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Trading Lessons

Gold And Silver ARE Money!

Commodities / Gold and Silver 2014 Mar 29, 2014 - 06:03 PM GMT

By: Michael_Noonan

Commodities

Almost all who read our commentaries know that we place the greatest importance on reading the developing market activity, as best seen in charts, in order to have the closest pulse on what is going on in the market[s]. The reason is because the activity found in price and volume behavior reflects the decisions of all market participants.

Smart money leads, the rest follow. What constitutes smart money? Those with the most knowledge and deepest pockets that control what goes on. In the US stock market, it used to be institutional money that drove stocks. For the past few years, it has been the Federal Reserve, through Permanent Open Market Operations, [POMO], and the all of the QEs that have unsustainably propped up stocks.


In the Precious Metals, [PM], it has been the US and London central banks colluding to suppress primarily gold but also the silver market, and with gold, the active suppression has been going on for at least the last 50 years, just more blatantly in the past few. It is for these reasons we have turned our focus toward the elites, all related to the Rothschild dynasty, because they control all of the money. All Western money is worthless fiat, but for as long as the masses continue to believe the "emperor is wearing clothes," the elites rely on people turning a blind eye and will get by with their massive Ponzi scheme.

Let us be clear about one thing, and the most important of all to never forget: gold and silver are money, and the truest form of money. Everything else, the fiat Federal Reserve Note, erroneously referred to as the "dollar," the Euro, the Yen, the Swiss Franc, and every other Western form of what passes for a country's currency is worthless paper money, backed by nothing but more worthless paper money. Actually, it is not even paper anymore. Almost all fiat currencies are digitalized, paper being a small percentage.

If you ask most people if they know that fiat currency has no value, they will agree. Yet, those very same people continue to use the intrinsically worthless paper as though it actually had value! In other words, people are willing to imagine the worthless fiat has the [lack of]value the issuing central bank says it does. The kicker is, everyone who uses fiat-with-no-intrinsic-value is a smart person.

Can anyone explain to their 8-year-old son or daughter what fiat currency means?

Parent: "It is paper money used to buy and sell goods and services, but it is not really worth anything."

Son/Daughter: "If it is not worth anything, why use it, and why do other people accept it?"

We cannot justify a worthwhile response without it begging the question, "If everybody else jumped off a cliff, would you, too?"

Parent: "Where is your new bicycle?"

Son/Daughter: "I sold it for $100. See! This man gave me a piece of paper and wrote $100 on it."

Parent: "Are you crazy! Just because someone tells you a piece of paper is worth $100 does not make it true."

This would be a good time to stay away from a mirror.

Living in America, prior to the 1930s, if you went into a bank with a US Treasury Note of any denomination, you could exchange it for gold or silver, for all currency was specie-backed, even the Federal Reserve issue, which circulated side-by-side with US Treasury Notes, [those issued by the US government and not the private corporation known as the Federal Reserve].

After the elites forced the US into bankruptcy in 1933, when FDR declared a bank holiday and shut the system down for several days, when the banks reopened, it was the foreign-owned Federal Reserve that was in charge of the entire banking system, finally. [We add "finally," because that was the objective of the Rothschilds for over 50 years even before 1933, actually longer, but it gets too complicated to explain.]

A man goes into a bank, prior to 1933, and hands over a $100 US Treasury Note, or even a Federal Reserve Note, which also was specie-backed, at the time, and asks for $50 in gold and $50 in silver. No problem.

Sometime after 1933, a man goes into a bank with a $100 Federal Reserve Note and asks for $50 in gold and $50 in silver.

Banker: "Sorry, sir. There is no gold or silver backing for your $100. Would you like two $50 Federal Reserve Notes, instead?"

What happened?

When the Federal Reserve Act was passed, two days before Christmas in 1913, when most politicians were home on holiday, the Act was passed with no opposition by the remaining chosen politicians who stayed on, and were well paid to do so by the Rothschild-backed bankers. And so the most treasonous act against the Constitution was passed.

Here is how the rest of the plan was carried out: The Federal Reserve issued its own currency, also specie-backed, to circulate along with the US specie-backed Treasury Notes. This went on for a few decades, which is a short period of time for the Rothschilds. What happened was, people saw the new Federal Reserve Notes, along with Treasury Notes, but it made no difference because both were equally backed by, and could be exchanged for gold and silver on demand, at any bank.

After 1933, when the Federal Reserve took over control of the money supply, it began to slowly withdraw all US specie-backed Treasury Notes and had them destroyed! Nobody paid attention to the disappearance of the US Treasury Notes because Federal Reserve Notes were the same thing, in their minds, and in reality. This was all planned, decades in advance. It was a part of the Rothschild formula for well over a hundred years even before that.

Something else happened very gradually, over time, and almost immediately after 1933. All Federal Reserve Notes that were specie-backed were also withdrawn from circulation. All of the US Treasury currency issued by the United States government had already been removed and destroyed. All that was left were Federal Reserve Notes, backed by the full faith and credit of the United States. Fiat. Again, people had come to accept Federal Reserve Notes in circulation at the same as Treasury Notes, so when all that was left were the Federal Reserve Notes, it did not matter because people could still buy and sell whatever they wanted and did as in times prior to the financial bait-and-switch.

All the gold and silver owned by the United States government was stolen, taken by the elite-owned Federal Reserve central bank. The central bank controlled the government and the media. The public was fed the kind of news that never let on to what happened during those decades, and the public has since been dumbed down even further in all the other decades to date.

