Transcription
Welcome back, everyone, to Living Your Greatness. My name is Ben Mummy, and I am super excited to welcome back the one and only Michael Oliver. So, Michael, how you doing today?
Doing fine. Northern Colorado. It's, uh, kind of cool today. Finally.
It's also very cold here in Montreal, about minus 12 today.
Cool.
Yeah. Yeah. So it's pretty cold here. But Michael, I'm super excited, happy you're back because last time we were speaking was a really exciting time because you were predicting that silver would go triple digits. It hadn't exploded up there yet, but you were right. You called it. So, super excited to welcome you back on the show because we've seen a lot in January as well as February. And I just want to start off just by hearing what you're seeing right now in the financial world. But most importantly, I really enjoyed last time you wrote your weekend report. I really liked your title, and I feel like there's a problem right now that you're seeing.
Yeah, the headline was, "What Houston, we have a problem." Okay. We're watching sectors that other people don't watch so closely. Essential sectors, uh, financials, particularly, and banks. Technically speaking, they are much weaker than the S&P. So, while the S&P has been firm against its recent highs, although congested, uh, just below 7,000, uh, the financials have slipped and slipped for a couple months. Broadly speaking, the financials, the XLF, for example, which is an ETF that holds banks, insurance companies, broker dealers, uh, credit card companies. Okay? It's deviated from the S&P in that its performance is credibly and measurably slipped. Okay? Not in a way that creates thunder or screaming or anything like that, but just it's subtle.
A very similar divergence occurred back in 2007 as the market was. Um, in 2007, we had a laborious price top in the S&P, and it made a high in the spring, like in May, dropped into the summer. So did the financial sector. Then the S&P turned around again, went back up near its highs. And then in September 2007, the Federal Reserve had a surprise rate cut of a half a point. Oh boy, party on. Okay. So the S&P moved to a new high in October. So literally a few weeks after that rate cut, that was it. That was a. Okay, but they had a party. They went up and took out the old high, which happened to also be the same high as occurred in 2000. So, this, the high in 2007 and the high in 2000 were around 1550 for the S&P. Then they cut the rates and blasted up into the 1576, I think was the high. So took out all the highs on a happy surprise federal rate cut. Oh boy, they're on our side. If you sold that, you sold the top tick. Uh, but during that time, the financials had already slipped while the S&P had just congested, and the S&P made a new high, and the financials went up and made an anemic secondary high, didn't get back to their highs. And but they'd already broken, by our metrics, the financials had already broken their major momentum trend, which the S&P had not done at that point. So, in other words, you had an early warning from the financials that wasn't like a table pounder, wasn't headlines, although later it would be, as we all know. Uh, but it warned you. And we're getting the same kind of behavior right now in our financials, and a couple banks even that are breaking what we consider to be major momentum support levels. Now, it's not the kind of thing that looks like, "Oh, you're going to crash because of it." It looks like the kind of thing that means, "Hey, I just snapped your leg in half, okay? And now you're crippled." And, you know, once you get a few more entities that start to break, like Visa and Mastercard, as far as we're concerned, have broken major long-term momentum trends. Well, heck, everybody's looking at AI and looking at, you know, Nvidia stuck in the middle of this like six-month range, just blip, nothing, you know, no fear or alarm there. Uh, whereas the financials are breaking stuff. And yet nobody's noticing because there's no headlines yet. But I can bet you'd bet that the Fed knows what's going on in the financial sector in terms of credit problems. And, and, you know, that we know that the Fed back in November, uh, Williams, I think is the head of the Fed of the New York Fed, uh, made a statement that the Fed's going to start buying bonds. His excuse was, "Oh, not that we need to support that market, but because of, we just need to provide liquidity." Isn't that cute? Okay. Since then, bonds have dropped in price, risen in yield, and recently they rallied in price, dropped a bit in yield over the last week or so, but basically gone nowhere since November when they started buying them. In fact, it's the price level right now of T-bond futures, it's where it was then. So they really haven't been able to cause that market to rally or the yields to pull back on the long end, and therefore that long-dated debt is choking a lot of people who have been, have to pay. Uh, and this impacts the banks, of course. Uh, and that's probably why we're seeing like things like, well, we all hear the stories about people laid on their credit cards, for example.
Chart of Mastercard and Visa, especially our momentum charts, and you'll realize, uh, oh, something's broken here, but nobody's talking about it. And we like that. We don't want to have headlines. You don't want a headline to justify a downturn. You want the downturn, and then you look back and say, "Oh, golly, now I know why." That's the way it works. But anyway, that's what's going on in the stock market. And meanwhile, the monetary metals have continued in a violent way, more violent than before, their uptrend. And, yeah, we just had a sell-off because a lot of idiots came in and bought silver gap up on Monday morning and gold and got hammered. Uh, our experience with war news is, uh, if the market is already in a negative trend, definitely sell it. Okay. Uh, this is what happened back with crude oil. Remember back in June when we bombed the nuke site in Iran? Uh, I say "we," I mean when Trump bombed the nuke site in Iran. Uh, they spiked oil up into the mid-70s. And if you bought that rally, and at that point in time, our assessment was oil was, it was still not broken out to a positive trend. It was still a negative situation, and they slammed it. Within months, you were back in the mid-50s. So if you bought war news, you got bagged. Well, if a market is in an uptrend, silver and gold are, as far as we're concerned, oil went into an uptrend back in January when it crossed 63. And you get a newsy story like that, don't count on holding. You're likely to suck in a lot of headline-chasing buyers, vulnerable people, and so when they buy high, you know, expect them to get kicked in the gut.
