writing this post today with a few forward-looking expectations while attempting to warn traders that some extended rotation is likely to enter the markets over the next 30+ days.  If you’ve been following our research, you’ll know that we’ve been calling these move months in advance of other researchers and analysts.  Our September 17, 2018 research post highlighting our Adaptive Dynamic Learning predictive modeling system suggested the US stock markets were poised for a massive price rotation followed by a very unique price setup that we are experiencing now.

Currently, the YM (Dow Futures Contracts) are leading the pack on a dramatic upside breakout move.  This is likely a result of the US government spending bill that is recently working its way towards approval and the fact that this new spending bill clears the way for at least 8+ months of uninterrupted market optimism (or at least we hope).  This 300+ point upside move clearly breaks price highs and puts the US stock market, at least the Dow/Blue-Chips, back into “new high trending mode”.  As many of you are likely aware, our Fibonacci price study teaches us that price must ALWAYS seek to establish new price highs or new price lows AT ALL TIMES.  Thus, these new price highs are a very strong indication that the upside trend is dominant and should continue for a while.

Additionally, we want to highlight what we believe will be a similar price pattern to 2015/2016 in the US markets – a multiple Price Wedge formation that could ultimately set up another price leg (which we believe will be higher, to the upside, at this time).

In the next article “PART II” pay close attention to the charts and images as we are attempting to clearly illustrate how and why price rotation is about to hit the US markets and why you need to be prepared for this move.

We continue to read that large amounts of capital are sitting on the sidelines or have been pulled from the markets over the past 12+ months.  We understand this as the rotation in early 2018 frightened many investors and the continued sideways price action, global market concerns and geopolitical issues have caused international investors to want to protect their investments from risk – thus they move their capital into cash.  We get it.  But we also believe the next breakout in the US markets will be a great opportunity for skilled traders to identify and prepare for an incredible profit potential no matter which way the market breaks up or down because technical analysis allows us to closely follow the direction of the market.

The amount of capital that is sitting on OUTSIDE the markets, currently, represents a massive amount of resources that could re-enter the markets when traders/investors decide the timing is right.  We’ve termed this a “Capital Shift”.

In simple terms, it reflects capital/cash moving from one market to another or from actively invested to cash, then back to actively invested.  Our belief is that capital operates in a manner to always protect itself from risk while attempting to identify suitable returns.  The best environment for capital is always a relatively safe investment with protective values and a high probability of decent returns.  Therefore, this massive amount of capital not being deployed in the global markets will, at some time, re-enter the markets and will likely increase pricing valuations.

How and when will this capital re-enter the markets?  What will price activity look like and how will we know when the timing is right for our own strategic deployment of our trading capital?  Continue reading to learn why we believe we are only 30~45 days away from an incredible trading setup.  You won’t want to miss this one.

Please take a minute to visit TheTechnicalTraders.com to learn how we can help you find and execute better trade in 2019 and stay ahead of these market moves. We are confident that you will find our Daily Video, Detailed Market Research, Proprietary Research Tools and Detailed Trading Signals will help you make 2019 an incredibly successful year.

Chris Vermeulen
Technical Traders Ltd.

 

 

Oil & Gas Company Reveals 2019 Drill Plans for Southeast Asia Projects

The Energy Report

Source: Streetwise Reports   02/14/2019

The first of the three scheduled programs launched on Feb. 11, 2019.

Pan Orient Energy Corp. (POE:TSX.V) announced in a news release the 2019 schedule for drilling at its assets in Thailand and Indonesia.

These programs “will be evaluating the largest prospective resource base that the company has ever targeted in any given year, and they will also be one of the most balanced from an overall risk perspective,” President and CEO Jeff Chisholm said in the release.

Now underway is a drill program consisting of two appraisal wells in the L53-DD oil field in Thailand. The first well, L53-DD4, which was spud on Feb. 11, 2019, is targeting an undrilled fault compartment located to the north of the field’s Proven and Probable reserve area.

In mid- to late Q2/19, drilling of the Anggun-1X exploration well in Indonesia will commence. Construction of the access road is a bit behind schedule due to rain. Rather than being 43% complete, which was estimated for this time, it is about 36% finished. Construction is expected to wrap up in April, with the start of drilling following in May to June 2019.

Subsequently, in late Q3/19 to early Q4/19, a three- to four-well exploration drill program in Thailand will start. Three of the targeted prospects are “close in” to the L53-DD oil discovery, the release noted.

The company will fund these drill programs with revenue from its Thailand production and its treasury that totaled CA$39.6 million as of Sept. 30, 2018.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Pan Orient Energy. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Pan Orient Energy Corp., a company mentioned in this article.

( Companies Mentioned: POE:TSX.V,
)

COT Report: Speculators boosted WTI Crude bets, cut SP500-Mini, Gold & Silver bets

By CountingPips.comReceive our weekly COT Reports by Email

The CFTC put out their latest Commitment of Traders data release on Friday for data that is updated through January 22nd. The releases were delayed for over a month due to the government shutdown and are being released twice a week to catch up to current data.

