SD Midweek Update: Are the markets, gold & silver figuring out that nothing is, or will, be accomplished in Washington, DC, for at least the next year?
Gold has been hanging in there.
Silver is also on the move.
Of course, this is to be expected, for the fundamentals are simply too much for the cartel to bear, pun and no pun intended, so we are really just seeing some minimal suppressive fire as the cartel pulls-back.
Over the past few weeks, I’ve talked about various aspects of the fundamentals.
Here are just a few of the fundamental reasons gold & silver continue to catch that bid:
- There is geo-political tension with increasing risk for military conflict, especially in the Middle-East.
- There is national political uncertainty around the globe, increasingly so regarding Brexit and the situation in Hong Kong.
- Central banks around the world, including the Fed, are determined to keep suppressing interest rates and pumping emergency monetary stimulus into the financial system.
- Inflation is becoming all too real as the Fed & government continue to understate inflation, or, in the case of President Trump, claim repeatedly, that there is no inflation at all.
These fundamental factors and more are causing people to, in no particular order of importance:
- seek an alternative to the increasingly weaponized US dollar.
- look to protect themselves against political and geo-political uncertainty.
- get an insurance policy against the destructive forces of central bank monetary policy.
- put their savings somewhere that hard earned money will, at a minimum, keep up with inflation.
And how are people doing these things?
They’re buying gold & silver.
It really is that simple!
Here’s another fundamental reason I’d like to discuss today: The loss of confidence in Washington DC, by Americans themselves.
You see, for nearly three years, there has been this apparent “battle”, between “good and evil”, for “social justice”, or whatever you would like to call it, but really what we have is nothing more than a “divide-n-conquer” strategy which the sheeple fell for, yet again, in where the Left is always just about to get Trump out of office, and Trump is always just about to bring the Deep State Traitors to justice!
I’m not sure if that is funny or sad?
Regardless, let’s look at two recent examples of what I am talking about:
- Trump is about to bring the Traitors to justice for their Russiagate Witch Hunt.
- The Democrats are going to run Trump straight out of office via impeachment.
Here’s an honest question: With major US elections coming up in 2020, including the presidential election, and with literally hundreds of politicians spending all of their time & energy on their election or re-election campaigns, combined with this latest move in congress just yesterday to begin a Trump impeachment Inquiry, what exactly is going to get done for the good of America over the next 13 months?
If the answer to that question is “not much, if anything at all”, then we have yet another bullish fundamental factor for gold & silver.
As the weeks and months drag on, in my opinion, we will see a loss of confidence in the ability of Washington DC to do anything at all, and this moves beyond complaining about simple gridlock in the capital, which will increase uncertainty in the markets and in the economy with respect to the future direction of the United States, which, in turn, causes a “safe haven” bid for gold & silver, a “flight to safety”, a “hedge against uncertainty”, or whatever you’d like to call it, and, perhaps more importantly, this loss of confidence in Washington will be a double-whammy.
How will it be a double-whammy?
Because this loss of confidence will come from within, from Americans themselves, and this is on top of the loss of confidence we are seeing in America from various nations around the world.
That’s how it will be a double-whammy.
OK, “Hey Half Dollar, what if Washington DC and President Trump are able to accomplish some good things for America over the next year?”.
That’s a fair question, but the answer to that question is yet another bullish fundamental factor for gold & silver because if we have good times in Washington DC again, that means our “elected” officials will be spending a ton of money which future Americans must repay, with interest, and all of that fiscal spending equates to inflation, which is only one of the numerous bullish fundamental factors attracting that bid for gold & silver.
This is why we see, for no real reason and no real catalyst, silver back above $18.50:
That break-out back above $18 on Monday sure is impressive, as was the turnaround yesterday.
Gold is right back to testing $1550:
I think we could break-out above $1600 before the end of September, but if we don’t, and if I’m wrong about the US wanting to engage in some psychological warfare against China, I’ll likely start looking for the hammer next week.
The gold-to-silver ratio has been falling as expected:
If the rallies in gold & silver are beginning from these levels, and it looks like the rallies are beginning from these levels, then we are looking at some of the last opportunities to buy 80 ounces of silver with only 1 ounce of gold.
The “gold-to-silver ratio arbitrage” means that when the cycle peaks again, at, say, 40, a stacker can take those 80 ounces of silver and buy 2 ounces of gold!
That’s free money.
Palladium is looking good:
We’ve had a big run from the August 1st smack-down, but it is not alarmingly parabolic, and I think what is happening is a reversion to that sweet trend-line stemming from the low at $1032 one year ago.
Platinum’s support at $940 has been holding:
Is that the illusive yet uber-bullish Loch Ness Monster Chart Pattern?
Yes, that was sarcasm.
Yes, just like with statistics, with enough determination and enough eloquence, logical or otherwise, anybody can make any chart look like anything they want it to – bullish, bearish, etc.
The problem with the charts, however, and especially for the gold & silver charts, is that in my opinion the fundamentals matter more than the technicals do right now.
The stock market is still hanging out at the top:
There is a lot of week left and a lot of potential to see a black swan, and I do not think the impeachment is a black swan because half of the nation has been dancing to that tune for years now, and it’s getting kinda old.
The VIX is starting to move higher:
The gurus will be quick to say the VIX spiked because of the impeachment inquiry, but I think its the other way around in that the impeachment inquiry offers good cover for the cartel to begin ramping volatility.
The dead-cat-bounce in yield on the 10-Year Note looks textbook:
I think we will be putting in a newer lower-low pretty soon.
Recall that is not the low in yield on the 10-Year Note.
The low was 1.336% on July 6th, 2016.
The dollar bulls are salivating as they think about their US dollar shortage:
We are really coiling now, so if the technicals matter, a break-out or a break-down is coming very soon, and the way I think it plays out is with a break-down because, well, a break-down would really bring on the economic pain and financial ruin to America, which I think is exactly what the Deep State Globalists want.
What’s the bottom line as we find ourselves here this beautiful Wednesday in September?
It looks like absolutely nothing will be accomplished in Washington over the next year.
As this becomes more and more obvious, Americans will begin to lose patience.
Call it a “loss of confidence”, and that means more than just uncertainty.
It also means no effort’ll be made to solve any of our real problems.
Combine this loss of confidence with that of Powell & the Fed.
People are finally losing confidence in the central bank.
The realization’s that we’re all to fend for ourselves.
Messes are too big, and leaders too ineffective.
Solutions will not come from the top-down.
They can only grow from the bottom-up.
Which means gold, silver & skills.
That is what is needed for all.
Family & community helps.
Religion can help too.
Or the Fed?
– 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.