Weekly Update: Gold, Silver, Bitcoin – 03.03.2017

Greetings fellow amateurs,

Another one for the history books! Immediately after President Trump’s first address to a joint session of Congress marked a moment in which even some of his most erstwhile critics were forced to admit that Americans approved of his message, the war inside the Deep State still embedded within the swampy hideaways of the Beltway escalated yet again. The latest and greatest fight over various abominations targets new Attorney General Sessions and marks a return to the well-worn Russia narrative. Time will tell whether or not this one trick pony will continue to be effective, but it is clear that the enemies of our President cannot be appeased.

They are in full meltdown mode and have the capacity for dangerous action through useful idiots, patsies, and electronic sabotage. Be advised, right now treasonous activities are taking place across a plethora of both overt and covert venues. It seems we’re always one incident away from the asymmetrical conflicts boiling over into a live revolution, but you certainly couldn’t tell that by looking at stock prices with the Dow at 21,000.

This week the Fed returned to a shock and awe strategy of hawkish rhetoric, effectively cornering themselves into a rate hike in March. Should they fail to follow through, the reversion could be dramatic. However, I have a sneaking suspicion that all of these surface level narratives are nothing short of hyperbolic distraction tactics. Other more important dynamics are at play, and it seems that everyone is in a position to be caught offside.

Even if I may not agree with the macro predictions that Stockman makes, we certainly don’t see much about the incoming debt ceiling and other potential catalysts like the Dutch elections anywhere in the obsolete media. They’re still caught feverishly inventing the next scandal du jour that will last until the next news cycle pivot over the weekend. Nothing sticks. Everything is fluid. These are tenuous times despite the appearance of breathless complacency.

Gold

Gold D 03032017.png

I didn’t mind the pullback in gold this week as official after official from the Fed performed furious non-textbook OMOs this week. In economics class we learn that the Fed conducts policy through open market operations. In reality monetary policy is done through open mouth operations. Spoken words are channeled into perceptual existence and causal impact through algorithms in the form of a boost in the dollar and a drop in the paper price of a gold contract. Of course this is more nonsense, but there’s nothing wrong with the stability we’re seeing with gold stuck above $1,220 and closing off the lows for the week. One clue that this was in the works is that gold stocks didn’t participate in the last leg of the recent rally towards the end of the previous week. Full strength should see every component of the precious metals complex moving up aggressively together. Nonetheless, a stronger base can be built from here, and nothing moves in a straight line. Should the Fed fail to raise rates or the geopolitical situation in Washington or Brussels appear materially less stable in the short term the uncoiling of the spring will swiftly undo the moderate drop in price. Continue to accumulate real wealth.

Silver

Silver D 03032017.png

It’s been awhile since we’ve seen the old familiar red waterfall in silver! This week is an excellent example of how to recognize manipulation. When a normal entity sells an asset, they want to get the best price possible. When they have a lot to sell, they piece it out across time so that they don’t impact the price. In the absence of dramatic catalysts and seismic shifts, a billion dollar sell order executed all at once would get any independent trader fired. The simple inference is that either price didn’t matter or the actual objective was to push the price down. Given the information in the public domain about manipulation in the paper precious metals markets through essentially all major institutional mechanisms, the latter seems likely. Should things start to wobble in the weeks ahead, this smackdown will be engulfed by the meltup. This tells us that the regime of price suppression is not only still in place but also that it still has access to its old bag of tricks. They can keep on selling invented paper until they’ve sold a million paper contracts for each ounce of silver on the exchanges. I’ll sit on the real thing and wait patiently for the scheme to implode. Continue to accumulate real wealth.

Bitcoin

btc-d-03032017

After having almost touched $1,300 this week, bitcoin still hasn’t quite run away yet to the $1,400 – $1,500 range mentioned in last week’s update. The next chance to get bitcoin for triple digits might be the last should it even materialize, so set your alerts for a buy back towards the moving average. It looks like it would take a dramatic announcement to get that outcome in this environment. This is strength upon strength and steady at that. Hang on tight folks: it feels like we could see multiple hundred dollar moves in either direction but more likely up than down. Much is being made of the price of one bitcoin eclipsing the price of one paper ounce of gold, but I regard it as a psychological marker and nothing more. The units are arbitrary, but in several years we may likely look back at this time as a fulcrum moment for cryptocurrencies. Each day that passes bitcoin becomes more mainstream, and though it has doubled in the last 5 months it doesn’t seem to be done at all. Continue to accumulate the likely currency for bringing the rest of the world into the new global economy in the new monetary system.

Conclusion

Ignore the nonsense, expose those who would tyrannize us, and continue to accumulate real wealth.

Disclaimer: These are one amateur’s fallible opinions. Holding any asset is risky, so do your own research and make your own investment decisions.

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