The Surrender Announcement for those who listened...so it was Party time!

Chen Lin says who gold and other small cap companies are ready to roll

The headline here was stolen from Michael Oliver of www.OliverMSA.Com who pointed out that Powell was clearly sending a signal yesterday before Congress that rate cuts are on the way. He said, “Elevated inflation is not the only risk we face; reducing policy restraint too late or too little could unduly weaken economic activity and employment” (our emphasis). He also said the Fed had made “considerable progress” on their anti-inflation policy before finally admitting what most economists had recognized for several months: that the labor market has “cooled considerably.”

Then came the 0.1% decline in the CPI which when combined with Powell’s remarks triggered a huge move out of the few stocks that have been rocketing the S&P and NASDAQ in a perpetual rise in the indexes. Once again, wealthy Americans celebrated the anticipation of untold financial gains at the expense of America’s middle class.

However, passive investors who think they are getting a diversified investment portfolio but are not because of the dominance of massively overvalued AI stocks didn’t far as well as Wall Street pros who have understood that most smaller cap stocks are grossly undervalued. So the pros jumped on to the Russell 2000 which gained 3.57% today while the NASDAQ lost 1.95% and the S&P 500 shed 0.8%.

Chen Lin spoke about this in my Turning Hard Money into Good Times podcast this morning. He suggested that this should be very good news the smaller gold and silver mining companies that he and I follow as well as the very large number of undervalued stocks in many different sectors. The performance today of the Russell 2000 today as noted above confirmed Chen had it right at least today. We shall see if this is a new trend.

So in anticipation of lower rates, Wall Street rejoiced today because it suggests they will become even wealthier even though higher unemployment is causing people of modest or meager means will suffer. Such is the end game once a nation goes down the dishonest fiat money path. As I have said many times all fiat money ends up in the dustbin of history. The dollar will be no different which is one reason of course to own gold.

But does prospects for lower interest rates mean good times for all sectors of the economy? As Luke Groman said on Adam Taggart’s Thoughtful Money, given the U.S. government debt/GDP ratio of around 130%, higher rates are actually good for gold because when a nation has to print money to simply pay its interest, it indicates an acceleration of the currency’s decline is well on its way. And Alasdair Macleod wrote in an article on Substack today titled “Why all financial markets will crash” our massive indebtedness will require the Fed to print more and more money faster and faster to ensure sufficient liquidity to keep the wheels on the economic wagon turning. That will most certainly lead to even more inflation (decline in the dollar) which is why both Groman and Macleod adamantly suggest that owning gold is a must whether we face a deflationary or inflationary future.

Chen has some very exciting things to tell you about Nervgen Pharma, the company that may have found a solution that enables severed spinal cord tissue to reconnect and enable people with spinal cord injuries to walk again. He also has some comments about Cerro de Pasco, with a massive gold-copper-silver-lead-zinc tailings deposit in Peru in which legendary investor Eric Sprott recently became the largest shareholder. I hope you take the time to listen to Chen in my 26-minute conversation with him this morning.

I do hope to resume doing my podcasts on a fairly regular basis. That plan has been deterred in part by a medical issue my wonderful wife Teresa is dealing with. She expects to be hospitalized for approximately three weeks beginning next Monday. From those of you who believe in God our Creator, your prayers are coveted.

Best wishes and enjoy my discussion with Chen.

Jay Taylor

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