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Frank Holmes



Articles by Frank Holmes

Signal and Bitcoin: Twenty-First Century Tools of Personal and Economic Freedom

10 days ago

Key Points:
Social media’s suspension of President Trump’s social media accounts should be troubling to everyone, whether you support him or not. Recall Ben Franklin: “They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.”
Privacy seekers are downloading Signal to replace WhatsApp.
Biden’s proposed relief package, at $1.9 trillion, is expected to boost investor demand for real assets, including gold, Bitcoin and Ethereum.
In my final commentary of 2020, I wrote that the U.S. media has a major trust issue. According to recent polls, most Americans put little faith in what they see and read on TV and the internet.
These negative sentiments were probably not improved much by big tech firms’ decision to suspend President Donald Trump

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Will Commodities Ride the “Blue Wave” Higher in 2021

19 days ago

What a way to kick off the new year.
If you happened to watch the storming of the Capitol unfold live on TV on Wednesday, you might have mistaken it for a movie adaptation of a Tom Clancy novel. Not since the Burning of Washington in 1814 have antagonistic forces succeeded in breaching the Capitol walls and causing damage.
I believe that may be one of the most alarming things about what happened. I’m hardly the first to question how the rioters were able to get inside the building so easily. It’s being reported that lawmakers are planning a “minute-by-minute” investigation into law enforcement failures during the attempted coup that resulted in five deaths, including an officer with the Capitol Police.
Despite the turmoil, stocks have incredibly continued to trade up. Today the S&P 500

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2020: Gold’s Best Year in a Decade; Ethereum Beat Bitcoin; Inflation Higher Than Reported

27 days ago

One of the keys to being a successful investor is making sure you’re getting the right facts. Otherwise, you run the risk of making investment decisions based on poor or faulty information.
The problem is, the media has a major trust issue. Many Americans put very little faith in the accuracy of the “news” they get from newspapers, TV, radio and social media. A Gallup poll in September found that 33% of Americans—a full third—don’t trust the media at all.
This would be distressing in any year, but it’s particularly so during a pandemic and presidential election.
I was curious to see if this distrust was turning up in people’s web searches. My suspicions were confirmed. Google inquiries for “media bias” have historically spiked around elections, but this year, people seemed to be more

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Bitcoin Cracks Record High Due to Institutional Investors

December 19, 2020

If I asked you how many hospital beds the U.S. has, what would you say? Two million? Five million?
Try 924,000. That’s right: The U.S. currently has under 1 million hospital beds for a population of approximately 330 million, according to the American Hospital Association (AHA). By my calculation, that comes out to 28 beds per 10,000 people.
This is the real threat posed by the pandemic, as I see it. Supply-demand imbalances can often be favorable when we’re talking about asset prices, but they’re not ideal during a global health crisis. As of today, more than a third of Americans live in areas that are critically short on intensive care unit (ICU) beds. All of Southern California—a region that’s home to around 25 million people—is now at 0% availability.
And it’s not just beds. Hospitals

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Still Plenty of Gas in the Base Metal Rally Tank

December 12, 2020

Industrial metals are well on their way to being among the top performers of 2020, supported by red hot demand from China and global supply concerns.
As of today, the MSCI Industrial Metals Index—which tracks the price of copper, nickel, aluminum and more—was up 21.4% year-to-date, just below the index of precious metals, up 21.9%. The broader S&P GSCI, which measures metals as well as agricultural and energy-related commodities, was underwater by nearly 10%.

As I discussed last week, copper prices have been on a tear this year thanks not only to the economic strength of China, the metal’s biggest consumer, but also because of its essential role in nascent technologies such as electric vehicles (EVs) and renewable green energy.
The very hottest major commodity, however, has been iron ore.

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The Investment I’m Most Grateful For

November 28, 2020

I hope all of my American readers and subscribers had a safe, happy Thanksgiving Day. This year has been exceptionally challenging for a variety of reasons, but I believe there’s still a whole lot to be thankful for. I trust you were able to spend some time with friends and family, whether in person or over Zoom, and found the time to count your blessings.
Americans appeared to buck Thanksgiving travel warnings from the Centers for Disease Control and Prevention (CDC), with the number of commercial air passengers hitting a new pandemic high. Nearly 1.05 million passengers took to the skies last Sunday, beating the previous record of 1.03 million people on October 18. That figure was beaten again on Wednesday, when 1.07 million people were screened to fly.

