Jim Willie: Silver Independence Day Breakout
By Jim Willie
The spot prices scream loud. The Silver breakout will be one to behold in the history books. Silver has broken the shackles of the vile banker cabal. Silver has begun its historic run-up. Silver will capture the world’s attention. The equivalent of the 1980 Hunt Brothers breakout in today’s terms would be $200 per oz. The fundamentals for Silver look better than almost every commodity on earth. Silver has declared independence from the control rooms and their paper gimmicks. The Silver imbalance is monstrous. Gold has broken the gates down with the British Exit vote, pushing its price over the tough stubborn $1300 resistance line. In the following days it has been adding to its gains. But Silver has emerged amidst the political smoke and deceptive din to ride hard through the gate. Silver is on a rampage, and has begun to make the news headlines. Silver has chosen July Fourth as the day to declare INDEPENDENCE from fiat paper money.Silver will be part of the new monetary system and trade payment system. The Jackass has advocated that Silver be 80% of investment portfolio, with Gold at 20%. The silver proof will be easy to see.
MASSIVE BREAKOUT AT THE 18 LINE
The initial breakout occurred with Gold surpassing the $1300 resistance mark after the British Exit vote in favor of leaving the European Union. It is increasingly recognized as a fascist dictatorship. The second thrust was with Silver surpassing its $18 resistance mark a few days later, when the big contract holders stood for delivery at the COMEX, a giant crime center. The range between 19.0 and 22.5 might not hold for very long. Do not expect much resistance at the 22-23 level, not given the current crisis circumstances. Plenty of washed out positions occurred in late 2013 and the several early months of 2014, which is a long time ago. The Cup & Handle reversal pattern is plain as day, with an 18 top and a 13 bottom, thus a 5-point potential upon breakout. The target at 23 will be easily reached, not in weeks but rather in days. It might take several days or a couple weeks to reach. The stochastic cycle indicator is powerfully positive. Sentiment is exceedingly strong. The monetary crisis is in full bore. Central bankers are viewed as the problem, not the source of solution. The true solution is the newly imposed Gold Standard, in which Silver will participate in a monetary role. The bigger Cup & Handle reversal pattern shows a 35 neckline. With the same 13 bottom, the indicated potential is 22 points, which produces a target of Silver $57 price. It could happen next year, or possibly sooner. Any announcement on international USDollar contract conversion into Gold terms could produce a massive non-linear upward dislocation in price, for both Gold and Silver.
The monetary crisis is in full swing. What remains is its powerful wrecking ball within the USEconomy and Global Economy in a climax phase. The USFed Quantitative Easing has wrecked capital in gigantic effect, from four years of application. Save the big banks, while ruining the capital base of the economies. The price weapon is on the verge of being unleashed, in a manner never witnessed before in the US centers. Price inflation is ready to be imported back to the United States after three decades of its export. The monetary crisis will bring about a new US Scheiss Dollar with a purely domestic role, its instant and repeated devaluation, strong price inflation from imports, followed by a call to arms to reduce the $500 billion trade deficit for the United States. Next comes investment by foreign entities, upon open invitation, then commercial colonization. The USDollar is dying, its head cut off by the Golden Sword and Silver Spike, the USEconomy put into the chopping block by highly destructive monetary policy and political influence. The banker elite killed the system.
SILVER PROOF FACTORS
Many are the factors pushing up the Silver price. The fundamentals and sentiment are perfect for a bull run perhaps 10-fold in the next two to three years or more. The factors are numerous, diverse, convincing, and powerful. The monetary system is destroyed, while the banking system has been wrecked. No faith exists anymore with the stewards of money. Their supposed solutions are contributing to ruin. The following are over-arching factors driving up the precious metals, which are money:
- Official USFed (and other central bank) monetary policy has been a dismal failure
- Official USDollar monetary supply dictates Gold & Silver prices at least 5-fold higher
- Rescues of banks with easy money will continue forever, to treat intractable insolvency
- Banking system will re-capitalize using Gold bullion as reserve asset
- The USGovt and European Union Commission have been revealed as fascist dictators
- Another round of QE to Infinity is at the door, waiting for announcement
- Cracks are showing in the USTreasury Bond market after the fake rate hike
- Negative rates push investment funds into precious metals, not business lending
- Threat of bank account bail-in pushes working funds more into precious metals
- Money market shifts within financial firms hint of Special USTreasury Bond arrival
- The USGovt suffered a hidden debt default a few months ago
- War by the USGovt to defend the USDollar has failed, and unmasked evil motive
- An end must come to money counterfeit by Langley and certain camps.
