Gold, Silver, The Markets, & The Economy Get Their First Glimpse Of Reality For 2019

SD Outlook: Reality is, of course, that gold & silver are set to take-off, while the markets tank and the economy collapses. Here’s why…

Yippie!

We finally get the government’s lies & propaganda economic reports this week, and there’s some big ‘uns:

  • Trade statistics
  • GDP statistics
  • Inflation statistics
  • Employment statistics

If the markets aren’t prepared for a change in narrative, to, oh, say, a lousy trade report, a crummy print of the GDP, higher inflation, or a dismal employment report, in my opinion, markets will begin to start pricing in the reversals, which means, to me, gold and silver begin their ascent as the stock market begins making its ultimate move down, wherever that may be.

Furthermore, if “everything is awesome” in those reports, the markets may not like that either because it would mean the return of the “hawkish” Fed.

Oooh, scary-scary!

Relatively speaking, gold & silver have held steady ever since the rate hiking process began in December of 2015, so I’m pretty sure gold & silver would not only not face headwinds from higher interest rates, but I think gold & silver would rise regardless, especially as the inflation hedge begins to take shape.

Remember, gold and silver are many things, and right now, a few of the things that gold & silver are behaving as just so happen to be:

  • Completely liquid money, better than any physical cash fiat currency or crypto
  • Hedges against uncertainty (good thing we don’t have any of that /sarc)
  • Hedges against inflation (such as in the first scenario above)
  • The “love trade” is on
  • Etc, etc, etc

My point is that a confluence of factors are all converging that should boost demand in general for gold & silver, and those are only a few of the factors supporting the bullish price-trend for gold.

We may even find out this week if the physical supply of gold & silver are showing signs of tightness.

Because just like with palladium, in my opinion, and very soon, we will begin to see just how tight or loose physical inventories really are.

I think inventories are a lot tighter than people think.

So let’s start keeping a closer eye on premiums for physical in-hand, real-world pricing again.

But for now, back to the macro-picture.

One last thought about the current government reports that presumably will now be released –

It’s also a big point, because it demonstrates just how everything is a lie.

Here’s the thing: The government has not released most of its economic reports in over a month. So we don’t have the data from two months ago. Well, supposedly the government is just now starting back, right?

So how do they have the time to even make those reports?

OK, “Hey Half Dollar, federal government employees are paid more than their non-federal employee counterparts, so government employees are much more efficient, so the reports will get released!”.

Are you serious?

I mean, this is the federal government we’re talking about.

I’m sorry to break it to ya, but please take a moment to hear me out –

Jessica and Christina work for the federal government.

On Monday, Jessica goes to Christina’s office and asks, “Hey Christina, so what did’ya do on vacation?”.

Wow, Jessica and Christina sure do have a lot to catch-up on!

And my goodness, where did the morning go?

On Monday afternoon, federal government employee Christina realizes her computer won’t turn. You see, the lazy IT team can’t take care of the equipment, and so her 2-year old desktop is caught in a boot-loop.

On Tuesday, Christina can’t work while she waits for the help desk to respond.

No problem, Christina bought a sweet phone during her free paid-vacation, and she also upgraded her plan to unlimited data, so she finds plenty-a-way to pass her time at work.

Netflix is her favorite.

In the middle of watching Bird Box while waiting for the IT team to look at her computer, Christina decides to go chit-chat with Rico down the hall.

You see, Christina got a nice tattoo during her free month-long paid-vacation, and she really wants to show it to Rico, and he’s been checking emails all morning, but she just spotted him walking back to his office with a cup-a-joe in-hand, so she knew that he was no longer busy for the day.

Christina’s new tattoo is nice.

Real nice.

Rico sure likes it.

Holy crap, Christina was caught-up in a moment with Rico when she came to her senses and realized she saw a man standing outside her office, taping a note to her door.

It was the IT guy.

Christina brushed off the front of her blouse, pulled down her skirt so it didn’t look wrinkled from sitting on Rico’s desk, got her footing in her oh-so-cute but still not broken-in heels, and then she walked over to her office.

“Can’t come back till tomorrow afternoon, I hope – Jake from IT”.

Oh well.

On Wednesday morning Christina went over to Jessica’s office to check email.

The coffee was good.

It was a flavor they hadn’t tried before.

Ever since they switched to pods, the coffee has been extra delicious, and they have been rotating through many different flavors and varieties.

Who knew there were so many?

Jessica really likes the imported ones.

Rico knocked on Jessica’s door.

Rico likes the hazelnut, but today he was going strong and bold.

100% Colombian.

Rico invited Jessica and Christina to an extended lunch at the Texas Roadhouse.

Rico’s got a government credit card you know.

Not that it would have mattered.

It’s Rico.

The like going out with Rico.

As luck would have it, coming back from the nice steak lunch, Christina’s office showed no signs of a new note taped to the door – Jake never made it back to Christina’s office.

On Thursday morning, Christina had a knock on her office door.

It was some new guy from IT.

His name was Mark.

Mark got to see the tattoo.

It’s nice.

Real nice.

On Thursday afternoon, after spending a whole two minutes on her computer for the entire day so she could hit “compile report”, Christina realizes her printer is out of paper.

She calls up Mark on his government cell phone, but the IT team can’t get over there with any paper until tomorrow.

Christina was elated.

That means Christina can cancel her Friday morning meeting because she can’t print out her reports, and not only that, but if Christina schedules her cancellation email to send at 7:38 p.m. on Thursday evening, it looks like Christina was in her office working late.

Real late.

Because working until 7:38 p.m., when you work for the government, is the closest thing government employees can get to voluntary self-subjection to waterboarding, and so it shows effort.