One of the things I’m most

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The World Has Racked Up $277 Trillion in Debt

November 21, 2020

How do you even begin to visualize $277 trillion?
If we convert it into seconds, 277 trillion is the equivalent of 8.8 million years. I’m not sure what was happening that long ago, but I guarantee you it didn’t involve people.
It’s been estimated that Jeff Bezos increases his net worth by about $321 million a day. At that rate, you’d have to work for close to 863,000 days, or 2,364 years, to reach $277 trillion. 
You get the point. It’s an unfathomable sum.
It’s also the total amount of debt the world is expected to hit by year-end. That’s according to the Institute of International Finance (IIF), whose members include some 400 banks and financial firms around the globe.
This year alone, as of the end of September, the world added $15 trillion to the debt pile, with government borrowing

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Investors Get a Shot of Hope Amid the Uncertainty

November 15, 2020

America, and the world, received a huge shot of hope this week.
The $210 billion drugmaker Pfizer announced on Monday that its coronavirus vaccine is 90% effective at preventing COVID-19.
As expected, travel and hospitality stocks were the trading session’s big winners. The best performing S&P 500 stock was Carnival, up nearly 40%. Hawaiian Airlines cruised the highest among airline stocks, up an incredible 50%. Only three airline stocks —Singapore Airlines, Air Transport Services and Cargojet—were down for the day. Airline stocks’ daily volatility has historically been ±4%, but on Monday they had a move of 4 standard deviations.

Following the positive news, Goldman Sachs was quick to adjust its market forecast for the next 12 months. The investment bank sees the S&P hitting 4300 by the

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Red, Blue or Both? Still A Bullish Scenario For Stocks

November 7, 2020

As I write this, former vice president Joe Biden has not yet been named president-elect, but with him leading in the crucial battleground states of Pennsylvania and Georgia, it looks more and more likely that he will be sworn in this January.
The market seems to have predicted this outcome. If the S&P 500 is up between July 31 and October 31 before an election, it has historically favored the incumbent party. And if it’s down, it has favored the challenger. Following a loss of 5.6% last week, the S&P was underwater about 4 basis points from the end of July.
Many of you reading this are no doubt disappointed. In a poll I ran back in August, 76% of you said you believed President Donald Trump would be better for the stock market than Biden.
I’m here to tell you there’s probably no need for

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If Inflation Is the Trick, Gold Is the Treat

October 31, 2020

October 30, 2020

Want to hear something really scary? Inflation, the scourge of the modern economy, may be running much faster than we’re led to believe.
I’ll use consumer spending on Halloween as an example of what I mean.
Total Halloween spending has fallen for the past three years and is projected to fall yet again this season, to $8 billion from $8.8 billion last year, according to recent data from the National Retail Federation (NRF).
No surprise there. With many people still avoiding large gatherings due to the pandemic, and health officials calling trick-or-treating a “high-risk activity,” less is going to be spent on candy, costumes, party decorations and other Halloween-related items.
Indeed, spending on costumes is forecast to plunge a not insignificant $600 million compared to

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Some Are Betting on Red, Some on Blue. I’m Betting on Gold

October 11, 2020

Whether you support President Donald Trump or not, you must acknowledge that one of the bedrocks of his governing style is unpredictability. To some critics, Trump’s behavior and decision-making process may seem erratic, but I believe they make a sort of sense when viewed through the lens of game theory.
Take, for example, his hot-and-cold stance on a new coronavirus stimulus bill this week. On Tuesday, Trump unexpectedly tweeted that negotiations with House Speaker Nancy Pelosi would halt until after the election. “After I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Businesses,” he said.
That same day, Trump appeared to change his mind—reportedly after he saw how the stock market, and particularly airline stocks, reacted to the news. (I often

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October Is Already Living Up to Its Reputation as the “Jinx Month”

October 3, 2020

For the past several months, I’ve been watching “Resurrection: Ertugrul” on Netflix.
It’s a Turkish television series that first aired in 2014. Set in the 13th century, the series centers around the titular Ertugrul, the father of Osman, who founded the Ottoman Empire.
Some viewers have called the show the Turkish “Game of Thrones,” and for good reason. It’s full of adventure and excitement as well as intrigue and corruption.
It’s also controversial within the Arab world for showing why the Middle East has so many problems to this day. A number of Arab countries have actually banned it because they believe Turkey’s president Recep Erdogan may see himself as a modern day Ertugrul, out to create a new Ottoman Empire.
In the show, members of the Byzantines, Mongols and Templars are all

