It's time to care again about gold and silver

INDRANIL MUKHERJEE/AFP/Getty Images

It's been a while since I've covered the precious metals in an article. They've been range-bound for much of the past year, with few notable sector developments to report.

But I feel compelled to write about them today for two reasons:

  1. The probability of an upwards re-pricing of the precious metals is rising, and
  2. Both gold & silver are quite over-sold right now, technically-speaking.

With technical and fundamental indicators flashing green simultaneously like this, now is an advantageous time to consider increasing your PM exposure (I did so myself yesterday).

The Human Factor

Before I go into further detail on the current conditions of the PM market, here's a recent personal experience that underscores how few people have any real familiarity with gold & silver as an asset class, let alone own any (beyond, perhaps, a bit of jewelry).

A good friend moved and needed help transporting some bullion from his old town to his new one. Most of it was silver, several thousand ounces worth.

That much silver is pretty friggin' heavy.

So we huffed and strained, hauling that load out of one bank vault, into his car, and from there into the vault at his new bank. While we did our best to be as discrete as possible, our sweaty, grunting 2-man production was hard for the bank staff to ignore.

Managers at both banks figured out what was going on, as it was pretty obvious. And both separately asked us out of genuine curiosity, "Is that real silver?".

My friend briefly handed over a 100-oz bar so they could see for themselves, sparking conversations about the merits of owning physical bullion.

It turns out that neither manager had ever held a bar of silver before. This was pretty shocking to me. Even though they know that the safe deposit boxes in their own vaults very likely store some bullion, neither own it personally, nor even come into contact with it. It's just not a part of their world.

Anyways, later on I mentioned this story to another buddy who shared my surprise. "Man, if the bankers aren't familiar with silver and gold, then who the heck is?", he asked. A very good question, I agreed.

But then he jolted me by asking: "So, one of those 100oz bars -- what's it worth, anyways? $150?"

This is an otherwise intelligent, math-competent person. But like most folks, as well as those bank managers, he doesn't own any precious metals and so his knowledge of them is pretty limited. Limited enough to underestimate the price of silver by over 90%.

This reminded me of Mark Dice's videos, which show just how woefully ignorant the average person is when it comes to the value of bullion. In this one, street passersby decline a free gold coin in favor of a Snicker's bar:

Simply put: gold and silver, in the West at least, are underappreciated assets. As Grant Williams famously put it in his excellent synopsis, when it comes to public and institutional sentiment of the precious metals, "Nobody cares."

Which is a big factor why the prices of PMs have languished for the past seven years. And why the flow of bullion has been uni-directional from West to East over that period.

Time To Care

But there are gathering signs that it's now time to start caring again.

Looking at the just techinical side for a moment, both gold and silver have been in a prolonged downtrend for the past two months. They're now at extreme undersold levels.

Both RSI and MACD indicators are signalling that the recent declines have likely been played out at this point:

Gold price chart

Silver price chart

And both metals have now broken below their Bollinger bands (a sign of extreme oversold conditions). Here's gold:

Gold Bollinger Band chart

While a break below the Bollinger bands could indicate that something fundamental has suddenly changed in the PM market to merit a materially lower repricing, there just don't appear to be any credible candidates for that argument. Yes, the dollar has risen over this period; but there are solid reasons that the USD and gold/silver need not always trade inversely to one another. And as we'll get to in a moment, conditions are actually becoming more PM-favorable.

Technically-speaking, it seems much more likely that the current downtrend is long-in-the-tooth and that, as prices dip down to 18-month lows, a recovery is soon due. In fact, we may be seeing the start of such today, the first material up day for the PMs in a while.

Fundamentally-speaking, world events are providing more and more reasons to own gold and silver -- from stratospheric asset bubbles threatening to burst, to a long-overdue return of market volatility, accelerating de-dollarization, slowing global economic growth, increasing credit market risk in both Asia and Europe -- the list goes on and on.

