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A look at the Gold and Silver Charts (18.04.2024)

Please have a look at the Peter Schiff article appended in full at the bottom of this letter about The Roman Empire analogy.

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We have an analogy between the bond market, the stock market, the war market and the dynamite as shown above.

It is difficult to imagine the consequences as the fuse burns down. It appears that a small fire is burning along the fuse. Eventually the fire lights the charge and the consequences are way beyond the expected result.

The bonds are vulnerable to an interest rate hike. The banks are in a pickle. They borrow short and lend long term. In order to make money, they buy bonds.

If interest rates increase, the bond value drops. If there is a call on those investments they are forced to sell at a loss. This is not conducive to long term bank survival.

The FED may be forced to cut interest rates irrespective of the long term damage, firstly to save themselves, (Interest payments over a trillion dollars a year), secondly to save the banks, so that their bonds regain some value.

How long can the FED carry this burden and how long can the banks survive on this course?

Even though the stock indexes are at, or close to all time highs, the underlying market is in big trouble. As of yesterday 60% of stocks traded above the 200 period moving average. ($DITH) 

So the large cap popular stocks are carrying the market higher while the smaller stocks languish. Does this indicate the slow burn before the implosion?

War: First some skirmishes, then bombing some small weaker Arab states. Then regional ambitions  are exercised locally. Then  requirements to obtain minerals and control their supply, leading to conflict.

Then Russia and Ukraine, then Israel and Gaza, opening fronts in Lebanon, West Bank, Jordan, and Yemen. Now Iran enters the conflict directly, China looks at Taiwan. See the slow burn? When does the fuse ignite the dynamite? What are the consequences?

BITCOIN AND GOLD

BTC:GLD below shows bitcoin  still underperforming Gold, no signal to buy bitcoin yet. I am aware of the halving, but see no signals to buy Bitcoin yet.

$BTCUSD:$GOLD Bitcoin to US dollar/Gld CRYPT 18 April 2024
GOLD AND SILVER STOCKS

Gold physical is now outperforming the stocks.

$GOLD:$HUI Gold- Continuous Contract (EOD) Gold Bugs Index - NYSE - 18 April 2024

Physical silver outperforms silver stocks as of this week.

$SILVER - SIL Silver- Continuous Contract (EOD) Global X Silver Miners ETF 18 April 2024

GOLD AND SILVER

Silver continues to outperform gold. The silver:gold ratio is coming off nicely from around 92:1 early this year to around 84 plus presently.

$GOLD:$SILVER Gold Continuous Contract - (EOD) Silver - continuous 18 April 2024

GOLD TO USD

Gold v USD  Gold is outperforming the USD. Even though the USD is strengthening, rates are up and so is gold. A great sign for future gold strength. These things would normally mitigate against the gold price. Chinese jewelry demand is adding to price pressure.

$GOLD:$USD Gold - Continuous Contract (EOD) CME 18 April 2024

Gold and the USD usually work in opposition to one another as can be seen on the chart below. This is definitely not the case now. The fear trade as well as countries loading up on gold see them both run up in tandem. Note the Green Dollar running up with the candlestick gold representation.

$GOLD:GDX Gold - Contract 18 april 2024

A LOOK AT THE GOLD AND SILVER CHARTS
TodayLast Week
Gold Price$2,382.00$2,344.00
Silver Price$28.45$28.12
Gold:Silver ratio83.66:183.22:1
Gold Miners bullish percent index78.6775.00
Dollar Index106.10105.14
Dow:Gold Ratio (BahaUS 37889.00 Gold price, $2,382.00)15.9016.40
Current USA inflation rate (Dept. of Statistics)3.5%3.2%

Gold’s low of the week was $2,324.00 and the high was $2,398.00, now trading at around $2,379.00.

  • The monthly chart for Gold is a hold. We bought it at $1,800.00 and have held it to date. It looks overbought but the indicators are mainly positive.
  • The weekly chart remains a hold.  Looking overbought but no sell yet. Subject to my worries on the spike high last week. See below.
  • The daily chart is a hold. Price is looking overbought but all indicators are positive so we hold. I am worried about the spike high which has not yet been broken and which indicates the possibility of a consolidation at best and price breakdown at worst. (Chart below).

$GOLD Gold - Continuous Contract (EOD) CME 18 April 2024

The low for Silver this week was $27.56 and the high $29.02, trading around $28.43 at present.

  • Silver on the monthly chart indicates a hold. It needs to break $30.35 then $50.00. The signals look strong for now.
  • The silver weekly chart is a hold. We bought it for $24.00. It has broken out of its long-term trading high of around $28.60 and pulled back inside it again. Silver weekly looks overbought but no sell signal yet. 
  • The silver daily chart is a hold, looking overbought it has broken out of the long-term trading area. If it holds above $28.00 that is a great sign. Silver daily is very close to a sell, but has not given a definitive signal yet. The spike high on silver is a problem to be overcome as discussed in Gold Daily above. (See chart below)

$SILVER Silver - Continuous Contract (EOD) CME 18 April 2024



April 15, 2024

[Note from Peter: This historical parallel from the Roman Empire is the perfect analogy to the situation today– the US appears far weaker than it was even just a few years ago. And that has some pretty substantial implications for the future.]

When the barbarian king Rugila died in the year 434 AD, Roman Emperor Theodosius II likely rejoiced that his mortal enemy was no more.

Rugila (and his father Uldin) had been invading and terrorizing Roman territory for decades; but the Empire was so weak at that point that Theodosius was powerless to stop them.