  • US Dollar Index Speculators trimmed their net positions. Mexican Peso bets gained
  • WTI Crude Oil Speculators sharply boosted their bullish bets in January
  • 10-Year Note Speculators cut bearish bets for 5th time in 6 weeks
  • Gold Speculators cooled off their bullish bets for 3rd week
  • Bitcoin Speculators trimmed their bearish bets for 2nd week in January
  • S&P500 Mini Speculators retreated into a net bearish position
  • Copper Speculators cut bearish positions for 1st time in 9 weeks
  • Silver Speculators lowered their bullish bets for 2nd week in January

US Dollar Index Speculators trimmed their net positions. Mexican Peso bets gained

Large currency speculators cut back on their net positions in the US Dollar Index futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday. See full article.


WTI Crude Oil Speculators sharply boosted their bullish bets in January

The large speculator contracts of WTI crude futures totaled a net position of 334,859 contracts, according to the latest data this week. This was a change of 27,934 contracts from the previous weekly total. See full article.


10-Year Note Speculators cut bearish bets for 5th time in 6 weeks

Large speculator contracts of the 10-Year Bond futures totaled a net position of -125,752 contracts, according to the latest data this week. This was a change of 74,432 contracts from the previous weekly total. See full article.


Gold Speculators cooled off their bullish bets for 3rd week

Large precious metals speculator contracts of the Gold futures totaled a net position of 74,504 contracts, according to the latest data this week. This was a change of -13,409 contracts from the previous weekly total. See full article.


Bitcoin Speculators trimmed their bearish bets for 2nd week in January

Cryptocurrency speculator contracts of the Bitcoin futures totaled a net position of -1,010 contracts, according to the latest data this week. This was a change of 194 contracts from the previous weekly total. See full article.


S&P500 Mini Speculators retreated into a net bearish position in January

Large stock market speculator contracts of the S&P500 mini futures totaled a net position of -4,581 contracts, according to the latest data this week. This was a change of -68,783 contracts from the previous weekly total. See full article.


Silver Speculators lowered their bullish bets for 2nd week in January

Large precious metals speculator contracts of the silver futures totaled a net position of 48,156 contracts, according to the latest data this week. This was a change of -4,019 contracts from the previous weekly total. See full article.


Copper Speculators cut bearish positions for 1st time in 9 weeks

Metals speculator contracts of the copper futures totaled a net position of -24,525 contracts, according to the latest data this week. This was a change of 3,067 contracts from the previous weekly total. See full article.


Article By CountingPips.comReceive our weekly COT Reports by Email

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

Fed Chairman Deceives; Precious Metals Mine Supply Threatened

By Money Metals News Service

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up Chris Martenson of PeakProsperity.com and famous author of The Crash Crouse and his latest book Prosper! joins me to dissect what’s behind the Yellow Vest movement in France and why the mainstream media and those in power simply don’t want you to know what’s really going on there. Chris also tells us which precious metal he most favors right now. Don’t miss another wonderful interview with the great Chris Martenson, coming up after this week’s market update.

In a recent speech, Federal Reserve chairman Jerome Powell told some real whoppers. We’ll address his misrepresentations head on, in just a bit.

But first, let’s review this week’s market action. Despite drama in Washington over averting a government shutdown and prompting President Donald Trump to declare a national emergency on the border, nothing too dramatic is happening in the gold market. 

Prices are trading in a tight range, coming in essentially unchanged from last Friday’s close. Gold currently trades at $1,316 per ounce.

Turning to the white metals, silver is posting a 1.3% decline on the week to trade at $15.66 an ounce.  Platinum is off 1.0% to check in at $797.  And finally, palladium pushed up to a new record high close on Thursday and is continuing higher this morning… posting a weekly gain so far of 1.8% to trade at $1,436 per ounce as of this Friday morning recording.

Mining industry analysts know that palladium is in a chronic supply deficit that could last for years. The world’s biggest supplier of palladium is South Africa. That country is also a major producer of platinum and gold.

The South African mining industry has suffered a dramatic contraction over the past year.  Statistics South Africa reported on Thursday that gold produced by South African mines has declined for 15 straight months.  In December, gold output plummeted a whopping 31% from 2017.

But mining companies aren’t investing in new projects in South Africa in part due to increasing hostility from the government. The ruling African National Congress has vowed to expropriate white-owned farms without compensation, a move that puts all property rights there in potential jeopardy. Militant Marxist insurgents are vowing to seize businesses and vacation homes.  

Deteriorating infrastructure, rolling power blackouts, and labor disputes are also contributing to the shuttering of mines.

Unless the South African government changes course from its socialist path and restores investor confidence, the mining industry there will likely continue its decline.

Elsewhere in the world, the mining industry is struggling to find and develop economical new reserves.  Global gold production could actually go into decline on a worldwide basis this year. 

In other words, we may have seen peak gold – a peak in the total number of ounces pulled out of the ground by miners over the course of a year.  At least for the foreseeable future, it appears the mining industry lacks the capacity to ramp up production in order to meet rising global demand.

One of the leading proponents of the peak gold thesis is Ian Telfer, chairman of Goldcorp – now part of Newmont Mining.  Telfer called for peak gold in 2018 and expects global gold output to go down from here.  If he’s right, it will be hugely bullish development for prices.

Well now, as promised, we’re going to expose some of the lies and deceptions of Jerome Powell.  Here is the Fed chairman in his own words, speaking last week in front of a group of educators.

Jerome Powell:  If I could say one overarching thing that is really my job, and all of our jobs here, it is to try to earn and deserve the trust of the American people for our institution, that we’re here working on their behalf in a non-political way to support the economy and use our tools to achieve maximum employment and stable prices. That’s really the essence of this job and that involves transparency, it involves doing our job as best we can, explaining ourselves clearly. It’s a world where surveys show that all over the world, people are losing faith in large institutions, so we’re paddling against the current in trying to sustain public faith in the Fed.

