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Trading Lessons

Gold And Silver – There Are Reasons Greater Than Demand For Owning Them

Commodities / Gold and Silver 2014 Jan 11, 2014 - 07:14 PM GMT

By: Michael_Noonan

Commodities

Here is some very cogent rationale for owning gold and silver. None pertain to the ever-ending reasons that demonstrate great demand. Everyone has been hearing about them in a steady stream for the past year, and the impact on the market has been nil. Often in tandem with the latest news, like record coin sales from...[pick a mint or country], is the lament from PM holders on where the current price of gold is, at lows for the past two + years, making many question the validity of owning PMs.


For any self-doubters, especially those who paid for their PMs at 50% to 100% higher in the past year or two, by example, we still hold some gold purchased at $1800 the ounce, some silver at $48 the ounce. That just happened to be where gold and silver were at the time. We were engaged on a consistent plan of purchasing, regardless of price. There were specific reasons for wanting to own physical gold and silver, and none of those reasons have changed. In fact, they have increased.

We now live in a financially insane world. The government tells everyone that 2 + 2 = 5, consistently, and people continue accept the lies. If you listen to the government and the bought-and-paid-for mainstream media, all is well in this country, when in reality, we are dealing with recession, inflation, joblessness, and general instability.

The biggest problem is debt. Actually, it is the core issue. Bury people and countries in debt, and demand their hard assets as payment in return, aka the Rothschild formula, in use for hundreds of years. The debt burden is now so onerous that it is becoming almost impossible to keep under control. The elites are so skilled at getting their false message out, through governments, that people are more than willing to believe the lies.

Greece was a warning shot for the rest of what passes as a [not so] free world. The message? It is mathematically impossible to sustain the growing debt burden in any given country with no ability to ever pay it back. The United States has become a welfare state for too many of its citizens. The largest growth sector in this country is the federal government. The government produces nothing. Everything it spends has to come from the people, or increased borrowing. It is a tapeworm consuming its host

The Fed has kept the stock market propped up by tapered window dressing. Interest rates are artificially being held low to enable the government and all the banks to keep the debt Ponzi scheme on life-support, which ultimately leads to death, financially.

Zero rates means keeping the accumulating interest costs of government lower. Allowing rates to rise to a more normal 3% - 5% would collapse the federal government and all of the insolvent banks which are responsible for every financial problem everyone now faces, except the privileged 1%.

No one in the past 100 years, since the Federal Reserve Act was passed and the privately owned Federal Reserve bank usurped the organic Constitution and took over issuing this nation's money, has done anything to abolish the Fed.

"Give me control of a nation's money, and I care not who makes the laws." ~ Mayer Amschel Rothschild

It really is not hard to connect the dots if one truly wants to do so. The information is out there, but few are willing to seek out the truth, and instead, prefer dwelling in the [dis] comfort of debt-laden lives.

There was one person who tried to make a difference: John F Kennedy, when he decided to print billions of silver-backed dollar certificates. The world knows that Kennedy was assassinated and replaced by Lyndon Baines Johnson. One of Johnson's first official acts, within days of being sworn in, was to rescind Kennedy's order to issue the silver-backed certificates. The elites have their priorities, and puppet presidents must do their bidding.

Why aren't politicians doing everything possible to get rid of the legal [but not lawful] privately owned Federal Reserve Banking system that charges the government interest on the purely fiat money the Fed issues? Very few people in this country wonder why the U S government does not issue its own currency, [as it did prior to the Federal Reserve Act of 1913], and not have to pay interest on the currency issued. One of the largest expenses is the federal government is the debt owned to a foreign entity that controls this country's own money. Federal Reserve Notes are not money. They are debt instruments. Debt can never be money. Dwell on that thought for a while.

The elites use the Federal Reserve to entirely control the government and used FDR to ban gold ownership in 1933. Previously, gold and silver were used exclusively in backing United States Notes and gold and silver coins issued by the U S Treasury. Since 1933, gold has been absent from the public arena, and 1963 for silver. So many in this country are unaware of the important role gold and silver have played.

Prior to 1933, people used gold and silver in all ways of their daily lives. No one used credit cards, and people had no need for socialist government services. This is why the elites had gold and silver removed from circulation as money. It was accomplished over decades, by design, so people would not notice the change and gradually accept the substituted Federal Reserve Note system.