In the current situation, though, silver and gold, for example, they're already in an uptrend. We know that. Okay. So, they got kicked in the gut, but it didn't in any way threaten the uptrend in gold. And so, it's just a sharp pullback from the high we made on Monday. And frankly, I think where we are right now, as you and I are talking, is probably about where the low is going to be. Was just below 80 today. It's now 83, 84 on silver, for example. I think probably in here, if you see a gel here for a day or two, that's it. It's over. All you did is bag the headline chasers. Uh, news stories like war, that's not what's driving gold and silver anyway. You know, it's, it's the underlying major fundamental financial factors that are in play. Monetary excess that's ongoing. Now, we have vulnerability, we argue, in the financial sector that's likely to show itself in the coming couple quarters, later this year, especially. And I think the monetary metals know that. That's what's been driving them. They don't need war news. And anyway, so the people that bought the war news got gut-kicked. Good. Anyway, that's what we see.
Every time I see war news, I always think two things. A, we don't even want war in general as humans around the world. And B, it's just so dramatic that it moves our metals the wrong way that we want it to go. So, it's, it's definitely not good at all whenever we hear that news. Michael, I want to stay on silver because, you know, you just mentioned that you believe right now that $80 is a bottom. You know, and there's been a lot of talk on silver in the last, I would say, couple months, ever since it got that huge attention going up all the way triple digits, pretty much close to 120.
Mhm.
I want to hear more about. I know you've always talked about this new price reality, and I think even right now, just it holding at 80 minimum is showing that there is a strong base and new reality. So I'm curious to hear more about if you could walk us through where you see silver going in the short term. So let's say one to two months, and then let's say midterm, six months, and then let's say long-term.
I think most of the move of the move to a new reality in silver is going to occur in the next handful of months. By some, okay, there may be some after that, but the main goal is to get to the new reality. What do I mean by that? If you get a chart of copper, in fact, you can go to the Federal Reserve of St. Louis and type in copper, and they'll give you a chart going back to the 1980s or something. Look at that. You'll see that for decades, copper lived in a range from half a buck to a buck 50 a pound, up, but decades up and down. That was its reality. Okay. And in 2005, late that year, copper broke out of that range on its own. It didn't have help from gold or silver or even other base metals. And it went up, quadrupled in a matter of a couple, several quarters. Went up to 4450. Okay. Boom. A new reality. And, yeah, there were sharp sell-offs after that rally high. But the reality that then occurred over the next decades, the next 20 years, was basically either side of four bucks as opposed to either side of a dollar. Okay. So copper moved to a new reality, and it did it quickly. Where it's, when it broke out of that price range, the buck 50 to 50 cent in late 2005, it didn't go to the new reality over three years. It went to the new reality in the next couple quarters. Okay? And the exact same thing happened to lead back in 2007, where it had been in an old reality. We talked about lead, you can get that chart on the Federal Reserve too. And when it broke out in 2007, it would have been like quadrupled in a couple quarters and then lived in a new reality. How come silver was stuck in a half-century range, four bucks to 50, four bucks to 50, when those two base metals didn't? Gold didn't. It's mama market, you know, made a high at 200 bucks, then it made a high at 850, then it made a high at 1920. So all those new highs in gold that were dramatically above the prior highs, silver was still capped at 50. What's going on? Well, that ended. Our momentum work told us that was going to end a year ago. We could tell, okay, we're coming up out of here now. We're going to blow through that nonsense, the idiot level we called it, 'cause any idiot with a price chart could see 50 bucks, 50 bucks, and thought that was, that was it. You had, couldn't go through there. And when we did, we gushed. We got up, uh, you know, into the mid-90s, and they had some congestion and sell-offs. And then finally, 122 was the top trade in January. And in one and a half trading days, literally one and a half trading days, the tail end of January, silver collapsed down big time to 70, and ultimately got down in the high 60s. And then all during February, after that January 31st, February 3rd price low, one and a half days, uh, silver congested above that level and built a base. We shot up out of that base based on our works a couple weeks ago, and price shot up into the, you know, mid-90s recently, upper 90s, I think early this week, and up out of that basing action. And then, then with this headline story where you sucked in a lot of, you know, "Hey, I want some too," you know, uh, they got bagged, and you pull back about into the middle of that price range that hit the basing period that occurred all during February. Our weekly momentum though pulled back to the top end of that basing action. So momentum showed a slightly different picture than price. Price went back down below the recent highs, which were in the low 90s, the basing period in February, got down into, you know, under, under 80, even now we're 83, 84, but momentum sat back on top of those highs when you plotted a momentum chart. So, as far as we're concerned, okay, this pullback was to a kosher area. It's okay. If you see any stability here like today, we got some, you see some more tomorrow, assume that was it. Okay. Same, same assessment with gold, except it's a little firmer than silver of late. Generally, it's, it's been weaker than gold over the last, actually the last year. Uh, but there's some other things going on out there. One of the things that told us also that we're going to have this move to a new reality was the spread relationship between silver and gold. There was, when you divide an ounce of silver into an ounce of gold, express that as a percent. And back in 20, 24, 25, silver, I think even, yeah, early last year, silver got down to 1% the price of an ounce of gold. Well, think about that. Okay, what does that mean? Well, if you go back and look at that 50-year range in price where silver went up to 50 and 50. The two prior times that it went up