Where Gold And Silver Are Headed Next

The ebb and flow of futures and weak handed speculator games on the COMEX have been in place for decades and continues to shape sentiment and market commentary.

Currently, the big commercial shorts are still in control. Until this changes, prices will remain either within a range (or in some direction) that directly benefits the banks - and only indirectly the current monetary system.

Over the last few months, retrospective data released by the CME and published by the CFTC reveal that JPM et al. (the largest commercial banks) increased their collusive and concentrated short position aggressively. And this has occurred on falling prices. 

There could be nothing more artificial about this process. Yet much like the London Interbank Offered Rate (LIBOR), the effect of this manipulation is broader than most could ever imagination. In fact, it reaches deep into the collective confidence of money itself and, therefore, the natural trading must be contained at all cost.

Short - Intermediate - Long

It can be helpful to view the markets in three separate contexts.

Day to day is a wild ride. There is no way to predict, other than looking at "news sentiment indicators" like upcoming FOMC meetings or POTUS speeches, or the outbreak of a crisis (surprise). These, along with technical milestones like options expiration, are reliable indicators that price is about to soften.

The intermediate view shapes perception and forms market commentary. Speculation leaks into the intermediate influence. It is the face that new investors see staring at them after they've panic-awakened to the need for protection 

Long term gets closer to the fundamentals, though softly muted by real physical supply and demand - especially with silver. We've seen prices rise five times over a decade.  Prices have risen even more so in terms of potential purchasing power with a massive cloud of money and debt obscuring us from the ultimate price event horizon. 

So price remains held range-bound and far from any important technical moving averages.

The HFT revelations now hitting the mainstream will be short-lived in terms of the news cycle.

But the lower silver goes, the more physical demand skyrockets. U.S. Mint data and jewelry demand are consistent reminders of this.

Monetary and industrial demand compete for a very small pool of available 1000 ounce bars, but just-in-time delivery practices make the risk of user panic a constant potential. Any hint of storage or rumor of stockpiling could change the physical market in a minute.

Pure silver miners are extremely rare. And the entire precious metals mining community has suffered horribly over the last 20 years, destroying communities and permanently damaging future supply prospects. These events occur as the industry suffers from talent (geologist) migration – all because of the “money manipulators”. There are only a few pure silver miners left. Most silver comes as a byproduct. And these operations depend on the same big banks for their financing, which is also the primary reason they don’t speak out about manipulation - against their masters.

From a monetary perspective, the amount of dollar creation has been unprecedented over the last five years.

We don’t have money velocity yet, but that’s what we should be watching. The Fed will provide that data. We will only see it in retrospect. So higher food and energy prices, or even the Feds bond buying program, may not show up in the data for months on end.

One should be reminded of why it's dangerous to watch the short term price action -- especially when the intermediate term has been in a downtrend.

We do see inflation in food and energy all around us, in addition to inflated real estate as well as bond and equity valuations. If we measure the economy using 1980 methodology, the entire perception would be so shocking to the masses that immediate panic would ensue.

Maybe they can print money forever? Maybe for the first time ever in the history of all civilizations they figured out how to create an everlasting fiat currency that never fails? Maybe we’re on the cusp of scalable alchemy, liquid fuel independence? I doubt it.

The degree of sophistication is parallel to the decibels of confiscation threats sung by the analyst.

What about all the money sitting in retirement accounts? Trillions upon trillions. Promises denominated in dollars with management fees and penalties for cashing out and templates now in place for confiscation and bail-ins. Not to mention that most of this money is invested in bonds and equities – the most overtly manipulated markets of all. This is by far the greatest “scam” to steal your wealth.

In the end, what we are doing literally and symbolically is placing a financial put option against the insanity that is slowly trickling out around us. Cheaper entry points for accumulation are a temporary benefit, but not one on which to leverage faith.

Courtesy of http://www.silver-coin-investor.com