Today’s message is “positive” for long-suffering precious metal holders; albeit, decidedly negative for the vast majority of the world’s seven billion denizens. Clearly, we are amidst an “historic inflection point” – both economically and geopolitically; and here at the Miles Franklin Blog, our aim is to enhance your personal due diligence process in the hope you to PROTECT YOURSELF from what’s coming.
I think it's normal to have doubts - especially in rigged markets like this. Stockholm Syndrome creeps in and we begin questioning everything. Commenting on these markets over the last decade, I often wonder how long they can keep it all together. The entire house of cards has stood up much longer than anyone has expected. The next wave of investors will likely go through the almost reflexive reach for derivatives first. New investors, or would be long term holders, simply have an aversion and are well versed in the worlds of ETFs.
Many investors have been freaked out by silver’s recent breakdown from a Descending Triangle and the sharp drop that followed, but as we will see this morning there is now a strong case to make for silver either being at its low for this cycle, or very, very close to it.
According to the MSM, yesterday’s equity plunge was due to the Russians considering counter-sanctions against the West. I mean, how pathetic can the propaganda get – as if such actions, if indeed taken would “surprise” anyone? Alternatively, any financial professional would look at charts like this one – depicting dramatically higher valuations then even the 2000 mania peak – and run for the hills, no matter what the Russians were doing. To boot, amidst the weakest global economic backdrop and most dangerous geopolitical environment, in decades.
COT Silver Report - September 26, 2014
Buy fish line patterns, sell rhino horn patterns, and trust that politicians and bankers will continue to borrow and spend money that must be “printed” in ever-increasing quantities. Example: Official national debt increased by $1,013,588,000,000 in the one year from Sept. 23, 2013 to Sept. 22, 2014.
This week saw gold rally $15 to $1233 on Tuesday before sliding to $1207 yesterday morning, then rallying in the afternoon. Silver's moves tracked gold's, bottoming out at $17.30 yesterday at the London opening. This morning precious metals are firmer in pre-LBMA trade, reflecting some short-covering ahead of the weekend.
Purchasing and securing precious metals is easy. It's like stepping out of the river where you can see the mainstream headed for the big waterfall.
Silver is the Rodney Dangerfield of the precious metals. It gets no respect. Maybe this chart says why. The price noted in the chart above is as of the end of August. Today it is lower around $17.80. On an inflation-adjusted basis, silver is trading around where it was in either the late 1800’s or “heavens above” back around 1780. Some improvement. Outside of a good run in the mid-1800’s and the famous Hunt Brothers spike into 1980 silver has actually been in a long-term downtrend on an inflation-adjusted basis.
As the manipulated paper price of silver heads lower, so are the silver inventories as the Shanghai Futures Exchange. The silver stocks hit an all-time low today as the price of silver trades in the $17 range. At the peak, the Shanghai Futures Exchange held 1,143 metric tons of silver. However, today only 7% of that record amount remains.