to 50, here's where that spread was, 6 and a half percent ounce of silver versus gold. And in 2011, it was 3.1%. We got down to one. I mean, it's like silver is free relative to the mama metal. Well, our argument is not only is silver likely to go to a new price reality, but it's likely to retest or challenge or even take out the old relative performance reality it proved to have in 1980 at 6 and a half percent of gold, and in 2011 at 3.1. Right now, we're about halfway there, 1.6 area percent of gold. Still dirt cheap on silver, but technically that spread is broken out. Now, when you can plot that spread chart month to month, you get a technical picture, and we got a basing action spanning like almost a decade. We broke through that in November. That started the clock. By the way, in November, silver was $56. So, it had just broken out of the range of the price range. And at that point, the silver spread just broke out of a basing act. And we find that whenever that spread breaks out, like it did in '79, just prior to the explosion to 1980, and it did in 2010, prior to the explosion in 2011, that spread told you something is engaged other than just the price chart. And sure enough, we went from 56 bucks at November close to intraday high of 122 in two months. Two months. Okay. And you get a pullback. Now we're 84. Okay. But you're still well above that $56 breakout level on the spread of November. Also, we find that when that spread breaks out, it tends to gush. Not just the spread itself, the performance of silver, but the net price of silver tends to gush for a couple quarters. We're only in month three post the breakout, just starting month three. We suspect this surge is likely to continue for a couple more handful of more months, three maybe four, uh, to keep the norm of what it does in the past. And there, so there's a lot of factors in play here that tell us silver's in a gush. Ignore the recent break because in each of those prior surges that we had, 1980 and 2011, there was a point in the middle of that time frame that like couple quarter surge where you had a bad month and it looked like, "Oh gosh, that was it," and it wasn't. Okay. So that's where we are. A lot of factors are telling us silver is engaged versus gold. Not only is it engaged in price, it's engaged in relative performance status. And then there's another new technical we're going to talk about in a minute, that's the minverse.
I appreciate that, Michael. And I actually want to keep you here still for a little bit on silver because it's very clear from what I'm hearing that there's been a jiggle, which you've also talked about.
Um, it's not going to go all the way straight up.
Pullback was super healthy, super normal. But your point is that the momentum is still screaming, and that you see that there's still legs up for a powerful move. So I would love to hear what we have to see if you could walk us through what we have to see for it to go past towards three digits. So let's say above 100, and what it has to do to get towards maybe going to 300 and then $500 silver.
Yeah. Well, there's also the monetary factor. If you're just dumb and you say, "Well, you know, what's the monetary degradation?" You go look at an M2 chart. You go back to 1980. How much money was in circulation? M2 monetary, you know, measure. And in 2011, you compare that to where monetary growth is now compared to those time periods. How much has the money supply doubled, tripled, you know? And if silver were to simply match the growth or the decay in the value of the money or the increase in supply of the money, it would be three to $500 just to match that. So, you, that's another fact that you got to look at that's sort of, it's a glacial factor. It's not a timing factor, but it's, it's just a fact of reality that silver is vastly underappreciated, undervalued relative to what it's selling for. Whereas gold has continued to to go higher. You know, each of its bull moves are eightfold dimension moves from bare low to bull high, bare low to bull high, new highs each time. Eightfold. Well, if we have an eightfold move in gold, we started from a,50 in 2015, would be $8,400 gold. Okay? And by the way, we've been saying that for like a year, that that's not our target. That's just noting a past reality. You have another eightfold move. Big deal. Had two of them. Have a third one. Okay. Uh, JP Morgan, I think Morgan Stanley both come out with reports suggesting something along that line based on fundamental factors. So, we find that interesting. Maybe they're reading our reports. I don't know. Anyway, so if gold went to 8,000, think about that. And silver said, "Well, I'm going to go back to my spread relationship high that I had in, let's say, just 2011." That was, that was, uh, 3.1%. Well, what's 3% of 8,000? You know, with 240 bucks. Yeah. And, and if I'm 6%, 6 plus percent like it was in 1980, in fact, for a period of time there, it wasn't just a spike. You say you were well above 6% for like a whole year or so. Uh, good grief. That's assuming gold only matches its prior bull market dimensions. The, the 2000, uh, the 1980 peak and the 2011 peak were both eightfold gains. Uh, I don't think it's going to stop there because the factors we also talked about earlier, the financial sector and stuff like that, that stuff hasn't even started to to unfold in a way that people get aware of. And the Fed is fully aware of. You know, and therefore the monetary panic that you can expect from them, they haven't even unleashed it yet. And you can bet by mid-May, if not before, the Fed's going to start cutting because they'll have excuses, uh, like phone calls from the big banks, you know, "Hey, hey guys, cut those rates." Okay. Uh, but, and I, and we suggested in the weekend report that frankly, any of these things that we see through our momentum work about specific big banks that are sitting on death lines, in other words, on momentum structures that if you slip just a bit, you're going to start cracking massive momentum structures. One of the major banks already has, I won't mention its name. Uh, and two or three others are sitting on structures like that. But when you break those, that's it. It's over. You're going to start down in a, in a more serious manner. Not a crash, but that's when the Fed, while they won't admit it in public statements, will wake up and start cutting. And they'll have some excuse like, "Well, I, whatever." They'll find an excuse. What are their two mandates? Uh, but the real concern is they can't allow any kind of story to come out of the big banks. Remember a couple years ago, we had the, the crisis in the middle, middle scale and small scale banks.
