The Phaserl


Metals Report: Calm Before The Storm

from FTM Daily:

The final months of 2016 could begin to bear close resemblance to the closing months of 2015. You may recall that from Oct-Dec 2015, gold bounced along its lows between $1040 and $1100/oz in anticipation of the first rate hike in years. The stock market was trading sideways near all-time highs. When the measly 0.25% rate hike finally came to fruition in December 2015, it turned out to be a “buy the rumor, sell the news” event that marked the bottom for the metals and a top for the S&P 500. After the December 2015 hike, 2016 began with a powerful rally across the precious metals complex, while the S&P printed the worst Q1 on record.

In my estimation, it’s unlikely that the Fed will raise rates in November just prior to the election, but a December rate increase appears increasingly probable.  That would set the stage for a potential replay of last year.  If the market continues to anticipate Fed action in December, look for the metals to churn sideways for a couple of more months before the uptrend resumes. With reported earnings down some 20% from the peak of eight quarters prior, the fundamental case for a significant stock market correction is well grounded.

That said, if price and volume do not confirm the above scenario, I will respond accordingly to the market signals given.

Regarding all of the drama and intrigue surrounding the presidential election, it should be noted that unless the immutable laws of basic arithmetic are somehow altered, neither candidate will mend our economic woes.  The fact that we’re fast approaching a point where the sum of defense military spending and interest payments will combine to consume 100% of Federal tax receipts illustrates that point.  Unless the fundamental issue of a private banking cartel lending currency into existence -with interest- is addressed, political bluster about solving our looming debt and currency crisis is exactly that- bluster.  No carefully crafted concoction of tax, monetary, or fiscal policy can square the books in a paradigm of more debt and liabilities outstanding than currency in circulation.  Under the current debt-based monetary system, meeting future obligationsrequires more currency creation, and thereby more debt.  I’m not sure either candidate can even spell the word “fiat,” let alone possess the acumen or integrity to formulate a plan to return to a system of honest weights and measures.  Got Gold?

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