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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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  • Gold And Silver - Future For Gold As Uncertain As It Is Certain. Silver Will Lead/Follow. 0 comments
    May 17, 2014 4:12 AM

    Saturday 17 May 2014

    Based on several thousand years of history, and based on the last
    100 years of fiats, gold will continue to rise as a store of value, and
    almost all fiats will fail, massively. Which fiats will continue? The
    Yuan and the Ruble, for two. The Panama Balboa is another
    possibility, but Panama will have to do some sorting out to get rid of
    the fiat US dollar, its paper currency. The official money of account is the Panama balboa, but it ceased printing around 1941, in favor of
    the US dollar. This little Central American country has been making
    preparations to disassociate from the fiat Federal Reserve Notes.

    For all the gold China has been accumulating this past decade, it is
    unlikely that China will back the yuan by gold. It would be too
    problematic for what it would do to its economy. Russia has been a
    lesser buyer of gold, but it also has tremendous reserves that it
    mines every year, adding to its holdings. Its natural gas resource
    has taken center stage as a backing for the ruble. Russia will also
    unlikely want to back the ruble by gold.

    There have been numerous articles from reliable sources that havebeen calling for a new gold-backed currency to replace the waning
    Federal Reserve petrodollar as the world's reserve currency, many
    thinking a gold-backed yuan as a prime candidate. In this regard,
    gold's future is uncertain. It will undoubtedly play a significant role,
    but not likely linked to one specific country as a new world reserve
    currency.

    From the solidifying financial and economic ties between China and
    Russia, China and several other natural resource rich countries, and
    the BRICS alliance, a strong possibility lies in contractual ties
    amongst all these countries, and not a single nation gold-backed
    currency. A perfect example is what will likely be concluded next
    week between China and Russia, the largest ever natural gas deal.

    The deal is between Russia's Gazprom and China National Petroleum
    Corporation. All that needs to be finalized is the price. What will
    decidedly not be a part of the deal is any Federal Reserve Dollar as
    a part of the pricing mechanism, nor any use of the fiat "dollar."
    Expect to see more and more international dealings by Eastern and
    BRICS nations that preempt the soon-to-be-former world reserve
    "dollar."

    Obama does not "speak softly," nor does he carry a "big stick."
    ["Speak softly and carry a big stick," was first used by Theodore
    Roosevelt when he wanted Congress to increase the amount of
    money he needed to carry out and define his foreign policy, using
    "diplomacy" backed by military might, America's [outdated] foreign
    policy to this day.] So Obama's sanctions and threats against Russia
    ring hollow, and all parties concerned know it.

    Russia has more than enough natural resources and more than
    enough willing customers to not worry about Obama, the US, or its
    fiat "dollar." Russia's Ministry of Finance has already announced plans to use the ruble in all future contracts as Russia takes more steps
    toward "de-dollarization." China has been acting in a similar capacity
    as it has been making deals with several other countries, outside of
    the "dollar."

    Prior to the Rothschild elites forcing the US into official bankruptcy in
    1933, [from which point in time forward, the US has been owned by
    a few select international bankers...a fact about which almost all
    American remain ignorant], prior to 1933, the US used gold as a
    backing in it contracts with other nations, so there is a viable history
    for using gold, and any other natural resource, [oil, copper, natural
    gas, as a few other examples] as an integral part of contracts and
    foreign exchange.

    The deal with China may require backing with gold, to some degree,
    as a guarantee. There may be a clause that exchanges yuan or
    rubles for gold, silver, copper, etc, without the necessity of any
    country having a gold-backed currency. A soon-to-be relegated-to-
    third-world-status country, like the United States, would not be able
    to participate, by virtue of the fact that it will be unable to bring
    anything to the bargaining table. All other countries will engage
    based upon a relatively hard currency and/or a natural resource
    to act as collateral.