Number 23, there was a, we heard stories about that. It spooked people. You can't have that in the bigger banks. And right now, technically, they look vulnerable. So maybe even Powell, he goes out in mid-May, will have a story that forces him, not because he wants to accommodate Trump, because he doesn't want his legacy to look bad. Like he didn't cut and look what he did. Banks started. You get the point. What Trump would say if that happened that he might, just to save his legacy, uh, begin to cut in a quote surprise way. Uh, again, not because of unemployment, not because of inflation, but because of this other factor. And I think gold and silver know that.
Right, Michael? Well, I, I appreciate you explaining all that because it's very evident now that this is holding and going much higher in terms of like the short term of three to four months from here.
Yeah.
And I know, I know you're not the only one. I know Eric Sprat is talking about this. He talks about M2. I also know that many other technical analysts that I respect, Chris Veruan, Christopher Aaron, they're saying that as well. Their time frames may be a little bit different, but they're also predicting similar prices to you.
And on top of that, too, we haven't even spoken about even like the gold to silver ratio in terms of it's still super high, and over, over the next couple years, it's going to get tighter and tighter and lower.
We measured on a percent scale. So this percent will get higher. Yeah. Yeah, I understand that. I think that will be a big factor. Yeah.
So there's so many things that are just screaming right now. And I even had a conversation with Andy Sheckchman on the last episode, and he's been saying the last 16 months, both gold and silver keep getting record amounts of volume, physical gold and silver. So there's so many other things at play where the metals are screaming. So what else do you think from that? And then on top of that, I want to go to where I think you were going before, which is the miners, because I know Don Durr always talks about, you know, as silver continues to make these moves and not only silver, but even gold to rip higher, there's going to be a huge impact on the miners.
Yeah, it already is. Yeah. Uh, those dynamics, the other market dynamics, like if the stock market breaks, especially the financial sector, uh, that doesn't care about AI, they care about the banks, okay? And the credit card companies and, you know, etc. The financial sector. And if that starts to show vulnerability, and technically we see that, uh, and our opinion is, S&P's have not made its high yet. Okay? How, how do we factor that in and be bearish? I think it'll be a, a desperate last spike high. And I bet during that time, you won't see the financials do the same thing. So, in fact, you get the same type of diversion she had in 2007, which was a big tap on the shoulder, "Hey, something's wrong here." Okay? But the Fed will be acutely aware of that, and that's what drives the monetary metals, the degradation in the money unit. And I don't mean to just mean here. Then there's another market factor. Not just the stock market's going down. Bonds, government bonds, government debt paper, not mortgages like in 2007 to '09. This family, that's family. Talking about government bonds. And they're sick. They've not been influenced by lower rate cuts in 90-day bills or something. That doesn't influence them at all. Long-term deals have stayed glued to a ceiling at very high levels. And we watch 30-year T-bond futures. Well, we know there's been a bond crisis in Japan, and they've got the same problem we do, except theirs is now more forefront. Uh, and their new prime minister, uh, what's her name? But she is like the Trump of of Japan and declared herself to be that. She says, "We're going to print, print, print." I love it. You supposed market president or prime minister there saying, "We're going to print." Oh, great. Have no respect for the value of money. Okay. And Trump wants to print. So all you do, all you have to have is an excuse, and they've been going ape over there to print to save their bond market. Well, what if that contagion goes to us, too? 'Cause our bond market looks technically very bad. It looks like it's laying on the floor. Remember, T-bond prices collapsed 2020 to 2022. We called it back in October '20. Uh, T-bond prices collapsed, yields exploded. And if you go back to October of 2022, when the collapse ended, T-bond futures were at 117. Where are they right now? 117. They haven't been able to get off the floor. They do this, comes trying to rally, trying to rally, trying to get rates down. It doesn't work, and it can't sustain a rally. The bond market is anemic to the point where the Fed now has to buy it, print money to buy it. I mean, that's a crisis in the making. And we're not the only country. There's Japan, there's us, there's a couple European countries, there's UK. They all have government bond problems. Those are the kind of problems when they come to the forefront. Whoa. I mean, you know, that's, that's a bigger asset category than the stock market.