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Keep Calm and Stay Long: This Gold Price Correction Is Normal and Healthy

September 26, 2020

In the nearly six years since Greg Abbott has been governor of Texas, the Lone Star State has been the number one destination for U.S. businesses looking to relocate.
That includes California businesses. In 2018 and 2019, as many as 660 California-based companies pulled their stakes up and moved to greener pastures in Texas, where the cost of doing business is roughly 10 percent below the national average.
Next up is Tesla. The electric vehicle (EV) company is currently in the process of building its fourth factory in the Texas capital of Austin, a growing tech hub with a young, highly educated population.
A city in Texas may also be named headquarters to TikTok, the popular video-sharing app whose fate is still in limbo after Oracle and Walmart struck a deal to jointly buy the U.S.

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The Urban-to-Suburban Exodus May Be the Biggest in 50 Years

September 20, 2020

In the past three or four months, you may have noticed a plethora of headlines proclaiming the “death” of big U.S. cities such as New York, Chicago and Seattle. To paraphrase Mark Twain, these reports may be greatly exaggerated. However, there’s no denying that many urban city-dwellers—a great number of them high-income—are either relocating into the suburbs or strongly considering it, due to the double-whammy of the coronavirus and historic social unrest.
This latent “exodus,” as some are already calling it, may end up being among the biggest in U.S. history, or at least the biggest since the “white flight” of the 1950s and 60s. According to real estate brokerage firm Redfin, a record 27.4 percent of homebuyers sought to move out of their metro areas in the second quarter, with New York

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Ivanhoe Set to Begin Production at World’s Second-Largest Copper Project

September 12, 2020

Copper has had an incredible run, surging 45 percent since its March low on plunging global inventories and the prospect of heightened usage by China, its biggest purchaser. It’s also been a good year for one of the world’s top explorers of the red metal, Ivanhoe Mines, which just this week released stellar economic results of its tier-one Kamoa-Kakula Copper Project in the Democratic Republic of the Congo (DRC).
One of our favorite natural resource companies, Ivanhoe has returned more than 146 percent in the past six months alone as investors anticipate the start of production at the Kakula Mine, which has the potential to become the world’s second-largest copper mining complex, with annual output projected to be 800,000 metric tonnes a year.
We now know approximately when phase one of

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Is Headline CPI Inflation “Fake News”?

August 29, 2020

The Federal Reserve just tweaked how it thinks about inflation, and this could have a huge impact on gold and gold mining stocks.
Speaking at Jackson Hole this week, Fed Chair Jerome Powell unveiled an adjustment in U.S. monetary policy that would allow inflation to average 2 percent over a period of time. The implication is that the Fed would let increases in consumer prices overshoot the 2 percent target rate, which the U.S. has rarely touched since 2012 (if we’re going by the headline consumer price index (CPI), which I’ll talk more about below).
To support this reframing of inflation, Powell says interest rates are likely to remain at near-zero for some time longer, possibly for another five years.
This policy change could be constructive for gold prices and, consequently, gold

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Wisdom of Crowds Says Better Days Are Ahead

August 24, 2020

If you woke up this morning from an eight-month coma and happened to glance through the business section of the newspaper, you’d be forgiven for being unaware of any economic slowdown.
Don’t get me wrong: Many businesses and families are still struggling. The number of Americans filing for initial jobless claims this week spiked above 1 million, while the number of deaths attributed to COVID-19 remains above 1,000 a day.
But there was much else to celebrate this week.
Business activity in the U.S. snapped up to a post-pandemic high this month. The preliminary Composite Purchasing Manager’s Index (PMI), a measure of both the manufacturing and services sectors, hit an expansionary 54.7, the highest since February 2019. The upturn was due primarily to stronger exports and new orders as

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A Gold Correction Was Expected After Nine Straight Weeks of Gains

August 15, 2020

The price of gold had its first down week since early June, ending a spectacular nine-week rally, the likes of which we haven’t seen since 2006. The yellow metal briefly fell below $1,900 an ounce on Wednesday as stocks neared their all-time closing high and the 10-year Treasury yield jumped on record supply. Wednesday’s $38 billion auction of 10-year government bonds was the largest in U.S. history.
As I shared with you last month, gold was looking overbought at more than two standard deviations, so a short-term correction was to be expected. 
It’s important to keep in mind, though, that the metal’s long-term drivers remain intact. We have unprecedented monetary and fiscal stimulus, with more potentially on the way. There’s still trillions of dollars’ worth of global government debt

