The Markets Are Not Responding Correctly to Potential Repo Disaster Brewing
This repo thing is scarier than it looks and yet, the stock market continues to make new highs. I'm just repeating back what you said, but fundamentally all those facts should lead to higher precious metals' prices and they don't. And why is that? And the reason being, as almost anyone that's ever listened to me or any most people on your show would say, look, it's the paper paradigm that runs the futures markets. And that's how the prices determined. And until that is broken enough for the market to settle based upon the physical market, you have the ability to basically control the price more or less.
And that's unfortunate. People hear that and they get discouraged and he said, well, you know, why fight the Fed? I'm just going to be in the stock market. I don't want to be the metals. But as we said in the last segment, it's important to be prepared for what the eventuality is because nothing grows to the moon. The Fed Is not all mighty, even though it might seem that way at times, and we're getting near the end. I do believe, I know that's really tough to time, but I can't see it going on much longer. Our debt is so high relative with the interest payments are, and this is with low interest rates. If interest rates get pushed higher as I outlined a moment ago that it's more and more difficult to service the debt. So, no, the fundamental facts have probably never been more important for owning some precious metals.
And yet the market is just worn out. I mean it was a six year trading range for gold. It finally broke above it. It went up rather significantly. $200 on a $1,350 is a pretty good move given up half of it and it's taken awhile, and people say, “Ah, that's it.” And it would comment, and of course you could comment on my comment because as you know Mike I talk to many of the wholesalers and retailers in this marketplace and most of the bigger ones as well… and I was told by one rather significantly sized retail dealer that they were getting a four to one ratio, meaning they were buying back from retail, not on the wholesale side, about four times as much gold as they were actually putting through the door. So, most of this move has been based on the bigger money, in other words the ETF's, hedge funds, banks, you know China, that type of thing.