By the early 400s, Rome was an almost unrecognizable shell of its former greatness. Nearly two centuries of civil war, plague, inflation, invasion, and economic malaise had sapped the empire of its strength and reputation… and foreign kingdoms didn’t hesitate to take advantage.

In the early 420s, Theodosius finally resorted to paying off King Rugila, essentially bribing him with an offer of 350 pounds of gold ANNUALLY.

Rugila took the money… probably bewildered at how easily he was able to bend the supposedly powerful Roman Empire to his will.

Theodosius subserviently made the payments year after year, and managed to pretend that the deal was a win for Rome.

The Emperor acted as if he was still powerful and in charge of the situation. He even tried to convince his subjects that the annual tribute was payment for some bogus service that the barbarians were supposedly providing, rather than the ransom money it really was.

And that’s why King Rugila’s death was probably such welcome news to the Emperor. Finally, the menace was gone.

But unfortunately for Theodosius, Rugila’s successor would prove to be a far greater threat.
His name was Attila, known to history of course as Attila the Hun. And he wasted no time picking up where his father and grandfather left off: capitalizing on the Roman leadership’s weakness and cowardice.

Attila’s first order of business was to renegotiate the peace deal and make even more demands of the Roman Empire. Theodosius caved almost immediately.It became known as the Treaty of Margus; Attila walked away with DOUBLE the annual tribute (an increase from 350 to 700 pounds of gold). Plus, he forced the Emperor to eliminate trade sanctions against the Huns and open up Rome’s vast markets to Hun merchants.

Lastly, Attila negotiated a prisoner swap, receiving some very high value Hun nobles who had taken refuge in the Roman Empire. In exchange, Theodosius received a few low-level soldiers… and the Emperor had to pay an additional ransom for each one of them.

Like his father Rugila, Attila was probably astonished that the ruler of the supposedly most powerful empire in the world had no backbone, no confidence, no will to stand and fight.

So naturally Attila’s demands did not end with the Treaty of Margus. He knew an obvious advantage when he saw one, and he continued to exploit Roman weakness until the end of his life.

Despite promises of peace, for example, Attila constantly found new excuses to set aside the treaty and make incursions into Roman territory.

He crossed the Danube and laid waste to Rome’s provinces in the Balkans, forcing Theodosius to renegotiate the peace treaty once again. This time the annual tribute was tripled to 2,100 pounds of gold.

A few years later, Attila demanded to marry the sister of Valentinian, the ruler of the western portion of the Roman Empire. Valentinian refused the proposal (as well as Attila’s demand for half of the western lands), so Attila invaded Italy, plundering and pillaging along the way.

Attila finally died in 453 AD before he had the chance to completely destroy the empire. But other barbarian kings also saw the ineptitude and weakness of Roman leadership, and they followed in Attila’s footsteps.

That’s the thing about cowardice and weakness: adversaries tend to notice and take advantage. It’s no different today.

Iran, Russia, and China have all paid close attention to the weakness and cowardice of the Biden administration. They see the social and financial decay of the United States. The political instability. The woke priorities of the Defense Department. And they can barely believe their eyes.

They know that the guy with five decades of experience has no backbone… that he’s a corrupt, brainless stooge who bends to the most radical wing of his party. He stands for nothing, abandons his allies, and gives away the farm for absolutely nothing in return.

He traded away the most valuable Russian prisoner in US custody for a WNBA player. He freed up potentially tens of billions of dollars for Iran in exchange for little more than a phony promise that they won’t develop nuclear weapons. (But it seems the Ayatollah pinky swore, so it’s all good.)

He allows invasions and incursions of US territory… and not only does nothing but sues state governments to prevent them from securing the border.

He tries to prevent allies from defending themselves. He pathetically attempts to use the Strategic Petroleum Reserve to boost his sagging approval rating. And he caves anytime a belligerent nation threatens violence.

These are all signs of obvious weakness that adversaries are all too happy to exploit. Iran is just the most recent example.

After this weekend’s attack against Israel, Iran specifically warned the US against responding. Biden immediately wilted. It’s pretty clear who wears the pants in the relationship.

And just like the case of Attila, it never ends. Any treaty that is signed, any agreement that is reached, is simply a lie. They’ll never keep their word, and they’ll continue milking the obvious cowardice that is on display for the world to see.

Now, this story of weakness isn’t just about Joe Biden. Congress is also weak and ineffective. Many courts and judges now ignore the rule of law and are simply activists in robes. The military is suffering a very public recruiting crisis, along with outdated weapons systems and critically low mission readiness.

It goes beyond government too. Big Media is a left-wing propaganda machine. Premier universities cultivate radicalism. Even Boeing can’t seem to build a quality aircraft anymore.

Optics matter, and the end result is undeniable: America appears far, far weaker from even just a few years ago. And adversaries have no intention of letting up.

To your freedom,

James Hickman
Co-Founder, Schiff Sovereign LLC


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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

Please contact us to arrange the purchase and storage of your gold and silver requirements in a safe, insured location outside of your jurisdiction.

If you are interested in an overview of Fort Kobbe, you may want to have a look at this video: Mike Brown, Director, Fort Kobbe, International Vaults, A DotCom Magazine Exclusive Interview

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.

Larry Simon
Larry Simon

Larry Simon was educated at the University of Witwatersrand, Johannesburg, South Africa and is an experienced businessman specialised in management, investment and finance.

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