The full set of PM-positive drivers are covered in our recent excellent interview with Ronald Stoerferle summarizing the insights of his exhaustive 230-page annual report titled In Gold We Trust. If you haven't listened to it yet, carve out 49-minutes to do so soon:

To the many reasons Stoerfele gives in support of his conclusion that gold is "dirt cheap" right now, we can add the multiplying macro data points predicting market turmoil and economic recession later this year, as well as the building uncertainty of further rate hikes by the Federal Reserve -- all potential developments that should lead to higher PM prices.

Whether you're amassing bullion for the long term (which we've long recommended) or speculating in the paper markets for the short term (something we don't encourage for the average investor), you want to buy low and sell high. With precious metals trading near 18-month lows and close to the "all-in" production cost for many miners, prices are unlikely to get much lower than this.

Taking Action

So while prices remain at current lows, we recommend considering the following:

  • Creating your core physical precious metals position if you have none. Many PeakProsperity.com readers already have their core positions in place, should an abrupt crisis occur that suddently sends demand for 'safe haven' assets spiking. But if you haven't built yours yet, don't panic. But also don't delay too long in taking action. A good first step is reading our free guide Buying and Storing Gold & Silver, which details the various forms you can purchase bullion in.
  • Setting up an ongoing purchase program. The easiest and most affordable way to build exposure on top of your core position to set up an automatic purchase program that buys a consistent amount of bullion each month at a volume that fits within your budget. The MetalStream service offered by the Hard Asset Alliance is a good example of such a program, through which you can set up automatic purchases of as little as $100 per month.
  • Nibbling into the miners. The stock prices of precious metal mining companies are much more sensitive to the spot price of gold and silver than the actual metals themselves. They can yield fantastic returns during bull markets, as well as widow-making losses in bear ones. And widow-makers they have been for the past seven years. But, for the above-mentioned reasons, that long winter may be thawing. For investors with the constitution and resources to speculate, it's an opportune time to consider adding or increasing exposure to the miners. That said, when doing so, we *strongly* urge to you work with a profession financial advisor with longtime experience with this asset class *as well as* demonstrated expertise with using hedges to protect these high-risk positions to the downside. If you're having difficulty finding an advisor who meets these conditions, consider scheduling a consultation with the firm we endorse (it's completely free).

Remember, right now, nobody still cares about the precious metals. Which is why it's estimated that only 1-3% of US households own any (jewelry aside).

So even if you only hold a few ounces, that's still more than 97-99% of everyone else -- which may make a tremendous difference to your prospects when the world starts caring again.

As the nation soaks in the victory of the recent passing of the historic First Step Act, there are Congressmen who haven't stopped working to solve additional problems with the criminal justice system. Because while the Act was impactful, leading to the well-deserved early release of many incarcerated individuals, it didn't go far enough. That's why four Congressmen have joined forces to reintroduce the Justice Safety Valve Act—legislation that would grant judges judicial discretion when determining appropriate sentencing.

There's a real need for this legislation since it's no secret that lawmakers don't always get it right. They may pass laws with good intentions, but unintended consequences often prevail. For example, there was a time when the nation believed the best way to penalize lawbreakers was to be tough on crime, leading to sweeping mandatory minimum sentencing laws implemented both nationally and statewide.

RELATED: If Trump can support criminal justice reform, so can everyone else

Only in recent years have governments learned that these sentences aren't good policy for the defendant or even the public. Mandatory minimum sentences are often overly harsh, don't act as a public deterrent for crime, and are extremely costly to taxpayers. These laws tie judges' hands, preventing them from using their knowledge and understanding of the law to make case relevant decisions.

Because legislation surrounding criminal law is often very touchy and difficult to change (especially on the federal level, where bills can take multiple years to pass) mandatory minimum sentences are far from being done away with—despite the data-driven discoveries of their downfalls. But in order to solve the problems inherent within all of the different laws imposing sentencing lengths, Congress needs to pass the Justice Safety Valve Act now. Ensuring its passing would allow judges to use discretion while sentencing, rather than forcing them to continue issuing indiscriminate sentences no matter the unique facts of the case.