No doubt, Powell is genuinely concerned about maintaining “public faith in the Fed.” But he doesn’t want the public to know the truth about the Fed. 

First of all, the Fed doesn’t work on behalf of the public per se. It works for the member banks that formally own it and that depend directly on it.

Next, contrary to Powell’s claims, the Fed is quite political. It derives its legitimacy from an original act of Congress. Federal Reserve Board policymakers are appointed through a political process, then subjected to political pressure over their interest rate decisions.  Powell can claim he isn’t influenced by political pressure, but he certainly aims to exert the Fed’s influence in our political system.

The Fed actively lobbies Congress to protect its special privileges and thwart legislation it opposes such as the Federal Reserve Transparency Act.  It’s quite something to listen to Powell claim the Fed practices “transparency” when in reality it seeks to safeguard its secrecy. 

Powell talked about using his “tools to achieve maximum employment and stable prices” – as if American workers have the Fed’s magic powers to thank for their jobs rather than job creators.

Regarding “stable prices,” Powell has a strange definition of “stable.”  The U.S. dollar has lost close to 98% of its purchasing power since the Federal Reserve was established in 1913.  Moreover, it is official Fed policy to promote annual currency depreciation and prevent the dollar from maintaining a constant, stable value.

Finally, when Powell said part of the Fed’s job was “explaining ourselves clearly” – well, that was clearly untrue.  Former Fed chairman Alan Greenspan has admitted that “Fedspeak” entails deliberate obfuscation.

“Fedspeak” is meant to give the public the impression that Fed officials have special knowledge and wisdom.  In reality, they are just following the same economic indicators as everyone else and don’t even have the ability to anticipate major turns in the economy.

Chairman Powell doesn’t want you to know that.

Well now, without further delay, let’s get right to this week’s exclusive interview.

Chris Martenson

Mike Gleason: It is my privilege now to welcome in Dr. Chris Martenson of PeakProsperity.com, and author of the book Prosper! How to Prepare for the Future and Create a World Worth Inheriting. Chris is a commentator and a range of important topics such as global economics, financial markets, governmental policies, precious metals, and the importance of preparedness, among other things, and it’s always great to have him on with us.

Chris, welcome back, and thanks for joining us again.

Chris Martenson: Thank you. It’s a real pleasure to be back with you and all your listeners.

Mike Gleason: Well, Chris, when we spoke last in early November, we talked about the Fed printing money and expanding credit to prevent markets from correcting. The central planners there are always ready to intervene. At the time, equity markets were correcting and stock prices fell through the end of December. Officials must have then decided that enough was enough with all the selling because the Fed has very publicly signaled a change in course and instead of more rate hikes and more selling from the hordes of bonds accumulated during QE, the Fed is putting the brakes on tightening and looking to return to stimulus. Now the equity markets are off to their best start in something like 30 years. What do you make of the most recent intervention? Are they likely to get away with yet another round of bubble blowing here, Chris?

Chris Martenson: Well, that’s the hope, and all the machines out there doing this front-running and buying of equities. It’s not just the Fed, though. We really have to look at the global situation. So, what was supposed to happen? Here we are, we’re February, we’re closing and March is now in view. The European Central Bank was supposed to have begun unwinding its balance sheet at the beginning of 2019. Oh, quelle surprise, it’s actually at the highest level that it’s ever been, which it hit just yesterday.

China freaked out. Threw a trillion yuan, a few hundred billion into the market very, very suddenly. When you add it all up the so-called Financial Conditions Index is as loose as it’s ever been on a global front, and that of course drives all of these asset prices, which of course is what the Fed was targeting. And I know you noticed, but I didn’t hear it or maybe I missed hearing you say it, but the most important thing the Fed said was not that they were going to pause on these actually immaterial interest rate hikes … which are not actually hikes because they don’t actually withdraw money from the market to accomplish them … but they also said that they stand ready to stop their unwinding of the balance sheet. They’ve telegraphed that far and wide and, more importantly, they said, “If necessary, we’ll do more expansion of the balance sheet. We’ll use that as a tool.”

They wrap it up in gobbledygook but here’s what they said, “Gosh, a little bit of weakness in stocks scared us a little bit, so we’ll do whatever you need, Wall Street, to make sure that stocks only go up.” And that of course is a perversion of all things freedom, all things financial and economic that we’ve spent many, many centuries learning about. We now live in the era of centrally planned markets and, luckily for you and me, the central banks are staffed with a very few people who happen to know the correct prices for all assets at all times (he says with his tongue in cheek).

So, they’re on that mission. They think they’ve got it under control. They pulled that rabbit out of the hat in 2016. Can they do it again here in 2019? Well, if they do, I think they’ll win the battle, lose the war. And what I mean is the further they drive this, the more ridiculous the imbalances get, the more you see things like the yellow vests beginning to pop up. It’s just the level of gross injustice that’s sort of implied and delivered to us via these central bank actions are second to none in history.

Mike Gleason: Internationally, we have a very interesting situation playing out right now in Venezuela. The U.S. and others are attempting a power play and keeping Nicolas Maduro from getting his gold out of London. First off, why would any country in their right mind, Chris, have another nation store their gold for them and relinquish control of it? That is truly baffling to me. I mean, I understand the desire to have it in a place where there’s more liquidity, I get that. But it just seems like such a big issue when it comes to national security. Comment on that specifically if you would, and then also what do you make of the events there?

