Global Warming Savior of Employment, Saving is the New Investing & The Waterboarding of Gold & Silver
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The news from the bullion front was that the metals would be quiet until today, as the June jobs report saw the light of day. Yesterday, this should have changed, for yesterday central banks the world over cut deposit rates, from the ECB all the way to Kenya. In between, Denmark cut its rate to -2% and China dropped their rates for the second time in as many months down a quarter of a percent to 3%.
When the metals did nothing yesterday, the thought on the minds of many within the industry was: if this doesn’t send metals higher, what will? The truth is, rangebound choppiness from here on out will be the M.O. of gold and silver. Yes, they will trend higher, but this will be a longterm, inflation-bound trend. Gold and silver are no investment. They are the ultimate savings account: private, inflationary and anti-establishment.
Again, gold and silver are not an investment. If that is what the mainstream news call them, then look at the complex differently. The economic world is upside down, and what once was in abundance is now at a premium and vice versa. Where once there were few enough dollars to justify valuing other items in terms thereof, that is the case no longer.
Remember last winter when unemployment numbers kept moving downwards by government accounting tricks? Well, with that trend gone, and US turbulence now the official story, explanations for the illusory, brief reprieve are being dished out, in a wild way. Check out this CNN explanation of that blip when employment “spiked,” citing, of course, the experts:
Economists have attributed the strong hiring in the winter to unusually warm weather.
So, unusually warm weather in the winter leads to strong hiring, whilst unusually hot weather in the summer leads to a lack thereof. In a sudden development, which should take the precious metals world by storm, it appears that global warming might have an effect on the world economy. Whether global warming will be bullish or bearish for the economy might take decades to learn, but one thing is for sure – if the former is the case, the fundamentals of the entire precious metals gold market would be undermined.
Individuals who cited mismanagement of governments and transnational corporations everywhere – that is, abandonment of populist principles and ethical concern – will be harangued as near-sighted, a mob of neophytic conspirers. For, as the world continues on its path of destruction and inequality, tolerable winter weather could be our savior.
The managed medium-term bring down of the precious metals continues. It’s the water-boarding of the precious metals markets. Bring the metals up for hope, before bringing them back under water – maybe for the last time. Today, 6 July, gold and silver trade down towards important psychological supports. Currently, gold is at $1580. At $1550, gold is threatened with $1525 and $1500. Down near $27, silver is threatened with its, what, fifth or sixth bottom in the high $26 handle? From there, $26.75 and $26.15 threaten silver with a $25 handle. From there, it is my belief the floor might be the bottom of the fall of 2009 range, between $17.5-$22 for silver. Clearly, silver seems more top-heavy than gold, though both do seem very top-heavy.
From there, the trend continues. Long-term price appreciation. The perfect conditions for a savings account, but not as what’s generally understood to be a good investment. Saving is the new investing. The biggest development in the precious metals over this period has not been that central banks are beginning to view gold as reserve, but, instead that, in the silver market, commercial hedgers are as long as they’ve been in thirty years: 15,000 contracts of 5,000 ounces short. Conditions like this will continue to send gold and silver higher in terms of USD and other fiat currencies.