Monday, June 27, 2016

Kamikaze Bonds: The 10-Year Yield Goes Into a Death Dive

Here's an update of a chart that I've posted from time to time. Originally I had a much shorter time frame; I had to extend the time frame to find the next level of support.

Visit to see more great charts.

(Updated chart)

If that support breaks, our financial system is seriously working without a net. Look out below.

Gold higher again today. I took three rounds of gains in one of my publications on Friday. Maybe a bit too early? But you know what's wrong with 100%+ gains? Nothing!

Don't be greedy.

That said, I still have other positions in place to ride this next wave higher. And my intermediate-term target on gold remains $1,519. So if you're playing this in anything but short-term, just sit back and enjoy the ride. It could be wild!

Friday, June 24, 2016

Britain, Gold and the Big Surprise Yet to Come

I wrote a story for Energy & Resources Digest today about Britain's Brexit, how that affects gold, and the big surprise I think is yet to come.

You can read that here: Please do click through. 

However, the big surprise was cut out of the story (to keep the focus on gold). So here is the rest of the story, as Paul Harvey would say.


Why Is Everybody Screaming?

Gold aside, many of us will see our investments take a hit today, as global markets sell off. Is the panic justified?

Britain’s economy is 17% of the EU. That’s a little more than France (15%) but less than Germany (19%). So you can see why the Europeans worry. They’re really scared because if Britain can make a Brexit work, that’s a clear sign to other EU members chafing against Germany’s oppressive leadership – Greece, Spain, Italy and Portugal – that maybe an exit is the smart move.

The rest of the world is over-reacting. For example, Britain accounts for just 0.5% of the trade of Asian countries. Why are they selling off? It’s a panic, that’s why. Panics can be bought.

Especially since stocks should float higher on a flood of government easy money.

The losers aren’t just British oddsmakers (71% of bets placed were for Britain to leave the EU. Pay up, bookies!). The losers include investment banks and central banks that rely on the easy flow of cash across borders.

Politically, losers include the European Union, and especially Germany. Longer-term, maybe even the U.S.

Why us? Because if Britain can do a “Brexit,” maybe Texas, which has its own loud secessionist movement, can do a “Texit.”

What, you think that can’t happen? Never say never.  Pandora’s Box is open. Nationalist movements are gaining steam. The U.S. Congress is deadlocked and ungovernable. Secessionist referendums here in the U.S. could be next.

What, we already fought that war? Buddy, people never learn.

Is that good for gold? You bet.

This week’s move in gold sure caught the market by surprise. But it’s only a first step.

My intermediate-term target on gold remains $1,519. And my year-end target of $20 on silver is looming closer. I have higher, longer-term targets.

I keep saying pullback can be bought. When gold pulls back again, the babbling heads will tell you it’s done for the year. They were wrong on Trump winning the nomination, wrong on the Brexit vote, and wrong on so many things. Listen to your gut for a change.

My gut tells me that gold is going much higher.

More stories I've written recently ...

Monday, June 20, 2016

Update on Treasury Bond Yields

I recently posted a chart of the $TNX, saying bond yields (as tracked by $TNX) could break down. That's just what happened.

Now, we are seeing a strong rally. It is coming up to former support.

Visit to see more great charts.
(Updated chart)

Maybe the breakdown was false. Or maybe this is a typical test of former support as overhead resistance. And the big move down is yet to come.

Stay tuned.

Friday, June 17, 2016

Why Gold Is Going to Break Out and Go to $1,519

On Thursday, gold rallied to a two-year high of $1,316 per ounce before pulling back. It sure looked like a top. 
(Updated chart)
Let me make a case for why gold is not making a top. In fact, it's coiling up for a breakout.

If gold can close and confirm above $1,300, that will show that traders are betting the Fed will stay stationary until December. And that’s the start of a new rally.

My target in that rally -- just generated yesterday -- is $1,519.

Why is the Fed not raising rates important? Gold doesn’t pay interest. When rates are near zero, the “opportunity cost” of owning gold disappears. 

And just this morning, St. Louis Fed President Jim Bullard, who has been very hawkish, just slashed his outlook for rate hikes. Bullard now says low growth and a very low fed funds rate of just 63 basis points will likely remain in place through 2018.

That is a huge shift.

