➡ Raffia from The Endgame Investor discusses the potential for mining stocks, particularly gold and silver, to increase significantly in value due to the predicted end of the fiat money system. He compares this to the 1971 to 1974 gold bull market and suggests that these stocks will provide a source of income after the endgame. He also mentions the pressures in the repo markets at the year-end turn into 2025 and the potential for a financial reset. Lastly, he promotes the use of a safe for storing physical gold for immediate access in emergencies.
➡ The market faces a risk if repo rates suddenly increase and dealers can’t respond, potentially causing hedge funds to quickly reduce their leverage, which could force the Federal Reserve to step in. This is linked to a strategy used by hedge funds that involves betting on differences between cash treasuries and futures. If cash runs out in the repo market, this strategy could be forcefully unwound, leading to a shift from tightening to easing monetary policy and a potential increase in gold prices. The current low open interest in gold suggests there’s little room for its price to drop further.

Well hello there my friends, Raffia here from The Endgame Investor and if you don’t recognize the background it’s because I’m traveling. If it looks like there’s a halo around my head it’s because I’ve died and gone to heaven. I don’t even actually know I’m still alive and it’s just a bunch of glare. But anyway, here’s this week’s Silver Report and today we’re going to talk about when mining stocks, mining chairs, gold stocks, silver stocks will finally explode higher in real purchasing power terms. And we’re going to use a parallel bull market as an example of what these stocks did in the past and what they’re likely to do once we have a revaluation of the dollar or the death of the dollar.

It’s really about the same thing. You might be surprised to realize that from 1974 all the way through the 1980 top in gold and silver, gold and silver stocks did not do much of anything. So then why would they do anything now? The answer is because this time it will be more like the 1971 to 74 gold bull market which was at the beginning of a revaluation of gold, the end of the gold window, the end of the last vestiges of the gold standard. And we are now at the end of the last vestiges of the fiat money system and gold and silver will be money once again and at that point gold stocks are going to go much, much higher in real purchasing power because they will be the only ones that will be able to pay dividends in real money terms.

Everyone else will pay dividends in dollars which won’t be worth much of anything. And so the quick answer as to why own any gold stocks at all, any silver stocks at all is not because they will go up leading up to the end game, but because they will provide a source of income through and after the end game. That is why you should own any gold and silver stocks at all. And I’ll show you these parallels in the charts. They are very clear. We’re also going to go a little bit into the plumbing. We’re coming up on the year end turn into 2025 and the pressures in the repo markets are going to be at maximum, which happens on Thursday, January 2nd.

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And for now, let’s go to the slides. In 1976 was when the Treasury was busy selling gold to try to control its price and we had a little correction in the midst of a bull market that went into 1980 but from 1974 until 1980 this stock home stick mining, which could be representative of other gold stocks of the time, it actually went down. It did not even hit a new high in January 21st, 1980 top with gold at 872 and silver at $50 it hit a new high later on in 1981 as interest rates maxed out.

However, that was a short lived high and good luck timing that thing and expecting that you’d be able to sell the top in this gold stock as gold had already topped very confusing. I don’t expect anyone to be able to sell a highlight this so you could be saying then and I would say why would anyone want to own any gold or silver stocks now, given that this is what the gold stock sector did in the 1970s. Yes, granted from 1971 to 1980 or 1971 to 1974, it went up five and a half times, but then it became really, really volatile and it was not really worth holding on to after 1974 so much.

So here is the 1930s bull market, just so you can see how this stock, this is again is home stake mining how the stock behaved through the crash for 29 through the New Deal through executive order 6102 which mandated everyone give up all their gold to FDR and the Dow bottom is somewhere in there in May or July sorry 1932 so we see in the crash of 1929. This stock didn’t do much of anything. There was a peak here. There’s a trough here. It did go down in the crash and the liquidity crunches October 1929, but went up immediately afterwards.

It wasn’t much of a dip at all. And then as New Deal spending picked up and we ended up into what began as a socialist system and continues to this day, New Deal spending into the 30s. This was as the Dow was falling and falling and falling and bottomed over here where it says Dow bottom. So this stock was going up and up and up gradually into the Dow bottom, but it really took off after the Dow bottom in 1932 and you can see here that it really started to take off after the Dow bottom and reflated very slowly.

The down never fully reflated until decades later. I think it was around the 50s or even the 60s. Maybe I don’t remember exactly, but the point is here is that executive order 61 or two when Roosevelt decided to pilfer the entire country’s gold supply and stick it into Fort Knox and most people complied with that. Unfortunately, that is when the stock really took off. And so here in this next chart, we can see in the blue again is Homestake Mining and in the black is the Dow. So we can see here is the top and the Dow in mid-1929 here is the crash of 29 over here.

And what was Homestake doing there? Homestake had a peak as the stock market in general peaked. It did trade in tandem. However, there was not a concurrent fall. There was no concurrent fall in Homestake Mining as the Dow went kept getting lower and lower and lower. The bubble deflated further and further and further. This stock just kept going higher and higher and higher. And see, here is the gold revaluation from $21 to close to $35. And at that revaluation, that is when Homestake Mining really started to take off. It really took off once the Dow bottomed over here.

