Stock quotes in this article: GDX
It’s only been about three weeks since I last advised taking a position in gold-mining stocks through the Market Vectors Gold Miners ETF (GDX). I’ve been getting a lot questions asking whether it’s too late to get in now because the ETF is up about 38% since that column. The short answer is no, it is not too late.

The gold miners are experiencing an upside correction from the terribly oversold level they’d reached last year, which I wrote about in December. I expect GDX to double from current levels this year and, from a longer-term perspective, my expectation is for a 1,000% increase over the next decade, which is a 25% average annual rate of compounding.

Currently, the markets are experiencing the effects of the asymmetry of risk that Federal Reserve Governor Lael Brainard spoke about last year, just before the Federal Open Market Committee decided to raise rates, in a speech about normalizing monetary policy while the neutral interest rate is low. I wrote about the asymmetry of risk in December. In short, the risk asymmetry is that the probable negative consequences of raising too early are greater than moving rates late in the cycle, and that the prudent direction for monetary policy would have been to punt on a rate hike decision in December. That, of course, did not happen.

The reason for the global market action that has taken place since the FOMC’s decision to raise interest rates in December 2016, however, is not simply in response to that move. That was just a catalyst.

The big issues are debt and demand.

Bloomberg News reported in January that a $29 trillion corporate debt hangover could spark a recession. There is no historical precedent for the scale of corporate debt today as a share of wages and GDP — not even close. Total cumulative claims accruing to the existing debt preclude growth of world real GDP per capita in perpetuity, which leads to a binary outcome. Either demand increases immediately, allowing for the growth in income needed to service existing debt and add new debt, or a debt-deflationary wipeout unfolds and resolves.

That’s all folks.

For institutional investors, the hiding place in the event that demand does not immediately increase is U.S. Treasuries. For retail investors, the only place to hide is gold and similar hard assets.

Even if the Fed were to immediately reverse course and begin to stimulate again, it would not be able to provide the immediate increase in demand necessary to prevent contagion. That can now only come from fiscal intervention by the world’s largest countries. That does not mean that the Fed won’t reverse course. It is highly probable that it will reverse course very soon, and it is probable that the global capital markets will respond positively to such action.

All that will do, however, is buy some time for fiscal authorities to act.

The problem is twofold. There’s no guarantee they will, especially during an election year in the U.S., and there’s no guarantee that doing so would be successful at preventing a debt-deflationary spiral from occurring. The reason for this is the systemic and structural changes to the operations of economies that have become increasing evident since the 2008 financial crisis. (Dr. Jack Rasmus offered an excellent synopsis of this issue in a January presentation in San Francisco on the systemic fragility of the global economy, which I also wrote about a year ago here.)

Awareness of all of these issues and their implications and potential consequences is the real driver behind the action in global capital markets in the past few months, and it is likely still in its early stages. As the degree of awareness among capital market participants grows, concern about the potential for a flight to safety similar to what occurred after the Russian sovereign default of 1998 — and perhaps become self-validating — will increase unless governments take steps to prevent it.

(Kitco News) – It seems investors and the mainstream media are saying ‘my precious’ to the metals again. This week, gold and silver hit multi-month highs while the dollar (the thorn in gold’s side) has continued to lose value against other major currencies, including the euro, which had an impressive rally. It is a reverse scenario investors have been living with for the past few years. Since the start of the year, the dollar index (DXY) has been struggling to breach the key 100 level.

In turn, everyone is talking gold again, including making the top five searched keywords on Twitter this week.

Three-and-half-month highs were bestowed upon both gold and silver this week. Gold priced in U.S. dollars is up more than 9% since the start of the year. The metal has not only shined in U.S. dollar terms but based on Kitco’s Gold-Currency Charts, gold priced in both “hard” and “other” currencies have all posted gains in the last 30 days.

Mining stocks were among the biggest gainers of the week, with the NYSE Arca Gold Bugs index (HUI) up 15.8% for the week through Thursday’s close.

However, Friday’s weaker jobs number, which analysts expected to be bullish for gold, didn’t help the metal.. The January employment report showed the key non-farms payrolls up 151,000, following a strong rise of 292,000 in December. A reading of up 185,000 was expected.

April Comex gold settled Friday $1,157.7 an ounce, relatively unchanged on the day. March Comex silver settled at $14.778 an ounce, down 7.2 cents on the day.

A teenage girl in Germany will be allowed to keep a bar of gold worth €16,000 ($18,000; £11,500) found in a lake after the owner could not be identified, police said.

The 16-year-old found the 500g (1lb) gold bar at a depth of about 2m (6.5ft) while swimming near the shore of Bavaria’s Koenigssee lake last August.

She handed it into police, who were unable to find the owner.

It is still not clear how the bar ended up in the lake.
A six-month investigation could not identify the owner and, as a result, the teenager will be allowed to keep the gold. The girl has not been identified.

The bar’s identity number had been defaced but officials managed to restore it, German media reported.

The find revived rumours of Nazi gold supposedly lost in the lake, near Germany’s southern border with Austria, but reports said the find was not connected to the Nazi era.

From BBC News

An European Union diplomat was caught attempting to smuggled bricks of pure gold, jewelry, hundreds of smartphones, and dozens of kilograms of steroids into Israel on Thursday at Allenby Crossing.

