On the one hand, the major banks are generally forecasting a
continuation of the recent 3 year trend, and predict small to medium price
declines. The successful contrarian financial market forecaster Robert Precther
at http://elliottwave.com
is more bearish, predicting $9.68 (more about these forecasts below).
On the other hand, the “little people” are bombarded with forecasts
of fantastically massive price rises for silver and gold. Clif High of http://halfpasthuman.com
has been using linguistics in blogs to predict the future for some years and is
stating (and has been for many years) evidence for $600 silver soon! http://kingworldnews.com
interviews “independent” providers of gold and silver investment services and
the words “surge” and “soar” are most common adjectives, with projections of
multiples 10 to 100x the current price level.
The basic reason for this dichotomy is that the current fiat
money scheme is a pyramid scheme – the interest that is required to pay back
debt in the aggregate must come from new issuance of money. This new money
created at no cost dilutes the value of all existing money and is a wealth
transfer to the controller of the money (assuming counterfeiting is stamped
out). The controllers of the fiat money are those who control violence in
society for they are the ones that can disrupt the best. There is
historical evidence that although fiat money schemes can last well past their
economic value, 40 years is the median length of time for fiat money, and the
US dollar was unpegged from gold in 1971. So the little guy is
worried/welcoming a change from the current wealth stealing system that runs on
violence, debt, and war.
But will those who use violence not make a more oppressive
system or have plans for the fiat collapse if it occurs? Electronic money needs
a secure platform and the internet was designed by the US military and in its
base construction was not designed to be secure, so perhaps bitcoin is their
first step in implementing oppressive electronic money. Or, perhaps a
devastating war is in the pipeline?
So, will the new money be gold or/and silver? A major factor
cited in the kingworldnews articles is the continued use and purchase
particularly of gold, but also of silver, by people in the old Asian empires of
Turkey, Persia, Russia, India, and China. But using gold and silver as money
would have to come from the bottom of the current pyramid and can the average
person withstand the attacks from the greatest disrupters with
money/violence power? http://silverstealers.net documents the money
regulations and selling of government silver reserves through time, as part of
a strategy to unmake silver's monetary role, starting in the 1800s. The crash
in the value of silver was an important factor in the great depression due to
the loss of purchasing power by the average person in the world during the
1930s.
You cannot doubt the unbridled optimism of the silver-folks,
it calls from the blood of their ancestors. In their eyes, silver equals
freedom from the ridiculous rules of Sauron, for silver is more difficult to
control by those that desire power to control others above all else.
Elliottwave forecasts of the Silver Price
Elliottwaves are a method for understanding and predicting
price movements proposed by Ralph Elliott in the 1940s. The market moves in the
direction of its trend in 5 waves up (1:up, 2:down, 3:up, 4:down and 5:up) and
then retraces part of the gain in 3 waves down. They are complicated because
elliottwaves are fractals. So the first wave 1 up is itself made up of 5 waves,
and the 1st wave of the 1st wave is again made up of 5
waves and so on. Here is a chart from elliottwave.com, made by people more
experienced than me, of the current silver market with its forecast of $9.68.
The first thing that sticks out is the tiny wave 1 (wave 2 is cut-off from the chart).
It seems much easier to count the current wave 3 as wave 1. This
is my proposed new count. The 5 sub-waves that make up this new wave 1
would be for the peak from around 2003 to be subwave 1 (followed by subwave 2
down) and for the peak from around 2005 to be subwave 3 (followed by subwave 4
down), meaning the peak in 2007 is subwave 5. This completes the new wave 1,
which replaces the 3 on the chart. (see new chart below).
Then my new proposed wave 2 in 2008 is labelled wave
4 on the chart. Because wave 2's tend to be deep retracements this fits.
So how about the action from 2008 to 2011? It appears to be one wave up, so in
this new count, the 2011 peak is subwave 1 up of the larger wave 3 up. The decline to present time is
then subwave 2 of wave 3, and again is a deep retracement. This is
called a “nested set of ones and twos” and means the next wave is subwave 3 of
wave 3, which are the most powerful waves in a trend and as Precther
states are “wonders to behold”.
This new count makes the timing all very interesting because
subwave 1 (shown as 5 on the chart) lasted 3 years, and the new subwave
2 (shown as A on the chart) is currently 3 years. So time is favouring a
return to subwave 3, which would fit with the wild high price forecasts of the
little person.
Nature is allowing for the possibility of a massive rise in
the price of silver, albeit at long odds. Are the disrupters on board and actually have piles
of silver stocked away, so that this price rise will unfold? Or will they fight
the silver price as they have for the last 200 years, and the EWI of Precther be correct? Or, the shocking
possibility, will the disrupters be defeated? This is why silver at $21.12 is a
fractured market, like no other I have seen.
No comments:
Post a Comment