The US central bank, the private Federal Reserve, continues to claim that the US economy is strong. But yet this past week it initiated monetary policy as extreme, as last seen during the worst financial crisis since the Great Depression.
Early morning Tuesday of this past week, the Federal Reserve sprung a 50 basis point cut supposed surprise on financial markets, only to have the debt market respond by further front running the Fed’s likely additional interest rate cuts likely back to zero upcoming.
Bidding for both US bonds and t-bill yields went sharply lower all week.
Now supposed Treasury Inflation Protected Securities (known by the acronym TIPS for short) are now trading at negative yields.
Given that the real rate of inflation data has been rigged ongoing since the year 1980 (i.e. Gold vs NIRP), there is and has now, for a rather long time not been such a thing as an inflation-protected US Treasury.
Now at historic 150 year low US Treasury rates, only a few weeks ago we highlighted how gold performed about a century and a half ago when the nation had massive full fiat currency issuances and interest rates this low just following the US Civil War.
If you missed learning how Gold and Silver Bullion bull markets did versus greenbacks or in stock bear markets, stay tuned to the end of this week’s update for a few weeks old video entitled, “Gold Price Going to $2,000 oz ⌛ What if Stock Bubble Bursts?”
This past week too, one of the most candid silver and gold bull and billionaire bond traders in the financial markets today gave the Bloomberg news team a long explanation of his current thinking regarding financial market gyrations. We highlight some of his thoughts in our embedded video and market recap above.
Juxtaposed next to this week’s volatile and potentially bursting stock and bond market bubbles, the spot price for gold showed some serious upside volatility and looks to be finishing this week up over $100 fiat Federal Reserve notes per troy ounce.
It seems we’re not too far away from single trading days when the gold price regularly moves up and down $100 per troy ounce or more.
Some of you out there might know this little known fact.
Since the year 2015, the CME Group’s COMEX NYMEX futures markets
have had "circuit breaker" rules on their books regarding intraday silver, gold, platinum, and palladium derivative betting price swings.
So#Palladium— James Henry Anderson (@jameshenryand) March 7, 2020
& #Silver's eventual breaking of
these arbitrary #COMEX #NYMEX daily price fluctuation circuit breaker levels. Ongoing interventions too seem less & less effective in buying the system time https://t.co/B6VBeX9rDd
Volatility will get???? pic.twitter.com/R4sGEPG9i6
These COMEX / NYMEX Daily Price Limit Circuit Breakers are still in place today. They are daily price fluctuation limits for each major precious metals futures and options bet made. They cover four levels, for each respective precious metal that the COMEX and NYMEX trade.
For NYMEX palladium futures and options contracts, this daily circuit breaker price volatility range has likely already been triggered multiple times to date beginning that level one is only $50 fiat Fed notes per troy ounce in intraday moves.
But perhaps the COMEX is also eventually expecting Silver derivative intraday price gyrations ranging anywhere from $3 to $12 fiat Fed notes per troy ounce daily silver price swings in the years upcoming.
For COMEX Gold and NYMEX Platinum, the circuit breaker intraday price volatility ranges from $100 to $400 per troy ounce movements both up and or down per trading day.
Measured by currently escalating gold bullion prices, platinum is now hitting extremes akin to the peak gold-silver ratio reached during the great depression when silver was bottomed at 25$ per troy ounce and gold was confiscated by coercion and arbitrarily priced at $35 per troy ounce for near four decades to follow.
This week we are going to focus on the potential long term opportunity in platinum bullion currently.
If you have a bullish medium and longer-term outlook for silver and gold’s future values.
Or perhaps you have seen palladium’s record-breaking price performance over the last handful of years.
You might want to currently consider platinum bullion, specifically as a long term store of value with a limited current downside, versus a possible escalating valuation upside in the years to come.
In this remainder of this video, we’re going to cover the current value proposition for platinum bullion.
And to begin, we will let one of the world’s largest platinum miners speak about this very rare precious metal, in the 21st Century.
Anglo American is indeed one of the world’s largest platinum producers. All of which are located in South Africa. The country that regularly produces about 3/4th’s of the world’s entire fresh platinum supply.
