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"In FY 2018 Debt is up $1,271,158,167,127; Fed Borrowed $8,172 per every American with a job. This represents about 6% of GDP. What would GDP growth have been if we do not increase debt by 6%. Do you understand the math here?" -Bill Holter
"The whole edifice of American swag - including Donald Trump's remaining fortune - depends on fake money lent at fake rates sloshing around the world." - Bill Bonner
"This trade war will initially favor the US, but we will gradually lose the advantage as the rest of the world builds new pipes to bypass us. Something similar happened to the UK, our predecessor hegemon. We don't know what a new world financial order would look like, but the US dollar would not be on top of it..." - John Mauldin
Silver is also looking at a bright future, maybe even more so than gold, according to the October outlook.
"Silver is set to embrace a leadership role in a metals-sector rally. The number of ounces of silver equal to gold has reached the highest level in 23 years, with net silver positions the shortest in 12 years as a percentage of open interest. - Bloomberg
The gut feeling here is that if silver can take out $15 we could see some serious upside fireworks ... which would signify either an end game scenario for silver of an in ability of The Gold Cartel to keep the silver price at bay as they have done for so many years. - Bill Murphy (LeMetropole Café)
"It's clear as can be they're nipping all gold and silver rallies in the bud. Today's version of unnatural trading is yet another coma, after a(nother) 3% rally in silver. Why on earth wouldn't there be follow through in silver after two 3% rallies in 3 trading days? Schizophrenia reigns supreme, at least when the cartel is involved.
Silver is in a Twilight Zone like no others. The intensity to suppress it is surreal. Much like our alleged 2 party political system it appears the longs and shorts in gold and silver ultimately play for the same banking cartel team.
If the pattern continues tomorrow will be another 3% gain, with another coma on NFP Friday to follow. Welcome to silver, the newest schizophrenia to be diagnosed. The only cure is total annihilation of the derivatives scam." - James Mc (LeMetropole Café)
"People are going to be dumping their dollars and buying gold. . . . If you understood what the Fed was doing, you would be buying gold, but most people don't understand. - Peter Schiff
David's Commentary:
I smile every time I read a headline on Kitco that claims gold is up because... or gold is down because.... The reasons given may explain why hedge fund profit-motivated purchases or sales are taking place on Comex. Rarely do any of them have any bearing on future pricing. They buy and sell based on today's headlines, but it's for short-term profit, and not a long-term strategy. What is clear is that at any given time, the price tends to oscillate both above and below a certain level.
The significance of "even numbers."
Even numbers
are usually major resistance points - like $1,200 for gold and $15 for silver. The managed money hedge funds are defending the "even number" of $1,200. Gold moves above and below that number within a narrow range. That's not random. The hedge funds are waging war. One side is determined to defend it and the other side is working hard to penetrate it. It has no bearing on our physical holdings (unless we need to sell right now). It's just a game for profit that the hedge funds play that has no lasting power.
I believe that the significant "even number" for gold is $1,400 (or $1,450) and for silver it's $21. Once those levels are penetrated, the bull market in the metals should be off and running. But first, let's see $1,200 and $15 fall into place.
Moving averages are also important
.
Here is the definition of a moving average:
The simplest form of a
moving average
, appropriately known as a simple
moving average
(SMA), is calculated by taking the arithmetic mean of a given set of values. In other words, a set of numbers, or prices in the case of financial instruments, are added together and then divided by the number of prices in the set.
The hedge funds will fiercely defend gold's 50-day MA, which is $1,207.49The next important number is the 200-day MA which is currently at $1,283.42. These numbers move and are not static. By the time gold approaches $1,283, the number will be higher.
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The hedge funds will fiercely defend gold's 50-day MA, which is $1,207.49The next important number is the 200-day MA which is currently at $1,283.42. These numbers move and are not static. By the time gold approaches $1,283, the number will be higher.
