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Michael Noonan Edge Trader Plus Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he... More
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  • Silver - Rigged Market Coming To An End 0 comments
    Dec 14, 2013 1:12 AM

    Saturday 14 December 2013

    No one can question the fact that the demand for silver has grown
    exponentially in the past few years, record sales for American Eagle
    coins being one small example, record buying in India, another larger
    example. Demand has never been greater. Supply, on the other hand,
    keeps diminishing.

    Global mining production is at its lowest in the past decade. The
    annual Consumption/Production ratio is indicative of acute deficits.
    Whenever there is a situation where demand rises sharply, while supply commensurately declines, it is a recipe for higher prices, and usually,
    much higher prices. This is true, unless one is talking about the silver
    market. Under the conditions of record rising demand and considerably less supply, the price of silver is at its lowest levels in the past three
    years.

    With talk of silver going anywhere from $150 to $500 higher, it
    currently struggles to hold $20, why is this so?

    The answer is not to be found in the myriad supply and demand
    figures, no matter how cogently presented: as absolute numbers, or
    dramatically presented graphs, and with so many comparisons to other times/situations. Facts and figures do not lie. Politicians and bankers
    do.

    The reason why silver continues to languish is purely a political one.
    Silver, along with gold, compete against fiat currencies. All [Western]
    currencies are issued by central banks. All central banks are owned by the elites, New World Order, [NWO], the moneychangers, call them
    whatever you will. These elites have a vested interest in preserving
    the Ponzi monopoly they have enjoyed ever since Mayer Amschel
    Rothschild discovered the power of interest collected on debt, over 200 years ago.

    Debt = Wealth. That is the motto for the elites who charge their
    central banks with running up as much debt as possible for every man,
    woman, child. and country. The more debt, the more interest owed to
    the 1/10th of 1% who own the world's wealth. As an example, what
    was the answer to resolve Greece's unmanageable debt problems?
    Have that country borrow even more!

    The problem today is that the NWO is losing its grip as the growth of
    debt escalates to previously unimagined levels. The biggest threat to
    fiat currencies is sound money, such as being backed by gold and
    silver. This is why the United States eliminated the backing of United
    States Notes with silver and gold. This move was instigated by the
    elites who have controlled the United States since it was forced into
    bankruptcy in 1933.

    The next move was to have President Nixon repudiate gold backing
    in 1971. The stage was set to flood the world with Federal Reserve
    Notes, backed by oil, hence the petro-dollar as the world's reserve currency. The US has been exporting its debt-ridden society on the
    world ever since. What it did not count on was China, even Russia,
    to a lesser extent, emerging as world powers, and world powers that
    now have the gold.

    The Western central bankers have been leasing, hypothecating and re-
    hypothecating gold with impunity, no country ever strong enough to
    challenge Western financial supremacy. Then, in the 1990s, China
    wanted its gold back from the United States. "Sorry, Chinks!" was the
    arrogant response from the US. It was gone, "leased" out to keep a
    controlled lid on the world's price of gold. Central bankers were
    running a scam, one of the largest Ponzi schemes, ever.

    Huge mistake.

    It is now payback by the Chinese. Now aligned with Russia, Brazil,
    India, and South Africa, the BRICS nations have formed a trading
    alliance outside of the US petro-dollar. The world's reserve currency
    has not only been challenged, it has fast become irrelevant, except in
    West and EU, and even in the EU, that is changing.

    The golden genie was let out of the bottle over a decade ago, and all
    the central bankers cannot put it back. Every attempt has been made to keep a lid on the price of silver and gold by central bankers
    desperate to hang onto their waning power. This is why Germany
    was told it would have to wait seven years to get its gold back from
    the Federal Reserve Bank of New York. It simply ain't there, anymore.
    Gone. Guess where it is?

    China. Retribution can be a bitch. The East is over taking the West,
    and they are doing it by buying all the available physical silver and
    gold. Even more. China has been on a shopping spree, buying as
    many precious metals mining operations around the world as are
    available. Here is your largest demand factor, followed by the remaining BRICS nations.

    What about diminishing supply? What about the almost empty vaults
    at COMEX and LBMA? What about the demand of 68:1 claim for each
    ounce of gold? What about...insert your own example of how supply
    is being exhausted. All factual, all true.

    The elephant in the room no one is addressing is the political one. The
    elites have kept pressure on PMs to keep their last gasp efforts of
    control alive. The current price of silver has nothing to do with supply
    and demand, nothing. It is all about central banks being used by the
    elites to prevent silver and gold from exposing the fraud.

    There was a reason why, in the Wizard of OZ, the theme was to
    "follow the yellow brick road." The all-controlling Wizard behind the
    curtain was a fraud. The all-controlling elites behind the central bank
    curtain are also a fraud, but a more sinister one that has been
    cornered like a rat, and they are fighting back.

