SD Outlook: “bad news” can no longer be spun into “good news” for the markets. Global economic collapse has begun. It’s a rolling collapse…
Is anybody else hard pressed to find any “good news”?
I mean, there’s the Syria thing going on, and what do we see?
Just a shuffle into Iraq.
There’s the “Impeachment” thing going on, and what do we see?
Now even Mr Military Tribunals, Lindsey Graham himself, isn’t ruling out impeachment.
We can look across the pond, and what do we see?
We look to the far east, and what do we see?
The rioting continues in Hong Kong, and businesses are racking up serious rioting-related losses because those kinds of looses are not covered by insurance.
But Hong Kong is only one of several places around the globe that are in the midst of full scale rioting.
We can look to Europe, and there is now a new flare up in Spain with the Catalonia secession movement:
Recall it was a year or two ago when Catalonia actually voted for independence from Spain, it passed, and consequently, the political leaders of that movement were all just given their prison sentences.
Of course, we don’t have to go to the far east or across the pond to find problems around the globe.
Here’s Latin America over the Weekend in only 19 seconds:
OK, “Hey Half Dollar, none of that stuff’s happenin’ here!”.
Not yet, but my goodness, it’s gonna get ugly here.
OK, “Hey Half Dollar, do you have a point?”.
I do: There has been a joke over the last several years that “bad news” is “good news” for the stock market in this era of 24/7 Fed & US Government market manipulations and interventions, but now, the bad news is really getting bad, and we’re no longer talking about doctored-up statistics such as the “bad news” of permanently pesky “low consumer price inflation”, but rather, we’re talking about blood and fire on the streets.
That is a whole ‘nother kind of bad.
We are literally talking about the breakdown of society and economic collapse.
Think about the Hong Kong riots as an example.
Hong Kong isn’t just some rinky-dink player on the global stage whose parents (The US & China) are having issues.
To the contrary, from Investopedia (bold and bold added for emphasis):
Hong Kong is a key financial hub with the highest concentration of banking institutions in the world. The island also has the most beneficial legal regulations for both residents and companies and is the home of many fund management companies.
Hong Kong has benefited from its strategic geographical location; for more than a century, it has been the access route to mainland China. Hence, it is also the largest trading partner in mainland China.
Its proximity to other countries in the region has also worked in its favor. Hong Kong has an efficient and transparent judicial and legal system with excellent infrastructure and telecommunication services. It has a favorable tax system in place with very few and low tax rates, which adds to its attractiveness. The Hong Kong Stock Exchange is the sixth largest in the world, according to WorldAtlas.
In bold, we can clearly see that Hong Kong matters on a global stage, and it’s pure chaos in the streets when considering all of the different reporting that has been going on about the situation.
In bold, we can clearly see that China has put a wrap on that excellent telecommunication service, because the last thing the hard-line communists want are rioters/looters/protesters communicating, and, as noted above by the severe losses that are taking place as the riots continue to this day, just how long are those “very few” and “low” tax rates going to stay that way?
Let me make my overall point of today’s article in another way: “Bad” market and economic news, for the past several years, has been in the form of the Fed’s current read on inflation, low auto sales, etc, and has since evolved to somewhat bad news in abstract form, which is more theatrical than anything if you assume Trump & Xi are Deep State Globalists, as I do, and I’m specifically referring to the trade war, but now, we’ve moved on from the doctored up statistics and the abstract, and we’ve arrived at the concrete, no pun intended, and now we are actually talking about some really bad news.
And it’s global.
There is no way to spin blood and fire in the streets in a way that can be happily digested by the markets or the economy.
It is starting to look like the economic collapse has begun, and it’s a rolling type of collapse, but there is one wildcard: The tipping point.
Just like it was the hike in the cost of public transportation in Chile that pushed society over its tipping point, there will be some otherwise mundane action taken, or even plan made, which sets it all off everywhere else.
The gold-to-silver ratio is still heavily favoring silver purchases over gold:
This gift horse has been offered for so long that gold & silver investors not taking advantage of the gold-to-silver ratio arbitrage have no excuse for missing out.
In other words, what investor would not spend 1 ounce of gold for 80 ounces of silver now, as an investment, and then, some time down the line when the cycle peaks, spend those 80 ounces of silver for 2 ounces of gold?
Furthermore, the risk-reward to the gold-to-silver ratio arbitrage is nearly second to none in the investment world right now, and that’s not even considering actual “bad news” for the markets or the economy, which fundamentally put a bid under gold & silver.
Getting a quick close in silver above $18.05 will be super bullish in the short-term:
Technically, we would break through the 50-day moving average and put in that all-important higher-high, which would go along with the already established higher-low.
Gold’s chart is looking very similar to silver’s in the short-term:
If gold gets a quick close above $1,525, we will also have punched through the 50-day and put in that all-important higher-high to go along with the higher-low.
I think the outlook for gold & silver is bullish right now because i’m really only talking about a 2.0% move in gold & silver on the week.
Palladium’s range has been very tight for a few trading days:
The problem is an air gap down to about $1660, however, that kind of a pull-back would be healthy as palladium has done its own thing as compared to gold, silver, or platinum.
Platinum needs less than a 1.5% move to put-in a higher-high:
If I’m right about the cartel treating platinum from here on out as they treat gold & silver, then platinum should be on everybody’s radar.
If we get that 1.5% move, I think it is followed by a quick burst higher.
The situation is getting trickier by the day for the cartel, especially as more blood is shed and more stuff burns down.
Copper is already taking the lead with that higher-high:
I do think we’ve carved-out a bottom here.
That said, I’m not so sure the price of crude oil falls below $50:
If we do, I think it would be a “V” bottom flush-out, but at the same time, all it takes is a close above $55 to turn bullish again for the short-term, and that would be the start of the set-up to break-out of the sideways channel of roughly $52.50 and $57.50.
The Heartbeat of America Index is unchanged over the year:
I do think we are heading lower, and if any kind of social tipping point is reached, regionally, in the United States, say in, Los Angeles, or Baltimore, or Chicago, then we are talking less about a painful fade and more about a crushing decline, and since it’s the major index most US-centric, and since the Deep State Globalists generally despise America and plan to destroy us, they will have no problems with convincing their fellow Deep Staters who aren’t necessarily Globalists in letting it get really nasty.
There hasn’t been much movement in the VIX for several days:
I don’t think it stays this way for long, however, because if the Deep State Globalists really want to wreak havoc, they can simply ramp the VIX to jump start the market declines that go right along with the economic collapse.
Yield on the 10-Year Note will be very interesting to watch this week:
I say that because yield went nowhere last week, and next week is the FOMC, so we can look to clues as to how much of a rate cut the Fed gives the market.
Curiously, yield on the 10-Year Note is roughly 1.75%, but that is still inverted with the Fed Funds Rate, to which the Fed targets the middle of it’s 1.75% to 2.0% range.
It could be “look-out below” if President Trump starts expressing his inner weak dollar guyishness:
Many say the dollar’ll be last to go, but there are some who say the dollar goes first.
Bottom line as we find ourselves here this beautiful Monday in late October?
There is civil unrest either happening or brewing on every continent.
Talking points used to be about “global synchronized growth”.
And then they became “global synchronized slowdown”.
But now it’s time for “global synchronized collapse”.
This one is gonna get particularly nasty.
Especially when it hits the USA.
I mean, just try to blend.
“Armed to the teeth”.
– 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.