Okay. Those are power forces to help gold and silver go ape because of the monetary degradation that central banks will have to engage in in order to defend their paper. So these are factors that we're watching as well, the US bond market, the foreign bond markets, the stock market because with these guys start to break, and I think they're going to break this year hard, and I think we've been topping effectively in the S&P since, uh, last year. This time we're at 6,200, then in February, just, just short of 6,200. Right now we're trading 6,700. Oh, big deal. Okay. Uh, but it's still a topping in process from our vantage point. Uh, and I think that once it shows that it was topping and alarms people, where are they going to put their money? It's never the case. You go back to history, '29 to '32, '73 to '74 in the stock market, 2000, 2002, 2007 to 2009 stock market collapses, the gold collapse. Nope. There's always an alternative to the stock market, and usually it's the monetary metals. Oh, they'll have zigzags in sync with the stock market here and there, but their trend can be totally opposite. And I think that's what it's about to occur. Uh, in which case, even more money flow of fleeing assets from bad categories go into the monetary metals because, golly, now I feel safe. You know, I really, I own what I really call cash, you know. So, when you take profits, put it in cash. That's called gold bullion. Okay. But anyway, those factors have not yet engaged. We think they're going to engage. And once that happens, that's where the headlines start. And that's what all of a sudden people say, "Golly, gee, I got to buy some gold." You know, the Western world's way behind on that issue, or silver. And I think silver is the one that's the, the most severely discounted. And its spread says so. It says, "I'm cheap as heck. I'm going to catch up to gold and go back to more normal reality, a new reality." And then, then comes the issue of the miners. And boy, we got something there.
So, let's talk about that then, the miners.
Okay, the miners. Uh, there's a chart if you can show it. Uh, it it'll smack people in the face, and I'll explain what they're looking at there. This chart shows the price of the XAU index, which is the Philadelphia Gold and Silver Index of miners, by the way, not bullion. Okay? It goes back to the 1980s in its history. And if you plot the price of XAU each month, divide it into an ounce of gold and express it as a percent, you'll see that that red range prevailed from 1985 through 2008 between 17, 18% on the downside, and well over 30% repeated times on the upside. So you could say, sort of on average for many decades, it was an average of let's say 25% the price of gold. Okay, up and down above that, but in that range. Okay. In 2008, you broke down the relative performance of gold miners versus gold broke down, and they both were engaged in a bare market into 2015. You know, we, they peaked in 2011, both made price peaks, but already at that point, the gold miners were weak compared to gold, and they collapsed that spread relationship down to 4%. Okay, think about that for a minute. For decades, they'd been priced at an average of 25% of an ounce of gold, and they go to 4%. I mean, what do you think? They're going to go to free. We're going to have, we want gold, but we don't need miners. Okay, they went to 4% in December of 2015, coincident with the price low time of the price low of gold and miners in that bare market ended in 2015. Since then, we've had a massive upturn in both those markets in terms of price, but the spread of the relative performance of XAU has stayed in a dozen-year-wide range defined roughly at 5% on the bottom side with that one low at 4%. And the highs were repeatedly above 8%. That's that black range that you see at the bottom, dozen-year-wide range. Okay, you broke out of that last month, whereas we have a relative performance breakout that says, "Hey, I'm going to do better than gold." Okay, I have a technical breakout. Well, uh, if you just take that spread and say, well, I'm going to go now from, it's roughly just below 9% at the close of February, and again, these are each month's close. We ignore intramonth action. If you run up and just bump the bottom end of that multi-decade prior reality of the relative value of gold, silver miners to gold, you'd be 17.5%. Meaning you could double the price of the miners relative to gold just to bump the bottom end of that old range. Is that might be resistance? Maybe it is, but there's zero resistance between here and there. Say this spread broke out of a dozen-year-wide base, well-defined, and says, "I'm undervalued. Something's wrong here. I'm going to correct you. The old reality is wrong. I'm going to go back to a more pricing relationship." And heck, even just the bottom end of that says you could double the miners versus gold. Okay, now let's do some math. Let's say gold only goes to the $8,000 level and matches the prior two bull market peaks. They were eightfold. Okay, if you take XAU and put it up to about 17.5% of that price, it's more, it's like a doubling plus of the current value of XAU index. Other words, they will scream in price relative to gold. Now, if you'll notice on a price chart, and we don't have it here right now, but anybody can punch up on their screen, punch up a gold chart, continuation futures, or punch up a silver chart, and then punch up a GDX chart, the gold miners ETF, and a SIL chart, silver miner ETF. They went back to their highs of January. In fact, GDX made a marginally higher high. Gold didn't, silver didn't. What is that telling you? Even on a price basis, the January sell-off that collapsed the price of gold, silver, and the miners. Miners erased it fully, went back to their old highs. You don't do that top, by the way. Gold never tops, and that sector doesn't top with double tops. Okay? Any significant top, it's always a spike. It was true at the bottom in 2015. It was a spike low. 2011 high, spike high. 1980 high, spike high. You don't come back and kiss the high again. The miners have already done that. So even on a price chart, you can see that, hey, hey, they came up out of the hole better than gold and silver did. And that's an expression of what that spread says. So right now, if I were to say, "Hey, I want to invest in the gold sector." What do I want to buy? Well, you want to emphasize silver because it's going to outperform gold. And two, you want to, you want to own the miners more so than gold. And then when we go down within the miners and divided between the gold miners and the silver miners, we also have a spread breakout. We don't show it here where SIL is broken out versus GDX on a performance basis. So not only are the miners saying, "Buy me, not gold," within the miners, SIL is saying, "Buy me, not GDX." Okay? Because I'm likely to outperform it. So anyway, we think it's a very compressed situation that is only just now last month's close registered its bicycle. So it's not old, it's fresh.