In the 1940s, '50s, and '60s, one often heard the expression, "The dollar is as good as gold." That was another Rothschild-inspired idea to implant in the minds of the people, and it worked. Another popular expression related to the gold stored in Fort Knox. No one ever talks about Fort Knox, anymore, and hasn't for many decades. Why not? All the gold is gone, and the elites do not want to draw attention to what is not there.

Does the US own any gold, at all? Absolutely! But only on paper, if you believe the paper on which it is written. Has anyone seen any hard evidence of gold stored at Fort Knox? "Here it is, right here on this paper."

Can we see the actual physical gold?

"That would be inconvenient, but here it all is, and our ledgers are audited every year."

Hello, Germany, can you hear us now?

A bit of irony that the same people who hold and control Germany's gold got their start in Frankfort, where the wooden"red shield" sign used to hang over the door of Mayer Amshel Bauer, he who changed his last name from Bauer to "Red Sign," or Rotschild.

If a group, not just any group, but one that controls all of the money in existence in the Western world, and also controls all of the governments in the Western World, [almost], is it that far a stretch of one's imagination, [especially for those who believe in paper fiat], to believe that this group of elites can just as easily control the price of gold and silver?

They have for many, many decades, and do so to this day. It may well be that they have had to sell all their holdings to rising Eastern countries, but their grip on nations, and certainly on the powerless people who inhabit those nations is stronger than ever. It will take more time and much more effort to ever get those in power to give up that power.

When we look at the charts, despite the gold community pundits declaring the shortages of and the unprecedented demand for both gold and silver, tell us where in the charts there are any indications of the fundamentals reflecting what so many assert as the "true" value for gold to be in the $5,000 - $10,000 the ounce range, or silver in the $100 - $300 range?

Here are the charts, once again, and our comments. If you see extraordinary bullish signs within them, let us know. We certainly keep looking, but cannot find any needle in these "haystack" charts.

For every valid reason that so many others are advocating the purchase of physical gold and silver, demand, shortages, Chinese buying, exchange disappearing physical, etc, etc, we echo those sentiments and suggest/advise to keep on buying, but hold it personally. However, for more salient reasons, such as discussed in our last several commentaries, as well as this one, there are far more important reasons to buy and hold gold and silver.

They are money.

At some point in the future, and no one knows when, no one, but eventually the unsustainable debt generated by the United States, BIS, IMF, and other central banks, [all of which are insolvent], will collapse. The elites will fight the collapse to the bitter end, likely forcing war to cover their duplicity, and it will get real ugly, maybe even downright dangerous for daily living, not to sound alarmist. One can hope for the best and be prepared for the worst.

Thee is one more trading day left for the monthly charts, but we do not expect there will be any material change, either way, that will alter what is showing right now. The monthly chart reflects the makings for change, but the trend is still down. Forget about $5000 or higher gold, for now. It ain't going to happen any time soon.

The breaking of a down sloping TL does not mean the trend has changed. All it means is that the trend has weakened. Price may have stopped declining, but it could spend many more months moving sideways, and not up, at all. Do not place much emphasis on such an event as a broken TL.

The bearish spacing has not been challenged. The current swing high rally failed to reach, the $1420 -$1430 area, but developing market activity is showing a few clues that may prove more bullish than the market appears.

Within the down channel, the December low stayed above the June low, and price did not even come close to the lower channel line. Instead, price held firmly within the channel and above the 50% portion of it, a sign of strength.

From the December low, gold had a persistent rally for several days straight. March, last bar on the chart, has the look of a key reversal. A key reversal is when price makes a new recent high and then reverses to close lower than the previous bar. It can often be a red flag for longs. However, note the volume for March. It is the highest in 8 months, and it produced a lower close, ostensibly negative.

It may turn out to be negative, but for now, our read is that the increased volume, [effort], did not produce much in the way of results for a market in a down trend. Yes, the close is lower, but the low and the high are higher than the February bar, and the close did not even make it past the half-way mark of the prior range.

The overall chart is still negative, but within that context, there are these signs of potential change. If that were true, then the weekly chart should support this premise.


While the weekly chart is not bullish, it is less bearish than it has been, for price continues to move sideways and not down. However, the other bearish signs have not yet been compromised, like bearish spacing and the failure of the rally to extend closer to the last swing high.

On a positive note, the increased volume over the previous week, 2 bars ago, is a plus, as we read it. The range is slightly smaller than two weeks ago, so the increased volume did not produce as much as one would expect in a down trend situation. The effort of buyers for the last 4+ weeks was erased, but price did not fully erase the wide range rally 7 bars ago.

These observations are not anything in which to get overly enthused, but they are positive signs when sellers should be in total control.



Just as gold rallied persistently during February and half of March, it has also persistently declined for 10 days, since the last swing high. Support can be anywhere from Friday's low to the 1240 area, for now. The key, over the next few months, will be to see how far the next rally can carry, and then, how much of that rally gets corrected.



The demand for silver is much less than that for gold as silver continues to disappoint, at least for those of us wanting higher prices. The charts say otherwise. March is an inside month. It is hard to draw any meaningful conclusion from that, except to say the close is on the lower end, telling us sellers remain in control.



The picture does not get any better for the weekly chart, except to mention price is at important support, and the range for March is relatively small. The narrower range tells us buyers are meeting the effort of sellers and preventing price from continuing lower. It could lead to a rally, nest week.



It is not a positive sigh that the current decline has intruded as far into previous support as it has. It is a sign of weakness that buyers are not defending support very well. Also, the breaking of the lower channel line puts silver into an oversold condition, and oversold became more oversold. Price put in its first higher close in 9 trading days, and even the volume increased. It is not a game changer, but when all else appears negative, a little light shows up.

Buy the physical, and continue to avoid the paper from the long side, for trading purposes.




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.

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