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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold And Silver– Problem, Reaction, Solution Does Not Apply To Precious Metals

Commodities / Gold and Silver 2015 Dec 12, 2015 - 12:34 PM GMT

By: Michael_Noonan

Commodities

The Rothschild-now-globalist template for gaining control over all money, and now the world, has been create a Problem, let an adverse Reaction develop, then present the desired Solution. On a grander scale, there was the US Civil War to divide the country, then the manufactured Roaring ’20s and the stock market bubble, burst when the money changers purposefully tightened the money supply creating massive margin calls and the Crash of 1929.


On a more recent level, we commented on the Arab refugee situation designed to weaken Europe, [See article], as a plan to further the New World Order.  The globalists created a Problem in the Middle East.  This created an [orchestrated] Reaction of fleeing  Arabs to escape the US-driven destruction in their countries, most recently in Syria.  The most recent offered Solution?  Eliminate borders between European nations and institute EU- controlled border guards, whether any country wants them or not.  Checkmate, Europe.
Let the globalists take control over your borders.

Precious Metals, [PMs], have been exempt from that template. Instead, the Problem has been singular: keep a stranglehold on the price of gold. It does not matter what the Reaction is, the Solution is to keep the Problem in place: the removal of PMs as a competitor to the globalist’s fiat money Ponzi scheme.

Look at the Fed’s fiat [make believe] “dollar,” nothing more than an instrument of debt, and we all know, or should know that debt cannot be money. The globalists have won that mind game as the world believes a fiat Federal Reserve Note is actually a real dollar. It is not, never was, and never can be, yet the Ponzi scheme thrives, nearing its point of self- destruction.

While there was a sizable correction in the fiat “dollar,” recently, a look at a monthly chart shows the Ponzi game is far from over. Is a top in? Not likely, from our perspective. This could be the beginning of some topping activity, but tops take time to form and complete. The “dollar” game will not be over until the globalists are ready to pull the “dollar” plug and replace it with their next Ponzi scheme, paper Special Drawing Rights, [SDRs], to include China’s blessings and participation, and Russia is also behind that scheme.

The game of bait-and-switch from West to East has been planned and in process for decades. For as long as the scheme goes on, gold and silver will remain in the doldrums.
The globalists will have it no other way.

Why has not gold and silver responded to the reality of overwhelming demand for physical gold from China, India, Russia by the tons, and unparalleled public participation by the ounces? We include a chart on crude oil to help provide an answer. When a decision has been made to control a market, the reality of the natural laws of Supply and Demand are thrown out the window and are of no consequence, to the consternation of most.

Precious metal stackers are intimately familiar with this constant decline in price while demand soars. Oil has been the latest misuse of power as the Saudis are out to destroy as much competition for its market share in oil as possible. Where $70-$80 a barrel was thought to be important support, it was not even a temporary stopping point in the unabated slide from $100 down to $40, and now in the $30+ range.

The two horizontal lines show potential supports for crude oil, price just a few dollars away from the last major bottom in 2008. The $25 area would be next should $30+ fail. Does supply and demand matter to the Saudis [?], and we doubt they are acting independently from the globalists who plan for everything that takes place in their Problem-Reaction-Solution scheme for a one world currency, the SDR, [not gold-backed, by the way] and a one world government, enslaving people all over the globe.

The following comments may not be what one wants to hear, but charts tell what the reality is behind any market, and we are just the messenger delivering the chart-driven message. It is one we have been saying for the last 4 to 5 years, with regard to not being on the long side in the paper futures market. The simple but valuable premise is: never buck the trend. Being long physical metals is a different story for very valid different reasons.

Can, will gold see glory days ahead? This is a question not asked by many, now, and even fewer just a few years ago when gold was almost universally expected to surpass $10,000 per oz, at least within the PMs community. The monthly chart is not a pillar of strength as price continues to recede lower and lower with no meaningful rally attempts that would reflect the reality of actual physical demand.

Had gold stayed above $1,500, the chart pattern for continuing higher would have remained a robust potential. Just like crude oil is being driven to price levels almost no one thought possible, that has been the story for gold and silver for the past five years with no end in sight, currently.

The higher controlling pattern in the monthly chart shows no sign of an impending turnaround in the price of gold. However deflationary [to one’s mind] this may sound to gold and silver enthusiasts, and we are among them, the alternative, fiat, now soon to be digital world currency, is even less appealing. Time remains on the side of the globalists, for now.

The best read for price behavior moving forward is its overall past with an emphasis on its present developing market behavior, and that behavior does not show a break in pattern to the downside. So far, every encouraging rally has proven to be a blip in the overall malaise inflicted on gold and silver advocates by the moneychangers.

We keep looking for signs of a turnaround without seeing any. Rallies have been weak. Note how far away a 50% retracement is on the chart. Half-way retracements are used as a guide to gauge the character of a trend. For as long as a down trend can keep rallies from extending past 50% of the last swing decline, the trend is in no danger of ending. When price cannot muster much beyond just a 25% reaction rally, the activity speaks for itself.

Silver has a slightly different structure to its down trend, but it remains entrenched in its trend lower. The monthly shows no signs of encouragement that price has reached and/or is making a bottom.

When one continues to buy physical gold and silver, it is silver that will more than likely provide the best return on exchanged paper currency. The gold:silver ratio is now around 77 to 1. Every ounce of gold has an equivalent value of 77 ounces of silver. Ten oz of gold would yield around 720 oz of silver, accounting for transaction costs.

The historic ratio between gold and silver is said to be around 15:1, even 25:1. Should the ratio return to say 35:1, for the sake of argument, the 10 oz of gold exchanged for 720 oz of silver can now be reversed. The 720 oz of silver can be exchanged for just over 20 oz of gold, say 19, after transaction costs. The previous holding of gold, 10 oz, has now become 19 oz without ever having been out of holding PMs.

Food for thought.

It may take years for the ratio to rebalance from 77:1 to lower, but so what? One’s holdings are still going up in value for little to no risk. A thoughtful silver lining in the chart cloud.

A week ago prior Friday’s strong volume rally was a short-covering event evidenced by the fact that the rally could not sustain itself. The 15.10 area would be a 50% retracement, and the market has shown an inability to mount any kind of meaningful rally over the past few months, despite a few falsely encouraging rallies intervening.

The message is no different in the daily silver chart. Much more evidence is needed before one can entertain any thoughts for a change in trend. The most positive aspect for silver is the fact that the gold:silver ratio now strongly favors buying/owning physical silver over gold.

Prices for both metals are cheap, and despite what some may construe as not so favorable an outlook for PMs, at present, which is exactly what the globalists want from people. Get as many discouraged in their faith for buying/holding PMs as possible. Create false fiat gods. Destroy all beliefs that gold and silver will again be a storehouse for value. Rinse and repeat.

Always remember, the globalists who want to instill that false paradigm are the same ones who are issuing trillions and trillions of worthless so-called money, and no regime, from the beginning of civilization, has ever escaped from the collapse of every Ponzi scheme, including the current one that has been extraordinarily stretched beyond imagination, let alone far beyond reality tolerance.

If you feel disheartened, it is three rotten cheers for the globalists. If you want to take a stand against them, keep the faith. Keep your precious metals. The time for change has not yet come, but it will. It is lunatics that are running the show.

“The paper holds their folded faces to the floor
And every day the paper boy brings more.”

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.

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