|
Did Nero really fiddle carelessly while Rome burned, as some would
suggest? Perhaps surprisingly to most, the answer to this question isno, as violins did not even exit at
the time. But it was easy for his enemies to make such an aspersion due to
his otherwisedecadent and unpopular demeanor, so he
was painted with this brush in some mainstream history books, which has been
used widely as colloquialism to disparage those who show such behavior. Some
have attributed this characterization to President Obama, the supposed leader
of the free world (rich oligarchs actually run things),
as he appears to favor golf and expensive trips to Hawaii at taxpayer expense
as opposed to actually attempting to improve things for most in America. So
unlike Nero, it would be hard to argue with such an assessment. In fact, it
would not be difficult to portray the free world's (heavy on the sarcasm)
hapless leader as having actualdisdainandcontemptfor Americans (Constitution,
rule of law, etc.) - because growing numbers are on theendangered species listnow anyway -
where if you are not there yet -you will be. (i.e. thanks to self-serving
policies.)
From this perspective, where this homegrown disdain for
America ismore widespreadthan most care to
comprehend, it should be understood that it's to be expected in a mature
fascist state, where subjects are viewed as 'dumbed down objects' to be
exploited for the benefit of (corporate) oligarchs and high-level
bureaucrats. In looking at the US today, it could also be compared to France
at its peak as well (but morelike Romegiven degree) - with a
reckless and entitledneo-monarchy(completely detached from
reality),oligarchs, andbourgeoisie- the works. And at the rate these guys are strip mining themiddle class and American family, it
shouldn't take long now to see a new and more profound crisis at some point
soon, one where thetrue fragility of the US becomes
apparent to all, including all those still in denial attempting to live the
dreamon credit. No amount of dreaming about
how technology willbail America out again won't help
this time - not the Apple watch (a joke) - nothing. The human imagination is
incredible in terms of the denial and delusion it can engender. The American
dream is still a one-way ticket toElysiumat any cost.
Of course, this will not stop the oligarchs and their
dogs from continuing to exploitthe plebsfor as long as possible.
However if Martin Armstrong is correct in terms of hisEconomic
Confidence Model, where he is forecasting peak
government this fall with a popping of thesovereign debt bubble, theold fartsmight finally get a good view
of a new future not consistent with theNew World Order (NWO)- includingrapidly innovating crypto currenciesthat
are set to compete with existing regimes. Because let's face
it, the so called democratic governments of today have morphed into anuncontrollable and corrupt cancersthat
will stop at nothing to exploit the public for theirown benefit, and that of itsbenefactors, where left unchecked,
they willkill us all.
So in an effort to provide some substance, which is in
fact what is lacking in status quo propaganda, because they have made lying an
obsession rather than an art (which is how they view themselves - as
wise-acres - exemplified by the clowns on CBNC®), we find ourselves with the
task of attempting to raise people's awareness on this subject matter, in
addition to helping one survive this mess financially. And as evidenced by
the price action in financial markets Friday, where events are beginning to
spin out of control, in a nutshell the secret to surviving financially moving
foreword lies in one word in my opinion, where again, being a true contrarian
comes into play, with that word being - simplicity. Do the opposite of the
masses, and given good time, where good things come to those who are patient,
one can generally make a material difference in ones finances. Today, the
status quo wants you to think short-term, act impulsively, and create
transaction to feed the (materialism) machine. This is exactly the kind of
behavior that will end you spiritually, financially, and physically in the
end - the status quo is your enemy - and you should know they are at war with
the individual, quintessential knowledge, and, common sense. They want you to
focus on filling their pockets and if left unchecked, the current macro will
deteriorate into a full-blown fascist police state where they will confiscate
your wealth using increasingly draconian and aggressive techniques.