Rather than take years to go back and try to fix every single mandatory minimum law that has been federally passed, moving this single piece of legislation forward is the best way to ensure judges can apply their judgment in every appropriate case.

When someone is facing numerous charges from a single incident, mandatory minimum sentencing laws stack atop one another, resulting in an extremely lengthy sentence that may not be just. Such high sentences may even be violations of an individual's eighth amendment rights, what with the imposition of cruel and unusual punishment. It's exactly what happened with Weldon Angelos.

In Salt Lake City in 2002, Weldon sold half a pound of marijuana to federal agents on two separate occasions. Unbeknownst to Weldon, the police had targeted him because they suspected he was a part of a gang and trafficking operation. They were oh-so-wrong. Weldon had never sold marijuana before and only did this time because he was pressured by the agents to find marijuana for them. He figured a couple lowkey sales could help out his family's financial situation. But Weldon was caught and sentenced to a mandatory 55 years in prison. This massive sentence is clearly unjust for a first time, non-violent crime, and even the Judge, Paul Cassell, agreed. Judge Cassell did everything he could to reduce the sentence, but, due to federal law, it wasn't much.

The nation is facing an over-criminalization problem that costs taxpayers millions and amounts to the foolish eradication of individual liberties.

In cases like Weldon's, a safety valve for discretionary power is much needed. Judges need the ability to issue sentences below the mandatory minimums, depending on mitigating factors such as mental health, provocation, or physical illness. That's what this new bill would allow for. Critics may argue that this gives judges too much power, but under the bill, judges must first make a finding on why it's necessary to sentence below the mandatory minimum. Then, they must write a clear statement explaining their decision.

Judges are unlikely to risk their careers to allow dangerous criminals an early release. If something happens after an offender is released early, the political pressure is back on the judge who issued the shorter sentence—and no one wants that kind of negative attention. In order to avoid risky situations like this, they'd use their discretion very cautiously, upholding the oath they took to promote justice in every case.

The nation is facing an overcriminalization problem that costs taxpayers millions and amounts to the foolish eradication of individual liberties. Mandatory minimums have exacerbated this problem, and it's time for that to stop. Congresswomen and men have the opportunity to help solve this looming problem by passing the Justice Safety Valve Act to untie the hands of judges and restore justice in individual sentences.

Molly Davis is a policy analyst at Libertas Institute, a free market think tank in Utah. She's a writer for Young Voices, and her work has previously appeared in The Hill, TownHall.com, and The Washington Examiner.

New gadget for couples in 'the mood' lets a button do the talking

Photo by Matt Nelson on Unsplash

Just in time for Valentine's Day, there's a new romantic gadget for couples that is sure to make sparks fly. For those with their minds in the gutter, I'm not talking about those kinds of gadgets. I'm talking about a brilliant new device for the home called "LoveSync."

This is real — it's a simple pair of buttons for busy, modern couples who have plenty of time for social media and Netflix, but can't quite squeeze in time to talk about their... uh... special relationship.

Here's how it works. Each partner has their own individual LoveSync button. Whenever the mood strikes one partner, all they have to do is press their own button. That sets their button aglow for a certain period of time. If, during that time window, their partner also presses their own button, then both buttons light up in a swirling green pattern to signal that love has "synced"...and it's go time.

According to the makers of LoveSync, this device will "Take the Luck out of Getting Lucky." It brings a whole new meaning to "pushing each other's buttons." It's an ideal gift to tell your significant other "I care," without actually having to care, or talk about icky things like feelings.

If you find your significant other is already on the couch binge-watching The Bachelor, no problem! You can conveniently slink back to your button and hold it in for four seconds to cancel the desire. No harm, no foul! Live to fight another day.

