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Market Oracle FREE Newsletter

Why 95% of Traders Fail

Gold And Silver - Too Many Are Still Getting It Wrong

Commodities / Gold and Silver 2015 Jun 06, 2015 - 06:35 PM GMT

By: Michael_Noonan

Commodities

Americans labor under the misguided belief that they have freedom, and by extension, freedom of choice. This simply is not true. Corporations are dictating more and more how Americans live, what to think, what to eat, and more. Google is a perfect example of what was once a superior search engine-turned-government-tool-for-propaganda. Searches have been sanitized to provide only that information the corporate federal government wants you to know, and no more.

It used to be the will of one in this country was protected against the majority. You can no longer find any references to this line of thinking when one Googles "rights for the will of one." There is no such reference but mostly talk about the importance of a majority rule in a democratic society to get people to believe is such a dysfunctional point of view. If you want to do any research on topics the government prefers you do not know, content results will be sanitized, and depending on how "anti-government" a search may be, many available responses can no longer be found but have been cleansed.


Freedom of choice? How about the Miller family of 4 from Mississippi? They attended their niece's high school graduation and shouted out a cheer of support when their niece walked across the stage to get her diploma. The school district superintendent has asked the audience to hold their applause and support until the end, or they would be asked to leave. Security guards were told to escort the Millers out of the ceremony. A week later, the superintendent pressed charges against the Millers, and now they face up to 6 months in jail and a potential fine of $500. This is governmental authority, even at a low local level, gone amok. Is this an example of freedom? [There are far more serious ones from which to choose.]

Monsanto. We have posted articles of this corporate behemoth's use of Genetically Modified Organisms [GMOs] being forced into the food chain, none of which are healthy for consumption. Despite wide-spread unpopularity from the masses, even world-wide, Obama and his corporate federal government are doing everything to ensure corporate profits take precedent over public health interests. Is Obama's government representing you?

Not a few analysts are calling for a collapse of the Federal Reserve Note, aka the "dollar," and a major disruption in the American life style. If we have learned anything from Japan and its hara-kiri sacrifice of its own Yen over the past two decades, destruction of a fiat currency almost always takes longer than most expect, and the US "dollar" will be and is no exception.

Recall how many were calling for a huge rally in gold and silver in 2013, repeated to no effect in 2014. In late 2013 and the first half of 2014, we began saying that the end of 2014 will not look much different from 2013, for PMs. At no point since, have we been advocating a change in the 4 year down trend, extended into 2015, and unless or until there is a change in market behavior, 2015 may similarly pass unfazed.

Central bankers have had an agenda of suppressing the PMs markets in order to preserve the fiat "dollar" as the world's reserve currency. This has not changed, and there is no potential alternative for the US "dollar" to be used for trade settlement. Will the Chinese renminbi be used in place of the "dollar?" Maybe one day, but not any day soon.

Will Specialized Drawing Rights [SDRs] become the next reserve "currency?" The elites and the IMF are pushing for that direction, but keep in mind SDRs are another form of a fiat currency no matter how well the lipstick is applied. Even if the Chinese renminbi is included in the SDR basket, in October as anticipated, its percent is small so that change is more of a political accommodation for the growing economic power of China.

Yes, the Fed's fiat "dollar" is increasingly becoming recognized as a fast fade as the world's reserve currency for trade, and yes there is increasing use of the yuan as a trade settlement amongst Asian countries, and starting to grow in the West, but the yuan [renminbi] is in no position, [meaning China] to replace the US fiat anytime soon. Plus, there is no other country willing to oppose the proxy wars, responsible by the US, to keep the fiat "dollar" in place.

Despite the disappearance of the middle class in America, rising unemployment, rising numbers of people on government assistance, cities and counties on the verge of bankruptcy, a decreasing tax base, no ability to manufacture anything and create jobs [thank you Clinton and NAFTA and its disastrous outcome...expect similar disastrous results once Obama's TPP goes into effect], there is little to no opposition to the overt lies and abuse by the elite-driven corporate federal government. The mostly docile American public are too ill-informed and/or simply unwilling to believe how corrupt the government is as it serves only interests of bankers and corporate leaders...public be damned, and damned they will be.

These are more pragmatic reasons for buying and owning physical gold and silver, more so than relying upon the regurgitation of how many ounces are being sold to an insatiable public, how many tonnes of gold China and Russia continue amass, [include silver for China, too], the corruption of the Western metals exchanges, all of these very real factors but of little effect on prices.

When gold used to be the backing behind the US dollar [the real dollar], prior to the privately owned Federal reserve usurping the constitutionally mandated control of the money supply only by Congress, people were independent of and not reliant upon the government. There was no unemployment insurance, no social security, no social safety nets for the public. This is why gold and silver are so despised by the elites. People do not need the government when they have independent wealth in gold and silver.