What to do then? Buy stocks
and bonds, which have been working fabulously with a little (a lot) of help
from increasingly complexderivativesanddebtplay? Can't buy precious metals
right - the Western status quo boys have them in lockdown thanks to the
morons in the market(s) and machines. But you can't follow the fools into
debt and derivatives (due to short-termism) either, because when the music
stops these same fools will be attempting to shed risk all at the same time
in bottlenecked markets. That's when they will all start running towards
precious metals a bipolar manic moment, where although liquidity / market
risk may cause volatility initially, the simplicity of safety in precious
metals will become obvious to traders as global politics / trade / markets
come unglued. The reason for concern stocks could still rise and gold fall
further comes from closely examiningthis chart, where in order for the Dow
/ Gold Ratio (DGR) to hit the long-term trend-line again, it would need to
surge to the 20 area, presently at 15.7. It does not necessarily have to vex
the 20 area before resuming its secular decline towards unity once again (it
trends lower when people lose confidence in the status quo), but considering
it has not even retraced 38.2% of the decline from 2000, which would put it
in the 17.5 vicinity, the risk of such a move(s) must still be considered
within the realm of possibility, if not probable. (See Figure 1)
Figure 1
 
People ask, why do you focus
on the DGR so much, and other ratios that measure the stock market to gold
relationship? Answer: because in all the confusion, with copious variables to
factor, the DGR gives a trader / speculator / investor a track to run on that
is not evident in looking at the various markets in nominal terms. It's that
simple. Otherwise, how could one gauge the probability of the Dow rising
another 1000 points for example? The answer is, you could not. But in knowing
the DGR should rise further based on good historical mathematical
relationships, we are enlightened to this probable outcome. This is where the
genius of Fibonacci's original observations comes into play, with the primary
task after that intelligent application of this knowledge. The Fibonacci
resonance projection on the chart below is a very good example of this in my
opinion, where if the historical resonance pattern holds any predictive
value, which has proven to be a high percentage occurrence, the Gold Miners
to gold ratio should see lower lows at some point in the future, supporting
the view the counter-trend rally in the DGR still has legs. (See Figure 2)
Figure 2
More evidence a liquidity
event that will effect the entire stock market spectrum, including precious
metals shares initially, is approaching, comes in observing the monthly plot
of McEwen Mining (MUX) seen below, where if this were not the case, it would
have bounced off trend-line support instead of consolidating in its proximity
before plunging through it in all likelihood. MUX is a junior producer; well
known due to Rob McEwen's fame, and for this reason can be used as a proxy
for the entire group that falls into this category. As you may know, my
correction target for the CDNX, representing junior precious metals
companies, is down to 400, where like MUX, it's probably just consolidating
losses right now before plunging once again when the bottom falls out of the
broad equity complex. This is the view one must have until proven wrong,
which would be when the GDM / Gold Ratio breaks out to the upside, evidenced
by the 'game changing' event denoted in Figure 2, that being an RSI breakout
to the upside on the monthly plot. Therein, if this were to occur, it would
mean any strength exhibited would most likely be lasting, because monthly
charts are designed for trend following purposes. (See Figure 3)
Figure 3
Now you may be saying to yourself, what about the
negative correlation between the broads and precious metals shares price
managers have been using to cap the sector these past years - doesn't that
guarantee gains for gold and silver if stocks turn lower? The answer to this
question is yes, but with a caveat - not necessarily right away. There are
times when precious metals and stocks share a positive correlation, where for
example both were rising coming out of the depths of the 2009 lows due to
improved liquidity, which is the reverse of what is coming now at some point
in the not too distant future.Unsuccessful QEand various other desperate measureson the part of
central banks who have been attempting to stimulate sustainable growth are
about to find out about the fleeting benefits of unbridled and misplacedfiat based monetary (and debt collection) policy- despite attempting to 'stay ahead of the curve' by keeping
bubble economies inflated. The thing about it isZIRPandNIRPwon't work either because they are
just stopgaps in an alreadyexhausted debt supercycle. All central
authorities are doing is postponing the day of reckoning.
So, what is to be done now? For the individual, the
answer is obvious. Plan for the worst, and hope for the best. You don't want
to be like the Greeks who are being reduced to theirtrue financial state, along with
everybody else with no savings, bloated budgets, and improper currency
diversification. Again, this is why central planners must attempt to stay in
front of the bubble management curve or all will be lost - literally. In this
regard, now we apparently have China jumping on theQE bandwagonas well, not that it
wasn't printing money before. So, it could take some months for the markets
to digest this news, where the perspective should be Chinese stocks will hit
at least a double top before it's all over. This means theSSE Compositecould still go to 6,000,
from 4,200 today if Chinese authorities throw enough money at it. And then
again it might not if theovernight reactionto this news is any
indication. The stock market is nothing more than a video game controlled by
a bunch of adolescent traders and programmers who doing the bidding of the
bankers, hedge fund managers, and corporate oligarchs these days, so one
would be foolish to draw any conclusions from how Chinese stocks reacted to
this news.
Anything could still happen if morecrazed Chinese housewiveshave yet to
jump on the bandwagon.
See you next week.
Captain Hook
The above was
commentary that originally appeared at Treasure
Chests for the benefit of subscribers
on Monday, April 20, 2015.
Treasure Chests is a market timing service specializing
in value based position trading in the precious metals and equity markets,
with an orientation primarily geared to identifying intermediate-term swing
trading opportunities, which is an investing style proven to yield successful
outcomes in the longer term. Specific opportunities are identified utilizing
a combination of fundamental, technical, and inter-market analysis. This
style of investing has proven to be very successful for wealthy and
sophisticated investors, as it reduces risk and enhances returns when the
methodology is applied effectively. Those interested discovering more about
how the strategies described above can enhance your wealth should visit our
web site at http://www.treasurechests.info.
Disclaimer: The above is a matter of
opinion and is not intended as investment advice. Information and analysis
above are derived from sources and utilizing methods believed reliable, but
we cannot accept responsibility for any trading losses you may incur as a
result of this analysis. Comments within the text should not be construed as
specific recommendations to buy or sell securities. Individuals should
consult with their broker and personal financial advisors before engaging in
any trading activities. Do your own due diligence regarding personal
investment decisions.
Copyright © 2015 www.treasurechests.info .All rights reserved.
Unless otherwise indicated, all materials on these pages
are copyrighted by www.treasurechests.info .No part of
these pages, either text or image may be used for any purpose other than
personal use. Therefore, reproduction, modification, storage in a retrieval
system or retransmission, in any form or by any means, electronic, mechanical
or otherwise, for reasons other than personal use, is strictly prohibited
without prior written permission.
|
|