    The way in which the elites are fighting back is why silver is under
    $20, right now. If the price of silver were allowed to rally and reflect
    reality, the exponentially higher prices would expose what lies behind
    the central bank fraud. The market is rigged. The sad truth is all markets are rigged. The Libor interest rate market, the Federal
    Reserve taper-on stock market, the OPEC oil market, the De Beers
    diamond market, the US world-wide drug trade market, the
    pharmaceutical market, the food supply market. Each factor that
    controls a specific market is also ultimately controlled by the elites,
    the New World Order.

    If you want an idea of what to expect for the future price of silver,
    one only has to look at Bitcoin. It is not a government regulated
    market, and it is one that has taken the world by surprise. Just a few
    years ago, Bitcoin was under $1. Recently, it ran up to over $1,200.
    The appetite for any fiat alternative is huge. Bitcoin is not a currency,
    nor does it have the history of being currency-backed like silver and
    gold do. Once the lid is taken off the precious metals markets, they
    will leave Bitcoin in the dust.

    The good news is: every single fiat currency throughout the history of
    the world has failed. An ounce of silver is still the same ounce of silver from thousands of years ago. The bad news is: no one knows for how
    much longer the elites can keep control, via their central banks, in
    suppressing the price. The good news to the bad news is that the end is near.

    We are looking at the sale of the century for the price of silver, right
    now. There is a reason why China, Russia, and India have been huge
    buyers of physical silver and gold. Because of silver's properties of
    being an indispensable necessity for industrial use, it has been used up considerably more than has gold. Both will rise incredibly in the not
    too distant future, and odds based on the gold/silver ratio favor silver.

    One is likely to experience a greater return on investment in silver over gold. There is never any guarantee, but using historical relationships
    between the two makes silver a better buy and hold. The ratio is
    around 62:1. As both metals rise, once freed from central bank
    tentacles, the probability is that the ratio will move more toward 20:1.
    Wherever it goes, anything less than 62:1 makes silver preferred, on
    that basis.

    This remains the best opportunity to be buying and holding physical
    silver. Only buy the physical metal, in coin or bar form, as you can
    afford. Do not buy silver in any form of paper, for you are unlikely to
    ever received physical, if promised. Plus, the fine print will tell you
    that delivery can be made in some form of paper payment in place of
    physical delivery.

    If one has learned anything over the past few years, it is that
    governments cannot be trusted, and there is zero credibility in banks,
    all thieves, given the opportunity. Does it make sense to wait for the
    "best price possible?" Not as far as we are concerned. Silver may not
    be available at any price, or in very limited quantities, at some point.
    Plus, the reasons for buying are about wealth preservation that will
    eventually lead to increased wealth, when price finds its eventual true
    level. It is not worth the risk if you intend to accumulate silver and
    then not be able to buy any.

    There could be one more new low in the near future, but that does not mean the physical will be commensurately lower. It is a personal
    choice. The time to buy is now, in the present. When silver
    eventually reaches over $150 the ounce, will it have made any
    material difference if you paid a dollar or two more or less the ounce?
    We live in an increasingly Orwellian world. Name, address, and SSN
    may be required, at some point. Anonymity will be lost.

    The past cannot be changed, the future has not yet happened, so
    we can only deal with the present tense. The use of charts has its
    detractors, many simply from an inability to understand them, some
    from misapplying them, and a few from saying the charts are not real
    because they reflect the paper market, which is rigged. True, true,
    and true. However, paper valued or not, even the price for the
    physical is dictated by the paper market, [at least for now]. Until that
    changes, it is the only game in town.

    Most people have something to say about the silver market. Here
    is how we see what the silver market has to say about the people
    trading it. For anyone not overly used to looking at charts, they do
    convey a certain degree of logic, and the message can, at times, be
    incredibly helpful.

    A chart reflects the directional momentum of price behavior exhibited
    by participants. It is a way of tracking the results of all bets being
    placed, and it is the best way to see how the most skilled and
    informed, what we call smart money that moves markets, operate.
    Smart money trades with prevailing price direction, called the trend.
    They buy low and sell high, axiomatically, so it pays to have an idea
    of what they are doing.

    A monthly chart provides the overall history and context of a market,
    and it is closely followed by smart money. Most traders/investors do
    not even look at monthly charts. We look for any existing synergy
    between the various time frames, for it tells a more compelling "story"
    about what is likely to happen. To the degree any synergy may be
    apparent, the greater the degree of logic one can glean from the
    charts.

    According to the charts, the price of silver is not ready to reverse its
    trend. The monthly chart, and the lower time frames, clearly indicate
    the trend as down. Knowledge of the trend is the most important
    piece of information one can have, as a starting point.

