Très intéressant contre point de Ed Wener qui conteste l'analyse ( pessimiste) de Clive Maund sur les mines...j'avoue qu'outre le fait qu'ils m'arrangent bien, les arguments de Wener sont très crédibles, il faut avoir lu cet article...Clive Maund and the Art of Getting Fleeced
A few days ago Clive Maund published an article with the provocative title
“Don’t get fleeced-get rich CRASH UPDATE” The purpose of the article was to warn
investors not only to get out of shares in general but specifically Precious
Metal shares which have successfully protected them from ongoing currency
debasement. What I would like to do is examine the logic of Maund’s argument.
I’ve copied the bulk of his article below in italics along with his two charts
and added my comments with a chart and table plus an older chart that Bob
Moriarty used in 2008.
Maund’s article, after a long introduction continues as follows (my
underline):“the stockmarket has recouped most of its 2008 losses so everything’s back
to normal - that drop in 2008 was just an aberration and now everything’s back
to normal and its business as usual.” According to our interpretation of the
charts if you fall for this spin you are going to get seriously fleeced in short
order, and this could also apply to those who listen to the siren calls of those
exhorting the virtues of Precious Metals stocks at this time. So let’s make this
as clear as possible - if there is another market crash soon as expected,
investors are going to do what they always do, which is go into blind panic and
toss almost everything overboard, and that can be expected to include gold,
silver and PM stocks. Yes, we fully understand that the fiat money system
is rapidly approaching its nemesis and that gold is the ultimate safe haven
and is set to soar as currencies become worthless, but that won’t help it
much short-term during the crash phase, which is likely to result in a heavy
reaction in gold back probably to its long-term uptrend support line. Silver
will be treated as a base metal and will plunge precipitously as in 2008,
which it is now perfectly set up to do. PM stocks will tank and many PM
stock investors will be devastated as their cheerleaders slink into the shadows.
All of this looks very, very close.
Let’s summarize what Maund is saying here:
- He thinks the share market is about to soon crash “All of this looks very,
- This includes Precious Metal shares and Silver bullion.
- Gold is set to soar but not before it retreats to its long-term uptrend
Two quick points:
- The above must imply that those selling all these crashing shares and gold
and silver will be buying fiat currencies such as the Dollar, Euro etc.
- We are only a little over 3 months away from the November Congressional
Maund continues:“Think I’m joking, or have “lost my marbles”? - it’s time for a little
mental exercise then. Take a look at the 2 charts below, one a 2-year chart for
the S&P500 index and the other a 3-year chart for the large PM stock XAU
index. Having given a Dow Theory bearmarket signal (this signal is disputed
by Tim Wood, Ed) at the turn of the month by dropping to clear new lows, the
market has rallied as expected and predicted to alleviate the short-term
oversold condition, back up to a target near its falling 50-day moving average.
Whilst acknowledging that there is an outside chance of it rising up as far as
its January high at about 1150 before turning lower, it looks very close to
rolling over to complete the Head-and-Shoulders top shown on the chart,
breakdown from which will lead to a severe decline. This rally is therefore
regarded as presenting a final chance to get out, and is also viewed as an
excellent shorting opportunity. The MINIMUM or rather first downside target
is the early 2009 lows below 700, but this time it won’t come back up again, as
governments around the world have used up all their options (no pun
intended) and blown their credibility to boot…..
“This last sentence is quite interesting as he seems to suggest that “this
time” governments won’t be able to prevent the crash nor should a crash take
place will they be able to reverse it.
The “this time” implies that in the
past (such as 2008) it was government that reversed the crash. Why not again?
Because they have used up all their options? No evidence for this is offered but
let me say that given Bernanke’s Helicopter/Printing Press remarks the only
thing preventing them from avoiding/reversing a future crash is a soaring Gold
price which would lead to rising interest rates. The 2008 Crash saw Gold fall
below $700 only to soar to over $1200 as the government assisted share market
recovery took place.