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For silver the 50-day MA is $14.74. Silver is at $14.64 now so watch the action around the moving average. The hedge funds will do their best to keep silver from closing above this number. Once it does, the computer algorithms will automatically start to sell the short contracts and purchase long contracts. Silver's 200-day MA is $16.09. We have a long way to go to hit that number, but it is falling every day.
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If you don't understand how the moving average is derived here is a simple explanation. Every day you drop off the oldest entry, (in the case of the 20-day MA you eliminate the price from 20 days ago) and you replace it with the current number. You add them all up and divide by 20. Each day's change represents 1/20th of the new total. The moving averages are meant to eliminate the daily volatility and smooth it out over a period of time.
Hedge funds have changed the game. They don't operate like we do because they work with OPM. (other people's money). If there is a loss, it doesn't come out of their pocket. They can take chances that we probably wouldn't with our nest egg. They also have relationships with the large banks and they can get huge credit lines - at very low interest rates. They can "gamble" with large sums of money. Their purchases and sales are controlled by their computer programs (algorithms). There is no emotion or human intuition involved. It's not uncommon to see these hedge funds close up shop after making foolish bets and blowing their investor's money.
Do are wonder why inflation isn't higher than it is reported to be? Apart from the way they manipulate the numbers, to show a much lower number, the cause of inflation is an increase in the money supply (vs goods and services). But the money creation originates from "fractional reserve" bank loans. If the banks are holding onto their money and restricting their loans, money does not get into the economy to cause more demand and rising prices. Small businesses are finding it very difficult to impossible to increase credit lines or get loans now. The big corporations do not have that problem. In fact, they have a lot of cash, especially after Trump's tax cuts. But, as I have stated before, a lot of it is being used to buy back their own stock, which leads to higher stock prices and bigger bonuses to the company executives. If this money were used to expand their business or increase wages or be distributed as dividends it would have an effect on inflation. But it is not. The executives of the big international corporations are getting richer. I don't believe that was the intent of the legislation that allowed multi-national corporations to repatriate billions with greatly reduced tax consequences.
Two thing that should lead to rising prices are: (1) Trump's trade war with China. Prices will rise at Walmart and Target and Best Buy for sure. (2) The $15 minimum wage that the large retailers are moving to. They will pass that cost on; prices will rise. (I want to remind our readers that inflation is NOT rising prices; inflation is an increase in the money supply leading to rising prices). The lower end of the wage scale is not getting the bank loans, but they are getting more money to spend on more expensive retail necessities.
I started today's newsletter off with a quote from Bill Holter suggesting that the only thing holding up our economy (GD) is unsustainable levels of debt and money creation. The following article by Michael Snyder discusses this important topic.
Michael Snyder
America Is Committing Suicide: Over The Past 12 Months, The U.S. National Debt Has Increased By 1.271 Trillion Dollars
If we do not change course, our once great nation will be destroyed by a debt that has grown wildly out of control. We are facing an unprecedented debt crisis that literally threatens to bring our country to an end, and yet our politicians are almost entirely silent on this issue in 2018. In fact, Republicans and Democrats just worked together to pass another big, fat spending bill through Congress that is actually going to increase the pace at which we are going into debt. What the Republicrats are doing is not just wrong. To be honest, the truth is that they are committing crimes against humanity, and they are completely wiping out the very bright future that our children and our grandchildren were supposed to have. How in the world is America supposed to be "great again" when we are buried in so much debt that future generations can never have any possible hope of getting free from it?
Click to Read More
Greg Hunter
People Will Be Dumping Dollars & Buying Gold - Peter Schiff
Money manager Peter Schiff was in a small group warning of a coming financial meltdown that happened in 2008. Schiff says, "I was kind of a fixture on financial cable TV giving these warnings. My thought was the bubble would burst, and I knew that it would. Once the housing bubble burst and we had this financial crisis, I knew it would follow along with the Great Recession. I thought the Federal Reserve would try the best it could to reflate the bubbles in the stock markets and housing markets. But my thought was that their efforts would fail. The markets would not allow it and that a dollar collapse would intervene and would prevent new debt from being issued to fully reflate those bubbles. I was actually wrong. They didn't just Click to Read More
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