David Kranzler: Bonds are Signaling a Late Fed Response

Tom welcomes back David Kranzler from InvestmentResearchDynamics.com and Mining Stock Journal to explore the precious metals market's current state, particularly during the summer months. Kranzler anticipates heightened demand in India's largest buying season despite typical decreased volumes. He addresses gold price manipulation by western central banks and institutions, highlighting the influence of eastern hemisphere markets like Shanghai.

Banks, such as JP Morgan and Citigroup, dominate Comex trading, making substantial profits through short contracts, technical indicators, and sell stops. Central banks reportedly authorize these actions, making price manipulation lucrative. Kranzler remains optimistic about precious metals, predicting higher prices by the end of Q4 or mid-Q3.

Dave shares past experiences in analyzing gold and silver markets by monitoring open interest and positions held by banks and hedge funds. He observes a correlation between net short bank positions and net long hedge fund positions, leading to price rallies or smashes. Reflecting on 2008, he recounts how the financial system's instability did not result in gold and silver price increases due to manipulation. Current concerns include regional banks and commercial real estate debt, potentially leading to another crisis and further precious metals market suppression.

Well-run mining producers are thriving amidst rising gold and silver spreads versus production costs, acting like monetary printing presses. Junior project development companies face feast or famine situations, with some easily raising funds while others struggle. Institutional investors like Paul Singer and Stanley Druckenmiller invest in larger mining stocks for leverage effects. The speaker predicts a major shift into the mining sector once the stock market experiences a downturn, leading to price increases for gold, silver, and mining stocks by year-end.

The podcast also touches upon the significant impact of Apple, Microsoft, and NVIDIA (the 'magnificent seven') on the stock market. These companies have driven most gains in the S&P 400 and NASDAQ 100. A catalyst, possibly a financial crisis, could trigger capital to shift from these stocks into the mining sector when investors need to liquidate quickly. This occurred in 2008 with Fidelity's funds investing in junior microcap mining companies due to their size. The speaker encourages precious metals sector investors to remain persistent despite current trends and anticipates price increases by year-end.

0:00 - Introduction
0:44 - Summer Doldrums?
3:30 - Mr. Slammy at Mkt. Opens
7:10 - Eastern Pricing & Effects
10:00 - Eastern Buying Demand
11:20 - Bank Incentives & Metals
14:54 - Price Predictions
17:32 - Bank Status Now & 2008
24:39 - Low Grade Q.E. Chart
28:29 - Feds 'Control' & Markets
32:29 - Buy Now Don't Pay Later
33:43 - Middle Class Decline?
36:44 - Recession is Here?
39:29 - CPI & Health Insurance
43:52 - Miners & Capital Issues
53:52 - Wrap Up

Talking Points From This Episode
- Kranzler anticipates heightened demand during India's buying season despite decreased volumes and price manipulation by western central banks and institutions.
- Well-run mining producers are thriving amidst rising gold and silver spreads versus production costs, while junior project development companies face challenges.
- Institutional investors invest in larger mining stocks for leverage effects, predicting a major shift into the sector when the stock market experiences a downturn.

Guest Links:
Twitter: https://twitter.com/InvResDynamics
Website: https://investmentresearchdynamics.com
Newsletter: https://investmentresearchdynamics.com/mining-stock-journal
Article: https://brownstone.org/articles/is-the-global-inflationary-depression-already-here/

David Kranzler spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, he traded junk bonds for Bankers Trust. Dave earned a master's degree in business administration from the University of Chicago, concentrating on accounting and finance. He writes a blog to help people understand and analyze what is going on in our financial system and economy.