Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

The Fed Giveth and the Gold Bullion Banks Taketh Away…

Commodities / Gold and Silver 2016 Jun 17, 2016 - 06:18 PM GMT

By: The_Gold_Report

Commodities

Precious metal expert Michael Ballanger breaks down the gold price roller coaster surrounding the Fed's decision not to raise interest rates.

Janet Yellen just blew all remaining semblances of credibility believed to be still present at the U.S. Federal Reserve Board.


We have all heard for the past month or so that the Fed was going to hike the Fed Funds rate at today's meeting, the anticipation of which caused a rally in the U.S. Dollar (USD) and a surge in stocks—all while the bond market was rallying in response to weakness in the macroeconomic environment.

Well, they didn't raise as predicted back in March because of "China weakness," so today they didn't hike because of "soft exports" and "vulnerabilities in the global economy" and "Brexit worries" and a host of other totally clueless hypothecations. But the bottom line is that they didn't hike because the ensuing dollar rally would impair the collateral that underpins the massive debts owed by governments and homeowners to the banks that hold that debt. Stocks reversed lower when it became clear that the Fed has absolutely zero control over the U.S. economy, and is now truly caught in the headlights because banks are getting killed with the yield curve this "flat," and since the Fed's shareholders ARE "the banks," it takes on an aura of the surreal.

As long as I have been writing about markets (and that dates back to 1987), I have never EVER had any respect for the banking industry. To think that in Canada, when you get your paycheck and after your employer has deducted taxes and benefits from it, you cannot get paid with cash. In my first job as a golf pro shop attendant ("club cleaner") in the 1960s, the club pro handed out little banker envelopes with cold, crisp bills inside. After stashing the bills in my jeans, I would take them home and stuff them in a Jumbo peanut butter jar until I had enough bills to open a bank account. Then I would go down to the bank with the Jumbo jar in a canvas sack and present it to the nicest teller I could find and she would count it out carefully; give me my receipt; and update my bankbook. If I wanted to empty the entire account to buy a new pair of hockey skates or a new lacrosse stick from the Oneida First Nations (who made the BEST lacrosse sticks in the world), I could do so and still leave the account open AND get a smile from the teller.

Today, try to get cash from your employer. Secondly, try to put cash into a bank these days. Third, try to get cash OUT of a bank (over $5,000) without signing a form that tells the government where you are going to spend YOUR money. When they decide to eliminate cash transactions and go totally electronic, not only will they be able to trace your movements, they will be able to see what you buy, and when and where you buy it.

The freedoms lost during the last fifty years are going to only accelerate as the Dynamic Duo of Babbling Bankers and Panicking Politicians move to protect their unwarranted and fully undeserved positions of power ("POPs") by attempting to confiscate the earnings of citizens through taxation, and the savings of citizens through bail-ins, and the assets of citizens through some form of expropriation in the guise of an "Emergency Measures Act." Welcome to the world of the "New Normal" and 24-hour government surveillance.

When Janet Yellen started answering questions today, I suddenly had another Eureka moment, which have been coming with alarming regularity as the years on my birth certificate begin to pile up. That moment is the point in the interview or the chapter in the book where I call "Bullshit," and have to come to the realization that these deified morons called "central bank governors" are actually no smarter than my local barber, who has been a real estate investor for the past forty years and is now wealthy beyond belief.

Ayn Rand referred to these people as "looters," and that is truly where the consortium of elected politicians and unelected elitist interests reside; bankers pay for political campaigns and politicians are then indentured to the banks. Entire U.S. industries have been laid to waste in the interest of globalization all for the benefit of the looters as they move manufacturing jobs to Mexico and China in order to meet their minimum ROI and bonus benchmark. Criminal.

The junior miners ETF (GDXJ), which I own fully-hedged with July $35 and July $40 puts and with a sub-$19 adjusted cost base from last year, has now broken out along with gold to new high ground above $42, with gold trading up through the prior high of $1,306 on May 2. (See the chart above.) If you are a follower and proponent of classic technical analysis (which I am definitely NOT), you are now piling into the gold market because it has broken out to a new recovery high.

The problem with that as an "actionable strategy" is that such a trade set-up is EXACTLY how the bullion banks trap the public and the Large Specs, during which time they issue unlimited amounts of paper gold shorts to meet the demand. Then they pull the ripcord and take it back down.

To illustrate this point we have to go to Gold Anti-Trust Action Committee cofounder Chris Powell's famous line that reverberates around the walls of my consciousness on a daily basis: "The are no free markets anymore; there are only interventions." Yesterday, after the Federal Open Market Committee (FOMC) results were out, a CNBC economic analyst and Grade A snapperhead opined that "The market's won. The Fed has completely capitulated to the market's point of view. The Fed is not leading the markets here; the markets are leading the Fed. Every single time." Notwithstanding that many, if not all, of us who have spent more than five years trading markets have known full well that the Central Banks were going to lose control.

So when Rick Santelli responded to Steve Liesman's rant with, "There is no market left. There is Janet; there's Mario Draghi; there is Abe. THERE IS NO MARKET LEFT," there were all reading from the GATA playbook by essentially paraphrasing what Chris wrote in what feels like years ago.

Back to the $1,306 breakout, for reasons mentioned above, I find it exceedingly difficult to jump up and down while "Buying the BREAKOUT," with such a litany of gold market interventions having nipped such breakouts in the bud in the past. Of course, this time could be different and seasonality could fail, leading to an early test of the long-term downtrend line at $1,450, with the NYSE.Arca Gold BUGS Index (HUI) and the TSX Venture moving sharply higher. "Stay long the GDXJ but remain fully-hedged" is the order of the day, because while it certainly could be "different this time," the odds favor it NOT being "different this time." If I'm wrong, all I lose is the cost of the hedge and NOT my core positions.

As I close out today's missive, I notice that it is 1 p.m., and as we have 25 minutes left in the Crimex session, the Cretins have been successful in sucking the technical traders in between $1,308 and $1,318, and have now lowered the boom on them. The "but it's different this time" crowd is all in shock, working the calculators feverishly to see what their margin call is going to be. But today's reversal is a critical one, because if we take out $1,287 in the Access Market hours, the technical signal will be egregiously bad. Failed breakout with a double top and an outside reversal to the downside? Uglier than a one-eyed orangutan on steroids.

2:10 p.m. EST and the last trade for August Gold is $1,289.35. . .ugly.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger's adherence to the concept of "Hard Assets" allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

Disclosure:
1) Statements and opinions expressed are the opinions of Michael Ballanger and not of Streetwise Reports or its officers. Michael Ballanger is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector. Michael Ballanger was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

All charts courtesy of Michael Ballanger


© 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

6 Critical Money Making Rules