Here is Maund’s first chart of the S&P 500 followed by the Philadelphia
Gold Index the XAU. How are these two charts connected? See below for Maund’s
argument and logical errors. You must read Maund’s comments found within the
Maund continues:“Now here’s where you are asked to exert your grey matter a little. Look
at these 2 charts, one then the other and ask yourself where you think the XAU
index will be if the S&P500 drops to the bottom - or off the bottom of its
chart THIS YEAR. Get my point? - it’s not likely to be up is it? The XAU
index HAS NOT CONFIRMED GOLD’S BREAKOUT TO NEW HIGHS, NOR HAS SILVER - AND
BOTH ARE CLOSE TO FAILING BENEATH MASSIVE RESISTANCE. Watch out for a heavy down
day to confirm that the 2008 style crash has started. Remember all those poor
fools who froze like bewildered sheep in 2008 and were then summarily fleeced -
that doesn’t have to include you this time round, does it? “
I do not plan to argue with Maund’s S&P500 Crash prediction except to
repeat that he has not proven that the Government is out of options and that
given the upcoming elections one would expect them to prevent the markets from
crashing if at all possible. Two points that are related:
- Notice the S&P500 spike down in November 2008 was followed by another
low in March 2009. The XAU in contrast hit its low in October 2008 and by March
2009 was already on the road to recovery. These two charts are very
different. The fact that both crashed in late 2008 does not imply that they are
connected or that one caused the other or that a future crash of one will lead
to the other crashing as well. Maund is confusing Cause and Effect. The 2008
crash is more likely an aberration. How else could one explain that over the
past decade the PM shares have quadrupled while the S&P500 has lost 30%.
- Maund places great store in the fact that the XAU has not confirmed
Gold’s breakout to new highs. Therefore he argues the Gold breakout will fail.
Once again this is a logical and factual error. The Gold shares, as my chart
below shows, have been underperforming bullion for several years now and this
has not prevented Gold from breaking and rebreaking its old highs. One could
argue that the Gold shares should rise with the Gold price but the fact that
they haven’t has not prevented bullion from continuing upward.
Now let’s take a closer look at the two charts below. Both charts show the
XAU/Gold ratio. The first chart was created by Bob Moriarty in 2008 before the
great crash. It shows the BUY and SELL zones where historically Gold shares were
considered expensive or bargains. During the whole bear market from 1980 to
2001 the Gold shares NEVER fell below .1700 except at the very end when the last
Gold bulls capitulated.
Look also how much of this period was spend in the
SELL ZONE above .2700.
The chart below brings the first one up to date. Since the 2008 crash the
PM shares have never left the Really Buy Zone where the shares are considered
dirt cheap. Today with Gold near $1200 it is sitting at .142, a low level never
even remotely approached during the long Bear Market from 1980 to 2001.
only that but the PM shares would have to rise 50% from here to reach the pre
2008 crash levels. They would have to DOUBLE to just touch the SELL zone. And
they would have to almost triple to hit the spike high recorded in 1996-7.
An Alternate Explanation
Clive Maund tells his readers to SELL. Not only that but:“The great thing is that you can do more than just protect your interests
and watch idly from the sidelines as all hell breaks loose, you can
position yourself to reap massive profits from bear ETFs and Puts etc,
as set out on www.clivemaund.com as the market plunges - we just have to hope
that the markets survive long enough for you to cash in your gains.”
And Maund is not alone. On the weekend Jim Puplava said he too was
expecting a selloff and has moved his clients into cash. Surprisingly he has
also shorted some PM shares
. One could argue at current levels the PM shares
have already (mistakenly?) discounted a crash. WHAT ARE THESE GUYS THINKING? WHAT ARE THEY MISSING?
The problem with Maund’s forecast is that it is based on a poor understanding
of what happened to Gold and the PM shares during the crash of 2008. We now know
thanks to Ted Butler’s work that the Bullion Banks went massively short just
before the crash. We also know that liquidity was denied certain funds that
forced them to sell leveraged positions in the precious metals and oil. Even
funds that were not leveraged were hit with abnormally high redemption requests
by panicked investors. Those holding illiquid juniors were forced to sell into a
vacuum causing many share prices to fall 90% and more. We also know that bullion
demand from Asia soared and hundreds of tonnes of Gold were shipped East.
I’ve created a Table showing how this was reflected in the purported holdings
of the largest Gold ETF. During the initial panic GLD lost 13% of its bullion.
But from that low of 614.35 tonnes on Sept 10th
2008 GLD added 500
tonnes of bullion to reach a new high on March 20 2009. Why is that important?
