Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Most Exciting Biotech Stock Of The Year? - 17th May 21
Gold Mining Stocks Fundamentals - 17th May 21
Junior Gold Miners Should be Rallying – What’s Holding Them Back? - 17th May 21
Stock Market - Should You Be In Cash Right Now? - 17th May 21
Learning the Financial Markets - 17th May 21
INVESTING IN HIGH RISK TECH STOCKS - ALL OR NOTHING - 16th May 21
Is Stock Market Selling Madness About Over? - 16th May 21
Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
Budgies Birds of Paradise Indoor Grape Vine Singing, Chirping and Flying Parakeets Fun 3D VR180 UK - 16th May 21
Wall Street Roiled by Hot Inflation Data: Is This REALLY “Transitory”? - 16th May 21
Inflation Going Stag - 16th May 21
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

GET READY - The Great Transfer of Wealth in Gold & Silver is Coming

Commodities / Gold and Silver 2013 Aug 20, 2013 - 10:34 AM GMT

By: Steve_St_Angelo

Commodities

The U.S. Economy stands at the edge of the abyss while the financial MSM debates whether or not the FED will taper in the fall.  Silly analysts.  Serious cracks are beginning to appear in the economy while the precious metals have now seemingly decoupled from the broader stock market in a big way.


The heartbeat of the U.S. retail economy is in serious trouble when we see this in the headlines, "WalMart Earnings Disaster Exposes a Collapsing Economy: Davidowitz."   I have been watching Howard Davidowtiz for years, and you got to like the guy because he doesn't sugar coat anything -- just calls it like it is.  He says that the real unemployment is closer to 14% because 75% of the jobs created so far this year are low-wage part-time jobs.  Basically, Davidowitz says the U.S. Economy is collapsing.

Furthermore, the housing market is about to hit a brick wall, "Mortgage Activity Plunges 50% to April 2011 Levels."  We can see from the Zerohedge chart below, that existing home sales (shown in brown) are about to fall in a big way as mortgage applications have dropped to three-year lows:

Mortgage & Home Sales

The continued health of the housing market is based on low-interest rates.  However,  bond rates have been rising substantially over the past 3-4 months which impacts the mortgage rates for the housing market.  Since May, the 10 year U.S. Treasury yield has increased a staggering 63%:

10 Year Bond  Rate

The whole idea of the FED's QE3 program was to keep interest rates down while stimulating the housing market and overall economy.  Well, as we can see... both of these critical components of their QE3 program are rapidly disintegrating.

Foreigners: Getting a Whiff of the Stinky U.S. Bond Market

Well, the U.S. Treasury TIC data came out today, and it showed what most of us in the precious metal community realized... and that is a broad sell-off.  If we look at the table below, foreigners unloaded $56.5 billion of U.S. Treasuries and Bonds in the month of June.

TIC DATA U.S. Treasuries June 2013

As you can see from the highlighted area on the top of the table, China & Japan sold the most at nearly $42 billion combined.  Furthermore, Hong Kong dumped $12.2 billion, the Oil Exporting Nations dropped $7.7 billion and Russia decreased its holdings by $5.4 billion.

It seems as if the Eastern and Middle East countries are beginning to realize that the U.S. Treasury market may not be the traditional safe haven for much longer.  With this in mind, how is the FED going to taper its QE3 program at a time when foreigners are dumping treasuries and bonds by adding more supply to the market?  This means that the FED will have to purchase MORE, not LESS treasuries if it doesn't want the interest rates to skyrocket.

The U.S. Brontosaurus Warning

There's all this talk about the infamous Hindenburg Omen that signals a huge stock market crash on the horizon.  However, I believe the U.S. has a much worse omen starring it in the face -- the Brontosaurus Warning.

It's one thing to see the negative signs in a single market, but another to witness the disintegration of an entire economic system.  The indicators below reveal the Brontosaurus Warning of an "Extinction level event" for the U.S. economy:

MARKETS (Aug 15th)

DOW JONES = -220 points

US DOLLAR = -48 points

10 YEAR = +4 points

GOLD = +29.70

SILVER = +$1.28

-----------------------------------

Not only are the broader stock markets down in a big way, so is the U.S. Dollar.  Moreover, the U.S. Treasury 10 year rate is up 4 points when it should be negative and gold is up nearly $30 while silver is up almost 6% at $1.28.

These indicators paint a very bad picture for the whole U.S. economy going forward.  There is no way the FED can stop QE3 as foreigners are already dumping their bonds while buying a great deal of gold and silver bullion.

At some point in time this whole situation will get very ugly forcing people to move into the historic safe havens of gold and silver.

The Great Transfer of Wealth is Just Beginning

Only a fraction of the public are ready for what is coming.  Most are still totally invested in paper assets that have no future... and the future is now here.  Even though many in the East are buying gold and silver, those in the West are totally asleep at the precious metal wheel.

I wanted to re-post these charts from a previous article to show how little is invested in gold and especially silver:

Global Gold Investment

Global Silver Investment 2007-2012

According to the CityUK Fund Management Report, there are over $85.2 trillion in conventional assets under management.  These include pension funds, insurance funds and mutual funds.  In 2012, total gold investment was $234 billion which turns out to be only 0.3% of world conventional assets.

Now, if we look at the silver chart we can see just how little has been invested in the precious metal compared to gold as well as global assets under management.  In 2012, for every dollar that went into gold, a little more than 3 cents went into silver.  Total silver investment in 2012 was 3.4% of gold and 0.009% of all the money held in pensions, mutual & insurance funds.  This is precisely why I believe silver will outperform gold in percentage terms in the future.

Mike Maloney talks about this great wealth transfer into gold and silver in his newest video, "Hidden Secrets of Money -- Seven Stages of Empire."   In the video, Mike explains the past 140 years of monetary history in ten minutes and also discusses why countries makes the same mistakes over and over again by what he labels as the "Seven Stages of Empire".  Basically, the world goes back and forth between "quality money" and "quantity currency."

Seven Stages Of Empire 140 year history of money

The world is entering the last stage in which we shift back into sound money such as gold and silver and away from the worthless fiat Dollar.  This is becoming more apparent as we see the huge amounts of physical precious metal buying from the East as well as the decoupling of their prices from the broader stock markets.

Not only will the values of gold and silver increase substantially in the future, but they will also be an excellent investment due to the upcoming global energy constraints.  It's one thing to re-value gold and or silver to match the amount of fiat money in the world, and another to become one of the best investments while the value of most other asset classes will continue to disintegrate.

Lastly, there is this huge misconception that the United States will become energy independent and a net oil exporter once again.  This is being propagated by MSM and the U.S. EIA.  Shale Oil & Gas will not be the energy savior for the United States.  It has been provided a nice bump up in production, but that will be short lived.  I explain more about this at the SRSrocco Report and how energy will impact the precious metals, miners and overall economy.

© 2013 Copyright Steve St .Angelo - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in