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The Pope just observed that the situation in the world
today amounts to a Third World War hes right and although he didnt
point the finger, we know what its all about the maintenance and
imposition of the dollar as the dominant world currency, by diplomacy or by
force as deemed necessary. We will come to these geopolitical considerations
later as they of course have huge implications for the dollar and thus for
Precious Metals.
The Pope just observed that the situation in the world today amounts to a
Third World War hes right and although he didnt point the finger, we
know what its all about the maintenance and imposition of the dollar as
the dominant world currency, by diplomacy or by force as deemed necessary. We
will come to these geopolitical considerations later as they of course have
huge implications for the dollar and thus for Precious Metals.
The Pope just observed that the situation in the world today amounts to a
Third World War hes right and although he didnt point the finger, we
know what its all about the maintenance and imposition of the dollar as
the dominant world currency, by diplomacy or by force as deemed necessary. We
will come to these geopolitical considerations later as they of course have
huge implications for the dollar and thus for Precious Metals.
As you probably know we had expected gold and silver to start picking up
in the last update, for various reasons, the most important of which was that
they are at important support at the most bullish time of year, seasonally,
for the Precious Metals, but the dollar rally accelerated even more, driving
gold and silver still lower and deeper into key support which is now being
severely tested. If the dollar continues higher then gold and silver could
crash key support, but this doesnt look likely short-term because the
dollar is now critically overbought and needs to take a breather.
On its 15-year chart we can see how gold is just starting to break down
from its long-term uptrend in force from late 2001, although thus far the
break is marginal, and with the dollar so overbought it looks likely that it
will step back from the brink. However, with another big dollar upleg looking
likely after its overbought condition has unwound, the threat of eventual
failure of this support may not go away soon. The key point to watch is the
support at last years lows, which is not far beneath the trendline, but we
should also note that Big Money may force a brief move below this support to
trigger stops and run investors out of their positions before a sudden
reversal.
On its 4-year chart we can see that gold has broken down from its Triangle
pattern that had formed for over a year, which has made a test of last
years lows likely soon, perhaps after a short-term bounce as the dollar
digests its recent gains.
On its 15-month chart we can see that gold could freefall from here to
support at years lows, if the dollar doesnt consolidate short-term as we
are expecting. If it does, gold could bounce back perhaps to the $1260 area.
Note that gold is already critically oversold on its RSI, although that
wont necessarily prevent a plunge from this position.
Golds COT readings have eased substantially in recent weeks, but as we can
see on the latest COT chart, there is room for more improvement, meaning that
the improvement thus far is not enough to prevent further losses.
On the 6-month chart golds losses are starting to look a bit climactic, and
it is substantially oversold. So this is a good time for it to stage a relief
rally as the dollar consolidates recent gains.
Now we come to the principal determinant of the gold price, and the big and
obvious reason for its recent losses the dollar. On the 6-month chart we
can see how the dollar index has accelerated over the past week or two so
that it is now critically overbought on a short-term basis, which is why we
are expecting it to consolidate for a while soon. It is thought unlikely that
it will react back much, if at all, however, and after consolidation and
perhaps a minor reaction, the risk is that it will go on a tear into the
mid-90s. Lets now look at the long-term chart to see technically why this
should be.
On its long-term 11-year chart we can see that its not just gold and silver
that are at a critical juncture, the dollar is too, because it is on the
point of breaking out upside from the huge Triangle shown, and fundamentally,
as we will see, there are very good reasons for it to do so soon. However, it
doesnt look like it will happen right away because it is so overbought on a
short-term basis, as we have already seen, but after due consolidation of
recent gains, another upleg appears to be on the cards, and it could be
really big.
So whats going on? whats the Big Picture? how does it all fit
together the crisis with Russia and the Ukraine, the increasing chaos in
the Mid-East and elsewhere? and why is the dollar gathering strength as it
is?
The Pope sees whats going on but he cant go pointing fingers
otherwise he will have to get the bullet proof glass reinstated on his
Popemobile. What we are witnessing now is nothing less than the New World
Order (NWO) endgame the completion of the drive for world domination.
Whilst this conjecture may be classed as conspiracy theory, remember
its in order to be a conspiracy theorist when there actually is a
conspiracy. Although obviously largely based in the US and more specifically
Washington, the NWO are actually a supra-national elite whose power
centers include, in addition to the US, the UK and Israel. They live
international lives, which has definite tax advantages, and probably regard
with amusement the parochial nationalism of most people which they routinely
exploit. The UK is an interesting case because it never joined the single
currency and one of its roles is to throw a spanner in the works and
derail various EU initiatives. The elites obviously dont want Scotland
becoming independent as it goes against their global drive for centralization
and are right now engaged in a vigorous anti-independence propaganda campaign
in the major media outlets under their control against the Yes vote that
in addition to blatant scaremongering involves attempting to smear Alex
Salmond, the leader of the Scottish Nationalists.
The two main planks of the NWO drive for world domination are economic
subservience achieved through imposing the dollar as the global reserve
currency, involving such things as the SWIFT payments system, which entire
countries can be shut out of at their discretion, and a massive overpowering
military machine, which is used to impose their will by force, where
diplomacy and coercion fail to produce the desired results. We have already
seen 3 countries destroyed who dared to stand in their way Iraq and Libya
were planning to sell their oil in currencies other than the dollar, and
Syria is an ally of Russia, and therefore came under attack as a way of
getting at Russia. They havent (yet) succeeded in overpowering Syria, but
Assads resistance has left the country in ruins, and they will probably
soon go in and get him under the guise of chasing down ISIS (or ISIL).
Russia has made a lot of bilateral trade agreements with China over the
past year or two which bypass the dollar. This cannot be tolerated, which is
why the coup was fomented in the Ukraine as a means of sucking Russia into
confrontation which was then used as an excuse for robust anti-Russian
propaganda as a prelude to heavy sanctions, which are intended to either
force Russia to kneel, or destroy it economically. They cant attack Russia
directly because it has a formidable array of nukes, otherwise they would, so
for now they have to confine themselves to racking up the pressure on Russia
and seeing if that does the job. If they succeed in facing down and
subjugating Russia, they will continue to complete the job by going after the
largest and juiciest fruit on the tree China. China has already figured
this out, which is why it is embracing Russia and supporting it, and
scrambling to develop a credible military deterrent before it has to square
up to the US military, which is of course the underlying reason for their
space program. China and Russia are the King and Queen of the BRICS trade
pact. BRICS stands for Brazil, Russia, India, China and South Africa. Brazil
and South Africa are just pawns in the eyes of the NWO, as they can be easily
overcome. India is bigger and more difficult - it has a huge population but
is comparatively weak and unsophisticated, and can probably be manipulated or
coerced into compliance the judicious application of bribes at the highest
levels might be all that is required to get it to see the light. The
overall objective is to destroy the BRICS pact, and the threat it involves to
global dollar dominance. Encouraging Japan to militarize is another way of
racking up the threat against China and has the added interim advantage of
potentially producing big lucrative contracts for US defense manufacturers.
Returning to the charts, various commodity charts continue to look scary,
showing a potential crash setup
The general commodity index is also showing a dangerous setup the
support shown must hold
US Treasuries look particularly vulnerable after their long bullmarket if
rates should start to rise
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