Derivatives are a huge worry as the unimaginable values of contracts are terrifying. The list of banks and amounts contracted are available at this address below. A long list but worthwhile looking at the first twenty or so.
I believe that the FED will have no alternative but to increase rates.
If we look at the chart below, we see consequences at lower and lower levels. Raising rates correlates almost directly with recessions. This makes perfect economic sense.
If the FED was serious about damping inflation and wanted to leave the economy reasonably intact, they would be increasing the reserve requirements which the banks should hold.
This would force the banks to lend more carefully and clean out businesses operating on thin credit margins, instead of increasing costs to already strapped individuals.
Gold and Bitcoin
At this time I do not see a buy signal on the NYSE Bitcoin Index nor do any of the other indicators on this index that I watch say it is a buy at present.
The onslaught against the bigger crypto exchanges continues. In my opinion Bitcoin has been protected, so my cynical mind says it is government controlled and monitored.
This does not mean that it is inviolable. When CBDC’s are established it will be an unwanted competitor to governments.
Gold and Silver Stocks
Gold and silver stocks have been on a rollercoaster ride this week. I see a number of stocks on the cusp of giving buy signals. The royalty stocks have been disappointing, but understandably need reliably increasing metals prices to rise reliably.
For interest sake uranium stocks are beginning to look compelling.
Gold and Silver
The chart below by Stansberry Research reveals perceptions of the five best investments over the next year. It is of note how property, although still the best investment, has turned down sharply, so have stocks and mutual funds, while gold has turned up.
This is to be expected in this economic environment. I would certainly not write off property or stocks as inflation protectors, but I would get out as soon as I saw deflation on the horizon.
Property particularly cannot be sold quickly in most cases and is subject to being highly taxed, which cannot be escaped.
A look at the Gold and Silver Chart
|Gold: Silver ratio
|Gold Miners bullish percent index:
(BahaUS 33,055.00/Gold price, $1,954.00) =
|Current USA inflation rate (Dept. of Statistics)
Gold’s low of the week was $1,940.00 and the high was $1,978.00, now trading at around $1,958.00.
- The monthly chart for Gold is a hold and still looks positive.
- The weekly chart is a hold. The spike high is not supported by the other signals, so no sell yet.
- The daily chart gave a buy indication last Thursday evening and is holding on to it by the skin of its teeth.
The low for Silver this week was $23.45 and the high $23.93, trading around $23.90 at present.
- Silver on the monthly chart remains a buy.
- The weekly chart is a sell, within a whisker of turning up again.
- The daily chart is a sell, so out of the market.
Price is inside the long term trading range. The indicators are looking better, but no buy signal yet.
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On the Stockcharts.com charts, the blue vertical lines are our proprietary system buy signals and the red vertical lines are system sell signals – for information purposes only
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This is my interpretation of the market and is not to be taken as financial advice. Before making any buy or sell decisions I recommend that you consult with your professional financial advisor.