SD Friday Wrap: Presenting the case that the black swan everybody has been looking for is actually silver, and also presenting a market wrap…
Here’s a question: Could silver see sharp price rises due to a developing trade war that now includes tariffs on Chinese, Russian, Venezuelan and Vietnamese steel and aluminum (in addition to the ones already in place on solar panels)?
There certainly does seem to be turmoil and infighting between the Deep State, Patriots, the global elite, and the Trump Administration.
The cartel could be an unintended casualty in all of this by taking a stray bullet with all this fighting.
We do not know the great lengths the cartel goes through to keep all the balls in the air, but we do know that its tired, and it just can’t keep juggling forever.
Here’s the thing: Silver has been suppressed for so long, that as a counter-attack to this Trade War, China and Russia could just buy up all the available physical silver on the market.
That would thrust the COMEX into turmoil, and as Bill Murphy says, silver is the cartel’s Achilles Heel. If we think of the cartel as a combination of the ESF and the Fed, comprised of the Deep State and the global elite, that would deliver a serious blow to the cartel.
China and Russia have a way to bring the U.S. to its knees.
Bottom Line: Silver could see a major price spike out of the escalation in the Trade War.
The jig would be up.
If China and Russia counter-attack by buying up a commodity (in silver’s capacity as an industrial metal) that the U.S. and the cartel has kept suppressed since basically the 1960s and especially since COMEX opened in 1974, would the cartel just feed all that supply at these unnaturally low prices?
How long would it be before supplies ran dry?
That would be the black swan that absolutely nobody saw coming (unless you read Half Dollar’s informative articles of course).
But for now, it’s the same old same old in the markets.
I mean, the stock market is fixed you know:
Up five days in a row and seems I read somewhere the fastest and steepest five-day rally ever.
Obviously they are not ready to pull the plug on the market and crash the economy just yet.
Not surprisingly, volatility is dropping:
The VIX fell four out of five days this week, because, you know, everything is awesome!
Or is it?
There has been a reprieve in interest rates:
Notice, however, that the yield on the 10-year has been consolidating above 2.8% for weeks.
The next step sure could be a move higher in interest rates.
Returning to the Trade War theme for one moment: China and Russia have all the good cards. You see, we are in debt to them, not the other way around. China and Russia could also simply begin selling treasuries in earnest and then what?
We would see interest rates go into another round of surges higher. Imagine what that would do to the Fed’s plans, to inflation expectations, and to all of this budget busting deficit plans?
No surprisingly, the dollar hit a new low in last night’s trading:
We said the bounce looked over earlier in the week, and the dollar has fallen precipitously.
Looking at the dollar on the weekly, notice the air pocket:
One could argue we’ll be right at minor support when we hit 88, and then again at around 84, but those are weak support levels. The real support doesn’t begin until the greenback loses the 80-handles and gets into the 70s.
Not surprisingly, crude is making a comeback:
Crude oil is now back above its 50-day moving average, something that oil bulls look for.
Copper surged back above its 50-day:
Copper is up for the fifth day in a row.
It will be interesting to see how the steel and aluminum tariffs impact the base metals.
But the overall trend seems to be resuming: Commodities bull market.
Some are even calling it a commodities super cycle.
Looking at the precious metals, we see this does look bullish indeed.
Platinum is up over 5.5% on the week:
Platinum is up five days in a row.
Palladium surged even higher:
We’ve been playing close attention to palladium since it was the start performer of 2017.
The correction was also hard and fast, so it’s nice to see palladium up five days in a row, as well as the technicals having turned bullish.
Gold looks like the third time could be a charm:
We’re right back at making a run for those highs of last year and then again early this year. In fact, I saw a gold price over $1364 at one point last night.
We can see what the major test is on the gold weekly:
We really need to break-out above the 2016 July highs of $1377.
Is next week the week we see gold test those highs?
The technicals sure are turning bullish again and we just may.
Which leaves us this week with silver.
Just look at the beating as shown through the gold to silver ratio:
We’re still above 80.
The gold to silver ratio is screaming “buy silver” still.
We can see just how brutal the cartel has been on silver with this daily chart:
Forget $17 for now because the cartel is set on not letting silver get above its 200-day.
The Weekly doesn’t look much better:
Breaking that trend-line will be a major accomplishment. But really, let’s not sugar coat it: Aside from a four-month run up to $21 back in 2016, that’s several years of pain right there.
Hopefully we have all been stacking all along, in our own unique capacities, because that is also some serious pent up energy on that chart.
Now, with inflation taking hold, the dollar dropping, yields getting away from the Fed, the bond, stock market and Bitcoin crashing, the Petro-yuan coming, Russia dumping SWIFT, Mueller indicting the Russians, the Middle-East heating up, North Korea far from over, mass shootings and school shootings a thing again, and an escalating trade war, you mean to tell me that the silver price is under $17?
When the average price of the other three precious metals (gold, palladium, platinum) is $1130.
When the average price of all four precious metals (gold, palladium, platinum, silver) is still $854.43.
Yet the price of silver is under $17.
Seventeen worthless debt-based FRNs.
That is not even in the same galaxy as silver’s true value.
There is a huge difference between price and value.
Those who understand that will be rewarded.
Those who do not will go down with sinking dollar ship.
All you have to do is withstand this short-term pain.
Suck it up.
And do not be surprised if a black swan comes swooping down out of the storm clouds forming over silver.
Because exactly zero people are looking for it there.
The black swan.
– Half Dollar