Weekly Update: Gold, Silver, Bitcoin – 02.17.2017

honest-money

Greetings fellow amateurs,

This past week has seen a dramatic shift in the fiery internal battle over control of America between President Donald Trump and the Deep State controlled by the occult elite and represented by the obsolete media. The fireworks have shifted away from immigration and civil unrest and back to Russia and fake news. Despite these substantial, escalating tensions pointing towards a soft coup attempt, there has been no noticeable impact on asset prices. Those wondering why discord, uncertainty, and even existential threats no longer move the needle on stocks must now of all times understand that asset prices are governed by high frequency algorithms rather than either actual reality or the illusion of reality that we view through the lens of news and commentary.

The maintenance of the bubble continues despite forecasts of higher interest rates, whispers of problems on the periphery of Europe that never actually went away, terminal debt saturation, and geopolitical chaos. All that is required is a brief mention of potential tax cuts and the buying algorithms can get to work squeezing anyone with bearish tendencies out of their positions by hammering volatility and using all sorts of leverage and derivatives to move prices wherever is necessary. The law of supply and demand still holds in reality, so even though that no longer applies to fake asset prices we can still examine it in regard to human character.

Here is a brief list of traits that are in profoundly short supply and therefore immensely valuable:

Patience
Critical Thinking
Historical Perspective
Maturity
Motivation
Truth-Seeking
Accountability
Effective Communication

I’ve left plenty of things out, but if you can obtain and cultivate these skills – and many others like them – then you will be able to stand out in our generation. That doesn’t mean that you’ll have it easy because you’ll be going against a herd that possesses none of these characteristics and worse yet imagines that it does.

Madness, deception, and risk abound, yet you can’t infer that from classical market analysis. With that being said, let’s see how the future monetary system is coming along:

Gold

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Next week will be interesting for gold. The slow and steady march has continued with consolidation between $1,220 and $1,240 for the week. This has been a bit of a slow grind, particularly for those who always view the inevitable revaluation upmove as an imminent event. Such an approach will wear you out eventually as checkpoints pass and prognostications fail. Nonetheless, we’re still looking for a momentum break above $1,240 now that we’ve built a solid base at these levels, and a drop below $1,220 that sticks would likely signal a move back below $1,200. Another week bound in this tight range wouldn’t be impossible, but it would leave gold with more pent up energy in terms of the current structure (the real pent up energy is the manipulation). Keep accumulating. My preferred strategy of buying on the manipulation smackdowns hasn’t presented tons of opportunities recently as opposed to the final two months of 2016, but I’ve added a small chunk as well. Gold for me is a vehicle for savings, so when I have excess savings above my operating capital I move some into gold. Slow and steady.

Silver

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Check out the continued regularity of the uptrend in silver. This week saw some time spent above the $18 breakout level from last summer without a momentum move higher. Keep in mind that over the same time frame we’ve continued to see a shallow but steady rise in the dollar. This is still a stealth rally, but the strength is building. If we compare this price action to the past year there isn’t any proper match to look to. When the steeper uptrend resumes is anybody’s guess, but we’re just one cascading upmove away from being above $20 then $21. Buy here and buy often. Buy more on a smackdown. Silver is still a strongest buy at these levels. You can also consult your neighborhood financial professional, but they will likely disagree. Do the due diligence and the homework that’s necessary to buy with conviction.

Bitcoin

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Last week after the latest China policy smackdown I said that I would use how fast bitcoin got back above $1,000 and then $1,100 as a measure of its strength. Well amateurs, without an unlimited supply of paper derivatives and rehypothecated contracts it’s proving challenging to keep this one in check. Perhaps we’ll get one more cascading drop before we get the run to new all time highs, but at this point it’s a toss up. The last runaway upmove counted for around $350, and the same thing would fire up the $1,400 target. Despite what this chart says, I don’t think it was functionally possible to get any bitcoin back closer to $900.

In the interest of full disclosure I did add a bit to my holdings when I saw the drop in price and what precipitated it. Even though I was late to the bitcoin game overall, I’m still happy with my average price even though it’s likely irrelevant in the longer term. If bitcoin is going to be the vehicle of choice to bring the unbanked world on board the New Silk Road, then whether you bought at $2, $200, or $2,000 won’t matter apart from the extent you were able to get as much as you could. The volatility is still present, but I’d view any substantial price hit as a buying opportunity. I think it’s too bold to say that we’ll never see $1,000 again, but unless something exogenous comes into play and bitcoin goes to zero we appear to have left the lower hundreds in the dust for good.

The spring appears to be coiling here. Keep a close eye on it and set alerts because this thing can fly.

Conclusion

All the swirling insanity still hasn’t made it’s way properly into real assets. Get there, continue to accumulate, hold tight, and maintain a balanced portfolio.

Disclaimer: These are one amateur’s fallible opinions. Holding any asset is risky, so do your own research and make your own investment decisions.

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