An over-weight in Silver versus Gold in investment strategy makes perfect sense. The central banks own huge vaults of gold bullion but no silver bullion. Thus on supply side, Silver wins. The industrial demand for silver is massive and growing in uses, but not for gold. Thus on the demand side, Silver wins. The following are powerful factors related to Silver, driving up the Silver price:
- Massive contracts are standing for Delivery at the COMEX (like 530 moz), volumes not seen in many years, as buyers are not rolling into future month contracts
- Shanghai demand for Silver in June was 4265 tons, up from 3250 tons in June 2015 and way up from 1850 tons in June 2014
- COMEX warehouse is down to less than 22 million oz (moz) silver, whereas a year ago it was in the 60 moz range
- Total Silver coin demand is six times greater than pre-Lehman, and 50% greater than during the Lehman crisis in 2008
- A 34 million oz deficit coin demand from US & Canada, over mine output, has underscored the shortage, without any consideration of industrial demand
- Silver scrap supply is down 44% since 2011, an important supply component
- A 42-to-1 ratio of paper silver claims per physical ounce has emphasized the corruption in the COMEX price mechanisms toward price suppression
- Huge demand from Silver powder in solar panel construction, with Japan the leading powder supplier and with China the leading producer
- Indications that China is stockpiling Silver, and might have hired JPMorgan as broker in order to conduct the accumulation
- Mine shutdowns have hampered silver output, due to suppressed price and lower profit potential
- Chronic economic recession has reduced industrial metal demand, thus shutting down some mines that have By-product Silver output, thus further reducing its supply.
BIG NEW DEVELOPMENT ON GLOBAL FRONT
THE CHINESE FINANCE OFFICIALS AND THE BASEL-BASED BANK FOR INTERNATIONAL SETTLEMENTS ARE NEGOTIATING A GLOBAL REFORM OF ALL BILATERAL CONTRACTS. THEY STRIVE TO ALTER USDOLLAR-BASED CONTRACTS, AND CHANGE THE CONTRACT TERMS TO GOLD SETTLEMENT. THEY ARE WORKING ON A GLOBAL CONTRACT AT THE $5000 GOLD PRICE IN CONTRACT CONVERSION. CHINA REPRESENTS EASTERN INTERESTS, WHILE BASEL REPRESENTS WESTERN INTERESTS. It is not yet clear what will happen to commodity price mechanisms.
If and when the global contract reform is completed, all bilateral contracts will be shifted into Gold settlement, no longer USD settlement. The result will be the USGovt is then made free to launch a domestic-only new USDollar, called disrespectfully the New Scheiss Dollar by the Jacksass for the last two years. It will resemble a Third World currency, and be subjected to a sequence of devaluations. A $500 billion trade deficit will require several years to overcome. If reduced by 50% in five or six years, it will be a miracle. The $1 trillion federal deficit has a different solution in mind. The USGovt plans to commandeer pension funds, forcing investment in the Special USTreasury Bond. It will not be a confiscation, but rather forced conversion with all the disadvantages of currency devaluation that come.
NEW SCHEISS DOLLAR & GOLD TRADE STANDARD
In time, expect an eventual refusal by Eastern producing nations to accept USTreasury Bills in payment for trade. The IMF reversal decision assures this USTBill blockade in time, and might accelerate the timetable. The United States Govt cannot continue on five glaring fronts of gross negligence and major violations. These violations have prompted the BRICS & Alliance nations to hasten their development of diverse non-USD platforms toward the goal of displacing the USDollar while at the same time take steps toward the return of the Gold Standard. The violations are:
1) to import finished goods and crude commodities, paying with IOU coupons
2) to commit multi-$trillion bond fraud in its big banks, done without legal prosecution
3) to do QE bond purchases in applied hyper monetary inflation, monetizing debt
4) to rig all major financial markets in favor of the primal USDollar
5) to engage in numerous regional wars to support the USDollar.