    China, Russia, Panama, other BRICS, Turkey, Iran, et al, can keep
    their fiat currency, but simply back up any contract with acceptable
    collateral, oil for gold, gold or some acceptable equivalent for
    whatever is being sold. This will eliminate the stronghold that the US
    and UK have maintained for the past century, and the military might
    will become a whisper of what it used to be. For now, however, the
    military remains very much a tool of desperation as the once mighty
    West continues its unabated slide into a decline from which it cannot
    recover.

    The time frame between now and then remains an unknown, and it is very likely that the elites will cause major disruptions, like Ukraine,
    aiming for what it knows best, profitable war. Countries and people
    suffer, but the Rothschild formula for creating chaos, leading to war,
    provides incredible wealth for themselves.

    With the US Gestapo Homeland Security purchasing billions of
    bullets, 7,000 NATO personal defense weapons, aka the kind of
    assault weapons used by civilians that the Obama/United Nations
    wants to outlaw, and now the Department of Agriculture wanting
    to buy submachine guns, it is very apparent that the elite-controlled
    corporate federal government is preparing for war...against
    Americans in their own country. This will not end well, and perhaps
    for the first time, the ravages of war will be confined to the US.

    Over a year ago, we were going to do an article on the Department
    of Homeland Security, [If you guess the Homeland to be secured is
    the US, you would be wrong. The Homeland to be secured, at all
    costs, is the corporate federal government.] The reason for not doing
    the article was the content, the fact that Homeland Security has
    hundreds of "camps" around the country, where, thanks to the Bush
    Patriot Act and Obama's National Defense Authorization Act, on top
    of the 1933 amendment to the Trading With The Enemy Act, [the
    Amendment made U S citizens the enemy within their own country...read the Act.], the corporate federal government can
    declare anyone an enemy and held without rights of any kind, and
    for any duration. Think of Guantanamo Bay coming to roost on US
    soil.

    There was more. Homeland Security has also purchased tens of
    thousands of caskets, stacked up, row after row after row. Draw
    your own conclusion as for whom they are intended. No country
    at war has a history of bringing back war victims to be buried in
    special camps.

    The uncertainty for the role of gold has yet to be defined.
    Expectations for a gold-backed currency may be misplaced. It could happen, but it seems unlikely that the largest holders of gold have an interest in putting themselves at an economic disadvantage by
    pricing out their exports. However, within whatever the realm of
    uncertainty for gold's specific role is, it will undoubtedly remain
    pivotal. Rising from the ashes of central banker suppression for the
    past several decades, it is certain that the price will go higher.

    Will it be $10,000, or as high as $50,000 the ounce, the price range
    so often speculated on as its next level of price reality? Who knows?
    It will be determined by a freer market than it has been for over
    eight decades, or more. Regardless of where the prices of both gold
    and silver finally reach, it should not matter to anyone who is
    prepared.

    The best way to participate is to be prepared. The best way to be
    prepared is to already own physical gold and silver. The handwriting is on the wall. Western fiats are destined to fail, not next week, not
    next month, maybe not even this year, but failure is coming, and the unelected European "officials" are doing whatever they can to steal
    whatever they can get away with.

    In the United States, the foreign-owned Federal Reserve has been
    stealing wealth through the harder to detect, but equally as insidious
    inflation. With the fiat Federal Reserve Note worth about 3 cents
    today, relative to 1913 dollars, that means the Fed stole 97 cents
    of every dollar over the past century. If you do not understand
    inflation, it is the debasement of money, and the value debased goes to the benefit of the issuer. The Fed does nothing if it is not for its
    own benefit.

    Expectations that gold would respond to the Rothschild-inspired, US-
    led Ukrainian situation have been proven wrong. For as long as the
    US/UK/EU troika can exert any degree of control over those
    governed, for as long as central bankers control all Western
    countries and fiat purse strings, gold and silver will remain in their
    bottoming phase, and the bottoming process can last for longer than
    most expect. Neither gold nor silver appear to be turning up, and for
    that look, we turn to our favorite topic, charts.