Enter the elites and the passage of the Federal Reserve Act in 1913 leading to the elimination of specie-backing and elimination of the US dollar, replaced by the now totally fiat Federal Reserve Note, deceptively called a "dollar" by the Fed, even though by law FRNs are not dollars but instruments of debt. The purpose of removing gold and silver was to get rid of the public's ability to have wealth [physical gold and silver] and independence from the government influences. Now, with no gold or silver, [no wealth], the duped American public has become dependent on useless fiat, credit, and government handouts.

The above paragraph is the best reason to buy and hold gold and silver, at any price, and especially at these artificially suppressed prices. Both PMs are a means of economic freedom and independence from the de facto corporate federal government doing everything it can to enslave the country, and succeeding quite well.

At some point, things will unravel, and this country will come apart at the seams, but it may be a slow bleed rather than a quick rupture. The elites are in the final process of killing off America and shifting their efforts to China, and they want a smooth, orderly transition in order to keep the facade alive.

Buy gold. Buy silver. The fact that the central bankers do not want you to own either should be sufficient reason. The fact that growing economic powerhouse China and rich in natural resources Russia are buying as much as is available is another tell for your wanting to be on the side of strength. The PMs have a history as a store of wealth and may be your economic life boat, at some point in the future. They may also literally be life savers. For sure, as bankers force people into a cashless society, it will mean your ability to buy and hold either or both PMs may come to an end, unless you prefer to have a target on your back.

Is the dollar ready to disappear, fall apart? No, absolutely not, according to the charts, and charts do not lie. The fact that many people do not understand them or cannot read them is more of an indictment against those people and not against charts, per se. The trend is up, and there is no confirmation whatsoever that the trend is in danger of changing, at least not yet.

We do not use charts to predict, only fools do, for no one can divine the future using them any more than they can with a Ouija board. However, a common sense read of the relationship between price and volume, information generated by the market itself, can yield some cogent clues as to direction and phase of where the market is and likely to continue. The trend is most reliably used for that purpose.

US Dollar Weekly Chart

The weekly trend takes more time to change direction than the daily, and the daily is now in a trading range [TR]. Volume for currencies is not very reliable, so we lean more heavily on price. Note, for example, the rally which began in late February, peaking in mid-March, a period of about 11 trading days [TDs]. The correction of the up move was retraced by the end of April [yes, the move continued into May], but it took 34 TDs to fully retrace the gains. Easier move up v a more labored move down. Which side had the momentum?

Notice how much price dropped from the swing high into the end of April initial support, from almost 101 to 94.50, or 6.5 cents. How much farther did price drop from the end of April to the May swing low? About 1.5 cents, clearly a loss of momentum to the downside.

Does this seem like a fiat currency about to implode? Common sense says no. Many newsletter writers will tell you otherwise. Trust your eyes. [And we hate the fiat "dollar."]

US Dollar Daily Chart

Speaking of the strength of trends, those for both silver and gold remain down, neither evidencing any sign of change. Always keep that in mind. Again, trust what you see and not what you hear, [or read].

Is the spike low in November 2014 the final swing low? If it is, why isn't price rallying up and away instead of languishing, moving sideways and giving ample opportunity to get in at the bottom of an about to change market? Know this about smart money: they will never make it easy for you to get in on a move. If we are recipients of so many invites to get in on a move higher, it becomes suspect, for that reason alone.

We [collectively], do not need to know if the swing bottom is in, or not. The market will give confirmation once a bottom is determined to be final. Buying after a bottom has been confirmed will mean buying at prices higher than the actual bottom, but one can be much more secure in positioning, once the trend has been confirmed as changed. Just ask all of the bottom pickers over the last 4 years how they have been faring in not waiting for that confirmation.

Let the market lead, and learn to be a follower. It will prove more beneficial to one's bottom line.

Silver Weekly Chart

After the above, it seems a bit silly to try to dissect what the market is doing on a minor scale, but more people have a thirst for that kind of information. The chart comments are self-explanatory. Daily silver remains in a TR at the bottom of a price swing. How bullish can that be? Trust your eyes.

Silver Daily Chart

For how long can a TR last? The best answer we know is: until it ends. We see no evidence of an ending to this one, at this point. Buy the physical, but avoid being long paper.

Gold Weekly Chart

Price is at an area of support, however, gold has consistently proven an inability to hold rallies. The fundamental reasons for buying gold do not translate into the charts. The charts are more a product of central banker suppression, For whatever reason anyone wants to ascribe to why PM prices are low, the charts agree and show no signs of change.

Dold Daily Chart

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.

© 2015 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

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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