The goods were discovered by customs officials in the vehicle of the European Union representative, as the representative and his driver attempted to enter into Israel from Jordan by means of the Allenby Crossing, near Jericho. The driver is a resident of the Israeli city Atarot, of North Jerusalem.

The driver and the EU diplomat were taken into custody to be investigated by the Israeli Customs Authority. The diplomat was released while the driver was brought to court and his arrest was extended until Sunday.

The confiscated contraband has an estimated value of NIS 10 million.

ALBUQUERQUE, N.M. (AP) — An antiquities dealer who inspired tens of thousands to search the Rocky Mountains for $2 million in hidden treasure now leads an increasingly desperate mission to find one of his fans.

Forrest Fenn has been flying out in chartered helicopters or planes, searching remote stretches of the upper Rio Grande for any sign of Randy Bilyeu, now missing in the wild for more than three frigid weeks. Fellow treasure hunters also are searching for Bilyeu, who was last seen on Jan. 5 while trying to solve Fenn’s mystery.

“Every time we go out and don’t find Randy it’s discouraging but we’re not going to give up,” Fenn told The Associated Press. “There are still places out there that I want to look.”

Fenn, an eccentric 85-year-old from Santa Fe, has inspired a cult following since his announcement several years ago that he stashed a small bronze chest containing nearly $2 million in gold, jewelry and artifacts somewhere in the Rockies. He dropped clues to its whereabouts in a cryptic poem in his self-published memoir, “The Thrill of the Chase.”

The hidden treasure has inspired thousands to search in vain through remote corners of New Mexico, Yellowstone National Park and elsewhere in the mountains. Treasure hunters share their experiences on blogs and brainstorm about the clues. The mystery has been featured by national media, igniting even more interest.

Fenn gets about 120 emails a day from people looking for his 40-pound box, and believes 65,000 people have searched for the stash, some using family vacations to venture into the woods.

View galleryThis undated photo provided by Forrest Fenn shows an …
This undated photo provided by Forrest Fenn shows an estimated 2 million dollars of gold jewelry and …
“The hope of finding the treasure is one thing, of course, but there’s a sense of adventure when you get out in the mountains and in the sunshine and the fresh air,” Fenn explained. “One of my motives was to get the kids off the couch and away from the game machine.”

But the search can be risky: Some have forded swollen creeks in Yellowstone and were rescued by rangers. A Texas woman spent a worrisome night in the New Mexico woods after being caught in the dark. Others have been cited for digging on public land, and federal managers have warned treasure hunters not to damage archaeological or biological resources.

No “Fenner” has been in a more dangerous a predicament than Bilyeu, a 54-year-old grandfather who moved to Colorado two years ago to follow this dream.

Family and friends say he bought a raft and set out on Jan. 5 after scouting for two weeks along the river west of Santa Fe. He had a GPS device, a wetsuit and waders, and brought along his little white dog, Leo.

More than a week passed before a worried friend reached out to his ex-wife in Florida, Linda Bilyeu, who filed a missing person’s report on Jan. 14. His raft and dog were found the next day.

View galleryFILE – In this March 22, 2013 file photo, Forrest Fenn …
FILE – In this March 22, 2013 file photo, Forrest Fenn sits in his home in Santa Fe, N.M. Geese, a f …
Bilyeu left maps with markings in his car that fellow treasure hunters are using to narrow their search. He also left a sandwich, suggesting that he hadn’t planned to be gone long.

The New Mexico Search and Rescue team and state police scanned canyons and mesas along the river by air and on foot, even bringing in dogs to sniff for clues, but suspended their efforts after several days.

“Unfortunately, we just don’t have anything to go on right now,” State Police spokeswoman Sgt. Elizabeth Armijo said. “If someone were to find clothing or footprints or just something that might be indicative of the hiker, then we would have an area to go to. But we just have not found that yet.”

The treasure hunters — led by Fenn — have not given up.

“We know that Randy studied this area very well. He even noted that certain areas were dangerous when the weather was bad and he had done quite a bit of research,” said Sacha Johnston, a treasure hunter helping to coordinate searches. “He wasn’t just randomly kayaking down the Rio Grande one day. He knew where he was going. He had a plan.”

View galleryThis Tuesday, Jan. 26, 2015 photo provided by Cynthia …
This Tuesday, Jan. 26, 2015 photo provided by Cynthia Meachum shows an areal view of the area where …
Fenn never meant for his treasure hunt to be easy: His poem points searchers to somewhere beyond “where warm waters halt … in the canyon down … too far to walk … below the home of Brown.”

Getting out would be dicey as well, he wrote: “… from there it’s no place for the meek/The end is ever drawing nigh/There’ll be no paddle up your creek/Just heavy loads and water high.”

This was all supposed to be fun, of course. Now the search for Bilyeu is taking an emotional and physical toll on Fenn, who spends his days organizing, hiring aircraft, and worrying.

His fans stand ready to admonish anyone who dares blame Fenn for Bilyeu’s disappearance, saying they’re all responsible adults.

Fenn, for his part, has issued plenty of warnings, along with more clues. Among them: He says there’s no point to searching in winter, when snow would hide the treasure. He also said “the treasure is hidden higher than 5,000 feet above sea level,” but it isn’t buried, nor in a graveyard, “nor associated with any structure.”

And he has no plans to reveal its location.

“There have been too many people looking,” Fenn said. “It would not be fair to them if we shut the thing down.”