    If gold or silver appear to be unresponsive to known news, be it how
    much China is buying, potential war breakout in Ukraine, financially flagging EU, the US losing control on so many fronts, it is because
    both are still under the control of relatively unseen forces that
    continue to exert pressure, like a helium-filled balloon being kept
    under water.

    Many say that the charts are irrelevant, but no one is pointing to
    anything else that is. For as long as we have been following markets
    via charts, those of gold and silver have told the most accurate story
    in the face of news and events that would suggest otherwise.

    Before gold can rally, it has to first turn the trend from down to up.
    We see no evidence of a change in trend. The bearish spacing is
    repeated, again, as a reminder that it represents a weak market within its down trend. How anyone can posit a bullish scenario from
    what the charts show flies in the face of known facts, as depicted in
    the charts.

    The biggest fact upon which almost all can agree is that the trend
    remains down.

    Within that context, there are slight signs of bottoming activity, such
    as the current two month TR holding near a 50% retracement of the
    last swing low to swing high. For this to occur in a down market is a
    plus; not enough to turn the trend, but what could lead to a change
    in trend. Also, within the past two months the weekly closes are
    clustering, a sign of a pause before the previous trend resumes, or
    a resting period that can begin a market turn.

    For now, there is no confirmation, either way.

    GC W 17 May 14

    The shorter perspective of a daily chart indicates a recent up trend
    that has turned neutral. The most important elements for reading
    developing market activity in any charts are price and volume.
    Everything else can almost be ignored.

    Three weeks ago was the 3rd highest volume of the month, occurringon a lower close, indicating sellers "won" the battle for that day.
    Volume is important. The volume increase should lead to a lower
    market. Yet, when you look at that specific day, it was an inside day,
    relative to the previous up day. The question to ask then is, why did
    all of that increase in volume not take out the low of the previous
    day, and why was that day's range slightly narrower? While sellers
    won the battle that day, in context to the increased volume, it was
    buyers that prevented the effort of the sellers from achieving a lower level.

    Friday was a lower low, but notice this time, volume declined, and
    the close was mid-range the bar, a stand-off between buyers and
    sellers, but more of an edge to buyers for stopping the momentum
    of the sellers.

    Price closed just about dead center of the two month TR, and that
    says balance. From balance comes unbalance, and the further price
    moves along the RHS, [Right Hand Side], of a TR, the closer is the
    TR resolve, in either direction. Instead of having to guess in which
    direction price may move, it is better to be prepared for either event and then act accordingly.

    GC D 17 May 14

    From the August 2013 swing high, price went into a protracted and
    labored retreat until the beginning of February 2014. After a three-
    week rally, from the February swing high, price once again was in a
    labored 12 week decline. When it takes sellers four times as long to
    correct a market that is in a clear down trend, it tells us sellers are
    generally weak.

    Last week, it was mentioned that when an area is continually
    retested, it becomes weaker and subject to being broken, unless
    buyers, in this instance, can show more strength. A look at a more
    detailed daily chart may be helpful in getting greater clarity on the
    chance of silver make a new recent low.

    SI W 17 May 14

    There have been a few attempts to sell silver to yet lower levels,
    since late April, and on each occasion, silver was able to rebound and close well on strong rally days. One would not expect to see that kind of relative strength in a down market. The decrease in trading
    volume on Friday indicates relative weakness by sellers for not being able to drive price lower than occurred.

    Price needs to get above 20, and hold, if buyers want to wrest
    control from sellers. If not, sellers will see this buyer inability,
    and that may prompt sellers to try for new lows.

    Silver will also be certain in seeing eventual higher prices. With the
    gold/silver ratio at the high end, favoring gold, and silver tending to
    lead PM rallies, silver could outperform gold to the upside, once the
    trends change. For this reason, silver may be the one to watch.

    SI D 17 May 14

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