SILJ A Silver Mines ETF For Champions

With the ratio charts of most senior miners versus gold bullion looking droopy at best, I will suggest that inflation is needed to give these stocks some “mojo”.

Will they get it?

For some quality insight into the matter see here.

Hedge fund manager Paul Singer thinks significant inflation could happen, and sooner than most investors expect.

(Click on image to enlarge)

weekly T-bond chart

 From March to late July, there was a disconnect between bond yields and gold; yields rose and gold soared. 

That happened in a much bigger way in the 1970s and the big question is of course… can it happen again?

Investors need the patience to wait for a sustained move higher in the consumer price index (CPI). Most people in the world know that “boots on the ground” inflation is much higher than the CPI indicates.

Rent, government services, taxes, and fees move relentlessly higher, but the CPI just sits there, year after year!

Unfortunately, the big unleveraged institutional money managers won’t take “here to stay” positions of size in the miners until they see the CPI showing a strong uptrend.

The good news for the miners: I’m predicting that the ascension of Janet Yellen to the US Treasury throne will be a game-changer for inflation as measured by the CPI.

As Fed chair, Janet added momentum to the stock, bond, and real estate market inflation that was created by Ben Bernanke’s ludicrous QE program. 

That program deflated Main Street’s purchasing power while enriching the government and Wall Street.

The Fed clearly likes printing money to create financial markets inflation for the richest people in America, but as Treasury Secretary, Janet is more likely to direct enormous amounts of printed and borrowed money at Main Street.

(Click on image to enlarge)

arguably the most important gold chart in the world

Investors really need to stay focused on two items; the fundamentals that can create Main Street inflation and this weekly gold chart.

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