And what would this mean, Michael, for the juniors?
Same story, except, you know, a lot of them will get bought up. My own personal investment right now is, we, we run performance reports every month on, we sift through the mining ETFs, and try to pick out the outperformers and focus on them, which ones are doing better than GDX, for example. And, you know, in any market sector, whether it's going up or down, there's always going to be stocks that are doing better than the sector or worse than the sector. So we're trying to find the better performers. My son also runs a junior report every month where he looks at junior miners, looking not at their trends, but their trend versus the sec, or are they beating the other juniors? But in my poor, own personal portfolio, which I have to list at the end of each report, you know, for disclaimer reasons, uh, I got a lot of juniors in there, or, or smaller miners. Uh, and I've got a lot of the biggies, but my emphasis is on silver miners, almost entirely silver miners. So I've got four of the big name silver miners and a lot of other ones, you know, I don't even know their names hardly. Uh, I almost think you can, we're at a point in the silver market that if it does what we say we assess that it's going to do, namely explode to a new reality, and the silver miners as well, even more so, that you can almost throw a dart, or better yet, throw six or 10 darts and pick those symbols and just put them in your portfolio. And I bet a lot of those little tiny guys won't be around in a year or two. They'll have been bought up. You know, and it's not so much a function of, you know, how profitable is their operation. You know, they may have a totally inefficient operation, management may be totally inefficient, but the big issue for the big miners might be, "Hey, how much you got under the ground?" You know, we don't care whether you get it out peritable way. We're gonna get out in the profitable way. So it's an issue of, you know, what they got under the ground more so than, you know, how, what's the current management like? Uh, and I know a lot of people like to look at that in the current earnings and stuff, and even that gets silly because, you know, like we had a bunch of earnings reports on silver miners early in February, first half of that month, based on what fourth quarter earnings, based on what price of silver then was around 50 in the fourth quarter, closed out November at 56, so probably about that average price. Well, all those earnings projections you've got are meaningless now because, you know, we've got 30, 50, 60, 80, 100% almost during this quarter at some point. So all the earnings projections go out the window. It's more of an issue of what's under the ground. And some of the big miners, and some probably some of the big gold miners, are going to start to diversify by silver miners. So you could again, throw a dart.
And you're actually not the only one talking about this. Like in terms of miners for silver, I know Rick Rule sold 80% of his silver and he's just rotating it into the really good, best of the best companies, right? So you're not the only one saying this.
I, I think it's a good idea. And in terms of the M&A, we saw a lot last year, but I keep hearing from well-respected voices like Michael Jim Tle, that he believes that this year is going to be on a whole another level. So again, someone else that's very well-respected, who's also saying the same thing as you.
Michael, I, I, I'm curious to ask you, you know, we spoke a lot about silver, we spoke a little bit about gold. Are there any other commodities right now you think people should be paying close attention to?
