One Massive, Global, Serial Bubble
By: Michael J. Ballanger
GoldSeek.com
Thursday, 15 June 2017
Precious metals expert Michael Ballanger reflects on the state of the stock and bond markets and their effect on the gold market.
These missives that I construct periodically usually have as their genesis a “Eureka!” moment while reading a research piece or a written commentary from one of the thousands of self-styled market authorities or if I have the random luck of catching an interview on Bloomberg or (UGH!) CNBC. During a normal week, I will text myself a quick note or leave myself a voice note when and if an idea comes to mind so when I am travelling, it is usually preferable that I be close to a decent WiFi signal in order for my ramblings to be relevant.
During the past two weeks, I found myself swept up in a wondrous journey to the land of my ancestors and rather than bore you all with the bark and rings of my Family Tree, suffice it to say that walking through castles built in the 10th century that are still intact and more magnificent today than they were when constructed is, to put it mildly, awe-inspiring. Just walking up the side of the hill in front of the walls gives one a sense of just how dangerous it was to live and how important was the need for protection and strategic advantage. That is relevant to the topic of valuations in today’s bond and stock markets as there has never been a greater need for that very protection and strategic advantage, so by merely looking at Rock of Cashel Castle, you get a sense of that urgency through the imagery.
During the trip through Western England and Ireland, the only notes I could make were through photographs taken on my phone and after downloading 453 pictures to a 4-gig data stick, I took the time to go through them and, as I did, I was able to reclaim the thoughts I had as they related to gold, the gold miners and global markets. The larger story of the first week was that gold had “BROKEN OUT” above a six-year downtrend line and was now poised for a move of several hundred dollars to the upside. Sadly, as long as I have been writing this missive, I have contended that as valuable as technical analysis is for some markets and certain commodities, it is ineffectual for any and all markets that are “rigged.” The markets that are “rigged” are defined as “all markets deemed important to the national security of the United States” and that means debt markets (bonds), equity markets (stock, ETFs), and precious metals (gold, silver).
All three of these markets are targeted by the Working Group on Capital Markets (“Plunge Protection Team”) with the first two (debt and equities) manipulated higher while the third (precious metals) is manipulated lower. The purpose of this is to insulate the almighty U.S. dollar from attack because to successfully undermine the U.S. dollar would undermine the fundability of the U.S. military and its propensity to protect nations abroad such as the U.K. and Japan. Now, since the U.S. dollar has been under pressure since the end of December 2016, these Interventionalists are intent upon keeping all markets levitated in order to insulate bank collateral from unexpected markdowns. So, with the world all rejoicing and in full voice, the siren of the majestic “Gold breakout!” was in no fewer than fifty separate commentaries that I have read since last Sunday and I watched as if it was a beer bottle sliding off the edge of a table in suspended slow motion as the Commercial Traders fed over 70,000 contracts out into a $50/ounce rise and capped the rally at exactly the point where the “technicals” turned “long term positive.”
The Rest…HERE