Chris Martenson: Well, to start with the gold storage issue. If you’re a foreign country, and you’re keeping it with London or the U.S., good luck. That’s a really stupid thing to do. The idea is that the central bank has access to more liquidity, meaning that they can easily push it through either the London or the New York markets into a lease arrangement and put it out on the forward gold swap market. Now, that gives you a little, tiny, extra bit of liquidity. The reason I say it’s dumb is that we already saw that London, which is really a proxy for the U.S., has decided not to ship gold back to a variety of countries when they wanted it. And it belongs to them, it belongs to their central banks, all of that.

So, you’re dumb to do that, if you’re a country, because typically gold isn’t that much of a percentage of the overall reserve asset ratio. So, if gold is supposed to be this hedge that gives you this stability, especially during turbulent times, why you would want to trade that value for a little bit of extra liquidity … and I’m talking like tiny amounts, like quarter percent per year. It’s like ridiculously low amounts. Plus, coupled with the fact that London and the U.S. might just decide at some point, “You know what? Nah. We’re not going to ship it back,” right? Germany discovered that when the U.S. Federal Reserve out of New York said, “Oh, we can only get you like five tons a year of your 300 tons that you want back,” which is a fraction of what they are actually holding here in the U.S. for Germany, allegedly.

I think it’s just ridiculous. I think that the failure of the Bank of England to return Venezuela’s gold when requested is a warning shot that should go across the bow of every central bank. And, by the way, they’re all participating in this. If you look at the amount of gold that any European nation thinks they have, a lot of that is encumbered … and I’m using that word carefully … by the fact it’s being held in London. Meanwhile, the United States thinks it’s going to do another regime change. It’s promising us this time it’s going to be fast and easy and the people are going to love it.

If you look at the situation in Venezuela on the ground, it’s very split. There’s a lot of people who are sick to death of Maduro’s leadership. I understand that. There’s an even larger number of people, according to polls I’ve seen, who don’t want any U.S., or other outside, meddling in their country. Which is wise. Because if you look at the regime change that the United States has pulled off, the United States is very clearly interested in the regime change itself, but no interest in the rebuilding afterwards. Libya: a complete mess after we took another arguable bad guy out, Gaddafi. In Syria, we’re attempting stuff there. It’s a mess. Iraq, still a mess.

So all the places the United States has sort of come in with its blunder and might, it makes things worse, not better. So, I think it’s wise for people to say, “Listen, this is our issue. If we’re going to get rid of this guy or any leadership at all, that’s up to us. Please stay out,” I respect that. Meanwhile, I do know people who are from Venezuela. It’s really awful down there. And it’s important to understand that that’s at least in part, they are tumbling down the stairs, but at least one of the feet that was on the small of their back giving them a nudge, was the U.S. with some pretty punishing financial and import sanctions that have been helping, which adds to the misery down there. So I look at all of that, I’ve got to be honest with you, I’m sick to death of the United States playing regime change agent across the world. I think it doesn’t win us any friends. I don’t think it’s resulted in any measurably better outcomes. In some cases I think it’s cost us a lot of moral authority.

Mike Gleason: Yeah, well said. I completely agree. It is somewhat encouraging that precious metals prices are holding up as well as they are. The U.S. dollar has had quite a rally over the past two weeks and equity markets are on a tear. We’d have thought that that would be a lethal combination for gold and silver prices but so far at least the metals have held on to most of their recent gains. Now, in our view, precious metals futures markets and any price action there has to be treated with plenty of skepticism. There aren’t many markets which reflect reality and fundamentals. COMEX gold and silver certainly don’t fit that description. But we would have expected the bullion banks to cash in on the short position they’ve been building over the past few months. Any thoughts as to why that hasn’t happened yet?

Chris Martenson: Well, I think they’ve been adding to it, not cashing it in. Let’s just look at silver. In the week before silver breached it’s 200-day moving average, normally a pretty big event. Normally an opportunity to do some short covering if you’re on the wrong side of that breach. And so what we saw was open interest go from a 178,000 contracts to just most recently, last number I saw 215,000 contracts. So the open paper silver interest rose by 20% the minute silver breached its 200-day. It’s been fairly successfully capped at or below that level ever since. So somebody thought it was worth their while to go ahead and throw an extra 20% of total outstanding volume into that.

I mean, can you imagine like a major corporation doing a big turnaround. Suddenly they’re really on the up and up, and somebody who could, out of just thin air, produce 20% more shares of that company and just introduced them into the market, and say, “Nah, we’re good. We’ll take this.” And of course that works because those large bullion banks are on the other side of that trade. They don’t lose money doing it. They’re very successful. They are the market. They own it. I’m not sure why anybody looks at those markets and says those represent the actual value or price of those things, because the price is wholly manipulated. But, got to be honest, we have a lot of manipulated markets now. So, it’s really hard to know what’s up, what’s down.

