A Master of Understatement
Contributed Opinion

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2. As of the date of this article, officers, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of Nvidia Corp., Tesla Inc., Fitzroy Minerals, Green Bridge Metals, Getchell Gold Corp., Grafton Resources, and Silver North Resources Ltd.
3. Michael Ballanger: I, or members of my immediate household or family, own securities of: Fitzroy Minerals, Freeport-McMoRan, Green Bridge Metals, Getchell Gold, Grafton Resources, GLD, and Silver North Resources. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: None.  I determined which companies would be included in this article based on my research and understanding of the sector.
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Michael Ballanger Disclosures

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

On Friday, in a setting providing a deliberate contrast between a rustic, exposed-wood environment and high-stakes global finance, featuring a lodge with massive, 60-foot floor-to-ceiling panoramic windows that frame a direct view of the Teton Mountain Range and the Snake River, Fed Chairman Kevin Warsh addressed the usual throng of billionaire investors, hedge fund managers, Wall Street strategist, and several hundred reporters all clamouring to get the "scoop" as to forward guidance concerning the Fed's monetary policy. Instead of the perfunctory business attire of suits, jackets, and ties, the uniform of the attendees was strictly western-casual, with officials frequently conducting interviews on the outdoor deck wearing flannel or fleece jackets.

Unfortunately, after thirty years of forward "front-running", the reporters were having an extremely tough time allowing the new Warsh (and Fed) directive to permeate their skulls, which was, essentially, nothing. Warsh clearly enunciated in his first address to the media after being appointed that "forward guidance" is out. Gone. Overboard, Kaput.

As a result, reporters took to their laptops trying feverishly to conjure up a clickbaiting narrative to conform to the mundane ramblings of the Fed head, but they found themselves increasingly frustrated because the Fed chairman simply repeated what he has been opining since he took office, and that was reinforcement of a hawkish focus on inflation while signaling nothing. He inferred a shift toward a quieter central bank that relies on "structural realities" rather than reacting to single monthly reports, while leaving the door open for future interest rate increases.

The bond market remained essentially unchanged after the speech, which has to have the employers of all these financial reporters now trying to rationalize the cost of sending a team of three to five people to a function in a remote part of the U.S. West, only to come home with no story and a number of mosquito bites. It is estimated that to send one individual from London (U.K) to Jackson Hole would cost around ₤6,000 or about US$8,135, so assuming a reporter, a cameraman, and one assistant, that is US$24 grand to listen to Warsh make what has to be the "understatement of the century", that being that "money matters".

The master of opening one's mouth and saying nothing was former Fed Chairman Alan Greenspan, who, in response to a question from a member of Congress, replied: "If I seem unduly clear to you, you must have misunderstood what I said." Brilliant. Simply brilliant. However, Kevin Warsh actually outdid "the Maestro" by telling these highly-respected journalists that the US$40 trillion owed by his governments now representing US$1 trillion of interest payments (larger than the defense budget) actually "matters " because, as the late Senator Everett Dirksen once said ""A billion here, a billion there, and pretty soon you're talking real money." Only now we insert "trillion" for "billion", and we must be talking "ultra-real money".

I have never been a fan of the Fed, nor have I ever been a fan of charlatans masquerading as politicians, but after watching the non-plussed looks on the faces of the Jackson Hole attendees, I am actually starting to warm up to this Warsh character. He is refreshingly candid in his approach to the role of Fed chairman, and I suspect there is a reason for that. When I look at photos of other Fed chairpersons, such as Greenspan, Bernanke, Yellen, and Powell, there is not one who was an accomplished athlete in earlier phases of life. They never performed in front of hundreds or thousands of spectators until they became famous, so once they found themselves in the spotlight with cameras trained on their every expression, gesture, or inference, they actually associated that with achievement in the same manner that a jock would. That explains their constant need to be revered by the financial world.

Contrast that with Kevin Warsh, who was a competitive athlete in his youth, primarily excelling in tennis. While he is now known for his towering presence in global finance, his early background includes competitive school sports. Growing up in Loudonville, New York, Warsh was a standout tennis player, making his way onto the varsity tennis team at Shaker High School as early as middle school. He eventually advanced all the way to the New York State Championships during his high school career. In addition to tennis, he played competitive soccer and basketball during his high school years. Well done, Kevin…

This man enjoyed the limelight of athletic achievement at an early age, and while he does not lack competitive spirit and drive, recognition by the masses in front of a camera in no way becomes an addictive narcotic controlling his every move and agenda. He appears to me to be focused exclusively on the task at hand, which is 2% inflation with nary a concern for the price of Nvidia Corp. (NVDA:NASDAQ) or the level of the S&P 500. Now that is my kind of Fed chairman.

Precious Metals

The precious metals markets are acting far better than at any time since late January, when it became all too apparent that, led by silver, they were forming an impending "blow-off top" which I wrote about numerous times and acted upon twice, finally getting it right on the third shorting attempt after nearly getting my face ripped off in late December and early January.

Dodging any mania-driven bullet is tough at the worst of times, but shorting silver last December-January was like trying to short Tesla Inc. (TSLA:NASDAQ) in 2023 during its moon shot from US$100 to US$500 per share or Cisco Systems (CSCO:NASDAQ) back during the dotcom bubble of the late 90's. If you were not terribly careful in those two runs and were just stupid enough to think that the delusion of crowds cannot last forever, then you got steamrolled into embarrassment, insolvency, and abject terror all in one fell swoop.

