Professor Elam

Weekend May 19, 2024

23% of Americans with a mortgage owe more than the home is worth. Let one spouse lose their job and I expect they walk away from the debt.

The interest on the Federal debt is more than the defense budget. And with rates on the way  up that will only get worse.

Rank Paul commented that a large part of the Federal budget is borrowed money .  With Social Security looking to go negative, less revenue than pay out by say  2035, well…

Firms piled on cheap debt right to the rate bottom of March 2020. Now all that debt is coming due and will be rolled over at higher rates, Can small firms pay that debt and stay profitable?

All of which sets the stage for a precious metals rally. The break out in Hecla and oOuer CDE Friday lef no doubt.

CDE

Hecla exhibits the same  pattern.

Here is a longer term picture

Notice the new high in volume  in the lower chart, the gold and silver bugs are back, and no wonder in  world  awash  in debt.

Here is a long term silver chart. But I think the potential is much higher than $50.  The world has never been so indebted.

The weekly  ratio chart of the gold bug index to the SPX has been in a downtrend for some time. /Taking out the  overhead resistance of the blue line at  .054 will be a further confirmation.

For mutual funds, say a  401 or  403

 Rydex Precious Metals looks good at  $41.

Apache APA is a good proxy energy stock. It is tryiing  to break out again, MAuso

D and RSI are trending up.

Patterson PTEN is a major energy service firm in Texas, Note the on balance volume at bottom.

Patterson trades at  96% of book value. RIG is trading at 47%, the largest  offshore driller on the planet. NOtice OBV is taking off.