That’s one of the greatest sins of the central banks was destroying price discovery and then of course the failure of the regulators, in the CFTC, in the SEC, to police effectively any of these markets, to have these price manipulating moments happen so much now that everybody just expects them, and they become almost self-fulfilling because of that. And, by the way, price manipulation, to me, goes both ways. Sometimes we see people manipulate the price up really suddenly, down really suddenly. Clearly trades are being conducted in thin market hours in swamping amounts. They are not about discovering the correct price. They’re about moving the price. That’s price manipulation. In the United States the regulators could not possibly be less interested in that story. And I don’t buy the angle that they’re just outgunned and maybe they lack the talent. I think they’re fundamentally uninterested in that. But of course who didn’t know the fix was in when Ben Bernanke, Chairman of the Federal Reserve, went and joined Citadel, one of the largest companies involved in these shenanigans.

Mike Gleason: Switching gears here a little bit. We’ve talked about complacency that people have in these markets and I wanted to revisit that topic with you again. Over the past few years, things have seemingly been very strong economically and most Americans apparently feel good about the state of things and aren’t too interested in planning for the next collapse, which we would both agree is not a matter of if but when. The lack of concern that folks have for what might be coming, may be the single greatest asset that these central planners have in keeping the wheels on. Talk about the dangers of apathy, Chris, because people really ought to be taking the time to prepare themselves, whether it’s financially, personally, what have you. I’ve heard you talk about this before, but share with us your thoughts on this if you would, because I just feel like this is so, so important.

Chris Martenson: Well, absolutely. I’d love to because it is important. And part of the issue that’s going on right now is that the way you might get your information that it’s time to not be apathetic, that it’s time to maybe think about things differently or to have concerns about things, is through the news, is through the information flow that you might get. And “news,” by the way, put air quotes around that, that might be something that gets re posted to your timeline by friends. It might be something that you’re seeing on a larger scrolling Twitter feed that you have. It might be what comes across either the airwaves or the newspapers, traditional sources like that. Well, what we’re seeing are just absolutely fantastic sins of omission and commission by all of these social media giants and their associated corporate news masters.

So, for instance … quick example … each Saturday there are these Yellow Vest protests in France, which are not about climate change or diesel taxes … that may have been the last straw … but honestly, there was this huge bonfire, tinder pile that was built, looking for a spark. And in that it was just the grotesquely unfair treatment that the people of France have been suffering under with the amount of taxation they’ve been getting, the fact that they’re squeezing pensioners while giving enormous tax breaks to corporate owners. The rich are getting richer. And they just basically, same as in the United States, same as in lots of Europe, you find that the wealthy have coopted the system for their own benefit. Not a surprising story. Happens all the time. But when the people start protesting that, it’s been fascinating to watch the response of that same corporate media structure.

And so it happens every Saturday. There’s on the twelfth now. And so Sunday morning I troll all around. I look at all the online news sources, so Le Monde in France, I’m looking at the BBC, Wall Street Journal, New York Times. I’m checking everywhere, looking at my Twitter feeds. I’ve got to tell you, you can’t find stories about the Yellow Vest protests the next day in the mainstream media except when they really downplay it. So for this last one they said, “Oh, there was a few thousand.” I was personally looking at live streams shot by people there, where I was easily seeing 10s, 20s, 50 thousand in a single pop. There’s lots of violence being committed by the police where they are specifically aiming at the heads of people with these so-called rubber bullets, looking for head shots, and having great success, doing lots of damage to people. Thousands of injuries, thousands of arrests. And zero stories anywhere.

But in the UK this would be instructive. I’ve heard that they have a D-Notice placed on their media. And a D-Notice comes out of security firms and it’s a governmental regulation that passes through that says, “This is important to the State that this news be suppressed in some way.” And so, they’ve got a D-Notice on the Yellow Vests. You can’t find any Yellow Vest protest stories at all in the BBC press or in the UK press, except when they talk about how… this is great… Daily Mail last Sunday came out with a story that said, “Six out of eight Yellow Vest protestors believe that Princess Diana was murdered.” So they’re calling them conspiracy theorists. Nice touch there.

Today there was a nice op piece in a French outlet that said that the Yellow Vests are tightly aligned with a rise in anti-Semitism in France. So great, now they’ve tied them to the anti-Semitism. And we’re waiting for them to tie them to puppy beating and tearing the wings off of live insects, you know? It’s hysterical how much the corporate media hates the idea of people rising up and saying, “Hey, this all feels a little unfair. We would like to have a seat at the table. We don’t have any avenues left to us besides getting out in the street and disrupting things.”

So that’s starting to rise up and we’re seeing that in Italy, where Italy has clearly come forward with some very populous leaders who are really sticking a sharp stick in the eye of the ECB. Very interesting news coming out about how that movement over there wants control again of the gold of the nation for the people. Fascinating story there. So this trend, though, of seeing that people are actually not apathetic but when they aren’t apathetic and they turn out in the tens, if not hundreds, of thousands to protest, the media won’t tell you about it. And when they do tell you about it they paint it in very dark light. “It’s a conspiracy, it’s anti-Semitism.” It’s whatever they need to do to sort of put a lid on that.

And it’s pretty clear what the UK is afraid of. They’re afraid of that movement spreading. Why would it spread to the UK? Because they have a deeply unfair system over there that’s been looting the population and giving it to a few kleptocrats and that creates a lot of fuel on those bonfires. So they don’t want it to be reported on. So this idea of apathy is really important. I would advise people listening to this to understand that if you are just getting your news, or primarily getting your news, off of what you see and hear that’s about what’s presented to you, it’s flawed. Deeply, deeply flawed.