We have Homestake Mining over here slightly above it. And then after the Dow started to reinflate slightly nowhere near as where it was in 1929. But as the Dow started to reinflate after this whole monetary system had ended and we went into a new era of gold standard-esque monetary regime, that is when Homestake Mining really started to take off into 1936, reached a high then. So the point here is that we shouldn’t expect the gold stocks to really start to revalue higher until during and after the endgame itself. The Dow bottomed here. So once the Dow bottoms and the dollar regime is pretty much over, that is when these gold mining stocks are going to seriously outperform the market.

Remember, not only was Homestake Mining making new highs for itself, it was making tremendous new highs relative to the stock market, relative to the Dow here. So I’m expecting in terms of purchasing power that these stocks will go up at least 10 times and they will be able to pay a real income stream in perhaps certificates for their product in real money terms. And now I wanted to go into an article in Bloomberg about the year-end turn into 2025 and what could happen in leading up to it and in the short months afterward.

We do not have a lot of time and Bloomberg is confirming this as well. And I’m seeing a lot of emails and articles and all this other stuff. Will 2025 be the year of the reset? Lots of people on our side of the monetary spectrum believe that it will be. We’ll see if it finally rings. Treasury’s elite bond dealers will struggle to handle $50 trillion debt. Just wanted to go into a few key paragraphs here. Here is the first one that I wanted to highlight. They worry about the potential for the type of breakdown in Treasury market functioning that happened at the start of the pandemic when investors rushed to sell bonds as panic set in.

U.S. government debt sold off sharply until the Fed implemented an emergency backstop measures to limit the damage. The fear is that a confluence of pressures could strain liquidity and spur dislocations even without an obvious fundamental trigger. So essentially they’re saying this is going to happen randomly with or without a trigger, meaning it could happen in the year-end turn, which happens in the next two days, or it could just happen randomly in the time afterward. The other paragraph I wanted to highlight is this one. A key risk for the market is that if repo rates surge again unexpectedly and dealers aren’t in a position to step in, hedge funds may not have properly factored in that risk, triggering swift and violent deleveraging that would likely prompt the Fed to intervene.

Regulators continue to fret about potential disruptions around the popular basis trade. We’ll get into that in a second. A leveraged bet that seeks to exploit differences between cash treasuries and futures, given the prevalence of hedge funds on one side, who have stepped into a role formally taken by primary dealers. And so what is this talking about? I will show you in one scary-looking chart right now. This is the basis trade. It should scare the pants off. Any central banker, especially an American central banker, meaning anyone on the Federal Reserve Board. The blue line is the hedge funds, and it shows how short they are.

Treasury bonds is exactly what that last paragraph was talking about, how the hedge funds have taken up the job of the primary dealers. The primary dealers aren’t dealing with this for whatever reason, and instead the hedge funds are dealing with it by shorting treasury futures and buying spot. And that depends on futures being more expensive than spot, which reverses itself in a liquidity crunch, as we saw in 2020, and this whole thing is forced to wind down, which is what happened in 2020 and 2019. So here we see the 2019 numbers. They were less than 2 million contracts, and here we see it’s much, much worse.

Now, there’s much more repo money involved in this. This is the very thing that is going to have to be violently de-leveraged if cash runs out in the repo market, which it is, especially because QT continues, or the tightening of the balance sheet, which means that the Fed is taking dollars in retiring them out of existence and the extra cash is being slopped up out into a black hole. Nobody really knows what happens in a black hole. It’s possible she’s still alive in another dimension somewhere, right Professor? Not a chance. It might not be triggered on the year-end turn, but it definitely will be triggered at some point, and when it does, the Fed will reverse from QT to QE and push interest rates back down to zero very quickly.

That is when I expect the final run of gold versus the dollar to head to the sky. I don’t know where the sky is, but it’s a lot higher than where I am now. And related to that, I’m just going to take a quick look at the open interest in gold. We are at 450,000 contracts, and I drew a red line here, so you can see at the trough just post the big crash of March 2020 from about 1750 to 1450, I think it was. That was one of the scariest gold crashes ever known to gold bugs, and we can see here that the open interest now at 450 is below the low point in open interest post the March 2020 market crash, the point being that there is not much room for gold to fall here price-rise because open interest is already pretty low, very much lower than the March 2020 lows post the gold crash.

And in order for gold to go lower, the open interest usually goes lower as well, and there’s not much room for it to go much lower than it is right now. And for now, this is Rafi, the Endgame Investor, with this week’s report for my own channel. Happy New Year, everyone. Happy 2025. And may it be the final year of this God-Verzig and fiat money system that is ruining all of society and the entire planet with it. I look forward to a very healthy and a very healing and a very cathartic endgame and reset so we can all get on with our lives.

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