    There is a small amount of spacing when the August swing high failed
    to reach the 2011-2012 swing lows. This tells us that sellers were
    confident enough that price was headed lower, that there was no
    need to wait and see how broken support would be retested.

    Whenever spacing exists, the probability is high that the last swing low will be exceeded. That swing low was $18 this past June. Those odds are in the 80% area, right now. To what degree the swing low will be
    exceeded is unknown. It could be a failed probe, or it could take price a few dollars lower. Because this is a politically driven war against the
    precious metals, no one has a clue how much lower and how much
    longer the elites can maintain its increasingly fragile control.

    With $18 having been a previous area of support, from 2008, and again in 2009-2010, the ability for sellers to move the market lower will be
    met with increasing buying support. For now, that spacing is indicative of silver having its work cut out to change the trend, and trends can
    take time to change. The one exception would be a surprise event
    that moves the market unexpectedly, creating a V-bottom, with price
    accelerating off the lows.

    SI M 13 Dec 13

    The labeling on the weekly supports what was expressed on the
    monthly. The focus will be on explaining the numbers. When we say
    there is a high degree of logic in reading developing market activity,
    the more detailed weekly chart serves as a great example.

    At 1, you see a wide range vertical decline bar. This is telling us that
    sellers just took over in a big way, evidenced by the EDM [Ease of
    Downward Movement]. There was a reaction rally at 2. where price
    stopped at a half-way retracement. A horizontal line can be drawn
    from that swing high, extended into the future. We made it a dashed
    line to indicate it was drawn as of that swing high date, and how the
    market developed from that point on was after that fact.

    At 3, we can expect resistance, based upon the logic that price just
    failed at that level in October/November 2011. A failed probe to the
    upside develops, right at where price failed at 2, confirming the
    importance resistance just under $36. Eight months later, there is
    another failed rally at 4, respecting the horizontal line drawn almost
    a year earlier.

    Three failures at the $36 level are a good clue that price is more than
    likely to head lower. From 4, down to support at $26, you see a series
    of lower swing highs and lows, indicating a weak market. At some
    point in the future, a rally to 5 will become pertinent. Once support
    was broken at $26, and with ease, that level will become future
    resistance.

    There is a small change of behavior, when price rallies quickly for four
    weeks in August, where the last swing high was formed. That failure
    is what created the bearish spacing. The decline since has been
    relatively labored, telling us buyers are more active and not
    allowing sellers to move the market lower with ease. Still, the odds of
    the June low at $18 to be broken remain high.

    This is the message from the market that tells us about the
    participants and the degree of control sellers have over buyers.
    Sellers remain in charge, despite all of the bullish news and indicators
    there are about strong demand for and a shortage of silver. All of
    that bullish news has been priced into the market. In other words, it is going to take something new to move the market to the upside.

    Our scenario is not a definitive explanation for silver, but it goes to
    show the kind of thinking one needs to better understand why precious metals are going lower and not higher. One of the strongest moving
    factors to act as a catalyst for silver will be the fate of the fiat dollar.
    That is all central bankers care about.

    China's and India's record buying aren't even enough to change the
    trend. Let that be your message of how strong a hold central bankers
    can exert in suppressing price. Why would China or India want to see
    silver at $25, $30, $50, or over $100 when they can buy at current
    levels? Take a page from their book and keep on buying.

    SI W 13 Dec 13

    Just as history does not directly repeat but often rhymes, so, too,
    does the market. People make history. The markets are composed
    of people, as well, and this is why one sees repeating pattern
    behavior. This daily chart picks up where the failed August rally
    created the spacing on the weekly chart.

    You see the rhyming pattern on the daily repeating like the weekly
    above. The reason why 1 starts where is does is due to the gap
    lower, next day, and the last small rally just before price broke sharply
    was at point 2. 3 and 4 are similar to explanation given above, so no
    need to repeat. The chart says it all. At some point, a rally will meet
    up with 5.

    We see the same broken support, just like the weekly, only the last
    swing high retest, 2 bars ago, Tuesday, [this is written Thursday
    evening, the 12th], it did not leave any spacing behind. However,
    Thursday's wide range decline on increased volume erased the
    Tuesday rally which had even stronger volume. This is an indication
    of how rallies cannot be sustained and a sign of a still weak market.

    Finally, there is no answer for when a change will occur, and there
    have been a great many silver experts that have used bullish signs
    as justification for calling for much higher prices, but that has not
    materialized. Listen to what the market is saying, and not what
    others are saying about the market.

    It may be weeks, it may be months, it may even be longer before the
    manipulators lose control, and they will, as history tells us. History
    also tells us it often lasts longer than most people expect. Buy the
    physical while you can, even if it takes another year before reality
    prevails. Just as one cannot know when a turn will occur, one cannot
    also know for how long silver will be able to be purchased, in the
    interim. Be smart. Better a year early than a day too late.

    SI D 13 Dec 13

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