by David Kranzler
Investment Research Dynamics
Another round of “QE” money printing, another round of the flight-to-safety rush into gold, silver and mining stock…
For as insanely overvalued as are many of the “tech/unicorn” bubble stocks (SHOP, W, TSLA, CVNA, etc), the precious metals sector, especially silver and silver mining stocks, are just as undervalued. With multiple Fed speeches per day everyday for the last few weeks, the Fed is priming expectations for another big round of money printing in order to monetize the deteriorating credit quality of bank balance sheets and to fund the next round of Government stimulus payments as well as the massive spending deficit.
An eventual, inevitable stock market “accident” like the one in March will likely take everything with it, including the precious metals. However, like in 2008 and March, I expect an event like that to create a buying opportunity because a lot of the money that is pulled out of general risk assets will find its way into gold, silver and mining stocks. At that point the precious metals sector will head higher while the stock market continues to head south.