I am a retired accountant and business manager who has 30 years of experience studying markets, investing, and trading futures and stocks. I have made and lost money during my investing career, and those successes and losses have taught me about timing markets, risk management, government created inflation, and market crashes. I currently invest for the long term, and I swing trade (in a trade from one to four weeks) stocks and ETFs using both fundamental and technical analysis. I offer opinions and commentary, but not investment advice.
How much physical gold do you have? How much do you want when you contemplate nearly $17,000,000,000,000 in official US government debt, another $100 – $200 Trillion in unfunded liabilities, and nothing backing that unbelievable amount of debt except the “full faith and credit” of what is clearly a government that won’t balance a budget and must resort to printing dollars to pay its bills?
This simple model, which uses only four cycles and an exponential increase, indicates that a low in the silver price was expected approximately February – July 2013, and that the next high is expected approximately March – October 2014 in the $50 – $60 range. Further, the model suggests that a silver price of $90 – $110 is possible in the September 2015 – March 2016 time period. Do not depend solely on a model such as this; it is one of many tools.
There are many more insanities in our financial and political systems than have been mentioned here. The consequences will be unpleasant, but we expect no material systemic change without a major crisis. This suggests a crisis is inevitable. When? It will occur when some event destabilizes the system and interrelated cascading failures occur. Cyprus was the warning! Cyprus was the “Mayday!” and the “SOS” to the world. Are you prepared?
Have gold or silver ever defaulted? Do gold or silver have counter-party risk like EVERY paper investment? Why are Chinese businesses, individuals, and their central bank buying gold as rapidly as possible?
There is an excess of monetary heroin, Quantitative Easing, in Europe, the UK, Japan, the USA and elsewhere. (When will they ever learn?) The S&P 500 is hitting new highs and gold and silver are sitting roughly at two year lows. Strange and stranger every day…….
Gold and silver are in long term bull markets. One of the objects of a bull market is to arrive at the peak with very few long term participants. The “bull” wants to buck you off periodically. It usually happens. Basic human nature – fear and greed – makes it difficult to ride the bull most of the way up and exit at the proper time. Fortunately for gold and silver bulls, there are many more years of deficit spending and increasing debt that will push metals prices much higher.
Unfortunately, there is not, that I can see, a simple pattern that predicts the next low in the price of silver. Markets seldom make it that easy. However, there are patterns that provide valuable information to help illuminate the “big picture” perspective of where the current price of silver lies in the up-down-up-down cycle of prices.
Our current Quantitative Easing process is creating about $85,000,000,000 in digital currency each month, or about $1 Trillion per year. About half a century ago we could buy a cup of coffee for $0.15, gasoline for $0.19 and a new car for under $2,000. What changed was the value of the money. We increased spending, budget deficits, national debt, and the money in circulation, and prices increased as a result.
Inflation – a few percent seems unimportant, but over a decade, it becomes very important. Look at the calculation in this article. According to several surveys, real people think their personal inflation rate is around 8% per year with a significant percent of the responders claiming 9 – 11% or more per year. Are you going to believe what the government is telling you?
The recent crash in silver and gold was one for the record books. But, gold is not the same as Enron stock. Tangible physical metals, that have been a store of value for over 3,000 years, are not the same as a paper promise made by less than reputable individuals and organizations. In the world today, it seems there are many disreputable individuals, corporations, and governments, all pushing paper.
For your emotional and financial sanity and physical health, get off the bipolar silver roller coaster, buy physical silver, relax, and watch the spectacle as the central banks of the world drive the value of paper currency toward zero.
Do economists, central bankers, and governments really believe that printing money creates wealth and prosperity? I doubt they do, but they do know that printing money helps the “extend and pretend” confidence game, and it allows an increasingly unstable system to persist for a little longer. When does it stop?
Bank deposits are neither safe nor sacred. More financial disasters are inevitable and imminent. Your standard of living is likely to decline. Governments, agencies, and bankers are preparing for more confiscations. Plan on it! Buy gold and silver and remove it from the banking system.
Debt, money supply, and the prices for most commodities have exponentially increased over the past 42 years. Prices for crude oil and silver have substantially increased but inconsistently. I feel confident that the national debt and prices for crude oil, cigarettes, silver, and most other consumer items will drastically increase in the next few years.
Gold & Silver Price Down As Fed Could End Bond Purchases In 2014
Fair or not, like it or not, the US Fed is currently the most powerful financial organization on this planet. Today, during a press conference after a two-day meeting of the Fed (FOMC), the chairman of the Fed took almost all markets down. Precious metals, equities and bonds went sharply lower. There was something going up though: the dollar and the 10 year interest rate.
Gold And Silver – Greater Certainty Is Found In Charts
We can assert the trend is down because of lower lows and lower highs. What can be seen, at this point, is a very small range, so far, following a small range in May that closed poorly. What we know for certain is that the downtrend has not yet changed, so lower prices can be expected. We may hold an opinion that gold will ultimately be considerably higher in value, but there is no confirmation that price has begun to rally.
JPMorgan Now Long Gold. A Game Changer?
JP Morgan was able to maneuver itself to the long side of the gold market while speculators (which by nature are long during the bull market) have been pushed to the short side. Does it mean that the gold price will move up right away? No, although it could. Timing a price move is not what COT is about. But with the largest holder of gold futures contract on the long side of the market things could seem less bearish as the picture that has been painted lately.
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Gold & Silver – Market Overview April 23d
Times are changing. Default is in the wind. It could happen. If so, expect the premiums on physical gold and silver to increase much further. There is no fever like gold fever. But as I see it, the important news is that demand for physical gold and silver is huge – worldwide.
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