Dear Reader,
Good news keeps coming—and we’ve got another opportunity to lock in ~100% gains.
In the latest issue of Crisis Investing, I mentioned that two positions were approaching Casey Free Ride territory and that we’d issue an alert if they continued climbing. Well, they did—and then some.
But before we get into the specifics, it’s worth understanding the backdrop—because it’s directly relevant to why we own these positions.
As I wrote in Thursday’s essay, on Wednesday the Fed cut rates for the third time this year, dropping the federal funds rate to a range of 3.5%–3.75%. But the real story wasn’t the rate cut itself. It was what the Fed announced alongside it: stealth money printing.
In fact, starting yesterday, December 12th, the Fed already began purchasing $40 billion in Treasury bills per month. They’re calling it “reserve management” and insisting it’s temporary. Let’s be clear: this is money printing. The Fed’s balance sheet is expanding again—and they didn’t even provide an end date for when the purchases will stop.
Powell can claim this is just “plumbing” or “seasonal liquidity management” all he wants, but history tells us this is the exact same playbook the Fed used before QE1 in 2008 and before COVID-era QE in 2019—start with “technical operations,” then transition to full-scale quantitative easing (QE).
Note: I went into this in more detail in Thursday’s piece, so if you missed it, be sure to catch up.
Precious metals got the message immediately. Gold jumped to a one-month high following the announcement, while silver hit a record high above $64 per ounce. Even platinum, a metal not usually thought of as a monetary hedge, climbed above $1,750—its strongest level since 2011.
That’s exactly the response we position for—and why we own precious metals and mining stocks, including the two names I mentioned at the beginning.