We wanted to see presidential election
fallout news and post election trading action
before moving to our next reporting segment on precious metals
markets/prices. Having fulfilled this timing hold up, we have now sat down
and used a weekly gold chart that covers 2010, 2011, and 2012 to our current
date, and discovered some nearly perfect technical numbers…. We were
surprised at how perfect.
We do not explore data using three
decimal places, as we know the stop-and-go magnet numbers for gold and silver
prices within increments of $100. Rounding is automatic using those magnet
prices from memory when computing our forecasts.
What surprised for this report was the
latest bull cup-and-handle numbers. The price sequence within this pattern,
hit three important magnet numbers on the button. This says: we’re
on the right track for computing our next forecasts for gold.
You have to be very careful in
forecasting annual, December cycle prices. Market controllers, holidays and
end-of-year fund managers/central bankers (who fiddle with credit and stock
markets) are employed to slice and dice for maximum performance. This
unstable market action produces figures that can seemingly be erratic with
some of them being really off the wall.
In our current situation as we write
pre-open before the Monday markets on 11-26-12, we expect the following:
(We have a nine-month chart pattern for
gold that was just completed showing enough visible signals for this
Technically, we are supposed to have
another gold, silver and related precious metals stocks correction as we wrap
up November and travel through December 2012. We agree with this supposition
but do not expect any large price drama in the selling department.
Nothing goes up in a straight line. We
always have pullback, profit-taking corrections after each and every rally.
This is standard stuff and should be considered just regular trading. Get
used to it and expect it.
A normal gold rally from
bottom-to-top-to-bottom is around six weeks for one cycle give or take a few days.
Some key points to keep in mind: (1) as
metal prices go ever higher the trading range corrections go equally wider.
That means harder selling events appear after the larger rally events, (2)
expect that daily trading ranges from open to close will grow wider. (It was
a big deal just a few years ago if gold moved in a trading range of $4-$8 for
the day. Now we commonly see days of $20-$30 per day and on some days get a
trading range of $55-$60.)
If we see a stronger Elliott Wave
Three up-move of $55-$60 right now with the price of gold at $1,750, what
do you suppose the range will be when gold is $2,500 to $3,000? Do not be
surprised to see moves of $100-$200 in one day.
The commodities exchanges on these big
prices will install some very high margin requirements to insure against
default on futures trading contracts.
Our technical forecast produced after
days of intensive analysis in 2005 was $2,960. Since that forecast, we can
see a gold price as high as $4,450 projecting from this date to 2017.
We expect to forecast gold higher than
the $4,450 price but would rather refrain from suggesting those higher
numbers until we can see more data with gold trading in the $2,000 to $3,000
Key Fundamentals Driving Gold Prices
Precious metals traders and investors sometime
compartmentalize politics and the metals markets. We often compare the two
sectors as separate and distinct except for their cause and effect often seen
in faster trading.
This is not the case. Political
legislation, executive orders or demands of dictators (whether it comes from
legitimate government or from ram-it-down-your-throat socialists), creates
serious long-term trends in precious metals markets.
Other affected markets would be those in
currencies and bonds. The action-reaction in precious metals is more volatile
and apparent, as these markets are much smaller.
Base metals are affected too, but they
move slower due to massive market size as big traders are trading them less
We suggest that there exists a much
longer view over years (say decades) that will produce our best and serious
trends. The idea best driving gold and silver
prices would be: the ongoing paradigm and propensity of central bankers to
print and digitize bonds, bills, credit and currencies with no apparent
backing. Smoke and mirrors pseudo-assets do in fact move precious metals
markets as well as others.
Let’s pretend stuff created with
stern authority creates reality.
This condition is not exclusive to the
United States. For decades, central bankers have deliberately enticed
individual central banks and national governments to become indebted to them,
with the idea their national country collateral can be snatched upon loan
failure and their very economic bones could be picked clean. Too often, much
to the chagrin of borrowers, this has proved to be the case. “Loan, and
rob countries” is a good business plan for banks.