Well, we're bullish on the commodity complex. Uh, the Bloomberg Commodity Index is vastly underpriced. In other words, the commodity category as a whole is is cheap in relation to its own prior reality. Like the Bloomberg, for instance, you know, hit, let's see, 238 back in 2008, I think it was. So it was a peak, and then in 2011 made a high like 170. It collapsed to under 60 in summer of 2020. Okay, totally uncorrelated to gold because between 2015 and '20, gold went from like a thousand to 2,000. But the Bloomberg kept coming down. So it wasn't in correlation with gold. Meaning commodities were under pressure to the point where they got to 60. An asset category that used to be priced at 230 something and 170 something got to 60. What's it going to do? Go to zero? We don't need commodities anymore. Okay. It, it was overdone. In October of 2020, we put out a buy signal saying there's going to be an explosion. And sure enough, they doubled. They went to 140 in the Bloomberg. But even then, that price high wasn't anywhere near its old highs. And then what happened after the war started in Ukraine? And by the way, at that point, Bloomberg should have gone down because we predicted around 140 would be a stopping point. It pulled back down, and it's been a couple years recently either side of 100. Okay, think about that 100. It used to be 238 and 170, and here it is at 100. Okay. In October last year, we crossed 106.50, and at that point, we said that's it. Next up wave is starting. Okay, no headlines. Now we get a little war headline, but prior to that, there were no headlines. Bloomberg is now up to 125, and it's already been there before with this crude oil surge today, you know, the last few days. So, it wasn't crude that got it up there. It was already there. Uh, so it's already moved up out of that hole, and we think it's engaged in another asset class shift. And I'm going to suspect, and I expect that over the next several years, anybody who right now says, "Okay, I'm not going to buy metals. I just want to own real, I want to own stocks." Okay, buy stocks that are related to agriculture, to oil, to base metals. You don't have to buy gold miners if you don't want, you know, if that's where you should be, gold and silver miners, but even just buy basic commodity-related companies, fertilizer companies, etc., and a basket of those. And I bet you're going to beat the pants off the S&P. Not only because they'll go up, but I think the S&P is not just going to not go up, but go down. I think there will be an asset class shift among investors that says, "Hey, I want to buy some real-world stocks. You know, they have dirt on their shoes that point, they dig wells, they grow crops, uh, etc." I think that's a shift in asset class preferences is now underway. And it's not a talked about on Wall Street, but I think it will be, particularly when the stock market starts to roll over and the commodity complex and the stocks related continue up. Then you're going to have an awareness. Wow, something's going on here. I think it's a revaluation of an underpriced category. So, I think that's another place to be, secondary to the monetary metals, but I think it's a reasonably safe place to be because I don't think the downside potential is, is at all meaningful, if at all, given current historic levels that we've got.
Well, I really appreciate that, Michael. You know, giving that context because I know people are always asking what else is Michael thinking about. So, you obviously answered that.
That's, that's the one. Yeah. And I, I also have, I think I told you this before in the past, I have friends that really appreciate your work and really appreciate too, it helps them have more conviction of whenever there are these jiggle wiggle pullbacks that you call. They feel a lot more conviction and they feel a lot more calm to kind of embrace the volatility. But it's interesting to hear now again your thesis. I'm excited to see also the next time I bring you back where we are from here. But before we even go there, I want to actually bring up I was telling you about a couple weeks ago that I've been reading your book. And so it's called Anarcho-Capitalism. And I would love you to share in a couple minutes, you know, why this book is so important and why more people around the world should be listening to it or reading it.
The libertarian movement as we now know it, like the LP, the Libertarian Party, started in late '71, '72. And at that time, I already knew a guy named Dr. Murray Rothbart. Uh, I interviewed him for a newspaper that I put out back then. It was the first libertarian anarcho-capitalist paper in the country. And the movement then, as we, the movement, it was tiny, like a couple hundred people. Okay. Rothbart was an economist. And, uh, now there is the Mises Institute down in Alabama, which is a think tank of some importance and acknowledgement, uh, that is based on Rothbart, and it's a libertarian, anti-statist, intellectual-based think tank. It started in the late '70s. Uh, I communicated with Rothbart through letters, and he's now considered the father of modern libertarianism. He died in the mid-'90s. Uh, and he also coined the term anarcho-capitalism back then. He didn't write any major papers on it, but he, he used the term. I wrote a master's thesis in 1971, '72, was later accepted as my thesis in '70, I think it was '73, called Anarcho-Capitalism. And I published it in 2013, but it was the first major paper. Rothbart told me in a communication, "Yours will be the first to theoretically explain what is this all about on a conceptual basis." And so it's a philosophical work. It's a short book. I don't recommend it to everybody. It bores you to death. It's only like 180 pages. But on a philosophical level, I develop the core tenets that underlie what we, what we call anarcho-capitalism. And now, lo and behold, a couple years ago, year and a half ago, there's a president in Argentina who declares himself to be not a libertarian, but an anarcho-capitalist. So there is some acknowledgement and rising acceptance that, hey, this is a concept that has some validity. Anyway, but it was the first book on the subject. And what it is, is I married the basic concepts of Ayn Rand, who politically was what you could call sort of a conservative, and she basically just accepted the founding father's notion of government and trying to limit it in its scope, you know, checks and balances and all these different divisions to to sort of restrain it from ever becoming a monster. And so she accepted that as her.
political premises, but below that are basic philosophical issues that are prior decisions you have to make prior to coming to a political conclusion. And then when I get up to the political level, I shift over to Marie Rothbart. And so it's a layered book, basic ideas on up. And uh it sort of explains, you know, what is what's anarco capitalism? What's the idea about? Uh it sounds crazy, you know.
Um, anyway, that that's it. I'm not involved whatsoever in the quote movement. Uh I did give a speech at the Mesa Institute in March of 2024, but that's the only event I've ever done in the last 50 years that's involved with libertarians. U so anyway, my my focus is MSA.
