Month: June 2020

Gold, silver and platinum prices spike, then fall apart  Kitco NEWS

Despite a year of tumult on Wall Street and Main Street, the banking system seems to be holding up remarkably well… for now.

Whereas previous financial crises were marked by a surge in bank failures, hardly any have gone under so far in 2020. The Federal Deposit Insurance Corporation (FDIC) reports that only 1% of FDIC-insured banks are on the “problem list” for financial weakness.

“Banks are safe,” according to FDIC chair Jelena McWilliams. “There are no concerns for depositors.”

No concerns? We beg to differ.

First quarter earnings for banks and savings institutions plummeted 69.6% compared to the year prior, based on the FDIC’s own data. Meanwhile, risks in the mortgage and corporate debt markets continue to mount amid an uncertain post-lockdown economic future.

In 2007, leading up to the meltdown of 2008, banks had loaded up on collateralized debt obligations (CDOs). When housing prices headed down, CDO bundles of mortgage debt that appeared to be safe because they were diversified were suddenly exposed as vulnerable to the systemic risk of a collapsing asset class.

After Lehman Brothers went bust, the Treasury Department and Federal Reserve took drastic emergency action to shore up the “too big to fail” banks and avert a total collapse of the financial system.

Fast forward to 2020 and the banks are sitting on more than $1 trillion in corporate debt bundles knowns as collateralized loan obligations (CLOs).

A wave of defaults in the corporate debt market may have begun earlier this year with energy companies and is likely to continue spreading as the economy remains severely hampered by virus restrictions.

Holding wealth in a bank or brokerage account carries both obvious and hidden risks. Even though the risk of losing everything in a failure may appear right now to be small (the FDIC boasts a $110 billion backup fund), it’s possible to lose money in financial institutions in a number of other ways.

One potential risk that looms is that of negative interest rates. It’s not merely theoretical. Rates actually have turned negative across much of Europe, forcing account holders to pay banks (and bondholders to pay issuers) for the privilege of holding onto their wealth.

U.S. Federal Reserve officials insist they have no intention of pursuing negative rates. But that can all change if a new financial crisis hits. With rates already stuck near zero, any “emergency” rate cut would push them into negative territory.

Regardless, the Fed knows that manipulating interest rates wouldn’t be enough to save a troubled banking system. Even before the Fed slashed rates to zero in March… and even before virus fears crashed the stock market, the Fed had already been bailing out the banking system.

The Fed started aggressively pumping liquidity into the so-called “repo” market in the third quarter of 2019. Many analysts believe the mysterious freezing up of this overnight lending market was caused by a loss of confidence in one or more major banks that cascaded until the entire market ceased functioning normally.

Since then, the Fed has ballooned its balance sheet by $3.5 trillion.

This extreme new version of “Quantitative Easing” (to infinity) should give all holders of U.S. dollars pause. The currency is being debased and this ultra-low rate environment offers virtually no protection.

Holders of savings accounts, CDs, and most bonds across the yield curve stand to incur real losses of purchasing power. They may be relatively small in any one year, but compounded losses could be staggering over time – especially if inflation begins to accelerate.

In this dangerous environment for the banking system and the Federal Reserve Note itself, holding some wealth in the form tangible assets is a must for investors who want to hedge against systemic risk.

When all else fails physical gold and silver serve as the ultimate money – no default risk, no counterparty risk, no risk of being “printed” into worthlessness.

However, if you hold precious metals via exchange-traded or derivative products, or within a bank account or vault, then you are partially defeating the purpose. You are effectively putting your gold and silver at risk if something goes wrong in the financial system.

A few years ago, the investment banking firm MF Global ran into financial trouble and defaulted on the gold bullion it supposedly held on behalf of customers.

In reality, customers held gold “accounts,” or credit claims on MF Global. These account holders eventually got back only a fraction of the gold they thought they had owned.

The last thing you’d want to do with precious metals that are intended to protect you from risks in the financial system is give up control of your holdings to banks or brokerage firms.

Even safe-deposit boxes at banks should be avoided when it comes to precious metals storage. Some banks have policies that explicitly prohibit gold bullion storage. Regardless, your gold would be at risk in the event the bank goes under or gets raided by government agents.

The portion of your gold and silver stash you don’t want to store yourself should be stored through a high-security, reputable vaulting service such as Money Metals Exchange’s Vault Metals.

Vault Gold, Vault Silver, and Vault Platinum are simple and transparent – the very opposite of paper derivatives such as futures contracts or ETFs. Every ounce clients own is securely stored, documented, and available to liquidate at market rates without encumbrances.

Another great option is physically segregated storage of your coins, bars, and rounds held at Money Metals Depository in Idaho.

However you choose to do it, physical ownership of precious metals will give you true independence from the financial system and full protection from a collapse in the value of the U.S. dollar.

Source: Bob Moriarty for Streetwise Reports   06/17/2020

Bob Moriarty of 321gold discusses a company with a project in northern British Columbia that has “exceptional” past drill results.

We are in a depression. Don’t let the idiots buying Tesla at a new high and pumping money into bankrupt Hertz lead you into believing we are in some new economic paradigm. We aren’t.

The crash will resume soon and some day shortly down the road Americans are going to be presented a bill for the orgy of money hurling being done by the Fed. The butcher’s bill will be paid. At that time the only shares with any real value will be that of resource companies.

Benchmark Metals Inc. (BNCH:TSX.V; CYRTF:OTCQB) understands the issue and after raising $24 million from Eric Sprott and half a dozen with-it institutions is ready to get serious about advancing their prime gold project in the Golden Horseshoe region of northern BC.

Their drill plans call for 50,000 meters of drilling from five drills with drilling starting in July and continuing until October. There will be a lot of news being released starting in August through January.

Past drill results have been exceptional with results of 108.0 g/t Au and 91 g/t Ag over 7.0 meters and 33.53 meters of 5.76 g/t Au and 128.65 g/t Ag. It’s a bulk tonnage target at Lawyer’s with some high-grade hits. Benchmark is targeting up to 2 million ounces of gold with an updated 43-101 and PEA due in 2021.

The 2020 program is fully funded as BNCH intends to fast track to production. The Lawyer’s camp has produced 171,000 ounces of gold and 3.7 million ounces of silver in past production. With civil disorder becoming the issue of the day, Benchmark is in the safest jurisdiction in the world. Their existing infrastructure would cost $50 million to replace while the company has over $11 million in cash and a tiny market cap of about $42 million.

Benchmark is an advertiser; I have bought shares in the open market and as such am biased. They do a great job of communication and potential investors should pour through their company presentation.

Benchmark Metals Inc
BNCH-V $0.365 (Jun 17, 2020)
CYRTF-OTCBB 113.8 million shares
Benchmark Metals website.

Bob Moriarty
President: 321gold
Archives
321gold

Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.

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Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Benchmark Metals. Benchmark Metals is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
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.
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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: BNCH:TSX.V; CYRTF:OTCQB,
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