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I Believe Gold and Silver Are Just Getting Started

July 25, 2020

The U.S. Mint made an unusual request this week. In a press release dated July 23, the bureau literally begged Americans to start putting coins back into circulation by spending or depositing them.
As you may have noticed, people just aren’t making transactions with coinage like they used to. That’s especially the case now in the age of the coronavirus. With many people sheltering-in-place, billions of dollars in everyday purchases are being made online that in normal times would have happened at the cash register.
This is creating a national coin shortage.
“Until coin circulation patterns return to normal, it may be more difficult for retailers and small businesses to accept cash payments,” the Mint writes, adding that for millions of Americans, cash is the only form of payment. Without

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How Robinhood Investors Beat Buffett at His Own Game

July 19, 2020

If you’ve listened in to some of my interviews or online presentations since the start of the pandemic, you may have heard me discuss Robinhood, the no-commission trading app favored by millennials. According to the company, the median age of users is 31. Many are first-time investors.
In the first quarter, the startup reported that some 2 million new accounts were opened, which was more than Schwab, TD Ameritrade and E*Trade combined.
For some investing veterans, the narrative has been that Robinhooders are clueless kids living in their parents’ basements, whose haphazard day-trading has destabilized stock prices. They took their $1,200 pandemic relief checks (which contributed to record disposable income growth in April) and loaded up on tech stocks, making markets frothy, some might

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Precious Metals Were the Winners in H1 2020… And It Wasn’t Even Close

July 13, 2020

Every year around this time, we check in with raw materials for our popular commodities halftime report. This year, it wasn’t even a competition.
Precious metals were the big winners for the first six months of 2020. Spot gold took the first place position, rising over 17 percent, followed in second place by silver, up nearly 2 percent. Palladium rounded out the top three, essentially flat at negative 10 basis points.

Platinum—which, like palladium, is used in the production of emissions-scrubbing catalytic converters—trailed substantially behind its precious metal brethren for the six months as global auto sales plunged amid coronavirus lockdown measures.
However, that may be set to change. Automobile manufacturers in China, the world’s number two auto market, announced today that

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American Exceptionalism Is Real

July 3, 2020

Nearly 120 years ago, an American engineer named Willis Carrier invented the very first electrical air conditioner. The device was such a hit that he founded the Carrier Corporation in 1915 to meet demand, making it the world’s first HVAC (heating, ventilating and air conditioning) company.
Fast forward to today, and Carrier Global, as it’s now called, is one of the largest HVAC manufacturers in the world. Last year it did some $18.6 billion in sales, close to half of it overseas. The Florida-based company employs approximately 53,000 people across six continents.
The reason I bring up Carrier now—besides the fact that, this being July, most of you reading this likely have your air conditioners running full blast—is because the company was the best performing S&P 500 stock for the first

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The Perfect Storm for Gold and Gold Stocks?

June 27, 2020

This Could Be the “Perfect Storm” that Pushes Gold to a New Record High

A “perfect storm” of surging government debt levels, plunging real bond yields, rising coronavirus cases and deteriorating economic forecasts pushed the price of gold to an eight-year high this week, and some analysts now project the metal to top its all-time high within the next 12 months.
Gold touched $1,778 an ounce on Wednesday, its highest level since February 2012 and coming within striking distance of the psychologically important $1,800 resistance level.
What drove the yellow metal’s price action this week was not just an alarming rise in confirmed virus infections—U.S. cases hit a new single-day record of more than 40,000 on Thursday—but also a weakening U.S. dollar. The greenback declined the most in three

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Are We Heading for a Second Wave of Lockdowns?

June 20, 2020

“I cannot emphasize how important this could be.”
That’s Dr. Sam Parnia, a doctor and professor at the Grossman School of Medicine at New York University. What he was reacting to is news that a cheap drug, dexamethasone, has reportedly been shown to reduce deaths among COVID-19 patients on ventilators by as much as one-third.
“It’s a huge breakthrough, a major breakthrough,” Dr. Parnia said of the study conducted by scientists at the University of Oxford.
The 60-year-old anti-inflation medicine is manufactured by a number of companies, including Mylan and Merck, and is widely available in pharmacies and hospitals around the world.
The discovery—if it’s everything the researchers say it is—comes just as new coronavirus cases and hospitalizations are spiking again in several countries,

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The Math Is on Investors’ Side

