Wednesday, January 5, 2011

The Price of physical precious metal is decoupling from the paper Price

Platinum is once again testing the $1800 resistance level, the most important resistance level in all of finance.  All equities markets across the world have had a 1:1 relationship with platinum at some point or another.  Japan was the most obvious when it tracked platinum verbatim for weeks on end in '10.

If platinum breaks that resistance level it will do exactly what silver did when it broke its range-it will move swiftly to $2200, and then break out from that too.  The room in between $1800 and $2200 is thin.  After that their will be no shorts in the way of appreciation.  What will gold do?  Will silver have another big move?  Anything is possible when the world is in a global debt panic.

When platinum moves past the level it can't seem to break it will be one of those lightening out of a bottle moves PM owners are so accustomed to.  From $1800, $2200 should be made in a week flat.  It will happen when spin news is at its finest.  The US will raise the debt ceiling, and budget cuts of real working jobs will be sold as not only pertinent but becoming.

America may well wallow in the mire a little longer, but not in the face of PMs.  Precious metals are the force behind this economy.  Precious metals are used in all technology, and function perfectly as monie.  It is an investment as a commodity and one of a store of wealth, a unit of account, a fungible asset.  The combination of this perfect asset creates what is real monie.  Paper is bested by real monie because paper is not a store of wealth.  IOU is nothing in the real world.

Paper monie has lost value against real monie its entire existence.  Inflation is always present in a FIAT system because more debt is always needed to promise future payments.  In history FDR and Nixon also did away with standard and FIAT has fallen on its face into the mud.  Can the paper standard get up?

The whiteness is in full formation and hedged appropriately, it is only a matter of time until it lands on the lake of reality.  There is a swan in the wedge that is paper gold.  It is possible that swan will be the one that ends the ponzi.

Spot gold and silver have taken off and continue to create nominal highs.  Platinum is on the edge of breaking out.  Yet miners and other paper gold lag.  Is this the move of physical moving away from paper?  What would happen if gold and silver on COMEX are in short supply?  How high would REAL precious metal prices go?

In an interview the other week Jeff Rense asked Jordan Maxwell what he thought of the silver movement.  He said he didn't know if it would work.  Well it can work if it is willed.  The will of the people is a dangerous thing.

2 comments:

  1. Gold
    Fly on my sweet angel....
    http://99ercharts.blogspot.com/2011/01/gold_05.html

    Thanks for having me on your blog roll.

    ReplyDelete
  2. You are a talented technician, and you're welcome.

    ReplyDelete