The Blood Bath Has Begun

Freshly slapped in the face by a US stock market crash which fell harder and faster than even the 1929 version.

We watch the growing pandemic increasingly shut down economic activity across the world, requiring a resetting of virtually all prices and values still ongoing. Add to that, a supposed oil price war, which may be a clear signpost to the end of the fiat petrodollar era <- see the 18-minute mark there for the collpasing road we have been on some time now.

Will we again revisit a Gold Oil Ratio near 100?!

This video below is a brief examination of how deep this deflationary beating may get. And how large the bailouts may get.

Most are completely unprepared for its potential duration.

Precious metals and speculators betting long in the COMEX and NYMEX price discovery markets were also taken to the woodshed this week.

Gold held up best in value. Below we drill into historic levels of gold bullion value appreciations we may be revisiting again.

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The spot price which underlies pricing of silver bullion finally fully rolled over in the face of this deflation and deleveraging.

The gold-silver ratio is now around 104, and we’ll put that into historical context later this episode.

The same deflationary spot price beatdown occurred this week with both platinum and once record price parabolic palladium. 

Amazingly on paper at the moment, the gold-platinum ratio is now over 2.

Just yesterday we had a stock sell-off about -10%, 
that was second only to Black Monday in October 1987 when
the S&P500 lost -22% of its value in 1 day.

Today we had a stock market rebound up of over 9%.

Trump autographed this latest PPT ramp as if it were cool another perversion to not-so-humble brag over.

 

 

This kind of day to day volatility is not the typical sign of a healthy financial or equity market.

Demographic and fundamental factors are a lot different now than they were back in 1987.

Yet still, some hopeful stock rebound bulls think the private Central Bank and the Federal Government will create and inject more trillions of fiat Federal Reserve notes, driving our return back to all-time nominal highs.

As fallible human begins, it typically takes about three generations or roughly ninety to one hundred years of time for most to forget big and even small lessons of our forefathers. 

The last time we had a pandemic on this scale was the Spanish Flu. And that lasted for some two years of time and came in two waves killing millions across the world.

Just yesterday macro analyst and founder of Real Vision was on Yahoo Finance discussing downside potentials to come. This is not meant to scare you, merely remind us all, that this could last longer than many thinks is even possible.

This past weekend, a supposed price war in oil broke out, and the Gold Oil Ratio was driven to new all-time full fiat petrol dollar system highs.

The battle appears to be between the Russian Federation, Saudi Arabia, and US Shale oil frackers.

The price per barrel of WTI crude oil is now in the low $30s and questions remain not merely regarding possible US shale oil bailouts, but more so geopolitical strategy, and regarding gold’s role.

In the fullness of our nation’s history during deflationary eras following when silver was demonetized that the gold oil ratio rose to nearly 100.

Hard to know how much higher this ratio might go now that we apparently, not foreigner governments, are busy buying our escalating IOUs.

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Regarding gold’s strength of late, it is questionable how much higher this gold-silver ratio may run to.

The all-time record high for the gold-silver ratio occurred in 1933 when the gold-silver ratio reached 134 as freshly confiscated gold got rigged to $35 oz and silver were only a penny higher than its all-time low level priced at a mere 26¢ per troy ounce. 

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The US Mint is now temporarily sold out of Silver Eagle Coins. The most popular silver bullion coins in the world, have temporarily sold out citing rates of sales that exceed 3Xs of what was sold last month.

While we still have bullion supplies on our shelves here at SD Bullion, product premiums are escalating due to supply constraints versus outsized demand at the moment.

What is past is likely indeed Prologue for Precious Metals.

As in the fall of 2008, this industry is typically not able to handle the demand increase of 5X to 10X over months or more durations of time.

This industry has also suffered many silver and gold refinery bankruptcies over the last few years and that has exacerbated ongoing supply constraints.

If spot prices stay or perhaps lower in the weeks to come, you can expect more delivery delays and product sellouts.

For now, our team at SD Bullion is working 7 days a week processing and shipping out hundreds and thousands of customer orders every day.

To finish this week's video update, we are going to hear some of silver bull and billionaire bond trader Scott Minerd’s thoughts from yesterday while speaking on CNBC.

Specifically on which fiat Federal Reserve and federal government bailouts and stimulants are to come from all this (the debate appears to be not should we but more so how much and where to funnel the next trillions in market proppings).

 

This fiat Billionaire was Bullish on Silver Bullion around $35 oz, still is now.

While late this week the Federal Reserve upped their seemingly ever-expanding overnight REPO operations to trillions of daily aggregate loans and with multi month-long durations.

The US Treasury head is now using terms like Unlimited Liquidity and now have a listen to billionaire silver bull, Scott Minard thinks may be coming our way.