June 14, 2020

Most baseball fans know that the New York Yankees is the winningest team in MLB history. Of the 18,426 games it’s played since 1901, it’s won 10,378, or about 57 percent of them.
The Yankees have also won the most World Series championships. Between 1903 and 2019, the team has lifted the Commissioner’s Trophy a record 27 times, a win rate of 23.5 percent. (The 1994 World Series was cancelled due to a strike.)
As impressive as this track record is, it doesn’t come close to the U.S. stock market’s.
Over the past 90 years, the S&P 500 Index has ended the year up 61 times, for a win rate of 68 percent, or a little more than two-thirds of the time.
This means, of course, that the market has statistically ended the year down one out of every three times. It’s even rarer for it to sink lower two

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Airline Stocks Just Posted Their Best Week on Record

June 6, 2020

Today I’d like to start by lending my voice in support of those who seek to bring attention to and rectify the deeply rooted societal inequities that contributed to the senseless killings of George Floyd, Breonna Taylor, Ahmed Aubrey and others. Racism has no place in America. Full stop.
Many Americans understand and empathize with the outrage, even if they don’t necessarily agree with the looting and violence that have defined some of the protests.
A vast majority of the demonstrators want only to exercise their First Amendment rights peacefully, and it’s unfortunate when a few bad actors are allowed to hijack the protests.
Like the coronavirus pandemic and economic downturn, the civil unrest has generated a lot of fear and uncertainty among Americans.
But there are signs that the worst

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Wheels Up! Economic Recovery Could Be Faster Than Expected

May 31, 2020

Sometimes it can be challenging to remain optimistic, to look past the never-ending raft of negative headlines and see the upside.
This past week was no exception.
The number of COVID-19 deaths in the U.S. exceeded 100,000, a significant toll, with cases continuing to climb in new hot spots.
Meanwhile, political and racial tensions are running high. Violent protests erupted in Minneapolis in response to alleged police brutality. The incident also led to an escalation of the ongoing feud between Twitter and President Donald Trump, when Twitter blocked one of the president’s tweets for violating its rule about “glorifying violence.”
And across the Pacific, protests resumed in Hong Kong following China’s passage of a national security law that, among other things, enables Chinese law

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You Can’t Just Print More Gold

May 26, 2020

“I think there is a strong likelihood we will need another bill.”
That’s according to Treasury Secretary Steven Mnuchin, who supports additional fiscal stimulus to combat the economic impact of the novel coronavirus—within reason.
The secretary’s statement comes after the House passed a record-shattering $3 trillion relief package, though leaders in the Senate have said they will not put it up for a vote. Senate Majority Leader Mitch McConnell has made it clear that the next coronavirus bill “cannot exceed $1 trillion,” according to reporting by Axios.
Even so, the U.S. government’s response is already massive, dwarfing anything that’s come before it.
Across the pond, Britain’s government is likewise spending like crazy. The U.K. budget deficit widened to a record 62.1 billion pounds

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Bitcoin Is “Right Where Oil Was in 1890”

May 18, 2020

This week I was honored to participate in the first virtual Consensus cryptocurrency conference, hosted by CoinDesk. In years past, the annual gathering—attended by the world’s biggest crypto and blockchain companies, experts, entrepreneurs and investors—has been held in New York, but in an effort to curb the spread of the coronavirus, everything was moved online.
I was impressed with CoinDesk’s ability to adapt to unforeseen circumstances, and I want to thank them for the opportunity to participate.
No doubt many were disappointed to lose the in-person Consensus experience this year, but I believe it may have turned out for the better. Attendees were able to listen in to every panel and seminar for free, and from the safety of their own homes. This potentially allowed speakers’ thoughts

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Gold Royalty Companies Report a Strong First Quarter

May 11, 2020

A month is all it took to wipe out a decade of jobs growth.
U.S. employers cut an unprecedented 20.5 million jobs in April, the most in history, while the unemployment rate rocketed up to 14.7 percent. As of this week, a head-spinning 33.5 million Americans, or one out of every five workers in the U.S. labor force, have lost their jobs as a result of coronavirus lockdown measures.
With so many people out of work as we head into the second quarter, the next earnings season for S&P 500 companies is undoubtedly going to be one for the history books. FactSet reports that Wall Street analysts have already cut their second-quarter earnings estimates by 28.4 percent, the largest such decline on record.
Meanwhile, we’re seeing corporations file for bankruptcy protection at an accelerated clip. As

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