Bernanke rules the markets today...

A bold claim about gold companies over the past decade...

A bold claim about gold companies over the past decade...

Investment bank Citi reports no gold company will generate free cash flow at today's prices. In today's Digest Premium, Porter explains the truth these companies don't want you to learn...

To continue reading, scroll down or click here.

 Investment bank Citi recently released a report about gold miners. It said, "No gold company under our coverage will generate free cash flow at spot gold."

But I (Porter) would take that statement even further...

If you look carefully at the last 10 years, I would be surprised if any major gold mining company in the world produced free cash flow. (Keep in mind, the price of gold has still more than tripled over that time frame.)

 Free cash flow is whatever cash is left over from operations after subtracting capital expenditures. So Citi's report, while important, is somewhat overhyped... because these companies never produce free cash flow. That's not a mining company's model...

 Instead, these companies earn profits by selling gold, which is, in one way or another, put back into the pursuit of acquiring more gold in the ground. These businesses are always valued on the basis of their proven reserves and their current production. They're never valued on the basis of free cash flow. That's just not how it works.

One reason shares of gold miners have fallen in half this year is because they're capital intensive. (Their input costs are rising while the price of gold is falling.) But eventually, the sector will bottom. And the bottom will look like it always does...

Mining companies will liquidate assets – the proven reserves in the ground – for between two cents and 10 cents on the dollar. We can't predict when we'll see that kind of liquidation... It depends on what the price of gold does. But I think we might see that desperation later this year.

Around October, November, and December, I think you'll see gold companies engage in lots of equity financing (as in, selling new shares to raise capital). And that's incredibly disruptive to existing shareholders.

– Porter Stansberry with Sean Goldsmith

A bold claim about gold companies over the past decade...

Investment bank Citi reports no gold company will generate free cash flow at today's prices. In today's Digest Premium, Porter explains the truth these companies don't want you to learn...

To subscribe to Digest Premium and access today's analysis, click here.

  Fed Chairman Ben Bernanke spoke last night... and stocks rallied.

Bernanke wanted to assure the world that he doesn't really intend to stop printing money... "Highly accommodative monetary policy for the foreseeable future is what's needed," he told a crowd in Cambridge, Massachusetts last night.

That's nothing really new. But it was enough to send the S&P 500 up 1% to 1,670 – above its all-time closing high of 1,669.1 on May 21.

 Meanwhile, gold jumped more than 2.5% to nearly $1,280 an ounce.

And gold stocks rallied... The Market Vectors Gold Miners Fund (GDX) – which holds shares of most of the big publicly traded gold stocks – jumped as much as 6% on the news.

 His pro-easing comments followed the release of the June Federal Open Market Committee minutes, which showed nearly half of the 19 participants wanted to end the Fed bond-buying ("quantitative easing") policy by the end of this year.

But Bernanke's words took precedence over the split vote... though, once again, he said nothing new.

 Following Bernanke's mid-June announcement – when he said he saw a gradually improving economy – the market fell, while Treasury yields and volatility spiked. Investors thought the Fed would begin reining in (or "tapering") its $85 billion in bond purchases.

We knew that wasn't the case. As we wrote in the June 28 Digest Premium...

 For now, we'll enjoy the upward march in stock prices. But we know it can't last forever.

 While Steve Sjuggerud agrees we're on an unsustainable path, he believes there are more gains to come before things go bad. In fact, in today's DailyWealth, he said all-time high stock prices shouldn't scare you away from the market...

 As Steve points out, in 2000 (in the midst of the dot-com bubble), stocks traded for an average of 30 times their earnings – the highest price-to-earnings (P/E) ratio in 100 years of stock market history.

In 2007, just before the subprime crisis, stocks had a P/E ratio of more than 20. Today, the S&P 500 index trades at a more reasonable 14.9 times earnings.

 In Monday's Digest, we showed you the U.S. household burden was at a record low, leaving plenty of room for Americans to borrow more money. And they're not wasting any time...

Consumer credit jumped in May by the most in a year... According to Federal Reserve data, total consumer credit increased by $19.6 billion to $2.8 trillion. Consumer credit jumped $10.9 billion in April.

The big surprise was the growth in revolving credit (mainly credit card debt), which jumped from $849.9 billion in April to $856.6 billion in May.

Non-revolving credit (like auto and student loans) increased from $1.8 trillion to $1.9 trillion, a much slower pace of growth.

 People are comfortable taking on more credit-card debt when they're bullish on the economy and feel secure in their jobs.

The latest jobs report showed the economy added 195,000 jobs in June. The April and May numbers were also revised to reflect an additional 70,000 jobs.

Also, the Consumer Confidence Index increased from 73.4 in May to 81.4 last month.

 Perhaps that's why we're seeing so many consumer-driven stocks hitting new highs... Target, Domino's Pizza, Amazon, AutoZone, Bed Bath & Beyond, Gap, Kroger, etc...

 In last Friday's Digest, we told you about the strategy Dr. David "Doc" Eifrig has used in Retirement Trader to amass one of the most incredible track records in newsletter history. Since launching Retirement Trader in 2010, Doc has closed 123 consecutive winning positions.

Many people don't believe this track record could be real, but we assure you, Doc is 123-for-123.

Today, we wanted to give you a couple recent examples of actual trades Doc has recommended. And don't miss below, where we tell you how you can join Doc for a live webinar tonight... and receive hundreds of dollars' worth of free research...

 Here's an example of how Doc's Retirement Trader strategy works.

Earlier this year, the tech sector was rallying. But as the rally grew long in the tooth, Doc looked for a safe way to capitalize on the remaining upside.

On March 22, he recommended a trade on the Technology Select Sector Fund (XLK). Doc's exact words to subscribers read...

If you put on this trade every three months – assuming all prices remain the same – this could return about 57% a year on margin.

 Here's another example of how this strategy works...

On April 26, Doc recommended a trade on networking giant Cisco. As Doc explained...

In addition, earnings in the technology sector were beating estimates across the board.

Here's what Doc recommended...