Meanwhile, there is another good reason to own gold. Historically, the yellow metal is a risk-haven repository. In other words, investors scramble to gold for security in uncertain markets. 

Then there is the upcoming vote the United Kingdom will take on whether to leave the European Union. I think the vote is a tempest in a British teapot. Nonetheless, there is a risk that global markets could be thrown into chaos. And that risk is being priced in right now.

Three stories for you on this topic ...

I've made it clear that I am more bullish on silver than gold. And I think miners are the way to play this rally, not the metals.

Good luck and good trades.

Saturday, June 11, 2016

10-Year Yield Breaks Support. Look Out Below!

I wrote a story for the Non-Dollar Report on how zero and negative-yields are helping boost precious metal prices. You can read that here:

And here's an updated version of the chart was in the story. The 10-Year-Yield has broken the first line of support.

(Updated chart)

Will there be follow-through? And what does it mean for the prices of gold and silver? Stay tuned.

Pray for a Pullback. My Targets on Silver: $20 and $25.50

I think precious metals put in a short-term top on Friday. The good news, it was great to grab remaining gains on Barrick calls. The better news; if this IS a short-term top, we'll see a correction. And that will be a buying opportunity.

Why? Because ...
  • Precious metals have just come out of a 4 1/2-year long bear market. The bull market could last 3 to 5 to 7 years.
  • There is a global supply/demand squeeze, especially for silver. By that I mean mine production has peaked, and demand is rising. For gold, it is primarily investment demand. For silver, it is investment and industrial demand.
  • The zero- and negative-interest rate policies of the world's central banks lift a huge weight off gold and silver. There is little to no carrying cost of holding physical metal.
Here's what the technical analysis "voodoo" I use gives as targets on silver now.

Visit to see more great charts.

(Updated chart)

Your time frame may vary.

We'll see what happens. Good luck to us all.

Oh, and for your viewing pleasure, here is molten silver being poured into dore bars at a mine I just visited in Mexico.

Friday, June 3, 2016

Lurulu: Death, Destiny & the Lifelong Quest

Here's an article I wrote in 2013 ...

