Broken Markets & Broken Economy (Or Why The Cartel Can’t Smash Gold & Silver Too Hard)

SD Outlook: As gold & silver complete their pullbacks, it is important to understand why the cartel can’t smash the metals too hard at this time…

Nothing has been fixed.

The markets are not fixed, the economy is not fixed, the latest season of The Real World: Washington DC Edition is already a dud, and when it comes to geo-politics, forget putting lipstick on that pig because everybody knows that pig is straight-up ugly.

The events calendar for this week continues to be a mess as well.

Here’s just one example:

We’re finally getting December, 2018 Retail Sales on Thursday, February 14th, but January and February Retails Sales?

Well, they’ll just get around to it when they dang well feel like it.

And that’s assuming there’s not another government shutdown, which would preclude any getting around.

Notice the theme here?

The fundamentals in terms of politics, geo-politics, the markets and the economy keep worsening, and this worsening is leading to all sorts of market and economic uncertainty.

Let’s think of just a few uncertainties plaguing the globe right now:

  • Sweeping Socialism in the US
  • BREXIT and/or Forget-A-Brexit
  • Syria, Venezuela, Et al.
  • Trade Wars
  • China slowing
  • Eurozone slowing
  • Auto & Housing bubbles popping everywhere
  • Etc, etc, etc

So gold & silver are just kind of “hanging-out” here.

In my opinion, gold & silver are kind of just hanging-out because of the “hedge against uncertainty” bid, the “fear trade”, or the “however else you want to classify it” increase in demand for physical gold & physical silver.

In other words, the cartel can’t smash gold & silver prices as much as they would otherwise like to because physical demand in on the rise, and with rising demand, the cartel is forced to re-assess and re-jigger the the amount of pressure they can apply.

This is bullish, folks.

You see, over the last couple years, as demonstrated by decreasing US Mint gold & silver coin sales, the cartel has been able to apply extra pressure because they didn’t have to worry so much about protecting physical supply.

But with the increasing demand for physical we’re seeing right now?

Yup.

Bullish.

Because the cartel must protect physical supply to keep the Unconstitutional fraud of gold & silver price suppression alive.

Which brings me to a point I would like to make about market manipulation.

People often say, “sure, the markets are manipulated a little, but they are more “free markets” then they are “manipulated markets” because it’s too complicated to manipulate the markets all the time.”.

On the surface, that argument seems logical, but in reality, that argument doesn’t hold water.

Do you want to really know just how easy it is to manipulate the markets?

Think of it in terms of the most popular online video game right now – Fortnite.

Let’s say you’re an administrator for Epic Games, and you oversee a few Fortnite servers.

All you have to do is type-in a command to give yourself invincibility, and there you go.

Nothing complicated, nothing complex, or nothing even mysterious about it.

In other words, when you control the game, you can control the outcome.

The cartel has administrator rights over the paper gold & paper silver markets.

They control the paper game.

They control the paper game any way they want to, but they only control the paper game if they can maintain enough physical supply to satisfy the demand of the physical markets.

One day, the cartel will lose control of the physical gold & physical silver markets, and that loss of control will lead to the cartel losing control of the paper markets.

Personally, I’m cool already sitting in my seat aboard this train.

Because most people will miss the train.

Especially since the schedule is not posted.

And the train could leave the station at any moment.

And with no warning.

Just like the gold-to-silver ratio could break to the downside at any moment:

Just check out the symmetry to start the year, however.

Amazing!

No manipulation there, of course (/sarc),

Gold may fall below $1300 before this pullback is over:

Overall, however, the outlook is bullish, the trend is up, and this correction is healthy.

The same thing can be said about silver’s current price action:

 

I don’t think silver loses whole number support of $15 on this pullback, and $15.50 to $15.60 is theoretically strong support.

I also think the pullbacks in both gold & silver are ending or have even already ended.

We’ll see.

Palladium will be consolidating soon:

I’m looking for one more break to the upside to take-out that recent high before the consolidation, however.

On the surface, platinum looks like it wants to struggle to start the week:

We’re still just bottom-bouncing, but I think that once it is obvious to all that the rally in gold & silver is real, we’ll get that upside surprise in platinum that I’ve been looking for.

We can look to copper for some clues this week:

The main clue I will be looking for is if copper can get north of its 200-day moving average, and then close above it by the end of the week.

I think copper can.

We’ll see.

The second shoulder is pretty much complete on crude oil’s daily chart:

We’re getting to the moment of truth, and, in my opinion, we’re about to see either a break-down or a break-out, and I’m in the camp that sees a break-out coming.

The Heartbeat of America index never got up to its 200-day moving average:

Recall that in 2018, the Russell 2000 led the decline.

Furthermore, we know the rally that began the day after Christmas was nothing natural.

And if the Russell 2000 is once again leading the decline?

We’ll know soon enough.

Of course, as much fear in the market that can be smashed, has been smashed:

I still think we have some volatility spikes in front of us, and very soon, especially in light of deteriorating economic, political and geo-political conditions in every corner of the globe.

Yield on the 10-Year Note may finally get interesting this week:

And by interesting, I’m talking about a break-down in yield below the recent low put in on January 3rd of this year.

The US dollar looks like it wants to fool everybody into thinking its strengthening:

Technically, we have a higher-low, and just today, we have a higher-high on the daily chart.

But one higher-low and one higher-high is not a trend.

I still think the US dollar heads south from here.

Bottom line for the week: The big picture has not changed.

What’s the big picture?

We have totally artificial markets that must be rigged 100% of the time, but this new-found US stock market nirvana is in spite of worsening economic, political and geo-political conditions. In order to keep the illusion going, the cartel may have to let the stock market fall somewhat this week to keep in line with the mainstream, official narrative.

That said, I think the downside is limited here in gold & silver, especially considering that since the start of the year, we’ve already had two pullbacks in the metals.

We’re ready for the next leg-up.

Will it begin this week?

I think it can.

Stack accordingly…

– 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.

Paul’s free book Gold & Silver 2.0: Tales from the Crypto can be found in the usual places like Amazon, Apple iBooks & Google Play, or online at PaulEberhart.com. Paul’s Twitter is @Paul_Eberhart.

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