Gold and Silver Prices -
Filtering Out the Noise
By Dr. Jeffrey Lewis
Silver and gold price sentiment is an
unmentionable reflection of the desires of central banking, backed by a currency
enforced by decree. Real price discovery is the forbidden yet beating heart of
darkness - where few are willing to travel.
A million barriers are self-constructed to
protect the sinister truth. And a million barriers rise up to justify price
action, whether up or down.
Ukraine and the Non-influence on Prices
These issues are exceedingly complex and long
standing. They involve conflicts that have been gathering and off-gassing for
Developments in Asia can be tracked decades
and more. There are risks and convergences that would have been priced in long
ago if the markets were not broken.
To suggest that prices have been or are
suddenly being "priced in" is borderline absurdity.
For the professional trader, there is an
overlapping yet prevailing mentality that the real drivers of the market are the
hedge funds and the speculators. The overlap is where many of these
professionals can see perfectly that the big picture is unsustainable. But there
is a desperate need to justify what is left of a disappearing art. Technical
analysis is resurrected daily to justify a futile game where the machines took
over long ago.
Long time readers know that in order to
understand the massive disconnect between current price and fundamentals, one
must follow the money to price discovery. This is becoming universal across all
asset classes - whether equities, bonds, or even real estate.
Paper futures markets were once the cleanest
mechanism for sorting out fair price by matching production with current and
near future demand. Now they are completely dominated by speculators - wolves in
sheep's clothing pretending to be commercial entities. But in reality they are
massive consolidated multinational hedge funds that own the sellers and control
the regulators; massive and consolidated positions which allow them the constant
potential to move the price any way they decide.
But they are parasites without any concern
about fundamentals. They are pure short term - profit-driven and played by the
most powerful forces. Contrary to popular belief, they are not selling, but
accumulating illegally by gaming the price at will.
The HFT revelations have entered the limelight
and burned yet another construct into the unconscious minds of the masses. Most
people will not take the time to understand the subtlety, but the underlying
effect is a more gradual loss of confidence in the institutions that informally
back the world’s reserve currency.
But make no mistake: the return to fair value
will be set upon and accompanied by another million false comments.
Those whose livelihoods depend on these
markets love to ridicule those who protest rigged markets. A favorite argument
goes something along the lines of: "You notice how these guys never complain
when the price is flash-crashed up?" Any honest observer of these markets
recognizes the gaping disconnect between the false reality of price massively
below inflation-adjusted reality. The return to fair price will not be like a
journey to the moon. It will be more like finally arriving back home to earth in
an instant. Up or down, range bound prices are a fixed affair benefiting the men
behind the curtain either way.
Once price control mechanisms ultimately fail,
there will be absolutely no question about the value and scarcity of monetary
assets. History will be written by those who held some part of reality as a
literal and metaphysical anchor.
For more articles like this, including
thoughtful precious metals analysis beyond the mainstream propaganda and
basically everything you need to know about silver, short of outlandish fiat
price predictions, check out