Posted on  
Sean Brodrick
Every week in this space, we look at ways you can make more money to make your financial dreams come true.
But this week, I want to take a little bit of a departure from our usual conversations about gold, silver, oil and natural gas to examine a valuable lesson I learned from one of my other passions … one I think you can appreciate and, I hope, benefit from in your investing and personal pursuits.
On May 26, Jack Vance, a grand master of science fiction, passed away at the age of 96. Our world is poorer for his passing. He leaves a wealth of writing to his legion of fans, and what a fascinating life he led.
When I call him a “grand master of science fiction,” you might peg him as a writer of cheap pulps. Well, maybe he was — but oh, what a glorious treasure every cheap paperback contained. In fact, I would put Mr. Vance on par with the greatest writers of the 20th century, along with Ernest Hemingway, F. Scott Fitzgerald, Stephen King and others.
Today, I’m not going to talk too much about his great stories, like the five-volume revenge-fueled “Demon Princes” or “The Dying Earth,” a series of novels and stories in which the sun has dimmed and magic has been re-established as a dominant force. Sure, those books changed the face of fantasy fiction forever. But you can find those on
Instead, I’m going to talk about something you CAN’T find, at least not easily. But it’s something we all should be looking for. Vance certainly was.
The concept is a theme in his last two books, the duology “Ports of Call”/“Lurulu.” That concept islurulu itself.
Vance was a writer who liked to invent words, and lurulu was one of them. While it is never strictly defined, characters allude to it as achieving your heart’s desire … sort of. It’s a bit of fate, a bit of destiny; all that AND the fulfillment of a quest.
As investors, we identify with those desires. Whether we want a speedier path to retirement … a second home in a country we’ve always loved or wanted to visit … or the ability to make sure our kids and grandkids can pursue their dreams without fearing how they’ll afford them … each day we work toward achieving our own personal lurulu.
As one character in the book says:
“‘Fate,’ ‘destiny’ and ‘lurulu’ are not synonymous. ‘Fate’ is dark and ponderous; ‘destiny’ is more like a beautiful sunset. In speaking of ‘lurulu,’ however, language of this kind is not useful; lurulu is personal, it is like hope, or a wistful longing more real than a dream.”
“Ports of Call”/”Lurulu” is ostensibly about a picaresque group of crew and passengers aboard a tramp space freighter shuttling from planet to planet. They meet amazing people and have weird adventures.
I liked this book in particular because it is capitalistic; many science fiction writers are more-terrified of economics than they are of any bug-eyed monsters.
Vance published the last of these books when he was 88. It is built around an old man’s truth, one that is no less profound for being simple: that life is a voyage whose significance is not to be found in the arrival but in the journeying.
Of the main characters, one burns for justice, one wants to save his mother from a scoundrel, one shifts his desire (or lurulu) from one thing to another, and one denies the very concept of destiny while revealing his deepest desires in a conversation with the one man who bested him. After one character achieves his goal — he gains wealth beyond most men’s dreams — he finds it not satisfactory in the least.
That’s because lurulu lies not in the amassing of wealth, but what you do with that wealth. It is here and now, in the warmth of friendship, in shared encounters that celebrate life. It is the awareness to grasp fleeting moments and appreciate them to the fullest.
Vance was going blind when he wrote these books. What an ironic fate for a writer and a lover of books. But he’d battled nearsightedness his whole life.
Getting Around the Rules
In his youth, Vance worked in a cannery, on a gold dredge and in many other trades to support himself while periodically attending college before the outbreak of World War II.
Weak eyesight prevented military service. So, in 1943, he memorized an eye chart and became an able seaman in the Merchant Marine.
I like that Vance got around the rules by using his brain. It reminds me of “Cugel the Clever,” Vance’s most famous creation, an absolute scoundrel who defeats much more powerful beings through his wits alone.
The stint in the Merchant Marines inspired a love of boating for the rest of Vance’s life. Boats, ships — and spaceships — were often themes in his work. In real life, he built a houseboat with science fiction authors Frank Herbert and Poul Anderson, and he went on at least one round-the-world voyage.
Vance and his wife settled in Oakland in a house that included a hand-carved wooden ceiling from Kashmir. He loved art but detested modern art; was spiritual but spoofed religion mercilessly; lived by a moral code but painted bureaucrats as incompetent bunglers. You would have liked him.
He wrote for the pulp magazines of the 1940s and ‘50s. He went to Hollywood and was a screenwriter for the “Captain Video” TV series. Vance was a lover of Dixieland and traditional jazz. A lifelong musician, he released a jazz album just two months ago.
Hugos, Nebula, Edgar, Oh My!
And then there were his accomplishments in books. He won two Hugo Awards, a Nebula Award, the Jupiter Award, the World Fantasy Award, and an Edgar. That’s right, Vance wrote mysteries, too.
Vance’s stories featured great plots — but his shining quality was that he was a virtuoso wordsmith. No one was more adept at creating a strange landscape and populating it with bizarre people in only a few paragraphs.
The most amazing thing to me was that Vance’s heroes could be horrible scoundrels, or killers bent on revenge, and yet you’d still find yourself rooting for them. Many writers try to pull off that trick, and they fail miserably. Vance did it without breaking a sweat; he put the “master” in “grandmaster.”
A Life Well-Lived
Vance was so influential that in 2009, 24 of the biggest names of fantasy and science fiction — George R.R. Martin, Neil Gaiman, Robert Silverberg, Tanith Lee, Mike Resnick and many more — put together a collection of stories called “Songs of the Dying Earth.” Set in Vance’s Dying Earth world, these are incredible stories — it’s impossible to find a stinker in the bunch.
And with each story, every single one of these best-selling authors enclosed an essay talking about how Vance’s writing had influenced, entertained and enthralled them as a young reader and writer.
Jack Vance has a treasury of memories to take to his grave, and he managed to give his readers a wealth of reading experiences along the way. I’ve lost count of his books.
“Lurulu” is not Vance’s best book, but the concept of lurulu — the idea of finding your real reason for living —  is something none of us should be without.
Happiness is not in the arriving. Happiness is in the getting there. It is the experiences you share with your friends. It is not the accumulation of gold, but the golden memories you build along the way.
Jack Vance’s productivity, sense of wonder and sheer love of life should be an inspiration to us all. I hope you read his books.
And most of all, I hope you find your lurulu.
All the best,