The Trinity complex (PMs) move together in the long run, yet in the short term they don't move in lockstep. Recent trends have shown platinum to be the more bullish of the three. I do think platinum will be above $2000 next year, as it has a beta more similar to silver's, higher than gold, yet is more rare than silver and already past its peak of production (it peaked in 2009).
Silver has yet to peak its production, and it could be a few years until it does so, but from what we have seen from past production peaks, the peak happens suddenly and swiftly. Once silver does peak its production, it will be the the last of the PM complex to do so, also joining oil and steel. Silver's production peak is very important, for then no PM will come cheaply.
Supply is a very important piece of finance, especially as demand increases. A rise in demand, which there is for PM not only to store wealth but also industrially, will increase price. If supply can rise with demand, then price keeps equilibrium, but if supply stays flat or decreases, then the equilibrium moves to find a rise in price.
Since PM, other metals, and oil have seen a rise in price due to the value of fiat alone, their demand has increased, and this has led to supply being mitigated. Now with oil higher in price, drillers are going after oil that is not just low hanging fruit, and this is the same for everything. The supply increase will only last so long, and it will increase the sharpness of the downturn. So when the downturn does happen, it will happen quickly and sharply.
Monday, April 9, 2012
Wednesday, April 4, 2012
A Long April
I have been writing that precious metals will have a long April. Well, it has started that way. First, I will give new end of the month targets: Gold at $1735 and silver at $35. Those are big moves percentage wise, but the volatility has been and will be big both ways.
The volatility makes the upside more bullish, because it shows the desperation of the "M"oney "M"asters and also their desperation shows the important role PMs play in the system, but the move will not happen all at once. It will be a volatile month with big upside and downside moves. We have seen the moves start. The reason there will be a cap on price appreciation is because Europe is under pressure. Monetary policy does not have the affect it once did, and the Trinity will be suppressed at all costs so the secret is not know to the world until the Fiat Ponzi crumbles. The secret is that precious metal is monie, and nothing else is.
The Fed will let markets pull back to scare people into accepting more debt, if that debt is outright QE, or debt swaps and FX swaps. I think the market will drop to DJ 12650 by late April, and Bernanke will usher the next round in then. By that time, Europe will give up all its recent gains and the world economy will be in jeopardy of falling into depression again, like it had ever been saved.
I think PMs take off this summer due to the continuation of lax monetary policy, but I think this will be a long month. Big moves usually have opposing big moves ahead of them. This happens so the market can get the best price available. When I write the "market" I mean "m"arket "m"akers, because there is no market, and hasn't been one in a long time.
The volatility makes the upside more bullish, because it shows the desperation of the "M"oney "M"asters and also their desperation shows the important role PMs play in the system, but the move will not happen all at once. It will be a volatile month with big upside and downside moves. We have seen the moves start. The reason there will be a cap on price appreciation is because Europe is under pressure. Monetary policy does not have the affect it once did, and the Trinity will be suppressed at all costs so the secret is not know to the world until the Fiat Ponzi crumbles. The secret is that precious metal is monie, and nothing else is.
The Fed will let markets pull back to scare people into accepting more debt, if that debt is outright QE, or debt swaps and FX swaps. I think the market will drop to DJ 12650 by late April, and Bernanke will usher the next round in then. By that time, Europe will give up all its recent gains and the world economy will be in jeopardy of falling into depression again, like it had ever been saved.
I think PMs take off this summer due to the continuation of lax monetary policy, but I think this will be a long month. Big moves usually have opposing big moves ahead of them. This happens so the market can get the best price available. When I write the "market" I mean "m"arket "m"akers, because there is no market, and hasn't been one in a long time.
Tuesday, April 3, 2012
March Fed Minutes
The Fed minutes from the last meeting were released today, and there was little surprise in the text. However the market "reacted", or that is what people are led to believe. The market was sold off, but was the minutes release only a front for the selloff? And what are the implications?
First, technically there is usually a break before a large move. Precious metals were moving up, the dollar was moving down, but the trends reversed dramatically. Does this mean that there will be a trend reversal, or is this a break that is a last move before the recent trend continues?
As PMs have been in a ten year upward trend, and the dollar has been losing to inflation for its whole existence, I do not see a trend reversal. The breakdown today allows the market to use this break and reinvest. What I mean is, right now, the dollar can be used to buy precious metals. And this is what will be done sooner than later.
The readjustment will be slow. I think PMs will experience a long April. I do see the PM complex moving up, gold finishing the month off at $1750 and silver at $36.
In conclusion, the market did not react to the Fed minutes the way people think. The minutes were not news; everyone knew that the minutes did not implement another new QE. What happened was that all trends are in line, nothing happened, but the market players wanted to refresh their positions.
First, technically there is usually a break before a large move. Precious metals were moving up, the dollar was moving down, but the trends reversed dramatically. Does this mean that there will be a trend reversal, or is this a break that is a last move before the recent trend continues?
As PMs have been in a ten year upward trend, and the dollar has been losing to inflation for its whole existence, I do not see a trend reversal. The breakdown today allows the market to use this break and reinvest. What I mean is, right now, the dollar can be used to buy precious metals. And this is what will be done sooner than later.
The readjustment will be slow. I think PMs will experience a long April. I do see the PM complex moving up, gold finishing the month off at $1750 and silver at $36.
In conclusion, the market did not react to the Fed minutes the way people think. The minutes were not news; everyone knew that the minutes did not implement another new QE. What happened was that all trends are in line, nothing happened, but the market players wanted to refresh their positions.
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