Well take a look at Maund’s chart again. March 2009 was when the S&P500 hit
its panic low of 666.
|Date||PM Gold Fix||GLD Holdings (tonnes)||Comment|
|July 15/08||986.00||701.91||High before CRASH|
|Sept 10/08||775.75||614.35||GLD low for Crash|
|Oct 8/08||903.50||763.90||Bullion bounce|
|Nov 13/08||713.50||748.94||Bullion Low but GLD steady|
|Mar 20/09||954.00||1114.00||This when S&P500 crashes|
Clive Maund and others want us to believe that there is a connection between
the S&P500 and the Gold Market. That if the S&P500 crashes the PM index
is “not likely to be up is it”? He indirectly implies that the government will
be unable to prevent the crash. The Gold market, on the other hand, is unlikely
to be government supported is it Clive? Rather the opposite wouldn’t you agree?
Could they, and would they if they could, instigate another Gold crash similar
to 2008. Possibly, maybe even necessarily, but it will be at great cost. And the
cost would be measured in tonnes. Tonnes of Bullion shipped East and 500 tonnes
now supposedly in the vaults of GLD. Even if GLD does not have the Gold Bullion
they’ve dramatically increased their Gold liabilities which is a reflection of
the strength of the market.
Clive Maund and others are advising their clients to sell shares at the
bottom of a thirty year price range and to hold fiat cash which is guaranteed to
depreciate. Nimble traders might well pull this off, assuming it occurs, but
look again at Maund’s two charts. The S&P500 crashed to just below 750 in
November 2008 and then rose 200 points into the New Year. The XAU chart shows a
very similar pattern. But then look at the divergence. From Jan 1/09 the
S&P500 crashed 30% to 666. The XAU, on the other hand, which began the year
at 124.80 should have, following Maund’s logic, crashed below its Oct 2008 low
of 63.52. Instead it trended higher to around 140 at the time the S&P
finally bottomed. Well Clive, here is a case when the S&P500 crashed and the
XAU was up. How many investors were able to get these trades right? Did Clive
Maund? Did Jim Puplava? Would you?The function of a Bear Market is to separate you from your money. The
function of a Bull market is to separate you from your shares. We are in a
powerful Gold Bull Market. Are you about to be fleeced out of your position?
Wouldn’t it be more prudent to just sit tight?
Finally I ask myself why are the Gold shares performing so poorly. Yes, it
might possibly be simply shorting, perhaps discounting some real or imagined
future crash but in addition there are two other reasons seldom mentioned.
First of all I think there is poor understanding of proper mine management.
This was briefly discussed during a recent Puplava interview with Sean Boyd, CEO
of Agnico Eagle. When the Gold price rises, especially a significant rise, the
Mine Manager can redirect production to less economic zones of the Mine. These
Zones are now profitable even though the grade is lower. So what happens? A
tonne of ore is shifted, the grade is lower, fewer ounces are produced, the cost
per ounce is higher and profit per share DROPS. The miner reports lower grades,
lower production and smaller profits. The share price drops.
But wait! Mine life has been extended at no additional capital expenditure.
The high grade zones remain to be exploited. Reserves and resources have to be
recalculated higher. When they are mined, and assuming in a Bull Market the Gold
price does not fall, the profit per tonne of ore moved will skyrocket. The
market is certainly mistaken here focusing on the immediate bottom line and
forgetting the future of the mine. It is discounting a weaker rather than
stronger miner going forward.
The second point which is even more important, I think, is that the Gold
market is no longer the same as it was ten years ago and earlier. The buyers of
bullion, in Russia or Asia or the Middle East, are not, for the most part buying
the PM shares. There is a disconnect between the two. So a North American
investor might decide to buy or sell both bullion and the shares at the same
time. The universe of bullion buyers has expanded enormously while at the same
time the number of PM share investors is stagnant or even dropping because of
poor performance. This process will eventually correct itself. Why? Nothing
cures low prices like low prices. The shares are becoming so cheap that it will
soon become apparent (even to Central Banks) that they can acquire a miner like
Goldcorp for $30 Billion and soon get 100 tonnes of Gold a year (never mind the
bonus tonnes of Silver) for many years to come. At $1200/oz a hundred tonnes
would cost $3.85 billion. At $2000/oz this jumps to $6.4 billion per year.
Cheers from Auckland, Ed Wenered.email@example.com