Have fun explaining those buttons to inquiring children.

No word yet on whether LoveSync can also order wine, light candles or play Barry White. Maybe that's in the works for LoveSync 2.0.

Of course, LoveSync does have some pitfalls. Cats and toddlers love a good button. That'll be a fun conversation — "Honey, who keeps canceling my mood submissions?" And have fun explaining those buttons to inquiring children. "Yeah, kids, that button just controls the lawn sprinklers. No big deal."

If you've been dialing it in for years on Valentine's Day with flowers and those crappy boxes of chocolate, now you can literally dial it in. With a button.

Good luck with that.

The social power of 'Reddit' is helping teens of anti-vaxxers get vaccinated

Noam Galai/Getty Images for TechCrunch

Reddit certainly earns its motto as "the front page of the internet," with roughly 540 million visitors monthly, the third most-visited website in the U.S., sixth worldwide. Unlike Twitter and Facebook, Reddit is a largely anonymous platform. People's faces are masked, their names are disguised. Which makes their hidden humanity all the more impactful.

On Reddit, both news and serious information are threaded in among gifs of cats and posts about Call of Duty, but that doesn't make it any less important. For many people, Reddit signifies the town hall where news is passed along or stomped into obscurity.

It gives you a healthy read of our society as a whole.

RELATED: Forget Rabies, 'Woke' Hipsters in Brooklyn Skipping Vaccines to Prevent 'Dogtism'

A recent Pew Poll found that Reddit leans left politically at a rate higher than the general public. Most users are young men, whose extensive internet use gives them a gatekeeping authority over what information should be considered important. From there, it spreads through the rest of the internet and helps shape public opinion.

So, it makes a lot of sense that Reddit has become a sort of makeshift safe place for children who grew up with parents who refused to give them vaccinations. Of course, Reddit also vehemently mocks the anti-vaccination folks, for better or for worse, often the latter, but that's a subject for another day.

The Daily Dot recently published an article on this strange intersection of ideology and nerd culture. "Desperate teens of anti-vaxxers are turning to Reddit for vaccination advice."

The article follows Ethan, whose parents are staunchly against vaccinations:

But Ethan is not his parents. When he turned 18, he decided to take matters into his own hands. He wasn't sure where else to begin, so he turned to Reddit.

Where do I go to get vaccinated? Can I get vaccinated at my age?" Ethan asked his fellow redditors in December. Ethan's post flooded with over 1,000 comments from users offering their encouragement and support, along with practical advice. "Good on you for getting your vaccinations," one user responded. "It's never too late and you're not only protecting yourself but those around you who truly can't get vaccinated.

Ethan told the Daily Dot that some redditors even offered to give him money via GoFundMe or PayPal if insurance didn't cover the shots. "People were really supportive, and that was really cool," he said. "I had the blessing of Reddit. They were supporting me on a decision my mom freaked out about." Ethan is not alone. "More and more teens are turning to places like Reddit to seek out information on where and how to get vaccinated, and if it's too late."

Whatever your opinion on vaccinations, there's a positive message to all of this. A human message. Hopeful. Proof that, in an increasingly caustic world, people can turn to one another in times of need.

Whatever your opinion on vaccinations, there's a positive message to all of this. A human message. Hopeful.

Now more than ever, that is crucial.

Given the social power of Reddit, it is often characterized as a tool for politicians or political movements. Throughout the forum, various political ideologies gather and organize like factions in some ideological war. A political thread on Reddit is like a Facebook comment section at its most hostile, arrogant or confident, but with no identities attached to the attacks, rants or opinions. When you find yourself riled into a debate, it's easy to wonder who's behind the replies, especially the more vicious ones.

People often characterize it as a hive-mind message board full of circlejerk memes and jokes about SpongeBob. This description isn't entirely wrong, but it is shallow and incomplete. At its core, Reddit is humane. Its users, for the most part, are compassionate. If it were an experiment on human nature, the results would be gratifying.