Markets Will Figure Out The Narratives, Including The ‘Build The Border Wall’ Narrative, Make ABSOLUTELY NO SENSE

SD Midweek Update: “Build the Wall” is front and center once again, but the story-line in this b-grade political thriller is barely believable…

Somebody wants to keep the “build the wall” issue front and center.

But there is a big, gaping hole in the build the wall story, and not only that, but the wall has become nothing more than political theatrics with the added bonus of “divide and conquer”.

One simple headline tells us all we need to know:

First, let’s gather the information we need from that ZH headline.

  • A brand spankin’ new caravan has left Central America, assuring months of continued MSM & political coverage
  • The US military will be “deployed” to the Southern border through at least the end of the fiscal year
  • Since the US mi…

OK, “Hey Half Dollar, sorry to cut you off, but I thought you said there was a gaping hole in the build the wall story, so just get to your point!”.

Certainly.

Here’s my point, and I’ll state it as a question: There appears to be a blank check for this not only brand new, but now “extended” US military operation, and not only is there a blank check to pay for it, but the US Military, (i.e. laborers, i.e. “nation builders”) will be deployed to the Southern border for at least nine more months, so why hasn’t President Trump, the Commander in Chief of the US military, simply ordered the military to build a wall and use the blank check to do it?

Hmmm.

What if the reason is because President Trump is not supposed to build the wall, but to take the blame for not building the wall?

Additionally, who benefits from this now large scale military operation on our Southern border?

I know one thing is certain, Misters Kellogg, Brown & Root are drooling over the prospects of a bunch of buddy-buddy, no-bid Department of Defense contracts which they stand to make a crap-ton of fiat on, because, you know, you don’t have to pay “hazzard duty” premiums to your contractors supporting the US military when the contractors are not in some hostile 3rd world bombed-out craphole but instead inside of the United States.

Furthermore, these caravans from Central America have been going on for what, a year now?

And we know exactly where they are organized and start because we see it in real-time.

So here’s a question: We’re supposed to believe that the US intelligence community doesn’t have the ability to nip the funding and organizing of the caravans in the bud?

I don’t think so.

And instead of deploying the US military to the Southern border, why not, since President Trump is a proud cost-cutter,  just print up some Federal Reserve Notes to build a refugee center (a la huge tent) in Central America, one in which the “migrants” can apply for refugee status all from the comfort of their homes, without having to walk thousands of miles in the process?

Hmmmm.

But then again, what do I know?

Moving on.

I would consider the recent rise in the gold-to-silver ratio a nice little “flash sale” for those stackers who dollar cost average their purchases:

Once the metals turn-up, the ratio will start turning down again, but in the meantime, there are a couple extra ounces of silver for those who have been building up a position for the GSR arbitrage.

I’m starting to think the wave of silver buyers may be under $15.50:

If so, I’d be looking at any weakness below $15.50 as an opportunity.

I have been saying I’m looking for the rally to commence again next week, and I still think that is the case. Furthermore, I also think that if there are any meaningful moves, before then, those moves will be to the upside.

Gold is really starting to coil:

I think we’re about to see a surge to the upside, especially since we should see the golden cross in just a few days time.

Platinum really needs to hold here:

I went ahead and drew the rising trend-line to show the support.

We’re right at support right now.

We’ll see if platinum can find it.

Palladium, well, yeah, still on fire:

We got some bullish news about palladium just yesterday.

Do fundamentals matter anymore?

Over the coming weeks, palladium will likely be showing us if the fundamentals matter.

I have been talking about the inverse head-n-shoulders pattern in crude oil for some time:

The pattern is really starting to fall in line.

If I’m correct on the call, then we should see a nice little drop followed by the completion of the shoulder, and after those two things happen, price will be back up into the upper $70s surprisingly quick.

I think that will catch a bunch of traders and investors off-guard too.

As for Dr Copper, well, still in the process of bottoming:

I still think the next big move is up.

Why?

I mentioned one reason on Monday, but here’s another: I think there will be increased demand for copper from either the private sector or the government. If we really do have this booming economy, which I think we do not, then the private sector will have a lot of demand for copper with all of the economic activity taking place everywhere. If we really do not have this booming economy, but rather, if we have an economy that is on the verge of collapse, which I think we do, then the government will launch Public Works 2.0 and there will be robust demand for copper.

To me, it looks like increased demand for copper no matter how you slice it.

The Heartbeat of America Index looks toppy:

The major US indices, including the Russell 2000, have been rising not just because of the Plunge Protection Team, but also because of the ability of the government and the Fed to maintain the narrative of both a vibrant economy and an attentive monetary policy.

I’m still looking for the change in the narrative.

It’s coming.

But for now, they’ve totally succeeded in subsiding all fear in the market:

If the stock market is toppy, however, then I’d be looking for a pivot and surge to the upside with the VIX.

Yields are at an interesting point on the chart:

I think there is another down-turn in yield in the short-term, especially if the stock market turns down and volatility begins to rise.

Why?

As the mainstream narrative goes, people flee a volatile and falling stock market by selling their stocks and buying bonds. When that happens, with more people buying bonds, the price of the bond goes up because of the increased demand, and since interest rates move opposite of price, the interest rate drops.

It’s all just too, well, suddenly bullish, and sooner or later the stock market, the VIX and the bond market will figure this out.

As for the dollar, well, I’ve been calling for a “sucker’s rally”:

And that is what we see.

It makes sense, too.

That is to say, with a Fed that is now more “attentive”, “patient”, or whatever the word of the month is, with the booming economy narrative at its climax, with the massive surge in the stock market, and with an easing of fear, US dollars are in demand, because, well, you know, gotta get in on the action of the two-for-one stock market-US dollar trade.

This is also being helped by currency turmoil around the world.

But I think the rally in the dollar is almost over.

While rallies in gold & silver are just beginning.

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.

***