On a secondary front, I would say that people need to be aware that these changes that I’ve been talking about for a long time are really bearing down on us very, very rapidly at this point in time. There’s going to be some extraordinary changes coming and when all of this self-delusion breaks, when the money printing doesn’t work, when simply making stocks go up and telling everybody everything’s awesome when they aren’t. When those stores shred, they tend to break very rapidly. They tend to break a little bit like the Yellow Vest. That’s why I bring that movement up, because it came out of nowhere. But really, it didn’t.

It’s like the Soviet Union didn’t just sort of crumble out of nowhere. Like, these things build up and if you know what to look for, you can say, “Yeah, that’s coming, we know it’s coming. We know there’s a recession coming. We know that this credit bubble is going to burst. We know it’s going to be painful. We know that all the insects disappearing is a very bad sign.” There’s all these signs coming forward and my most recent piece I wrote I asked the question directly, “How many signs do you need for you to say, ‘Oh, my gosh, I’ve got to get off my butt and start taking care of things for myself because nobody else is going to do it.'” And by the time it’s reported on, it’s kind of too late, you know, to really do much about it at that point. So think for yourself. Gather your own news. Don’t even trust me or anybody else. Think for yourself. Really burrow in but don’t wait for it to be presented to you. It’s too late then. You’ve got to go find it. You’ve got to go look for it and make up your own mind.

Mike Gleason: Yeah, very well stated. Got to take advantage of the opportunity that we have right now to get prepared for what may happen. A lot of things are sort of simmering beneath the surface, especially here in the States.

Well, getting back to metals, and as we kind of begin to wrap up here, we’ve certainly seen palladium perform as a total outlier and it keeps going up and up and it’s reached $1,400 an ounce this week. Now eventually you would have to think the rally is going to come to an end. Meanwhile, its sister metal, platinum, can’t seem to get much going to the upside and continues to struggle around the $800 mark and then gold and silver continue to be stuck in range trades for the most part. So where do you see the best value in the precious metals space here, Chris? Talk about that as we begin to wrap up.

Chris Martenson: Well, still, I love silver a lot. For a pure play silver, mine it’s at or below the all-in cost production for most producers right now. As a supplementary metal that comes out of the ground as part of the base-metal mining, that’s most of its volume in terms of brand-new mine production. There I’m expecting to see some drop-offs as we go forward in overall output. Meanwhile its price is just ridiculously cheap compared to its overall value. So, it’s a commodity that I really like. Silver’s my play of course in my belief that there will be an industrial future and things will carry on after a big hiccup.

Gold is something that everybody has to have just because everything we’ve been talking about in terms of where the economy’s going, money printing, yada, yada, that’s talking about monetary mayhem that may be coming forward. Gold is still the only monetary asset I know about that can play in the overall global sphere that’s not simultaneously somebody else’s liability. Asterisk on that, meaning “as long as you didn’t store it at the Bank of England exchanges,” right? Because there, it is somebody else’s liability.

So if you have gold in your hot little hands, it’s a monetary asset. It’s exactly the thing you want when … not if, but when … this next financial/monetary accident really begins to get rolling again. So, I really like the precious metals here but I’m a big fan of all kinds of things that are real, tangible assets. That includes at this point land real estate, other things like that, simply because if you don’t hold real assets when the wealth transfer comes, you’ll be holding a bunch of paper claims. There’ll be some chuckling from Wall Street. They’ll say, “Sorry for your losses. Would you care to play again?” And it’ll just be a wash, rinse, repeat sort of a thing. Bubbles burst. People get hurt. Except those who are not participating in a bubble when it finally lets go.

Mike Gleason: Well, we’ll leave it there for now. Thanks very much for your time and your insights, Chris. Keep up the good work there and thanks for coming back on with us. And finally, before we sign off here, please tell our listeners about the Peak Prosperity site, what it is that they’ll find there, and anything else that they ought to know about you, your books, or your site.

Chris Martenson: Absolutely. PeakProsperity.com, that’s the main website. We have a subscription newsletter for people who like to go a little bit deeper. And we hold events several times a year. Adam and I are both going to be with the Real Estate Radio Guys on their Summit at Sea. That’s a great thing to look that up as well. We only have a couple of spots left. Almost sold out entirely for our yearly seminar that’s happening in Sebastopol, (CA), April 26, 27, 28. That’s Friday, Saturday, Sunday. I think we have like three spots left in that. So that’s going really well. So, if anybody’s interested in that, come by PeakProsperity.com, see if you can grab one of those last few slots.

Mike Gleason: Well, excellent. Great stuff as always. Enjoy your weekend, Chris, and I’m sure we’ll be catching up with you again before long. Take care.

Chris Martenson: Excellent. Enjoy your weekend, too.

Mike Gleason: Well, that will do it for this week. Thanks again to Dr. Chris Martenson of Peak Prosperity and author of the book Prosper! How to Prepare for the Future and Create a World Worth Inheriting. For more information just go to PeakProsperity.com. Check out the extensive site there and the great online community or get a copy of the book which is available there on the Peak Prosperity site and also at Amazon. You will not be disappointed.

And don’t forget to check back here next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great Presidents Day weekend, everybody.


The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.

A Promising and Inexpensive Gold Stock in Arizona

By The Gold Report

Source: Clive Maund for Streetwise Reports   02/13/2019

Technical analyst Clive Maund charts a gold miner that is advancing its project to production.

