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Dave Kranzler: Money printing and physical demand will drive gold higher
By Dave Kranzler
Investment Research Dynamics, Denver
Monday, December 30, 2019
I'm growing more confident that we're on the cusp of a big move higher in the precious metals sector because of the Federal Reserve's massive money printing. Also, because the money printing and near-zero interest rates are visibly not stimulating economic growth, we're at the point at which unless the Fed continues increasing the money it puts into the system, the melt-up in the stock market is completely unsustainable.
This is very similar to late 1999/early 2000 when Fed Chairman Alan Greenspan tried to reverse his Fed's massive money-printing operation ahead of that notorious boogieman, the Y2k bug. Not only did the tech stocks collapse then, but also the precious metals sector transitioned from the end of a 19-year bear market into the current secular bull market.
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From what I'm hearing -- and something that's been referenced by Alasdair Macleod and Egon von Greyerz -- a shortage of physically deliverable gold is developing in London. The action this past week fits the information. Given the size of the derivative short position (futures, LBMA forwards, leased gold, OTC derivatives, hypothecated gold) in London and New York, if obligated counterparties begin to default on delivery demands, the precious metals sector could become explosive next year. ...
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