United States issued Treasury Notes, backed by gold and silver, were allowed to circulate along side Federal Reserve Notes, [debt instruments], and people began to equate the two as the same. At that point, the Federal Reserve began withdrawing all US Treasury Notes and had them destroyed.

You do not need more statistics about the current shortage of gold and silver, or more citing on the number of tonnes of gold China continues to import. That information has been of little practical use. What you need to know is the kind of factual history we just briefly presented in order to know that it is incumbent upon your future to take whatever measures necessary for surviving the financial time bomb waiting to explode.

It is not important to know what others are doing, but it is critically important to know what others are doing to you, and what you are going to do for yourself and your family. It is a proven historical fact that every fiat system has failed, utterly. The U S is in that process, right now.

The actions of the government will be your first signs of imminent collapse. Anyone who chooses to keep money in the banking system is fodder for the banking whores. They will steal your money. It is a known fact that all money you deposit into the banking system becomes their money, and you, by banking laws, become an unsecured creditor.

The government will raid private pensions, like Hungary and Poland have done. Your pension will likely become nationalized, and you may receive a 10 year government bond in return for whatever money you have saved. It happened in Argentina just a decade ago. There is ample evidence throughout the world of what a government will do to survive, at your expense.

You want a reason to own gold and silver instead of anything paper-issued? Forget about statistics and the demand side of the equation. All of the events discussed here, and worse, are on the agenda of the elites to gain world control over everyone. Without gold and/or silver, it will be almost impossible to survive what is to come. No one knows when, but when it does, and it is a historical certainty, are you really going to care what you paid for your gold and silver?

We all have choices to make, and we all deal with the consequences of these choices. Do not worry if you paid a high price for your gold and silver. You do not intend to sell it, so any loss is imagined. Stay true to what history has proven. No one knows when the collapse will be realized, but one has to continue to prepare for the inevitable in a world that makes no sense, financially.

We were interviewed on this topic, last week, and the audio can be found on our site, edgetraderplus.com, under the category "Interview," for anyone interested.

The charts may be closer to showing signs of bottoming. Here is our current read.

Bearish spacing develops when a low is broken, last April, and the next rally swing high, August, fails to reach and retest the previous swing low, leaving a space. It indicates a weak market.

There was a strong rally on Friday, but when seen on the weekly chart, the results are less impressive. That observation is amplified when you compare the last two bar ranges and respective volume. The second bar from the end shows ease of upward movement by a wide range and strong close with volume greater than the previous day.

On Friday, volume increased sharply compared to day 2, yet the price bar range narrowed. Increased effort, volume, yielded less results, a smaller range. The reason why the range narrowed was due to sellers meeting the increased effort of buyers and preventing the price range from extending higher.

You can expect to see this kind of activity in a down trend where sellers have been in control. From a weekly chart perspective, gold continues to struggle, even with a strong rally effort on Friday. This is the way to read the "message" of developing market activity.



Friday's rally stopped at a minor resistance area, [thin horizontal line]. Continuation to the upside would be expected on Monday. We will now begin to see if gold can develop a sustained upside rally and begin to change the trend, from down to at least sideways.



The last time silver spent 8 weeks in a TR, June - August, the 9th week was a strong rally. There are now 8 weeks completed in the current TR, and Monday starts week 9. The last three weeks have a close clustering of closes. This reflects balance between sellers and buyers, and from balance comes unbalance.

All three of the last closes are upper range, indicating buyers won the battle each week, and it would indicate that buyers are absorbing the effort of sellers prior to moving higher. That is the probability read, but the market always has the final say.



The daily does not have a similar positive read as the weekly, and as we noted on the chart, the increased volume, last bar, did not quite generate as wide a price range as occurred 6 bars earlier. Price is still within the established TR, moving farther along the Right Hand Side, where resolve takes price out of the TR.

For the moment, momentum is on the buy side.

The futures still have issues, and one cannot buy into rallies in a down trend. The physical gold and silver metals also have issues, but the resolve is going to eventually lead to an explosive upside. Continue to buy the physical. These are great prices.



By Michael Noonan

http://edgetraderplus.com

Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.

© 2013 Copyright Michael Noonan - 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.

Michael Noonan Archive

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