SD Outlook: All things are quiet as the U.S. celebrates MLK Jr Day, but the week could end with a Spectacular Chinese Fireworks Display. Here’s why…
Today is a federal holiday and a day when markets are closed, and many employees are off of work, and students are off of school.
The markets are closed today, but last night, futures trading in some of the markets did open.
We saw overnight action in the commodities and in the precious metals. So far so good.
Silver seems to be maintaining the strength from last Friday:
As does gold:
Which is nice to see because there was no Sunday night smash in the metals.
The gold to silver ratio is pointing out that the arbitrage may start to close soon:
Platinum looks like it is holding up on it’s own:
Although it is very overbought on the RSI.
But palladium is still doing it’s thing putting in a new record high in the overnight action:
Crude is still hanging above $64:
And copper surged on the overnight session:
As today is a national holiday, there is not much going on in the events calendar.
On Wednesday we get industrial production numbers, and a trio of Fed Head speeches, and we get more data releases towards the end of the week, but that’s not where all eyes will be.
All eyes will be on China this week and whether or not they launch their yuan-priced oil futures contract.
This is especially of interest to goldbugs and silverbugs everywhere, because the launch of the contract could bring a shake up in not just the crude oil markets, but also foreign exchange markets and gold and silver.
The Chinese are notoriously late on their rumored start dates, but for now there has been no news of a delay.
Reports and rumors are pointing to Thursday, January 18th.
Supposedly on that day, China launches it’s Shanghai oil futures contract priced in yuan. The implications are of epic, historic proportions.
Recall that President Nixon cut the ties to gold, and essentially took the world off of the gold standard, on August 15, 1971. Historians refer to this moment as “closing the gold window”.
Listen to President Nixon say it himself (on a Sunday evening, yes Sunday, the day the government does all things that are world changing for the worse):
Well, since politicians have become corrupted to the core, from the top down and the bottom up, and since the Fed is bowing down to their masters in complete disregard for gold (and silver) as they pump their main product – U.S. debt-based fiat currency, it’s rather a shame that the nation who decides what “temporary” means is China.
Ever since that moment in 1971, the world has been on the “petro-dollar” (see our page on ‘death of the petro-dollar‘ for more information on why this system is coming to an end) standard, by which the currencies aren’t backed by gold, but by the might of the U.S. military forcing nations around the world to buy oil in dollars. Of course, it goes deeper than that, such as the military protection of Saudi Arabia and their cooperation to price their oil and OPEC’s oil in dollars, and by the U.S. invading nations and killing leaders who chose to not play along (see Saddam and Qaddafi). But more or less, that is the system we have been operating under since the 1970s, and if there is one thing for sure, that’s change in monetary systems, and this one is long overdue for change.
You see, everybody – whether it’s people or nations, will only take a lie and a scam for so long, and the currency can only get corrupted and devalued until it is worthless to the point of not being usable.
Does this mean that with the launch of the Shanghai Oil Futures Contract, we are witnessing a return to the gold standard?
Perhaps not initially.
Perhaps the launching of the yuan priced contracts is “temporary” as well. But the bottom line is where the U.S. has run the dollar into the ground, after such blatant disregard for fiscal and monetary prudence and sound practices, there is a new nation that is stepping up to the challenge and promise for a brighter monetary future.
And that is what makes this week so potentially pivotal.
Fitting too –
As the United States celebrates the life of a Civil Rights Leader (as civil rights are being systemically flushed down the toilet with the rise of an even more violent police state) and enjoys time off, the Chinese are hard at work, and there is no rest in their desire to build trade and business relationships with foreign nations rather than offer the standard death and destruction that is the principle export of the United States.
So come Friday, there could be a new paradigm born in the world.
Or we could just be staring down the same old, same old, because for whatever reason, the Chinese get cold feet.
On that note, keep you powder dry and watch your six. If this is truly a paradigm shift, the U.S. will likely not go out without some sort of false-flag to distract from possible global economic events.
Returning to the markets:
The treasury market is for now on hold:
We will waiting to see what happens to this bearish omen for the dollar:
On Friday we put up the Dow hitting a record high, but we could have just as easily put up the S&P 500:
And we’re also waiting to see just how much uncertainty comes back into the markets this week:
If the petro-yuan is in fact born this week, that would literally be a way to define uncertainty and volatility.
Bottom Line: The week may be short on hours, but then again, it could forever change the course of global economic history.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.