To look at the stock charts for Kerr Mines Inc. (KER:TSX; KERMF:OTC; 7AZ1:FRA) you would think that it owns nothing more than a moose pasture where wild-eyed geologists get out of helicopters in huge anoraks with hoods for photo ops, instead of which it owns a respectable gold mine in Arizona that is set to go into production later this year, and finished a financing late last year that apparently involved Eric Sprott, who is not known for “putting his foot in it.” The location of the company’s main asset in western Arizona, which is a gold mine despite having the somewhat misleading name of the Copperstone Mine, means that the company is likely to attract a higher caliber of employee since it is very close to Las Vegas, affording all employees, especially management (although they are unlikely to admit it in their annual report), the opportunity to leverage their gains by attending the various casinos during their time off.

We’ll start by looking at the long-term 16-year chart, on which we see that the company’s stock is extraordinarily cheap, historically speaking, being less than 1% of its price at its peak at its spike high above C$17.00 back in 2007. It is so cheap now that even Ebenezer Scrooge might consider sticking his hand in his pocket to buy some. For those who might argue that “Oh well, it’s so cheap because of dilution—there are 277 million shares in issue,” this is a good point to link to the company’s latest presentation in which we see that much of its stock is owned by directors and insiders and family funds, etc., leaving only 31% or 85.5 million shares on the open market. On this very long-term chart we can also see that the price is bumping along the bottom at a very low level marking out some kind of low Pan base, which we will now look at in more detail on a 6-year chart.


Our 6-year chart opens out the base pattern and reveals it to be a fine classic “Cup & Handle” base. The Handle part of the pattern has been building out for a long time now, about 16 months, and has taken the form of a bullish Falling Wedge, and its duration suggests that an upside breakout is drawing near. Of particular importance is the volume pattern, which is signature for one of these formations—heavy volume on the rise out of the Cup, followed by a dieback as the Handle forms, and although the On-balance Volume line still looks grim, the more telling Accumulation line, which is trusted more because it is intraday tick for tick instead of just end-of-day like On-balance Volume, has held up very well as the Handle has formed and is not far off making new highs, which is a very bullish sign that portends an upside breakout before long.


Moving on, the 2-year chart enables us to examine the Handle part of the Cup and Handle base pattern in detail. It shows that it has consisted of a stubborn and destructive downtrend that has wiped two-thirds off the value of the stock from the September 2017 peak. However, there are subtle signs that this long reactive downtrend has run its course, and that a reversal into a new uptrend may be imminent. These include the relatively buoyant Accumulation line already mentioned, the easing of downside momentum revealed by the MACD indicator, which has already climbed back above the zero line, the breakout from the inner channel shown that has occurred this month and lastly the 50-day moving average flattening out and turning up. Whilst these factors won’t necessarily stop it from sagging back again short term if the sector turns lower, they are certainly positive and increase the chances of a breakout into a new uptrend.


Finally, the 6-month chart shows that Kerr may be “coiling” ahead of a breakout above its 200-day moving average. It gapped above its 50-day moving average over a week ago and then stalled out at a resistance level at about C$0.145 where it is suspected that it is marking time to unwind its short-term overbought condition and allow the 200-day moving average to drop down closer to the price, before pushing on higher again. Whilst it could react back a little short-term, it is considered unlikely, given all the positive factors that we have observed, that it will make new lows again.


The conclusion is that Kerr is inexpensive here and good value, and a large quantity of stock can bought for a relatively small outlay. Whilst it could dip back short-term, downside is now considered to be trivial compared to its upside potential and it is rated a strong buy here and on any near-term dip which is likely to be minor. The stock trades in light but acceptable volumes on the US OTC market.

Kerr Mines website.

Kerr Mines Inc, KER:TSX, KERMF on OTC, trading at C$0.145, $0.11 at 11.00 am EST on 8th February 2019.

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Disclosure:
1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Kerr Mines. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Kerr Mines. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Kerr Mines, a company mentioned in this article.

Charts provided by the author.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

( Companies Mentioned: KER:TSX; KERMF:OTC; 7AZ1:FRA,
)

Analyst Forecasts Cloudy 2019 Outlook for Energy Firm Despite Strong Q4/18

The Energy Report

Source: Streetwise Reports   02/13/2019

A Stifel report reviewed Q4/18 and discussed factors affecting 2019 projections for this provider of equipment and components for oil and gas drilling and production.

In a Feb. 7 research note, Stifel analyst Stephen Gengaro reported National Oilwell Varco (NOV:NYSE) ended 2018 solidly, but outlook for the company near term is “uncertain” and for the rest of 2019 is “cloudy.”

Stifel reduced its estimates and lowered its target price on National Oilwell to $37 per share from $46. The stock is currently trading at around $29.79.

Stifel’s concerns about National Oilwell are only short term, Gengaro asserted. In fact, the firm expects boosted revenue and cash flow in H2/19 and into 2020, and likely beyond. Those increases will come from undersupplied crude oil markets.

The analyst provided numbers that depict the energy company’s growth during Q4/18.

EBITDA in Q4/18 rose 14% from the previous quarter and exceeded Stifel’s forecast by 11%. The main driver was “upside in all three segments,” each of which “generated sequential revenue growth and margin improvement,” explained Gengaro.

Revenue was $2.4 billion, an 11% increase over Q3/18, on more drill pipe deliveries, some accelerated, an expanding rig count, and increased coiled tubing and wireline sales. Drilling motors grew 60% year over year in Q4/18.