The news was reported today that this same major platinum mining consortium, Anglo American, is drastically cutting its platinum production for the year 2020 by perhaps over 30%.
The spot price of platinum jumped on the news, closing above $900 per troy ounce today, a still super depressed valuation by many long term historic measurements.
During this petrodollar, full fiat reserve currency era, now almost 50 years in the making.
The ongoing price for barrels of crude oil mimics much of the price action for platinum over this same timeframe.
There may be some further downside to come for both crude oil and platinum prices, but this most physically rare of all the four major precious metals has underperformed its peers in the price for almost a dozen years now.
After selling off dramatically in the wake of the financial crisis from its $2,280 per troy ounce price peak to a recent bottom below $800 per ounce, platinum has yet to really regain its luster.
But if platinum’s somewhat recent full fiat currency era past is any inkling of its future, platinum bullion at these current valuation levels may be a great long term value today.
In order to have a fundamental discussion about platinum’s future price potential, one must always consider its sister precious metal palladium.
Both of these precious metals are often used in catalytic converters, helping pass increasingly stricter gasoline and diesel engine CO2 pollution requirements ongoing.
As you can see based on recent annual demand, palladium on the right is mainly an automobile demand-driven market, one that is in a severe physical supply shortage at the moment.
Escalating palladium price records now have palladium valued as a 120-year high point versus underperforming platinum.
But looking back at ongoing demand, it still remains common knowledge around the world that platinum is rarer than gold and thus platinum’s jewelry demand from wealthy eastern nations like Japan, China, and India is likely to escalate with such low historic platinum prices at the moment.
Currently, gold is too priced at an all-time high versus platinum.
The gold-platinum ratio closed today at 1.85, a level so high it would now literally spring off this 120-year monthly ratio chart you are looking at.
This is the ongoing supply-demand data for platinum over the past decade with the year 2019 forecasted partially through its full data recuperation completion.
Less than 6 million ounces of newly mined platinum get brought to market every year. That is less than $6 billion in fiat market cap per year. Platinum is an extremely small precious metals market.
And about one year ago I decided to test the newsletter writer claim that all the physical platinum in the world could fit inside an average US citizen’s two-car garage or living room.
After days of digging through decades of mining data and transparent physical platinum depository holdings around the world. A conservative estimate was that there are perhaps 8 million ounces of .999 fine platinum bullion being held by investors, suppliers, or speculators.
And all of it could possibly get cornered and possibly too fit inside a random billionaire’s walk-in closet.
Platinum is very difficult to melt requiring over 3,200 degrees Fahrenheit to so.
Virtually worthless to Spanish conquistadors who could not get fires hot enough to melt it, with no clue about its unique elemental characteristics that give platinum such a bright future for industrial applications to come. Old miners in South America used platinum inserts to counterfeit clad gold coins hundreds of years ago.
Platinum is so dense and heavy that most of it on Earth sits deep within the molten mantle and planetary core.
If this platinum cube you are looking at in the video, was six inches on each side, it would weigh as much as an average human male, about 165 pounds.
Platinum like all precious metal elements is only originally produced by star explosions. During a currency crisis in its physical form, it is most certainly a store of value.
Given today’s known physical precious metal market data, platinum bullion is some 500x rarer than silver bullion and more than 300 times rarer than gold bullion.
Since the platinum price crash and the 2008 global financial crisis crescendo, investors around the world have been betting on platinum as a long term value buy.
While its price has certainly disappointed over the last many years, platinum bullion bets keep increasing seemingly every time its price falls near long term support.
In terms of Platinum’s past price performance during the last near full fiat currency system meltdown in the year 1980.
The price of platinum like all major precious metals reached a then all-time record price high only months after silver and gold did.
Our contention here at SD Bullion remains that this 21st Century bullion bull market will likely peak in a crisis of fiat currency values and confidence. It would not surprise us to again see all 4 major precious metal prices making all-time fiat Federal Reserve note price highs, again within a similar timeframe as they did some 40 years ago.
Palladium currently foreshadows the other three major precious metals. Their current, and future wall of worry climb to eventual record price breakouts too.
At these current historically low valuation levels, you might consider adding some platinum bullion for the long term to come.