Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Paper Money Yielding Madness

Currencies / Fiat Currency Nov 21, 2014 - 12:34 PM GMT

By: Dr_Jeff_Lewis

Currencies

The mainstream investor (with any time and "money" left), wielding an internet connection, and hell bent for yield is about to feel the temperature drop despite a thousand reminders that the cold winter is coming. (Or perhaps not - if you are in South Florida.)

Zero interest policy scorches the planner and the saver, rotting the seed corn while providing fuel for speculation, breeding the trading culture pestilence we see today. Yet again, another tiresome cycle appears. More bubbles to end all bubbles.


Modern bubble incarnations are fueled by a social media driven propaganda and the same dog and pony we've seen over and over. All the cash on the sidelines needs a willing seller to come back in.

The winter always comes. To illustrate the detachment from prudence...

The following comes from a retired relative (frustrated investor) after a long discussion about precious metals price manipulation.

A Confession

"Jeff,

This stock has been referenced as one of the most shorted stock, manipulated stock ever- perhaps an exaggeration but definitely painful for me. The company has a great scientific platform and a pipeline that has a lot of potential.

I have owned it for 10 years; bought when it was $1.20 and, unfortunately, at $11.20. My biggest mistake was when I sold every one of my 10,000 shares on a stop order that I placed the day before the FDA approved Belviq.

The price dropped from $11.00 to under $7.00 where I had ready to get out before I lost everything. It stayed down for seconds, was back up to $11.00 and I repurchased every share - bad mistake.

You can take a look at what it has done since then and I have added to my position to get my average cost per share down.

Bottom line is I am in for as long as it takes to get me the Porsche, yacht and cruise around the world. What has happened is that reality has finally set in that these companies selling obesity drugs are worth only as much as their revenue and profits.

It is said by longs like me that there are paid pacers that try to get less committed longs than me to see so the Hedge Funds can cover their short position."

And therein lies the rub.

In the metals – futures - the big commercial banks induce the hedge funds and small specs into collectively going short using the same methods as above.

The hedge funds or managed money category are notorious for utilizing spoof trades or fill/kill orders to induce weak longs into selling - and then covering in the aftermath. This is HFT, computer driven pump and dump scams at their worst; typically dumping or spoofing massive uneconomic lots into low volume overnight trading.

They drop the price, where the big commercial shorts buy back positions. The rally comes when all these specs decide to book profits and cover.

Of course, all of this is derivatives wagging the dog. Commentary comes in the aftermath of price movement, not the other way around. Ultimately, it adds an unseen layer of geometric risk to the markets in general.

The whole thing is uneconomic, unnatural.... really just an extension of the monetary policy underlying it all.

The retail investor gets thrown under the bus. Everything is managed in a paper fiasco. And that's just it. It's all paper.

My relative should know better, but will have a hard time at this point changing his view. He is one of a class of speculators chasing a dream with their retirement accounts. Ironically, they will be blamed in the coming crash. And they will willingly give up their accounts in the name of safety, allowing the bail ins.

Sometimes I imagine these guys, who are used to the trading terminals at Charles Schwab  (or speaking with friendly account managers) walking in to visit my coin dealer, in his tiny disheveled shop, with the am radio blasting, seeking shelter from the financial storm to come. And only for a tiny allocation.

Sadly, most people shall remain literally oblivious, by measure of average PM portfolio allocation, to general awareness. The Wall Street Journal/Financial Times reader has seen a few articles praising the coming of silver — but through the lens of the ETF. This perpetuates the paper madness.

It is not easy to escape the profit driven mentality at a time where the storm clouds read:

Return of Investment

For more articles like this, including thoughtful precious metals analysis beyond the mainstream propaganda and basically everything you need to know about silver,

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2014 Dr. Jeff Lewis- 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.

Dr. Jeff Lewis Archive

© 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

6 Critical Money Making Rules