Now, it just so happens now, and I do not allow, by the way, those philosophical views to mix with our analysis because I've been bearish on gold, for example, in 2012, a few months after the high and '11. We got major bearish and you know, I I should love gold, right? I mean, it's real money, okay, as a libertarian. But there were times when the technicals said, "No, it's going down big time." And it did. Uh so I don't allow that to mess up or muddle our analysis. So don't confuse the two. The book is on its own. Uh and uh anyway, so thanks for thanks for your appreciation of it.
>> I appreciate you explaining it just because it's been interesting. This was a younger version of you years ago, what you put together and what you wrote.
>> And so you've spoken about it in the past and I wanted people definitely to hear hear a little bit more. Yeah.
>> Um, Michael, I have one final question I want to ask you. And my question is, you know, all titles aside, who is Michael Oliver?
>> MSA is what I want to be. Okay. And I am I've been doing it since '92. My sons help operate it uh and do research and editing and so forth. Uh, we have a unique focus. We don't use just old bar charts and draw lines on them. Instead, we create what we call momentum charts. And that's not the normal kind you're used to like the wet noodle kind like MACD or RSI. That kind of, "Oh, it's too high. Oh, it's too low." You know, that kind of thing. Uh we look for structure and we've done well with that in in calling major market moves, not just not just gold and silver, but other categories as well. And uh oh, sometimes we're wrong, but not very often. Not very often at all. Uh and usually when we're wrong, we identify it shortly thereafter. But uh so we try to guide people and many of our in fact, we were not even open to retail subscribers until 2015. So for the first couple decades, we were uh strictly institutional. Uh but anyway, so that's what we do. So we provide a we look at all the four major asset categories because they're important. You can't just say, "Oh, gold and silver and have your blinders on." I mean, you need to know what's going on with T-bonds cuz if that beast breaks about uh I'll give you a number about four points below where it is now. It's 117. You don't want to go to You don't want even drop below 114. You don't want to do that again because you could have a bond crisis, meaning a implosion in price, sharp rise in yields, long end. That's the kind of thing could impact gold. You know, "Oh gosh, I can't even own bonds. What do I own?" Okay? You know, and also impact the stock market. And so once the money flows out of that category and it's already started because you can see it, gold versus S&P broke out back in November. And if you look where gold is since November and where stock market is since November, wow, you made a ton of money on that spread. You haven't lost, you've made some money on the short side of the S&P, not much. And you've gained a ton on gold. The spread. You know, in other words, there's money moving from one category to another. And so, watching those other categories is important because it tells you, hey, let's sink that boat. That money is going to go to gold. Sink that boat. Okay, you get the point. And we're not even at that point yet where the massive amount of money flow out of those other asset categories has been triggered. It's begun, but it hasn't been massively triggered yet. Wait till that happens.
>> I appreciate that, Michael. And just just still though, I'm still curious if someone was like outside of the financial world, who is Michael Oliver as, you know, a father, a friend. What would you want to say to that question? Who is Michael Oliver?
>> Oh, you know, probably the book. Okay. Even though I'm not, you know, not crusading for it and I haven't I don't tout it, you know, it's just it's out there. Amazon sells it. Uh and it's usually about number one on the libertarianism paperback category. Uh but anyway, uh that that's sort of my core, but MSA is too. And I I love the work we've done on using the way we use momentum. I I like it. Uh I I think our subscribers like it and hopefully it it does a lot of good for people.
Well, Michael, I just want to take this last little bit of time.
>> Okay.
>> I really thank you. You've always been so generous with your time to myself, my audience, and having a greater impact on the world. Just before we sign off today, is there anything else you want to say or any last words to value?
>> I think a lot of the stuff that we've been talking about is going to happen this year and I think especially in the monetary medals, I think it's going to happen by summer. There was a lot of the move. I think it will be dramatic. I don't think you're going to have an arm wrestling rally all the way up to couple hundred dollars in silver, okay? Or beyond. Uh I think it's going to be more sudden. Uh and I were to throw out a number right now and this is not momentum based simply price. Uh gold made two high closes. One on Monday and one back in January and they were about 10, 20 bucks apart. 5,300 plus, 5,300 plus using the Feb contract back in January. Now we rotated to April contract. Okay. But it's made two high closes. If you just look at that, you ever go back through that, you're going to zoom. The top pickers will say, "Oh, golly, we're wrong again." And once you do that, then gold will be saying, "Hey, this was it was a joke." Okay, we fooled you. And and silver likewise. And expect silver to outperform gold. So anyway, that's that's I think a lot of it's going to occur quickly and certainly by the end of this year, you're going to look back and say, "Golly, what a year that was."
>> I feel your confidence, Michael. So definitely when this happens, I'll definitely want to
>> bring you back on.
>> Okay.
>> In hindsight.
>> Yeah.
>> But yeah, Michael, just want to take the last little bit of time to thank you for being here and I hope to meet you one day in person. I I know I've shared with you before that I love the outdoors, so I would love to come to Colorado and see you one day.
>> Good. Look forward to it, Dan.
>> Cool. Take care.
>> Thanks for having me on. Bye-bye.