Silver Rigged Market Manipulation Coming To An End
Commodities / Gold and Silver 2013 Dec 14, 2013 - 12:31 PM GMTBy: Michael_Noonan
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 *****. 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.
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.
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.
By Michael Noonan
Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.
© 2013 Copyright Michael Noonan - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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