Besides, she could always take some “comp time” to leave work early on Friday since she “had” to stay late on Thursday, you know, working on her reports.

On Friday morning, Christina had French vanilla.

Jessica tried the Chai tea.

They were delicious.

Rico, Christina and Jessica went to the Olive Garden for lunch, even though Rico wanted to go for Chinese, but he didn’t care. It’ wasn’t so much the food that Rico liked, it was his two young co-worker’s legs he was interested in, and so Rico was not only easy going, but also downright satisfied with the tasty chicken Parmesan.

Orange chicken would have to wait until next week.

At 2:00 p.m. EST, on Friday, Christina’s manually scheduled email sent out automatically.

“Decembers reports to be estimated, current reports on a three-week delay”.

The problem-solving skills of Christina are uncanny.

OK “Hey Half Dollar, what are you, some kind of b-grade novelist now? If you are, you suck, so just tell us you’re point already!”.

Sorry.

Yeah, I’m kinda semi-amateur.

My point is there’s not a chance in heck that federal government employees get anything done this week, so if they do, then the data should not be trusted.

What data from the government should be?

That’s not all of the fundamental news this week either.

We also get a two-day FOMC starting on Tuesday and ending on Wednesday with the FOMC statement release at 2:00 p.m. EST.

This one’s also got a Fed Head Powell Presser at 2:30 p.m. EST.

The Fed “on hold”, or “pause”, or however you want to say it, is what the mainstream expects.

Yet if the government and the Fed weren’t enough for gold and silver to shine this week, the state of politics and geo-politics is rather pesky and also supportive of the bull case for gold & silver.

Let’s take a snapshot of those pesky details:

  • Dog-n-pony show in Washington, DC
  • Regime change in Venezuela
  • Forget-a-Brexit
  • Middle East non-US Military withdrawal
  • Etc, etc, etc

To me, gold & silver look set to shine as the world comes to terms with reality.

As such, Let’s see if the gold-to-silver ratio can get below 80 this week:

After that move on Friday, I said something to the effect that carry-through momentum is important here. If we get that carry-through momentum, we could see the ratio in the mid-70s in a hurry.

Check out silver’s beautifully curved 50-day moving average:

We recently talked about the golden cross in gold, and silver is making progress on its own.

Which makes sense.

Gold leads, and silver follows with more oomph!

When gold moves-up, silver then moves up, farther and faster.

When gold moves-down, silver then moves down, farther and faster.

And what do we have right now?

Gold is moving up, and silver is following.

Silver’s really going to punch through its 200-day too when the time comes.

Bullish.

Gold has come out swinging to start the week:

 

You just know the cartel is going to gripe and moan between $1300 and $1375, so we really need an authoritative break-out here.

As I tried to explain above, conditions are ripe for a break-out.

Hopefully I made my point?

Whereas gold is finding resistance, palladium is finding support at $1300:

Palladium looks no-where parabolic to me. To me, I see a strong surge in the price based on the physical palladium shortage in London, and I see consolidation taking place now at $1300.

Basing.

Getting ready to vault to the next price level higher.

Platinum doesn’t look bad here:

We are above the 50-day moving average to start the week, and we never put in a lower-low on the most recent decline.

All-in-all, the precious metals look good here.

I do think they can break-out this week.

Copper has been dealing with $2.70 since mid-July:

I’m still thinking we start moving higher.

Why?

Governments are about to step-in around the world and start their massive infrastructure spends, a move in which governments print-up a bunch of money to buy up all the resources needed to build-up the infrastructure, and copper will be one of the industrial materials that gets scooped up.

And why not?

If governments are just going to print this most recent iteration of debt-based fiat into oblivion, someone might as well make the first move and end up with stuff to show for it.

Price is nice and cheap.

As such, I’d say get ready for crude oil to be in the upper $70s by Spring or Summer:

Also, since everybody and their brother can see the inverse head-n-shoulders pattern now, when I called it before the fist shoulder was even complete, we’ll know soon enough whether the chart pattern holds up.

I’m still looking for reversals in the mainstream, sheeple scams.

That is to say, I’m looking for increasing volatility:

Because, well, you know, when the markets are crashing, the economy is collapsing, and gold & silver are going bonkers, well, there’s gonna be some volatility there.

I’m looking for the stock market to head lower from here:

Part of the reason is because right now, there is only “talk” of the Fed saving the markets.

For there to be action, well, the Fed really needs to see the stock market fall one more time.

And hard.

And then the Fed can come in to the market’s rescue, because, well, everybody already talked about it, right?

But the devastation will have be done.

And the inflationary printing to hyper-inflationary death spiral will be game-on.

I think the dollar is headed lower:

If the dollar does head lower from here, there will be a move out of US financial assets in general, further exasperating declines in both the dollar and dollar based financial assets.

Because foreign investors will want to move out of the dollar to capture any FX gains, and they will at the same time want to capture profits in dollars, like their gains in the US stock market.

Said differently, when you’ve seen the price of stocks rise, and the dollar rise, it’s a double-win, because you get the stock profits and then the currency profits.

If that’s all reversing?

Which I think it all is?

Yikes!

Additionally, before the ultimate, final crash low in the stock market, I think yield is headed lower in the short-term:

When the rescue comes, that’s when the inflation begins which eventually turns into the hyperinflation, and we won’t be stoppin’ at no stinkin’ 3.2% on the 10-year either.

Nope.

I’m talking about 15 – 20% interest rates before the global economy moves on to the next phase: The reset.

Ah yes.

The reset.

It’s coming.

Stack accordingly…


 

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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