I tried the same earlier this year with the semiconductors, and while they are finally starting to correct trading some 22% from the all-time high, expiring put options in my P&L statement were pulling down returns until my beloved Freeport-McMoRan Inc. (FCX:NYSE) finally rescued me last week with a move through $80 and an all-time high. However, that is all history now, and for me, the balance of 2026 looks promising, but only after we get through the month of September without anything going seriously awry, which it might, and usually when one least expects it.

I yammered away for the better part of late July and most of August, how the only way I would call a bottom for gold and silver was if we could get a 2-day close for gold above the "convergence zone" between the 100-dma and 200-dma, which for spot gold was $4,427 to $4,593. For the GLD:US (my preferred trading proxy for gold), that zone was bounded by US$402.67 and US$414.80.

Last week, I got that 2-day close, so theoretically, the ensuing spike to US$430 set up an overbought condition that I told subscribers should not be chased. Accordingly, we stood aside and avoided the sudden bullish wave that swept over the Twitterverse and the blogosphere with every podcaster and his pet poodle calling once again for "US$10,000 gold!" and "US$300 silver by summer!" (except that in three weeks, summer will be over).

Oops!

Traditional technical analysis dictates that "former resistance becomes current support through a market phenomenon known as 'role reversal', which occurs when an asset's price breaks decisively above an established ceiling (resistance), turning that old ceiling into a new floor (support)". It further states that "Former resistance becomes current support through a technical analysis phenomenon known as role reversal (or a "flip zone"), which occurs when an asset's price decisively breaks above a previous price ceiling. Once breached, that old resistance level transitions into a new floor that prevents the price from falling lower".

While that has been the case since last week for gold, silver failed to do so as its resistance band ("convergence zone") was in the US$68.34-71.43 range for spot and while it has been moving toward an overbought condition, prices could only just touch the upper realm of the band but failed to better that level of US$71.43, peaking this morning (Friday) at US$71.16.

Since the Wash speech, gold has collapsed over US$150 and silver by US$2.41, so gold has now moved back down and well into the "convergence zone," which has now become support unless, of course, silver's inability to break out along with gold represents a "non-confirmation" of the entire move.

From the chart of GLD:US shown below, that big red candle is blatantly bearish, but if one adheres to the tenet that "past resistance must become current support" (once the breakout is achieved), then we should be buyers of gold and of the HUI:US and a basket of one's favorite gold miners along with it. If this were any other period than the end of August and about to enter the ominous month of September, I would probably start accumulating.

Furthermore, if silver had already broken out of its "convergence zone", I might be taking out a leveraged long position in silver or gold. Since September starts next Tuesday and since silver has not yet confirmed, it is a far safer bet to await the HUI:US correcting back to its "convergence zone" in the 728-749 range, which is about 105 lower than today's price.

Notwithstanding the fact that I had a bunch of GLD:US puts designed as a hedge against drawdown in my portfolio of junior metals explorer/developers that expired last Friday, today's drop in GLD:US is maddening and frustrating.

There is a fairly large gap between the last trade at 837 and the top end of the "new floor," so the "Prudent Man Rule" must take precedence over the "Wild-Eyed Speculator Rule" for at least the very near term.

Juniors

There are two trading sessions left until the arrival of September and six trading sessions left until Labor Day, so that is the window of opportunity that arrives with impunity each and every year, providing investors with a terrific buying opportunity for their favorite juniors.

As we move into month-end and are forced to get the sand and suntan lotion off our bronzed bodies (I wish…), it is important to remember how the metals are faring on a year-to-date basis. As you can see from the chart shown below, copper is by far the star performer, with an annual return almost triple that of gold and far above silver, which remains negative for the year. The juniors I own in both the Portfolio and Trading accounts mirror this, with my largest holding being junior copper developer/explorer Fitzroy Minerals Inc. (FTZ:TSX.V; FTZFF:OTCQX) as my top pick and largest position, but joined by blue-chip copper-gold producer Freeport-McMoRan, which has treated us wonderfully recently and over the past four years. Also beefing up the junior copper holding is Green Bridge Metals Corp. (GRBM:CSE; GBMCF:OTC; J48:FWB), which has been struggling lately but remains a high-potential "Special Situation" for the near-term.

Getchell Gold Corp. (GTCH:CSE; GGLDF:OTCQB) remains my largest precious metals position, but it is being chased closely by the recent private placement in Grafton Resources Inc. (GFT:CSE; PMSXF:OTC), whose management team is busy amassing an enviable portfolio of gold-silver projects in Chile.

Lastly, my silver exposure is Silver North Resources Ltd. (SNAG:TSX.V; TARSF:OTCQB), which has been very successful in its exploration efforts in Canada's Yukon Territories with special focus on the Haldane project, located proximate to the legendary Keno Hill Silver District.

Both portfolios have allocations in line with the 2026 performance for all three metals. I am vastly overweight copper, market weight gold, and slightly underweight silver.

While this could change dramatically if silver starts to reassert command as it did late last year, I will be more than ready to shift allocations should that occur. However, I will not be changing the copper weightings as the fundamental picture remains powerfully bullish for the balance of the decade.