The balance sheet “remains rock solid with a net-debt-to-total capitalization of less than 8%,” Gengaro pointed out.

He noted that two current positive factors for the company are global interest for its coiled tubing and inquiries about land rig upgrades, which continue to be robust.

Gengaro then presented the negatives concerning the near-term future of National Oilwell. One is management’s weaker-than-expected Q1/19 guidance, which reflects revenue and margin drops in all three segments due to expressed customer concerns about oil price volatility and the deliveries moved up to Q4/18. Others are that new builds offshore “remain extremely limited” and new pressure pumping equipment demand has had a “sharp drop-off,” Gengaro indicated. The company also faces a higher tax rate in the near term.

Stifel maintains its Buy rating on the company.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
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Disclosures from Stifel Nicolaus & Company, National Oilwell Varco Inc., February 7, 2019

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Lunar New Year sales in line with expectations

By Dan Steinbock

According to some international observers, the Lunar New Year sales indicate a plunge in Chinese consumption. Economic realities tell a different story.

Chinese Lunar New Year can be seen as a barometer for Chinese private consumption, due to gift-giving and family reunions. Consequently, both holiday data and its international coverage are of great interest.

Here’s the bottom line: During the Lunar New Year holiday in early February, Chinese retail and catering businesses generated a record over 1 trillion yuan ($148 billion). Sales by retail businesses rose 8.5% from a year earlier.

Here’s how the data has been reported internationally: “the slowest increase since at least 2011” (Bloomberg), “Cooler pace of [sales] growth added to evidence the economy is slowing” (Reuters), “China’s lunar new-year spending growth slowest since 2005” (Financial Times).

A dramatic plunge in Lunar New Year sales would indicate that China’s ongoing rebalancing is failing – and yet, that’s not the case.

Shifts in retail sales

One of the key reasons for retail pessimism in international media is that holiday spending appears to have hit profits of foreign high-end companies, such as Apple, Swatch Group and luxury car makers.

But what’s so surprising about that? Good times drive consumer nondurable and durable goods, while uncertainty undercuts the sales of relatively more expensive consumer durables (e.g., cars, appliances, furniture), and over time even cheaper nondurables (e.g., clothing, food, and clothing).

Other observers have lamented that auto purchases are in contraction for the first time in almost three decades. Inevitably, the Trump administration’s unilateral tariffs on U.S. car imports are weighing on Chinese consumers. Last year GM’s car sales were down 10%, Ford fell 37%, Tesla had to cut prices for Model 3 in China and Jaguar Land Rover temporarily closed a factory.

U.S. tariff wars have contributed to the gains of China’s domestically- manufactured models, which grew some 3.9% last year and made up more than nine of ten cars sold in January. And in the absence of tariffs, Japanese Toyota is expanding in China. Sales of the Japanese carmaker’s vehicles surged 14%, while Volkswagen held its ground.

In the 1970s and ‘80s, Japanese carmakers beat U.S. giants because the former offered smaller, more fuel-efficient and affordable models. Today, Japanese and European producers push attractive hybrid vehicles. Trump’s America does not take climate change seriously; China, Japan and Europe do.

Until spring 2018, global prospects still looked positive and expansion in the U.S. and Europe had momentum. It was the White House’s new protectionism that undermined the promising future, as evidenced by the Baltic Dry Index. It rose to almost 1,800 until July 2018. After the Trump White House began to implement its tariffs against China, the Index has plunged to less than 600 – lower than amidst the 2008 global crisis.

Consumption on track

Like their counterparts in the West, Chinese consumers are now more cost-conscious as they should be, thanks to tariff wars. But it does not follow that Chinese rebalancing toward consumption and innovation is falling.

Despite international negative hoopla, Chinese GDP growth in 2018 was broadly in line with expectations since the beginning of the year, as even World Bank has acknowledged.

Much of international media mistakes secular, long-term trends with cyclical, short-term fluctuations. So the deceleration of Chinese growth is portrayed as secular slowdown. In reality, deceleration reflects the eclipse of the intensive phase of industrialization, which heralds a shift to post-industrial society, and deleveraging, which will make that transition more resilient.

In the early 19th century, England experienced its “growth miracle.” In the late 19th century, US growth accelerated. As these countries began to move toward post-industrial services, growth acceleration gave way to deceleration. That’s the norm with industrializing economies. Similarly, a decade ago, China still enjoyed double-digit growth. But today growth is slowing relative to its past performance.

Chinese consumption is a different story, however. In 2018, it contributed 76% to GDP growth. Retail sales, the key component of consumption, rose 9% from one year earlier, down from 10.2% in 2017. Yet, both figures were 2-3% higher relative to overall GDP growth.

In other words, China’s structural rebalancing toward consumption and innovation remains on track. That’s why most analysts see consumption as the largest driver of the Chinese economy in the 2020s.

Recently, Chinese economy has accounted for some 30-40% of global growth, thanks to Chinese consumption. If and when U.S. tariff wars penalize that consumption more, global growth prospects will be undermined accordingly.

That’s the not-so-secret secret of the ongoing tariff wars. Due to its importance to global economy, China fuels growth prospects of many other economies. Consequently, unilateral tariff against China will penalize global economic prospects.

About the Author:

Dr Dan Steinbock is an internationally recognized expert of the multipolar world economy. He is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see www.differencegroup.net/  

The original commentary was released by China Daily on February 14, 2019