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RATES GOING NEGATIVE: Brace For IMPACT!
There is so much data out there. Analysts from Bank of America to JP Morgan Chase are all pumping-out charts, presenting endless bits of information to investors, who, in turn, are basing decisions on these indicators.
I’ve seen presentations that include 50+ charts, making projections of all sorts, according to anything from the weather in China, used for predicting global wheat prices, to car parking traffic activity in Walmart, used for anticipating their next quarter’s sales.
The only chart that really matters, though, is what is known as REAL INTEREST RATES.
That’s the only reliable and proven data to indicate how gold stocks will perform, going forward. January has been a phenomenal month for U.S. stocks so far, yet gold is trending up, nonetheless, toying with the $1,300 price mark, while silver is getting closer to the $16.00 target, all because real interest rates are turning negative like in 2016.
The 10-yr bond yields 2.7%, while CPI’s last print was at 2.2%. Core inflation is the FED’s favorite measure for sizing-up inflation. With 20 states raising minimum wages and with the FED’s reluctance to hike rates again, these two numbers are getting nearer by the day.
When they hit ZERO, by subtracting the 10-yr yield (2.7%) from CPI (2.2%) and even more so, when they turn negative, you’ll see a repeat of 2016’s mini-bull market in gold; only this time it won’t be as SHORT-LIVED as those legendary 8 months were, since the Federal Reserve is not in the early innings of the tightening cycle, as it was in 2016, but the last part of it.
In the past three months, we’ve been sifting through 122 mining companies, which have development-stage projects on the asset column. I wanted to focus on these specific ones, since they will be the ones that, potentially, hit production in this new gold bull market. Alternatively, they’ll get to sit and watch how the billion-dollar, large-cap miners, begin a bidding war for their near-term production projects, even before they actually announce production plans – that’s how tight the supply picture is right now.
Within that world of development-stage gold stocks, I cleared and removed from my list any company that isn’t trading at a discount, greater than 70% to its peak price.
In other words, I was looking for the cheapest, most beaten-down stocks there are. From there, we solely zoomed-in on stocks with large assets, with millions of ounces in the Measured & Indicated category, along with the Inferred category.
Of course, when a company owns such a prospective asset that size, their shares don’t go on sale too often, so the list of these is very tight as it is, but I wasn’t done screening.
Real negative interest rates don’t come around very often and, when they do, I want to concentrate my efforts and my funds on potentially life-changing winners.
So, I looked for companies that have SHAREHOLDERS, which are other mining companies themselves. In other words, it would be like finding a start-up tech stock, whose biggest shareholder is Google or Microsoft. These are truly rare, but with the stock I’ve uncovered, there are THREE such investors.
This is akin to Google, Microsoft, and Apple investing in the same tiny start-up all at the same time. These things don’t just happen, since each strategic partner does due diligence separately and independently, so it means we have a triple confirmation that this small-cap gold stock has what it takes.
In this case, the Fiore Group, which is behind some of the most famous gold companies ever, own 8.5% of this company. On top of that, quietly and behind the scenes, Gran Colombia Gold, one of the best mining businesses at the sub-$200M level, has bought 16.6% of the company!
Put together, 25.1% of this company is owned by some of the best evaluators of undervalued stocks on the planet.
This is our opportunity to partner with the absolute best, while this stock trades for a fraction of its true worth, down 87.5% from its all-time high.
CONSIDER OWNING SANDSPRING RESOURCES
(TSX-V: SSP & US: SSPXF) NOW!
When I found out who their third financial backer and aligned partner is, it sealed the deal on how rock-solid this opportunity really is. It would be similar to a start-up tech stock, whose biggest two shareholders are Google and Microsoft, but then the most successful fund manager around wants a piece of the action as well.
This is what has happened here.
Wheaton Precious Metals, known in the business as the best project evaluator, has committed $135M to Sandspring Resources (TSX-V: SSP & US: SSPXF), to advance their flagship, gold-rich project, all the way to production!
This is, without a doubt, the best institutional backing to any company with a market cap of only $50M I’ve encountered since 2002, when I purchased my first gold stock.
CONSIDER SHARES NOW
Governments Have Amassed ungodly Debt Piles and Have Promised Retirees Unreasonable Amounts of Entitlements, Not In Line with Income Tax Collections. The House of Cards Is Set To Be Worse than 2008! Rising Interest Rates Can Topple The Fiat Monetary Structure, Leaving Investors with Less Than Half of Their Equity Intact!