The New Scheiss Dollar will arrive in order to assure continued import supply to the USEconomy. It will be given a 30% devaluation out of the gate, then many more devaluations of similar variety. The New Dollar will fail all foreign and Eastern scrutiny. The USGovt will be forced to react to USTBill rejection at the ports. The US must accommodate with the New Scheiss Dollar in order to assure import supply, and to alleviate the many stalemates to come. The United States finds itself on the slippery slope that leads to the Third World, a Jackass forecast that has been presented since Lehman fell (better described as killed by JPM and GSax). The only apparent alternative is for the United States Govt to lease a large amount of gold bullion (like 10,000 tons) from China in order to properly launch a gold-backed currency. Doing so would open the gates for a generation of commercial colonization, but actual progress in returning capitalism to the United States. The cost would be supply shortages to the USEconomy, a result of enormous export increases to China.
The colonization has already begun, with secret deals galore. It is very unclear what deals are being struck in order to arrange for the USGovt to have a proper gold reserve hoard, for backing a new legitimate USDollar. Meetings at very high level are in progress, with little if any popular representation, only elite members present. Failure to produce a legitimate bonafide gold-backed currency would mean the United States must proceed with the New Scheiss Dollar, an illegitimate fake phony farce of a currency. It would be subjected to a series of devaluations. The result would be heavy powerful painful price inflation from the import front. The effect would be to reverse a generation of exported inflation by the United States. The entire USEconomy would go into a downward spiral with higher prices, supply shortages, and social disorder. However, the rising prices would come from the currency crisis, and not so much from the hyper monetary inflation. That flood of $trillions has been effectively firewalled off.
As Ron Paul has stated, one cannot blame capitalism for the current failure, since we have had almost none! He can take credit for the independent audit conducted on the US Federal Reserve itself in 2009. From the audit, it was learned that $23 trillion in near zero cost loans were granted to the USFed owners, by the banker cabal to itself. The US population remains largely asleep and steeped in ignorance on the entire financial crime scenes. They must prepare with reduced paper wealth held as assets, and more Gold & Silver bars & coins held instead as assets. The reckoning has begun.
The Gold price will find its true value and price over $10,000 per ounce. The Silver price will find its true value and price over $300 per ounce. In reaching these levels, the ratio will return to the 30-1 range. Several steps have been laid out by the Hat Trick Letter toward the return of proper price to precious metals. The major upcoming events will be exciting to watch unfold, one after the other, in an inevitable sequence away from fascism and concentrated uni-polar power, with a strong movement toward freedom and equitable systems with distributed power. The steps will each involve a quantum jump in the Gold & Silver prices. The process will take a few years, but might be breath-taking in speed once the process is begun. The steps involve:
- the critical mass of rejected USTBills in trade settlement, citing its corrupt roots and illicit monetary policy as foundation
- the return to the Gold Trade Standard and introduction of Gold Trade Notes as letters of credit, in replacement for a fair tangible payment system (no more IOU coupons)
- the recapitalization of the global banking system with Gold as primary reserve asset, so as to relieve the grotesque stagnation, insolvency, and dysfunction
- the seeking of equilibrium in Supply vs Demand in the new fair uninhibited market, with exclusive control removed from London and New York, and placed elsewhere like in Shanghai, Hong Kong, Dubai, and Singapore.
- the seeding of BRICS gold & silver backed currencies from participating nations within the Alliance (likely several with slight variation in features)
- the re-opening of the gold mine industry with some blue sky, and relief from the Evergreen element at Barrick
- the remedy toward owners of over 40,000 tons of rehypothecated and stolen gold in bullion banks across the world (primarily in Switzerland.
Permission to Post – Jim Willie & GoldSeek.com
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Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors atwww.GoldenJackass.com. For personal questions about subscriptions, contact him at [email protected]
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