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Is the Junior Mining Market Starting to Bottom Out?

While our market continues to suffer, I have been in a constant search for the best values amongst our slaughtered junior mining shares...

The good news is there is great value within our sector.

The bottoming process for precious metals continues to be an ongoing and debilitating scenario leaving faithful investors wondering when this will end...

Yet as this is happening, the fundamental rationale for taking positions in the metals has never been stronger.

From a contrarian point of view, this is creating an exceptionally incredible opportunity to buy low and sell high.

And while it is still too difficult to call a bottom at this point, many of the shortcomings in recent years of the precious metals sector appear to be fading away...

Within the mining share community, management teams that were not doing the right things for the right reasons have come under intense scrutiny and pressure the last six months — and are being pushed out the door. Where ego and pride on the part of management ignored legitimate shareholders concerns in the past, they now must consider them or lose their positions.

This type of activity over the summer months this year is sure to cause plenty of changes within the junior mining sector, with many companies falling by the wayside.

This, to me, is a good sign that we are nearing the end of this horrendous downward cycle we have had to endure.

Shopping for the best values and realignment of our portfolios over the summer period this year is absolutely critical for recovering lost monies and getting back into the black.

I have seen this time and time again during my tenure as an individual investor and as a newsletter writer of the junior mining shares, where portfolios that looked down and out are suddenly rejuvenated.

There is no doubt this particular bear market has been the worst one I have ever dealt with. It has certainly taken a toll on all of us.

But I firmly believe we will soon see the bottom of this activity and begin to solidify in preparation for what looks to me like one of the most aggressive moves higher that we have ever witnessed.

Related article: Two Themes Exciting Energy Investors: Oilfield Services & Heavy Oil Producers

For now, the linchpin to holding the whole enchilada together for the U.S. government is keeping the illusion of a strong dollar, no matter the cost. And a strong dollar keeps gold and silver prices in check.

This is the modus operandi of the powers that be.

They will do everything in their power to continue this — until suddenly, they can't do it anymore.

Paul Craig Roberts posted an excellent article last month that I thought was right on the mark:

A perfect storm has been prepared for America. Real interest rates are negative, but debt and money are being created hand over foot. The dollar's demise awaits the world's decision how to get out of it. The Federal Reserve can print dollars with which to keep the bond and stock markets high, but the Federal Reserve cannot print foreign currencies with which to keep the dollar afloat.

When the dollar goes, Washington's power goes, which is why the bullion market is rigged. Protect the power. That is the agenda. Is it another Washington over-reach?

Unfortunately, I still don't see our market recovering in the near term — despite my belief that when the turn comes, it should be quite volatile to the upside (thus the need to buy the best values in the coming weeks and months ahead).

I remain focused that those who do this will recover their losses and get back into the black within their junior mining stock portfolios.

Something big is amiss in the financial system, and the monetary authorities sure seem spooked about it. I have maintained that we'll see another round of derivative nightmare unleashed throughout the system — but this time, the problems are magnitudes worse than in 2008.

Stay on top of the hottest investment ideas before they hit Wall Street. Sign up for the Wealth Daily newsletter below. You'll also get our free report, Wealth Daily's 2013 Gold Outlook.

The general public is completely oblivious to any of this as they continue to invest in the highly-overvalued Dow stocks. Smart investors sense that something is wrong, even if they don't fully understand, and are taking precautions.

The latest new catastrophe caused by the Keynesian central banksters is Japan.

Japan's stock market/real estate bubble burst in the early 90s. Since that time, Japan has launched NINE QE efforts equal to roughly 25% of its GDP.

And GDP growth has worsened despite these efforts, from 2% to 1%. Ditto for employment.

Japan elected their new Prime Minister Shinzo Abe in September 2012. Since that time, his primary belief has been that Japan hasn't engaged in enough stimulus. He threatened the Bank of Japan to get working — and it did, announcing a $1.4 trillion stimulus in April.

Since that time, the yen has positively imploded...

It broke below 100 for the first time in years. It's now fast approaching the long-term trend line.

When we remove this from the equation, it's game over for the great monetary experiment of Japan.

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Japan has a debt-to-GDP of over 200%; the country's demographics are terrible (it sells more adult diapers than children's diapers); its economy has been imploding for 20 years; and now it’s truly epic bond bubble is on the verge of collapse as well.

If you thought Greece and the continuing onslaught in Europe was bad for the financial system, wait until you see what Japan will do to it...

So here we have two of the three biggest economic centers in the world (Europe and Japan) already in implosion mode, with the biggest economy, the United States, barely hanging on and soon to experience their consequences.

As all of this is happening, the banksters have another monster derivative surprise that is about to be unleashed, causing the banks to sign agreements worldwide that if they get into trouble, the model followed in Cyprus this year will be engaged worldwide.

As intelligent investors, our options are severely limited if we can't depend on our savings and retirements accounts to be there as the chaos unfolds.

A recent Jim Sinclair quote sums it all up:

Everything is off the table when you suddenly have 90 plus percent of the population realizing that their options are essentially rape, steal, kill, or do whatever you have to do to survive, or just sit there and die.

Chaos. The elites hate chaos. The police hate chaos. The people hate chaos. As the Joker said in The Dark Knight: "You know... the thing about anarchy... at least it's fair."

No one wants what is coming — but those who understand what is happening realize you must prepare if you want to survive well.

Ownership of the precious metals and the quality junior mining shares will shine like they never have before in the coming chaos and civil unrest. Food, protection, and supply preps are a no-brainer at this point, with a portion of your funds.

Stay invested in precious metals, and prepare as much as you can while we wait to see what the bankster geniuses have in store for us...

I'm betting all my chips it's not going to be a pretty picture.

Until next time,

By, Greg McCoach

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