This is an old game and numerous
instances can be cited. Watch what they do to Greece. We got a report the
Greece central bank holds six tons of gold. Who gets the gold when those new
loans go bad? Assuredly they will go bad and all the players know it. This is
the reason the current three-ring lender circus remains in play. Those
lenders are fighting over the gold collateral. Who cares about getting paid
back with the crummy fiat paper currency you just lent to them?
Perfect examples of this activity can be
traced back over years with several South American nations being driven into
poverty as outsiders lure them into indebtedness depravity to the extent they
can never repay those loans. This is just a larger version of Ponzi with a
newer twist added and promulgated on a larger international playing field.
In past years we often wondered why
global Big Boy banks in New York would keep lending huge amounts of money to
those poor nations knowing full well the loans would not be paid back. The
old story said whole nations do not go bankrupt so consequently our loans are
secure. Not anymore!
The reason of course is to strip those
countries of precious assets… collateral in the ground or by taking
collateralized property on aboveground improvements. Further, while the loans
initially remain current, consider all the lending fees and interest
collected by the lenders. Later, when the loans default, they simply take all
the collateral. Hey, you can get paid three times in this game!
These bankers didn’t worry about
being paid back. The loan money was just digitized crap originated from the
Federal Reserve owned by the very bankers making the loans! How is that
for a really cool scam?
It’s kind of like giving a real
estate developer just enough cash and credit to develop and begin
construction of a fine, expensive project. The lenders having done this so
many times they know when those loans will go bad; and when they do they can
seize the property, land and all improvements for pennies on the dollar. They
loan just enough in cash and credit to set it all up and then make it fail.
It’s just a big criminal game. Set
‘em up to fail so they can hang themselves and
then go in for the kill, seizing it all.
Some nations seem to be better at the
game than others. Most of them are sincerely encouraged by the IMF, World
Bank, Bank for International Settlements and various nefarious lending
components of the United Nations…the catch-all One World Government
go-to entity that’s supposed to “save us all” and oh, by
the way: police us all.
Have you noticed the reluctance of Spain
to take credit from the IMF or the European Central Bank to bail them out?
Spanish financiers in their government understand the usurious terms and what
comes later if those loans are made and then foreclosed upon.
Japan has been busy doing the same thing
for decades but they have one major difference in that their citizens are
hardcore savers of Yen. In our view, this has enabled Japan to print,
digitize and borrow on steroids as buyers of their paper are primarily held
within the nation of Japan.
In the United States, a lot of paper
shuffles around in our country too, but trillions more is sold off-shore
denominated in USA Dollars, the primary reserve currency of the world. Being
a dominant currency the dollar is widely accepted as “Good as a
Dollar” despite millions knowing otherwise.
We see numbers going all over the yard
saying Japan has borrowed 200-300% of GDP. Of course, once the debt threshold
of 70% of GDP borrowing has been passed, there is no going back. At that
point, you have become economically dead.
Now we see some USA numbers from
national government insiders working in the Budget Office, Labor Department,
or Department of the Treasury. Some of those folks say America is way beyond
Japanese spending. They tell us including all the entitlements, welfare
schemes and others (far out-demanded by current law), the United States owes somewhere
between $80 trillion and $120 trillion. That is indeed a far cry from the $16
trillion currently bandied about in the news.
It doesn’t matter, as it
won’t be paid back anyway. The numbers are an impossible dream. The
idea is to keep the game in play as long as possible and Kick the Can
while scarfing up all the goodies.
In the United States the most common
consumer theme is ‘spend it when you get it’ and if you
are short, whip out the plastic and keep spending anyway. This condition
creates a different can of worms but the general trends for Japan and the USA
are the same: these economies and others throughout the world are ripe for a
It is obvious to us (and many others
with bigger accounts and more experience) that hard assets are the answer. It
all starts with physical gold and silver.
Somebody please tell us when the global
bond markets crash for good and we’ll tell you when this can all get
better and we can start all over again, maybe with a partially backed fiat
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