Today long time market veteran, James Turk, told King World News this pullback in the gold and silver markets is not surprising. He also included a shocking chart that all KWN readers around the world need to see. 

Gold & Silver Pullback Not Surprising
August 15 (King World News) – James Turk:  Gold and silver last week climbed 1.4% and 4.3% respectively, Eric. What’s more, since their low close in New York in July, gold is up 5.8% while silver has shot up 13.8%. All that has happened in a four weeks, so lower prices today to get some retesting of support is not surprising – even for manipulated markets like gold and silver.

Each day the precious metals stay above their July low they are building support. As they do that more buying power enters the market, with the result that the metals climb higher. Their action the past month bodes well for higher price expectations as we move toward the end of the year because of inflation. 

Lower gasoline prices have reduced inflationary pressures somewhat, but that drop is a 2-edged sword. Prices are dropping because of weak demand, which is not a good sign because it suggests softening economic activity. Actually, there is a gloomy economic outlook around the globe, including China, which made an unexpected interest rate cut today to bolster its troubled property market. And interest rates are the key to fighting inflation as this chart shows.

DON’T BE DECEIVED:
Fed Not Doing Anything To Fight Inflation
Early 1980s Volcker (RED) And Powell Today

A Very Revealing Chart Above
This chart of real interest rates is very revealing. It is a clear picture of what Paul Volcker did to end the high inflation in the 1970s and early 1980s. He raised interest rates so that at the peak in June 1981 they were 9.4% above the inflation rate, which is probably an all-time record for the dollar. Real interest rates in an unfettered economy are normally about 2% per annum, less for short term maturities.

But Volcker did what he set out to do – tame inflation to keep confidence in the dollar so that people would continue using it. National currencies have always been a con game. Confidence in the currency rises or falls depending on the demand for the currency. This demand is often overlooked by economists because it is difficult to measure, but demand for the currency is never ignored by central banks.

Protect Yourself
Here’s the important point, Eric. Even with the drop in gasoline prices and some other commodities the last few weeks, inflation is still way above the Federal Reserve’s 2% target. But in my view, even their 2% target is unacceptable. It’s theft by inflation of the purchasing power of everyone who holds dollars.

To protect yourself from this theft, my recommendation remains the same. Minimize the currency you hold, and continue to dollar-cost average your purchases of gold, and if inclined, silver too.

Also of importance…

Big Acquisition!
American Pacific Mining Corp and Constantine Metal Resources Ltd. announce that they have entered into a definitive agreement pursuant to which APM will acquire all of the issued and outstanding common shares of Constantine in an all-share transaction.

Premier Exploration & Development Company
The combined company will be a premier exploration and development company in the western USA with two projects being aggressively advanced under strategic partnerships with well-respected major metal producers and an expanded portfolio of prospective precious and base metals assets.

Highlights of the Transaction and Strategic Rationale:

  • Shareholders of the combined company will gain exposure to two advanced exploration projects under strategic partnerships with majors:
  • Palmer (Constantine) is an attractive PEA-stage (US$266 million after-tax NPV at 7% discount rate) zinc-copper-gold-silver volcanic massive sulfide (VMS) project located in a strategic area of Southeast Alaska, being advanced with world-class joint-venture (“JV”) partner Dowa Metals & Mining Co., Ltd. of Japan (“Dowa”). The JV approved 2022 program and budget is US$18 million, with funds being advanced exclusively by Dowa, as required, during project advancement. Constantine has an option to contribute pro-rata, up to December 31st, 2022, to maintain Constantine’s 44.91% interest.
  • Madison (APM) is a past-producing high-grade copper-gold skarn and porphyry system located in the heart of Montana’s prolific copper-gold belt under an earn-in joint-venture agreement, whereby Kennecott Exploration Company, part of the Rio Tinto Group, may spend US$30 million to earn a 70% interest.
  • The combined company will be well financed with a pro-forma cash balance exceeding C$10 million allowing APM to aggressively progress projects while leveraging spending commitments of partners.
  • Improved capital markets profile with increased market capitalization exceeding C$85 million and better positioned to attract additional institutional and high net-worth investors.
  • The Transaction has strong shareholder support, with Constantine’s two largest shareholders Michael Gentile and John Tognetti and management and directors of Constantine, together representing 27% of the issued and outstanding common shares of Constantine, entering into voting support agreements with APM.
  • Strong and experienced management team (APM was recently nominated for five awards at the S&P Global Platts Metals Awards) with demonstrated ability to raise capital and operate in the western USA.
  • APM and Constantine shareholders will have exposure to expanded portfolio of precious and base metals exploration projects in Idaho, Nevada and Arizona.

Both CEOs Comment On The Powerhouse Merger
CEO of American Pacific Mining, Warwick Smith, stated: “This is a transformational step for American Pacific as the Palmer Project gives us an established PEA-stage asset with a tremendous amount of exploration upside. We are very impressed with the quality of technical work completed by Constantine and Dowa to-date and look forward to collaborating with our new partners and stakeholders to expand resources and realize the full potential of this high-grade VMS system while continuing to deliver exposure to progress and new discoveries across our existing portfolio of highly prospective past-producing exploration projects.”

CEO of Constantine Metal Resources, Garfield MacVeigh, commented: “Constantine is pleased to enter into this agreement and our Board unanimously recommends the transaction to shareholders at a significant market premium. We believe American Pacific’s focus, financing capabilities and breadth of exploration experience in the US will result in Palmer reaching its full potential. We would like to thank our shareholders, the team at Constantine, our Board and our joint venture partner at Palmer, Dowa, for all their support.” American Pacific Mining, symbol USGD in Canada and USGDF in the US. To learn more about the opportunity this powerhouse merger creates CLICK HERE.

ALSO JUST RELEASED: Greyerz – This Global Collapse Will Be Like Nothing Seen Before Featuring Economic Disintegration, War & Riots CLICK HERE.

***To listen to Alasdair Macleod discuss the breakout in gold and much more CLICK HERE OR ON THE IMAGE BELOW.

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