Most Popular
1. Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs - 21st Feb 22
2.Putin Starts WW3 in Ukraine, Will Use Tactical Nuclear Weapons, China Prepares Taiwan Blitzkrieg - 28th Feb 22
3.World War 3 Phase 1 - Putin WINS Ukraine War! - 25th Feb 22
4.INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! - 10th Feb 22
5.Will There Be A 2024 US Presidential Election? - 3rd Mar 22
6.Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot - 6th Feb 22
7.Why Putin Wants the WHOLE of Ukraine - World War 3 Untended Consequences - 6th Feb 22
8.Dow Stock Market Expected Max Drawdown 2022 - 19th Feb 22
9.Stock Market Calm In the Eye of the Inflation Storm - 4th Mar 22
10.M = F - Everything is Waving! Stock Market Forward Guidance - 7th Mar 22
Last 7 days
Cathie Wood Goes All in on Teladoc, ARKK INSANE Noob Investing Strategy! - 17th May 22
This is Anything but Positive for US Housing Market - 17th May 22
What Should We Do If There Is No Fed Monetary Policy Pivot? - 17th May 22
All Possible Ways to Earn Free Litecoin - 17th May 22
How low Could the Amazon Stock Price Fall? - 16th May 22
Cathy Wood ARKK INSANITY There is NO Coming Back! - 16th May 22
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH - 16th May 22
Sanctions, trade wars worsen US inflation - 16th May 22
AI Tech Stocks Earnings BloodBath Buying Opportunity - 14th May 22
Futures Contract – Trading Crude Oil With USO - 14th May 22
How to Get Kaspersky Internet Security for 80% Discount! Do not Pay Renewal Price! - 14th May 22
Sagittarius A* Super Massive Black Hole Monster at Centre of Our Galaxy REVEALED! - 14th May 22
UK Public Debt Smoking Inflation Gun - 13th May 22
What Happens When the Stock Market Dip Keeps Dipping? - 13th May 22
Biden Seeks Inflation Scapegoats; Gold Advocate Wins GOP Primary - 13th May 22
Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - 12th May 22
The War on Gold Ensures the Dollar’s Downfall - 12th May 22
Crypto Investors Stable Coins TERROR as Terra USD COLLAPSEs towards ZERO, Tether Next! - 11th May 22
INFLATION IS KILLING SILVER - 11th May 22
The Dominant Investing Theme of the Decade - 11th May 22
Is Bitcoin Headed to Zero? - 11th May 22
RECESSION RISKS 2023 - 10th May 22
The Future of the Dollar Seems So Bright It’s Blinding Gold - 10th May 22
Take Advantage When Markets Succumb to Fear - 10th May 22
How to Recognize a Less\ Than Obvious Opportunity (In focus: Corn) - 10th May 22
How to Ensure Financial Stability for Your Family - 10th May 22
The Stocks Stealth BEAR Market - 9th May 22
A Strengthening US Dollar Is A Double-Edged Sword - 9th May 22
Making Wise Investment Decisions - 9th May 22
Ways to legalize a Moving Company - 9th May 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Paper Money Yielding Madness

Currencies / Fiat Currency Nov 21, 2014 - 12:34 PM GMT

By: Dr_Jeff_Lewis

Currencies

The mainstream investor (with any time and "money" left), wielding an internet connection, and hell bent for yield is about to feel the temperature drop despite a thousand reminders that the cold winter is coming. (Or perhaps not - if you are in South Florida.)

Zero interest policy scorches the planner and the saver, rotting the seed corn while providing fuel for speculation, breeding the trading culture pestilence we see today. Yet again, another tiresome cycle appears. More bubbles to end all bubbles.


Modern bubble incarnations are fueled by a social media driven propaganda and the same dog and pony we've seen over and over. All the cash on the sidelines needs a willing seller to come back in.

The winter always comes. To illustrate the detachment from prudence...

The following comes from a retired relative (frustrated investor) after a long discussion about precious metals price manipulation.

A Confession

"Jeff,

This stock has been referenced as one of the most shorted stock, manipulated stock ever- perhaps an exaggeration but definitely painful for me. The company has a great scientific platform and a pipeline that has a lot of potential.

I have owned it for 10 years; bought when it was $1.20 and, unfortunately, at $11.20. My biggest mistake was when I sold every one of my 10,000 shares on a stop order that I placed the day before the FDA approved Belviq.

The price dropped from $11.00 to under $7.00 where I had ready to get out before I lost everything. It stayed down for seconds, was back up to $11.00 and I repurchased every share - bad mistake.

You can take a look at what it has done since then and I have added to my position to get my average cost per share down.

Bottom line is I am in for as long as it takes to get me the Porsche, yacht and cruise around the world. What has happened is that reality has finally set in that these companies selling obesity drugs are worth only as much as their revenue and profits.

It is said by longs like me that there are paid pacers that try to get less committed longs than me to see so the Hedge Funds can cover their short position."

And therein lies the rub.

In the metals – futures - the big commercial banks induce the hedge funds and small specs into collectively going short using the same methods as above.

The hedge funds or managed money category are notorious for utilizing spoof trades or fill/kill orders to induce weak longs into selling - and then covering in the aftermath. This is HFT, computer driven pump and dump scams at their worst; typically dumping or spoofing massive uneconomic lots into low volume overnight trading.

They drop the price, where the big commercial shorts buy back positions. The rally comes when all these specs decide to book profits and cover.

Of course, all of this is derivatives wagging the dog. Commentary comes in the aftermath of price movement, not the other way around. Ultimately, it adds an unseen layer of geometric risk to the markets in general.

The whole thing is uneconomic, unnatural.... really just an extension of the monetary policy underlying it all.

The retail investor gets thrown under the bus. Everything is managed in a paper fiasco. And that's just it. It's all paper.

My relative should know better, but will have a hard time at this point changing his view. He is one of a class of speculators chasing a dream with their retirement accounts. Ironically, they will be blamed in the coming crash. And they will willingly give up their accounts in the name of safety, allowing the bail ins.

Sometimes I imagine these guys, who are used to the trading terminals at Charles Schwab  (or speaking with friendly account managers) walking in to visit my coin dealer, in his tiny disheveled shop, with the am radio blasting, seeking shelter from the financial storm to come. And only for a tiny allocation.

Sadly, most people shall remain literally oblivious, by measure of average PM portfolio allocation, to general awareness. The Wall Street Journal/Financial Times reader has seen a few articles praising the coming of silver — but through the lens of the ETF. This perpetuates the paper madness.

It is not easy to escape the profit driven mentality at a time where the storm clouds read:

Return of Investment

For more articles like this, including thoughtful precious metals analysis beyond the mainstream propaganda and basically everything you need to know about silver,

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2014 Dr. Jeff Lewis- 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.

Dr. Jeff Lewis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in